Imperial Garden apartments set for first round sale

On July 25, 2015 at Hanoi Daewoo Hotel the HBI Joint Stock Company will officially open for sale luxury apartments under its Imperia Garden project.

Located on the two façades of Nguyen Huy Tuong and Nguyen Tuan street in Hanoi’s Thanh Xuan district, Imperia Garden covers a 4.2ha area, including more than 10,000sq.m for greenery, landscaping, and facilities.

Imperia Garden is the first Imperia brand in Hanoi to be created by renowned design firms such as NKB Archi (France), CPG Consultants (Singapore), PTW Architects (Australia) and ACI.

Each of the apartments here is a small home steeped in natural light and filled with fresh air of the surrounding ecological system. The superiority of Imperia Garden in the premium segment is also reflected by the integrated and harmonised combination of natural elements with comprehensive facilities, meeting all the needs of various residents to enjoy a modern life.

Commenting on the factors that explain why Imperia Garden has enjoyed great expectations in the market in recent years, the developer representative said, “The value that Imperia Garden brings to customers and future residents is not only an ordinary apartment but also living values and a high-end life. Imperia Garden is highly evaluated thanks to not only the ideal settling-in place but also a safe investment opportunity with guaranteed profit".

Imperia Garden apartments have flexible areas ranging from 56 to 174sq.m, with 2 - 4 bedrooms at only VND2.3 billion ($107,000) for a luxury apartment in the heart of the capital.

Residents of the project will easily travel to the surrounding areas and neighborhoods because Imperia Garden is located among the key transport axes such as metro lines and the elevated highway of Hanoi. This factor brings formidable advantages and Imperia Garden pleases the customers when being compared with other projects in the same segment.

Imperia Garden is guaranteed in terms of progress by the Vietnam Prosperity Bank – VP Bank, developed by M.I.K Corporation and distributed by Real Estate Project Supermarket System STDA. In addition to ensuring the quality of life, HBI brings peace of mind and convenience for homebuyers with flexible payment modes divided into eight installments.

The customers only need to pay 25 per cent of the apartment value in the first installment; and in the next installment the customers pay from 5 – 10 per cent each time according to the construction progress of the project. The last 5 per cent will be paid when the developer hands over the ownership certificate of the apartment.

With the above payment policy, Imperia Garden is one of the pioneer projects in Hanoi that the developer is committed to handing over the ownership certificate of the apartment and by then, the customers will pay the last installment.

In case customers seek financial loans, VP Bank will support a loan of up to entirety of the apartment value (if the collateral is another real estate) and 80 per cent of the apartment value (if the collateral is acquired from the loan), with the interest rate of 6.9 per cent and the grace period during the first two years.

This offer from VP Bank will enable many customers, especially young families and employees with the initial accumulation of VND500 million ($23,250) to own a modern apartment with all amenities and guarantee perfect quality of life at the capital.

Commenced from January 2015, the project is expected to be completed and officially handed over to customers in mid-2017.

One-day visa eligible enough for foreign housing ownership in Vietnam

Foreigners and overseas Vietnamese are eligible for housing ownership in Vietnam immediately upon their arrival in the country, if they meet immigration requirements, an official from the Ministry of Construction said on July 17.

Vietnam officially approved foreign ownership of house and apartment starting July 1, but many homebuyers of this kind still have questions regarding the requirements, conditions and procedures on house purchases.

The Ho Chi Minh City Real Estate Association (HoREA) thus held a conference on July 17 to solicit feedback on the new housing rule from foreign individuals and organizations.

Yoshida Akio, head of the Vietnamese representative office of Japan’s Kitakei Co. Ltd., said he and many other Japanese who are working, or going to work, in Vietnam all want to own a house in the country, and even to settle down there.

But they are still in the dark about such issues as what kind of visa they need to have to be eligible for the housing ownership, and whether the allowed stay of the visa matters.

Yoshida said he was wondering if he was still able to buy an apartment if he was to stay in Vietnam for only one day.

Nguyen Trong Ninh, deputy head of the department for housing and realty market management under the construction ministry, said foreigners only need a valid visa for immigration to be allowed to buy houses and apartments in Vietnam.

“For businesses, investment funds or branches of foreign banks, they must be operating in Vietnam and have such required documents as investment license, and legal office and branch establishment licenses,” Ninh said, citing the Law on housing.

In the meantime, foreign individuals only need to have entry visas and a written guarantee that they do not have diplomatic immunity, the official added.

“Even visa with only one day of allowed stay is eligible for house and apartment purchases,” he asserted.

Under the Law on housing, the foreign ownership of house and apartment has a maximum term of 50 years since obtaining the ownership certificate.

When the 50-year term expires, the owner can apply for an extension by the same term.

If an apartment is transferred, the new owner is only allowed to own the property for the remaining term.

Truong Anh Tu, director of sales and marketing with Sacomreal, a realty firm, said the company has received many questions regarding the valid term of ownership from foreign customers.

“If the foreign owner wants to sell his apartment to others, will the new owner be allowed to own it for another 50 years, or the remaining term?” he said.

“How many term expansions can the owners apply for, and are there any fees for that?”

Ninh said the new owner is only allowed to own the property for the remaining term, and an apartment can only have its term expanded for one time.

HoREA chairman Le Hoang Chau said such regulation is not really reasonable.

“The new owner should also be allowed to own the property for another 50 years, and to later extend the ownership term,” he said.

VASEP: Shrimp exports will bounce back

Vietnam shrimp exports in the six months leading up to July tumbled 29% year-on-year to US$1.20 billion in gross revenue on the back of very weak demand for farmed shrimp in the US and other key global markets.

According to the latest statistics from the Vietnam Association of Seafood Exporters and Producers (VASEP), the lower than expected figures led to an overall 16% drop to US$2.99 billion in aquatic exports for the six-month period.

US importers are said to have large inventories of frozen shrimp and are holding off on the ‘big buy’ for the year-end holidays, which usually comes in June or July report several executives in the global shrimp market.

Marc Nussbaum, president of International Marketing Specialists, a US importer says the picture is ‘100% demand driven’ and that many US importers still have plenty of shrimp, but can’t wait much longer.

Nussbaum told Undercurrent News that most US importers will have to start buying soon to have adequate inventories of frozen shrimp for the Thanksgiving and Christmas holiday season later this year.

World production of farmed shrimp is up, and wholesale prices are down, but US retailers have not passed the lower prices on to consumers, so demand in the US is very weak reports Shrimp News International.

“I think the problem is really lack of demand,” said Jim Gulkin, managing director of Siam Canadian Group a frozen seafood supplier based out of Bangkok, Thailand.

Gulkin said retailers are not trying to move volume.  They just want to increase (profit) margin and don’t mind if they sell less.

Raw material prices in Thailand, Vietnam, India and Indonesia are currently close to cost or even below cost and that will definitely impact the quantities the farmers stock for the remainder of the year. Look for tight supplies from September onwards, Gulkin said.

Deputy General Director of Vietnam’s General Fisheries Department Nguyen Huy Dien in turn echoed the perspective that the weak demand is attributable to a global shrimp oversupply and resultant lower price.

Consequently, VASEP has revised its annual forecast for shrimp exports downwards by 17% to US$3.2 billion in gross revenue in 2015.

Secretary General of VASEP Truong Dinh Hoe remains optimistic and reports there are still positive signs for the shrimp market throughout the remainder of the year.

The shrimp output of major competitors such as India, Indonesia and Thailand failed to reach their set targets for this past June and as a consequence their inventories are low, Hoe underscored.

Vietnam’s inventories are high so if the global demand such as in the US picks up for the holidays later this year the nation’s shrimp farmers will be well positioned to capitalize and increase sales.

Hoe added that with some good fortune shrimp prices may even bounce back by 5-10%.

In addition, recently signed free trade agreements between Vietnam and promising seafood markets like the Republic of Korea (RoK) and the Eurasian Economic Union are expected to prop up sales.

To be prepared to tap these opportunities, businesses should take extra precautions to strictly comply with regulations on food safety and technical standards of foreign markets, he stressed.

SBV interest rate management benefits businesses

The State Bank of Vietnam (SBV) has flexibly managed the interest rate policy to suit the market and currency exchange demand and support businesses, stated SBV Deputy Governor Nguyen Thi Hong.

Currently, interest rates are at an ideal level, the same level as in 2005-2006, she noted, adding that both deposit and lending interest rates have dropped compared to those at the end of 2014.

Specifically, deposit interest rates fell 0.2%-0.5% per year, mostly for over six-month terms, while lending interest rates declined by 0.2%-0.3% per year, standing at about 6%-9% annually for short-term loans and 9-11 percent for middle- and long-term ones.

Recently, inter-bank interest rates have decreased sharply to about 3%-3.5% per month, which is relatively low and stable, she said.

Through the rest of the year, the SBV will continue flexibly introducing and withdrawing money from the market for banks to boost credit growth and better meet market demand, said Hong.

The bank will also keep interest rate at a stable level while keeping a close eye on the operation of commercial banks for timely monetary adjustments, ensuring management targets set earlier this year.

Hong re-affirmed that the SBV will keep fluctuations of the VND/USD exchange rate at a maximum of 2% in 2015, as set in its policy for the year, despite the fact that the rate has already been adjusted by 1 percent twice this year.

This is part of efforts to guide the market and help import and export enterprises actively define their production plan in line with developments of the domestic and global currency market.

Hong said that although the devaluation of the VND may benefit exporters, it would negatively affect manufacturers of export products made from imported materials, since the cost of raw materials will be higher.

She noted that the textile and garment sector had to import 82.5% of materials in 2013, the wood sector - 70%, and footwear - 60%.

Although the devaluation might benefit farmers in exporting agro-forestry and fishery products, it would also raise the price of fertilizers, pesticide and agricultural equipment and machinery. As such, exchange rate adjustments to improve price competitiveness would only be slightly effective in supporting exports, she held.

At the same time, total imports of Vietnam account for as much as 80% of the country’s GDP, evidence of the country’s deep dependence on machinery and equipment imports. Thus, the devaluation of VND would pose additional difficulties for import enterprises.

Statistics show that about 90% of Vietnam ’s import products are machines, equipment and materials and only 10% are consumer products.

After careful analysis and assessment, the SBV will stick to the policy of maintaining the fluctuation of the VND/USD exchange rate in 2015 at 2% as set earlier this year, Hong concluded.

State budget collection to reach 20% of GDP

State budget collection for the next five years is expected to make up 20%-21% of the GDP, Deputy Minister of Finance Do Hoang Anh Tuan said at a meeting of the Ministry’s Party Committee on July 17.

Tax and fee collections are expected to range between 19%-20% of the GDP and domestic collection (excluding collections from crude oil) is set to reach 80% of the state budget revenue by 2020, according to Tuan.

The sector also aims to keep the budgetary overspending at 4% of GDP and the public debt below 65% of GDP by 2020.

In order to realise the targets, the sector needs to pursue a tight and effective fiscal policy, improve the management of tax collections to reduce the impact of decreasing budget revenues from natural and mineral resources, Tuan said.

He also underlined the importance of the private sector in increasing investment resources for the society.

Meanwhile, Minister Dinh Tien Dung highlighted the opportunities and challenges faced by the sector in international integration from 2015-2020.

The sector needs to build synchronous and transparent financial institutions in line with the development of the market economy and international integration.

Administrative procedure reform in the financial sector is a priority of the period to ensure a favourable business climate and enhance the competitiveness of the economy, Dung said.

He also urged science and technology application in the sector to improve effectiveness in tax collections, customs and stocks as well as strengthening the role of monitoring and supervision of public finances to ensure security of the public budget and prevent corruption and waste.

Reports at the meeting showed that state budget collections from 2011-2015 nearly doubled those from the previous five-year period.

Embankment raises rice production levels

Farmers in Ben Tre Province's My Trung Village built an embankment to regulate water in their waterlogged rice fields.

The village's rice fields cover 200ha. More than two thirds are on low-lying land and would often become submerged, causing farmers a lot of difficulties.

So 27 of the village's households started building an embankment for more than 9ha of crops early last year. It worked well over the past year, raising the village's average productivity from 4 tonnes per hectare to 6 or 6.5 tonnes per hectare.

Vo Dong Khoa, a farmer with 3,000sq.m of rice, said that before he wasted a lot of time and petrol pumping water from his fields.

"If the water level rose in the harvest period, there was no dry place to air the rice, so I had to put them in water and the quality decreased," said Khoa. And he couldn't use the wet rice straw to feed his cows because it went rotten. But since the embankment was built, his problems have evaporated.

Nguyen Thanh Tri, another farmer in the village, said that thanks to the embankment and the use of more technology, his fields' productivity increased.

With the embankment, Tri and other households in the embankment areas signed a contract with the Ben Tre Hi-tech Application Centre to produce seed rice.

Producing seed rice doubled the farmers' incomes compared with planting rice, Tri said.

Vo Van Dung, a representative from the My Thanh Commune Farmers' Association, said that since the embankment was built, the local farmers have followed the crop schedule more closely. They also chose the same rice seeds to make the cultivation easier.

The association would work with the households on a plan to expand the embankment, he said.

Crop restructuring increases productivity,value

The development of high-quality crop seeds and seedlings as part of HCM City's agricultural restructuring programme has significantly increased productivity and production value in recent years, city officials have said.

In recent years, different crop and animal varieties were provided to farmers in HCM City's outlying areas as well as to farmers in other cities and provinces, according to Duong Hoa Xo, deputy director of the city's Department of Agriculture and Rural Development.

However, he said the agricultural seed sector had not kept pace with those in other regional countries. Limitations exist in management as well as in technology and equipment.

In addition, the domestic seed industry is faced with competition from imported seeds.

HCM City is home to about 35 tissue culture rooms, providing numerous flower and ornamental varieties a year, meeting the increased demand in the city and other localities.

As many as 47 enterprises are active in producing and trading crop seeds and seedlings in the city. Most of them are private companies.

Last year, they produced 15,400 tonnes of seeds, up 6.5 per cent compared to 2013, serving about one million hectares of cultivation, with rice varieties accounting for 56.1 per cent, maize 33.6 per cent, and vegetables 5 per cent. Besides supplying the domestic market, about 451.4 tonnes of crop seeds were exported last year. Thanks to new varieties as well as suitable production technology, vegetable productivity has increased significantly in recent years, from 19.07 tonnes/ha/crop on average in 2006 to 23.8 tonnes/ha/crop last year.

Average production value on each hectare of land rose to VND325 million (US$14,921) /ha/year last year, two times higher than the figure in 2010.

Orchids are one of the key plants under the city's agricultural restructuring programme, which plans to shift from traditional to urban agriculture, Xo said, director of the HCM City Bio-technology Centre.

In recent years, the HCM City Bio-technology Centre and the Centre for Animal Genetics and Seeds Evaluation and Management have preserved genetic sources of more than 334 orchid varieties, including wild orchids, Mokara, Cattleya, Vanda, and Oncidiumm.

The city has also identified ornamental fish as a spearhead industry under its restructuring plan for the agricultural sector until 2020.

Ornamental fish have a higher value produced on the same area as other plants and are suitable to urban agriculture.

The city produced 90 million fish last year, with 11.2 million heads exported.

Under the city's ornamental fish development plan until 2020, the city will strive to produce around 200 million heads a year and earn about US$30-$50 million from exports.

Nguyen Tuan of the Research Institute for Aquaculture No 2 said the ornamental fish industry had provided significant earnings to many countries, with total ornamental fish trade worldwide reaching more than $400 million a year.

The city's ornamental fish exports remained modest, less than $10 million each year, compared to $50-$70 million in Singapore.

The city has advantages in cultivation conditions, but management and trading experience remain limited.

Mekong Delta farmers do well

The Cuu Long (Mekong) Delta is harvesting a bumper summer-autumn rice crop though the weather has been unfavourable, according to the Ministry of Agriculture and Rural Development.

More than 9 million tonnes are expected to be harvested, 143,000 tonnes higher than a year ago because of increased yields.

The country's rice bowl planted the grain on more than 1.6 million hectares, fractionally down from last year's summer-autumn crop.

But farmers are likely to be hit by unstable demand and low prices. Speaking at a seminar in Kien Giang Province last week, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said despite some achievements rice production in the delta faces many problems like unstable rice demand that need to be resolved.

The region should focus on improving rice quality and increase export value, he said.

In the summer-autumn crop, average-quality rice varieties are grown on 25 per cent of the area, according to statistics from local agriculture departments though the ministry's Plant Cultivation Department has warned it should not exceed 10 per cent.

Next the delta plans to grow the autumn-winter rice crop on 827,000ha, 12,256ha more than a year earlier, mostly high-quality varieties.

In Vinh Long Province, for instance, high-quality varieties will make up 80 per cent of the output.

The autumn-winter crop is sown during the rainy season and harvested in mostly dry weather, meaning its quality is superior to that of the summer-autumn rice. It is also easier to sell because the output is not large. But the crop faces risks like the annual flooding in the Mekong River.

Mai Van Nhin, deputy chairman of the Kien Giang Province People's Committee, said the delta provinces should schedule their sowing properly to avoid the floods.

Upstream provinces should carefully calculate the release of flood water to avoid losses in downstream provinces, he said. All provinces should regularly consolidate their dykes and irrigation works to ensure safety for the autumn-winter rice.

Doanh said the Plant Protection Department should improve its forecast of rice diseases.

The National Agriculture Extension Centre needed to propagate farming techniques on the media, he said.

HCM City has project to develop support industry

HCM City is seeking more solutions to complete a project on developing the support industry, which plays a key role in promoting the sustainable development of major industries, according to a report on the Government website chinhphu.vn.

The municipal Department of Industry and Trade has recently completed Phase 1 of its project, which focuses on mechanics, electronics-communications, rubber-plastics, food processing, and textiles and garments.

FDI enterprises, especially large corporations such as Intel and Samsung, have a great demand for spare parts supplied by domestic businesses, according to Nguyen Phuong Dong, deputy director of the Industry and Trade Department.

"The Department of Industry and Trade is being proactive by connecting local businesses operating in the support industry with FDI enterprises, especially large ones," Dong said.

Recently, HCM City People's Committee issued Decision No1026 on a trial construction of high-rise factory models for lease at the Sai Gon Hi-Tech Park, Tan Thuan-Linh Trung Export Processing Zone and Hiep Phuoc Industrial Park during the 2015-18 period.

The three- to eight-storey factory will have a total area of 10,000 sq.m – 40,000 sq.m. It will be divided into small areas covering 100 sq.m, 200 sq.m, 500 sq.m, 1,000 sq.m and 3,000 sq.m.

The factory will create favourable conditions for international investors, especially for local SMEs and Japanese businesses in the support industry that want to make long-term investments in Viet Nam.

Nguyen Bach Hoang Phung, deputy head of the HCM City Export Processing and Industrial Zone Authority (HEPZA), said that HEPZA had urged investors to quickly implement the high-rise factory models with preferential policies.

The first high-rise factory is expected to start operation in August next year.

HEPZA also plans to create specialised areas for support industry businesses, covering a total of 200 ha at Hiep Phuoc Industrial Park and Le Minh Xuan 3 Industrial Park.

Dong said that SMEs were the key factor in the development of the support industry. Ninety-five per cent of businesses in HCM City are SMEs. However, SMEs lacked capital due to difficulties in accessing loans, and did not have enough qualified staff.

As a result, they have weak competitiveness because their products are low quality and have high costs.

Japanese businesses face difficulties in acquiring materials and parts in Viet Nam, according to the Japan External Trade Organisation (JETRO).

The purchase ratio for materials and components of Japanese manufacturers in Viet Nam is 33.2 per cent, compared to 66.2 per cent in China, 54.8 per cent in Thailand, 43.1 per cent in Indonesia and 40.7 per cent in Malaysia.

Hirotaka Yasuzumi, executive director of JETRO in HCM City, said the opportunities were huge for Vietnamese businesses to participate in supplying products for Japanese enterprises and FDI companies.

He urged the Government and the business community to develop new policies to help the support industry.

Hiroshi Tahara, a financial specialist at the Japan Finance Corporation, said the Japanese Government in the past had issued credit guarantee policies to help SMEs in Japan, which had faced the same challenges as Vietnamese businesses.

Tahara said that Viet Nam should conduct a survey of local SMEs and provide support soon.

Banks expect robust growth in 2015

The business performance of commercial banks is expected to improve in the third quarter, helping the banks achieve much better results in 2015 as against last year. In a recent survey of business sentiment among commercial banks by the State Bank of Viet Nam, the banks expressed optimism about economic recovery, customers' ability to absorb loans and banks' improving business in the third quarter. They expect pre-tax profit growth in the banking sector this year to average 8.9 per cent.

The sector could post annual credit growth of 18.2 per cent this year, higher than an earlier estimate of nearly 17 per cent, while bad debts may account for 2.49 per cent of total outstanding loans, below the Government target of 3 per cent, the survey found.

Good liquidity would be a key factor helping credit growth accelerate in the last two quarters, the banks said. They expect deposits to grow 6.8 per cent in Q3 and 15.8 per cent for the whole year.

Lending rates in Q3 are forecast to fall by roughly 0.13 percentage points, which will bring down the year's rates by 0.44 percentage points from the 2014 level.

Retail property sales climb in two main cities, but not rents

The retail property segment in the two major cities of Ha Noi and HCM City saw recovery in occupancy but not in rent, Savills Viet Nam said.

In its quarterly report on the two cities, the consulting firm said in Ha Noi, the occupancy was 84 per cent, stable quarter-on-quarter (q-o-q) and up 7.2 percentage points year-on-year (y-o-y). Meanwhile, the average rent was VND841,000 (US$38.7) per sq.m per month, decreasing 0.9 per cent q-o-q and 10 per cent y-o-y.

Department store occupancy increased by one percentage point q-o-q, while shopping centre occupancy remained stable q-o-q. In the first half of 2015, Ha Noi's retail sales were approximately VND210 trillion ($9.63 billion), increasing 10.3 per cent y-o-y.

Without inflation, the real growth rate was 9.6 per cent y-o-y. With free-trade agreement participation and the expected signing of the Trans-Pacific Partnership in 2015, the competition between domestic and foreign retailers would continue, Savills Viet Nam said.

In the second quarter, Ha Noi's retail supply was approximately 950,000sq.m, increasing by 3 per cent y-o-y.

In the second half of this year, approximately 353,000sq.m from 16 projects will enter the market. Two notable projects are Vincom Nguyen Chi Thanh and Aeon Mall Long Bien, which will provide more than 165,000sq.m. Meanwhile, the retail property segment in HCM City showed positive signs in the year's second quarter, with average occupancy rising by seven percentage points to reach 92 per cent, Savills Viet Nam said.

The average rent decreased by one per cent q-o-q to touch VND1.3 million ($59) per square metre per month. Shopping malls and department stores' occupancy rates have been stable since the previous quarter at 92 per cent and 97 per cent, respectively.

Retail podium occupancy was at 82 per cent, down two percentage points q-o-q, but this decrease had no impact on the overall occupancy.

The average rent for department stores increased by one per cent to reach more than VND1.3 million, while it fell by two per cent to touch VND1.33 million in shopping malls.

The rent for department stores increased by three per cent year-on-year, but decreased by two per cent in shopping centres and retail podiums.

In the first half of the year, HCM City retail sales increased by 11.8 per cent y-o-y to touch VND256 trillion ($11.75 billion), significantly higher than the 7.7 per cent rate a year earlier and higher than the national figure of 10.2 per cent.

The growing population and middle class in HCM City are driving the growth in retail demand.

In Q2, two new shopping malls and one new supermarket entered the market, increasing the total retail stock by five per cent q-o-q to reach 940,000sq.m.

The retail market is expected to expand faster in secondary and suburban areas than in the central business district due to upgrades in infrastructure and new residential projects.

According to the second report in the series, Asia Pacific Consumer Survey - How We Like to Shop Online, released last week by CBRE, online shopping has overtaken bricks-and-mortar retail as the most popular method of purchase in certain Asian markets.

Consumers in the 18-24 age group — known as ‘Generation Z' — are also set to play an influential role in the regional retail market in the coming years. As a result of factors such as these, landlords and retailers would need to be proactive in order to remain competitive, the survey reported.

"For emerging markets, given the lack of quality retail space — particularly in lower-tier cities — advances in technology and logistics networks mean that online retail is often the most efficient way for retailers to reach their customers," Jonathan Hsu, head of Occupier Markets Research, CBRE Asia Pacific, said.

The ability to compare products without having to physically visit individual stores is another key factor for the region's consumers when shopping online. This trend is more prominent in emerging markets such as Viet Nam, China and India, where quality shopping centres or shops are often located far from each other.

Hoa Phat Group profits due to rising steel sales

The Hoa Phat Group has posted consol-idated revenue of more than VND13.6 trillion (more than US$623.4 million) for the first half of this year.

It earned a consolidated profit of more than VND1.9 trillion (more than $87.09 million) during the same period.

It has thus achieved 61 per cent and 83 per cent of its revenue and profit targets, respectively, for the year.

Sales of the group's two major products, construction steel and steel pipes, contributed the most to its H1 growth.

According to the group's report, it sold 675,000 tonnes of construction steel, seeing a 52 per cent year-on-year increase. It controlled 22.1 per cent of the steel market in the first half of the year.

Meanwhile, 196,000 tonnes of steel pipes were sold in the first six months of 2015, which is a 44 per cent year-on-year increase. This helped the group consolidate its top position in the country, with a market share of nearly 22 per cent.

In the second quarter of 2015, it earned quarterly revenue of more than VND7.7 trillion (nearly $353 million) and more than VND1.25 trillion ($57.45 million) in profit, an increase of 15 per cent and 30 per cent, respectively, over the same period last year.

The group's real estate business also showed positive signs. Some 20 per cent and 42 per cent, respectively, of the Pho Noi A and Hoa Mac Industrial Zones in Hung Yen and Ha Nam Provinces have been rented by local and international firms. In addition, most of the apartments in its Mandarin Garden residential project in Ha Noi have been sold.

Hoa Phat is currently constructing basements in an office and apartment complex in Ha Noi. The project, involving an investment of VND1.5 trillion (nearly $69 million), consists of four buildings with more than 600 offices and apartments which are expected to go on sale in 2016.

Speaking during a meeting with investors on Thursday, Hoa Phat Group Chairman Tran Dinh Long said the business results were achieved due to the group's strong financial condition and low total debt-to-asset ratio of 28 per cent.

Asked about the progress of some major projects the firm is investing in, Long said VND3.8 trillion ($174.2 million) would be invested in the third phase in the Hoa Phat integrated steel complex in Hai Duong Province, which would have a capacity of 750,000 tonnes per year. The construction was expected to be completed in September 2015, and the blast furnaces would become operational by the end of this year, he said.

The firm has imported most of its raw materials because the Thach Khe iron ore mine in Ha Tinh Province has not become operational.

"The proportion of imports of ore depends on the Thach Khe iron ore mine. If the mine begins operations, the rate of ore imports will be low; if not, the import ratio will increase to 80 per cent," Long said.

The group has also implemented a plan to develop its cattle feed business. It has invested in a food processing factory in Pho Noi A Industrial Zone with a capacity of 300,000 tonnes per year. The factory is expected to begin operations in the first quarter of 2016.

Investors and securities firms are struggling with two taxes the Government imposes on their bonus shares, Dau tu chung khoan (Securities Investment) newspaper reported earlier this week.

Investors are the ones being directly affected by the tax policies. Under the Law on Individual Incomes, shareholders have to pay two taxes for their bonus shares. One of the two is equal to 5 per cent of the share value when investors receive bonus shares as dividends, and the other is 0.1 per cent of the total trading value when those shares are sold.

These taxes reduce investors' benefits or profits, and they could lead to unfairness between securities firms, as some of them only collect taxes from their clients' trading activities.

At the moment, shareholders have two problems. First, they still have to pay taxes, even when they suffer losses from trading shares. Second, receiving bonus shares for dividends will cost shareholders more in taxes than receiving cash for dividends if they exchange bonus shares for cash.

Investors said they should be charged one tax instead of two when they received bonus shares for dividends, and the Government should not impose taxes on them when they sell bonus shares on the market.

They said removing a tax would help reduce the gap between securities investment and other sectors in which investors pay less or no taxes for their activity, including the banking sector.

On the other hand, securities firms have to deal with more challenging problems – they have to deal with both clients and Government agencies.

According to the General Department of Taxation, a company doesn't have to collect taxes from bonus shares when they pay them to shareholders as dividends. But the company must collect two taxes from investors when they sell their bonus shares.

The problem for securities companies arises when investors don't accept that they have to pay two taxes on a single transaction.

Investors also question their brokers, accusing them of too strictly following the rules while other brokerage firms skirt them, making their investors pay only one of the taxes.

Thus, those firms that follow the rules are facing complaints from their clients, who feel they're getting fewer benefits.

Nhu Dinh Hoa, director general of Bao Viet Securities Joint Stock Company (BVSC), said the securities market could decrease, making such tax policies discouraging for investors and securities firms.

He said listed companies had already paid individual income taxes when they paid dividends to shareholders. This meant it was unreasonable to collect more taxes from shareholders' bonus shares.

If companies paid bonus shares from their capital surplus, which is created when the company issues shares at higher than face value, investors wouldn't have to pay taxes for those bonus shares because the company only returned the initial investment to shareholders, he said.

If the securities firms could not distinguish bonus shares from initial shares, they would be unable to collect taxes from trading activities between investors, Hoa said. In addition, investors could avoid paying taxes by changing their accounts from one brokerage firm to another after receiving bonus shares.

Banks must explain debit card charges

On July 17 the State Bank of Vietnam (SBV) issued an official document requesting debit card issuers urgently review their charges and fees and ensure they comply with Circular No. 35/2012/TT-NHNN.

Charges and fees must be publicly available in accordance with the law and banks must carefully explain these charges and fees when signing contracts with customers. Any changes to these charges and fees must be notified to customers in a timely manner.

The interest rate on overdrafts must also be listed publicly. The SBV document requests that banks receive feedback from customers and respond to customer questions about charges and fees as well as interest rates.

Customers have recently been forced to pay a number of basic service charges, such as card issuance fees, annual fees, withdrawal fees, transfer fees, and balance inquiry fees, and fees for lost or stolen cards.

Vietnamese economy in the first half of 2015 creates stable growth momentum

The Vietnamese economy witnessed positive changes in the first half of the year in which GDP increased nearly 6.3% against the same period last year. It’s also the highest rate since 2011.

It’s predicted that Vietnam will face more challenges during the remaining months but the outcome might be a boost for businesses and foreign investors.

Vietnam’s economic achievements over the past six months were attributed to the increase in three areas, of which industry and construction posted an impressive growth rate of 9%, service 5%, and agriculture, forestry, and seafood nearly 2.4%.

The index of industrial production posted a strong rise at 9.6%, much higher than the last two years. The development of businesses recorded active signs with 45,400 newly-registered enterprises, contributing more than 60% to GDP.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said although businesses are still facing many difficulties, their confidence has gradually improved. Many of them are planning to expand production and trading with performance being relatively positive.

"I think such confidence will continue to be fostered by the government’s effort to speed up the renovation and open its market as part of free trade agreements that Vietnam has signed or will do in the future," Loc added.

By the end of June, the average consumer price index (CPI) increased 0.86% against the same period last year. The rise is said to be rather low compared to the recent decade, helping the government control inflation, reform the way to set price for public products and services in line with market mechanism, and reduce input costs for companies.

In spite of positive performances in the early 2015, the Vietnam economy is being posed to numerous challenges in the following months, requiring the government and enterprises to endeavour to complete the targets set for this year.

Particularly the agricultural sector is predicted to see more difficulties, said Tran Dinh Thien, director of the Vietnam Institute of Economics.

He added that biggest and objective risk is natural calamity which will affect agriculture and social stability. Lack of water will cause difficulties for not only agriculture, but also industry and service because electricity and water are essential to daily activities. This year the El Nino pattern and abnormal heat wave will have direct impacts on agricultural production.

Vietnam has set a GDP growth of 6.2% and above. The Ministry of Planning and Investment has put forth three scenarios for Vietnam’s economic growth under which if agriculture continues to face difficulty due to drought, crude oil exploitation remains the same in the first half of this year, Vietnam will find it hard to fulfill the set growth target of 6.2%.

Second if the agricultural sector keeps having difficulties, Vietnam will outline policies to step up the mineral industry, export market. It means Vietnam will likely achieve the 6.2% target. The third scenario is that Vietnam will obtain a growth higher than the target set by the National Assembly.

But to that end, it requires more efforts and flexibility of ministries and relevant agencies, and especially the coordination of fiscal and monetary policies and measures to prevent illegal imports and counterfeit goods.

Director General of the General Statistics Office Nguyen Bich Lam commented on the second scenario which, he said,“is more feasible above all because the Ministry of Industry and Trade has recently signed a trade deal with the Republic of Korea under which Vietnam can export more seafood to this market. Second we hope that by the end of this year, the European market will import our farm produce including seafood to prepare for their New Year holiday."

"From now to the year-end, the government will facilitate the best possible conditions for agriculture and work out solutions to intensify exports and minimize imports. By this way, the Vietnamese economic panorama will become more satisfactory," Lam noted.

Despite advantages in the short-term, Vietnam’s economic growth is facing risks in the long run. To restore the growth rate for this year and coming  years, the government has issued flexible monetary and financial policies, improved business environment, restructure state-owned enterprises, the financial and banking system, and remove barriers for the private economic sector.

Car sales increase 58 percent over last year

Sales of automobiles rose in most segments during the first half of the year in comparison with the same period last year.

In its latest report, the Vietnam Automobile Manufacturer' Association said that some 103,500 vehicles were sold in the Vietnamese market during the period, an increase of 58 percent period-on-period. Sales included 45 percent from small cars, 75 percent in commercial vehicles and 136 percent from special-purpose vehicles.

In June, the sale of passenger cars reached the highest volume in every segment with 9,796 units, a growth rate of 9.2 percent compared with the previous month. Meanwhile, commercial car sales saw an increase of 0.5 percent to 7,834 units, while special-purpose autos lost 8.1 percent to 1,083 units.

As the purchasing power of passenger cars depended upon VAMA members, that of commercial and special-purpose vehicles increased for car importers.

The month also saw an unbalanced growth rate between locally-assembled complete knock down (CKD) and imported complete built units (CBU).

It was further reported that domestic sales reached 14,448 CKD units and 4,238 CBUs in June, increasing by 3 percent and 9 percent, respectively.

According to Toyota Motor Vietnam (TMV), a member of the VAMA, the company's total sales volume reached 4,289 units in June, increasing by 25 percent compared to the previous month. This is also the highest sales volume of TMV in 2015.

Of note, the all-new Vios continued to lead in sales with 1,106 vehicles sold in the passenger car segment, 42 percent higher than the same period last year.

For CBU models distributed by TMV, in the first 6 months, the total sales volume increased by 72 percent, compared with same period last year with 2,782 units. Figures showed that Hilux leads in CBU models with 744 sold units.

Nearly 480 trillion VND for developing power grid

The Electricity of Vietnam (EVN) has spent nearly 480 trillion VND (22.3 billion USD) to develop power plants and grids from 2011-2015 in compliance with the national power development plan.

In the past five years, some 34 power generators with a total capacity of 9,852 megawatts were put into operation and work started on the construction of ten power projects nationwide. Particularly, the Son La Hydro-Power Plant designed with a 2,400-megawatt capacity was completed three years earlier than scheduled, bringing huge economic benefits to the country.

Other projects such as the Vinh Tan 2 thermal power plant and Duyen Hai 1 thermal power plant have made great contributions to ensuring power supply to the southern region.

As many as 865 transformer stations and transmission lines were connected to the national grid during the period. The EVN also completed the 500-kilovolt Pleiku-My Phuoc-Cau Bong high voltage line and the 220-kilovolt Dak Nong- Phuoc Long-Binh Long line to increase the transmitted power between the north and the south.

However, the EVN said that power overloads are occurring in some localities due to a number of delayed projects spurred by insufficient capital, slow land clearance, natural calamities and design changes.

In a bid to meet investment demands, the group targets to mobilise over 600 trillion VND (27.9 billion USD) from 2016-2020 through official development assistance loans and issuing domestic and international bonds.

The group will scrutinise provincial and municipal power development plans nationwide to adjust investments in line with practical needs; ask relevant ministries and organisations to facilitate administrative procedures, land clearance and power planning; and build advanced economic technical standards for the grid to improve efficiency and reduce losses during transmission.

In the next five years, the group will complete 11 power plants with a combined capacity of 5,819 megawatts while ensuring progress of key power projects and making preparations for the country’s first nuclear power plant in Ninh Thuan province.

PM okays Ca Mau seaport investment plan

Prime Minister Nguyen Tan Dung has approved the Ministry of Planning and Investment's 2.5-billion-USD investment plan to build Hon Khoai seaport in the southern province of Ca Mau.

PM Dung on July 17 ordered the ministry and the provincial People's Committee to complete the administration procedures required for Public Private Partnership projects.

The seaport would be built on Hon Khoai island in Ngoc Hien district, 14.6km from Ca Mau and 42km from the province's Nam Can Economic Zone. The island has an area of 4.2 square kilometre and is located northwest of the cape of Ca Mau, the southernmost point of Vietnam.

Once completed, the seaport will have the capacity to accommodate the largest vessels used for commercial activities around the world.

In June, the Ca Mau People's Committee submitted a proposal on the seaport to the Government and recommended Cong Ly Consutruction, Commerce and Tourism JSC as the project's investor.

The company recommended the construction of a system of sea dykes, large harbours for vessels of up to 250,000DWT, transfer harbours for smaller vessels from 5,000 to 100,000DWT, facilities for pilot boats, patrol boats, and bridges and roads to connect the port to the mainland.

According to the proposal, Cong Ly JSC will finance about 15 percent of the seaport project and foreign investors will chip in 85 percent.

The provincial People's Committee said the seaport would play an important role in the development of its Nam Can Economic Zone and enhance national security.

In December 2013, the Vietnam Maritime Administration proposed that the Government build and develop deep sea ports that meet international standards for large-tonnage ships.

The Government estimated that cargo transported through the country's seaports would reach 400 to 410 million tonnes this year, 640 to 680 million tonnes by 2020 and 2,100 million tonnes by 2030.

The country has 39 seaports installed along its coastline, which stretches more than 3,260km.

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