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BUSINESS IN BRIEF 20/3

 Vietnam tops list of fastest growing ultra-rich; Vietinbank to open branch in Laos; March CPI sees lowest increase in a decade; Vietnam Logistics index launched; Japan's Nissin opens $75m auto facility

Domestic petrol prices rise again, global trend blamed

Domestic petrol prices rose for the second time this year yesterday by an average of VND180 per litre, with authorities citing consistently high world prices as the reason for granting approval for the hike.

As of noon yesterday, all petrol stations belonging to Petrolimex, PV Oil and Mipec companies were selling RON 95 and RON 92 grade petrol at VND25,190 and VND24,690 (US$1.19-1.17) per litre respectively.

Diesel prices went up by VND70 per litre to VND22,840.

However, the price of kerosene remained unchanged at VND22,630 per litre, while the price of mazut (fuel oil) went down by VND120 per litre to between VND18,490 and 18,890 depending on its grade.

The ministries of Finance and of Industry and Trade explained the latest hike by saying world prices of petrol products excluding mazut have remained high in the past month.

They said that over the last 30 days average world prices for petrol products were higher than domestic prices by between VND71 and VND654 per litre, and retailers were therefore suffered a loss of nearly VND500 per litre.

During this period, mazut prices in the world market were around VND113 per litre than the domestic price, the ministries estimated.

The latest price hike sought to balance benefits for retailers and consumers, they said.

The Finance Ministry has told retailers they can draw VND300 per litre from the Petroleum Price Stabilisation Fund to offset their losses. No drawings are allowed for kerosene and diesel, it said.

The last petrol price hike on February 21 adjusted prices by an average of VND300 per litre.

The price of one litre of RON 92 is currently lower than the record high of VND25,070 per litre that it reached on July 17, 2013. 

Japanese firms selected for high-tech road project

Three Japanese firms have been awarded a contract to supply construction and transport monitoring and supervision equipment for a south-north expressway project in HCM City.

The Vietnam Expressway Corporation (VEC) on March 18 announced that Toshiba, Hitachi and Itochu won a JPY4 billion Intelligent Transportation System (ITS) project scheduled to get underway in the first half of 2017.

The ITS will be applied to a 55km road section from HCM City to Long Thanh and Dau Giay.

Under the signed contract, Toshiba will supply ITS equipment, Hitachi will provide specialised construction services, and Itochu will assume general contractor responsibility for business affairs.

The project is expected to ease traffic congestion that negatively affects economic development in southern Vietnam, particularly in HCM City.   

B.Braun eyes Hanoi dialysis centre project

Germany-based B.Braun Group, one of the top healthcare companies in the world, plans to invest in a dialysis centre in Hanoi.

An executive of the group revealed the information at a working session with Hanoi People’s Committee leaders on March 18.

He said B.Braun manufactures and supplies medical equipment to hundreds of dialysis centres worldwide, including 50 in Asia.

The group has already operated in Hanoi and it is to invest an additional US$100 million in Thanh Oai industrial zone and create more than 2,500 jobs for local people in the second phase.

Vice Chairwoman of the Municipal People’s Committee Nguyen Thi Bich Ngoc welcomed B.Braun’s proposal and said Hanoi is considering providing 2 hectares of land in Ha Dong district to the group to carry out the project.

She said Hanoi has offered incentive policies and simplified procedures to attract direct foreign investment in many areas, including health care.

The capital city encourages companies to invest in community health care to help ease overload in hospitals and improve medical service quality, she said.

Vietnam tops list of fastest growing ultra-rich

Vietnam’s “ultra high net worth individuals”, those with US$30 million or more in total assets, will double to nearly 300 in the next 10 years, according to the latest wealth report of Knight Frank.

Vietnam tops the list of countries with the fastest growing ultra-rich population, forecast to increase 166% from 2013 to 2023, followed by Indonesia (144%), and Cote d’Ivoire (116%).

Knight Frank said that Vietnam’s recent decision to allow foreign investors to hold up to 20% of shares at banks will greatly help develop the banking system, a prerequisite to wealth development.

Additionally, the government is successfully shifting the economic model away from agriculture to more modernised technology while containing inflation, which facilitates the consolidation of growth and create opportunities to raise individual citizens’ wealth.

The country’s largest urban centre, Ho Chi Minh City, is expected to lead the list of cities, with the number of ultra-rich to triple to 246 over the next 10 years, according to Knight Frank.

Indonesia’s Jakarta will come in second with ultra-rich population increasing 148%, and China’s Ordos will finish third with 141% growth.

Russia’s St. Petersburg will take the lead among European cities while Argentina’s Buenos Aires will rank first among Latin American cities.

London had the largest number of ultra-rich worldwide last year, and the figure is forecast to double to 5,000 by 2023.

Can Tho to host Mekong Expo 2014

An exposition entitled – Mekong Expo 2014 – casting the spotlight on Made in Vietnam products and services will get underway in Can Tho City on April 26.

Le Thi Kim Thu, Director of the Can Tho International Exhibition and Fair Company, said the fair aims to provide domestic enterprises an avenue to display their wares to the foreign business community.

Additionally, it hopes to provide both domestic and foreign enterprises an opportunity to expand cooperative relations and in turn boost the economy, she added.

She said on display will be new interior woodwork, agricultural development achievements, trade and service promotion solutions, and industrial products serving agricultural and rural development.

The exposition will run through May 2.

Vietinbank to open branch in Laos

The Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) will open a transaction office in PhonKoung Village, Pakse District, Champasak province, on March 29.

The office, the first of its kind in Laos, will provide all the customary services of a full-service bank including capital mobilisation, lending, trade finance, foreign currency exchange, Western Union money transfer, and card services.

Vietinbank hopes that the transaction office will meet with customer’s satisfaction and create more favourable conditions for Vietnamese enterprises to do business in Laos as well as bolstering economic cooperation between the two countries.

Champasak is Laos’ largest province, which has a wide range of commercial centres and the most developed economic zones in the South.

The province has historically also attracted a large number of Vietnamese people to live and do business.

In February 2012 VietinBank established a branch in Laos which has so far attracted more than 700 customers.

March CPI sees lowest increase in a decade

The country’s consumer price index (CPI) will register an insignificant increase this month due to low demand, experts have forecast.

The HCM City Securities Company (HSC) this week said that the CPI is likely to inch up only 0.8% against the previous month, the lowest rise for the past decade. Compared with the same period last year, the index will rise 4.93%, it anticipated.

HSC said that the CPI rise was lower than previously expected due to low demand and the close price management by the relevant agencies.

The Government in its regular meeting late last month also decided to adjust down the annual inflation target to 6% from 7% as estimated early this year.

According to the online news portal Vietstock, Tran Hong Minh, head of Vietcombank Securities’ Market Researcher Division, also stated that there would be no significant change in inflation this month, adding that the index will rise between 0.05% and 0.1%.

Nguyen Mai Phuong, director of the Maritime Bank Securites’s Researcher Division, said that March’s consumption demand will be lower than February which witnessed the country’s largest holiday of Lunar New Year.

The CPI in February edged up 0.55% against the previous month, marking the lowest price hike in the past decade, even though February often sees the CPI rise to the highest level of the year as the domestic demand is very high.

The CPI rise this month will reflect the petroleum price hike of VND300 per litre late last month, Phuong said, adding that the price rise might also affect transport fares and restaurant prices.

Phuong said that the rise of CPI to date this year was very low as consumers had tightened their belts, while the prices of goods were stable and reasonable.

She forecast that the CPI might hit the bottom in the first quarter and then pick up in the second quarter.

HSC said that the low CPI was one of the reasons for the State Bank of Vietnam deciding to cut policy interest rates by 0.5 percentage points on March 18, making the decision the first of its kind in nine months. Negative credit growth and good liquidity in the banking system were the other cause for the rate cut, HSC said.

Vietnam Logistics index launched

The Vietnam Logistics Business Association (VLBA) and the Vietnam Logistics Institute (VLI) launched the Vietnam Logistics Index in Ho Chi Minh City on March 18.

Do Xuan Quang, Chairman of the VLBA and the ASEAN Federation of Forwarders Association, said the logistics sector generates US$20 - 22 billion a year, representing 20.9% of Vietnam’s gross domestic product.

VLI Director Dang Vu Thanh said that the index, based on other countries’ experiences, is updated daily, thus providing more information about listed logistics companies for investors and investment funds.

On this occasion, a programme voting the top 25 logistics companies in Vietnam was started. The result is scheduled to be announced in June.

According to the VLBA, most of the 1,200 logistics businesses in Vietnam are based in Ho Chi Minh City and Hanoi and are of small and medium size. Meanwhile, 25 multinational logistics enterprises operating in the country have an 80% market share.

Trade-economics – key pillar in Vietnam-Sweden ties

Swedish Secretary of Foreign Affairs Frank Belfrage reiterated on March 18 that trade-economics has become an important pillar in Vietnam-Sweden relations over the past 45 years.

While meeting local media in Hanoi, the official noted that the two countries have obtained average annual trade growth of 28% since 2011 to over US$1 billion in 2013.

He said the success of Swedish enterprises in Vietnam shows the attraction of the Vietnamese market to firms that wish to expand their business abroad.

Meanwhile, about 30,000 Swedish tourists visit Vietnam every year to enjoy its beautiful natural landscape, he added.

Regarding the progress of the Vietnam-EU free trade agreement, Belfrage said the deal is expected to be reached this autumn after being approved by all the 28 EU members.

Apart from concluding the planned negotiations, it is also important to ensure a comprehensive agreement benefiting all involved parties, he said.

The EU is the largest market of Vietnam and this will be further consolidated once the FTA is signed, said Belfrage.

He hoped that the deal will create more opportunities for Swedish and other European investors who could introduce new technologies to the 90- million-strong market of Vietnam.

Ecuador promotes trade ties with Vietnam

Ecuador’s Foreign Ministry announced on March 17 that Vietnam and Ecuador will establish a group to carry out a feasibility study on negotiating a preferential tariff agreement to boost bilateral trade ties.

This is part of a memorandum of understanding on economic and trade cooperation between Vietnam’s Ministry of Industry and Trade and Ecuador’s Ministry of Foreign Trade signed in Hanoi last week.

The Ecuador Foreign Ministry said the signing of the MoU is to prepare for the President Rafael Correa’s visit to Vietnam later this year.

The Ecuador Government’s statistics reveal that two-way trade turnover is currently US$100 million annually.

Vietnam needs to further improve investment climate

A seminar on improving investment environment was held in Hanoi on March 18 by the Development Strategy Institute (DSI) and the European Chamber of Commerce (EuroCham).

The seminar provided a good opportunity for investors, experts, researchers and lawmakers to discuss issues related to seaport infrastructure development, foreign operations in the banking sector, price management, and a price law in pharmaceuticals and nutritious food.

DSI Director Bui Tat Thang stressed Vietnam is on its way to becoming a modern industrialised country in 2020 fuelled by rapid and sustainable economic growth.

He said to support the process, EuroCham issues a white book annually, which gives a comprehensive and transparent account of economic effects on European businesses in Vietnam.

If these issues are resolved, they will help increase FDI capital and tax revenue, generate more jobs, and create better quality products for Vietnamese citizens, Thang said.

At the seminar, EuroCham experts suggested that Vietnam clarify its regulations on foreign capital ownership limits at State-owned banks to make it more transparent.

The DSI will gather opinions and incorporate common ideas into short and long-term policies so as to improve the investment environment in Vietnam.

Norway seeks maritime opportunities in Vietnam

Norway wants to comprehensively cooperate with Vietnam in the maritime industry which is developing rapidly in Southeast Asia, said a Norwegian trade representative.

Harald Neavdal, Head of the Maritime and Oil & Gas at Innovation Norway, expressed his desire at a seminar in HCM City on March 18.

Terje Lillenes, Managing Director of the Norwegian Maritime Exporters, introduced Norway’s potential for maritime development, saying the country has more than 3,000 businesses involved in maritime operations that generate over US$80 billion in revenue annually and supply 10% of the total global maritime market value.  

Norwegian businesses want to cooperate with Vietnam in shipbuilding, and maritime equipment manufacturing and design, he said.

He added Vietnam can learn from Norwegian experience in modernizing its fleet and increasing its operational capacity when the country is deepening the integration process.

Norwegian experts said equitisation of the Vietnam Maritime Corporation (Vinalines) in the 2014-2015 period will provide an excellent opportunity for Norwegian maritime businesses to increase cooperation with Vietnam.

They said seaports managed by Vinalines are operating effectively and if Vinalines is able to reap even greater profits if these seaports are better managed and exploited.

Kristine Pedersen, senior adviser to the Norwegian Ministry of Trade, Industry and Fisheries, acknowledged Vietnam’s recent impressive development achievements and said the Norwegian Government wants to promote cooperation with Vietnam in maritime, trade liberalisation, and industrial production, so as to increase bilateral trade value.

Challenges to safe vegetable production

Despite a huge demand for healthy clean produce, vegetables meeting Vietnamese Good Agricultural Practices (VietGap) standards are in short supply on the market.

Deputy Minister of Agriculture and Rural Development Nguyen Thi Xuan Thu underlined the fact at a March 18 seminar in Hanoi, to discuss measures to improve the quality of products, ensure food safety and environmental protection and raise added value in plantation.

Thu said extensive application of VietGap in plantation is a key solution for the national agricultural development strategy.

Thu noted applying GAP poses a number of difficulties in market development, organisation and management due to small-scale and scattered production. In addition, some producers and investors do not strictly follow production regulations, adversely affecting consumption.

Australian GAP expert Scott Ledger said GAP application is essential as consumers nowadays increase demand for safe and wholesome food.

He posited each country establishes its own GAP standards based on such matters as environmental sanitation, product quality, welfare in production, and workers’ health. However, it takes time to set these standards and Vietnam should learn from experience from other countries like Australia and Thailand, he suggested.

To ensure food safety, participants proposed applying VietGap, ASEANGap and GlobalGap and tightening the use of chemicals such as fertilisers and pesticides in plantation.

They also said Vietnam should identify and produce fruits and vegetables which are potential for export. Relevant agencies should support production planning, provide capital and further invest in research.

Japan's Nissin opens $75m auto facility

Japan's Nissin Manufacturing Vietnam Company Ltd on March 14 inaugurated its US$75 million factory that will manufacture automobile and motorcycle spare parts in the northwestern province of Hoa Binh.

The factory is currently designed to provide Honda and Yamaha with 23 million motorbike spare parts in the local market annually. Meanwhile, according to the Hoa Binh media, the factory plans to earn an annual revenue of $28.2 million and hire 242 local employees.

Located in the Luong Son Industrial Park, it is the first factory that Nissin Manufacturing Company Ltd has opened in Viet Nam. Ever since the company was set up in Kyoto, Japan, in 1946, it has opened factories in Mexico, China, Thailand and Indonesia.

Da Nang to host IT and telecoms fair

A fair on information technology and telecommunications will be held from August 30 to September 1 at the Da Nang Fair and Exhibition Centre in Da Nang City.

Eighty enterprises operating in different fields such as computer software and hardware, telecommunications and electronic components will participate in the fair.

Conferences on technology and a job fair will also be organised. The event is expected to be held annually to introduce the latest products by technology and telecommunications enterprises which will attract foreign and local visitors.

Truong Hai Auto unveils New Sorento

The Truong Hai Automobile JSC (Thaco)has introduced the locally made new Kia Sorento at showrooms across the nation this month.

The Sport Utility Vehicle (SUV) is the second design released by the brand, which is being manufactured at the Thaco Kia Plant in the Truong Hai-Chu Lai Auto Complex in the central Quang Nam Province.

The Truong Hai Company has set aside a target to manufacture and assemble 36,500 vehicles, with a year-on-year increase of 34 per cent, including 16,200 trucks, 1,500 buses, and 18,800 passenger cars.

Quang Binh calls for local, foreign investors

The province is looking for investment in 37 projects from local and foreign businesses this year, according to the People's Committee of Quang Binh.

Investment projects will focus on developing new urban areas in Bao Ninh and Phu Hai of Dong Hoi City, building the Quang Trach 2 coal-fired power plant, and developing facilities for the production of seafood and footwear.

MPI moves to expand PPP categories

The Ministry of Planning and Investment (MPI) is eying to expand the categories of the much-vaunted Public-Private Partnership (PPP) model of investment.

In an attempt to fix any loopholes in the legal framework and lack of efficiency in previous policies, MPI is on its way to draft a new policy for synchronising and updating investment policies.

The new decree will replace Decree No 108/2009/ND-CP and Decree No 24/2011/ND-CP on Build-Operate-Transfer (BOT) contracts and Build-Transfer (BT) and dismiss Decree No71/2010/QD-TTg on pilot investment in the PPP.

In the draft that aims to mobilise more civil capital and ease overloading in certain sectors, the ministry has rewritten regulations related to the State's participation in PPP projects. The assessment and disbursement of the state capital under PPP will strictly follow the regulations of using state capital and state assets that are allocated for development.

The draft allows more areas of work under PPP, including urban transport infrastructure, port and logistics, waterway constructions, and energy production. Also included are information and communications infrastructure, infrastructure for economic and industrial zones, rural and agriculture, and commerce. Housing, resettlement, and public services will also be added.

The ministry plans to build the new policy on par with what is followed at the international level.

In fact, the lack of a comprehensive legal framework for PPP, the Government's lack of experience and shortage of funds are major obstacles, which have prevented investors, especially foreigners, from taking part in PPP projects in Viet Nam.

Viet Nam has become a middle-income country but faced a barrier that few countries did, which is the practice of relying heavily on the State budget that diverted the nation's focus from co-operating with private partners in infrastructure projects.

While the country needs about US$15-16 billion each year for infrastructure development, public spending can only provide about 50-60 per cent of the required funds.

The country is putting in major efforts to innovate public investment in infrastructure development, by shifting from heavy reliance on the dwindling State budget to mobilisation of private resources.

However, it is clear that Viet Nam's investment environment had many limitations including bureaucracy, cumbersome administrative procedures, and instable policies.

E-payment catches on with VN consumers

Vietnamese consumers have welcomed electronic card ownership and use, according to the results of a survey conducted by Visa.

The Payments and Cards Market in Viet Nam study, releases last Friday, was carried out by TNS Vietnam for Visa.

Respondents, when asked what made them feel they were being smart with their money, credit cards came out on top at 53 per cent, while debit cards and cash scored 38 per cent and 30 per cent, respectively.

Similarly, credit and debit cards registered as equal in terms of consumers feeling as if they were doing the "right thing" with their finances, according to the results of 1,200 interviews conducted in Ha Noi, Hai Phong, Da Nang and HCM City.

Respondents felt as if they were living within their means, regardless of whether they were using credit or debit cards or cash.

"These results reflect a very positive outlook for the growth of electronic payments in this rapidly developing market.

In an economy that is heavily reliant on cash, these figures are certainly encouraging," said LorijonBacchi, Visa country manager for Viet Nam, Cambodia and Laos.

The study also uncovered some interesting attitudes towards cash, which is currently the predominant payment method in Viet Nam. Forty-two per cent of respondents felt safe carrying credit cards, but only 20 per cent felt safe carrying cash.

Around 19 per cent indicated they felt vulnerable while carrying cash, and only 4 per cent felt vulnerable carrying credit cards.

"It's noteworthy that the figures show consumers in Viet Nam acknowledging the inherent disadvantages in relying on cash, with the majority of respondents indicating they felt vulnerable carrying physical money than payment cards. This study also revealed that Vietnamese consumers are becoming much more knowledgeable about card usage and financial management," added Bacchi.

"According to another research conducted by Moody's Analytics, electronic payments added US$1.2 billion to the GDP of Viet Nam between 2008 and 2012. Given that the TNS study points to significant potential for growth within electronic payments in the country, it appears that the time is certainly right to start transitioning the economy through the ‘non-cash decree' with a view to reduce the country's reliance on cash," she said.

There are still room for growth in card ownership and usage as only 4 per cent of the population (in the four cities) own credit cards, but the rate for debit cards stands at 42 per cent.

However, lack of knowledge about the benefits of credit cards and the procedure were the main barriers to signing up, according to the study.

Central bank to cut key interest rates

Several key interest rates will be cut to help reduce lending rates and combat stagnant production and negative credit growth, according to the State Bank of Viet Nam.

Vietnamese dong deposit interest rate caps will be reduced to 6 per cent yearly from the current 7 per cent as of today, while refinancing rates will be cut to 6.5 per cent from the current 7 per cent.

Also, interest rates in US dollar deposits will be slashed from 1.25 per cent to 1 per cent yearly.

The central bank's move was previously forecast for the past week, as many commercial banks consecutively cut both their deposit and lending interest rates, not only for short-term, but also long-term deposits. Previously, banks often cut only short-term deposit rates.

After the rate cut by Ocean Bank, ACB, and Techcombank, two others, Sacombank and Eximbank, also adjusted downwards their deposit rates last week.

After a cut of 0.1-0.3 per cent on Tuesday, Sacombank's short-term deposit rates currently remain at 6.25-6.3 per cent. This was the bank's third cut in the past month.

Eximbank's highest rate on 24-month deposits is also only 8 per cent, after the cut on Wednesday. Rates on 18-month deposits inched down to 7.7 per cent, while the one-month deposit rate remains at only 5.9 per cent.

Though not making the cut in the past week, deposit rates at major State-owned commercial banks remain lower than the central bank's interest rate cap. Rates for one-year deposits at the Bank for Investment and Development of Viet Nam are only 5.8 per cent, while Vietcombank's are 5 per cent.

Despite the rate cut, industry insiders still expect that banks will remain an attractive capital mobilisation channel and depositors will turn to long-term deposits, instead of current short-term deposits.

The central bank's cut is understandable in the context of stagnant production and steady capital mobilisation, while credit growth was negative 1.66 per cent as of February 20, 2014. With this situation, many banks that face capital redundancy may rush to buy Government backed bond.

According to financial experts, banks can further decrease lending rates by 1 to 2 per cent per year.

Obstacles slow coffee replanting

The replanting of old coffee trees, especially in the Tay Nguyen (Central Highlands) region, is making slow progress because of difficulties like diseases and a shortage of quality coffee strains and funds, experts have said.

The country has 662,000ha of coffee, with plants on 86,000ha being more than 20 years old and on another 140,000ha, 15-20 years old, according to the Plant Cultivation Department.

The Tay Nguyen region, which accounts for 95 per cent of the country's total coffee area, replanted less than 13,000ha last year, according to statistics from agriculture departments in the local provinces.

Around 200,000ha need to be replanted by 2020. Dak Lak accounts for the largest area of 85,000ha, followed by Lam Dong (59,600ha).

The task has slowed up in recent years, with competent agencies blaming it on a shortage of funding and quality coffee strains, replanting techniques, and the adverse effect on the income of farmers during the replanting.

Besides, many of the replanted trees become diseased within two or three years after being plagued by parasitic worms, with their leaves turning yellow and falling off.

Speaking at a meeting in Lam Dong Province last week, Nguyen Van Hoa, deputy head of the Plant Cultivation Department, said the Government attaches great importance to the replanting.

"Provinces should pay more attention to studying areas with old coffee trees and the number of households with old coffee trees, and draw up replanting plans," he said.

They should set up offices to provide information to farmers about replanting and grafting coffee trees and replanting techniques and models, he added.

In recent years, the Ministry of Agriculture and Rural Development has introduced several models to replant old trees.

One of them is intercropping with other crops. When the latter bear fruit, farmers can cut down their old coffee plants and replant them.

Another model involves replacing 7 -10 per cent of old coffee trees in their fields every year.

The latter model is being considered by the Viet Nam National Coffee Corporation (Vinacafe), which grows coffee in several provinces, including Dak Lak, Dak Nong, Gia Lai, and Kon Tum.

Le Van Bau, head of the Tay Nguyen Agriculture and Forestry Science Institute, said to replace ageing coffee trees efficiently, several things needed to be done simultaneously like producing disease-free seedlings and using more organic fertilisers to keep out parasitic worms from the soil to prevent diseases.

About 54 per cent of surveyed households said they had difficulty in buying quality coffee seedlings, according to the Tay Nguyen Agriculture and Forestry Science Institute.

Participants at the meeting said farmers should be enabled to borrow on easy terms at interest rates of 5-6 per cent a year.

Farmers face many difficulties in replacing old coffee trees since they do not have an income until the new trees bear fruit, which takes around three years.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said efficiently replant ageing coffee trees required the Tay Nguyen Agriculture and Forestry Science Institute, Vinacafe, and coffee growing provinces to work together to provide farmers with quality coffee strains and advanced farming techniques.

Coffee-growing provinces had to co-operate with banks to enable farmers to get loans to replace old trees, he added.

Local bank assets fall in January

The total assets of banks in the country at the end of January declined by 1.04 per cent against the end of 2013 to reach VND5,696 trillion, or US$258.9 billion.

According to the State Bank of Viet Nam's data, the State-owned commercial banks reported the highest decrease in assets of 2.21 per cent. The joint stock commercial banks followed with a drop of 0.97 per cent and the group of finance companies and financial leasing companies was down by 0.41 per cent.

However, the group of joint venture and foreign banks reported a rise of 2.64 per cent in its total assets.

Despite the asset reduction, the equity and charter capital of the banking sector kept rising at rates of 1.52 per cent and 0.63 per cent to reach VND474.024 trillion, or $21.546 billion, and VND426.651 trillion, or $19.393 billion, respectively.

According to the central bank's data, for the first time the group of joint venture and foreign banks posted the strongest growth in terms of the total assets, compared to the State-owned commercial banks last year.

According to the data, at the end of December 2013, the group of joint venture and foreign banks saw an asset growth of 26.92 per cent from the end of December 2012, marking an impressive figure compared to the previous years. Meanwhile, the total assets of the group of State-owned commercial banks last year increased by 13.77 per cent and that of the joint stock commercial banks by 14.8 per cent. The group of finance companies and financial leasing companies continued to have a difficult period with a negative ratio of 57.76 per cent in terms of the total assets as against December 2012. —

Tech park sets strategy plans

The Quang Trung Software City (QTSC) this year will work to complete its technical infrastructure and service system, targeting to attract more investors, delegates told a seminar yesterday in HCM City.

Chu Tien Dung, chairman of the QTSC Development Company, said "The park has pledged to improve its management and services quality to make it more professional and transparent," he said.

In addition, it will support IT firms so they can expand their market, including trade promotions in Myanmar and other countries, he added.

The park also plans to work with localities like Lam Dong and Nam Dinh provinces to help them develop the IT industry and establish more software parks in the country, he said.

Speaking at the seminar, Le Manh Ha, deputy chairman of the HCM City People's Committee, said the software park had attracted substantial investments from leading firms in the industry and become a model that could be expanded elsewhere in the country.

Le Quoc Cuong, deputy director of the City Department of Information and Technology, said the park had spurred economic restructuring in the city by promoting the role of the knowledge-based economy with high-quality and added-value products and services.

Cuong said his department would co-operate with the park to hold more dialogues between IT firms and agencies to help businesses solve operating difficulties.

The centralised IT Zone focuses on research and development, training, production and sales of IT products and services, providing IT services to organisations, businesses, and other activities related to IT.

Under the decree, organisations and enterprises in the centralised IT Zone will receive preferential tax, investment credit and customs procedures.

"For example, the new projects in the zone will enjoy corporate tax exemption for four years and a 50 per cent deduction in payable tax over the next nine years," said Nguyen Anh Tuan of the IT Department under the Ministry of Information and Communication.

In addition, businesses will be exempt from import duties on goods used as fixed assets and for production activities.

According to Lam Nguyen Hai Long, QTSC's deputy director, 108 companies are located in the park. They are involved in software, IT services and human resource training, including global IT giants like IBM and HP.

The total revenue of IT companies in the park reached US$130 million last year, a year-on-year increase of more than 20 per cent, with software exports going up strongly last year to top $78 million, he said.

It had also created jobs for more than 17,000 workers and become the country's biggest software training centre, he said.

The seminar is part of a series of activities to mark the 13th anniversary of QTSC.

Currently, besides QTSC, there are two other centralsied IT zones in Viet Nam -Da Nang Software Park and Ha Noi's Cau Giay IT Park .

Competition grips real estate market

The real estate crisis has eliminated weak investors, increased competitiveness and brought more choice for clients.

Unlike in the past, where buyers would buy on spec, buyers can now expect completed building work, as well as the proper legal documentation. Now, land purchase and transfers are handled by experienced financial investors, especially for projects that have reached a standstill.

The 557 investment joint-stock company is to buy an apartment project in district 9, HCM City that has been at standstill for the past five years.

"Many investors have mortgaged their land-right certificates to borrow money for construction. But most of them have not been able to finish the project as their funds ran out. They can't finish the project, they can't sell it as it has not been completed, and all the while they must still pay interest," Than Qui Phai, general director of the 557 investment joint stock company told the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

The HCM City Infrastructure Investment Joint stock company (CII) will also buy shares of several partners in different real estate projects this year to help move the projects forward.

"When a project faces financial difficulties, the investors must transfer or co-operate with other companies or else eliminate themselves from the market," Le Quoc Binh, general director of the (CII) said.

"The market needs more and more buoyant companies with good, solid projects," said Le Chi Hieu, chairman of the Thu Duc House's management board.

The Sai Gon Thuong Tin Real Estate company (Sacomreal) has recently announced that they are to sell the Arista Vills residential projects in Thu Duc district. All infrastructure, such as the swimming pool, tennis court and children's playground has now been completed. Clients only need to pay 20 per cent of value of the property and can pay the rest over the next 24 months.

"In the context of the frozen real estate market, we must convince our customers. We must prepare all the necessary infrastructure and encourage them to build houses immediately after buying land," Bui Tien Thang, deputy general director of the Sacomreal said.

An entertainment area with children's play battleground, swimming pool, rowing facilities, and restaurants has been built in the BCR project, invested in by House Viet Nam Joint Stock company to lure buyers.

For Tan Phu district's Au Co Tower, the investors have started granting apartment certification for all customers despite the fact that they haven't sold all apartments.

The Tac Dat Tac Vang company has invested in projects in new Binh Duong City. A night market was built by the company to make it more convenient for local residents.

Completed projects with good local conveniences, good sales policies and granted legal certificates will attract customers, a representative of HCM City's Real Estate Association said.

Green cards on offer to New York investors

Seminars were held in HCM City and Ha Noi this week to introduce an investment project in New York for which one of the payoffs for investors is a US green card for permanent residency.

Investors are invited to buy a share of a luxury shopping, apartment, and recreation complex, which is being built at a cost of US$462 million.

They will get 200 shares for $100 million.

Construction began last September and is expected to be finished in the second quarter of 2016.

It was organised by U.S. Investment Services (USIS), which provides services for the EB-5 visa programme in Viet Nam, Extell Group, the developer of the complex, and law firm Greenberg Traurig.

Car sales surge in February

The sales of domestically assembled cars in February jumped 72 percent from the same period last year, according to the Vietnam Automobile Manufacturers Association (VAMA).

This is the 11th consecutive month when the industry’s sale volume has been higher than the corresponding period 12 months earlier, according to the association, which is comprised of the country's 18 leading car makers.

Consumers bought more than 7,300 vehicles last month, including 4,509 cars and 2,805 trucks.

With the January figures included, about 18,400 units were sold, up 39 percent year on year.

The booming demand before the Lunar New Year holiday and the attractive discounts offered by automakers has helped increase sales, industry insiders said.

It is forecast that at this momentum, total sales can reach 120,000 units for 2014, a growth of 9 percent over 2013.-

Machinery exports rocket

The export turnover of machinery, equipment and vehicle spare parts reached 529 million USD in January, up 15.61 percent against the same period last year, according to the General Department of Vietnam Customs.

The exports to Japan, the United States and Hong Kong made up 45.7 percent of the total turnover with 111.99 million USD from Japan, 98.77 million USD from the US, and 31.21 million USD from Hong Kong.

Those to mainland China increased ten times compared to last year’s period with 31.10 million USD, accounting for 5.8 percent of the export value in the first month of this year.

Other markets seeing strong growth rate included the Republic of Korea with 33.21 percent, the Netherlands 96.77 percent, German 53.26 percent, and Malaysia 97.07 percent.

Machinery, equipment and vehicle spare parts are among Vietnam’s major exports.

Processing and manufacturing industry attractive to investors

As many as 62 foreign investment projects were registered in the processing and manufacturing industry with a total of 1.178 billion USD in the first two months of this year, making up 76.5 percent of the country’s foreign direct investment in the period.

With the increases in both quantity and the size of investment, this sector has become more attractive in the eyes of foreign investors.

According to a report by the Foreign Investment Department under the Ministry of Investment and Planning, from January 1 to February 20, 122 new projects were registered across the country, with a combined investment of 830. 87 million USD, equal to 80.7 percent of the figure in the same period of 2013.

During the period, the disbursement by direct foreign investment projects was estimated at 1.12 billion USD, up 6.7 percent from the same period last year, the report said.

To draw more investment into this sector, authorities should boost the investment promotion activities and improve the investment environment, experts said, adding that the training of high-quality human resources and the establishment of nearby material areas are also needed-

Trade remedy cases against Vietnamese goods increasing

Vietnamese goods are facing an increasing number of trade remedy cases brought by export markets, according to the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade.

The issue was discussed at a workshop in Ho Chi Minh City on March 14 organised by VCA and the European Trade Policy and Investment Support Project.

VCA said while there were only 33 trade remedy cases against Vietnamese goods from 1994 to 2007, the figure rose to 38 from 2008 to 2013.

Most of the cases happened in the US, European Union, Turkey and India, and a majority of them are anti-dumping cases against steel, footwear and fibre, which are exported in large volumes.

Experts said the trend is attributable to economic hardships that make countries take trade remedies as measures to protect their domestic production.

Pham Huong Giang from the VCA suggested businesses learn more about laws on trade remedies, actively appeal, and cooperate with investigation agencies as well as other businesses in the same field.

She also urged them to diversify their markets and improve product quality to minimise risks of being sued.

Mexico eager to import Vietnamese unhusked rice

Mexico will import unhusked rice from Vietnam if it meets the quality standards and price levels required by the country.

Mariana Rodrigue Allvre, visiting Director of the Mexican Rice Council, revealed the good news to rice exporters in the Mekong Delta province of An Giang at a meeting with local officials on March 14.

Director of the provincial Department of Industry and Trade Mai Thi Anh Tuyet said An Giang is willing to meet all the requirements set by Mexican importers and will create the best conditions for them.

Regarding price, the province is about to establish a price managing team tasked with fixing the price of exports, including paddy rice. This aims to ensure fair competition and mutual benefits among the two sides’ businesses, added Tuyet.

The team takes responsibility for tackling difficulties for Mexican importers to accelerate their purchase, she said, describing the country as a gateway for An Giang to expand its exports to other South American markets in the future.

The annual average paddy rice production of An Giang has surpassed 4 million tonnes, of which over 700,000 tonnes are exported to 61 countries around the world.

RoK programme helps agriculture forming value chain

Through a knowledge sharing programme, the Republic of Korea (RoK) is actively supporting Vietnam’s agricultural industry in forming a value chain – an issue paid close attention to by the Vietnamese government, the Vietnam Investment Review reported.

In a senior policy dialogue last week on a programme started last year (KSP 2013) at the Ministry of Planning and Investment (MPI), experts from the Republic of Korea selected three agricultural products – rubber, coffee and shrimp – to support in joining the global value chain.

According to professor Yong-Taek Kim from Chonman University, KSP 2013 selected these three products as their market shares and export values have risen over the past ten years.

Another reason was that coffee is the biggest forex earner and rubber comes in third of all of Vietnam’s agricultural exports. Shrimp was chosen as it is the country’s most important aquatic export.

Under the KSP 2013, agriculture is targeted due to its central role in the economy. Up to 70 percent of the Vietnamese population lives in rural areas and 50 percent of the workforce is in the agricultural industry. At the same time, the country’s agriculture has developed to the point where it is internationally competitive.

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

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