Techcom Capital launches Vietnam's first real estate investment trust


TCREIT is the first public REIT to be launched in Vietnam, with the initial charter capital of VND50 billion (US$2.35 million). At least five million fund certificates at VND10,000 each will be offered.

The funds' custodian and administrator is Bank for Investment and Development of Vietnam (BIDV). Investors register to buy fund certificates with the minimum subscription of VND1  million from December 14, 2015 to March 9, 2016. Techcom Securities (TCBS) is the REIT's exclusive distributor.

TCREIT focuses primarily on cashflow-generating properties such as office buildings, retail shopping malls, hotels and resorts. TCREIT is expected to be listed on Hanoi Stock Exchange (HNX) in 2016.

TCREIT enables the securitisation of real estate projects into fund certificates that give investors partial ownership. Furthermore, as TCREIT is expected to be listed, investors can trade the fund certificates for specific liquidity needs. . TCREIT plans to use the majority of its profit received from its investments to pay out as annual dividends, which will create a stable income stream for its investors.

“Techcom Capital is always the pioneer in introducing new and unique investment products such as TCREIT to investors in Vietnam. Along with Techcom Equity Fund (TCEF) and Techcom Bond Fund (TCBF), TCREIT will be another diversified investment choice especially for individual investors in Vietnam,” Nguyen Xuan Minh, chairman of TCREIT’s Board of Representatives, said.

“Individual investors in Vietnam have mainly been investing in residential projects such as apartments or land. Now, they have the chance to take part in owning office buildings, shopping malls and hotels that generate regular and stable income with high liquidity.”

Techcom Capital is a wholly owned subsidiary of Techcombank – one of the leading joint stock commercial banks in Vietnam. With its strong and professional investment team, Techcom Capital offers a diversified range of investment products and services to institutional and high net worth investors in Vietnam and abroad.

IFC, TP Bank boost trade finance for smaller enterprises in Vietnam

The International Finance Corporation (IFC), a member of the World Bank group is providing a trade facility of up to US$10 million to TienPhong Commercial Joint Stock Bank (TPBank) to enhance its support for local enterprises and help boost international trade opportunities, according to an IFC press release on December 17.

The facility, part of IFC’s Global Trade Finance Program (GTFP), will provide TPBank with risk coverage in granting trade financing to local companies, and access to a global network to help grow its trade finance business. The network helps promote transactions in challenging markets, boost competitive financing, and build correspondent bank relationships with new institutions at low risk.

“This trade line helps extend our capacity to meet trade finance demand from small and medium enterprises, one of our main target client groups,” said Nguyen Hung, TPBank’s Chief Executive Officer. “Being part of IFC’s GTFP will help us get recognized by a wider range of correspondent banks globally, and make it easier for us and our clients to complete international transactions. "As IFC is very thorough in partner banks’ appraisal and selection, this IFC’s GTFP line is a “stamp of approval" of TP Bank’s management efforts and strive in improving the bank's operation towards international standards.”

“IFC’s trade finance support to TPBank will enable the country’s small and medium enterprises sector to increase its share of global trade,” said Kyle Kelhofer, IFC’s Country Manager for Vietnam, Cambodia and Lao PDR. “Expanding trade flows is essential for SME growth and will help boost the economy, generate foreign exchange, and create jobs. This investment is also a testament of IFC’s continued commitment to support the strengthening of Vietnam’s banking sector. We look forward to further expand our partnership with TPBank, as well as our entire investment and advisory program in the Vietnam financial sector, to support the country’s economic growth and integration.”

Since the introduction of IFC’s GTFP program in Vietnam in 2007, more than 950 guarantees have been issued by participating banks to support US$4.2 billion worth of trade finance, making Vietnam one of IFC’s top trade finance markets. IFC’s GTFP supports trade in emerging markets by providing partial or full guarantees for individual trade transactions backed by IFC’s triple-A rating.

Since its inception in 2005, the award-winning program has provided over 18,000 trade finance guarantees to support more than US$30 billion worth of trade transactions in emerging markets. The program includes more than 500 bank partners in nearly 100 emerging-market countries.

Robins stores launch festive promotions

Thailand’s Robins department stores have launched three big promotions for shoppers during this festive season.

Shoppers who buy products at Robins on Saturday and Sunday can add triple points to their membership cards.

There are 100 free pairs of shoes and 10% discounts for customers.

From now until January 3, customers with bills from VND500,000 or above will receive free vouchers and those with bills from VND600,000 or above will have a chance to win prizes such as jewelry, Thailand trip and credit cards in a lucky draw.

Robins Royal City is located at B1, Royal City, 72A Nguyen Trai Street, Thanh Xuan District, Hanoi, while in Ho Chi Minh City Robins Crescent Mall is situated at the Crescent Mall at 101 Ton Dat Tien Street, District 7.

Vietjet receives the 30th aircraft

Vietjet has received its 30th brand-new aircraft, an A320 (coded VN-A664). The new plane arrived at Ho Chi Minh City’s Tan Son Nhat International Airport yesterday after flying from Toulouse in  France.

The aircraft is the eleventh of the milestone agreement between Vietjet and Airbus for acquiring and leasing 100 aircraft. With its advanced designof less fuel costs and CO2 emissions, the new aircraft is expected to boost the carrier’s efficiency and protect environment.

“With this addition to its fleet, Vietjet is now operating 30 brand-new and modern A320s and A321s, helping the new-age airline to further develop its network in Vietnam and across the Asia-Pacific region”, said Mr. Luu Duc Khanh – Vietjet’s Managing Director.

Enthusiasm in Vietnam’s auto market: Financial Times

Vietnam is enjoying a surge of investor interest and the auto market is one area where the enthusiasm is warranted, according to the UK’s Financial Times.

It said car sales in Vietnam were up 59 percent year on year in January-October, following annual growth of 35 percent in 2014 and 23 percent in 2013.

Vietnam now accounts for 6.8 percent of car sales in the “ASEAN 5” which also includes Indonesia, Malaysia, the Philippines and Thailand –and could approach 10 percent in 2016, according to the FT Confidential Research.

Vietnam remains the poorest country Southeast Asia outside the so-called “frontier” of Myanmar, Cambodia and Laos. Yet with a population of 90 million and one of the region’s most dynamic economies, the country is becoming an increasingly attractive consumer market.

Across the ASEAN 5, Toyota stands as the favourite brand, followed by Honda.

These companies are benefiting from surging demand in Vietnam and the Philippines.

Industry, trade sectors warned of fiercer competitions brought by FTAs

Vietnam’s trade and industry sectors have been warned about fiercer competitions when the free trade agreements (FTAs) that Vietnam has signed take effect.

Speaking at a workshop held in Hanoi on December 18, officials of the Ministry of Industry and Trade also admitted state management agencies need to change their way of thinking in building macro-economic policy and carrying out their management functions.

At the same time, the officials emphasized the vast opportunities that will come with the FTAs.

Luong Hoang Thai, Director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade and deputy head of the government’s negotiation delegation on economic and international trade issues , said there are substantial chances for businesses to expand their market.

He added that as the FTAs are highly binding, they will ensure stability for the business circle.

Vietnam also has an advantage from the fact that it is one of the first countries in the region to sign an FTA with the European Union and the Trans-Pacific Partnership agreement, he said.

in 2015 Vietnam signed four important FTAs, which are the Trans-Pacific Partnership (TPP) agreement, and three others with the EU, the Eurasian Economic Union and the Republic of Korea.

Participants at the workshop noted that products of partner countries in the four FTAs do not compete directly with Vietnamese goods, which is an advantage for the country.

USD interest cut helps stabilise exchange rate: experts

The State Bank’s December 17 decision to reduce interest rate for deposits in USD by individuals to zero percent is said to be a right move to curb dollarization and stabilize the foreign exchange rate.

The VND/USD exchange rate in the domestic market has reached the ceiling set by the SBV during recent days, with selling rates quoted at 22,547 VND per USD.

Director of the School of Banking and Finance under the National Economics University Dang Ngoc Duc said the move is a flexible measure to phase out lending in foreign currency and reduces foreign exchange rate tension.

Nguyen Tri Hieu, a banking finance specialist said the initiative would stimulate people to sell USD, improving liquidity.

Deputy Governor of the State Bank Nguyen Thi Hong told the media that the exchange rate fluctuation during the past days was due to psychological factors in anticipation of the FED’s decision to raise interest rate and the falling yuan.

The SBV has introduced several measures to stabilize market since the beginning of this year. The bank will continue with its consistent solutions, the Deputy Governor said.

EU now Vietnam’s fourth biggest timber, wood product buyer

The European Union (EU), which makes up about one fourth of the world consumption, is now the fourth largest importer of Vietnam’s timber and wood products after US, Japan and China.

Nguyen Ton Quyen, Vice President of the Vietnam Timber and Forest Products Association (VIFORES), made the statement at a workshop on Vietnam-EU trade in timber and wood products in Hanoi on December 18.

The event was jointly held by VIFORES, the Forest Products Association of Binh Dinh (FPA Binh Dinh), the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) and US-based non-profit Forest Trends.

The EU is the second largest buyer of Vietnam in terms of wood furniture listed under HS codes 94, mostly importing wooden seats, outdoor furniture, and furniture for office and bedrooms from the partner.

The three main European destinations for Vietnam’s wood product are the UK, Germany and France, together accounting for two thirds of the exporter’s timber and wood product sales in the EU.

The EU is also one of Vietnam’s key timber suppliers. Last year, the bloc shipped to Vietnam 172 million USD worth of timber, or one fourth of Vietnam’s exports.

Vietnam is negotiating a Voluntary Partnership Agreement (VPA) with the EU within the framework of the Forest Law Enforcement, Governance and Trade (FLEGT). Once the agreement is signed, the Vietnamese Government will put forth closer mechanisms to ensure the legality of the country’s wood products exported to the EU.

To Xuan Phuc from the Forest Trends said the country’s deeper integration would not only benefit local timber producers in many ways but also pose risks to them, including the legal origin of their material wood.

He suggested that the Government and wood associations should play an important role in reducing such risks and call on wood businesses to stop trading timber of unclear origin.

In the first eight months of this year, Vietnam’s timber and wood product exports to the EU fetched 442 million USD while its timber imports from the bloc was 111 million USD.

HCM City to promote sales of E5 bio-fuel

Ethanol gasoline E5(A92-RON petrol containing 5 per cent ethanol) will be sold at all filling stations in HCM City beginning on December 31, according to the city's Department of Industry and Trade.

Speaking at a meeting to review the sale of E5 in the last 12 months, Le Ngoc Dao, the department's deputy director, said the city had nine fuel wholesalers with six general agents and 518 retail petrol stations.

The city is among seven localities, including Ha Noi, Hai Phong, Da Nang, Can Tho, and the provinces of Ba Ria-Vung Tau and Quang Ngai, that are implementing the pilot supply of E5 fuel by the Government.

In November last year, 58 petrol stations began selling E5 and the number rose to 262 by the end of the month, or 50.57 per cent of total petrol stations in the city.

"Despite efforts made by the city government and enterprises, sales of E5 fuel remain low, accounting for only 4.2 per cent of the total petrol sales in the city," she said.

The city's monthly petrol sales reached 130,100 cubic metres on average, of which A95-RON and A92-RON accounted for 33.3 per cent and 62.5 per cent, she said.

Consumers' consumption habits, few differences in price, and low profits of distributors contributed to the low sales of bio-fuel, she said.

Duong Van Trinh, representative of Petrolimex, one of the city's major fuel wholesalers, said the average E5 sales via his company's distribution system had increased significantly thanks to an increase in the number of petrol stations selling the fuel. But the volume of E5 sold accounted for only 7 per cent of its total petrol sales.

"Very few people ask for E5 at gas stations selling it," he said.

Consumers were still more familiar with the use of traditional A92-RON gasoline, he said, adding that they did not understand E5's benefits.

Even though the price for a litre of E5 was VND500 lower than that of A92, sales remained sluggish, he said.

Communication work should be enhanced to raise public awareness of the benefits of E5, delegates at the meeting said.

Trinh suggested that the Government support fuel trading firms in shifting to trading the bio-fuel since they had to spend a lot on building E5 mixing facilities, he said.

Dao said the department in collaboration with other agencies would raise awareness among people about the benefits of the bio-fuel.

In addition, all fuel stations in the city must hang two banners about the benefits of E5 starting from December 24, she said.

The city had encouraged general agents and retail stations to supply E5 on schedule, she said, adding that all stations were required to have at least one pump for E5 and to gradually reduce the supply of A92 fuel.

She suggested that the Government create a preferential policy for bio-fuel production and distribution firms as well as cut the price of E5 to stimulate distribution and consumption.

Retail prices of petrol were slashed at 3pm on December 18, following orders from the ministries of industry and trade and finance.

This is the 11th reduction in the petrol price and is expected to be the final adjustment this year.

The orders said the prices of Ron 92 petrol and E5 biofuel would be reduced by VND391 per litre to touch their ceiling prices of VND16,405 (US$0.7) and VND15,910 per litre, respectively.

Meanwhile, the prices of 0,05S diesel, kerosene and 3,5S mazut have been decreased by VND1,246 per litre, VND1,136 per litre and VND942 per kg to touch their ceiling prices of VND11,984, VND11,065 and VND8,162, respectively.

The two ministries said from December 3 to 17, a period during which the authorities calculated the global base price for fuel dealers, the price of Ron 92 was at US$53.29 a barrel, down more than $1.7, compared with the previous cycle. Meanwhile, the prices of kerosene and mazut were respectively reduced by $7.3 and more than $10 per barrel.

The petrol price was increased six times this year.

Digital data standard needed

Deputy Minister of Information and Communications Nguyen Thanh Hung emphasised that connected data and information exchanges were urgently needed to develop e-government, as well as for building a national database.

The deputy minister spoke at the 2015 Information and Technology Day (IT Day 2015) on the theme, "Digital information exchange standard for a smart society" in Ha Noi on Thursday.

Data that is not shared will not be effective, and it would be a waste of investment when building a database, he said.

The connection and sharing between information systems of government and ministries, agencies, localities and enterprises or between the national database and specialised database will only be implemented when connection and exchange standard systems are unified across the country.

The Ministry of Information and Communications has issued the framework for e-Government in Viet Nam, as well as focusing on researching, building and promulgating standards to ensure the united and synchronised development in accordance to the national ICT overall architectural plan.

For information exchange standards, the ministry has implemented the project on building digital information and information exchange standard system studying and proposing nine technical regulations and 117 technical standards on software, digital information content, standardised e-information, data and information exchange.

Deputy Minister of Transportation Nguyen Hong Truong said that promoting IT applications, especially increasing the exchange of digital information in traffic management would ensure long-term growing value for the transportation sector, as well as infrastructure.

However, many difficulties had arisen in practical implementation as the system of the State administration had specific characteristics, while functions and tasks of ministries, agencies were different, he said

Besides, there were differences in scales, and economic, cultural and social characteristics between regions.

Therefore, according to Deputy Minister Truong, building the standard requires co-operation between ministries and social organisations, enterprises, research institutes and universities nationwide.

"The IT application can only be successful when IT applications and administrative reforms are tightened," Truong said.

Highlighting on the necessity of information exchange standards, the deputy minister of transportation said that data should be consistent and synchronised across the country so that systems can chat and connect with each other.

Garment industry joins supply chains

Viet Nam's local garment industry, which until now did not have much of a role to play, has revamped its production process to join the global supply chain, experts said.

Vu Duc Giang, chairman of the Viet Nam Textile and Apparel Association (Vitas), said the local garment industry had been one of the leading industries in export value but the industry had just joined the processing stages of cutting and sewing in the global supply chain.

The industry depends on imported material from abroad, especially from China, which accounts for 50 per cent of the material for the industry's production, according to Giang.

However, if the markets providing material for Viet Nam's garment industry show any abnormal fluctuations it impacts the local industry adversely.

In addition, the local textile and garment sector has not seen much co-operation between manufacturers to create a production chain and a sustainable development strategy in the long term.

Tran Thu Hien, director of Nha Be Garment Corporation's branch in Ha Noi, said Viet Nam's garment enterprises had focussed on developing their strengths.

They had not paid attention to demand or the lack of raw materials and had not sought ways to ensure the supply of raw materials, and had instead depended on imports, she said.

The Nha Be Garment imports 70 per cent of its material for production while it sources 30 per cent of the material from the local market.

Truong Thi Thanh Ha, general director of Dong Xuan Knitting Ltd Company, said Viet Nam required 400,000 tonnes of cotton each year, but the local market supplied 3,000 tonnes, and the remaining had to be imported from other countries.

"Most of the machines, chemicals and textile dyes that Viet Nam's garment industry uses needs to be imported. That means the supply chain remains the weak point in Viet Nam's garment sector," Hasaid.

Phan Chi Dung, head of the Light Industry Department under the Ministry of Industry and Trade, said the development of the world garment industry would result in the development of supply chain and e-commerce transactions.

These were challenges for the local garment sector so it must reform itself in future, he said. However, 21 per cent of small- and medium-sized enterprises (SMEs) in Viet Nam had joined the global supply chain, which is lower than Thailand and Malaysia, where 30 per cent and 46 per cent, respectively, of SMEs are part of the chain.

"Vietnamese enterprises have joined the lowest stages of the supply chain of processing and supply of alternative parts, not major production stages such as production of materials and design," he said.

Giang said that to increase added value of the garment industry, its enterprises must focus on developing production of material and changing production methods.

These solutions would improve the quality of exported textile and garment products and encourage co-operation among garment enterprises to create a domestic supply chain, he said.

Le Tien Truong, general director of the Viet Nam National Textile and Garment Group (Vinatex), said the local textile and garment firms should change its strategies in production and management and develop skilled workers to create favourable conditions for firms shifting the production modality from Cut-Make-and-Trim (CMT) to free-on-board (FOB) practice and Original Design Manufacturer (ODM), reported vietnamplus.

Vinatex has planned investments in a series of plants in central Ha Tinh province to form a competent production chain serving domestic and foreign markets.

At a total capital of nearly VND1 trillion (US$45.14 million), four factories, wastewater treatment, and water supply centres will be built in the local Nam Hong industrial park, covering 19 hectares.

The construction of two sewing plants, Hong Linh 1 and 2, costing VND190 billion ($8.6 million), will start in February 2016 and early 2017.

In late 2017, the Hong Linh plant for scarf weaving, with designed capacity of 1,500 tonnes per year, will be built under a VND314-billion ($14.17 million) investment.

The last of the four is a factory for dyeing and knitting worth VND410 billion ($18.5 million), which is capable of turning out 1,400 tonnes of products annually.

Vinatex has launched a drive to increase productivity which is vital when the country accelerates international integration.

Experts warn of housing imbalance amid growth

Amid the recovery of the real estate market, experts have rung early alarm bells about the risk of supply and demand imbalance by the recent boom in high-end housing projects.

Dang Hung Vo, a real estate expert, said at a recent workshop that the Viet Nam property market was still witnessing unbalanced development with developers focussing on high-end housing rather than affordably priced apartments.

He estimated that between 2016 and 2018, the market would receive nearly 80,000 housing units, 70 per cent of which would be in the luxury segment.

This would be a problem, considering the country's high demand for housing for low-income earners, experts said. The construction ministry forecast that Viet Nam would need around 1 million square metres of housing space for low-income earners, but the current supply was only around 10,000 units per year.

The low-priced housing segment supported the revival of the property market in 2013 and 2014 from a protracted downturn, but was now seemingly neglected by a number of property developers due to eclipsed profits, economic expert Vo Tri Thanh pointed out.

Nevertheless, high-end properties appeared to be the most attractive destination last year for investments, property experts agreed.

High-end property projects were aimed at not only those who were seeking high-quality living standards but also at those who were hunting for profitable investments.

Encashing on the trend, during the recent months, property developers rushed to release sales of many luxury housing projects highlighted by ideal living environment and guaranteed profits, especially in big cities. In addition, the market also received the launches of new types of luxury property products like shop-houses, mini villas, resort townhouses, farmhouses and officetel apartments.

According to Le Hoang Chau, president of HCM City Real Estate Association, the property market was on a recovery path but there existed uneven development among different segments.

The high-end segment during recent months witnessed an abundance of supply while affordable housing projects faced shortages, Chau said.

Attention should be paid to this problem, Vo said, although both market watchdogs and experts affirmed that a property bubble could not return next year, and the property market was on a firm recovery track driven by the improved macro-economy and improved property policies and credits.

The Viet Nam Real Estate Association said that property developers should strictly following the government's housing development strategy to ensure healthy development of the realty market and avoid the mistakes of the past which resulted in high inventories and market stagnation.

Jeff Foo, president of the Association of Singapore Realtors, was quoted by Dau Tu (Investment) newspaper at a recent workshop that new government's policies should ensure a more balanced, transparent and sustainable market.

He said that foreign investors were also concerned about changes in policies in the next five or ten years when Viet Nam joined the free trade agreements.

According to the Ministry of Construction, the bottleneck in the property market was a supply and demand imbalance and to tackle the problem, developing affordable housing projects was a core solution.

A report titled "Viet Nam Affordable Housing – A Way Forward" recently launched by the World Bank urged the development of a national affordable housing programme for maintaining high economic growth, citing that almost 20 per cent of households are still living in poor conditions.

However, developing social housing projects was of little interest to property developers due to inconsistencies in policies and unattractive profits, a conference heard on Thursday in HCM City.

Experts at the conference urged more incentives to be given for social housing projects together with the diversification of social housing types.

According to Huynh The Du, from the Fulbright Economics Teaching Programme, residents could only spend between 30 per cent and 40 per cent of their total income for housing purchases, so the housing prices should be at that affordable level.

However, in Viet Nam, there remained a huge gap between housing prices and incomes of residents, which make housing unaffordable to people with a monthly income of less than VND7.7 million (US$340). Du said that only those with a monthly income of VND32 million ($1,400) or higher, could afford comfortable homes.

Nguyen Xuan Quang, chairman of Nam Long Investment Jsc., said that policies and incentives should be favourable to property developers to encourage investments in social housing projects.

According to Chau, the land for developing social housing projects must be expanded to the outskirts where land was readily available. The housing development programme should not rely only on 20 per cent of area which was compulsory designated for social housing development in property project, he said.

Industrial park properties show expansion potential

The property market in industrial parks (IPs) shows great potential for development with enterprises looking to invest for better production and business opportunities once free trade agreements come into effect.

According to a report of VinaCapital on the domestic property market, there was total foreign direct investment of about US$7 billion in the industrial parks in the first ten months of this year, reported Kinh te do thi newspaper.

In the near future, the housing segment for workers in the IPs would attract large foreign investments due to the high demand. Property experts said enterprises should get the opportunity to invest in the potential segment.

If the Trans Pacific Partnership (TPP) agreement comes into effect, between 2.5 million and 3 million people from the rural areas of Viet Nam would come to cities for jobs, resulting in demand for housing in the IPs.

Economic expert Nguyen Minh Phong said real estate enterprises could invest in building medium-priced homes for lease or houses for workers with low incomes. Meanwhile, they could develop luxury homes and apartments or villas for local and foreign experts working at IPs. There would be a great demand in the market, so there was tremendous potential in it for property investors from 2016 to 2018.

However, investors should invent specific strategies for experts and workers because the experts need accommodation with convenient services such as supermarket, hospital and schools, while the workers have simple demands on housing such as quality and cheap prices.

Do Thu Hang, head of research and consultancy at Savills Viet Nam's Ha Noi branch, said property in industrial zones would directly benefit from the TPP. Foreign companies of TPP countries would increase investment in Viet Nam and move their production work here to benefit from the advantages in production and business from the TPP commitments. Therefore, the demand on housing in industrial zones had really great potential.

The TPP will spur more investments into Viet Nam, especially from countries that are big importers of Vietnamese products like the United States (US) and Japan, CBRE Viet Nam, a foreign property service provider said.

The US investment in Viet Nam remains modest compared to South Korea and Japan. American companies will increase manufacturing activities in Viet Nam and reimport Made-in-Vietnam products thanks to the country's tax exemption on major products such as garments and textiles.

They will likely target industrial land in the Southern provinces of Viet Nam, where a number of existing garment and textile factories are located. Similarly, manufacturers from other countries will certainly consider switching to Viet Nam from non-TPP countries such as China, Thailand, Cambodia, and Indonesia, in addition to India, to enjoy extra-low tariffs.

This will lead to more demand for industrial land, warehouses and factories, not necessarily from the TPP countries but also from the non-TPP investors like mainland China, Hong Kong or Taiwan.

Fed move may fuel outflow from stocks

The recent decision of the US Federal Reserve (Fed) to hike key interest rates could see foreign investment flowing out of the Vietnamese stock market in the future, stock analysts forecast.

On Wednesday, Fed put an end to the market uncertainty with the announcement raising the federal fund rate by 0.25 per cent, the first increase in the benchmark in nearly a decade.

The world stock markets, ranging from the US to Europe and Asia, responded positively to this news. Viet Nam's benchmark VN-Index on the HCM Stock Exchange also increased 0.8 per cent on Thursday.

However, foreign investors kept selling out. Analysts expect this trend to continue in the near future and this may have a negative influence on the domestic securities market.

The VN-Index has lost over 6 per cent in the past 30 days due to uncertainties over the Fed's decision and prolonged net selling streak by foreign investors.

"Foreign net selling is one of the main reasons which has pushed the market down," Lai Duc Long, an analyst from Phu Hung Securities Company said.

Foreign investors have been net sellers on the HCM Stock Exchange since November with a total outflow of VND2.53 trillion (US$112.4 million).

According to Andy Ho, managing director and chief investment officer at VinaCapital, foreign investors have increased selling out in the past two weeks over the concerns that they would suffer losses in stock assets if Viet Nam's central bank adjusted the foreign exchange rate.

"If the Vietnamese dong was devalued further, foreign investors would compare investment returns in Viet Nam with the currency depreciation," Ho was quoted as saying on the financial website

However, Ho forecast that no adjustment in the foreign exchange rate would be made by the State Bank of Viet Nam after the Fed's decision and the VND/US$ rate would depend more heavily on the dollar supply from banks and movements of the Chinese yuan, Viet Nam's main export competitor.

In reality, foreign investors have divested investments from emerging markets in the past month in preparation for the Fed's rate hike, following the principle that smart money flows in places promising higher returns.

According to Bui Nguyen Khoa, a stock analyst at BIDV Securities Co, foreign investors used to buy strongly in the first quarter of each year following the portfolio restructuring of exchange-traded funds but the Fed's interest rate hike could slow down this activity.

Seminar zeroes in on Vietnam-US relations

Forty years since the war ended, the US has become the largest purchaser of commodities from Vietnam while Vietnamese students comprise the eighth largest foreign student community in the US.

On December 18, the Ho Chi Minh National Academy of Politics and Public Administration held a workshop analysing these and other trends in Vietnam-US relations over the past four decades.

Those in attendance also held thought provoking discussions on prospects for future relations over the coming time.

Cooperation between Vietnam and the US has expanded and advanced across a variety of fields since the normalisation of their relationship in 1995, participants said.

They expressed conviction that both nations would further enhance trade links, especially when the Trans-Pacific Partnership (TPP) agreement comes into force. They also used the occasion to scrutinize advantages, challenges and opportunities for comprehensive cooperation in the time ahead.

The US has been Vietnam’s largest export market since 2005, while Vietnam has ranked 20th among exporters to the North American nation.  US investors have poured more than US$11 billion into 742 investment projects in Vietnam so far.

US Ambassador to Vietnam Ted Osius in turn said since the establishment of the US-Vietnam comprehensive partnership in 2013, the two countries have seen significant advances in their ties.

He hoped that spirit would be maintained for the next two decades and beyond, elevating cultural and trade relations to new and greater heights for the benefit of the peoples of the two nations.

Official inaction leaves Vietnam businesses struggling against cheap imports

Many Vietnamese businesses say they have been hurt by cheap imports since the government and industry groups have failed to give them support.

They were speaking at a recent meeting with the Vietnam Competition Authority, where they warned the situation would worsen when Vietnam is obliged to scrap more tariff lines under upcoming free trade agreements.

Vo Van Thanh, deputy CEO of steel producer Hoa Sen Group, said non-tariff trade barriers are supposed to shield local production against the influx of cheap imports, but in Vietnam they are "very weak" due to the lack of an efficient legal framework.

For instance, while Vietnamese steel exporters are subject to tight quality checks in foreign countries, in Vietnam, authorities apply technical standards for imported steel that are not "adequate", meaning poor products can sneak into the local market, he said.

Since October steel producers have been seeking authorities’ help to fight against the rising influx of cheap imports, especially from China, which is now the biggest seller of iron and steel to Vietnam.

One of their complaints is that Chinese chrome alloy steel billets are imported tax-free though their minuscule chrome content of 0.3-0.4 percent does not add any value to the billets, meaning they cannot be used for making sophisticated products.

In response, government agencies began to inspect importers of the product and sought to amend regulations to slap a 10 percent import duty on chrome alloy steel.

However, the findings of the investigation have yet to be released and the proposed tax is awaiting feedback from other relevant authorities. Meanwhile, many factories are on the verge of closing down as they cannot sell their products amid the glut caused by the cheap imports from China.

Nguyen Van Toan of the Vietnam Steel Corporation said many of its factories are at risk of shutting down since their products have been undercut by Chinese imports.

Responding to the businesses' complaints, Nguyen Phuong Nam, deputy chief of the Vietnam Competition Authority, admitted that government agencies have failed to provide efficient support.

They are "very slow" to act on dumping cases, taking more than six months to reach a consensus before filing a complaint with the World Trade Organization, compared to one-two months in Taiwan and three months in the US, he said.

After China depreciated the yuan a few months ago, its products became even cheaper than before, and many countries have slapped anti-dumping taxes on Chinese goods, but Vietnam has been very slack, leaving local industries like steel struggling, he said.

However, he also blamed businesses’ lack of knowledge of the laws.

Many industry groups, also lacking knowledge of safeguard measures and related rules, turned their back on distressed businesses, he said. Some even discouraged businesses from taking legal action, claiming it was impossible to win, he said.

Other challenges Vietnam faces in taking trade remedy against foreign imports are language barriers and the lack of qualified lawyers, he said.

Though Vietnam issued the law on competition in 2004, it has taken remedy against foreign imports in only four cases, he said.

"As a tool for protecting local producers, trade remedies are rarely applied in Vietnam, which puts Vietnamese businesses at a disadvantage."

Totalgaz acquires Petronas's LPG business in Viet Nam

Totalgaz Viet Nam Limited has announced the acquisition of Malaysian company Petronas's liquefied petroleum gas business in Viet Nam.

The agreement signed late last week in Malaysia covers Petronas's two liquefied petroleum filling facilities in the northern city of Hai Phong and the southern province of Dong Nai together with a large portfolio of customers and partners.

With this purchase, Total will become the second largest LPG player in Viet Nam.

French-owned Total, one of the largest integrated oil and gas companies in the world, has been in Viet Nam for over 20 years in the LPG, lubricants and retail fuel businesses.

$97 million for building infrastructure in Cam Khe IP

The Prime Minister Nguyen Tan Dung signed off on a VND2.2 trillion (US$97.6 million) investment package for infrastructure development of the Cam Khe Industrial Park in Phu Tho Province, reported.

Viglacera Corporation, the investor in the industrial park project, will help the park increase efficiency and facilitate its management and operation. The hope is that the project will stimulate the surrounding areas' socio-economy and further development of industrial parks in the province.

The project will occur in three phases, the first of which will complete developing 137ha by the fourth quarter of 2017. The second phase will add another 138.5ha by the first half of 2020. The third will quickly follow at the end of 2020.

The Prime Minister permitted the provincial people's committee to grant the license to Viglacera and co-ordinate relevant agencies to assist in land clearance.

The Prime Minister asked the province and investor to attach special importance to devising job solutions for locals whose will be forced to move and for industrial workers in the area.

The Cam Khe industrial park is a multi-industry park utilising advanced technology and producing goods that qualify internationally.

The park will involve several industries: construction materials; electronics and high-end consumer goods; textile equipment; automotive; and agro-forestry machinery and processing.

The park is expected to create 25,000 to 28,000 jobs when it goes into operation.

There are currently seven industrial parks in the province, the biggest being Phu Ha and Cam Khe with 450 ha.

Belgium group expands investment at Dinh Vu IZ

On December 14, , the Belgian-based investor, Rent-A-Port, held a ground breaking ceremony of South Dinh Vu Industrial Zone II – Deep C II and construction commencement of the Gateway Commercial and Logistics Business Centre – CDC Haiphong at South Dinh Vu IZ.

With the success of the project of Dinh Vu Industrial Zone, Rent-A-Port decided its expansion plan in the city by developing South Dinh Vu Industrial Zone II – Deep C II, and creating Deep C industrial cluster in the area.

The project called “Gateway Commercial and Logistics Business Centre” starts in Deep C II, with a total investment of around US$2.2 million to develop office buildings and open storage for lease. After being granted the investment certificate since June 2015, the project is scheduled for commercial operation from January 2017.

Khalil Boutros Al Sholy, Director of CDC International Corporation, said CDC has a long-term vision in Vietnam where following the success of this initial project, the company has confirmed to invest in Cat Hai Island, right next to LachHuyen Port. With its strong financial background, the company is confident in successfully exploring the real estate market of Vietnam.

The existing Dinh Vu Industrial Zone has operated successfully with over 55 multinational projects, attracting almost 30% of the total FDI into Haiphong city.

Deep C II has a total area of nearly 650 ha.With this strategic location, Deep C II expects to rapidly complete its infrastructure and hand over 40 ha to committed clients in 2017.

At the ceremony, Haiphong authority pledged to facilitate the development of Deep C industrial cluster and its investors.

Marc Stordiau, Chairman of South Dinh Vu II/Deep C II, affirmed the corporation will continue to deliver the same quality and reliability in infrastructure development, utilities and services provision as being enjoyed by existing clients of Dinh Vu Industrial Zone.

Transport ministry to sell Cienco shares in lots

The Ministry of Transport will conduct auctions of the share in lots owned by the State in Civil Engineering Construction Corporations No 5 and No 6 on December 31.

Cua Dai Bridge is one of major projects of Cienco 5. It comprises a bridge and two roads connecting Hoi An ancient town, a World Cultural Heritage site, and Duy Xuyen and Thang Binh districts with a combined length of 18.3km.-Photo

The auctions of both companies, Cienco 5 and Cienco 6, will be held at the HCM City Stock Exchange.

The Cienco 6 has registered capital of VND492 billion (US$21.87 million), equally to 49.2 million shares, of which, the total State-owned share volume of nearly 45.70 million, or 92.8 per cent of registered capital, will be auctioned at the starting price of VND10,011 ($0.44) each, or total VND457.4 billion.

Earlier in 2014, the company launched its initial public offering with a sale of 28.7 million shares, but only a little more than 1 million shares were bought.

Meanwhile, its brother Cienco 5 will also sell the share lot as an effort to divest State investment capital. A share lot of nearly 10.18 million shares will be auctioned with the starting price at VND10,000 or a total at VND101 billion ($4.48 million).

The Cienco 5's registered capital is VND439 billion ($19.5 million), equally to 43.9 million shares, of which the State owns more than 27.7 million shares, occupied 63.18 per cent of the capital.

Cienco 5 launched the IPO in March 2014 with about14.21 million shares offered at a starting price of VND10,000 each, only 13.7 per cent of which were bought.

Cienco 5 and Cienco 6 are seen as major companies of the transport ministry. They focus on construction of railway, road, industrial parks and urban infrastructure.

The share sale in lots is seen as a successful method for State-owned capital divestment. Under this method, the transport ministry has divested nearly VND4 trillion ($177.8 million) in the last two years.

Vietnam Motors Industry Corporation (Vinamotor) is an example of the successful sale of shares in lots by the ministry. Last year it launched an IPO to sell 51 million shares, but the retail sale of shares failed. This year, according to the proposal from the transport ministry, the government has allowed the ministry to divest the State-owned capital by selling shares in lots. The auction is yet to be organised but many investors have expressed their interest in buying entire shares.

In a talk with Vietnam Television on December 15, Chairman of Vinamotor Nguyen Hai Trung said there were four investors interested in buying shares in lots. This was because if the transaction of shares in lots was successful, the investor could get the right amount of control of the business.

Director of Business Management Department Vu Anh Minh said if the business sold 70 per cent of shares in lots, it meant that the entire 70 per cent would be sold.

"In case the transaction was not in lots, the investor bought only 65 per cent, a level high enough for them to have the power of veto. What about the remaining five per cent? With such a little percentage of shares, the State still had to assign its representative of the shares, which would be really difficult to sell," Anh Minh said.

To push up the State-owned capital divestment, the government issued Decision No. 41/2015/QD-TTg dated September 15, in which the State would sell its shares in joint-stock companies which had not been listed or registered for trading held by ministries, ministerial-level agencies, government-attached agencies, and provincial-level People's Committees, or state-owned economic groups and corporations.

The shares of equitised state enterprises which are neither listed on the stock exchanges nor registered for trading on the Unlisted Public Company Market (UpCOM) may be sold in lots through auction at the stock exchanges based on in-lot sale plans approved by competent authorities.

Shares on sale may be divided into various lots for auction based on their quantity and market situation. There will be only one share lot to be auctioned each time, which is worth at least five per cent of the charter capital of the joint-stock company.