Services lift HCM City growth

The service industry accounts for nearly 60 per cent of HCM City's economy now, exceeding the target of 57 per cent - and four percentage points higher than in 2010.

Investment in the sector has risen by 73.2 per cent since 2010.

According to the municipal People's Committee, from 2011- 15 the sector's average revenue grew by 11.2 per cent a year and the aim is to increase the proportion of high value-added services.

Finance, banking, insurance and trade, transportation and logistics account for more than 34 per cent of the city's economic output.

Science and technology consultancy is the fastest growing service, achieving annual growth of nearly 17 per cent in recent years compared with 5.4 per cent in 2006 –10.

The sector accounts for 9.5 per cent of total services turnover thanks to intensive efforts by the city to establish research – production – market links and create programs to bolster domestic research, design, manufacture and transfer capability to replace import of technology and products.

The service that is growing at the second fastest clip is information and communications technology (16.5 per cent). It accounts for 5.8 per cent of services sales.

The city has firmly established its leading position and brand in software programming and outsourcing in the country.

In third place is healthcare, which is growing at a yearly rate of 14.8 per cent, and makes up 5.7 per cent of the services sector.

Transport – ports – logistics ranks fourth in growth (around 13 per cent) but is the third biggest service segment — accounting for 15.9 per cent of revenues — benefiting greatly from large investment in infrastructure and many new key highways.

Banks cut non-performing loans

The banking industry will meet the State Bank of Viet Nam's target to reduce non-performing loans (NPLs) to 3 per cent or less by the end of this month.

This was confirmed by chairman of the Vietnam Asset Management Company (VAMC) Nguyen Quoc Hung.

In June this year, the central bank's Governor, Nguyen Van Binh, required credit institutions to reduce the NPL ratio from 3.72 per cent of total outstanding loans reported by the end of June to 3 per cent by September 30 this year.

Hung estimated that the NPL rate of the entire banking system was currently slightly more than 3 per cent, adding that VAMC purchased VND77.273 trillion (US$3.43 billion) in NPLs from credit institutions in the first eight months of this year.

Leaders of credit institutions said they were also hurrying to meet the deadline.

Besides selling NPLs to VAMC, credit institutions had actively handled NPLs by funding risk provisions, Hung added, using Agribank as an example.

"Being a bank with a high number of NPLs, sometimes reaching more than 6 per cent, Agribank has made great efforts to bring the rate down to 2.8 per cent, " Hung said.

Further, according to Hung, this year was also considered a better year for VAMC in collecting NPLs. The company's NPL collection ratio this year is roughly 7-8 per cent compared with 4 per cent in 2013 and 2014.

He said VAMC had collected nearly VND8 trillion ($355.5 million) of NPLs as of August 31 this year, nearly doubling the amount from last year.

However, Hung admitted that there was no ultimate resolution for the handling of bad debt, as it had been difficult to find investors to purchase the debt.

According to Thoi bao ngan hang (Banking Times), VAMC has so far bought VND182 trillion ($8.08 billion) worth of NPLs, but sold only VND9 trillion ($400 million).

Besides the needs of the debt trading market, Hung said, a streamlined legal framework for bad debt trading procedures and the settlement of secured assets should also be necessary to help VAMC retrieve and handle bad debts.

Currently, VAMC purchases bad debts using its own funds or issues special bonds to credit institutions. The bonds can be used to obtain refinancing from the central bank. The company will, in theory, sell the debts to investors, both foreign and local. If the debts are not sold by the time the bonds mature, the banks would have to swap them with the bad debts.

Besides, according to economist Nguyen Tri Hieu, another barrier to investors taking part in the debt trading market is that Vietnam does not have independent assessment agencies.

Investors will not participate in a market unless they know the assets' true value, the potential to resell such assets, and can clearly understand bad debt trading procedures in Viet Nam, according to Hieu.

Hong Kong firm invests in high-end property project

The Vietnamese property firm SonKim Land and Hongkong Land, a listed leading property investment, management and development group, have announced a joint-venture luxury condominium project named "The Nassim" in HCM City's District 2.

Located in the heart of Thao Dien, the project includes 238 residential units ranging from one – to four-bedroom condominiums and penthouses, offering a premier location and exclusivity unparalleled in the market. It is expected to open for sales in the last quarter of 2015.

Robert Wong, executive director of Hongkong Land, said that Viet Nam's real estate market had been growing, especially in the high-end segment of the condominium market.

Social housing projects get bank guarantees

Hoang Quan Real Estate Corporation recently signed an agreement with BIDV to provide bank guarantees for buyers of its three social housing projects.

These projects were HQC Plaza in HCM City, HQC Hoc Mon in HCM City and HQC Nha Trang in the central Khanh Hoa Province, the first social housing projects in the country to obtain bank guarantees for future property purchases.

The revised Law on Real Estate Business, which went into effect at the start of July, made bank guarantees compulsory for selling or renting the houses that will be built in the future.

Recently, the central bank listed the names of 38 commercial banks that qualified for providing guarantees.

Vietnamese-made power equipment shipped to the US

Doosan Heavy Industries Vietnam (Doosan Vina) recently sent 2,100 tonnes of components for two 300MW heat recovery steam generators to the Salem Harbour Combined-Cycle Gas Turbine Power Plant in the US state of Massachusetts.

“This is our first ever products to go to the US and it marks a new milestone for us. Our products are now present and hard at work in 27 countries around the world and that figure will be going up soon”, said Nguyen Tan Hong, HRSG Production Department leader.

The Salem Harbour Combined-Cycle Gas Turbine Power Plant project was signed in December 2013 to supply two heat recovery steam generators that will increase the efficiency of the plant by up to 30 per cent.  

The total weight of the two units is 4,200 tonnes and took 179 skilled workers in Doosan Vina’s HRSG shop five months to manufacture.

The first shipment included ten modules weighing 2,100 tonnes that were shipped from Doosan Vina’s specialised port in central Vietnam’s Quang Ngai province. The biggest module in the shipment was 30 metres long, 4.4 metres wide and 6 metres high.

The second and final shipment for the project is scheduled this month.

The natural gas-fired Salem Harbour Power Station, located 30km from Boston, Massachusetts will have an installed capacity of 674MW. Commissioning activities are expected in 2016 and steam production is scheduled for early 2017.

It is projected to supply electricity to 600,000 homes, filling the power gap in the region and offsetting approximately 450,000 tonnes of CO2 emissions per year.      

Doosan Vina, part of Korean industrial conglomerate Doosan Group, is one of Vietnam’s biggest foreign-invested heavy-industry factories. It was launched in mid-May, 2009 in Quang Ngai province’s Dung Quat Economic Zone, with an investment capital of $300 million.

Taiwanese shoe maker building social housing

The Sun Jade Vietnam Footwear Co., under Taiwan’s Hongfu Group, kicked off construction of a social housing project for workers at the Le Mon Industrial Park (IP) in northern Thanh Hoa province’s Thanh Hoa city on September 10.

With investment of VND1.5 trillion ($66.7 million) the project covers an area of 66,900 sq m and includes eight nine-storey buildings with a total of more than 1,200 apartments.

This is the first social housing project for workers developed by a foreign employer in the province, according to Chairman of the Thanh Hoa Provincial People’s Committee Nguyen Dinh Xung.

More than 22,000 workers are employed at Le Mon IP, over half of which have demand for housing as they are renting cramped houses in residential areas with poor hygiene and security, Mr. Xung was quoted as saying at the breaking ground ceremony.

The project is expected to be completed by 2019 and will house 5,000 people.

Sun Jade Vietnam has a total of eleven garment factories with total investment of VND1.28 trillion ($57.2 million) in Thanh Hoa. It is also the largest foreign employer in the province, with 11,000 workers.

AAA launches Ford preferred insurance program

AAA Insurance Joint Stock Co. and Ford Vietnam last week inked an agreement on a Ford preferred insurance program to provide insurance products for motor vehicle owners.

This is the first time the two businesses have cooperated at the head-office level to offer a convenient service at a reasonable price for customers of Ford Vietnam nationwide.

Within the framework of the cooperation program, AAA provides Ford Vietnam’s clients with a comprehensive insurance package including insurance for auto bodies, civil liability and people.

Ford Vietnam customers can acquire the insurance package at a preferential price, replace genuine parts, use rescue service available around the clock and get access to the hotline 18001528 #2.

Stephen Beatty, head of Insurance Australia Group (IAG) in Vietnam, a main investor of AAA, said the firm plans to collaborate with auto manufacturers and banks to expand its distribution network. IAG Vietnam and AAA will offer insurance products with good services and prices to serve customers better.

AAA Insurance Joint Stock Co. was established in 2005 and has become a member of IAG since 2013. IAG is a leading non-life insurer in Australia and New Zealand. It has over 30 years of experience in the motor vehicle insurance sector and has established a presence in Australia, New Zealand, Malaysia, Thailand and India, among others. IAG’s annual revenue amounts to 10 billion Australian dollars.

AAA is among the first insurance enterprises to send assessors to accident scenes upon customers’ notice. According to a customer care report of AAA, over 95% of clients have given positive feedback since the model was introduced.

AAA has developed a direct payment portal with garages to fasten vehicle repair cost settlements. At present, AAA has launched the service at many garages across Vietnam, which has provided its customers and partners with peace of mind.

In the coming time, AAA plans to develop business through its extensive branch network and establish partnerships with banks, vehicle manufacturers and dealers to reach out to customers.

Feedback collected for e-commerce development plan by 2020

A workshop took place in Ho Chi Minh City on September 18 to collect feedback from provincial authorities and businesses in southern Vietnam on the national master plan for e-commerce development orientation between 2016 and 2020.

The event was organised by the Vietnam E-Commerce and Information Technology Agency (VECITA) under the Ministry of Industry and Trade (MoIT) and the European Trade Policy and Investment Support Project (EU-MUTRAP).

In his remarks, VECITA head Tran Huu Linh said the e-commerce sector has come to play a vital role in Vietnam’s socio-economic activities after five-year implementation of the master plan for e-commerce development (2011-2015), contributing to the rapid and sustainable growth of not only enterprises but also the whole country.

The MoIT hereby decided to build another master plan for the next five years to keep the sector moving in the right direction.

Speaking at the workshop, business representatives said they have not only used various mobile commerce platforms but also developed their own mobile applications to introduce products and promotional deals to customers in recent years.

However, Vietnam has not adopted any regulations to manage these activities, ensuring a healthy business environment for all enterprises.

A joint effort between the ministry and provincial authorities is needed to effectively implement both national and provincial e-commerce development programmes, especially in terms of capable human resource provision, Ha Ngoc Son, an official of the Ho Chi Minh City Department of Industry and Trade, suggested.

It is estimated that by 2020, about 30 percent of Vietnam’s population will be online shoppers with an average purchase of 350 USD per person, of which Business-to-Customer (B2C) online sales will grow by 20 percent annually to hit 10 billion USD, or 5 percent of total retail sales.-VNA

Bo Y border gate to overhaul procedure

The Bo Y international border gate in the Central Highlands province of Kon Tum will shake up its customs procedure for optimised performance following a recent instruction issued by Deputy Prime Minister Nguyen Xuan Phuc.

Accordingly, the Bo Y border gate authorities will work closely with their counterpart at the Phu Cua border gate in Lao province of Atapeu to facilitate the flow of people and goods, especially at weekends, in line with the 2007 Hanoi agreement.

Meanwhile, the Kon Tum authorities are tasked with planning and upgrading the border crossing’s infrastructure facilities, including wards for import-export goods and vehicles.

International fashion fair opens in HCM City

The fashion industry’s latest achievements as well as brand new collections are being introduced at the Vietnam International Fashion Fair (VIFF) 2015, which opened in Ho Chi Minh City on September 18.

The fair, jointly held by the Vietnam Textile and Apparel Association (VITAS) and Vietnam National Textile and Garment Group (Vinatex), is part of the activities in the national trade promotion programme.

Featuring nearly 200 booths, the event draws the participation of famous textile businesses such as Viet Tien, Duc Giang, Nha Be, May 10, Hoa Tho, Viet Thang and Dong Xuan together, with a line-up of designers and small and medium garment providers.

Speaking at the opening ceremony, Deputy Minister of Industry and Trade Ho Thi Kim Thoa highlighted garment as a leading export of Vietnam, adding that the sector has made significant progress with a raft of highly-competitive and prestigious brands.

She noted that enterprises need to give a push to the sector’s development by following the Government’s strategy and taking advantages of free trade deals to build brands favoured in both domestic and foreign markets.

According to VITAS Chairman Vu Duc Giang, the annual fair aims to introduce garment production and export capacity of Vietnamese enterprises to domestic and international customers while linking garment material providers, designers and producers.

Entertainment programmes and fashion shows are scheduled during the event, which will run until September 25.

SMEs must seek place in global supply networks

The domestic small- and medium-sized enterprises (SMEs) should define positions in the global supply chain to gain success in integrating into the world economy.

Nguyen Thi Tuyet Minh, Chairwoman of the Vietnam Women Entrepreneur Council (VWEC) and also Chairwoman of the ASEAN Women Entrepreneur Network, made this remark at a workshop on improving SME access to regional and global markets in Hanoi on September 17.

The event held by the United States Agency of International Development (USAID), the US-ASEAN Business Council (US-ABC) and the Vietnam Chamber of Commerce and Industry (VCCI) attracted 130 SMEs operating in many business sectors in the country.

According to the Asian Development Bank's Asian Development Outlook, only 36 percent of Vietnamese enterprises have joined the global production and export network against 60 percent in Malaysia as well as Thailand. Meanwhile, 21 percent of Vietnamese enterprises have joined the global supply chain compared with 30 percent of Thai enterprises and 46 percent of Malaysian companies.

In fact, Vietnamese firms have assembled, processed and supplied alternative components but not produced main products.

At the seminar, Hoang Quang Phong, VCCI Deputy Chairman, said establishment of the ASEAN Economic Community (AEC) by this year-end and free trade agreements between Vietnam and its partners would be a golden opportunity for local enterprises to integrate with the global supply and value chains for expanding export markets, attracting investment and receiving technological transfers.

Deputy Minister of Planning and Investment Dang Huy Dong said that with the trend of globalisation and economic integration, the local SMEs are considered the sector with great potential in joining further into the regional and global supply chain.

However, Phong said the local firms, especially SMEs, must face challenges due to low competitiveness, management at low level and limitation in integration ability.

Therefore, local firms need the State's policies to create good conditions for the development of the enterprise, Phong said.

Dang Phuong Dung, Deputy Chairwoman and General Secretary of the Vietnam Apparel Association, said joining the global and regional markets has forced local enterprises to reform and increase competitiveness for the remaining businesses in the market.

The local firms must meet standards in the origin of goods, reduce spending of enterprise and improve competitiveness when joining the global supply chain, Dung said.

Nguyen Binh, senior manager of FedEx Indochina and Myanmar, said Vietnam has joined the global supply chain and that has promoted Vietnam's economy.

However, local firms should improve further to get more chances to join the global supply chain and increase their competitive ability on the world market, Binh said.

The local firms need good managers with knowledge of integration and the market to take a chance on business and measures to increase production of the enterprise in the chain, he said.

For the long-term, the firms should improve product quality, productivity and production efficiency to reduce production cost and increase the competitiveness of products.

Meanwhile, Dung said local firms should promote cooperation to create a production chain among them.

During the seminar, experts from multi-national companies United States, such as FedEx, Microsoft, MasterCard and Baker&McKenzie shared their experiences in many issues such as supply chain management, cloud technology, digital payment and regulations in business.

Treasury bonds report modest sales

The volumes of successfully auctioned government bonds were modest during recent sessions, Dien dan Doanh nghiep (The Business Forum) reported.

On Wednesday, the State Treasury auctioned VND1 trillion (US$44.44 million) worth of 15-year bonds and VND2 trillion ($88.88 million) worth of five-year bonds at the Ha Noi Stock Exchange.

It sold only VND613 billion ($27.24 million) worth of 15-year bonds, with a winning interest rate of 7.65 per cent per year. It reported no transactions for the five-year bonds as bid rates did not meet expectations.

On September 3, the Treasury also auctioned VND1 trillion worth of 10-year bonds and VND2 trillion worth of five-year bonds.

Only 7 per cent of the 10-year bonds, or VND70 billion ($3.11 million), was sold at an interest rate of 6.9 per cent per year. Some 12 per cent of the five-year bonds, or VND230 billion ($10.22 million), was traded at an annual rate of 6.45 per cent.

Industry insiders said recent fluctuations in the foreign exchange market would continue to impact investor sentiment in the bond market in the short term.

In an economic report for the first eight months of this year, the National Financial Supervisory Commission said the volumes of government bonds sold during auctions had fallen sharply following the central bank's move to devalue the dong.

While banks are likely to continue to expand loans, weak demand in the bond market is expected to force the bond interest rates to rise.

The Treasury has mobilised some VND96.12 trillion ($4.27 billion) through bond auctions this year. Its goal of mobilising VND250 trillion ($11.11 billion) worth of bonds this year will be a heavy task, industry insiders said.

Taiwan's E.SUN Bank comes to Viet Nam

Taiwan's E.SUN Commercial Bank (E.SUN Bank) yesterday opened its first branch in the country in Bien Hoa.

Situated in the Amata Industrial Zone in southern Dong Nai Province, the bank hopes to benefit from the expected increase in foreign investment, especially from Taiwan, as a result of the many bilateral and multilateral trade agreements Viet Nam signed this year, and the Trans-Pacific Partnership, which it might sign in the near future.

"The opening of E.Sun Bank's branch in Viet Nam is part of a plan to expand operations in Asia," Joseph N.C. Huang, the lender's president said.

Initially, the bank will provide financial services to Vietnamese and foreign businesses, especially Taiwanese, before targeting individual customers in future.

The bank now offers services to 3,000 Taiwanese businesses. It has a chartered capital of $30 million and a license for 99 years.

Moon cake prices unjustifiable

The high cost of moon cakes is tantamount to "pickpocketing" consumers, a former deputy head of the Ha Noi Department of Trade told Viet Nam News.

Vu Vinh Phu said he has kept a close watch on input costs for many years, and moon cake prices are now unreasonably high, with customers now paying for marketing and other costs.

Every year in the run up to the Mid-Autumn Festival confectionary firms run elaborate marketing campaigns, with major players like Kinh Do and Bibica splurging on TV advertising, which is expensive.

Khanh Pham, a producer at Film Ninja Productions, told that making a 30-second commercial costs at least VND300 million (US$13,300) while advertising a 30-second prime time slot for it costs VND120 million ($5,330).

Thus, the marketing costs could run into billions of dong.

Packaging has also contributed to the rise in cake prices. According to Tuoi tre (Youth) newspaper, in a VND1 million ($44) moon-cake box, the cost of packaging accounts for 30-40 per cent of the retail price.

Before the cakes reach the final buyer, there are also expenses like putting up temporary kiosks at busy locations, printing banners, making sales kits, hiring salespeople.

Distributors usually rent places outsides popular malls like Vincom Ba Trieu and Hang Da Galeria and busy streets like Ba Trieu, Phan Dinh Phung, Kim Ma, and Le Van Luong.

It is estimated the rent of a 9-15sq.m stall on Ba Trieu Street to costs VND15-25 million ($666.67-1,111) a month after rising by around 5 per cent since last year.

The competition for good locations is fierce, with prime one needing to be booked at the beginning of the year. Some locations require a deposit to be made two months in advance.

tuffed with traditional ingredients like lotus seeds, green bean, salted egg, pork fat, and watermelon seeds, a moon cake does not cost much to make.

Nguyen Thi Hue, who has run a bakery at home for four years, said a cake using the best quality materials costs around VND10,000 (US$ 0.44).

It contains 20 grammes of wheat flour (VND15,000 or $0.66 per kilogramme) and 50 grams of filling (VND70,000 or $3.11 per kilo).

Sticky rice cakes require 50 grammes of sticky powder (VND55,000 or $2.44 per kilo) and 50 grams of filling.

Plastic packaging and desiccant bags increase the final cost to VND10,000-15,000.

Hue said for big companies, with their scale, the costs would be much lower.

But mid-end companies sell a five-ingredient moon cake for VND36,000 – 94,000 ($1.6 – 4.17) and a box of four cakes for VND300,000 to nearly VND1 million.

Authorities do not regulate prices, leaving manufacturers to their devices.

Phu said every year six market supervision teams are formed to check the production and quality of moon cake manufacturers and can penalise them if the quality is not as advertised.

"The traditional values attached to moon cakes have become greatly skewed," folk culture researcher Nguyen Hung Vy said.

"[The cakes] are no longer a traditional custom but have become gifts instead."

Moon cakes are one of the traditional aspects of the Mid-Autumn Festival together with dragon dances, fairytales and folk toys.

This year it falls on September 27.

Work starts on Nghi Son 2 thermal power plant

Construction began on the Nghi Son 2 Thermal Power Plant at the Nghi Son Economic Zone in the central province of Thanh Hoa on September 18.

The plant is being built at a total cost of 2.3 billion USD, with 25 percent contributed by a joint venture between Japan’s Marubeni Group and the Republic of Korea Electric Power Corporation (Kepco) and the remaining coming from foreign banks.

It will use the world’s most cutting-edge technologies to ensure productivity and cut coal losses and emissions.

Included in the master plan of the Nghi Son Power Centre, the project, together with the 600MW Nghi Son 1 Power Plant, forms part of the national power development plan during the 2011-2020 period with a vision towards 2030 approved by the Prime Minister.

The 1,200 MW plant includes two turbines with the first scheduled to be operational in September 2019 and the second in March a year later, expected to churn out a total of 8 KWh annually.

To ensure the project’s progress, the provincial People’s Committee has promptly addressed issues regarding land clearance, electricity and water supply, and ensuring security at the construction site.

SC VivoCity shopping centre opens in HCM City

The first SC VivoCity shopping centre, a joint venture between Saigon Co.op Investment and Development Company (SCID) and Singaporean-based Mapletree, opened in HCM City on September 20.

President Truong Tan Sang was present at the inauguration ceremony.

SC VivoCity belongs to the phase I of the Saigon South Palace, a complex of 4.4 hectares in District 7.

The five-storey shopping centre has been filled to 84 percent of its total floor area of 62,000 sq.m.

SCID Executive Director Nguyen Thi Tranh said the new facility marks an important milestone in the company’s business strategy on diversifying forms of modern retail.

VietinBank tops domestic banks in financial strength rating

Credit ratings agency Moody’s has recently ranked the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) the first among nine rated Vietnamese banks in terms of financial strength.

It was followed by VIB, BIDV, Sacombank, Techcombank, ACB, MB, VPBank and SHB.

Moody’s also listed Vietinbank among those with “positive” outlook. The bank, together with BIDV and VIB, was also given a B1 rating in local currency deposit and B2 grade in foreign currency deposit.

Currently, VietinBank has the largest registered capital among domestic banks in Vietnam.

The agency said the Government’s enhanced capacity to provide support to large banks reflects improved macro-economic stability and strengthened balance of payments as well as reduced risks in the banking sector.

Australia, Vietnam increase cooperation in wool sector

The Australian Wool Growers Association (AWGA) expressed its desire to boost cooperation with Vietnam to introduce its wool products to Vietnamese consumers.

The association said it could provide technological and training assistance to Vietnamese companies as well at a recent working session with the Local Industry Department under Vietnam’s Ministry of Industry and Trade.

According to Rajesh Bahl from the AWGA, Australia accounts for 22 percent of the world’s wool production, and up to 90 percent of global merino output.

Bahl said Vietnam’s textile industry had a great potential with favourable conditions, especially when the Trans-Pacific Partnership is nearing completion and Vietnam has signed many free trade agreements.

The AWGA first entered in Vietnam in 2012 and now has 90 partners across the country.

Phan Van Ban, deputy head of the department, said the textile industry is one of the biggest industries in Vietnam with 1.1 million labourers and produces an export value of 23 billion USD in 2014.

The country, however, has to import up to 60 percent of input materials because of the weak support industry, said Ban.

The Vietnamese government is making efforts to reform administrative procedures to boost foreign investment in this field, he added.

The dollar–dong exchange rates have eased at domestic commercial banks, following a decision by the United States Federal Reserve (Fed) to keep its interest rates steady.

Vietcombank slashed both the buying and selling rates of the US dollar on September 19 by 25 VND from the previous day's close, listing them at 22,445 VND and 22,505 VND per dollar, respectively.

Vietinbank quoted its buying rate at 22,445 VND per dollar and the selling rate at 22,500 VND per dollar, both down 40 VND.

BIDV cut its buying rate by 25 VND to 22,460 VND per dollar and the selling rate by 20 VND to 22,520 VND per dollar.

At Eximbank, the buying rate was down 40 VND to 22,430 VND per dollar and the selling rate dropped by 35 VND to 22,510 VND per dollar.

Currently, the average inter-bank exchange rate is 21,890 VND per dollar. The State Bank of Vietnam (SBV) has listed the buying rate at 21,800 VND per dollar and the selling rate at 22,475 VND per dollar at its head office.

The USD-VND exchange rates increased sharply after the central bank devalued the dong by one percent, and widened the trading band for the reference rate to three percent last month, in a bid to minimise the negative impact of the sharp Chinese yuan depreciation.

Market speculations about a Fed rate hike have fuelled worries about even more pressure on the domestic currency and economy, especially when Vietnam 's current account balance is sliding into a deficit.

National Financial Supervisory Commission Vice Chairman Truong Van Phuoc said the US rates staying unchanged has allowed the market to heave "a sigh of relief," as it indicates that the Fed is continuing to maintain high caution while the US economy remains sluggish.

He said the move could not reverse market trends, however, since the US central bank would continue to aim at rate hikes later this year.

According to Phuoc, domestic macro-economic conditions have stabilised, with the economy growing at rates of six to 6.5 percent, and inflation has been controlled at low levels, with the expectation of reaching one to 1.5 percent this year.

"These factors create quite a bright outlook with positive prospects [for the domestic economy] during the rest of the year, whether the Fed raises rates or not," he said.

Banking and Finance expert Nguyen Tri Hieu argued that the latest Fed decision will only generate temporary [monetary] stability in Vietnam and that the SBV should take proactive measures to cope with future fluctuations.

Vietnamese milk brand wins international gold prizes

The TH True Milk brand name under the TH Group won three gold prizes at the Tasting Contest as part of the World Food Moscow 2015 exhibition held in Moscow from September 14-17.

The crowned products include nutritious substance-supplemented Topkid Chocolate milk, Phytosterol-supplemented fresh milk and pasteurised milk.

The TH True Milk also gained three silver awards, namely Herbal Drink (five types), mulberry-flavoured Topkid milk, and Collagen-supplemented fresh milk and a bronze prize for Topkid Vanilla.

TH Group Chairwoman Thai Huong said her company’s participation aimed to improve the standing of Vietnam’s dairy industry in the world.

Last July, the group disclosed its plan to invest over 1 billion USD in a dairy cow farming and milk processing project in Russia.

Fourteen Vietnamese enterprises showcased the best of their agricultural products at the World Food Moscow 2015, which drew the participation of more than 500 companies in the food and beverage industries from 37 countries and territories around the world.-

Sungroup offers extra benefit for customers

Real estate developer the Sun Group launched the second sale of its five-star Premier Village Da Nang Resort which was located on My Khe Beach, one of Asia's most beautiful beaches, on September 19, offering extra benefits for buyers who deposited within the day.

Accordingly, buyers of the day would have a ten day tour to Europe for two persons worth VND250 million (US$11,110) or they could have VND200 million ($8,888) directly deduction on the real estate price.

Besides, they still have all the attractive offers from Sungroup like in the first sale in August. Under which, buyers would get their land use certificates and villa ownership rights, and assured an annual minimum profit of nine per cent during the first 10 years for those who lease their villas.

The Sun Group and the Bank of Investment and Development's Quang Trung branch signed co-operation contracts under which the bank will give loans of up to 100 per cent of the villa value to the buyers for 20 years.

Along with the above-mentioned benefits, buyers will enjoy a 15-night free stay in the resort's villas.

The resort has a prime location on the crossroads of Vo Nguyen Giap and Ho Xuan Huong Streets, and is just a 10-minute drive from the international airport and the city centre.

From the resort, tourists can easily reach Ba Na Hills Resort, Asia Park, My Son Holy Land and Ngu Hanh Son Mountain, as well as Son Tra Peninsula, or they can go further to experience the tranquility of the ancient Hoi An town or enjoy coral-diving in Cham Island.

Each villa, a combination of white and black colours, has a private pool, two or three bedrooms, a large living room and a kitchen.

The resort has a five-star spa and gym services, as well as entertainment centres for children, besides a nanny service to help tourists enjoy a totally relaxed holiday.

STK launches a $32.74 million plant in Tay Ninh

Century Synthetic Fiber Corporation (STK) inaugurated a fibre plant, Trang Bang phase 3, worth VND 735 billion (US$32.74 million) on September 18.

STK leaders inaugurate Trang Bang phase 3 fibre plant in Tay Ninh Province on September 18. Photo ndh.vn

The plant, located in the southern province of Tay Ninh's Trang Bang Industry Zone, which was constructed in May 2014, increased 40 per cent of its total capacity, to produce 52,000 tonnes per year.

With the phase 3 plant, STK increased its total investment capital to VND1.6 trillion ($71.7 million).

According to STK chairman Dang Trieu Hoa, the plant employed one of the most advanced production management systems known as POC that could not only manage operations, jobs, statistics and data, but also monitor the quality.

Modern production lines and machines at the plant would boost the capacity and quality of products and enable the creation of new products with higher speed and at lower cost, he added.

Besides, the corporation would also work on new products such as quick drying fibre, UV resistant, flame retardant and recycled fibre to meet the demand of the international fashion industry and also serve the local industry.

Hoa said that by the end of this month, installation of machinery at the plant would be complete. Once operational, it would supply an additional 15,000 tonnes of partially oriented yarn (POY) and 15,000 tonnes of draw texturised yard (DTY) per year.

STK also planned a VND9275 billion ($12.2 million) plant at Trang Bang phase 4 to increase the total capacity to 60,000 tonnes per year by Q3, 2016.

Established in 2000, with the first plant in HCM City's Cu Chi District, STK now has four plants in Viet Nam and became one of the leading fibre manufacturing industries, with customers such as Nike, Adidas, and Uniqlo, in addition to Puma, Guess.

VCBS: Little or no rise in September CPI

After analyzing the market situation in August, the macro-economic report from Vietcombank Securities Limited Company (VCBS), a subsidiary of Vietcombank, forecast that CPI in September would not increase or only increase slightly, by about 0.05 per cent.

VCBS pointed out that although the CPI in September will be under pressure from seasonal factors such as the new school year, twin cuts to the petrol price totaling 10 per cent is likely to offset such factors.

It expects to see continued recovery in consumer demand and domestic investment demand, though neither will be significant. The FDI sector remains a bright point and a growth driver in the economy.

VCBS also forecast GDP in the remaining months of the year will be 6.3 per cent to 6.35 per cent, with an annual figure of around 6.4 per cent to 6.5 per cent. “The trade deficit will continue to increase gradually over the remaining months and is likely to be around $4 to $5 billion for the year,” it wrote.

The report said the decision to devalue the VND to deal with unexpected fluctuations in China may provide a degree of support to exports over the final months of the year. It will be difficult, however, to see major breakthroughs from the move as currencies in Vietnam’s key export markets, such as Europe and Japan, have also fallen significantly against the dollar.

Imports, meanwhile, will continue to increase to meet rising demand in production and consumption towards the end of the year, VCBS predicted.

Jan-Aug phone exports up 30%

Mobile phone and component exports reached $20.18 billion in the first eight months of this year, up 32.6 per cent against the same period in 2014, according to the latest figures from the General Department of Vietnam Customs.

Mobile phones and components is now a major contributor to export growth in Vietnam, primarily by foreign direct investment enterprises, which exported $20.12 billion of the total in the period.

The EU was the largest market for Vietnam’s mobile phones and components in the first eight months, with $6.7 billion, up 22.3 per cent and accounting for 33.2 per cent of the total. Following was the UAE, with import value of $3.17 billion, up 23 per cent, the US with $1.78 billion, an increase of 109.5 per cent, and Germany with $1.2 billion, up 42.2 per cent.

Exports of mobile phones and components in August were estimated at $3.02 billion, 19.1 per cent higher than in July.

Computers, electronic products and components also recorded high export value. Vietnam exported computers, electronic products and components valued at an estimated $1.42 billion in August, up 16.7 per cent against July, while the figure in the first eight months reached $9.99 billion.

Exports to the EU totaled $1.97 billion, up 57.9 per cent, to the US $1.74 billion, up 60.2 per cent, and to China $1.72 billion, a 31.3 per cent increase.

Nojima joins Hanoi's electronics market

Japanese electronics retailer Nojima is set to open the first of its new stores in Vietnam in October, following its acquisition of an additional 21 per cent in local electronics chain Tran Anh Digital World in June.

According to Insider Retail Asia, the first of its new stores will carry both retailers’ home brands when it opens in the Aeon shopping center, which is nearing completion on the outskirts of Hanoi.

As with Nojima’s stores in Japan, the Hanoi outlet will feature wide aisles and LED lighting and also stock a range of Japanese name goods.

Tran Anh is based in Hanoi and has 15 stores in Vietnam’s north, with plans on track to open as many as nine more this year.

Nojima previously held 10 per cent of shares in Tran Anh and now owns about 31 per cent after the June acquisition.

Researcher GfK reported that home electronics sales in Vietnam exceeded $5.5 billion last year; the second consecutive year growth has been 20 per cent or higher.

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