Information deficit, new rule worries dampen shares

The last trading week was sluggish because of a lack of supportive information and concerns over new regulations regarding financial institutions' capital adequacy ratio.

At the HCM City Stock Exchange, the VN-Index ended last Friday at 588.03 points, falling by two per cent week-on-week. Blue chips lost the most value as seen through the VN30 Index, which tracks the southern bourse's top shares or blue chips. It plunged by 7.8 per cent.

Meanwhile, trading value remained high at an average of VND2.5 trillion (US$117.9 million) on an average volume of 146.7 million shares.

At the Ha Noi Stock Exchange, the HNX-Index dropped by 1.76 per cent to 89.14 points. Trading value and volume averaged VND1 trillion ($47.1 million) and 73 million shares.

Selling pressure late in the previous week continued and drove share prices down. However, speculative investors still favoured property developers FLC, Tan Tao and Kinh Bac Urban City, as well as Quang Nam Rubber and Ocean Group in HCM City. They likewise favoured property developers PetroVietnam Construction, Sacomreal and Tasco, as well as retailer KLF and financial and insurance company FIT in Ha Noi.

Notably, FLC witnessed more than 50 million shares change hands on Thursday, a first in the market's trading history.

Last Friday, the State Bank of Viet Nam (SBV) announced a circular to tighten the safety ratios, cross holding and securities lending of credit institutions. The market tumbled before the circular was issued as sources had acknowledged about the ruling in advance.

According to the circular, domestic commercial banks and branches of foreign banks shall not offer securities credit of more than five per cent of their charter capital, compared with the previous regulation of 20 per cent.

Investors washed out shares over fears that margin lending would significantly decline. However, according to analysts, the ruling will bring benefits in the long term.

Last week, foreign investors were net sellers, unloading a net of VND347 billion ($16.3 million) and witnessing an increase of about 0.5 per cent in the US dollar exchange rate, although the SBV opposed the lifting of the foreign exchange rate.

At the end of the year, demand for imports is expected to increase as global gold price decreases, making dollars more valuable. In addition, according to Pham Hong Hai, HSBC Vietnam's deputy general director, the trade deficit lasted for two-and-a-half months and indirect foreign investment made a turn after the United States Federal Reserve terminated its quantitative easing programme.

Regarding the domestic stock markets, Nguyen Duc Hung Linh, Saigon Securities head of retail research and investment advisory, predicted the downtrend to continue and urged investors to purchase shares of PetroVietnam Gas and Vinh Son-Song Hinh Hydropower. 

Petrolimex continues to lower fuel prices

The Vietnam National Petroleum Group (Petrolimex) lowered the petroleum price by 1,140 VND (0.053 USD) per litre and diesel by 450 – 590 VND (0.021 – 0.028 USD) per litre, starting at 11:00 on November 22.

Accordingly, the price of petrol RON95 was reduced to 20,850 VND (0.98 USD) per litre, petrol RON 92 and E5 to 20,250 VND (0.95 USD) per litre.

Meanwhile, diesel 0.05S will be sold at 18,650 VND (0.873 USD) per litre, diesel 0,25S at 18,600 VND (0.871 USD), kerosene at 19,250 VND (0.9 USD) and mazut at around 15,040 – 15,510 VND (0.7 – 0.72 USD) per litre.

The new prices are applied in Petrolimex’s distributors nationwide.

The group made its latest petroleum price cut on November 7.

TPP predicted to hit small farms

The Trans-Pacific Partnership (TPP) agreement which Vietnam will sign is projected to cause difficulties for the domestic livestock breeding industry, especially small farming households.

According to a report announced on November 18 at a conference on the livestock raising sector structure and benefits for small farmhouses in Vietnam, held by the National Agency for Rural Development in Hanoi, the breeding industry has increasingly imported breeders as foreign breeders have low risk of catching diseases and grow faster than domestic ones.

On the other hand, animal feed companies on the local market also provide foreign breeders which they said can grow well on their feed, Nguyen Van Giap, director of the Southern Center for Agricultural Policy and Strategy (SCAPS), one of the report’s writers, told the conference.

For animal feed, which makes up the largest proportion of 70% of the breeding sector’s value chain, foreign companies dominate half of the market, and with more foreign-invested firms controlling the market, a monopolistic mindset has appeared in the local animal feed market, he said.

Although prices of materials for animal feed have stayed stable on global markets, the volume of domestic animal feed has increased, and the Government has removed the 5% value added tax on animal feed imports, local prices of animal feed have still marked up, placing farmers in a difficult position.

However, more challenges will arise when Vietnam signs the TPP agreement. “TPP will hit small livestock farming facilities harder than bigger ones,” said Giap.

In fact, large farmhouses will expand their business operations and replace smaller rivals which cannot survive the growing competition.

The report pointed out that existing policies to support the development of the livestock farming sector have only benefited large rather than small farmhouses.

According to the report, the livestock breeding industry should have a development strategy, strictly control smuggled products, effectively put monopoly under control and spur healthy competition in the animal feed market, tighten controls on hygiene at farmhouses, manage the veterinary medicine market, monitor food safety and hygiene in the meat slaughtering and distribution processes, and establish a meat consumer association.

Money transfer on Facebook, Google Plus

Techcombank has launched a money transfer service on Facebook and Google+, becoming the first Vietnamese bank to offer such a service in the country.

According to Techcombank, the service is accessible to users of mobile phones using iOS (version 6.1 or higher) and Android (version 4.1 or up) operating systems. Customers can register and download “F@st mobile” app from Apple Store or Google Play to use the service with the help of Techcombank’s transaction offices.

This app allows users to transfer money to relatives and friends who connect with Facebook, Google+ or SMS attached with messages, images, video clips and audio recordings.

To transfer money, clients must log on the F@st mobile app, select “Social network”, choose receivers from Facebook or contact list and type the amount of money to be transferred.

Receivers can get their money at transaction offices of Techcombank. They can also get the amount from automated teller machines (ATMs) but have to report passwords given by the bank via their cell phones earlier.

Techcombank said it already considered security issues for those transactions. Senders will create a passcode for each transaction to ensure that their money come to the right person. Receivers are required to supply the correct passcode to take delivery of money.

The bank’s mobile baking service also allows customers to withdraw money from ATMs without using ATM cards. They just need a mobile device connecting to the Internet to transfer or receive money. This is an advantage especially when clients do not bring their cards along or just have banking accounts but ATM cards.

To withdraw money, customers can click on F@st mobile app and select ATM withdrawal. Techcombank’s system will give them a verification code. At ATMs, he supplies this code and the sum of money needed to transfer. The bank’s system will conduct an automatic call to a receiver to inform a second code. The receiver can get money from ATMs when supplying this second code.

At present, many banks are offering the mobile banking service with functions such as checking balance in the account, transferring money within the same bank and mobile charging.

Cocoa sector in search of fresh way forward

The agricultural sector, companies, and researchers should do more research into the cocoa market, analysing its value chain and socio-economic impact, and utilise the by-products of the crop to develop the sector, a seminar heard in HCM City yesterday.

Le Duc Thinh, deputy head of the Ministry of Agriculture and Rural Development's Department of Cooperative Economy and Rural Development, said not much research is done into cocoa and the industry lacks professional researchers.

Most researchers in the field are from other sectors, he said, and much of their studies is impracticable, he told the seminar organised by the Cao Nguyen Xanh Joint Stock Company.

They focus on particular problems to cope with short-term challenges related to production, improving quality, expanding cultivation area, and diseases, while basic research to achieve greater understanding of the fundamental aspects of the sector is lacking, he said.

The Government has invested in research but that mainly focuses on seedling and farming techniques, and few studies are done on developing the domestic cocoa market, marketing strategies, or developing the value chain, he said.

This should be changed, and the Government should collaborate with the private sector for such research and strengthen co-operation with international cocoa research organisations, he said.

Nguyen Van Hoa, deputy director of the Department of Crop Production, said though cocoa trees were introduced to Viet Nam in the 1950s, cocoa plantations did not prosper until 10 years ago.

Since cocoa is still a relatively new crop in Viet Nam, more research is needed to come up with better cultivation techniques to improve efficiency, he said.

The area under the crop has increased from 2,000-3,000ha in 2003-04 to nearly 20,000ha now.

Those areas applying proper farming techniques achieve very high yields, he said.

Experts said the industry has new opportunities thanks to the growing global demand, which is expected to cause a shortage of one million tonnes by 2020.

The seminar was held as part of the "Cooperation for enhancing sustainable cocoa development," a Viet Nam-Netherlands public private partnership project for sustainable cocoa development, which aligns the public efforts with those by Rabobank Foundation, Mars Incorporated, Cargill and others.

New land price framework issued

A recently issued decree on land price framework has regulated the maximum price of VND 162 million (US$ 7,800) per square metre in urban areas in the Red River Delta and the South Eastern Region.

The new decree categorizes land as agricultural land and non-agricultural land.

The minimal rate for fifth-tier urban land in the Central Coast Region will be VND 40,000 per square meter.

Commercial and service land in urban areas in the Red River Delta and the South Eastern Region will be set between VND 120,000 to VND 129.6 million per square meter.

Meanwhile, the lowest rural land price will be VND15,000 per square meter for mountainous communes in the Central Highlands Region, and the highest will be VND 29 million per square meter for communes in the Red River Region.

The Decree shall come into force on December 29, 2014.

Thanh Hoa golf resort to open in May 2015

A VND5.5 trillion ($261 million) resort and golf course complex invested by FLC Group in the central province of Thanh Hoa plans to start operations in May next year.

According to Doan Van Phuong, FLC’s general director, the province’s largest golf and resort complex took shape as part of next year’s National Tourism Year programme, to be hosted by the locality.

Once finished, the 400 hectare compound will include an 18-hole golf course and high-end hotel and resort.

The project will also offer 670 villas and 152 semi-detached houses for sale.

FLC Group recently put on sale memberships at the project’s Fusion Maia Samson Golf Links.

The first memberships will include incentives such as free green fees, a discount of 10 per cent at the Pro Shop, 10 per cent off all food and beverage services, and free hotel stays.

Memberships are valid through 2049.

Located at Sam Son beach in Thanh Hoa, 135 kilometres from Hanoi, the golf course was designed by Nicklaus Design, which has worked with more than 400 courses around the world and is managed by Flagstick. This will be Nicklaus’ first project in Vietnam and will also be the northern region’s first five-star golf course.

The Fusion Maia Samson Resort is planned to be managed by Serenity Holding Group, a famous hotel management company with sub-brands such as Fusion, A La Carte and Alma.

FLC’s project is expected to turn Sam Son and Thanh Hoa into a popular tourism hub in Vietnam’s northern region.

Rising demand for electricity to leave power plants short of coal

Facing growing demand for electricity, Viet Nam will be forced to start importing coal by 2020, an official said.

Coal demand will rise to 67.3 million tonnes by 2020 and up to 171 million tonnes by 2030, according to Government estimates. However, Viet Nam is expected to produce only 65 million tonnes of charcoal by 2020 and 75 million tonnes by 2030.

"The serious imbalance between supply and demand leaves the electricity sector with no other way than importing coal," Viet Nam Energy Consultation Centre Director To Quoc Tru told Hai quan (Customs) newspaper.

Australia and Indonesia, the biggest coal providers to Asian economies, are considered the most likely partners. However, most of the countries' existing charcoal mines have been claimed by other Asian nations like Japan, South Korea, China and India.

"Investing in new foreign coal mines can cost a lot," Tru said, estimating that investing in a coal mine in Australia with annual output of 30 million tonnes would cost about US$8 billion.

He added that Viet Nam also lacked clear regulations on capital and taxation, as well as infrastructure.

"Viet Nam does not have any port capable of loading huge ships carrying hundreds of thousands of tonnes of cargo," Tru said.

Tra Vinh, Vung Tau and Tien Giang have been selected as possible locations for such big ports but only Duyen Hai port in Tra Vinh is currently under construction.

The Viet Nam National Coal – Mineral Industries Group (Vinacomin) has suggested boosting co-operation with local enterprises like Viet Nam National Oil and Gas Group (PVN) and Electricity of Viet Nam (EVN) to confront obstacles in importing coal such as lack of capital, technology and human resources.

Vinacomin also plans to co-ordinate with Laos and Cambodia to explore the coal reserves in the two countries in preparation for future investment.

Medi-Pharm Expo 2014 to take place next month

The 21st Viet Nam International Hospital, Medical and Pharmaceutical Exhibition (Viet Nam Medi-Pharm Expo 2014) will take place in the capital city from December 3- 5.

The fair aims to link domestic and international firms in the pharmaceutical and medical equipment sector.

Over 100 companies from 16 countries and territories will display pharmaceutical products, dietary supplements, packaging and processing machines, analytical and testing equipment and medical equipment at 150 booths.

Textile businesses join Australian sourcing fair

A dozen Vietnamese textile businesses are participating in the Australian International Sourcing Fair (AISF), which opened on Tuesday in Melbourne.

On display at the fair's two pavilions are products from major companies such as GARCO 10, Ho Guom, Dong Xuan, Phong Phu, Thai Hoa and Thang Long.

Chairman of the Vietnam Business Association in Australia Tran Ba Phuc described the three-day event as an unparalleled opportunity for Vietnamese firms to introduce their products to international friends.

Garment and textile products are one of the key foreign currency earners of Viet Nam, shipped to 54 nations and territories. The country earned US$97.3 million from apparel exports to Australia in the first nine months of this year, up 46.8 per cent year-on-year.

Farmers concerned over domination by FDI companies

Vietnamese farmers are seeking help to reduce their dependence on foreign animal feed suppliers.

Luong Hong Doan, a farmer in Dong Nai Province, said the price of animal feed is constantly on the rise. "When the price of corn was VND6,900/kg, the price of feed was VND12,000/kg. However, even when the price of corn price dropped to VND5,500, the price of feed stayed the same," he said. Doan went on to say that when traders come choose pigs, household farms are being offered less.

Nguyen Van Giap, director of Insitute of Policy and Strategy for Agriculture and Rural Development for the southern region, said animal feed suppliers were mostly FDI companies who are monopolising the market.

CP Vietnam Corporation, owned by the Thai Charoen Pokphand Corporation, currently holds 19.5% of market share. In second place is Cargill Vietnam, held by the American Cargill Corporation, which has over 8% market share.

A group of researchers said there were signs that large companies collude to fix prices.

"Even though material prices decrease, the feed prices don't move. This may cause a loss of thousands of billions of VND each year. We need to improve competition in the animal feed market," Giap said.

Unemployment on the rise in Vietnam

Thousands in Vietnam have lost their jobs this year due to the massive closure of companies, creating a rise in unemployment that is expected to continue for some time.

Each day, the Hanoi Employment Introduction Centre (HEIC) receives hundreds of people registering for unemployment insurance. The people run the gamut in terms of age and professions.

Mr. Duc said he worked at Big C supermarket with a salary of VND4 million (USD190.4) per moth. However, in April the the firm started to scale down, leaving him to be unemployed. Now he is living on the unemployment benefits of VND2 million (USD95.23) per month.

He said that despite having experience, it is not easy for him to find a job as Tet nears because Vietnamese companies usually recruit at the beginning of the year.

Mrs. Thuy, who worked for Duoc Khoa Company in Hanoi, said she has been living on unemployment since September. In the meantime she has had to take a job as a housekeeper.

Nguyen Toan Phong, director of HEIC, said in the first ten months of this year, 27,665 people came to the centre to register for unemployment insurance, up 5,837 from the same period of last year.

In the ten-month period, the centre spent VND178.8 billion (USD8.5 billion) on unemployment benefits. Mr. Phong added that the majority of people registering work in the areas of processing, electronics and garments and textiles. A high rate is seen at companies located at industrial parks and export processing zones as well as foreign-invested firms.

According to the Ministry of Labour, Invalids and Social Affairs, up to 30-40% of people who register unemployment have graduated from colleges and universities.

Nguyen Thi Kim Loan, head of HEIC’s Unemployment Insurance Board, said that economic difficulties are the main cause of the rise in unemployment. Meanwhile, according to Mr. Phong, the passivisation of state-owned companies has also contributed to the problem.

So far this year, the number of unemployed in Vietnam grew by 20% against last year, Phong added.

Hanoi taxi companies announce price cut

At least 15 taxi companies in Hanoi have announced cuts in fees of between VND200 and VND800 per kilometre, according to a report from the Hanoi Department of Finance.

The move followed instructions from the municipal departments of Finance and Transport after a reduction in petrol prices.

Still, some claim that the price reduction is modest, at between 1.6%-6.5% compared to the current fee level. After the nine consecutive price cuts, the price of Petrol A92 has dropped by VND4,250 per litre and the price of diesel fuel has fallen 15 times for a total of VND3,580 per litre.

Khuat Viet Hung, deputy chairman of the National Committee for Traffic Safety, said that the petroleum price cut would help slash overall transportation fees by 5.6-8%.

According to the Ministry of Transport, to date, 10 transportation firms in HCM City also said they had reduced fees by VND500-2,000 per kilometre.

Vietnam Airlines pilots jump ship for higher salary

Many pilots employed by Vietnam Airlines have been opting to change to other carriers because of low pay.

One pilot said his fixed monthly income was about 90 million VND per month, but if he switched to another domestic airline, he could triple his salary.

For Vietnam Airlines pilots, the monthly salary ranges between USD8,000 to USD13,000 depending on seniority and rank.

In just one Vietnam Airlines flight team, ten pilots have left to work for other airlines in recent months, and there are more resignation letters waiting to be processed.

According Vietnam Airlines policy, pilots are sent abroad for training on corporate funds if they agree to sign a 15-year contract. The estimated amount for training a pilot for the carrier is around 2.5 billion VND, not including later courses. The investment is significant to the airline, and when pilots decide to leave before the contract is up, it means a loss for the company.  

Can Tho’s aquatic exports witness twofold increase

Mekong delta Can Tho City has exported more than 11,000 tons of aquatic products, mainly shrimp to such large markets as the EU, Japan, Australia, Singapore and the US, according to the city’s Department of Industry and Trade.

Over the past 10 months of 2014, it earned US$500 million from exporting 55,000 tons of aquatic products, accounting for 51% of the total export turnover and representing a twofold increase compared to the same period last year.

The city has provided a loan of VND8,000 billion for local businesses to purchase new materials and promote consumption in large markets.

It also cooperates with other provinces and facilitates enterprises' further coordination in production and export with the aim of making an aquatic export value of US$600 million for the full year.

Nafiqad wants Russia rule on seafood imports lifted

The National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) has proposed the Russian government abolish a rule that requires Vietnamese seafood exporters to sign contracts with Russian importers in order to ship their products to Russia and the Customs Union that groups Russia, Belarus and Kazakhstan.

An inspectorate of Russia and the Customs Union late last month conducted inspections into some enterprises exporting seafood to these markets.

As many as 64 local firms complying with regulations on food safety of Vietnam and the Customs Union are allowed to export their products because they have struck deals with Russian partners.

Meanwhile, 38 other enterprises cannot ship their seafood to Russia because they have yet to ink contracts even though they are able to meet technical requirements. The director of a company listed among 38 enterprises said this is the first time the company has begun to explore business opportunities in Russia. Therefore, it has yet to secure a contract with Russian importers.

However, as the firm’s products can fulfill food safety requirements, it is unreasonable if those products are not allowed to enter the Russian market, he said, adding that with permission from Russian authorities, it will be easier for his firms to present products to Russian importers.

Enterprises say the condition that seafood enterprises must secure contracts with Russian importers is a barrier for them and that Russian consumers are those who will suffer.

In the past, the Vietnam Association of Seafood Exporters and Producers had a management board to export seafood to Russia, including only around ten seafood firms.

The board then was blamed for making other enterprises lose their opportunities to export to Russia.

On July 15, 2013, the Ministry of Agriculture and Rural Development decided to dissolve it. Such a move has helped increase the number of firms exporting seafood to Russia.

Gov’t revises up reference urban land tariffs

The Government has issued a new decree on land prices, in which the reference land prices in special-grade urban centers will double with the maximum of VND162 million per square meter.

The decree covering both agricultural and non-agricultural land stipulates the prices of each type in each region, and has two groups. It is expected to take effect at the end of next month to help relevant State agencies and investors to establish a more agreeable price when it comes to compensation for affected people.

In accordance with the decree, prices of non-agricultural land in urban areas will have the lowest value of VND40,000 per square meter for fifth-grade cities in the north-central region, while the highest rate of VND162 million per square meter for special-grade cities will be applied in the Red River Delta and the southeastern region.

Prices of commercial and service land in the Red River Delta and the southeastern region will range from VND120,000 to VND129.6 million per square meter.

Meanwhile, the maximum land price in the rural areas will have the highest value of VND29 million per square meter in the Red River Delta, around 16 times higher than the current one.

Previously, many experts and property traders expressed concerns over a draft of the decree announced by the Ministry of Natural Resources and Environment to double the current land prices in urban areas as it could result in the higher costs for development of infrastructure, urban centers and housing, and the low growth of real estate market.

However, the ministry stated that the land price framework has existed for a long time without adjustment and has not followed market prices, while land prices in reality now are three to five times higher than those regulated in the land price frames of localities.

Lawyer Hoang Van Son at the HCMC Bar Association, who has received many claims on land, said the Government should focus on reform of administrative procedures and mechanisms on land as raising land prices for many times in the new decree could not resolve existing land disputes.

Fuel traders await price cut order again

Local fuel trading companies again are waiting for a decision from administering agencies to announce further retail price cuts as they are making good profits from VND300-750 from each liter of fuel sold.

According to the base price calculation list provided by fuel wholesale traders, they have been gaining VND733 from each liter of gasoline sold, VND405 from diesel oil and VND253 from kerosene as of early this week, not to mention a fixed profit of VND300 a liter factored into the base price.

A fuel trader in the South told the Daily that the base price has declined strongly compared to November 7, when the Ministry of Industry and Trade requested traders to lower retail prices given steady fuel price drops in Singapore as the key petrol supplier for Vietnam.

The RON 92 gasoline price on November 7 was US$91.58 per barrel, diesel oil 0.05S at US$96.13 a barrel and kerosene US$99.14 a barrel. In the latest trading session on Monday, the prices were US$85.43, US$91.95 and US$94.77 a barrel respectively.

The 15-day average price from November 3 to 18 used to calculate the base price of RON 92 gasoline was US$89.86 a barrel, diesel oil US$95.75 and kerosene US$98.7.

Joint Circular 39/2014/TTLT-BCT-BTC regulates that a team of officials from the ministries of Industry-Trade and Finance is responsible for calculating and announcing the base price and the difference between the current base price and the preceding base price every 15 days.

At present, the Ministry of Industry and Trade’s official website updated the latest base price list on November 6 and import price from Singapore on November 12.

Before the retail price cut on November 7, fuel wholesale traders had been also waiting for a decision of the ministries of industry-trade and finance to revise down their retail prices following sharp crude oil price falls on the global market.

In a related development, local fuel trading firms reported huge profits in the third quarter of this year.

Vietnam National Petroleum Group (Petrolimex), which accounts for a lion’s share on the domestic market, obtained VND406 billion in pre-tax profit in the third quarter. Between January and September, it obtained a pre-tax profit of VND67 per liter or kilo of fuel sold.

Materials - Petroleum Joint Stock Company (COMECO) reported an after-tax profit of over VND9.8 billion in the third quarter, rising VND3 billion year-on-year. From January to September, its after-tax profit surged 45% to over VND28 billion.

Saigon Fuel Company (SFC) obtained over VND26.7 billion in after-tax profit in the Jan-Sept period, rising by VND12.4 billion from the same period of 2013.

Incentives for coach station investors

Individuals and businesses developing coach stations would be exempt from land rent, land-use fee and ten years of income tax, and would gain easy access to soft loans, according to the draft of a decision to be issued by the Government.

The draft specifies investors of all economic sectors involved in coach terminal development projects would get preferential treatment.

In specifics, investors of coach station projects included in the master plan would be offered funding to build entrance and exit roads, and financial assistance from the State budget to cover site clearance cost. They could take out soft loans from local development funds.

As for coach stations in the highlands and remote areas, the State budget would cover supporting works such as restrooms, ticketing offices and waiting lounges.

Land use fee and tax would be exempted in the pick-up and drop-off areas, parking lots, waiting rooms, ticketing offices, restrooms and access roads. Investors would also be exempted from corporate income tax for ten years from the operation date of a station.

The Government would not relocate stations in the approved planning at least in 50 years and prioritize projects to connect stations to the road system.

As of June, statistics from the Ministry of Transport showed 457 coach stations had been operating in Vietnam. Of this figure, 213 stations accounting for 46.6% were operated by private companies.

However, investors only pay attention to stations in large urban areas. Meanwhile, small-scale ones are facing with difficulties in attracting investment.

PVN urea arm to launch IPO

PetroVietnam Ca Mau Fertilizer Company Limited will launch its initial public offering (IPO) on December 11 with nearly 129 million shares offered at a reserve price of VND12,000 each on the Hochiminh Stock Exchange.

The urea manufacturing affiliate of Vietnam National Oil and Gas Group (PVN), expecting to raise over VND3.1 trillion from this IPO, will spur its chartered capital to nearly VND5.3 trillion, equivalent to 529.4 million shares.

The State will hold a 51% stake, equivalent to 270 million shares, while around 129 million shares (24.36%) will be offered to strategic investors and the same amount to other investors. The company will sell nearly 1.5 million shares (0.28%) to its employees.

After deducting charges and fees from the expected proceed of over VND3.1 trillion, the firm will hand over VND3.078 billion to its mother company PVN.    

The company will also adjust its name to PetroVietnam Ca Mau Fertilizer Joint Stock Company after the IPO. It said target strategic shareholders should have long-term commitments to the company, pledge to supply it with gas at a stable and competitive price and support the firm in the fields of governance, technology, research and development and consumption. They should have a strong financial capacity too.

PetroVietnam Ca Mau Fertilizer Company Limited has seen its output increasing over the past three years. It stood at 444,000 tons in 2012, 747,000 tons in 2013 and an estimated 772,000 tons in 2014.

The fertilizer maker said PVN will ensure the stable price of gas as feedstock for the company in the 2015-2018 period so that it can earn an average return on equity of 12% per annum. The company targets profit of nearly VND5.6 trillion in 2015, VND6.2 trillion in 2016, VND6.4 trillion in 2017 and VND7.4 trillion in 2018.

The company, which operates Ca Mau urea plant in Ca Mau Gas-Electricity-Fertilizer complex in Ca Mau Province, has its business portfolios including fertilizer and nitrogen production, petrochemicals and fertilizer export-import, logistics and finance investment.

HCM City flexible about home certification

The government of HCMC will issue home ownership and land use right certificates to home buyers who have finished payments to investors even though the investors have not settled debt owed to banks.

Nguyen Huu Tin, vice chairman of the city, said at a working session on November 17 that the move would help solve the long-running problem in which home buyers have not received housing ownership and land use right certificates though they have finished payments for their homes.

City citizens usually complain that they have moved to their new apartments for years but have not received certificates,  Nguyen Van Lam, deputy head of the economic and budget committee of the HCMC People’s Council, told the meeting.

City departments and district authorities at the meeting said the issue comes from the intricate relationship between investors and banks and that between investors and customers, and suggested the city government solve the problem on a case-by-case basis.

However, vice chairman Tin said the city should help all affected households, not on a case-by-case basis.

Investors have responsibility to pay debt using their own assets while banks should monitor the flow of their capital to ensure they can take back their money.

Therefore, it is unacceptable when home buyers cannot get certificates for land use rights and home ownership after they have made payments to investors and moved to their new apartments for a long time.

To handle the problem, Tin requested authorities of the city’s districts to inform investors and banks the city’s decision to issue home ownership and land use right cerfiticates for buyers.

Within 15 days from the date of the decision being announced, if banks have any questions, district authorities will instruct them to deal with investors’ debt and collateral in a way that banks can only take away mortgage assets which investors own.

If banks and investors agree on the solution, the authorities will complete procedures to issue cerfiticates. For buyers who have finished 95% payments for property developers, the city authorities will help investors collect the remaining 5% and then issue certificates.

The same solution will apply to projects which have been suspended by the authorities as their investors have not been able to repay loans to banks, Tin said.

Sa Dec flowers to be used for perfume production

The Mekong Delta province of Dong Thap plans to make perfume from flowers grown in a village in its Sa Dec City in addition to supplying flowers for other parts of the delta and HCMC.

Tran Thi Thai, vice chairwoman of Dong Thap Province, told the Daily that an advisory group from France had come to Sa Dec flower village to do a survey and present a proposal for flower production. This project is expected to raise the value of homegrown flowers and help local farmers increase their incomes.

“Under this program, the French delegation plans to support Sa Dec to produce flower seeds to supply other localities in Vietnam. Especially, local businesses can produce perfume from flowers,” said Thai.

However, the provincial government has not yet made an official decision on the program. Therefore, she could not provide any details about the partner and an expected economic outcome.

According to the Sa Dec Department of Agriculture and Rural Development, more than 1,500 household businesses are growing over 2,500 species of ornamental flowers on 400 hectares. More than 1,300 of these families are earning a living from 240 hectares of ornamental flowers in Tan Quy Dong Ward.

Sa Dec flower village provides tens of millions of ornamental flower baskets for HCMC and the Mekong Delta a year, especially on Lunar New Year holidays.

It is also an attraction for both local and foreign visitors. Sa Dec welcomed over 32,000 visitors, including 22,000 foreigners, in January-September.

Banking system health improves

Basic indicators released by the State Bank of Vietnam suggest the overall health of the banking system has marginally improved in the three-month period from late June till late September.

According to statistics of the State Bank, as of September, the capital adequacy ratio (CAR) of the entire banking system stood at 13.43%, up from the 12.94% recorded on June 30, 2014.

Such CAR did not count credit institutions with negative equity.

In many countries, the minimum CAR at banks is set at 12% while credit institutions in Vietnam are required to maintain the minimum ratio of 9%.

At joint stock banks, the ratio was seen improved with 12.48% in late September compared to 11.77% in late June. Meanwhile, at banks with the State holding majority stakes, including VietinBank, Vietcombank and BIDV, the ratio went down to 10.07% from 10.44%.

CAR at joint venture and foreign banks continued to take the lead with 31.27% recorded in late September.

The ratios of return on asset (ROA) and return on equity (ROE) were also seen improving considerably.

The banking system’s ROA picked up from 0.17% (in late March) to 0.36% while ROE surged to 3.81% compared to 1.83% in late March.

However, it should be noted that ROA and ROE were quarter-two data of credit institutions and did not include ones having negative equity and people’s credit funds.

In addition, assets of the entire system totaled VND6,161,763 billion, or some US$290 billion, up 6.12% against late last year.

The ratio of short-term capital used for medium- and long-term loans as of the end of quarter three amounted to 19.04% against 18.26% in late June.

The loan-to-deposit ratio was 82.72% at the end of September compared to 82.30% three months earlier.

New growth markets for local firms

Cambodia, Laos and Myanmar are emerging as potential growth markets for Vietnamese companies, said Nguyen Duy Kien, deputy director of the Asia-Pacific Market Department under the Ministry of Industry and Trade.

Kien was speaking at a seminar held in HCMC last week on how to make use of the commitments to the ASEAN Economic Community (AEC), organized by the National Committee for Economic Cooperation Office in collaboration with the WTO Center in HCMC.

Kien said convenient transportation and cooperation programs in the Cambodia-Laos-Vietnam (CLV) and Cambodia-Laos-Myanmar-Vietnam (CLMV) regions are offering opportunities for domestic businesses to tap these three markets. Such joint programs can facilitate infrastructure development, investment attraction, and trade in goods.

Last year, Vietnam’s exports to Cambodia reached US$2.93 billion and its imports US$504 million. The country shipped a wide range of commodities to Cambodia such as fuel, steel, fertilizer and apparel and imported rubber, cashew, corn and materials for making cigarettes from the neighboring nation.

For the Lao market, the country exported fuel, steel, fertilize and vehicles worth a combined US$458 million and imported wood, mineral, ore and corn, among others, with a total value of US$668 million.

Although Myanmar has opened its doors to the world economy for only two years, it is considered a potential growth market. Trade ties between Vietnam and Myanmar are growing, creating business opportunities for local firms, Kien said.

Bilateral trade amounted to nearly US$250 million last year, up from the US$120 million recorded in 2012. Vietnam shipped large volumes of steel, machinery and apparel to Myanmar and mostly imported wood and wooden products in addition to fruit, vegetables and seafood.

Bui Thi Thanh An, deputy general director of the Vietnam Trade Promotion Agency, said Cambodia is an important export market for Vietnam with two-way trade growing over 30% a year on average. Vietnam’s exports to Cambodia amounted to US$1.51 billion in January-July this year and its imports reached more than US$440 million.

Revenue from exports to Myanmar exceeded US$163 million as of this year’s second quarter, surging 64.6% against the same period last year, while export turnover from Laos amounted to US$330 million in January-September, a year-on-year rise of 6.9%.

Eighteen travel firms clubbed together

Eighteen travel enterprises in HCMC have grouped together to form a new tourist group, known as Travelink, with an aim to improve and expand their services for independent travelers.

These enterprises are of small and medium scale, such as Vietcircle, Lien Bang Travelink, Vietnam Destination, Beautiful Asia Tours, Freetour, Lotus Travel, Tourance Travel and Saigonzoom. They are now advertising and selling their products on the website www.travelink.vn.

The group currently offers some 30 domestic and international tours. It plans to connect with more travel firms and introduce more new destinations in the coming time.

“Small companies do not have strong sales networks and operating capacity, so we establish this group to improve services,” said Tu Quy Thanh, director of Lien Bang Travel Trading Company Limited, who serves as the leader of the group.

Thanh said members can introduce and sell all tours of the group on their own websites, and send travelers to his firm for group tours. Companies without websites can use the group’s site to promote and sell their products.

Eight enterprises in the city last year also created a group named Vietnam Consortium Group to improve their services and attract more local and foreign tourists.

HCM City extends 18 projects to avoid waste

As HCMC’s power needs in recent years have been lower than previously forecast, HCMC Power Corporation (EVN HCMC) has extended work on 18 power transmission projects to avoid waste.

The combined investment capital for the projects that will not be developed in the 2011-2015 period is nearly VND11 trillion. In this period, the company had planned to spend around VND21 trillion on power transmission projects.

According to Pham Quoc Bao, deputy general director of EVN HCMC, when these power projects were approved for development in 2011-2015, power consumption was forecast to grow 12.9% a year.

However, the actual rise in power consumption in 2011-2013 was only 6% a year. Besides, commercial power output in HCMC rose a mere 4% compared to an initially projected 7.6%.

Under the city’s economic growth scenarios in the coming years, the maximum power consumption would increase 8% annually and the maximum capacity of the power system would reach 5,300MW by 2020. The current power system has virtually met demand in the next few years.

If the investments are made, debt would pile pressure as most of the power projects are funded by official development assistance (ODA) loans, Bao said.

EVN HCMC, he said, has also written to the HCMC government and the Ministry of Industry and Trade proposing adjusting the city’s 2011-2015 power development plan so that the plan for the 2016-2025 period the Institute of Energy is drafting can be closer to reality.

Regarding power supply in the 2014-2015 dry season, Bao said supply could be sufficient when completing the 500kV Pleiku-My Phuoc-Cau Bong, Song May-Tan Dinh, Vinh Tan-Song power lines and the 500kV Cau Bong substation to transmit power from the central region to the south.

Besides, work on Vinh Tan and Duyen Hai thermal power projects is being speeded up to provide power for HCMC and other southern provinces.

Cyber attacks in Vietnam megacity up 300% from 2013

Nearly 280,000 cyber attacks have been recorded in Ho Chi Minh City this year, a record 300 percent increase from the previous year, it was revealed at an Internet security conference Wednesday.

Cybercriminals have launched 275,816 attacks on Internet systems in the southern metropolis this year, Le Quoc Cuong, deputy director of the municipal Department of Information and Communications, said at the “Information Security and National Sovereignty” conference.

“The 300 percent increase is an alarming figure,” Cuong said.

Many of the attacks are from China, according to the recorded IP addresses, the official added.

“In 2013 Chinese IPs were recorded from more than 1,000 attacks, whereas the figure in 2014 is nearly 70,000.”

Nearly 25,000 attacks have come from the U.S., while 20,000 have originated from Taiwan, Cuong added.

Vietnam’s ability to defend against cyber attacks remains weak, as proven by the number of websites that have been compromised or defaced, experts said at the event.

Many attacks were for political purposes, especially issues related to Vietnamese sovereignty in the East Sea.

“From the end of August to November 17, 2,500 websites with the “.vn” domain name have been attacked,” Vo Do Thang, director of Athena, an Internet security training center, said, citing data from a foreign website.

“As for government website with the “.gov” domain, 250 were compromised in the first two weeks of this month.”

Thang said this is only the recorded data, and the real number of attacks could be much higher.

Dr. Trinh Ngoc Minh, deputy chairman of the Vietnam Information Security Association (VNISA), said the number privacy breaches in the Southeast Asian country have also soared.

One of the most noticeable cases was the discovery that an illegal phone tracking app had been installed on more than 14,000 Android phones, allowing the company behind the app to manipulate the secretly collected data.

Hanoi-based tech company Viet Hong Co advertised its Ptracker app as being able to help users track other people’s Android phones, read their SMS messages and contact books, record their phone calls and even turn on features like the camera, 3G or GPRS connections from the target devices.

But its customers did not know that all of the data they covertly monitored from the handsets has been transferred to the server computer of Viet Hong Co and is at the disposal of the company’s employees, according to an investigation report released in June.

“We can say this is the most serious and largest data breach case in Vietnam so far,” Minh said.

Internet security experts also pointed out hidden risks from social networks, as users can lose their personal information to hackers and have their Facebook or Twitter accounts stolen.

A report by the southern chapter of the VNISA addressed the case of VCCorp, a Hanoi-based communication center that was severely attacked by hackers last month.

The attack targeted a number of websites powered by VCCorp and left them inaccessible for days, which cost the company some VND2 billion ($94,135) in daily damage.

Even though the cyber attacks targeting Vietnamese victims are becoming increasingly dangerous, awareness on Internet security of local organizations and businesses is decreasing, according to experts.

While only 16 percent of the organizations and businesses surveyed by VNISA in 2012 said they did not know when their systems were compromised, the figure rose to 33 percent this year, according to a VNISA report.

In the meantime, the number of organizations who know that they had been attacked dropped from 40 percent in 2012 to 33 percent in 2014.

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