Shares increase amid signs of rising caution

Although closing last Friday in the red, the VN-Index on the HCM City Stock Exchange still added 1.45 per cent over the previous Friday, standing at 398.23 points.

The total value of trades rose 3.5 per cent compared to the preceding week's level to VND2.9 trillion (US$138 billion) on an average volume of 44.7 million shares.

Meanwhile, on the Ha Noi Stock Exchange, the HNX-Index slid 1.26 per cent over the previous Friday's close to just 54.74 points.

Trading value for the entire week, however, rose slightly to a total of VND1.16 trillion ($55.9 million). Nearly 169.7 million shares changed hands.

Trading on the two national stock exchanges last week indicated growing caution along with short-term profit taking. Increasing volume last Friday was not a good signal due to high selling pressure.

"Technically, the resistance levels of 411 points for the VN-Index and 57 points for the HNX-Index are hampering the rise of the two indices," PetroVietnam Securities Co analyst Dao Hong Duong said.

Based on the above analysis, he predicted the market would see no big changes. In addition, if liquidity remains low this week, investors should continue their caution, favouring a high ratio of cash.

Many businesses released their business results for the year-to-date last week. Some blue-chips such as Refrigeration Electric Engineering Co (REE), Phu Nhuan Jewelry (PNJ), Da Nang Rubber Co (DRC) and steelmakers Hoa Sen (HSG) and Hoa Phat (HPG) were named in the list of well-performing companies.

"Although these companies enjoyed good financial reports, their shares did not improve much as they already had high prices," said Duong. The support for market sentiment from these large-caps was weakening, he added.

"In the coming time, State policies addressing major problems of the economy are the issue most investors await, particularly vital measures for solving bad debts next year," Duong said.

Last Friday, Ha Noi's consumer price index for October was reported to have inched up by 0.37 per cent against September, a lower rate than in September. Meanwhile, according to the General Statistics Office, the total deposits by credit institutions in Ha Noi is expected to hit VND870.4 trillion this month, edging up 1.5 per cent over last month.

Total outstanding loans in October are estimated to have reached VND613.5 trillion, up 0.9 per cent from the previous month.

A bank official told vnexpress.net that many commercial banks fell short of liquidity and broke the short-term interest rate ceiling of 12 per cent.

The State policy of reducing interest rates had some negative impacts on credit growth and economic recovery, the National Assembly's Economic Committee has said.

Burger King official comes to Vietnam

Burger King, one of the global fast food brands, officially inaugurated its first restaurant in the centre of HCM City on October 21.

Since November 2011, Burger King has opened two restaurants in Da Nang and Tan Son Nhat airports.

From now till the end of the year, Burger King and a franchise company named Canh Dieu Xanh Co, Ltd plan to open 12 restaurants in Hanoi, HCM City and Da Nang.

Japanese investor to build medical equipment factory in Dong Nai

Terumo Medical Corporation has decided to build a medical equipment manufacturing factory in Long Duc industrial park, Long Thanh district in the southern province of Dong Nai.

A representative from the Long Duc Industrial Park said that the factory has an investment capital of US$98.9 million.

Covering 10 hectares, the factory is expected to go into operation in the second quarter of 2015. Previously, Terumo invested US$19.5 million in building a medical equipment factory in Hanoi.

Tourism projects hit roadblocks

Complicated administrative procedures and slow land clearance have held back the implementation of many tourism projects in southern coastal Ba Ria-Vung Tau Province.

Local investors begged authorities to simplify their procedures and speed up the land clearance process at a meeting with the provincial Department of Planning and Investment and the Tourism Association on Wednesday

Previously, the investors had committed to re-implementing their projects next year with the plan of putting the first phase into operation in the period of 2012-14, according to the Department of Culture, Sport and Tourism.

Many expressed concern over the land lease fee they had had to pay because of the economic downturn, which significantly increased their initial investments. According to the investor of Dragon Sea project in Vuong Tau City, the land lease fee was calculated so that it would increase each year, causing investors many difficulties.

O Cap Dai Duong Company said that the Department of Natural Resources and Environment had kept licensing for the Ho Tram – O Cap Resort project on hold since March to wait for the province's land use plan in the period 2011-16 to be passed – which meant that the company must continue to wait indefinitely for a license.

The company said it had also met with difficulties in land clearance due to local residents' lack of cooperation and confusing land use right transfer procedures.

The slow implementation process affected about 100 tourism projects with a total area of 2 million square metres, making up 70 per cent of all tourism projects throughout the province.

Central coast property developers face uphill development struggle

Real estate developers in the central coastal province of Binh Dinh's are struggling to complete ongoing projects due to a lack of funding.

While the province remains an attractive destination for property developers, some real estate projects have failed to sell out their villas, especially in high-end development projects, to ensure returns on their investment.

The An Phu Thinh new urban area developed by An Phu Thinh Development Investment Construction And Tourism JSC with a total investment capital of VND2.450 trillion (US$116 million) covers an area of 153ha in Dong Da and Nhon Binh precincts of Qui Nhon City in Binh Dinh Province.

The project was divided into three stages starting in 2010 and slated to finish in 2018, but work has progressed at a sluggish pace due to increase rates for bank loans and the frozen real estate market.

Vung Chua Green Eco Village in Qui Nhon City's Gheng Rang District, a project owned by Kim Cuc Construction and Investment Co with total investment capital of VND1.458 trillion ($69 million), also facing the same difficulties.

Nguyen Thi Kim Cuc, General Director of Kim Cuc Company, said the project covered an area of 107.3ha and construction work was divided into two phases.

The first phase consists of a trade and service centre, high-rise buildings and an international school and high-end urban areas that are expected to completed by the end of next year.

Cuc said the project played an important part in Qui Nhon city's master planning scheme and she was determined to continue its development. While initial construction work was completed and villas were put on sale, the frozen property market and the lack of finance hindered the continued development of the project, said Cuc.

Nguyen Thanh Hai, deputy director of Binh Dinh Province's Planning and Investment Department, blamed the slow progress of property projects in the province to limited finance as the property market was cooling down.

Hai said the economic downturn had a great impact on consumers. As a result, property developers in the province were dealing with great challenges as sales decreased.

It was expected that in the time to come the property market would see a rebound, allowing investors to quickly reclaim their investment capital, said Hai.

Techcombank launches new money transfer service

Techcombank has officially launched a new service to transfer and receive money via mobile subscriber numbers via F@st Banking in Ha Noi, HCM City and Da Nang.

Customers with an account at Techcombank, using F@st i-bank and ATMs, will benefit from this service.

US decision a boost for VN steel exporters

Vietnamese steel pipe manufacturers and domestic steel companies are not dumping products in the US market and do not receive subsidies, according to a recent decision by the US Department of Commerce.

The news is a boost for Vietnamese steel exporters, who will not be subject to extra tariffs in the US market.

The decision was a result of an anti-dumping investigation, which focused on Vietnamese firms including SeAH Steel Vina and Hong Nguyen Machinery Manufactory Company. The investigation was urged by US businesses Allied Tube and Conduit, JMC Steel Group, Wheatland Tube and the United States Steel Corporation.

The US Department of Commerce will order the release of any bond or other security and refund any cash deposits that were collected for Vietnamese steel exports after March 29, 2012. In 2011, imports of circular welded pipes from Viet Nam were valued at an estimated $50.1 million.

Thirteen foreign-invested projects halt operations

The northern port city of Hai Phong has decided to stop operation on 13 foreign invested projects worth a combined total of US$76.58 million, according to the municipal Department of Planning and Investment.

Four of the affected developments had their licences revoked for not carrying out their work, while the remainder were merged or dissolved ahead of schedule, the department said.

Long-awaited gifts expo to roll into capital city

The much anticipated Ha Noi Gift Show 2012 will open its doors next Friday, the Ha Noi Department of Industry and Commerce announced on Thursday.

Some 230 handicraft businesses will participate in the five-day event - the largest of its kind in the city - by showcasing their products in around 550 pavilions.

On display will be handicrafts, interior decorations and furnishings, garment and textile items, gifts and souvenirs from different ethnic groups and a variety of wood products.-

Vinamilk posts 25% revenue gain in first nine months

Dairy giant Vinamilk gained VND20 trillion (US$952.4 million) in revenue in the first nine months of this year, up 25 per cent compared to figures posted at the same time last year.

The revenue increase was extremely pleasing considering the current difficult financial climate, the company said, adding that it aimed to earn approximately VND26.5 trillion ($1.26 billion) over the course of the whole year.

Vinamilk is targeting to generate $3 billion in revenue by 2017, becoming one of the top 50 dairy companies in the world. Currently, the company ranks 53rd.-

PVI appoints its exclusive agent

PVI Holdings (PVI) officially appointed Savills Viet Nam Exclusive Marketing and Leasing Agent for PVI Tower. The building is located on Tran Thai Tong Street in Ha Noi's Cau Giay District, one of the city's most prestigious development areas.

The 25-storey building is the headquarters of PVI Holdings and its member companies and includes offices, multi-function meeting rooms, an international standard conference hall with a 700-person capacity, a gym, spa, restaurant and other services.

Japanese investor to build urban area

A delegation from the Japanese Land, Infrastructure, Transport and Tourism Ministry came to southern Binh Duong Province last week to select a location for building a large-scale eco-urban area in Viet Nam.

Afterwards, members of the delegation said they highly appreciated the investment environment in Binh Duong, adding that the Japanese government strongly supports investment in the province.

During their visit, the delegation shared Japanese experience in building eco-urban regions, financial investment, technology and workforce training with the hosts.

Korean firm plans recreation complex

The people's committee of central Quang Binh Province signed a memorandum of understanding with South Korean Zeta Planning and Investment Company to invest US$4 billion into an international entertainment project in Phong Nha-Ke Bang National Park.

The entertainment project would include a casino, a hotel, an outdoor entertainment area and a system of caves in Phong Nha - Ke Bang.

The province chose an area in Son Trach and Phuc Trach communes, Bo Trach District, for the project.

Vinaconex-ITC signs service agreement

Vinaconex-ITC Company signed a hotel development service agreement (HDSA) with Swiss-Attixs International Hotels SA (SAIH) last week. The agreement provides international hotel services to investors and customers of the Cat Ba Amatina Project in northeastern Quang Ninh Province.

Under the agreement, SAIH would provide comprehensive investment, development and management support to investors in the project.

Vinaconex-ITC is a company operating in the sectors of property investment and trading and tourism services. SAIH is a group of luxury hotels and resorts that also focuses on villa management and development.

Banks set to develop e-banking services

Aware of the growing demand for e-banking services, many banks have spared no efforts to develop their own systems in an attempt to attract more customers.    

Customers currently use e-banking services to check the status of their accounts, including outstanding balances, payments, and credit card account statements.

Customers find e-banking one of the most convenient services banks offer because of the ability to conduct transactions at any time and anywhere with an internet connection, as well as its time-saving and streamlining of transaction procedures.

According to a recent survey conducted by the International Data Group (IDG), around 32 percent of customers will use Internet banking and mobile banking services in the next two years, corresponding with the continuing boom in internet-based mobile devices like smart phones, laptops, and iPads. The e-banking user base is certain to increase.

The number of younger customers who prefer to use the Internet when dealing with banks is very high, accounting for more than 50 percent of the national population.

E-banking’s popularity among such an important market is encouraging domestic banks to exploit the service’s potential and offer a variety of convenient alternatives, improving general customer service quality. Established foreign banks like HSBC, Standard Chartered, and ANZ are no longer the only institutions to embrace e-banking.

Recently, Sacombank has launched the programme “Surfing Internet Banking, Getting Gifts”, designed to reward Vietnamese customers using Internet banking with gifts.

LienVietPost Bank has also encouraged customers to use e-banking through the product package “Green Banking” while the Bank for Investment and Development of Vietnam (BIDV) has debuted its e-banking service for both individuals and businesses.

These banks are promoting value added services to create closer links between themselves and their customers.

An expert from Vietinbank’s School for Human Resource Development says domestic joint stock commercial banks are increasingly paying greater attention to developing and diversifying their e-banking services.

Simplified account opening procedures are one example of the new focus on ease of use. Customers can now open a new account by typing a short guided message on a mobile phone and sending it to a switchboard.

Banks regard making online banking services more convenient for customers as a current priority development target, believing it could give them an edge over their competition.

However, most customers still feel that e-banking services are rather complicated to use. Many are not familiar with the advanced technology it requires, creating a barrier between commercial banks and potential customers.

Experts stress simplifying banking services while ensuring the security and safety of transactions represents the best way for banks to encourage more e-banking customers.

Exports hit more than US$88 billion

As of October 15, exports had reached US$88.2 billion, a year-on-year increase of 18.5 percent, and imports hit US$88.66 billion, up 6.8 percent.    

As a result, Vietnam ran a trade deficit of US$463 million, in more than 10 months of the year, according to the General Department of Customs.

Garments topped the list of the country’s exported commodities with a total value of more than US$12 billion, a year-on-year increase of 7.4 percent, followed by telephones and components, crude oil, computers, electronic products and components.

The EU is Vietnam's biggest importer of phone handsets and components, around US$3.72 billion, increasing twofold and accounting for 43 percent of the country’s total export value. It is followed by the United Arab Emirates at US$1.04billion, Russia at US$520 million, and Hong Kong at US$383 million.

Shell to expand business in Vietnam

Dutch energy and petrochemical company Shell will focus its Vietnamese investment in the oil sector, after transferring its liquefied petroleum gas business in Vietnam to Thailand's Siam Gas Company.    

Shell aims to double its oil business in Vietnam by 2015, seeking to expand its share of the oil market in Vietnam from 8-10 percent to 13 percent. The company estimates the growth rate of domestic oil demand to be as high as 8 percent, 4-6 percent higher than the average rate in the Asian market.

The company's General Director Le Duy Thanh said that Shell is also considering to invest in petrol if it can secure the relevant license.

The firm is also re-evaluating investments in its two bitumen factories in southern Dong Nai Province's Go Dau Industrial Zone and central Nghe An Province's Cua Lo. However, while the firm wants its bitumen business to better suit the market in Vietnam, Thanh said the possibility of selling the two factories has not been raised.

Official details on the sale of Shell's gas business to Siam Gas as well as the company's strategy are expected to be announced at the beginning of next month, after all legal procedures are completed.

The company said that all of its business activities will continue as usual until the transfer is completed.

Thanh confirmed the restructuring of its investments in Vietnam is in line with the company's strategy of refocusing target markets, investing in less markets but on larger scales.

Shell returned to Vietnam in 1988 and developed a nation-wide gas distribution system after the domestic Law on Foreign Investment was issued.

US$5 million jewelry factory opens in HCM City

The Phu Nhuan Jewelry JSC (PNJ) has opened a US$4.76 million jewelry plant in Ho Chi Minh City's Go Vap district.  

The new facility is the largest of its kind in the country with a total area of 12,500sq.m and 1,000 workers. It is expected to produce 4 million products a year.

PNJ chairwoman Cao Thi Ngoc Dung said that the inauguration of the factory will help the company solidify its position as one of the top domestic jewelry makers.

In the first nine months of this year, the company earned US$233.33 million in total turnover and US$12.24 million in pre-tax profits, or 81 percent of its yearly goal.

PNJ hopes to become one of the leading jewelry makers and retailers in Asia.

Hanoi’s CPI up 0.37 percent in October

Hanoi’s consumer price index (CPI) in October rose 0.37 percent against the previous month, according to the Municipal Statistics Office.
   
The figure represents a 6.75 percent increase compared to the same period last year.

Out of the 11 baskets of commodities measured, only post and telecommunications services remain unchanged.

The price of homes, fuel and construction materials saw the highest increase of 1.17 percent against the previous month, followed by culture, entertainment and tourism and transport categories, which saw the rise by 0.82 percent, 0.78 percent and 0.63 percent, respectively.

During the month, the gold price inched up 4.52 percent, while the US dollar index was up 0.05 percent against September.

Cua Van among world’s most beautiful villages

Cua Van village in Ha Long Bay has been recognized as one of the most beautiful villages around the world by Journeyetc.com, a travel blog that provide useful guidance on and latest information about the travel market.

In a recent article featuring the world’s 16 exceptionally charming villages, Journeyetc.com said tourists will be amazed at the historical sites and the cobble stone streets of the village.

It is definitely one of the most scenic around the world, it said, advising visitors to admire the majestic lime stone hills of Ha Long Bay, take photos of the floating fishing village and colorful raft houses, and immerse themselves in the rustic lifestyle of Cua Van.

Also in the blog’s list are beautiful villages in Switzerland, New Mexico, Italy, Tunisia, Japan, France, Czech Republic, Turkey, England, Hawaii, Georgia, Canada, Indonesia, Bermuda, and Chile.

Ministry tightens control of mobile phone market

The Ministry of Information and Communications along with  related agencies is preparing regulations to tighten control and further promote the telecommunication and information technology industry, while creating a more competitive environment for the mobile phone market.

The Ministry has organized the ‘Vietnam International Mobile Conference’ with the theme ‘The future for Vietnam’s mobile sector’ in Hanoi from October 19, with many leading domestic and international mobile and telecommunication companies participating.

Competition between mobile companies is currently not as fierce as it was from 2007-2010, but it still exists. In unscheduled checks of mobile providers, the ministry found that some of them were providing new services under promotional schemes.

Pham Hong Hai, head of the Telecom Sector in the Ministry, said there will be more tightened control over mobile service providers in the country.

According to new regulations, only enterprises having more than 30 percent market share will be allowed to send documents to the government for approval before launch of any new service.  Enterprises with less than 30 percent share can introduce their own services which cannot be lower priced than those in the market.

The Ministry has sworn not to allow any enterprise from deregulating prices in the mobile phone market.

Vietnamese investments abroad reach US$15 billion

Foreign Investment Department, under the Ministry of Planning and Investment, has announced that total investments from Vietnam in foreign countries in 736 projects have exceeded US$15 billion over the years, and in the first nine months of this year were US$1.3 million.

Vietnamese ambassador to Laos Ta Minh Chau presents certificate of merits for Nguyen Duc Moc, Chairman of Vietnam Entrepreneurs’ Association in Laos (photo VNA)

Specifically, in the first nine months of 2012, the Ministry of Planning and Investment had issued licenses for foreign investment for 66 projects at a total registered investment capital of US$1.217 billion.
 
Major investment projects in the agriculture and forestry sector numbered 14 projects; whole sale, retail sale and repair works were 11 projects; industrial processing, manufacturing were eight projects; mining were eight projects; the other remaining projects were in the field of accommodation and catering services, education and training.

Among the foreign countries and territories, Laos has the most number of Vietnamese invested projects, totaling nearly $3.8 billion; followed by Cambodia with nearly $2.6 billion; US by $306 million; Singapore by $87 million. Vietnam is by far the largest foreign investor in Laos.

Vietnamese entrepreneurs in Laos have been involved in preserving and developing the special friendship between the two countries.

Vietnamese businesses have practically engaged in reducing poverty in their host country by financing the construction of schools, health clinics, roads and resettlement houses in localities where they have investments.

A majority of the 193 Vietnamese firms currently operating in Laos are focused in fields such as energy, services and infrastructure.

They have been encouraged to step up investments in response to the Vietnam-Laos Friendship and Solidarity Year in 2012.

Luxury cars hit with higher tariffs

The General Department of Customs has imposed new tariff rates on new and secondhand luxury automobiles imported on or after October 18. Under the new tax directive, the taxes levied on new and used cars increase by US$8,000 to $22,000 per unit.
 
 A customer examines an imported Mercedes at an auto showroom in Ha Noi. The taxes levied on new and used automobiles have increased by US$8,000 to $22,000 per unit.
The General Department of Customs said the issuance of the new tax directive would also help authorised agencies manage tax calculations and avoid trade fraud and tax evasion by importers.

The highest tax increase of $22,000 would be imposed on a new Lexus GX460, lifting the total tax to $65,000 per unit.

New Toyota Camry and Toyota Venza models would be subject to tariffs of $21,000 and $25,000, respectively, an increase of $3,000 per unit.

A used Honda Acura ZDX Advance would be levied a tariff of $60,000 per unit, an increase of $15,200, while an Audi Q7 would be subject to a tax of $39,000 per unit, an increase of $8,000.

By late September, the total number of automobiles imported so far this year had reached 19,800 units, worth $448 million, a decline of 56 per cent in volume and 47.2 per cent in value compared with the same period last year.

Vehicles of fewer than nine seats accounted for 9,880 units of this figure and a value of $104 million, a drop of 66 per cent in volume and 72 per cent from last year.

Imports of completely-built automobiles into Vietnam in September alone stood at 1,980 units, with a value of $62 million.

The temporary importing of used cars and motorbikes destined for a third country has been banned until further notice.

Deputy Minister of Industry and Trade Tran Tuan Anh said the ministry was working with other ministries to produce a circular on the regulations covering temporary imports.

Businesses involved in the process or in trading goods such as wine, beer, tobacco and cigars and others which carry a consumption tax must have operated in the export field for at least two years.

In addition, businesses involved in temporary importing must deposit at least VND5 billion ($239,000) as a bond against environment problems and the possibility that goods get damaged and could not be exported.

Temporary imports are permitted to stay in Vietnam for 45 days instead of the previous 180 days. However, customs may allow one extension of time for up to 15 days, after which the goods are liable to be confiscated.

The Ministry of Industry and Trade has issued Decision No 5737/QD-BCT dated September 28, detailing the list of goods suspended from temporary imports.

Weak banks "should be allowed to go bankrupt"
 
Incompetent banks should be left to go bankrupt in order to enhance the banking system’s efficiency and ensure the best interests of depositors, one agency has said.

The National Assembly’s Economics Committee expressed the view at a recent meeting to announce a report on the global and domestic macroeconomic situation in the first half of this year.

To make matters worse, the figures for bad debts in the banking sector vary.

A banking inspection and supervision agency under the State Bank of Vietnam (SBV) said on July 12 that bad debts at financial institutions nationwide totalled over VND202 trillion (USD9.67 billion) as of March 31 this year, accounting for 8.6% of total outstanding loans.

The figure is higher than the SBV’s recent announcement based on bank reports on their debts, totalling over VND117 trillion (USD5.6 million) as of May 31, 2012, representing 4.47% of total outstanding loans.

The report also quoted the results of inspection of financial reports at six listed banks as of June 30. Total bad debts at these banks reached around VND18.942 trillion (USD907.61 million), accounting for 2.51% of their total outstanding loans.

Navibank recorded the highest rate of bad debts with 3.86%; followed by Vietcombank with 3.47%, MB with 1.82%, Eximbank with 1.73% and ACB with 1.53%.

The committee said that differences in bank bad debts not only triggered concerns among the public and investors over the quality and the transparency of the bad debt system, but indicated incompetence among the SBV’s agencies in managing bad debts.

The lack of clarity also impeded defining the size of risk funds for bad debts.

In order to step up the restructuring of the banking system, depositors should be protected but financial institutions could also be bankrupted if they prove to weak and badly managed.

“Firstly, financial institutions should regularly enhance their risk funds in a bid to prevent bigger losses and reduce bad debts to sustainable levels. Secondly, plans should be made quickly and completely  to deal with weak banks,” the committee said.

This is not the first time when a possibility that financial intuitions could go bankrupt was mentioned. Late last year, Vu Viet Ngoan, Chairman of the NA’s Finance and Budget Committee said that there should be a change in thinking about banks being allowed to go bankrupt.

In June 2011, Victoria Kwakwa, Director of the World Bank in Vietnam warned that if weak financial institutions are not encouraged to withdraw appropriately via controllable mergers and acquisitions, it would continue to weaken the banking system and add to costs of restructuring.

She emphasised the necessity of carefully making plans for bankruptcy and restructuring of enterprises, including commercial banks.

In late September 2012, Nguyen Dai Lai, a financial and banking expert, said that if weak banks are not allowed to go bankrupt it would foster possible wrongdoings.

Metro wholesale center opens in Hanoi

Metro Cash & Carry on Wednesday put into operation a new wholesale store in Hanoi City’s Ha Dong District, which is the third in Hanoi and the 19th of its chain in Vietnam.

Located in Melinh Plaza Ha Dong in the new administrative area of Ha Cau Ward, the 5,100-square-meter Metro wholesale store provides products for small and medium retailers, hotels, restaurants and businesses in Hanoi’s southwest area.

Like other Metro stores in Vietnam, this new store sells over 25,000 food and non-food products, mainly Vietnam-made ones.

Together with the opening of Metro store, the shopping and entertainment center Melinh Plaza Ha Dong was also put into service on Wednesday amid current difficulties of the retail space segment in Hanoi.

Having an investment of over VND500 billion, Melinh Plaza Ha Dong covering over 1.7 hectares consists of five floors and one basement with total floor space of over 54,000 square meters.

This shopping center features fashion products, electronic products, home appliances and furniture of several local and foreign brands.

Melinh Plaza Ha Dong comes into operation when the retail space segment in Hanoi is in difficulties. According to Savills Vietnam’s report, while the total retail supply was around 718,100 square meters in the third quarter, up 10% from the previous quarter, the average renting capacity dropped by five percentage points, with the capacity of shopping centers falling by up to nine percentage points.

In addition, the average rent also declines by 6% from the second quarter.

A recent report of CBRE Vietnam on Hanoi’s retail space, the vacancy rate has risen in areas inside and outside the city center as tenants have closed their stalls and consumers are still tightening their spending.

Royal Caribean introduces luxury cruise ship

The luxury cruise ship Voyager of the Seas of Royal Caribbean on Wednesday docked at Phu My Port in Ba Ria-Vung Tau Province, and dozens of travel firms in HCMC were invited to visit the ship.

According to PSR Royal Caribbean Cruises Vietnam, the 15-deck Voyager of the Seas was built in 1999 with a total cost of US$65 million. The ship is 311 meters long, 48 meters wide and 63 meters high.

Including several entertainment and sport facilities, Voyager of the Seas can accommodate up to 3,138 passengers and 1,181 crewmembers on board. It takes the ship one day to sail from Phu My Port to Bangkok, Thailand.

According to Nguyen Minh Hieu, Assistant Manager of PSR Royal Caribbean Cruises Vietnam, the cruise operator wants to introduce the cruise ship to travel firms so that they can sell the cruise vacation to Vietnamese tourists.

With this ship, tourists can travel to Singapore, Hong Kong, China, Japan and many other destinations. However, as international seaports in Vietnam have yet to perform entry and exit procedures for tourists to travel abroad, tourists have to fly to Singapore, Hong Kong or China in order to begin the journey.

“We started to sell the cruise tour of Legend of the Seas, another ship of Royal Caribbean, to Vietnam tourists last year with around 1,000 customers, with very positive feedbacks. Therefore, we continue to introduce Voyager of the Seas in Vietnam,” he said.

According to Hieu, Voyager of the Seas offers several different tours, but Vietnamese tourists often buy tours lasting four to five days. With around VND20 million, inclusive of airfare from Vietnam to Singapore, tourists can begin a journey with Voyager of the Seas.

Oriental drug makers rush to develop material zones

As people are switching to oriental medicine, many businesses in the industry have invested heavily in drug material zones.

Nguyen Van Minh, vice chairman of the Vietnam Farm and Agribusiness Association, told the Daily that oriental medicine made up just a small fraction of the pharmaceutical products market. However, as more and more consumers prefer oriental drugs, this market is forecast to grow strongly in the future.

Foreseeing this growth trend, many producers have increased investment to develop this sector.

In particular, Minh said a member business of the association had got the nod from the governments of Khanh Hoa and Binh Thuan to develop drug material zones in the two provinces. The material zone in Binh Thuan is 300 hectares, while the other in Khanh Hoa covers 2,000 hectares.

The combined investment capital of the two projects is some VND3 trillion. “The projects have entered the first phase. When completed, they will become the nation’s biggest drug material zone,” said Minh.

Vu Thi Thuan, chairwoman of Traphaco, said her company had built a factory at the material zone in Sapa, Lao Cai Province. In addition, the firm is expanding its material zone to better serve drug production.

Statistics show that Traphaco and OPC are currently the two drug firms that earn the highest profits from oriental medicine among the listed companies.

Thuan informed Traphaco had gained VND1 trillion in revenue last year, up 22% against 2010. Oriental drugs brought in 70% of the revenue for the company.

“Consumers are switching to oriental medicine. This is a positive signal for the growth of the oriental drug sector in the coming time,” she said.

According to the Drug Administration of Vietnam under the Ministry of Health, oriental medicine only accounts for 0.5-1.5% of the total value of the pharmaceutical industry.

There are currently some 80 oriental drug makers nationwide, including five GMP-WHO certified producers. Meanwhile, there are over 400 unregistered production facilities.

It’s a tough market for industry players as they have similar products and prices.

Social networking cuts marketing costs

In the current tough market conditions, businesses should use social networking as an efficient low-cost marketing channel, heard a global marketing seminar held in HCMC on Thursday.

Nguyen Khanh Hoa, managing director of AZ Marketing Solutions Co. Ltd., said social network sites in Vietnam now have a growth rate of 60% and attract millions of users every year.

Facebook is currently the most popular social network site in Vietnam with 8.5 million users, followed by Zing Me with eight million, Go.vn with three million, Google+ with two million and Twitter with 1.5 million.

“This means Internet users in Vietnam really like to join the social network and have formed a large community. This offers favorable conditions for enterprises to interact with this social network community,” said Hoa.

He added advertising on social network sites is not as costly as the traditional channels like print media and television.

Kazuhiro Iwai, senior vice president of ISB Vietnam, said social networks are considered an efficient low-cost marketing channel, allowing companies to approach their targeted customers and promptly measure the effectiveness of their campaigns.

In the environment of social networking, businesses can implement practical and closed strategies. At present, the number of users accessing social network sites via cell phones is large, allowing enterprises to interact with customers at anytime, said Iwai.

Vietnam Airlines to fly direct to Indonesia

Vietnam Airlines will launch a direct service between HCMC and Indonesian capital Jakarta on December 2, offering four weekly flights.

The nation’s flag carrier is offering preferential pricing policy to a number of special travel agents in Indonesia.

At the moment, to fly direct to Indonesia, passengers can only choose flights of the low-cost carrier AirAsia.

They have to transit in Singapore on Vietnam Airlines’ services for a lengthy journey which only takes two hours on direct flights.

Vietnam Airlines earlier informed in Vietnam Heritage magazine that the direct flights would open this month. However, sources from local tourism companies said the launch was now set for every Tuesday, Wednesday, Friday and Sunday from December 2.

Tran Xuan Hung, director of Viking Travel & Media said his partners in Indonesia had purchased air tickets for the new route to take visitors to Vietnam.

AirAsia also operates four flights a week between HCMC and Indonesia but the flights are often full, making it difficult for local clients to buy tickets.

The local tourism industry will enjoy huge opportunities to develop the Indonesian market thanks to Vietnam Airlines’ direct air connection with the nation, Hung said.

“This is really good information as we now are focusing on tapping the Indonesian market, with the stable arrivals of Indonesian tourists to Vietnam weekly,” Hung noted.

Indonesian travelers tend to choose four-to-five-day tours to HCMC and My Tho or to Hanoi and then call at Halong Bay, Hung said. He noticed many local tour operators have yet to enter the potential visitor-generating market at present.

E-book market posts slow growth

Local companies in the e-book industry, a new field of business in Vietnam, said the market’s growth is much lower than expected.

Tuong Tran Mai Van, sales director of First News, said there have been about 5,000 people purchasing e-books at her firm this year, a surge of some 10% year-on-year.

“First News expects the local e-book market to achieve growth of 50% or more as prices of the products now are quite affordable, just equivalent to around 40% of the price of normal books,” Van said.

Pham Thi Tuyet Nga, manager of Phuong Nam E-book Store of Phuong Nam Culture Joint Stock Corporation (PNC), reported few customers calling for e-book items with around ten people each weekend.

However, local firms said they will continue to invest in the e-book area as well as enhancing cooperation with other related agencies to wait for better business opportunities in the next two to three years.

Nguyen Vu Minh Thien, online sales director of PNC, said his company will collaborate with Hoa Sen and Medicine and Pharmacy universities and others to sell e-books specializing in economics, medicine and pharmacy to students.

“Students will not need to purchase the entire book but separate parts of the e-book version and prices of these e-books will be much cheaper than paperbacks,” Thien said.

Besides, PNC will sell e-books relating to foreign languages such as English textbooks of TOEFL or TOEIC, Thien added.

Meanwhile, Van said First News will focus on joining forces with telecom service providers and mobile equipment suppliers to jointly tap the e-book market.

First News is working with two foreign partners, namely Thailand’s IT Works and Singapore’s Epsilon, to open two e-book stores targeting overseas Vietnamese and foreign customers.

Sembcorp eyes up residential options

Following the lead of other Singaporean developers, Sembcorp Development is branching into Vietnam’s residential property business after succeeding in industrial property.

Sembcorp Development, a wholly-owned business unit of Sembcorp Industries, plans call for a $165 million Gateway residential project in southern Binh Duong province, about 40 kilometres from Ho Chi Minh City.

Gateway is part of a larger mixed-use development within the 500-hectare Vietnam Singapore Industrial Park in Binh Duong’s Thuan An district, which has been operational since 1996. The planned project sits on a 4.1-hectare plot, which will be developed into a mid-market residential project of about 163,807 square metres gross floor area, comprising 1,380 apartment units and amenities. Phase one will comprise two blocks of 250 apartment units.

“The project will be built in tandem with the local demand, and is estimated to be developed over eight years or more,” Sembcorp Development said in an announcement.

Sembcorp is a leading Asian developer with more than 20 years’ experience, undertaking master planning, land preparation and infrastructure development, and transforming raw land into large scale urban developments. The company owns, develops, markets and manages urban developments comprising industrial parks (IP) as well as businesses, commercial and residential space in Vietnam, China and Indonesia.

In Vietnam, Sembcorp Development is holding an effective 47.4 per cent stake in Vietnam Singapore Industrial Park Joint Venture Company (VSIP), the developer of IP projects across Vietnam including VSIP Binh Duong, VSIP Bac Ninh, VSIP Haiphong and VSIP Quang Ngai. The projects are said to be among the most successful IPs in Vietnam.

To prepare for its move into the residential market, the company founded Sembcorp Development Vietnam as a wholly-owned subsidiary. On October 11, this entity signed a joint venture agreement with VSIP, under which Sembcorp Development Vietnam and VSIP will incorporate a joint venture company in Vietnam with 40 per cent and 60 per cent shareholding respectively to develop the Gateway residential project.

Gateway is part of the developer’s efforts to develop projects that complement the functions of VSIP, delivering an integrated urban work and living environment that enhances the attractiveness of VSIP Binh Duong.

This is the first residential project of Sembcorp Development in Vietnam. Other Singaporean property developers with large investments in Vietnam include CapitaLand, Keppel Land, GuocoLand and Mapeletree.

Solar panel plant will help energise Hue region

The central province of Thua Thien-Hue has endorsed plans in principle for locally-invested WorldTech Transfer Investment to build a solar panel plant there.

Under the company’s proposal, it would team with United Arab Emirates’s Global Sphere to build this plant in the province’s Phong Dien Industrial Park. The project will be tested and certified by global standard laboratories in accordance with stringent requirements in the solar energy industry.

Total proposed capital is $310 million for a plant covering 40 hectares for phase one, according to a source of Thua Thien-Hue Provincial Industrial Parks Management Authority.

Greater details including the total capacity of the proposed plant and related infrastructure would be released later, the source said. Currently, the plans are collecting reviews and comments from relevant authorities.

With a 120-kilometre coastline, pure climate and a famous landscape, Thua Thien-Hue province is both home of the ancient capital of Vietnam and viewed as promising area for local and foreign investors.. As of September 2012, the province boasted 65 projects with the total registered capital of $1.9 billion.

There are two licenced solar panel projects in Vietnam - US-based First Solar’s $1.2 billion solar panel factory in Ho Chi Minh City and domestic invested IC Energy Industry Company’s $390 million project in central Quang Nam province.

However, both of them have stalled their investment plans due to the supply-demand imbalance in the world market.