HoREA wants easy credit for property sector continued

The HCMC Real Estate Association (HoREA) has proposed the State Bank of Vietnam delay revising Circular 36 in a way that tightens lending to the real estate sector, saying that credit tightening would cause adverse impact.

HoREA said the property market has just recovered from the crisis over the past two years and that the market would be hard hit if restrictions on property loans are introduced.

In a draft document issued by the State Bank of Vietnam and passed around for comment at financial institutions, the risk index of receivable lending for real estate and securities might be raised from 150%, as stipulated in Circular 36, to 250%. Besides, the maximum ratio of short-term funds used for medium and long-term loans should be adjusted from 60% to 40%.

According to HoREA, the strong rise in bank lending to the property sector in recent times is normal because the market has recovered since late 2013, after years of stagnation. Meanwhile, the banking system is being restructured with loans still at safe levels.

In 2015, investors in the secondary market accounted for around 15% of the city’s property market, mainly in the medium or high-class segments. The ratio was much lower than the real estate bubble in 2007, when the number of secondary investors made up around 70%, HoREA said in a petition sent to the central bank.

The real estate market still depended heavily on capital sources from banks and customers. In fact, much capital mobilized from homebuyers also came from banks. Besides, the city reported around US$5.5 billion in overseas remittance inflows last year, with 23% funneled into the property market.

Meanwhile, the local market is still short of other capital sources such as investment fund, venture fund, real estate trust fund, housing saving fund and stock market. Real estate is a medium and long-term investment vehicle, but few investors are able to secure medium and long-term credit for investment.

In Vietnam, medium and long-term loans carry higher interest rates than those for short-term ones, and this is contrary to other countries. On the other hand, outstanding short-term loans at banks make up a relatively stable ratio, which is manageable, the document said.

HoREA said the adjustment of Circular 36 as proposed by the central bank would place big impact on secondary investors and project developers, causing supply to slump and projects to be left unfinished.

Besides, customers, especially low-income earners in cities, will have fewer opportunities to buy homes. Legal change, if any, would also affect related sectors and employment.

Therefore, HoREA suggested the central bank not revise Circular 36 for now, especially when a real estate bubble is not in sight in 2016.

If the revision is a must, HoREA proposed cutting the maximum ratio of short-term funds used for medium and long-term loans to 50% while maintaining the current risk index of receivable lending for real estate and securities at 150%.

Finance-banking sector offers best wages

The finance-banking sector topped the list of 10 industries offering the highest salaries for mid-level and senior managers in 2015 and it is also one of the four sectors with strongest recruitment demand this year.

The 10 industries with the highest wages for mid-level and senior managers in 2015 appeared in a report recently released by Navigos Search, a job recruitment service provider which holds a 35% market share in the employment market for mid-level and senior managers.

Though the finance-banking sector has been facing a slew of challenges, it gave monthly wages of VND100-200 million (US$4,460-8,930) for mid-level and senior employees in the north of Vietnam last year, followed by the manufacturing and real estate sectors.

In HCMC, the healthcare sector took the lead in terms of salary, followed by consumer, retail and finance-banking sectors. The highest salaries of VND70-225 million per month were offered by top 10 industries in the south.     

Data of Navigos Search showed the manufacturing sector had the strongest recruitment demand in the last quarter of 2015, accounting for 22% of the total, besides retail-consumer with 14%, textile-garment and finance-banking with 10% each and information technology with 7%.

Overall, the highest monthly salary for mid-level and senior managers stood at VND225 million last year, up 11% versus 2014.

Navigos Search said this year will see a significant change in recruitment demand.

According to the firm, pharmaceutical, telecommunications, consumer finance and information technology sectors will be in need of largest numbers of mid-level and senior managers this year.

Chinese venture capital fund invests in Triip.me

Chinese venture capital fund Gobi Partners has invested half a million U.S. dollars in Triip.me, a Vietnamese startup project that provides tourism services online.

Triip.me will spend the money recruiting more staff to support its expansion. The firm posted monthly revenue of about US$1,000 in mid-2015, but has begun to operate profitably as sales have increased by 10 times.

Lam Thi Thuy Ha, chief executive officer of Triip.me, said her company previously had only two people to operate the tourism platform. With the new funding, the firm will be able to carry out its communication and marketing plans to boost sales.

Ha said the partnership with Gobi Partners brings Triip.me knowhow and experience in tourism in addition to capital injection.

Established in 2013, Triip.me helps connect travelers with local people by applying community resources to build tours across the world. The tourism platform uses a model similar to Airbnb’s to allow any person to create tours for sale and link sellers and buyers. Unlike traditional travel agencies, Triip.me tours are designed by local people, who are called Triip Creators.

So far, Triip.me has branched out to 86 markets worldwide. Through websites or mobile apps, it enables everyone to participate in the tours to share their lives and personal stories with tourists.

As of mid-2015, there had been 7,000 Triip.me users and 9,000 Triip Creators, and the successful tours had numbered 5,000. Triip.me gets 10% of the fee of each tour done.

Triip.me started with tours in Vietnam before expanding to other markets in the world. Tours offered on Triip.me are diverse, from rowing a small boat in a floating market of the Mekong Delta with a local family to strolling in a crowded and noisy corner of Hanoi with a tour guide who is a student to explore ancient buildings.

Ha said most Triip Creators have their own jobs and work as tour guides as their part-time job to earn extra incomes.

Tours sold on Triip.me are safe as tour guides are thoroughly checked. The firm requires Triip Creators to provide personal documents such as passports or ID and also check the places suggested by tour guides through an app installed on smartphones.

Triip.me will transfer money to Triip Creators only after tours end and travelers are pleased with what they are promised.

Ha said Triip.me helps people change the way they travel, create jobs for local people and localities preserve local culture.

Binh Dinh urged to focus more on tourism

With beautiful landscapes and historic relics, Binh Dinh Province needs to focus more on attracting investors to tourism and developing it into a key sector to fuel growth.

Many investors, researchers, scientists and corporate leaders shared the same view on tourism development in Binh Dinh at a seminar held by the provincial government in cooperation with the countrymen association of Binh Dinh Province in HCMC over the weekend.

Nguyen Huu Tho, chairman of the Vietnam Tourism Association (VITA), said the province hold great growth potential in tourism, especially sea tourism. If the province spends more on infrastructure for the sector and has more four to five-star hotels, the number of visitors would be higher than last year’s figure of 2.6 million.

International cruise ships with large numbers of passengers on board have called at Cai Mep, Nha Trang, Haiphong, and Danang ports, but have not visited Quy Nhon port in Binh Dinh. Therefore, Tho proposed the province team up with popular travel firms like Saigontourist and strong international partners to attract foreign tourists to Quy Nhon.

The province needs to seek investment in sea tourism in Quy Nhon City, Tho said, adding that tourism development should be considered a key driver for economic growth in the province.

Huong Tran Kieu Dung, general director of FLC Group, said Binh Dinh has many gorgeous natural sites, so the group has invested heavily in the province’s tourism. But she proposed the province promote tourism potential locally and internationally and upgrade Phu Cat airport to enable it handle direct international flights.

Dung asked the provincial government to woo more investors to luxury lodging facilities and encourage local people to develop community-based tourism products to help turn the province into a key tourist destination.

According to the Binh Dinh Department of Planning and Investment, more big enterprises have invested in tourism and hotel projects in the province. For instance, FLC Group has pledged a total of VND5 trillion (US$223.4 million) for its FLC Nhon Ly tourism complex and Eo Gio luxury eco-tourism resort, while Vingroup has registered VND3.5 trillion (US$157.5 million) for Vinpearl Quy Nhon tourism complex.

The province is seeking investors for many major tourism projects, including a 10,027-square-meter, five-star hotel in the urban-commercial-service area west of An Duong Vuong Street and an ecotourism area at Thi Nai Lagoon, Mui Rong-Tan Phung tourism area in Phu My Commune, and Nui Mot Lake eco-tourism zone in An Nhon.

At the seminar, investors, scientists, and corporate leaders called for Binh Dinh to channel more investment to marine economic development, seafood and farm produce processing.

The province was urged to improve the investment environment and assist investors in completing administrative procedures and solving difficulties.

Foreign and domestic enterprises pledged VND5.95 trillion for 33 projects in infrastructure, urban development, manufacturing, trading, service, and aquaculture last year, including six foreign invested projects worth VND947.7 billion (US$42.3 million).

Property brokers assoc backs strict new rule

The Vietnam Association of Property Brokers has thrown support behind the Ministry of Construction’s Circular 11/2015/TT-BXD that requires all property brokers to hold a practicing certificate.

The association said the new regulation in the circular that took effect last week will support the number of qualified and professional brokers to grow on the market and prevent possible losses for homebuyers.

Nguyen Van Dinh, general secretary of the association, said 30,000 property brokers were granted practicing certificates under the 2006 Law on Real Estate Business in previous years but only half of them are still working.

In the past, what property brokers needed was to complete a short course and then applied for a practicing certificate without having to take a test. Those who got the certificate will not be affected by the circular as it says the certificate will be valid for five years from July 1 last year when the date the 2015 Law on Real Estate Business came into force.

The circular only requires uncertified brokers to take a test to get a practicing certificate. Dinh said the test aims to check knowledge and skills of property brokers and that certified brokers will help limit risks for the parties involved in a transaction.

“We support strict controls on issuing such a certificate for property brokers since they participate in important transactions that will cause bad consequences if relevant information they provide and legal compliance are not ensured,” Dinh said.

The association suggested proper penalties be in place to stem brokers from enticing customers into buying homes at problem projects. Currently, property investors are fined when it comes to legal cases while brokers are not.

Under the circular, local construction departments are assigned to organize tests and issue practicing certificates for brokers. However, Dinh said that relevant associations should be invited to take part in training and examination processes to guarantee the quality and skills of property brokers.

Dinh predicted that competition among property brokers will intensify this year as demand will slow while the market will see an upsurge in supply. Last year was favorable for property exchanges and brokers as demand picked up significantly after years of stagnation.

The ASEAN Economic Community (AEC) was in place last year, allowing brokerage agencies in other member states to expand their operation to Vietnam. This will affect market share of domestic brokerage firms on the home market but open up new opportunities for capable companies to reach out to the regional market.

POSCO Energy to build second thermal power plant in Vietnam

POSCO Energy Co. said on February 22 that it signed a memorandum of understanding (MOU) agreement on Sunday with Nghe An provincial government to build a thermal power plant, the second coal-fueled power plant to be built by the South Korean company in Viet Nam.

POSCO Energy Co will build a thermal power plant in Nghe An Province. The plant will produce an annual power capacity of 1200 megawatts (MW), with two 600 MW-reactors. -Photo fuelcellenergy.com

According to POSCO Energy, the company will build Quynh Lap II thermal power plant in Vinh City, Nghe An province in northern central Viet Nam, about 270 kilometers away from Ha Noi. The plant will produce an annual power capacity of 1200 megawatts (MW), with two 600 MW-reactors.

The energy arm of South Korea's steel giant Posco completed construction and started operations of Mong Duong 2 coal-fired thermal power plant in northern Quang Ninh Province in Viet Nam last October.

The provincial government has been inviting private companies to build power plants that could steadily feed power to the special district for heavy industries that will be formed to recruit steel and machinery manufacturers. The South Korean energy company will transfer ownership of the plant to the local government after it builds and operates the plant for a certain period based on the contract.

Yoon Dong-jun, POSCO Energy president, hoped that Quynh Lap II thermal power plant construction will help it further enhance its presence in Viet Nam.

Many taxi firms registered lower fares after Deputy Minister of Transport Nguyen Hong Truong urged them to do so on Monday following recent drops in petrol prices.

A taxi picks up passengers at Tan Son Nhat Airport in HCM City. Many taxi firms have registered lower fares following fuel price declines. - Photo tuoitre.vn

Mai Linh Group Deputy General Director Pham Minh Suong said the company has set new rates across its nationwide network based on specific market conditions in separate localities.

In HCM City, Mai Linh will slash rates by 500 dong (two US cents) per kilometre for four-seat cars and 600 dong per km for seven-seat vehicles on Friday.

Vinasun announced that it will cut fares by 500 dong per km this week. With travelling distances of less than 30km, its new charges will be VND14,000 per km for five-seat cars and VND15,000 to VND16,000 per km for eight-seat vehicles.

Comfort Savico registered rate cuts of 500 dong to 700 dong per km, while Airport registered a cut of 300 dong per km, and Sai Gon Hoang Long registered reduction of 500 dong per km.

In the capital, while the Ha Noi Taxi Association said its member companies will slash fares by around 300 dong per km in one next week or two, Taxi Song Nhue announced a rate cut of 500 dong per km.

Ha Noi Transportation Association Chairman Bui Danh Lien told the press that the 300 dong cut would be small compared to the reduction in domestic fuel prices, which hit a record low recently.

He suggested that taxi firms consider more suitable rate cut levels to match current market developments.

Other firms such as Thanh Nga and Van Xuan have reportedly not announced adjustments yet, with charges for sedans hovering around VND11,000 per km for the first 21km, and VND9,000 for every next km.

With regard to fixed-route transporters, companies operating at Mien Tay (Western) Coach Station in HCM City lowered fares by two to five per cent, according to the station's deputy general director, Tran Van Phuong.

Yesterday morning, the Vietnam News Agency reported that some firms operating at Mien Dong (Eastern) Coach Station in the city had not registered price reductions.

Inspectors from the municipal department of finance said these firms would be subject to administrative fines if they did not carry out the registration by the end of yesterday.

"Transporters, including taxi firms nationwide must be aware that it is their responsibility to reduce charges when fuel prices fall. It is also the corporate culture," Deputy Minister Truong told a meeting in Ha Noi on Monday.

Domestic fuel prices plunged to a seven-year low last Thursday, when the retail price of petrol was cut by 961 dong to VND13,752 per litre, and the price of the E5 RON 92 biofuel dropped by 942 dong to VND13,321 per litre.

The price of diesel remained unchanged at VND9,580 per litre.

Property giant to develop five projects in 2016

Property developer Novaland on Tuesday announced that it would develop five new projects this year, bringing to the market around 4,000 products.

The company did not disclose details but said that the new projects would be developed in the central region of the city and that information would be published in March and April.

Phan Thanh Huy, general director of Novaland, said that the year 2016 would mark a turning point of his company when urban area projects are developed, offering houses, villas and shophouses to the market for the first time.

Huy also confirmed that Novaland would limit buying a new project to control credit. Its credit balance will not increase, he said, adding that quality would be further enhanced.

Novaland stressed that it would continue to maintain the progress of projects introduced to the market last year so they will be ready in time.

These include Sunrise Riverside, RichStar, The Sun Avenue, Golden Mansion, Orchard Parkview and Botanica Premier.

Last year, the company developed 12 projects, bringing the total number of company projects to 27.

Sapphire divests shareholding with Refico and exits the City Garden JV

Sakkara Asia Pacific Project Holding Investment Real Estate JSC (Sapphire) announced today that it had divested its minority shareholding in both Refico Real Estate Group and in the City Garden joint venture.

“Sapphire has successfully delivered high quality projects in Vietnam both independently and through managing joint venture partnerships,” said Sapphire’s joint managing director David Bedingfield. “As our business grows, we recognise that when we are a meaningful shareholder and are able to manage the project, the outcome is better.”

Sapphire recently topped out the first of its prestigious villas at HOLM, a residential community in Thao Dien in Ho Chi Minh City, and has commenced selling for the second phase of Sanctuary Resort, a luxury beachfront residential community in Ho Tram in the southern province of Ba Ria-Vung Tau.

In addition to existing projects, Sapphire has a strong project pipeline and is actively seeking well-located, medium to large-scale projects for office, industrial, residential apartments and houses and mixed-use developments. The group is willing to acquire land or joint venture with landowners. Together with established investor relationships, Sapphire is supported by Sakkara Group, Australia, whose global experience spans 86 projects valued at more than $2.5 billion since 1997.

“Sapphire is an innovator and we have evolved cutting-edge solutions to answer the needs of an ever more sophisticated customer,” Bedingfield said. “From Centrepoint, which was the country’s first true eco-office building to President Place, which provides a true balance of work and lifestyle in the heart of the city, we feel it is important to continue to add value to our projects, particularly in an increasingly competitive and dynamic marketplace.”

Mobile World turnover up in January

Mobile World Investment Corporation has released its business results for January, with revenue reaching more than $160 million, or 10 per cent of its annual plan and double the result recorded in January 2015.

Profit after tax (PAT) was around $10 million, or 11 per cent of the annual plan and up 118 per cent year-on-year.

It also opened 45 new supermarkets in the month, including 30 thegioididong.com outlets and 15 Dien May Xanh outlets.

According to Mr. Tran Kinh Doanh, CEO of Mobile World JSC, as at the end of January it had 589 thegioididong.com supermarkets, 83 Dien May Xanh supermarkets, and 13 Bach Hoa Xanh shops. The company targets expanding the network to 850 - 1,000 outlets nationwide this year, including both thegioididong.com and Dien May Xanh.

For Bach Hoa Xanh mini-markets the company will focus on service and locations in 2016, without putting a figure on how many new outlets will open or targeting turnover and PAT.

More than 850,000 visits online each day, a huge network nationwide, and rapid delivery services make the company the largest domestic online electronics retailer in Vietnam.

Its targets for this year are $1.55 billion in turnover and PAT of around $63 million, for growth of 35 per cent and 29 per cent, respectively.

Van Phuc silk struggles to access foreign market

Van Phuc silk, a famous silk brand from the most ancient weaving village bearing the same name, has been trying to access the international market while still preserve and enrich its cultural identity.

According to Pham Khac Ha, chairman of Van Phuc Silk Weaving Village Association, in the context of deeper global economic integration, silk producers are trying their best to improve competitiveness, renovating production methods to offer more creative products to meet the demand and taste of both local and international markets.

"However, the difficulty is how to further penetrate foreign markets while still maintaining the village's cultural identity," Ha said.

For three years in a row, the Van Phuc Silk Weaving Village Association has been invited by Mekong Institute of Thailand to attend seminars on silk textiles held by Greater Mekong Sub-region (GMS) countries, including Viet Nam, China, Myanmar, Laos, Cambodia and Thailand.

In addition, the organisers of the seminars also invited a number of the world's major silk producers such as India, Japan and Australia to participate in the seminars so that the handicraft villages of GMS countries would have the opportunity to study their experiences. Attending the seminar also enables the association to bring their silk products to trade fairs in Thailand, Italy and Russia, Ha said.

Van Phuc silk products presented at fairs were rated to be of high quality and well designed, Ha said, adding that such opportunities enable the association to introduce their silk to foreign customers, attracting tourists to visit Van Phuc more regularly and creating tourism development opportunities for the village.

In Van Phuc village, according to Ha, there are currently 150 stores selling silk and products made from silk. In 2014 alone, the village drew more than 10,000 foreign tourists.

Along with maintaining the existing stores, Van Phuc Village is also responsible for establishing new businesses to boost silk production and expand markets.

In addition to its achievements, Van Phuc silk is still facing difficulties, Ha said, such as stiff competition from low-quality fake silk imported from China with various designs, eye-catching colors and much cheaper prices.

"This has negatively affected the image and trademark of Van Phuc silk in the eyes of international customers," Ha said.

Van Phuc silk products are exhibited in a fair during international seminar on silk development held by Mekong Institute in 2014, in Khon Kaen, Thailand. - Photo courtesy of Van Phuc Silk Weaving Village Association

To address the problem, local leaders have established a high-quality silk introduction center with a store chain exhibiting and selling Van Phuc genuine silks and unique souvenir items made from silk. The silk products displayed here are regularly examined and strictly controlled, allowing customers to freely shop without worrying about buying fake and shoddy goods, especially foreigners who cannot distinguish genuine products from counterfeit ones, Ha added.

Ngo Thi Thanh Hien, an owner of Van Xuan silk store in the centre said a metre of fake silk costs from VND50,000 to 80,000 (US$2.20-$3.50), much lower than authentic silk products.

"I sell a metre of Van Phuc silk for about VND180,000 to 500,000 ($8-$22), even VND1 million ($45) for the high-end types. We cannot sell our products at prices that are too low since we have to purchase silk fibre, the material, from the central Highlands province of Lam Dong, not to mention that the process of making a silk cloth requires a lot of effort and meticulousness," Huong said.

Hien noted that foreign visitors often choose their favorite silk cloths to have their dresses or shirts made. They also buy many items such as clothing, blankets, pillows and towels and small items such as bags, purses and handbags as souvenirs.

Kikuchi Yoshihide, a Japanese tourist who has shopped for silk items in Van Phuc village three times, said every time he comes back to the village, the designs of the Van Phuc silk products have changed and become more beautiful.

"Japan also produces silk products but they are very expensive. Besides, silk is just used to tailor Kimonos, which are worn only in special occasions. In comparison, Vietnamese silk is much cheaper and its quality is quite good," Yoshihide said, adding that he had bought some silk shorts for himself because he likes its smooth and light weight, and also some scarves as gifts for his friends and family.

Situated on the bank of Nhue river in Ha Noi's Ha Dong District about 10 kilometers southwest of Ha Noi City centre, Van Phuc silk village is renowned for its traditional weaving techniques and premium quality of silk products.

According to Ha, under the Nguyen dynasty, Van Phuc silk had been considered as extremely precious handiwork used only to tailor the dresses of royal family members and aristocrats.

Not only prominent in the domestic market, the traditionally hand-woven and hand-dyed Van Phuc silk has captured the loyalty of customers outside the country. In 1931 and 1932, Van Phuc silk was displayed in international exhibitions for the first time in Marseille and then Paris. At the Paris Fair in 1932, Van Phuc Silk was praised by the French as the most sophisticated product from Indochina, Ha recalled.

From 1958 to 1988, the silk was mostly exported to Eastern European markets and then to many other countries all over the world, bringing great profit to the village in particular, and Viet Nam in general, Ha added.

With a history of more than 1,200 years, Van Phuc is proud to be the most ancient silk weaving village in Viet Nam. The village has been successful in joining craft job preservation with tourism development, Ha said, adding that it has been an amazing destination for handicraft village tourism.

Ha added that restoring traditional craft villages is one of key tasks that Ha Noi plans to undertake this year, so Ha Dong District's People's Committee has formulated and implemented a project on the restoration and development of Van Phuc traditional craft village.

Therefore, the village has organised handicraft village tours that enable visitors coming to the village to buy genuine Van Phuc silk products and at the same time, directly visit production facilities to explore the process of making a graceful silk cloth.

Visitors also have the chance to talk with the artisans and learn about the history of a village that has been recognised as the longest-lasting traditional handicraft village in Viet Nam.

Rising exports help VN register trade surplus in January, February

Viet Nam gained a trade surplus at US$900 million in the first two months of this year because of strong reduction in imports and regular increase of exports.

The General Statistics Office (GSO) said that in the first two months, national total import value had a year-on-year reduction at 6.6 per cent to $22.8 billion while the total export value gained a year-on-year increase of 2.9 per cent to $23.7 billion.

Viet Nam's imports decreased in most of the major markets against the same period last year. In particular, imports from China, the largest import market of Viet Nam, dropped by 5.6 per cent in the first two months to $7 billion, leading to the trade deficit between Viet Nam and China, which plunged 9.6 per cent year-on-year to $4.7 billion.

The import value to Viet Nam also fell by 26.6 per cent to $1.3 billion from the European Union (EU), 9.5 per cent to $1.9 billion from Japan, 7.6 per cent to $3.2 billion from ASEAN, and 4.8 per cent to $3.9 billion from South Korea; in addition to 4.2 per cent to $1 billion from the United States.

The foreign-invested economic sector witnessed reduction in imports during the first two months at 7.7 per cent year-on-year to $13.6 billion while the domestic economic sector's import value dropped by 4.8 per cent to $9.2 billion compared with the same period of last year.

During the first two months, machine, equipment and parts for production had the largest import value at $3.8 billion, a year-on-year reduction at 13.6 per cent.

The import value of petrol and oil products fell strongest by 34.8 per cent to $530 million due to a strong drop in the world crude oil price, though the import volume of petrol and oil products increased by 12.2 per cent to 1.7 million tonnes.

The GSO also reported that export value of foreign invested and domestic economic sectors gained a year-on-year increase of 2.3 per cent to $16.6 billion and 4.2 per cent to $7.1 billion, respectively.

Experts from the GSO said that an increase of the national total export value was due to the export contracts with traditional partners.

Most major export products saw an increase in export value compared to the same period last year, including telephone, garment, footwear, and wood and wooden products, in addition to seafood, rice, fruit and vegetables.

However, export value of crude oil witnessed a strong drop of 63 per cent to $250 million in the first two months against the same period of last year. Other products which plunged in export value included cassava and pepper.

MWG to offer reduced interest ESOP shares

Senior executives and management may receive shares from the Employee Stock Ownership Plan (ESOP) at reduced interest this year, Mobile World Investment Corporation (MWG) proposed at its shareholder meeting yesterday.

The total amount of ESOP bonus shares will be calculated according to the company's profit growth for 2016 instead of according to this year's plan.

For example, if this year's profit growth is above 10 per cent, ESOP share ratio is the profit growth multiplying by 0.1.

The total amount of ESOP shares will reach the maximum of 3 per cent in the total number of floating shares on the stock market, which is now more than 146.6 million shares.

MWG will reduce the number of bonus shares by one-fifth if the growth of MWG share price between 2016 and 2015 is lower than the growth of VN Index between these two years, which is defined at 15 per cent.

The price for each ESOP share is the lowest between VND10,000 per share and half of the market price – which is equal to the average closing price within 90 days before the issuance date. Bonus shares are forbidden from being transferred in four years.

Tran Duc Tai, MWG's director general, said that the number of management-level executives who received ESOP shares last year was more than 800, and that number is expected to increase to 1,100.

He said that the company will differentiate between those who want to receive bonus cash and those who want to receive bonus shares in order to reduce the ratio of ESOP shares compared to the company's total floating shares.

The company's shop managers will be the ones that receive bonus cash instead of bonus shares and total bonus could reach VND200 billion (US$8.9 million), Tai said, and added that the bonus is necessary to recognise their efforts in achieving last year's growth.

Last year, the company earned revenue of VND25.2 trillion ($1.1 billion) and a net profit of VND1.1 trillion ($47.8 million), an increase of 59 per cent and 60 per cent from 2014's figures.

MWG may issue ESOP bonus shares for executives and key managers in December of this year with the number of bonus shares being equal to 5 per cent of the company's current floating shares.

Of the bonus shares for last year's performance, 7.14 million shares are newly issued and 218,700 shares are re-acquired stocks.

Bonus shares for last year's performance are forbidden from being transferred for two years.

This year, MWG plans to earn a revenue of VND34 trillion ($1.5 billion) and a net profit of VND1.4 trillion ($61.7 million), an increase of 35 per cent and 29 per cent, respectively, from last year's numbers.

Securities firms calling for clearer regulations

Trinh Hoai Giang, deputy CEO of HCM Securities Corp. (HSC), has raised concerns about whether securities companies with foreign shareholders who own a 51 per cent stake or higher were defined as a local or foreign investor under a new draft decree.

Giang spoke at a seminar held yesterday by the State Securities Commission in HCM City to collect opinions on the decree, which addresses requirements for securities investment and trading.

"Our company plans to open up to foreign investors. Thus, we're interested in the status if foreign investors hold a dominant stake or even 100 per cent," he said.

He also wanted to know if his company would be able to invest in institutions that set limits for foreign investors, such as commercial banks.

In addition, he expressed concern about whether there would be differences between domestic and foreign-invested securities companies in activities like securities custody and settlement.

Giang also brought up issues related to tax, asset ownership and money transfer to other countries, and access to banking loans.

He proposed that the draft decree clearly define the institutions with foreign investment.

"Securities companies have recently been allowed to make investments outside Viet Nam and we want to invest in shares and derivatives. Therefore, securities companies should be licensed as fund management firms," he said.

Concerning fund management companies, Nguyen Dang Minh Khanh, deputy CEO of the VietFund Management (VFM), who also spoke at the meeting, said he wanted a clearer regulation for the draft.

He said that, under the draft, directors of departments that deal with professional activities within securities companies were not allowed to act at the same time as a staff member of another economic organisation.

Khanh wanted the decree to be more precise about whether a company could hire a foreigner who is an executive member of a company in his or her country.

He also said the regulation that forbids employees at a branch from working at the same time for another branch or at the headquarters was not suitable, as it could restrain the use of human resources and increase operational costs.

Nguyen The Trieu, who was representing Eastspring Investments Fund Management Company at the seminar, said that directors and deputy directors of fund management companies should be enabled to join investee companies because they represent the investing firms.

However, an investment consultant should not work simultaneously in the investment section, Trieu said.

Bids conducted for digital receivers for poor

The Viet Nam Public – Utility Telecommunication Service Fund has conducted a bidding of 461,893 digital receivers (DVB-T2) for the poor and poor households on February 25 and February 26.

With a total investment of VND318.4 billion (US$14.1 million), the project is divided into four packages in four locations such as Ha Noi, Hai Phong, HCM City and Can Tho City.

Yesterday, the fund also offered the fourth bidding package to purchase and install digital receivers in the provinces of Can Tho and surrounding provinces.

Transport Ministry sets sights on business equitisation

The Ministry of Transport will accelerate equitisation of transport corporations this year, an official from the ministry said in a recent interview.

Enterprise Management Department Director Vu Anh Minh told Giao thong, a newspaper of the ministry, that the key targeted businesses include Viet Nam National Shipping Lines (Vinalines), Shipbuilding Industry Corporation (SBIC), and the Viet Nam Expressway Corporation.

The other major companies are Nam Thang Long Transport Hospital, and Cuu Long Corporation for Investment Development and Project Management of Infrastructure.

The privatisation of these firms began last year, but has not yet been completed. The delay in Vinalines and SBIC cases were particularly attributed to obstacles related to their capital and debt settlement.

This year, the ministry also plans to equitise Academy of Aviation, Thang Long Vocational Training School, and two transport hospitals in Vinh and Da Nang central cities.

A registration centre of the Viet Nam Register and five technical centres of the Directorate for Roads of Viet Nam are also aimed for equitisation in 2016.

"The sooner enterprises get off ‘their parents' nourishment', the more experience and resources they will gain to better adapt to market developments," Minh said. "This is especially meaningful when we are integrated more deeply into the global economy."

Minh said that the one important thing to accelerate the equitisation process and improve competitiveness and efficiency of the companies after they are privatised, is to seek strategic investors who are truly capable.

The authorities have been cautious about looking for investors with adequate ability in terms of management, market, technology and finance, he said.

Minh said the ministry will not equitise four of its corporations, which serve the public. They are Viet Nam Maritime Safety – North, Vietnam Maritime Safety – South, Vietnam Air Traffic Management Corporation and Vietnam Railway (VNR).

The ministry will maintain controlling stakes in national flag carrier Vietnam Airlines and the Airports Corporation of Viet Nam, which is managing 22 airports nationwide.

It will withdraw state capital from all other corporations in the long run.

In January, Minh told Vietnam News Agency that the ministry planned to complete capital withdrawal from Vietnam Motor Industry Corporation, Transport Engineering Design Inc, Civil Engineering Construction Corporation No 5 (Cienco 5), Cienco 6 and Cienco 8 this year.

It will also step up divestments in a number of its seaports and VNR affiliates in 2016.

Between 2011 and 2015, 137 businesses in the transport sector went public, 67 more than the target that the ministry set for the period, according to Deputy Minister of Transport Nguyen Hong Truong.

Taxpayer database to stop payment evasion

The development of a taxpayers' database is necessary to improve the management of tax agencies and prevent tax evasions, such as transfer pricing, according to Deputy Minister of Finance Do Hoang Anh Tuan.

However, developing a taxpayer database would require the coordination of many organisations in different industries, such as garment, textile, footwear and beverages, he said at an online meeting last Friday, held by the General Department of Taxation.

Tuan noted that simplifying tax administrative procedures, coupled with applying information technology, were first steps in developing a reliable database for better management.

With a taxpayer database containing transparent financial indicators, the quality of forecasts of budget collections would be improved, said Tran Van Phu, Deputy General Director of the taxation department.

At the conference, tax authorities also raised concerns about difficulties in collecting tax debts and slow tax refunds.

Nguyen Dinh An, Deputy Director of Da Nang Taxation Department, said that tax refund regulations must be made clear, as enterprises were angry about slow refunds, while they had to pay fines due to the slow payment of debts.

In 2016, central budget collections were anticipated to drop by some VND50 trillion (US$2.22 billion) due to plunging global oil prices.

To cope with this drop, tax departments urged provinces and cities throughout the country to raise measures to promote production and business, while focusing on handing tax debts and enhancing inspections in sectors in which tax frauds and transfer pricing commonly occurred.

During the 2016-20 period, the General Department of Taxation set a goal for domestic tax collections to reach more than 80 per cent of total budget revenues, while increasing by 10 per cent over the previous five-year period.

This was an effort to implement the 12th Party Congress Resolution, which said that the proportion of tax collections to the State budget must be at least equal to 21-22 per cent of the country's gross domestic product (GDP) and ensure a budget deficit of below 4 per cent and public debt at below 65 per cent of GDP.

Still, the department said that tax collections must be increased in line with economic growth and price index increases.

Last year, tax collections reached VND806.3 trillion, or 110.2 per cent of estimates.

National index of industrial production rises eight per cent

Viet Nam's index of industrial production (IIP) in February rose by 7.9 per cent year-on-year, but decreased by 22.3 per cent against January, according to the General Statistics Office (GSO).

The reduction of the IIP in February, compared with January, was caused by the days off work for the traditional New Year.

GSO said the IIP in the first two months of this year showed a growth of 6.6 per cent against the same period last year, with the IIP of the processing and manufacturing industry up 8.5 per cent, electricity manufacturing and distribution up 12.8 per cent, water supply and waste treatment up 9.2 per cent.

Some products with strong IIP growth in the first months of this year against the same period of 2015 included automobiles, up 38.8 per cent, and steel bars and angle steel up 28.3 per cent. Some other products that witnessed IIP reduction included chemical paint, shoes, leather sandals and motorcycles, in addition to sugar and mobile phones.

The office also reported that many provinces and cities had shown high growth on the IIP for the first two months of this year against the same period last year, including central province of Quang Nam (65.6 per cent), northern provinces of Thai Nguyen (29.9 per cent), Hai Phong (14.7 per cent), and Hai Duong (9.2 per cent), in addition to southern provinces of Can Tho (13.4 per cent), Dong Nai (8.4 per cent), Binh Duong (5.7 per cent), and three cities of Ha Noi (8.5 per cent), HCM City (5.7 per cent) and Da Nang (9.6 per cent).

The inventory index of the manufacturing and processing industry in early February increased 8.9 per cent year-on-year, with some industries seeing growth in inventory index such as the industries involved in the production of beverages (up 56.1 per cent), metals (34.8 per cent) and motor vehicles (32.2 per cent).

The amount of employees working in industrial enterprises in early February increased by 6.2 per cent compared to the same period last year, of which employees working for State-owned enterprises increased by 0.5 per cent, non-State-owned enterprises by 4.8 per cent, and foreign direct investment (FDI) enterprises by 8.6 per cent.

Work begins on route to link mountain town

Deputy Prime Minister Nguyen Xuan Phuc launched the project to connect the Noi Bai-Lao Cai expressway with Lao Cai's Sa Pa town in northern Lao Cai Province on Saturday.

At a cost of over VND2.5 trillion (US$112.5 million), the project will include a four-lane provincial road crossing the Sa Pa and Bat Xat District, and Lao Cai city, as well as upgrading the existing 4D highway.

The work on the total 29.2 kilometres of road is expected to be completed in the first quarter of 2019.

At the ceremony, Deputy PM Phuc said he supported the project's build-operate-transfer (BOT) model and co-ordination among different road construction companies.

Highway 4D plays a significant role in the development of the northwestern region. However, the road is relatively small and easily blocked during heavy traffic.

Recently, the road to Sa Pa became overloaded due to the large volume of tourist arrivals. During the Lunar New Year holiday alone, more than 35,000 people visited the town.

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