Chu Lai economic zone looks to future

Deputy Prime Minister Nguyen Xuan Phuc has urged central Quang Nam province work harder in its efforts to make Chu Lai a major economic zone and thus attract more national and international investment projects.

Deputy PM Phuc made the remarks at a ceremony on August 17 to mark the 10th anniversary of the zone, which is situated in Nui Thanh district, Quang Nam .

After a decade of operation, Chu Lai EZ has granted permission for 89 projects with a total registered investment of over 1.5 billion USD, including 21 bankrolled by foreign investors. So far, 62 of these have become operational, worth a total investment of 783 million USD.

Developments in the zone have created jobs for nearly 50,000 direct and indirect workers in the locality.

Comprising 24 communes and five industrial parks spread over 3,500 hectares, Chu Lai been chosen as one of five key economic zones to be prioritised in the 2013-2015 period.

During the ceremony, the zone was presented with the Labour Order, third class, for its contributions to the national economy.

To mark the occasion, the zone granted an investment licence to the Doctor Thanh company allowing it to build an industrial park and international port covering an area of 709 hectares and worth a total value of 1.6 billion USD.

Cross-border trade with Cambodia on the rise

Cross–border commodity exchange between Vietnam and Cambodia is thriving thanks to 1,270km of shared border, 10 international gates, 37 main and auxiliary border gates, and nine border economic zones.

The southern province of An Giang, which lies on the Cambodian frontier, has two international and two national border gates, along with many auxiliary entry points. These play a crucial role in connecting Vietnam’s Mekong Delta provinces to the neighbouring country.

An Giang serves as a gateway for local commodities to access the Association of Southeast Asian Nations (ASEAN) market.

Last year, cross-border trade turnover reached US$1.76 billion, a 24% year-on-year surge.

According to the An Giang Customs Department, its import-export turnover reached US$793 million in the first half of this year, up by 31% from last year’s figure.

Since 2009, the province has intensified its trade and investment promotion activities, holding several border fairs to showcase quality Vietnamese goods.

Fairs promoting international trade, investment and tourism are held in Tinh Bien district each year to attract domestic enterprises and partners from Cambodia, Laos and Thailand.

An Giang’s exports to Cambodia totalled US$572 million in the first half of 2013, up by 35% year on year, noted Mai Thi Anh Tuyet, Director of the provincial Industry and Trade Department.

Exports to Cambodia include essential goods, such as construction materials (cement and steel), groceries, fertiliser and other agricultural materials.

The significant growth in trade is attributable to import-export policies and mechanisms updated and adjusted annually by the Vietnamese and Cambodian Governments.

An Giang frequently holds working sessions with Cambodian provincial leaders to effectively resolve difficulties and facilitate goods exchanges and trade promotion.

However, cross-border trade activities still face barriers in the form of administrative formalities and unsuitable regulations, particularly those determining permission for vehicles to pass through border gates.

To ease difficulties, the Vietnamese Prime Minister recently approved regulations on operating activities at land border gates to intensify trade support services and import-export activities.

Land site for US$4.5-billion oil project handed over

Ba Ria-Vung Tau Province on Thursday handed over 400 hectares of cleared land to the investor of the Long Son petrochemical complex project which will be kicked of early next year.

Kan Trakulhoon, President of Thailand’s Siam Cement Group (SCG), revealed the information at a press briefing held in Bangkok on Thursday in celebration of the group’s 100 years of establishment.

According to Kan, the land transfer deal was signed on Thursday between Long Son Petrochemicals Limited Company and Ba Ria-Vung Tau Province. The investor is completing final negotiations over equipment supply packages for commencement set early next year.

The Long Son petrochemical complex project based at Long Son Oil and Gas Industrial Park had earlier been expected to be constructed in 2009 and produce the first products in late 2012. However, the project has fallen behind schedule due to site clearance problems.

According to Kan, this is a big project SCG has pursued over the past six years and will continue to the end. SCG currently holds over 28% stake in the project while the remaining interest belongs to Qatar Petroleum, Vietnam National Oil and Gas Group (PetroVietnam) and Vietnam National Chemical Group (Vinachem).

The project which can produce 1.4 million tons of olefin with flexible grinding technology includes other supporting works such as port, pier, storehouse and power plant.

Besides, the project can produce other products like polyethylene (PE), polypropylene (PP) and vinyl chloride monomer (VCM). Such products are mainly for domestic demand.

Previously, Qatar International Petroleum Marketing, Qatar’s exclusive distributor of LPG, has signed a deal to supply propane and naphtha for the grinding plant. PetroVietnam Gas Corporation has also pledged to supply ethane for the project.

Foreign investors keen on Vietnam’s bad debts

More and more foreign investors are showing keen interest in the bad debt market in Vietnam but more transparent legal framework for operations of the market is what they require, said a senior international executive.

Karin Finkelston, vice president of International Finance Corporation (IFC) in Asia-Pacific, told a press briefing in Hanoi on Thursday that there have been many investors who wish to invest in bad debts in Vietnam.

IFC hopes to make stronger participation in the bad debt trading process, bank restructuring and State-owned enterprise reform in the country, she said.

IFC has invested in bad debt handling process in many countries and it hopes to help solve bad debts in Vietnam on market conditions. IFC wants to set aside investment sources and provide consultancy for the most challenging problem Vietnam is facing, she added.

IFC is in talks to on supplement capital in some banks in Vietnam but Finkelston refused to name these lenders.

Techcombank and VietinBank given IFC’s financial supports have provided over US$60 million worth of loans over the past three years. IFC, a member of the World Bank Group, invested US$805 million in Vietnam in the fiscal year 2013 which ended in June.

Finkelston commented that it is good to set up Vietnam Asset Management Company (VAMC) but Vietnam needs to build up market mechanism to facilitate the bad debt solving process.

Market mechanism is the most important factor in bad debt solving. Besides, Vietnam has to speed up banking reform to create new capital sources for effective growth, she said.

“IFC suggests that Vietnam find international financial partners with experience to solve bad debts,” Finkelston added.

Pham Manh Thuong, deputy general director of Debt and Asset Trading Corporation under the Ministry of Finance, said that many professional foreign investors comprised of investment funds and banks are seeking bad debt trading information in the country.

“I have met some big investors. They said that they are willing to spend hundreds of millions of U.S. dollars or more to buy bad debts in Vietnam,” Thuong said.

However, Thuong said that the lack of transparent information on bad debts is the biggest challenge to investors besides those barriers such as administrative procedures and reluctant cooperation from Vietnamese partners.

After nearly two years of debate, VAMC was set up late July with an aim to handle around VND40-70 trillion worth of bad debts from now to the end of this year.

The central bank estimated that bad debt ratio stood at 4.67% in the total outstanding loan by late April. However, some international financial institutions predicted that the ratio might be several times bigger.

Software processing industry shifts to high-value segment

After over a decade processing software for the Japanese market, Vietnamese software companies are now able to receive processing contracts with higher values than before.

In the past, local software enterprises could only carry out simple and low-value processes such as coding and testing but now they are able to design and research products to make more money, Nguyen Dang Phong, chairman of Fujinet Software Solutions Company, said.

“Vietnam is now winning one fourth of the total number of software processing orders offered by Japanese firms overseas. Most contracts that the country has won from Japanese customers have higher values than before as local firms have started taking on more complicated works,” Phong told the Daily.

According to    Phong, in the last two years Japanese enterprises have tended to transfer their software processing orders from China to Vietnam because of rising labor costs in China. Furthermore, he explained, a sharp rise in job-hopping at Chinese companies has badly affected the processing projects placed by Japanese partners while political tensions between the nations have also forced Japanese customers to transfer a number of their orders to Vietnam.

“To compete with Chinese companies, members in the local software processing industry have no other choice but to improve technical skills besides applying international criteria like Capability Maturity Model Integration in software production,” he remarked.

Sharing Phong’s view, Chu Tien Dung, chairman of the HCMC Computer Association, noticed the number of software processing contracts transferred to Vietnam by Japanese customers is increasing. A host of Japanese firms now are weighing up whether to choose Vietnam as a destination to open research and development centers specializing in software processing services, said Dung, who is also chairman of Quang Trung Software City (QTSC).

“After a period of time accumulating experience, Vietnamese software companies are capable of carrying out processes with higher technical levels and this has helped industry players increase their competitiveness against rivals from other nations like China, India, the Philippines and Malaysia,” he added.

Despite expressing an optimistic view on the Japanese market, local experts foresee Vietnam will face tough competition from Myanmar in the next few years as the emerging market is expected to attract a considerable number of software processing orders from Japanese clients.

Services buoy banks’ revenues

The stable banking service revenues have helped local banks maintain January-June profits at the same level as that in the year-ago period while their credit activities barely grew in the year’s first half.

Among seven lenders releasing their first six-month financial reports, up to six posted up a strong rise in service revenues as a percentage of their total pre-tax revenues compared to the same period last year, However, the total profit of their banking services are approximately equivalent to the year-ago period’s figures.

The seven banks are ACB, NaviBank, Southern Bank, BIDV, Eximbank, Sacombank and Vietcombank.

Among these lenders, BIDV reported up to VND1.21 trillion of net service revenue, a staggering growth from a mere VND411 billion in the same period last year.  

Meanwhile, NaviBank announced a sharp fall in net service revenues in the first six months, from up to VND7.5 trillion in last year’s first six months to only some VND1.11 trillion this year. However, the proportion of its net service revenues still increased in this year’s January-June.

A branch director of BIDV said service revenues at his bank come from the issuance of letters of credit and international payments services among others for corporate customers, and from fees of ATM cards and international payment cards or money transfer for individual clients. He noticed service revenues at his branch also inched up in the first six months.

In the meantime, net revenues from lending activities declined at five out of the seven banks from January-June while only BIDV recorded its net lending revenues shot up to around VND6.65 trillion from roughly VND2.73 trillion in the same period in 2012.

Five banks recorded a decline in pre-tax profits while BIDV posted a year-on-year rise of 45% to VND2.64 trillion in pre-tax profits in the six-month period. Southern Bank, meanwhile, reported pre-tax profits of VND227.8 billion, 2.6 times higher than VND62.6 billion in the year-ago period.

Vietnam’s gold demand surges in Q2

The World Gold Council (WGC) estimated gold demand in the country at 23.2 tons in the second quarter of this year, a 24% rise year-on-year but still lower than the gold volume the central bank sold out in the period, according to Vnexpress.

WGC in the report released on Thursday said that gold demand in Vietnam stood at 23.2 tons with the total value of over US$1 billion in the second quarter, up 24% and 9% year-on-year respectively. Of which, demands for jewelries and investment increased.

In the first quarter, gold demand declined 17% given gold trading regulations of the Government and falling inflation.

However, compared to other Asian countries such as China, India, Thailand, Japan, Indonesia and Korea, the gold demand increase in Vietnam was the second lowest, only higher than Thailand. The figure was also modest compared to 49 tons the central bank sold to banks and enterprises via auctions during the period.

Over the past one year, gold demand in the country reached 77.4 tons, down 26% against the same period of the previous year. Of which, the demand for bullion investment made up nearly 86%.

Anti-subsidy duties feared to strangle shrimp exports

With anti-subsidies duties on Vietnamese frozen shrimp determined by the U.S. Department of Commerce (DOC), industry players are worried that shrimp exports to this market will be strangled.

Tran Van Linh, vice chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP), described the final determination of DOC as a complete failure for Vietnam’s shrimp industry.

With anti-subsidy duties, Vietnamese frozen shrimp will no longer be able to compete with the same item of the countries that are also defendants in the anti-subsidy case, said Linh, who is also director of Thuan Phuoc Seafood Company in Danang.

The anti-subsidy case against shrimp imports from Vietnam and six other nations was initiated by the U.S. Coalition of Gulf Shrimp Industries in late 2012. DOC said the governments of these countries had provided their businesses with preferential interest rate and tax policies.

However, the Vietnamese side deemed such an accusation unjust, saying it is not fair to slap both anti-dumping and anti-subsidy duties on Vietnamese shrimp.

Though the final anti-subsidy duties set by DOC are lower than the preliminary ones, the hardship for Vietnam is not reduced as its main rivals in shrimp export, Thailand and Indonesia, are exempt from such duties.

China, India, Malaysia and Ecuador are imposed anti-subsidy taxes of 10-54%, higher than the wide rate of 6.07% levied on Vietnam, but these countries are not Vietnam’s major rivals because the U.S. is not their main export market, said Linh.

Moreover, DOC informed Thailand of its final determination two weeks ago, so enterprises in this country are boosting exports. Meanwhile, other nations including Vietnam received the determination later and are slapped higher duties.

With a wholesale price of US$20 a kilo in the U.S. previously, Vietnamese shrimp exporters secured a profit margin of 10%. However, with anti-subsidy duties recently announced by DOC, the U.S. importers will certainly push down prices of Vietnamese shrimp corresponding to the duties they have to bear, said Linh.

The VASEP representative stressed the two Vietnamese mandatory respondents to the investigation could not represent the entire shrimp industry, with many players not receiving any subsidy from the Government.

In a recent talk with the Daily, Le Van Quang, chairman of Minh Phu Company, one of the two mandatory respondents, said the board of directors set a revenue growth target of 25-30% for this year. Whether this target is attainable or not greatly depends on the results of the anti-subsidies investigation and the anti-dumping one, he said.

The U.S. is the second largest buyer of Vietnamese shrimp after Japan. As of mid-July, US$289 million worth of shrimp had been exported to this market, accounting for 23.5% of the country’s total shrimp exports.

Although there are only 25 companies exporting shrimp to the U.S. among hundreds of shrimp exporters, these 25 companies are the leading shrimp exporters and the duties stateside will definitely affect their business performance in the rest of the year, said VASEP.

Rural credit rises on easier borrowing requirements

Agriculture and rural credit has doubled from VND292 trillion to VND622 trillion three years after the Government’s Decree 41 took effect in 2010, said Nguyen Tien Dong, deputy general director of Vietnam Bank for Agriculture and Rural Development (Agribank).

Dong told a seminar held last week by the Governmental portal that Decree 41 on credit policy for this sector had left a great impact on rural lives and agricultural production.

Before the decree was issued, agricultural and rural loans without collateral were less than VND10 million for farmers, VND50 million for large-scale farm owners and VND100 million for cooperatives.

With Decree 41, farmers having no collateral are allowed to borrow loans of VND10-50 million while the respective figures for large-scale farm owners and cooperatives are VND50-200 million and VND100-500 million. This has helped meet a large capital demand, making access to loans easier for farmers.

Such agricultural and rural credit has accounted for 18-19% of the entire banking system’s total and will be 20-22% if Vietnam Bank for Social Policies’ outstanding loans are included, equivalent to agriculture’s contribution to GDP.

Currently, the total outstanding loans of Agribank are around VND560 trillion, with 70% invested in the agricultural and rural sector. Besides, bad debts of the sector are always less than 3%.

Responding to farmers’ question why the bank keeps land use certificates as collateral for any credit from VND50 million, Dong said that this aimed to avoid many credit institutions lending money to the same household as the bank, which will result in risks if the borrower was unable to repay.

Meanwhile, regarding difficult access to loans as complained by enterprises, especially those in the seafood and coffee areas, Dong said that high interest rate was one of the causes to this.

He also noted that coffee trading on commodities exchanges still contains many risks while many seafood enterprises even use loans for other purposes such as investing in property.

SCB launches insurance products

Saigon Commercial Bank (SCB) has offered insurance products at its transaction points given the bancassurance agreement signed with Vietcombank Cardif Life Insurance Company (VCLI) last Friday.

VCLI is the joint venture between Vietcombank, BNP Paribas Cardif and SeABank.

Le Khanh Hien, general director of SCB, said that the agreement aims to help diversify business operations of the bank. SCB customers are now able to buy products of the bank attached with insurance benefits or independent insurance products of VCLI at 230 transaction points of SCB.

Bancassurance is part of SCB’s development strategy to speed up retail banking activities.

SCB now has chartered capital of over VND13.5 trillion and total assets of over VND170 trillion as of June. The bank has 197,000 customers and nearly 4,000 staff.

Domestic investors aggressive in realty M&A deals

More domestic investors are taking part in the real estate mergers and acquisitions (M&A) market in Vietnam, focusing on condo and housing projects while leaving jumbo deals for hotels, commercial and retail centers to foreign players.

In early 2013, Thu Duc Housing Development Corporation announced to transfer its entire stake worth VND80 billion in Hanoi City-based Dong Mai project. Hoang Quan Real Estate Company has also announced to acquire parts of Nam Hiep Thanh staff housing project in Phu My new urban area in Ba Ria-Vung Tau Province.

Dat Xanh Group has also strongly participated in the M&A market, acquiring two apartment projects in HCMC earlier this year. According to a representative of Dat Xanh, many investors have offered projects to the enterprise, so it will continue to invest in condo projects whose investors face financial problems.

In Hanoi City, Vietnam International Township Development Joint Stock Company (VIDC), investor of Parkcity project, has transferred its 100% stake to Malaysia’s Perdana Parkcity Company.

Earlier this month, FLC Group Joint Stock Company has taken over a 99% stake from Alaska Land Company, investor of Alaska Garden City. The project has total investment of VND3.5 trillion and covers a total area of nearly 7.9 hectares in Hanoi City’s Tu Liem District.

More investors are now looking for buyers.

Vinaconex 7 is offering its project in Tu Liem District while Vinaconex 2 has plans to sell Golden Silk project to secondary investors.

Ha Do Group plans to transfer projects in An Khanh-An Thuong or My Dinh and it is negotiating with some local and foreign partners to carry out transactions. Licogi 16 Joint Stock Company has also announced it will transfer projects this year.

Recently, Song Da Urban & Industrial Zone Investment and Development Joint Stock Company announced to sell a part of Nam An Khanh new urban area project. The project, which was once considered highly profitable, has yet to be completed after many years of construction.

Phan Xuan Can, chairman of Sohovietnam Company, consultant for real estate M&A deals, said that around 70 investors in Hanoi City are offering projects, mostly in outlying areas such as Tu Liem, Thanh Tri, Hoai Duc and Me Linh. Those in the central area account for only 10%.

The main reason is that these investors have failed to complete the projects as scheduled given financial constraints. Some enterprises have restructured portfolios, focusing on more important projects, while others wish to escape from the market.

Meanwhile, most buyers are businesses with strong financial capability and knowledge about the market. They say that now is the suitable time to buy projects at the lowest prices from partners.

Nguyen Van Kha, chairman of Tu Liem Urban Development Joint Stock Company, said that many real estate companies will divest capital out of the market this year.

Earlier, many petty investors whose capital was just from VND5-20 billion joined the real estate market. When the market met many difficulties, small enterprises have no choice but to sell their projects to reduce losses, Kha said.

Old projects introduced at Vietbuild 2013

Just a few real estate enterprises joined Vietbuild 2013, the international exhibition on real estate, interior and exterior design, and construction materials, while most projects introduced at the fair were those already launched earlier.

In previous years, there were quite many enterprises joining the annual exhibition. But this year, due to scant participation, exhibitors had chances to lure visitors to their booths at the fair, which took place in HCMC from August 14 to 18.

Hung Thinh Land Company introduced three condo projects, including a project on Pham Van Hai Street with apartments priced from VND1.7 billion each, Phuc Yen 2 project in Tan Binh District at VND1.2 billion each and Chuong Duong Garden in Tan Phu District at VND13.5 million per square meter.

Meanwhile, Phuc Khang Construction & Investment Joint Stock Company continued to introduce to investors the Sunflower City project in Dong Nai Province, offering land lots at VND337 million each. The land lots are measured nearly 100 square meters each and payment will be made in two years.

The enterprise also offered Eco Town residential project in HCMC’s Hoc Mon District with land lots from VND600-800 million each.

Minh Vinh Khang Trade Joint Stock Company offered special sale for Bao Loc residential area in Lam Dong Province. The enterprise offered land lots at VND599 million each and houses at VND988 million each.

A staff of the enterprise said the houses previously were offered at VND1.6-1.7 billion each. So, the enterprise expected to speed up sales with the special discount.

Vietbuild 2013 took place at the Saigon Exhibition and Convention Center in HCMC’s District 7. Around 800 local and international enterprises featured 2,200 booths at the fair.

Tra fish processors post falling profits in Q2

Many tra fish export processing firms suffered a decline in profits in January-June due to rising production costs, according to financial reports of the companies.

According to the consolidated second-quarter financial report of Vinh Hoan Joint Stock Company, the firm obtained net revenue of some VND1.35 trillion, a rise of 38% year-on-year. However, its profits contracted by up to 26% over the same period in 2012 to VND52 billion only, which is ascribed to high production costs.

In the second quarter, Vinh Hoan’s production costs increased by more than 46%, resulting in a contraction of 8% to a mere VND139 billion in gross profits. Vinh Hoan also attributed its shrinking profits to slackened local demand and mounting inventories dragging down export prices.

The six-month cumulative revenue of Vinh Hoan reached around VND2.42 trillion, a pickup of 25% year-on-year, with net profits posting VND102 billion or a drop of 14% year-on-year. With the performance, the company has realized 50% of its business targets on revenue and after-tax profits.

According to the second quarter financial report of Mekong Seafood Joint Stock Company, the company only earned VND3 billion in after-tax profits in the first six months of the year, slumping by up to 72% year-on-year.

Mekong posted VND231 billion of net revenue from January-June, dipping 8% year-on-year. The firm reported a deep fall of 72% year-on-year to over VND3 billion in after-tax profits due to a sharp rise of 52% year-on-year to VND21 billion in sale expenses in the period.

In the second quarter alone, after-tax profits of Mekong were nearly VND1.8 billion only, plummeting 36% year-on-year.

Only Hung Vuong Joint Stock Company stands out. The company’s consolidated financial report indicates it in this year’s second quarter achieved after-tax profits of VND128 billion, taking its total profits in January-June to VND233.6 billion, a sharp growth over the year-ago period.

FDI heaps praise for great contribution to economy

A former investment official has brushed aside concerns over the domination of the foreign direct investment (FDI) sector in the country, saying the domestic economy could not have prospered like now without FDI.

Phan Huu Thang, former head of the Foreign Investment Agency under the Ministry of Planning and Investment, noted the FDI sector has made impressive development, contributing greatly to the nation’s economic growth.

Thang, who now serves as director of the Foreign Investment Research Center of the Vietnam National University of Hanoi, stressed that Vietnam couldn’t have developed as seen currently but for the presence of the FDI sector. He spoke out his comments following recent public concerns over the overwhelming development of FDI enterprises.

Many FDI enterprises, especially those in the hi-tech industries like mobile phones, computers and cameras, have far exceeded domestic players, and are playing a role of ever-growing importance in the country’s exports, Thang said.

Specifically, he noted, the FDI segment only held 45.2% of total export value before 2011 but it rose up to hold a share of some 64% in 2012.

In this year’s January-July, this area posted total export value of US$48.2 billion, or as much as 66.3% of the nation’s total exports and a rise of 22% year-on-year. The exportation of mobile phones and accessories alone, mainly by Samsung Electronics Vietnam, topped the list of Vietnamese key export products when bringing home US$11.6 billion in the period.

“It is undeniable that FDI contribution to the development of the country as a whole is really huge,” Thang told the Daily.

FDI capital picked up from US$26.6 billion in 1991-2000 to US$69.5 billion in 2001-2011, but the sector’s proportion in the country’s overall investment has slightly fallen from 24.4% to 22.7% in the given periods. Nevertheless, the FDI sector’s contribution to Vietnam’s GDP has increased from 10.7% in 2000, to 16.9% in 2006 and 18.9% in 2011, a staggering growth from a mere 2% in 1992.

The above figures indicate FDI capital’s important role in Vietnam’s socioeconomic development over the past time, he remarked.

Notably, FDI has boosted Vietnam’s economic restructuring towards industrialization and modernization over the past 25 years, Thang said. Nearly 60% of FDI capital has focused on industrial and construction sectors with higher technologies than the national level, he explained.

Furthermore, FDI capital has resulted in the strong development of certain industries including hotels, offices for lease, banking, insurance, accounting, logistics and supermarkets.

Con Dao to be upgraded to city after 2014

Island District Con Dao off the southern province of Ba Ria-Vung Tau will be upgraded to a city in line with an urban model after 2014 under a project that has been announced by the provincial Department of Internal Affairs and the local government.

Under the project on special administrative management mechanism for Con Dao, the district island after 2014 will be upgraded to a grade-3 city with an estimated population of some 15,000 people by 2020. The number of visitors to Con Dao is projected at 80,000 annually then, says the project.

With the plan, the administrative organization model in Con Dao will be a modern urban government model in which the city’s People’s Council won’t be established but an Administration Committee whose chairperson, vice chairpersons and members will be appointed by the local government. At that time, 11 specialized State management agencies will be set up in the city to support the Administration Committee.

Subsequently, Con Dao City in the future won’t have ward levels but so-called administration representative committees will be in place instead to carry out State management as assigned by the Administration Committee.

To become a high quality tourism, service and economic zone as targeted by the Con Dao socioeconomic development overall zoning plan by 2020 with a vision to 2030, the would-be Con Dao City will apply specific mechanism and policies to investment attraction, socioeconomic development, infrastructure construction and national defense in line with Decision 32/2013/QD-TTg approved by the Prime Minister on May 22.

Hanoi property fair scheduled for October

The second property exposition and trade fair will get underway in Hanoi from October 18-20, a move expected to shore up a long-time sagging property market.

Up to 20 exhibitors are on the waiting list with over 100 pavilions, said General Secretary of the Vietnam Association of Real Estate (VNREA) Phan Thanh Mai at a press briefing in Hanoi on August 19.

Information about banking support deals, and social and low-cost houses will be made available.

Customers are also able to talk directly with investors and commercial bankers and attend a workshop entitled “Social housing – perspective from a 30 trillion VND package”.

Mai said that around 10 commercial housing projects are being converted to social housing, each offering between several hundreds to one thousand apartments to the market.

The event will be co-hosted by the VNREA, the Hanoi Real Estate Club and the Alliance of Property Trading Floors G5.

Foreign gaming company seeks investment chance

Austria-based gaming company Casinos Austria AG on Monday had a meeting with HCMC Vice Chairwoman Nguyen Thi Hong to discuss its casino and computerized lottery plan in HCMC.

According to Karl Stoss, CEO of Casinos Austria, the company has worked with HCMC Lottery Company on supporting technology and developing new products such as bingo and scratch card. In addition, Casinos Austria has signed a cooperation agreement with HD Bank and a memorandum of understanding with Savico.

Casinos Austria will have a working session with the Ministry of Finance on the possibility of a computerized lottery project in Vietnam.

In response to Stoss, Hong said that the city did not have authority over such projects and lottery was managed by the Ministry of Finance.

Casinos Austria AG established in 1967 is one of the leading international gaming companies. Together with some partners, Casinos Austria AG is operating 40 land-based casinos in 16 countries, eight shipboard casinos, 750 gaming tables and over 7,600 slot machines.

Southern bourse’s trading volume hits three-month high

Given that the foreign ownership cap could be increased, investors have increased trading on the stock market in recent sessions. The traded value on the Hochiminh Stock Exchange on Tuesday rose to a three-month high of VND1.55 trillion worth of 65.9 million shares comprising both matching and put-through transactions.

While the traded value increased, the stock index of VN-Index declined 6.21 points to 504.81.

The fall of VN-Index widened throughout the session, losing 1.43 points in the opening trading phase, then dropping 4.33 points in the second trading phase before ending the trading day down 6.21 points. Meanwhile, the VN30-Index lost 4.1 points to stand at 557.52.

Trade focused on big stocks like Hoang Anh Gia Lai (HAG) with 3.65 million shares, REE with 180 million shares and Vinh Son – Song Hinh (VSH) with 140 million shares traded. In terms of put-through transactions, Masan (MSN) on Tuesday recorded a high volume of five million shares worth VND435 billion, equivalent to 41% of total traded value via matching orders on Tuesday.

Foreigners’ net buying value on Tuesday was VND84.5 billion.

There were 78 stocks increasing, 131 falling, and 97 standing still on the Hochiminh bourse. Vinamilk (VNM) price was adjusted down to VND146,000 per share from VND150,000 as on Tuesday was the ex-dividend date for shareholders to receive dividend of 20% in cash.

HNX-Index also fell as it lost 0.28 point to 62.65. However, in the contrast to the southern bourse, trade on the northern bourse was poor with only 21.8 million shares changing hands, equivalent to VND182 billion, dropping 20% from the previous session.

Explaining on improved liquidity on the stock market, many securities companies said that it was due to news on foreign investors’ ownership cap in local companies as Vu Bang, chairman of the State Securities Commission, was quoted by the media that the Government Office had approved the commission’s proposal on raising the ceiling.

However, a source told the Daily that the Government had approved in principle to widen the foreign ownership in June but it took time to consider methods how to apply it. It is because if the foreign ownership is revised up, the Securities Law must be amended which needs to have the approval of the National Assembly.

Gold sells well despite high bidding prices

The central bank sold 25,500 out of 26,000 gold taels to enterprises and banks through an auction on Tuesday, although the floor price was around VND200,000 higher than the market price for a tael.

Some 12 units won the auction with the highest winning price of VND38 million per tael versus the lowest level of VND37.98 million a tael, much higher than the floor price of VND37.9 million.

Over the past four months, the central bank has launched nearly 55 tons of gold onto the market. Le Minh Hung, deputy governor of the central bank, recently told the media that this agency will continue supplying gold for the market if demand stays high.

Notably, enterprises usually post up buying price in the morning lower than the bidding price and then revise prices following the average winning price. According to a representative of a large gold firm, enterprises have posted up low buying price before the auction to prevent risks, meaning that they do not have to buy gold at prices much higher than the bidding level. Besides, the central bank will base on these prices to calculate low floor price for auctions.

A source told the Daily that Saigon Jewelry Company (SJC) has continued to process gold bars for auctions in recent times.

The gold market has stayed a little quiet as SJC has seen strongest transaction volume of just around 2,000 taels a day. Trading turns busier during the days gold bar auctions take place.

Swedish firms keen on local mining industry

Many giant Swedish firms in the mining industry have shown keen interest in investment opportunities in Quang Ninh, wanting to supply mining equipment for local firms to tap coal mines in the northern province.

Speaking at a seminar on coal and minerals late last week in Quang Ninh, Swedish ambassador to Vietnam Camilla Mellnader said that Sweden was one of the leading nations in Europe specializing in the mining industry. Rising local demand for advanced technology and solutions plus the strong presence of Swedish coal mining firms in Asia will open up stronger collaboration chances between the two nations, she remarked.

According to Swedish enterprises attending the business matching with local firms in Quang Ninh on Monday, coal is mainly exploited from open-cast mines in Vietnam which has now exposed many problems relating to water source and environmental pollution. Therefore, they advised local industry players to focus on exploiting coal and minerals lying beneath the earth surface to ensure sustainable development.

Simon Asell, regional marketing director of the Swedish mining company ABB, said his firm wanted to join forces with Vietnam National Coal and Mineral Industries Group (Vinacomin) and other local enterprises to study cooperation chances in coal and mineral mining deep in the earth.

“This is a highly potential area in Vietnam,” he told the Daily.

Similarly, a representative of Scania Company, a solution provider in the transport industry established in 1891, also came to the event to sound out business opportunities this time. The firm said it had deployed many projects in coordination with mining companies by encouraging them to use high quality transport equipment with low-cost operational expenses.

The seminar was also attended by Richard Anund, managing director of Sweden’s SEK for Asia, who said at the seminar that his firm would provide trade finance for deals to acquire Sweden mining technology and machinery.

SEK has assisted lots of companies in Asia and the company is ready to provide financial supports to Vietnamese firms doing business with Sweden counterparts, he insisted.

Local wood products penetrate new markets

The local woodworking industry has posted positive growth in traditional markets, and has even penetrated into some new markets such as Canada and South Korea.

Besides traditional markets such as the U.S., Japan and the European Union (EU), the Ministry of Industry and Trade announced that Canada has become a potential interior furniture importer.

As Canada has reported more positive economic growth compared to other countries, local enterprises should pay attention to furniture demand of the nation. Currently, the country takes the lead among bedroom furniture importers of Vietnam.

The Ministry of Agriculture and Rural Development forecasts the nation’s wood export revenue growth rate at around 10-15% this year with value estimated at US$5.5 billion. Between January and July, Vietnam obtained over US$2.9 billion in wood and woodworking product export value, a 12.3% year-on-year increase.

Some markets such as Germany and France reported an import value decline while key markets such as the U.S., China and Japan posted strong growth rates of 6.4%, 15.9% and 19% respectively. Notably, shipments to South Korea saw a strong growth rate of 43%.

Nguyen Quoc Khanh, chairman of the Handicraft and Wood Industry Association of HCMC (Hawa) and chairman of AA Construction Joint Stock Company, said that the demand for woodworking products and project furnishing remains high. The enterprise has signed many contracts to furnish restaurant and hotel projects overseas.

Can Tho realty awaiting capital support

The property market in Can Tho, the economic center of the Mekong Delta, is still facing difficulties as both individuals and companies have not been able to access the VND30 trillion housing credit package launched by the Government.

Many commercial housing projects in Can Tho seeking permission for conversion into low-cost homes are still awaiting approval so as to benefit from the VND30 trillion housing credit package.

After the Government decided to offer the credit package to support developers and buyers of low-cost homes, Can Tho City has had five housing projects meeting the prescribed conditions. However, none of these developers have got the low-interest loans so far.

Specifically, Thien Loc Co. Ltd. has sought approval for adjusting two housing projects into low-cost homes with total areas of nearly 18,880 square meters in Cai Rang District. Can Tho Housing Development and Trading Co. Ltd. has applied for converting more than 14,230 square meters of commercial housing schemes into budget homes with a total of some 402 condos in Hung Phu 1 Residential Area in the same district.

Besides, Can Tho Hoang Quan Investment and Real Estate Joint Stock Company has asked for permission to develop low-cost homes at a resettlement project also in Cai Rang District with a total of 11,120 square meters.

Nguyen Tan Duoc, director of Can Tho City’s Department of Construction, said that four of the above five projects are still waiting for disbursement from the VND30 trillion package, except for a scheme of Hong Loan Construction and Trading Joint Stock Company.

As observed by the Daily, many projects are still under construction or have just completed shell buildings in Cai Rang District in Southern Can Tho and residential areas in Binh Thuy and Ninh Kieu districts among others.

In the Southern Can Tho new urban area alone covering 3,200 hectares, at least 20 investors with 30 projects to build modern residential areas, high-class apartments and offices for lease on a total of some 1,300 hectares are all incomplete.

The developer of an on-going project in the urban area who declined to be named said the hard access to the loan package along with the frozen realty market and slackened housing demand had forced many investors to abandon their schemes.

Seafood processing plants to be reorganized

The Vietnam Directorate of Fisheries has plans to streamline the network of seafood processors nationwide with a reported aim to better control environmental pollution and facilitate management, a move that has triggered instant reactions.

In its restructuring scheme, the directorate said the reorganization is needed as the processing capacity has now far exceeded the demand. On average, processing plants are currently running at 60-70% capacity, said the agency.

Therefore, the directorate will coordinate with the Ministry of Industry and Trade and provinces to inspect and rearrange processing enterprises, relocating them into industrial zones and concentrated materials.

The restructuring scheme suggests a road map for restructuring seafood processing plants to fit each material production area and each market.

In addition, the directorate will work with provinces on reorganizing production based on the product value chain from farming ponds to consumers. Purchasing and processing enterprises will play the crucial role in organizing the product value chain.

The model of farmers, material suppliers and processing enterprises all having their stakes in the product chain will be piloted and expanded to create “an organic link” between production and consumption.

According to the Vietnam Association of Seafood Exporters and Producers (Vasep), the nation currently has around 520 seafood processing facilities meeting export requirements. Among these, there are 412 facilities and plants qualified to export products to Europe.

One Vasep representative, however, blasted the directorate’s restructuring scheme, saying most of operational ones meet exporting requirements and need no restructuring.

“If wanting to reorganize the network, the management agency only can reduce the number of plants under the State ownership, not those belonging to the private sector,” said the source who asked not to be named.

Besides, there have not been any statistics pointing out which plants are operating at 50-60% capacity and which ones are running at full capacity, and running at a low capacity does not necessarily means low efficiency.

The restructuring scheme will need an estimated VND40 trillion until 2020, with 10% sourced from the State budget, according to the directorate.

Vietnam, Laos boost bilateral trade

Vietnam and Laos have agreed on a number of measures to remove difficulties for their businesses and facilitate cross-border goods exchange in an effort to raise two-way trade in the future.

The two sides reached the consensus during talks between visiting Vietnamese Deputy Minister of Industry and Trade Nguyen Cam Tu and his Lao counterpart Khemmany Phonsena in Vientiane on August 22.

In the coming time, the two nations will create a legal framework for their businesses’ trade and investment activities.

They will also focus on studying a possibility of establishing a new trade agreement that suits the current situations of the two nations, especially when they are members of the World Trade Organisation.

The two sides suggested measures to increase border trade, improve people’s living conditions and maintain political stability and security in areas sharing the border, thus contributing to fostering the Vietnam-Laos special relationship.

Two-way trade between Vietnam and Laos has seen a robust growth in recent years, reaching 866 million USD last year, a 17 percent increase from the 2011 figure. It was 504 million USD in the first half of this year, up 8.3 percent year-on-year.-

SBV holds forex rate as market steadies

An official from the State bank of Vietnam (SBV) told local media on August 21 that there will be no adjustment of the foreign exchange (forex) rate at present.

He said that forex market shows good liquidity and the demand for dollars has been met.

Earlier, the SBV said on its website that the forex market is becoming stable while the exchange rates at commercial banks and on the free market tend to decrease.

It said it will continue closely monitoring the forex market so that it could also take measures to stabilise the market if necessary. Two months ago, the central bank devaluated the Vietnamese dong by 1 percent.

On August 21, some commercial banks raised dollar prices, offering from 21,060-21,075 VND for buying and 21,120-21,140 VND for selling.

Thai Binh power plant credit agreement reached

The Vietnam Oil and Gas Group (PetroVietnam) and its Japanese partners signed an export credit agreement worth 141 million USD to purchase equipment for the Thai Binh 2 Thermal Power Plant Project in Hanoi on August 22.|

The credit is funded by the Japan Bank for International Cooperation (JBIC), the Bank of Tokyo-Mitsubishi UFJ (BTMU), Citibank and Mizuho Corporate Bank .

The money will be allocated to buy steam turbines and other machinery, provided by the Japan-based Sojitz Corporation .

The Thai Binh 2 power plant project, which is being built in Thai Thuy district of the Red River Delta province of Thai Binh, demonstrates the determination of PetroVietnam to meet rising domestic demand for electricity.

The company wants to help ensure a stable electricity supply which serves the country’s economic development and supports the business activities of Japanese enterprises in Vietnam.

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