Hanoi Food IPO on January 9

Hanoi Food will offer initial shares on January 9 next year, selling 3.45 million shares at the starting price of VND10,500.

The above amount accounts for 23.8 per cent of the company's charter capital. In addition, Hanoi Food will also issue 3.19 million shares to jewellery trader DOJI, its strategic partner.

Hanoi Trade Corporation, representing the State's ownership, will hold 51 per cent of the stake.

Second ETF to list 10.1m papers

10.1 million fund certificates of Viet Nam's second exchange-traded fund SSIAM-HNX30 will be listed on the Ha Noi Stock Exchange from next Monday, coded E1SSHN30.

The reference price on the first trading day will be the net asset value per certificate, dated Friday. SSI Asset Management operates the fund.

PSD to pay 45 per cent dividend

PetroVietnam Distribution Services (PSD) will pay a dividend on shares as high as 45 per cent during the first phase of 2014. The value of the dividends reaches VND64 billion.

In the first three quarters, the company made a profit of VND79 billion, accounting for 77.5 per cent of the year's target.

It closed yesterday unchanged at VND57,800 per share.

PPI to issue 25 million new shares

Pacific Property and Infrastructure Development (PPI) have announced that it will issue 25 million more shares at no less than VND10,000 to increase its charter capital by two-fold to VND500 billion.

The company estimated that it would need an investment capital of VND355 billion next year.

In addition, the company also planned to change its name to Pacific Infrastructure Project Investment and Development.

Programme encouraging local tourism launched

The Vietnam National Administration of Tourism, under the Ministry of Culture, Sports and Tourism, held a ceremony in Ho Chi Minh City on December 23 to kick off a programme on stimulating domestic tourism demand.

The programme will be implemented from the end of this year to the end of 2015 nationwide, aiming to boost domestic tourism demand to local destinations, particularly mountainous and coastal regions, plains and islands, and encourage public servants and employers to spend their holidays and weekends, touring the country.

It will also create favourable conditions for mountainous, coastal and plain provinces with tourism potential, to study and develop new attractive tourism products and promotion programmes, and build a friendly and safe tourism environment.

In addition, the programme will encourage border and coastal provinces to proactively organise meetings and exchanges between overseas Vietnamese, local residents and law enforcement forces in the region of Hoang Sa (Paracel) and Truong Sa (Spratly).

The programme is expected to boost the growth of domestic tourism and surpass 37.5 million local tourists and overseas Vietnamese visiting the homeland in 2015.

Companies promise to maintain Tet bonus despite economic downturn

Businesses have promised to maintain the traditional Tet pay bonus.

"Many enterprises are still in difficulties and they are trying to keep the 2015 bonus at the same level as 2014," said the deputy minister of Labour, Invalids and Social Affairs, Pham Minh Huan.

He said companies operating under the foreign direct investment category will hold salaries and bonuses at the same level as this year.

To Hoai Nam, vice chairman of the Vietnam Association of Small and Medium Enterprises, said that even though the Tet bonus comes on top of a worker's regular wage, it is an important tradition that reflects the health of a company and encourages workers to greater productivity.

The bonus is, essentially, an injection of cash into the economy, in that it stimulates consumption during a time of annual family gatherings and gift giving.

Prime Minister Nguyen Tan Dung has given the go-ahead to increase the minimum monthly wage by 15 percent in 2015, which raised concerns that the Tet bonus would be cut to offset higher wage costs.

The General Statistics Office reports that, in November alone, 60,340 firms shut down or asked to halt operation, up 9.8 percent year-on-year.

Despite the challenges, many businesses in HCM City have pledged to maintain Tet bonuses for employees at an average of one month's salary. Le Hoa Binh, a director of Hoa Binh Food Company, which suffered a 30 percent drop in revenue in 2014, declared, "The average bonuses was VND3.6 million per person so we'll try to maintain this rate to encourage workers."

Nguyen Van Ky, director of An Giang Fisheries Import & Export Joint Stock Company, confirmed that its workers will receive a one-month bonus and gifts. Workers with disadvantaged backgrounds will be given more support.

The chairman of the Labour Union in Can Tho City, Huynh Ngoc Thach, said Tet bonuses at many companies in his area will be the same or higher.

Vina Express resumes HCMC-Vung Tau hydrofoil service

Vina Express put its hydrofoils back into service on the HCMC-Vung Tau route on December 23, almost a year after all hydrofoil operators were forced to suspend their services after a blaze hit a vessel of this company.

Bui Cong Trung, chairman of Vina Express, said the company’s hydrofoil services between the two cities on the first day saw 40% occupancy, or around 51 passengers per trip.

To attract more passengers, Vina Express is offering a 50% discount until Sunday. Trung said after the promotion campaign, one-way fares will be adjusted up to VND200,000 (around US$9.4) on weekdays and VND250,000 on weekends.

In the initial time, two hydrofoils of Vina Express will ply the HCMC-Vung Tau route. The hydrofoil operator will offer four daily services on weekdays and six daily trips on weekends with departure times at 7:00 a.m., 9:00 a.m., 11:00 a.m., 2:00 p.m., 3:00 p.m., and 4:30 p.m.

In the coming time, there will be 10-12 daily hydrofoil trips between the two cities from 6:00 a.m. to 4:30 p.m. when Quang Hung Transportation Co. Ltd. (Petro Express) also restart its operations to meet high travel demand ahead of the Lunar New Year holiday, or Tet.

Petro Express plans to re-launch its hydrofoils on the HCMC-Vung Tau route before the New Year holiday, which begins on February 19.

Trung said the company has spent billions of dong on interior renovation and modern equipment including a smart fire system after a Vina Express hydrofoil with 85 passengers on board, including 37 foreigners, caught fire early this year.

Experts: Power tariff hikes to hit firms

While pressure of input costs is waning as a result of declining fuel prices, the planned electricity tariff spike of 9.5% might deal a heavy blow to producers if it is approved, according to economic experts.

Speaking to the Daily on December 23, chairman of the Vietnam Energy Association Tran Viet Ngai said Vietnam Electricity Group (EVN) has presented to the Ministry of Industry and Trade a road map to adjust up power tariffs with an average rise of 9.5% next year.

Commenting on the proposal, Ngai said it is reasonable as the selling price needs to rise to near 8.5-9 cent per kWh to attract foreign investors to power projects.

Price hikes would help EVN find financing for power projects and cover unpaid losses of VND8 trillion. Last year, EVN earned the highest profit ever but the profit amount was around VND6 trillion.

However, the proposed price hike plan has faced public criticism, as EVN is said to run at a profit at the moment.

Economic expert Le Dang Doanh said the proposed electricity tariff hikes are too high given the recent fuel price cuts. If a power price rise is necessary, it should be 4-5%.

According to expert Pham Chi Lan, EVN’s proposal to increase power prices may result from its need to have funding for developing power transmission and generation projects in addition to the gradual removal of electricity tariff subsidies.

However, the falling fuel prices are facilitating operations and recovery of enterprises, and thus the proposed hikes would hit them hard, Lan added.

Therefore, according to Lan, EVN needs to carefully take into consideration the plan to raise the power price as enterprises have not benefited much from the fuel price declines. Even though the excuse for the power price increase is to mobilize capital for new projects, the hikes should not be as high as 9.5%. Besides, if the power price is raised to reduce subsidies, the increase should be less than 7%.

Hoang Huu Than, director of the Electric Power Consulting and Development Center, said EVN may not need to revise up electricity tariffs if its corporate governance is improved.

The reasons for the power price hikes are not convincing enough, Than said.

Under the Prime Minister’s Decision 69 taking effect on January 10 this year, if input costs are 7-10% higher than the average selling price, EVN can propose raising power prices.

Since 2012, electricity tariffs have picked up two times by 5% each. The current average price is VND1,508.85 per kWh.

Transport firms to lower fares after sharp fuel price cut

Many transport enterprises announced plans on December 23 to decline their charges, one day after the gasoline retail price was cut by a steep VND2,050 per liter.

Ho Huy, chairman of Mai Linh Group, told the Daily that his firm will cut taxi fares by VND500-1,000 per kilometer after the group works with the HCMC Taxi Association, while a source from Vinasun Corporation said the firm is reviewing input costs to determine appropriate cuts.

A number of cargo transportation companies are mulling fee cuts.

Huynh Duc, director of Thinh Anh Duong Co. Ltd., said the enterprise is planning to cut its charges for some routes five to ten days after fuel trading firms lowered their retail prices.

Do Xuan Phu, director of Minh Lien Transport Trading Service JSC, said the company will not make more fee reductions in the coming time as it already did just that.

Thai Van Chung, general secretary of the HCMC Goods Transport Association, said transport firms will have to slash their fees if they do not want to lose customers.

Some enterprises in the passenger transport sector at Mien Dong Coach Station have plans to adjust their fares before the Lunar New Year, or Tet, even though demand will soar in the lead up to this holiday.

The Ministry of Finance on December 23 proposed the Ministry of Transport and provincial authorities enhance their controls on fares. Besides, the provincial departments of finance and transport should ask transport firms to register new fees in response to the fuel price cuts.

Vietnam needs to develop market economy institutions

Vietnam should develop market economy institutions in the context of integration and create a favourable business climate in order to attract more investment, heard a conference in Hanoi on December 22.

Participants at the event held that the joining of regional cooperation agreements under roadmaps will provide Vietnam with more opportunities to catch up with other countries in the region.

Institutional reforms in Vietnam need to target the people’s direct and indirect supervision rights through elected agencies, the press and associations, they said, adding that the people also have the rights to access information, question officials and dismiss appointed ones.

If Vietnam cannot solve issues related to group interests, it will find hard to make progress in economic institution reforms, with low competitiveness, expanded rich-poor development gap, and increasing environmental pollution, they said.

The conference, themed “Developing market economy institutions in the context of integration: International experience and implications for Vietnam ”, was jointly held by the Central Institute for Economic Management (CIEM) under Ministry if Plan and Investment and the World Bank.

Samsung set two new Vietnamese records

Samsung Vina Electronics. Co. Ltd set two Vietnamese records for the company in the electronics industry with most customer care centres and the first customer care system with 24/7 telephone service and remote service.

They are also first records on customer service in Vietnam’s electronics sector.

Samsung has a network of 115 customer care centres all over Vietnam with three models - customer service plaza (CSP), media solution centre (MSC) and authorised service centre (ASC). Currently, the company has 11 CSPs in six cities and provinces, 22 MSCs in 18 cities and provinces and 82 ASCs in 58 cities and provinces.

Beside being built based on Samsung’s global standards, all of the centres are in line with the local culture, and meet the demand of the Vietnamese customers. It is the first and largest customer care system that is widespread across the country.

Samsung is also the first electronics company  in Vietnam to operate a customer-care switchboard 24 hours a day and 7 days a week. 95 per cent of calls to the company’s switchboards is connected under 20 seconds. In addition, the company runs remote service enabling its technicians to remotely view and control customer’s products via internet.

On this occasion, Sansung officially kicked off its campaign known as 100 days – 100,000 compliments from clients when they use its customer care service. This campaign runs until March 22, 2015.

Mekong Delta targets 9.4 percent growth in 2015

The Steering Committee for the Southwestern Region aims to see an economic growth rate of 9.4 percent and an export value of 13.6 billion USD in the region in 2015, up 8.98 percent and 12.3 billion USD, respectively, against 2014.

The figures were heard at a December 24 conference in Can Tho city reviewing achievements the region has made in 2014 and orientations for 2015.

Southwestern localities are expected to draw 262 trillion VND (12.47 billion USD) in investment and reduce the poverty rate to 4.5 percent next year.

Addressing the event, Deputy Prime Minister Vu Van Ninh, who is head of the steering committee, urged the localities to focus on restructuring the agricultural sector in combination with building new-style rural areas.

He also asked them to work closely with ministries and sectors to successfully implement their political tasks in the coming year.

Ministries, sectors and regional localities should promptly make a list of priority infrastructure projects to be submitted to the Government, complete regulations on Mekong Delta regional linkage and implement programmes on socio-economic development, climate change response, education, religion and security, among others.

Participants discussed ways to lure investment in infrastructure, support production and export, and maintain defence and security in border areas.

In 2014, the Southwestern Region’s economy was estimated to grow 8.98 percent, 1.5 times higher than the country’s average. Its industrial production increased 11.9 percent and export turnover reached 12.3 billion USD, up 15.87 percent year-on-year.

The region produced 25 million tonnes of rice, about 500,000 tonnes higher than last year’s volume.

VRG opens latex plant in Cambodia

Vietnam Rubber Group (VRG) on December 23 commissioned a latex processing plant in Rattanakiri Province in Cambodia after two years of construction.

The factory with an annual capacity of 5,000 tons has two production lines including one for RSS latex processing with a capacity of 2,000 ton per year and the other for SVR latex production with a yearly capacity of 3,000 tons. Rubber Engineering Company under VRG is the supplier of those production lines.

The plant has a total investment of US$5.2 million funded and operated by Hoang Anh Mang Yang K Company, a subsidiary of VRG. After coming into operation, it will process latex extracted from the rubber trees planted on an area of nearly 45,000 hectares in the province.

VRG plans to grow rubber trees on 150,000 hectares in Laos and Cambodia next year, with 100,000 hectares in Cambodia.

SBV unveils plans to remove more deposit interest ceilings

The State Bank of Vietnam (SBV) will remove the interest rate ceilings for deposits of less than six months when market conditions are ripe, according to SBV deputy governor Nguyen Thi Hong.

Hong told a regular news briefing in Hanoi on December 23 that the caps for deposits of six months or longer have been removed. Currently, the ceilings only apply to deposits of less than six months.

Many credit institutions have reduced their deposit interest rates far below the permissible upper levels.

“The ceilings are simply a level based on which strong credit institutions can offer lower interest and weak institutions or banks unable to compete with the strong players can offer the highest allowable interest rates,” Hong said.

“The caps help create flexibility for interest rates based on capital supply and demand on the market. The central bank will closely monitor and take into account the macro economy and the safety of credit institutions to eliminate the caps when conditions are ripe.”

Credit growth is put at 13% this year compared to the target of 12-14% set by the central bank earlier this year. As of December 19, credit grew by 11.8% against late last year.

Hong said credit normally grows slightly in the first months of a year and significantly in the last months of the year.

SBV anticipates credit to increase 13-15% next year, Hong said.

According to SBV, the exchange rate between the U.S. dollar and Vietnam dong and the forex market are pretty stable this year. Foreign currency demand of organizations and individuals is sufficiently and timely met. Besides, confidence in Vietnam dong has improved and dollarization has declined when the ratio of savings accounts in foreign currency to total money supply is only 11.6% compared to 12.3% in 2012-2013.

This year interest rates have dropped 1.5-2 percentage points, with deposit rates falling 1.5-2 percentage points per year and lending rates down around two percentage points. The rates for old loans have also been revised down.

A representative of Vietcombank said at the meeting that the bank’s annual rates for short-term loans stay under 7% while those of medium- and long-term loans are kept at reasonable levels. If the deposit rates are lowered, Vietcombank will adjust the medium- and long-term lending rates down.

Retailers yet to take to online shopping

The development of e-commerce has played a vital role in the world market as retail continues to modernise.

However, many retailers have not utilised more modern trade methods, like online shopping, said Vu Vinh Phu, President of the Hanoi Supermarket Association, at a conference in Hanoi promoting internet-based retail.

Phu said e-commerce makes shopping more convenient, and increases production and consumption.

Consumers can save time and find lower prices online, said Nguyen Ngoc Hung, Director of Di Sieu Thi Joint-Stock Company. However, some businesses have posted exaggerated advertisements and poor products online, preventing the online market from developing.

Phu urged online retailers to deliver quality products and good customer service to protect the sector's reputation.

State agencies should have strict measures for dealing with online trading violations, he said. However, just in case, consumers should research products carefully before buying.

However, so far, online shopping accounts for only 0.1 to 0.2 percent of the nation's total retail revenue, far lower than in many other countries, said Nguyen Lam Thanh, General Secretary of the Vietnam Digital Media Association.

In developed countries, popular companies sell products online, but in Vietnam they haven't paid much attention to the new form of shopping, Thanh said. It's important to change how people in Vietnam think about online shopping, he said.

The conference was co-organised by the Hanoi Super Market Association, Vietnam Digital Media Association and Dien dan Doanh nghiep (Business Forum).

Increase export tax on woodchips: MARD

The Ministry of Agriculture and Rural Development (MARD) has petitioned the State to increase export tariffs on woodchips from 0 percent to 5-10 percent, in a move to limit woodchip exports.

MARD also proposed instituting a 10 percent value-added tax, as well as a 25 percent corporate tax for enterprises involving in woodchip production.

Under a scheme on managing domestic woodchip production in the period from 2014-20, as approved by the ministry, wood processing firms were allowed to use a maximum of 70 percent of wood material harvested from plantation forests to produce woodchips from now through the end of 2015. However, the ratio would then be reduced to 40 percent in the five following years.

The scheme also prioritised the development of high value-added products, such as indoor and outdoor furniture, wooden handicrafts and expansion of new export outlets, such as Russia and the Middle East, while maintaining traditional markets such as the US, the EU, Japan and China.

According to Huynh Van Hanh, Vice Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City, the value of Vietnam's wood exports would reach an estimated 6.5 billion USD by the end of 2014, up 15 percent year-on-year.

State budget revenue surpasses yearly target

State budget revenue surpassed the yearly target to hit 831.19 trillion VND (38.7 billion USD) as of December 22 despite economic troubles, Deputy Finance Minister Tran Xuan Ha informed a conference in Hanoi on December 24.

Of the extra revenue, 10 trillion VND (476 million USD) will be transferred to 2015 to spend on State payroll and the remaining will be used for debt payment.

The deputy minister noted that overspending this year has been kept within 5.3 percent of the GDP as set by the National Assembly.

Reforms in tax filing and customs formalities have helped businesses save time and costs, from 537 hours to 247 hours, Finance Minister Dinh Tien Dung told the conference reviewing the State financial-budget activities 2014 and setting orientations for 2015.

Regarding inflation control, the minister attributed the low CPI growth of over 4 percent to the close management of market prices.

He reported that as of November, 90 out of 108 State economic groups and corporations had their restructuring schemes approved. During the 11-month period, 115 State-owned enterprises were equitised while 62 others were merged.

SOEs have withdrawn over 2.4 trillion VND (114 million USD) from non-core business activities, up 2.5 times from last year’s same period.

However, the pace of divestment and equitisation remains slow, Deputy Minister Ha acknowledged.

At the same time, Minister Dinh Tien Dung pointed out issues that led to losses of State revenues, such as violations in value-added tax refund, smuggling, trade frauds and transfer pricing.

The amount of corporate tax debt currently stands at approximately 71 trillion VND (3.3 billion USD), higher than the 2013 figure. Since the beginning of this year, the financial sector has collected about 30 trillion VND (1.4 billion VND) worth of corporate tax debt and the customs sector collected more than 1.7 trillion VND (85 million USD).

The large outstanding debt amount is put down to ailing demand that resulted in large inventories, pushing a number of firms into tax default.

The financial sector set the 2015 goal of collecting 911.1 trillion VND (43.3 billion USD) for the State budget, with overspending at 5 percent of the GDP as approved by the National Assembly.

Minister Dung vowed to keep a close tab on State budget spending, market prices and public debts in order to meet liabilities, while fine-tuning policies in taxation, customs, budget, corporate financial management, securities market, and accounting-audit services in line with economic restructuring.

He also requested keeping market prices during the Tet (Lunar New Year) holiday in check and ensuring sufficient supply of essentials.

Mekong Delta targets 9.4 percent growth in 2015

The Steering Committee for the Southwestern Region aims to see an economic growth rate of 9.4 percent and an export value of 13.6 billion USD in the region in 2015, up 8.98 percent and 12.3 billion USD, respectively, against 2014.

The figures were heard at a December 24 conference in Can Tho city reviewing achievements the region has made in 2014 and orientations for 2015.

Southwestern localities are expected to draw 262 trillion VND (12.47 billion USD) in investment and reduce the poverty rate to 4.5 percent next year.

Addressing the event, Deputy Prime Minister Vu Van Ninh, who is head of the steering committee, urged the localities to focus on restructuring the agricultural sector in combination with building new-style rural areas.

He also asked them to work closely with ministries and sectors to successfully implement their political tasks in the coming year.

Ministries, sectors and regional localities should promptly make a list of priority infrastructure projects to be submitted to the Government, complete regulations on Mekong Delta regional linkage and implement programmes on socio-economic development, climate change response, education, religion and security, among others.

Participants discussed ways to lure investment in infrastructure, support production and export, and maintain defence and security in border areas.

In 2014, the Southwestern Region’s economy was estimated to grow 8.98 percent, 1.5 times higher than the country’s average. Its industrial production increased 11.9 percent and export turnover reached 12.3 billion USD, up 15.87 percent year-on-year.

The region produced 25 million tonnes of rice, about 500,000 tonnes higher than last year’s volume.

Dung Quat Oil Refinery given license for expansion

The Binh Son Oil Refinery Co Ltd was granted an investment certificate to the upgrade and expansion project of the Dung Quat Oil Refinery in the central province of Quang Ngai on December 24.

Accordingly, the plant will be constructed with a total investment of 1.9 billion USD. Once complete, its capacity will be 8.5 million tonnes per year, 2 million tonnes higher than that at present.

Le Viet Chu, Chairman of the provincial People’s Committee asked the company to start the construction without delay, so as to put the plant into operation soon, thus contributing to stabilising national energy security and promoting the province’s economic development.

The year 2014 marked a successful year for both the production and business of the Binh Son Oil Refinery Company.

Its total output reached 5.81 million tonnes, earning 128 trillion VND (around 6 billion USD), equivalent to 120 percent and 128 percent of the yearly target, respectively.

The company began providing bio-fuel E5-RON 92 from July 30 in accordance with the bio-fuel development roadmap approved by the government. It also implemented a number of initiatives of technological innovation in production.

The firm has set a target of producing over 5.86 million tonnes of various products with total revenues of over 120.6 trillion VND in 2015.

Can Tho city records high growth in trade, tourism

The Mekong Delta city of Can Tho recorded the highest growth in trade and tourism over the past 10 years thanks to effective promotion strategies, Director of the municipal Centre for Investment, Trade and Tourism Promotion Nguyen Khanh Tung reported at a review conference on December 24.

The city has so far attracted 22.95 trillion VND (over 1 billion USD) and 52.4 million USD from domestic and foreign investors; registered trade value of 71.73 trillion VND (3.24 billion USD); and welcomed over 1.36 million tourists, a year-on-year rise of 16.6 percent, 8.3 percent and 9 percent, respectively.

In 2014, the city has improved infrastructure built for land and waterway traffic, while adopting incentives for businesses at home and abroad, Deputy Director of the municipal Department of Planning and Investment Bui Ngoc Vy.

Intensive trade promotion brought Vietnamese goods to rural areas and encouraged businesses to join international trade fairs in the capital Hanoi and the southern economic and business hub of Ho Chi Minh City, and other countries and territories like Cambodia, Taiwan (China), France, and Belgium, according to Deputy Director of the municipal Department of Industry and Trade Duong Nghia Hiep.

Local authorities also provided technical assistance for businesses to create new products, reduce production costs, and increase competitiveness in the domestic and global markets.

By concentrating on export staples like rice, seafood and garment, strengthening its foothold in traditional markets, and seeking fresh outlets, the city grossed over 71 trillion VND (3.2 billion USD) from domestic goods consumption and 1.35 billion USD from foreign exports.

Meanwhile, the tourism sector earned over nearly 1.2 trillion VND (57.1 million USD) in revenue, exceeding the yearly target of 4.5 percent and registering a year-on-year rise of 20 percent, Deputy Director of the Department of Culture, Sport and Tourism Dang Thai Hoa revealed.

He attributed the outcome to the city’s cooperation with 19 cities and provinces across the country to promote its tourism products and services. Can Tho also partnered with southern An Giang and Kien Giang provinces to develop spiritual and ecological tourism, he said.

Dong Nai: Riot-affected businesses achieve growth

Almost businesses that were affected in incidents last May in the southern province of Dong Nai have achieved positive growth, thanks to timely support from the local authorities.

The businesses reported their operations at their meetings with the local authorities’ working delegation from December 16-24.

Representatives from Noroo – Nanpao Paintings & Coatings Vietnam who suffered a damage of 5 million USD expressed their confidence in the local business climate, adding that the company is rebuilding facilities for further production.

Besides, the Cu Thanh and Formosa companies proposed some concrete solutions to ease difficulties for businesses, such as expansion of workshops and roads to facilitate their production.

Meanwhile, others suggested simplifying customs procedures and tax declaration.

Vice Chairman of the provincial People’s Committee Nguyen Phu Cuong said the province will work together with relevant agencies to facilitate the businesses’ operation.

According to the Industrial Zone Management Board, of the 205 businesses affected by the incidents sparked by workers’ rallies protesting against China’s illegal actions in Vietnam’s waters on May 13-15, 114 have reported total property losses of nearly 377 billion VND (17.7 million USD), while 82 declined any assistance.

The Ministry of Finance teamed up with the province to hasten insurance payments for affected firms. As a result, 114.7 billion VND (5.41 million USD) has been paid to enterprises by insurance companies.

Derivative securities market expected to operate soon

Restructuring the Vietnamese securities market and building a market for derivative securities is crucial to the development of financial market, requiring careful preparations of state management authorities as well as the readiness of market players, the Vietnam Economic News reported.

Currently, the Vietnamese securities market just consists of basic investment tools such as shares, bonds and fund certificates.

Dr. Nguyen Son, Director of the Market Development Department of the State Securities Commission of Vietnam (SSC), was quoted as saying that derivatives were indispensable products in the development process of the financial market. In Vietnam, currency and commodity derivatives have been in use for many years. In the field of securities, simple derivatives such as rights to buy securities, options, and forwards, have been used unorthodoxly. Therefore, it’s time to develop new, diverse and attractive products such as derivative securities.

According to SSC Vice Chairman Nguyen Thanh Long, derivative securities are very important tools that help investors prevent risks, and the development of the derivative securities market would foster the share and bond markets. However, the development of this complicated market requires careful preparations of investors and market members as well as state management authorities. The derivative securities market must be developed step by step to ensure system safety.

In March 2014, Prime Minister Nguyen Tan Dung approved a plan for developing the derivative securities market under a roadmap for putting derivatives into transactions based on securities.

To prepare for launching the derivative securities market, the Ministry of Finance has drafted a decree on derivative securities market and is collecting opinions of relevant ministries and sectors so that the draft could be submitted to the Government for approval later this year. Along with legal preparations, the SSC, stock exchanges and securities depository centres are also preparing necessary system and infrastructure facilities while promoting investors' awareness on the new financial product.

SSC Vice Chairman Nguyen Thanh Long also said along with building a legal framework for the derivative securities market, the SSC was compiling a training curriculum in this field. The curriculum is expected to be issued in January 2015 for use in securities companies and banks with derivatives operations.

Workshop discusses economic progress

The next phase of Vietnam's economic development model should consider the role of science, technology and modern management, said experts at a workshop in Hanoi on December 23.

Economic Commission Head Vuong Dinh Hue shared that restructuring the economy has been a priority in the implementation of the 2011–2015 socio-economic development plan.

The Vietnamese economy saw some improvement in the first three years of implementing the plan, but many weaknesses remained, revealed Hue.

The information was disclosed at the workshop, which was conducted by the Central Committee of Economy, the State Auditing and the Nhan Dan (People) newspaper. It focused on the Vietnamese economy as the country enters a new phase of development.

He pointed out a number of shortcomings in the country’s economy, including no consensus on a new growth model. Moreover, Hue said that the country's economic growth still heavily rely on capital, natural resources and cheap labour, rather than knowledge and technology.

He said that the economy still faces numerous risks and administrative reforms are slow. He also disclosed that growth is causing negative impacts on the environment.

Thuan Huu, Editor in Chief of the Nhan Dan newspaper, said that three years have been spent in restructuring the local economy, which focused on three key sectors: public investment, financial and banking system and state-owned enterprises.

The years allotted in this endeavour showed positive results. However, the restructuring process is still considered generally quite slow with respect to the attainment of the economic reform targets.

Huu expressed his hope that the experts attending the dialogue will be able to offer more solutions on building a specific economic growth model in the future.

Nguyen Quang Thai, Vice Chairman of the Economic Science Association of Vietnam, shared that the model of economic growth used over the past years lacked efficiency and competitive ability.

The failure of the domestic economy to pay attention to efficiency and creation resulted in low labour productivity and reduction in efficiency, Thai explained.

The economy is facing difficulties in adapting to the rapid economic development. It also found it challenging to adjust to the advancements brought forward by science and technology. No innovation should lag behind, he said.

Thai advised that the new economic development model should follow the world economic development standard.

The state should attach immense importance to the private economic sector during the integration period in the future, he advised.

Luu Bich Ho, former head of the Development Strategy Institute under the Ministry of Planning and Investment, said that the new economic development model should push the local economy to aim for sustainable development in terms of productivity, quality and efficiency. Vietnam should apply modern technologies, scientific breakthroughs and management skills for the development of the local economy and strive to achieve high quality in workforce and input sources.

Saigontourist welcomes the year’s last maritime tourists

The Saigon Travel Service Company (Saigontourist) on December 24 received 3,500 passengers and crew members on board luxury cruise ship Celebrity Millennium from the US.

The ship, which anchored at Hon Gai Port, Ha Long city, northeastern Quang Ninh province, brought tourists from the United States, Britain, Canada, and Australia to Vietnam on the eve of the Christmas Day.

They are on a five-day tour of exploring Vietnam’s famous sites, including Ha Long, Hanoi, Hue, Da Nang, Hoi An, Vung Tau and Ho Chi Minh Cit y.

The visit wrapped up a successful year of the Saigon-based travel company, which welcomed more than 180 international cruise liners with 220,000 tourists.

Gentherm begins building new manufacturing facility in Vietnam

A world leader in thermal technology, Gentherm Inc announced on December 23 that it intends to expand its production capacity in the fast growing Asia market by opening a new manufacturing facility in the northern part of Vietnam, close to the capital city of Hanoi.

As planned, the new facility will be built on 20,439sq.m in Duy Tien district, Ha Nam province and put into operation in the fourth quarter of next year.

The facility will be dedicated to the production of the full line of Gentherm seat comfort and industrial products, and is expected to provide jobs for up to 1,500 people.

Gentherm President and CEO Daniel R. Coker said the Vietnam facility is being designed to accommodate the expansion and expected growth in the Company's Asian operations, a key region for Gentherm.

Coke said, Asia is the fastest growing region of the world, not only in the automobile market but across all markets. We already have an industry-leading presence in the Chinese, Korean and Japanese markets and our new footprint in Southeast Asia will serve to extend our presence across the rest of Asia. We believe Vietnam provides us with a competitive labor force and workplace environment to further pursue our ambitious growth plans in Asia, and elsewhere in the world, Coke added.

The Vietnam facility is the second new manufacturing plant being developed by Gentherm. Last week, the Company announced it intended to expand its production capacity in Europe by opening a new manufacturing facility in Macedonia.

Deputy PM: Import tariff cut under FTAs commitment

Ministries, sectors, and localities need to seriously realise the country’s commitment to import tax reduction as agreed in signed Free Trade Agreements (FTAs) in the 2015-2018 period.

The request was recently made by Deputy Prime Minister Vu Van Ninh as suggested by the Ministry of Finance (MoF).

The leader asked the ministries, agencies, and localities to proactively take necessary measures to ensure the implementation.

According to the MoF, Vietnam has signed eight FTAs bilaterally and multilaterally, with most of which requiring the cut of about 90% of tariff lines on average.

The duty on items that are in need for the domestic production will be cut first while that on sensitive goods with high tax rates will be reduced later.

It is expected that about 90%-97% of tariff lines will be cut to zero by 2020.

E-commerce – inevitable and vital for retail industry

E-commerce is both very new and indispensable at the same time. Since it first started gaining traction in the 1990s nearly every brick and mortar business in developed countries have developed an online sales strategy.

However, many retailers with physical shops in Vietnam have either not implemented or fully tapped into it either in terms of establishing a sales channel or a marketing channel.  

Vu Vinh Phu, president of the Hanoi Supermarket Association says online shopping has provided consumers with useful alternative methods of shopping for and buying goods and services.  However, the veracity of some online retailers is questionable, he adds.

Therefore, he has asked retail businesses to enhance their prestige to improve product quality and customer care services. He says he is convinced those businesses that maintain their prestige and heighten their responsibilities will reap success.

Regarding customer shopping behaviours, Nguyen Lam Thanh, Vietnam Digital Communications Association general secretary says the value of goods trading via online retail channels has accounted for just 0.1-0.2% of the retail industry’s total revenue, much lower than the rate in most other nations in the region and world.

Regarding payment methods, 90% of total revenues are paid via cash after taking delivery of the goods while only 10% are paid for via internet banking and credit cards.

Some 40% of the sales volume in the retail industry has focused on garments and textiles, and the fashion sector while 60% comes from electronics, household utensils and food industry. Customers are primarily office workers aged 22-40 and live in major provinces and cities.

Regarding solutions for online shopping in the retail industry, general director of disieuthi.vn JSC Nguyen Ngoc Hung says  residents in the city have always updated facilities and modern lifestyles to improve their quality of life.

At present, customers spend the majority of their time seeking products, waiting for payments or delivery when they go shopping at supermarkets.

Many people say behaviours of Vietnamese consumers have not matched the development of the trend. Many people go shopping online in the hope of purchasing goods at cheaper than brick and mortar store prices.

This purchasing theory runs counter to developed markets in the world. Thanh says in developed nations, several prestigious brand names only have online shopping channels without any physical retail establishment.

In spite of some weaknesses, Phu said the development of e-commerce is an inevitable trend. Vietnam is a nation which has fallen behind the field and should get back on the right track to catch up with other nations in the world.

The most important thing is for the state management agencies to initiate actions to limit the shortcomings, Phu concludes.

Awards honour SMEs and brand name developers

A presentation ceremony for the biennial Vietnam National Trademark Council (VNTC) awards was held December 23 in Hanoi.

On hand to present the 63 awards was Do Thang Hao, deputy minister of the Ministry of Industry and Trade (MoIT).

In his address, Hao remarked that small and medium sized businesses (SMEs) have been the foundation for Vietnam’s economic development and a major force underpinning social stability.

He explained that the aim of the awards programme is to promote brand name and trademark development of Vietnamese businesses.

The honourees were selected based on the soundness of their operations and performances and their commitment to the three values of innovation, creativity and entrepreneurship.

Hao stressed the importance of expanding markets and increasing the quality of products in the context of the country’s deepening regional and global integration.

A wide variety of business support consultancies, conferences, seminars, and training courses were launched by the MoIT over the past year to help raise business awareness of the importance of improving marketing capacity and protecting product trademarks, Hao said.

Hao praised the VNTC, the Ministry of Industry and Trade (MoIT), and the honourees for their initiatives and dedication to promoting Vietnam’s international image, including the National Trademark Programme and elevating the Made-in-Vietnam trademark.

Fuel price cuts continue dragging CPI down

The December consumer price index (CPI) fell by 0.24% from the previous month, bringing the CPI growth for the entire year down to only 1.84%, said the General Statistics Office (GSO).

The December drop is attributed to petroleum price cuts on November 22 and December 6 which lowered transport costs by 3.09%, said Director of the GSO’s Price Statistics Department Nguyen Duc Thang.

The tumble in global gas prices also led to a slump in domestic gas prices since December 1.

Besides transport, the category of housing and building materials saw their prices decline, by 0.94%.

Slight increases were recorded in food and foodstuff prices (0.14% and 0.05%) while the same trend was also read in such groups as household appliance (0.18%) and domestic services (0.19%).

Meanwhile, little change was seen in four categories, namely hospitality services (up 0.08%); pharmaceutical and medical and educational services (up 0.03%); and culture, entertainment, and tourism services (up 0.07%).

The average CPI this year showed a 4.09% increase compared to the 2013 average, lower than the Government’s 5% target. It is also relatively low compared to the readings in the last decade, Thang said, adding that this means the Government’s effort to curb inflation has paid off.

Once the CPI stays stable, the State Bank of Vietnam can further ease monetary policy and reduce lending interest rates, thus helping businesses cut their production costs and stimulate consumer demand, he said.

GSO General Director Nguyen Bich Lam forecast the recent plunge in fuel prices will continue pulling down production and delivery costs, thus keeping CPI low in January 2015. Next year’s CPI may rise by 5%if the Government continues with drastic measures.

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