Domestic sector tea exports rebounded in the first 11 months of 2016, building on momentum and strengthening a partial recovery last year, the Vietnam Tea Association has reported.

Association Chair Nguyen Thi Anh Hong was widely quoted by the Vietnamese media as saying that the country's tea exports have improved from their lacklustre performance over the past several years.

Though the better figures are encouraging much more need be done to achieve the export levels of five years ago, higher profitability and long-term sustainability, Ms Hong noted.

During the January-November period, the domestic sector shipped 118,000 tons of tea to foreign markets generating US$197 million in gross revenue, up 7.1% in volume and 4.3% in value year-on-year.

Major markets that experienced significant growth for the period included Pakistan, China, Indonesia and Malaysia. Pakistan was the lead buyer of the country’s tea, commanding a 33.5% market share.

Exports were buoyed by two-fold rises in sales volumes to China and Indonesia while consignments to Malaysia jumped 44.7% in volume, said the Association in a prepared statement.

Currently, the tea export price hovers around US$1,656 per ton, roughly a drop of 14% from November of 2015.

In line with statistics from the Association, experts estimate that the Vietnam domestic sector tea output fell to 160,000 tons in 2014— a 13.5% annual decline following a 7.5% drop in 2013.

The area dedicated to tea cultivation in the Southeast Asian country has fallen gradually over recent years, from 130,000 ha in 2009 to 124,000 ha in 2013. Poor weather and a lack of reinvestment in the tea segment contributed to a particularly weak 2014 result.

Experts had forecasted a partial recovery in 2015-16 on the back of the positive impact of official efforts to expand the production area (to a targeted 150,000 ha by 2020) and boost productivity.

However, at a projected level of 170,000 tons in 2016, production will remain around 15% below 2011-12 levels, per experts.

On the upside, Ms Hong noted that the domestic tea sector has managed to strengthen controls over excessive pesticide use, which grip is a fundamental prerequisite for the sector to gain market entry into the EU.

The EU is the globe’s third largest economy in terms of tea consumption and the Association is banking on improved market entry subsequent to a Vietnam-EU free trade agreement coming into full force by 2018.

The use of chemicals in the EU are also strictly regulated so it’s important to keep making progress in this area, added Ms Hong.

The domestic sector has also made headway in improving productivity, coordination among the supply chain members, noted Ms Hong, but still lags in giving effect to a cohesive global marketing and brand building effort.

Bac Ninh’s export value of industrial products touches $26b
     
Bac Ninh Province has gained US$26 billion from the export value of industrial products in 2016, largely because of foreign-invested information and telecommunication enterprises.

This year, the province’s total industrial production value is estimated at VND588.65 trillion and the total export value of its industrial products at $26 billion, 93 per cent of which comes from the IT industry, according to the Bac Ninh’s department of information and communications.

Foreign-invested businesses in the province that contributed to these figures include Samsung (Samsung Bac Ninh and Samsung Display), Canon, Microsoft and Foxconn, the department said.

Bac Ninh is a popular destination for local and foreign investors, including many multi-national groups, who manufacture electronic products such as tablets, mobile phones, printers, household appliances and chips.

The province has advantages in terms of its geographical location and has created a suitable environment to entice large investors. It is one of the key provinces that is attracting foreign direct investment in Viet Nam.

So far foreign direct investment (FDI) projects in Bac Ninh have operated efficiently and competitively. —

Cultivating science to instil food safety culture

Farmers and other actors in agribusiness need to embrace the science behind food practices and instil a new safety conscious culture, speakers told delegates at a recent forum in Ho Chi Minh City.

Accepting the science behind microbiologically safe fruit and vegetables is a first step to creating a safer food environment in all of agriculture, said Le Van Banh, a department head at the Ministry of Agriculture and Rural Development.

Fresh produce are raw agricultural commodities that are far too often consumed within the country without being subjected to a scientifically grounded practice to effectively destroy pathogens or detect excessive harmful chemicals.

Food contamination can occur at every stage in the food supply chain, Mr Banh underlined, adding that fruit, vegetables and other produce are only as protected as the weakest link in the supply chain.

It is the responsibility of whoever produces the food to maintain its integrity, he told delegates, emphasizing that every business in the fresh produce industry has a duty to ensure consumers that the country’s farm produce is free of harmful pesticides and insecticides.

Industry participants need to follow practices that science dictates will guarantee they are maintaining the highest standard of food safety within their organization. Mr Banh urged business owners to protect themselves and their market by embracing science.

Instilling a food safety culture within a business and throughout the fresh produce supply chain is imperative because all the factors that contribute to foodborne illnesses originate from human error.

The agriculture segment can’t eliminate foodborne illnesses in their entirety but they can limit the number of individual instances that occur and contain epidemics from breaking out, added Mr Banh.

Every company should employ staff that understand food safety so that they can ask the right questions and guarantee that the importance of food safety is communicated to all employees in a variety of media.

Nguyen Thi Hong Thu, director of Chanh Thu Co. Ltd headquartered in Ben Tre Province in turn suggested delegates be the catalyst for implementing GlobalGAP or VietGAP standards throughout the supply chain.

Mr Thu noted that currently exports are high but profits are extremely low due to food safety concerns. 

Vietnamese fruit and vegetable stands little chance of making any long-term and sustainable entry into the lucrative US or EU markets as it now stands, because of consumer food safety concerns.

Local business owners must take the initiative to compel as well as educate their employees and introduce a no-nonsense policy towards food safety within their working environments.

Employees must get the message that unsafe food practices are unacceptable and will not be tolerated, emphasized Mr Thu.

Mr Thu noted his agreement with Mr Banh on the issue of communication to implement a culture of food safety. That communication must be rapid, reliable, relevant and repeated often to workers through all kinds of media outlets if the effort is to succeed, he noted.

Changing the mentality of labourers, employees and salaried staff throughout the entire supply chain is the best way to combat poor safety standards and will without question limit the occurrences of foodborne illnesses.

Businesses should make food safety a part of their branding, said other speakers, adding that they ought to have routine inspections and make the results of those examinations public.

They urged that the government GlobalGAP or VietGAP safety standards are the minimum requirements and businesses must be creative and innovative, aiming to exceed these requirements, serving as a win/win for their business, the agriculture segment and ultimately the consumers.

Commitment from every player in every supply chain is needed to make sure food is kept as safe as possible and this story needs to be shared with consumers around the globe to make a compelling incentive for them to purchase produce from Vietnam.

The bottom line is that agriculture needs to live and breathe science – day in and day out – if it is to be profitable and sustainable, they concluded.

Cement and clinker exports fall 7% in 2016

Vietnam domestic sector cement and clinker exports in 2016 are estimated to have fallen 7% against 2015 on the back of fierce competition with cheaper product churned out by producers in other countries.

According to the latest statistics of Vietnam Customs, domestic sector exports of cement and clinker for the 11 months leading up to December of 2016 fell 7.3% on-year in volume to 13.5 million tons and 17.5% in value to US$510.7 million.

The Philippines and Bangladesh were the two largest buyers of Vietnamese cement and clinker for the 11-month period, importing 3.5 million tons at US$163.7 million and 4.3 million tons at US$129 million, respectively.

The only three consumer markets registering growth in imports for the January- November period were the Philippines (up 65.7%), Mozambique (up 39.3%) and Australia (up 36%), said Vietnam Customs. 

Seminar advises on debt risks

Risks that companies face while exporting and measures to mitigate such risks and collect overseas receivables were discussed at a seminar in Ho Chi Minh City on December 22.

Speaking at Risk Management and Offshore Debt Prevention in Free Trade seminar, Quyen Anh Ngoc of the Ministry of Industry and Trade’s Multilateral Trade Policy said existing and future free trade agreements would bring great opportunities for Vietnamese firms to boost exports and enter the global supply chain.

But they would also face challenges like technical barriers and the threat of losing domestic market shares, he said.

Ngo Khac Le, an arbitrator at the Vietnam International Arbitration Centre, said to prevent risks and improve efficiency in exports Vietnamese companies should carefully vet their customers before signing export contracts.

Besides, exporters face the risk of not getting payments from their buyers, he said.

He urged export firms to fully understand the commitments made under the FTAs, draw up suitable business strategies and strengthen their competitiveness to take better advantage of them.

Ngo Khac Le, an arbitrator at the Vietnam International Arbitration Centre, said to prevent risks and improve efficiency in exports, before signing export contracts Vietnamese companies should carefully check the antecedents of their customers, especially new customers, through consultancies, Vietnam trade offices abroad and other sources.

They should choose suitable INCOTERMS (international commercial terms), have clauses ensuring the independence of the contract, and set a duration for negotiations and dispute resolution, among others, he said.

Firms should resolve their disputes through arbitration centres, he added.

Christopher McNabb, director of Assurance Global Financial Services and Solutions in Vietnam, said collection of delinquent offshore account receivables is very challenging and expert advice is critical.

According to his company’s statistics, Vietnam’s exporters lost an estimated US$8 million last year, he said.

Uncollectable account receivables result in high financial losses to exporters and so they need to have a credit management system to manage these risks and employ global best practices to avoid delinquent debts, fraud and revenue loss, he said.

He also introduced his company’s services and measures for collecting delinquent offshore account receivables.

Organised by the Vietnam Chamber of Commerce and Industry and Assurance Global, the seminar attracted more than 100 delegates, including members of business associations and executives of large export firms.

Greenback price near upper limit

The central bank revised up the Vietnam dong-U.S. dollar exchange rate to a new high on December 21 while the dollar price quoted by local banks nearly touched the upper limit.

Most lenders in the afternoon quoted dollar prices at VND22,690-22,720 and VND22,790-22,810 for buying and selling respectively, down by VND10 versus those in the morning. Eximbank and DongABank sold a dollar at VND22,800 and VND22,810, VND9 below the ceiling imposed by the central bank.

The central exchange rate was set at VND22,154 on December 21, rising by VND6 against Monday. With the trading band of 3% on either side, banks could trade the greenback in a range of VND21,489 and VND22,819.

Meanwhile, currency exchange counters on the informal market sold a dollar at VND23,400 and bought it at VND23,350.

On the world market, the Dollar Index, which measures the dollar value against a basket of rich-country peers like the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.2% at 103.14 after reaching 103.65 on the previous day, the highest since December 2002.

According to a money dealer at a HCMC-based bank, the demand for foreign currencies always picks up at year-end. Banks now have short dollar positions but market liquidity is still ample.

Besides, given strong foreign reserves, the central bank is able to sell foreign currencies to stabilize the market, thus preventing the greenback from soaring.

However, some factors will exert pressure on the exchange rate. The policy stance of U.S. President-elect Donald Trump may leave impact on remittances to Vietnam and exports to the U.S., a major market for many key Vietnamese export products, the banker said.

Commenting on the U.S. Federal Reserve’s decision to raise rates by 25 basis points for the first time in a year, Ngo Dang Khoa, head of trading at HSBC Vietnam, earlier said that higher borrowing costs would prompt investors to withdraw capital from developing markets. Therefore, developing countries whose currencies are pegged to the dollar are under huge pressure to devalue their currencies.

Besides, the nation has had a trade deficit of a combined US$700 million over the past two months, piling greater pressure on the exchange rate.

In the current situation, the Government should keep dong interest rates at attractive levels. As dollar rates are up and U.S. trade policy remains unclear, enterprises should be more risk-averse.

Meanwhile, the State Bank of Vietnam’s promise to ensure sufficient liquidity in the system will help stabilize the market. It is watching new market developments to timely intervene, so the forex rate might not be strongly volatile in the near term, Khoa predicted.

Vietnam-Russia trade on the rise

Trade value between Vietnam and Russia reached US$532 million in October and November, up 33% against the same period last year, according to Vietnam Customs.

Of the figure, Vietnam’s exports to Russia rose by 18% to US$331.8 million while imports from the market jumped by 68% to US$200.2 million.

Vietnam’s exports to Russia increased 11.19% to US$1.5 billion for 11 months leading up to December.

Telephones and components top among major products to Russia with US$682.5 million (accounting for 45.3% of total export value and up 10.06%), followed by coffee with US$107.8 million (up 16.15%) and garment with US$99.1 million (up 19.64%).

Bilateral trade value has witnessed a significant increase since the Free Trade Agreement between Vietnam and the Eurasian Economic Union (EAEU) came into effect on October 5, 2016.  Nearly 5,000 tariff lines dropped to zero this year. This is considered a driving force for accelerating Vietnam and Russia trade in the coming time.

Hong Kong firm build garment factory in Vinh Phuc

The Hop Lun Vietnam Company Limited of Hong Kong (China) kicked off construction of a garment factory in the northern province of Vinh Phuc on December 22.

The factory will be built on an area of 9.7 hectares in Van Quan and Dinh Chu communes of Lap Thach district.

Once operational, the plant is expected to employ 2,500 workers, earn nearly 870 billion VND (38.2 million USD) from exports and contribute 150 billion VND (6.5 million USD) to the State budget per year.

The factory will help locals increase their incomes, thus boosting the province’s sio-economic development.

Hop Lun Vietnam is the third wholly foreign-invested business to invest in the Lap Thach district. Set up in 1992, the company now has factories in China, Bangladesh and Indonesia with over 28,000 workers who produce 15 million of products each month.

Vegetable, fruit export hits over 2.1 billion USD in 11 months

Vietnam’s vegetable and fruit export in the first 11 months of this year reached 2.178 billion USD, reported the E-Commerce and Information Technology Agency under the Ministry of Industry and Trade.

The agency revealed that Vietnam’s mangosteen and lychee have been accepted in the US and Australian markets, while an increase has been seen in exports of dragon fruit, rambutan, longan, lychee and mangosteen in a number of major markets, including the US, Japan and the Republic of Korea.

China remained the largest market of Vietnamese vegetables and fruits, consuming 70.4 percent of the country’s total export volume. It is followed by the Republic of Korea, 3.6 percent; the US, 3.4 percent; and Japan, 3.1 percent.

Meanwhile, in the January-November period, Vietnam spent 814 million USD to import vegetables and fruits, a rise of 44 percent year on year.

The agency forecast that in 2016, Vietnam’s vegetable and fruit exports are likely to fetch 2.6 billion USD.

Experts also highlighted huge potential for the country’s fruit exports.  Vietnam may earn 5 billion USD each year from exporting vegetables and fruits if it shows better control of goods quality, they said.-

Vietnam’s exports to US soar

Vietnam exported 35 billion USD worth of goods to the US in January-November, 2016, representing a remarkable rise of 14 percent over the same period last year.

The US topped the list of countries importing Vietnamese key products, such as garment-textile, footwear, machinery, equipment and spare parts, seafood, and timber products.

According to the Vietnam Customs, the country’s total import-export turnover exceeded 316.9 billion USD in the 11-month period, of which exports reached 159.94 billion USD and imports, 156.96 billion USD.

Mobile phones and components were the biggest hard currency earner (31.6 billion USD), followed by garment-textile (21.56 billion USD), computers, electronic products and spare parts (16.68 billion USD).

The US was the second largest importer of Vietnamese mobile phones and components, after the European Union, with 3.95 billion USD, up 52.7 percent.

The country spent over 10.33 billion USD buying Vietnamese apparel products, a yearly increase of 4.7 percent, accounting for 47.9 percent of the sector’s total import turnover.

Vietnamese footwear was mainly exported to the US, fetching over 4.03 billion USD, up 10 percent against the previous year, making up 34.6 percent of the sector’s total import turnover.

Regarding seafood, the US remains a key market, importing 1.33 billion USD, up 11 percent.

The US was the third biggest importer of Vietnamese farm produce with 1.71 billion USD, up 24.7 percent, after China and the EU.

In January-November, Vietnam mainly imported computers, electronic products and spare parts (25.33 billion USD), machinery and equipment (25.24 billion USD), mobile phones and components (9.56 billion USD).

The Republic of Korea (RoK) continued to be the largest supplier of computers, electronic products and spare parts for Vietnam with the import value of 7.94 billion USD, up 26.3 percent.

It was followed by China (5.36 billion USD, up 12.1 percent), China’s Taiwan (2.9 billion USD, up 43.4 percent), Japan (2.54 billion USD, up 20.7 percent), and the US (1.97 billion USD, up 50 percent).

Meanwhile, China remained the biggest provider of machinery, equipment and components for Vietnam over the past 11 months with 8.27 billion USD, an annual rise of 1.5 percent.

The RoK and Japan ranked second and third, with 5.12 billion USD and 3.72 billion USD, respectively.

Vietnam also imported raw materials worth nearly 16.17 billion USD in January-November, showing a yearly increase of 2.1 percent.

Main markets include China (over 7.3 billion USD, up 4.5 percent), the RoK (over 2.63 billion USD, up 2 percent), and China’s Taiwan (over 2.09 billion USD, up 2.4 percent).

Hong Kong firm build garment factory in Vinh Phuc

The Hop Lun Vietnam Company Limited of Hong Kong (China) kicked off construction of a garment factory in the northern province of Vinh Phuc on December 22.

The factory will be built on an area of 9.7 hectares in Van Quan and Dinh Chu communes of Lap Thach district.

Once operational, the plant is expected to employ 2,500 workers, earn nearly 870 billion VND (38.2 million USD) from exports and contribute 150 billion VND (6.5 million USD) to the State budget per year.

The factory will help locals increase their incomes, thus boosting the province’s sio-economic development.

Hop Lun Vietnam is the third wholly foreign-invested business to invest in the Lap Thach district. Set up in 1992, the company now has factories in China, Bangladesh and Indonesia with over 28,000 workers who produce 15 million of products each month.

Vietnam Airlines enjoys 10 percent rise in Indonesian market

The national flag carrier Vietnam Airlines saw a year-on-year rise of 10 percent in the number of Indonesian passengers visiting Vietnam in the first 11 months of 2016, according to the airlines’ branch office in Jakarta, Indonesia.

Addressing a meeting in Jakarta on December 21, Nghiem Van Khanh, head of the carrier’s Indonesia branch, attributed the rise to the carrier’s diverse activities to promote services and introduce Vietnam’s destinations.

At the same time, the airlines have received support from Indonesian partners and State agencies, he said, stressing the carrier’s efforts in market expansion.

Currently, Vietnam Airlines is operating a direct air route between Jakarta and Ho Chi Minh City with one flight per day using Airbus A321. 

In 2016, Vietnam Airlines ran 365 flights between the two countries, serving over 100,000 passengers and transporting more than 1,000 tonnes of goods, contributing to increasing the number of Indonesian visitors to Vietnam, noted Khanh.

Khanh revealed that in 2017, Vietnam Airlines will develop aviation products for Vietnam-Indonesia flights, while continue improving the quality of its service and expand booking agents to better serve travelling demands of passengers.

Nearly 2.4 bln USD poured into Quang Ninh in 2016

An estimated 54.4 trillion VND (nearly 2.4 billion USD) was invested in the northern coastal province of Quang Ninh in 2016, including 11.9 trillion VND (523.6 million USD) in foreign direct investment (FDI), up 10.2 percent year-on-year. 

According to the provincial Department of Planning and Investment, the local authorities granted new investment licences and approved capital additions to 28 domestic projects and 20 foreign-invested ones, with respective registered capitals of over 17.7 trillion VND (778.8 million USD) and 567.3 million USD. 

Noteworthy projects included a complex of seaports and industrial parks (IP) worth 330.4 million USD in the Mac Dynasty Lagoon area, a dyeing and garment factory costing 77.41 million USD and a 50 million USD wash-cloth and bath towel plant in the Texhong Hai Ha IP.

The Department said the local investment and business climate has been improved remarkably, contributing to increasing the confidence of businesses and investors. 

In the coming time, the province is working to lure more investors, especially those from Singapore, Thailand and the United Arab Emirates (UAE).

VFF leader hails Vietjet’s five-year development
     
President of Viet Nam Fatherland Front Nguyen Thien Nhan congratulated leaders and employees of Vietjet on Wednesday on the fifth anniversary of the airline’s first flight.

During his visit, Nhan highly appreciated Vietjet’s achievements, calling the airline a good example of Vietnamese enterprises which gained success in both domestic and international markets.

Vietjet is the first airline in Viet Nam to operate as a new-age airline with low-cost and diversified services to meet customers’ demands. It provides not only transport services, but also uses the latest e-commerce technologies to offer various products and services to consumers.

Vietjet General Director Nguyen Thi Phuong Thao said with effective investment and development plans, the carrier has opened up new travel opportunities for passengers over the past five years.

Currently, the airline boasts a fleet of 42 aircraft, including A320s and A321s, and operates 350 flights per day.

It has already opened 60 routes in Viet Nam and across the region to international destinations, such as Thailand, Singapore, South Korea and Taiwan, as well as Malaysia, mainland China, Myanmar, Hong Kong and Japan. The airline has to date served over 33 million passengers.

PVI pre-tax profit surpass yearly plan by 43%
     
PetroVietnam Insurance (PVI) estimated pre-tax profit at VND730 billion (US$32.2 million) this year, exceeding the yearly plan by nearly 43 per cent, Vu Van Thang, PVI deputy general director, said.

It earned revenue of VND8.78 trillion, surpassing its target for the whole year by 3 per cent.

PVI plans to reach total revenue of VND8.7 trillion with pre-tax profit of VND578 billion in 2017 as it forecasts the next year to be a difficult one.

To complete the goal set for the new year, Thang said PVI and its member units would continue to build a transparent management system; implement risk management and enterprise restructure; and develop businesses, markets and brands; while expanding businesses apart from oil and gas.

At the same time, PVI would also build a management strategy, train and develop human resources and continue completing its management of information and technology.

PVI remains the No 1 non-life insurer in the local market, while its reinsurance plays the leading role in the reinsurance sector, according Thắng.

In 2016, PVI was recognised as one of the 30 Vietnamese most valuable brands in 2016 by Brand Finance. It was also honoured by the Vietnamese edition of Forbes Magazine as one of 50 best companies on the Vietnamese stock market. 

Exporters learn how to avoid offshore payment delinquency
     
Risks that companies face while exporting and measures to mitigate such risks and collect overseas receivables were discussed at a seminar in HCM City on December 22.

Speaking at Risk Management and Offshore Debt Prevention in Free Trade seminar, Quyen Anh Ngoc of the Ministry of Industry and Trade’s Multilateral Trade Policy said existing and future free trade agreements would bring great opportunities for Vietnamese firms to boost exports and enter the global supply chain.

But they would also face challenges like technical barriers and the threat of losing domestic market shares, he said.

Besides, exporters face the risk of not getting payments from their buyers, he said.

He urged export firms to fully understand the commitments made under the FTAs, draw up suitable business strategies and strengthen their competitiveness to take better advantage of them.

Ngo Khac Le, an arbitrator at the Viet Nam International Arbitration Centre, said to prevent risks and improve efficiency in exports, before signing export contracts Vietnamese companies should carefully check the antecedents of their customers, especially new customers, through consultancies, Viet Nam trade offices abroad and other sources.

They should choose suitable INCOTERMS (international commercial terms), have clauses ensuring the independence of the contract, and set a duration for negotiations and dispute resolution, among others, he said.

Firms should resolve their disputes through arbitration centres, he added.

Christopher McNabb, director of Assurance Global Financial Services and Solutions in Viet Nam, said collection of delinquent offshore account receivables is very challenging and expert advice is critical.

According to his company’s statistics, Viet Nam’s exporters lost an estimated US$8 million last year, he said.

Uncollectable account receivables result in high financial losses to exporters and so they need to have a credit management system to manage these risks and employ global best practices to avoid delinquent debts, fraud and revenue loss, he said.

He also introduced his company’s services and measures for collecting delinquent offshore account receivables.

Organised by the Viet Nam Chamber of Commerce and Industry and Assurance Global, the seminar attracted more than 100 delegates, including members of business associations and executives of large export firms. 

MoIT to tighten control on fertiliser, petroleum markets
     
The Ministry of Industry and Trade (MoIT) will tighten control over the fertiliser and petroleum markets in 2017 to limit fake products and frauds.

The market watch department will conduct regular checks on all producers, importers and traders to ensure that regulations related to business registration, business conditions, quality of inorganic fertilisers, labelling, bills and the distribution system are being followed.

There will also be inspections on the implementation of regulations under Decree No. 83/2014/ND-CP on petrol trading.

During the 14th National Assembly session last month, MoIT minister Tran Tuan Anh said authorities would strengthen their fight against the counterfeit fertiliser market and build a legal framework on standards for sustainable development of the sector.

The fertiliser market has a potential value of US$2 billion and brings huge profits, which is why there are so many fake products. These not only have a harmful effect on crops, environment and people’s health, they also affect the reputation of genuine products.

Statistics from the ministry’s chemical department shows that the country has around 800 fertiliser producers. Counterfeit fertilisers have caused losses to the country’s agricultural production and economy to the tune of VND60 trillion (US$2.64 billion). 

Banks increase dong interest rate to lure depositors
     
A number of commercial banks have increased their Vietnamese dong deposit interest rates by 0.2-0.4 per cent per year to attract depositors at year-end.

VP Bank, on December 21, announced new rates, raising rates for 1 month deposits by 0.3 per cent per year to 5.2 per cent, and increasing by 0.4 per cent to 6.9 per cent per year for 12 and 13 month deposits.

Previously, Eximbank also increased its short-term deposit rates by 0.1-0.2 per cent per year for 1 month, 3 month and 6 month deposits to 4.6 per cent, 5 per cent and 5.6 per cent per year, respectively.

PVcomBank also offered depositors higher rates of 5.5 per cent for 3 month terms and 6.5 per cent for 6 month terms, up 0.2 per cent and 0.4 per cent, respectively. The bank’s highest rate of 7.7 per cent per year is applied to deposits of 24-60 months.

Besides interest rates, some banks also continuously introduce attractive promotional programmes to attract depositors.

According to a leader of a Ha Noi-based bank, demand for capital is rising prior to Tet (Lunar New Year), so banks have to try to attract deposits to balance their capital sources. 

Inter-bank rates touch 10-month high of over 5%     
 
Following a sharp rise in the past few weeks, inter-bank rates have hit a 10-month high of more than 5 per cent per year due to decreasing liquidity in the banking system, said Bao Viet Securities Co (BVSC).

According to the BVSC’s latest report, last week, the inter-bank rates for all tenors rose 1.25 per cent to 5.1 per cent per year for overnight loans, 1.17 per cent for one-week loans to 5.11 per cent, and 0.95 per cent for two-week loans to 5.07 per cent.

The State Bank of Viet Nam (SBV) last week also injected VND35.059 trillion (US$1.544 billion) via Open Market Operation (OMO) to support liquidity in the banking system.

Though the central bank has stopped issuing T-bonds of all terms, the total maturity capital via the channel reached VND2.590 trillion last week.

Rising inter-bank rates indicate that liquidity in the banking system is currently not as high as it was in the third quarter when the inter-bank rates fluctuated around 1-2 per cent per year, the BVSC report said.

Liquidity has gone down as a result of rising credit demand ahead of Tet (Lunar New Year), as businesses need money to reserve goods for the country’s largest holiday and the demand for payments for imported goods is high.

By the end of November, credit growth rose 15.8 per cent against December last year while capital mobilisation increased by 15.2 per cent.

The BVSC has forecast that inter-bank rates will continue to remain high, at 4.5 to 5 per cent per year, till Tet, which is in end-January. 

VietABank contributes to hi-tech agriculture development
     
VietABank has offered a preferential loan with of total VND500 billion (US$22 million) to support businesses in hi-tech agriculture.

Companies, households and agricultural production units could be given loans to invest in agricultural machines and equipment, expand production scale, buy fertilisers or spend on irrigation, harvesting and plant protection products.

Preferential credit would be applied in the 2017-20 period.

VietABank has also offered a VND1.5 trillion preferential loan to startups. including firms in hi-tech agriculture.

With the two loan packages of VND2 trillion, the bank expected to share businesses’ difficulties and support the Government in promoting startup activities.

Earlier, the bank also introduced its preferential policies for companies entering the agricultural sector.

Local enterprises have faced difficulties relating to land funding, technology and capital.

Statistics showed that the number of businesses in agriculture has been modest, with only 4,000 out of 600,000 firms operating in the sector.

Le Xuan Vu, VietABank’s general director, said the bank has focused on developing agricultural value and technological value chains.

In addition, the bank has introduced many loans with preferential interest rates over a period of several years to support businesses.

The bank will build many suitable products and programmes to strengthen its commitment to further support firms. 

Most banks cannot up lending
     
Many banks won’t be able to offer loans despite the high demand for capital before Tet as they have used up their credit quotas, said Dau tu Chung khoan newspaper.

The top official of a Ha Noi-based bank, on condition of anonymity, said that despite good liquidity preparation for the business season at the end of the year, his bank has used up the 20 per cent credit growth quota assigned by the central bank by November, so it cannot increase lending. The demand from both individual and corporate customers has risen in the fourth quarter, especially in December, as businesses need money to reserve goods for Tet and the demand for payment for imported goods is high.

“As we cannot get the central bank’s approval for increasing the lending quota for 2016, we must recover the existing debts to be able to grant new loans,” he said.

Many banks, especially the smaller ones, have very limited room left for giving more credit. Credit growth of the Orient Commercial Joint Stock Bank (OCB), for example, hit 21 per cent in the first half of the year while its lending quota for the entire year is only 25 per cent.

Chief of Vietcombank’s office in the southern region Huynh Song Hao said that the capital demand from both enterprises and individuals has increased at the end of this year partly due to the warming of the home loan segment. The gradual decline of lending interest rates has also created a favourable condition for taking loans.

Statistics from the State Bank of Viet Nam (SBV) showed that as of November 22, 2016, capital mobilisation has risen by 15.28 per cent compared to late 2015, while lending has shot up by 14.57 per cent, with dong loans rising 15.81 per cent.

Deputy director of SBV’s HCM City branch Nguyen Hoang Minh said that in HCM City alone, as home loans rose sharply in 2016, accounting for up to 40 per cent of the city’s total outstanding loans to individual customers, city-based banks’ lending grew fairly positively from this January to November, at 16.4 per cent.

While lending would grow fast at the end of the year, Minh noted that this year-end acceleration requires banks to strictly control their credit quality so as to limit the risk of bad debts.

Expert Can Van Luc said the credit growth target for the banking sector this year is reasonable and feasible. However, he said, bad debts remain one of the major barriers for lending, and banks must prioritise credit quality control over giving loans. 

Viettel to help Hung Yen build smart
     
The northern Hung Yen Province and military-run telecom group Viettel on Wednesday signed a Memorandum of Understanding (MoU) to build a smart city in the region between 2016 and 2025.

Under the MoU, Viettel will help draw up a master plan for smart, urban development in the province and provide technical support to develop modern information and technology facilities. It will also introduce IT applications into Hung Yen’s socio-economic activities for sustainable development, to improve the business environment and for better state management.

Both sides have agreed to work on areas such as public administration, healthcare, education, transport, food safety, environment, clean water, tax and finance while building the smart city so that living there will be very convenient to people.

Hoang Son, Viettel’s deputy general director, said the group will give priority to Hung Yen while implementing advanced technological solutions that are compatible with the province’s available infrastructure.

Nguyen Van Phong, provincial chairman of the People’s Committee, said Hưng Yen will strive to use IT in all its towns and communes in 2017.

The province will also focus on promoting transparency in the public administration so that it is more competitive, modernise its tax management system and build a waste discharge observation system to protect the environment.

Hưng Yen will help Viettel expand its research activities, applications and services as well as develop network infrastructure.

Banks to fully disburse housing credit package this year

The State Bank of Vietnam (SBV) yesterday said that banks were expected to fully disburse the VND30 trillion (US$1.32 billion) housing credit package, which the Government has provided for low income people, by the end of this year.

As of November 30, disbursements have reached VND29,239 billion with the outstanding loan of VND24,166 billion.
 
Of these, individual customers got VND23,845 billion with the outstanding loan of VND20,650 billion. Corporate customers including enterprises, households and individuals attending social house building or upgrading projects, received VND5,395 billion.
                                                                                    
SBV has proposed the Government to lengthen the current loaning time of 10 years to 15 years for citizens and annually determine and announce preferential interest rates for the program’s attendees.
 
The bank has also suggested the Prime Minister to extend the refinancing deadline to individual customers including individuals and households in capital demand to buy or rent houses, sign rent-to-own property contracts and repair or upgrade their houses. 

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