Site clearance solutions sought for Long Thanh airport

An inspection team led by Deputy Minister of Transport Le Dinh Tho on Saturday made a field trip to Dong Nai Province and worked with the provincial government over site clearance, compensation and resettlement for the Long Thanh International Airport project.

Data of Long Thanh District, Dong Nai Province shows about 5,000 hectares of land should be cleared to make room for the project with 4,730 households and 26 organizations to be reallocated. Around 70% of 15,000 affected people are farmers and the rest are rubber workers and those working for other sectors.

It would be hard for people aged over 45 to change jobs or work for factories. Moreover, land prices in the airport area have snowballed, making it difficult for the affected people to buy land there to build new homes.

At the meeting, Deputy Minister of Transport Le Dinh Tho said there need to be solutions and policies to support the affected people to find new jobs. Dong Nai Province should ask the central Government to disburse VND5 trillion (about US$220 million) as pledged for site clearance, resettlement and compensation for the project, he said.

The National Assembly (NA) on June 19 approved a proposal for separating compensation, site clearance and resettlement from the Long Thanh International Airport project and treat them as a sub-project to boost the pace of airport construction.

According to a report of Dong Nai Province, costs of site clearance, compensation and resettlement are estimated at VND23 trillion (over US$1 billion). However, the total amount which the Government has allocated for these components in the medium-term public investment plan for the 2016-2020 period is only VND5 trillion.

Where the remaining VND18,019 billion comes from is not known. In a report sent to the NA, the Ministry of Planning and Investment said it will work with the Ministry of Finance and the Ministry of Transport to consider using backup funds for medium-term public investments to finance the project.

The Long Thanh International Airport project will be executed in three phases at a total cost of VND336.6 trillion (US$16.03 billion).

In phase one, which requires VND114.45 trillion (US$5.45 billion) and is scheduled for completion in 2025, a runway, a passenger terminal, and other auxiliary facilities will be built, with a capacity of 25 million passengers and 1.2 million tons of cargo a year.

A second runway and terminal will go up in the second phase, so raise the airport’s annual capacity will rise to 50 million passengers and 1.5 million tons of cargo. The airport will be capable of handling 100 million passengers and five million tons of cargo a year after phase three is complete.

HCMC seeks to retain 10% of import-export tariff revenues

HCMC plans to ask the central Government for approval to retain 10% of import and export tariff revenues so that it could have an extra VND43.4 trillion (US$1.91 billion) in 2017-2020 to finance much-needed investment projects.

Under the current regulations, all import and export tariff revenues in the city must go straight to the central State budget.

According to the HCMC Institute for Development Studies, the city’s 2016 value added, import, export and special consumption tax revenues were estimated at VND172.18 trillion, accounting for 15% of the city’s gross regional domestic product (GRDP).

Import and export tariffs, and VAT and special consumption tax for imported goods reached over VND100.8 trillion, representing 8.79% of the city’s GRDP.

The legal basis for the city’s plan is Resolution 16-NQ/TW dated August 10, 2012 on directions and tasks for development of HCMC until 2020. The resolution mentions the possibility of using the State budget and regional import and export tax revenues to partially fund the city’s major projects and programs.

To finance traffic infrastructure and port projects to boost economic growth, the city will request the central Government to allow it to keep 10% of annual import and export duty revenues for a period of 10 years. The city’s tax collections from import and export operations in 2017-2020 are forecast to amount to VND434 trillion, so if approval from the central Government is forthcoming, the city would have an additional amount of VND43 trillion in the four-year period.

The municipal government will also propose higher tax on some luxury goods and services. At the same time, the city wants to impose some new fees on the transport and environment sectors.

The central Government has assigned the city to contribute VND348 trillion to the State budget in 2017, up by VND43 trillion against 2016, but revenues shared for the city will total only VND60.3 trillion, up by a mere VND1.3 trillion versus last year. Meanwhile, the ratio of retained revenues for the city is down from 23% to 18%.

Long An to supply safe food for HCMC

The HCMC Food Safety Board and the Department of Agriculture and Rural Development of Long An Province last week signed an agreement on cooperation in agricultural goods production, trading and consumption to ensure food safety.

Long An is the first province to cooperate with the board to supply HCMC with safe agricultural products.

The board earlier visited Phuoc Thinh Service Trading Production Agriculture Co-operative in Can Giuoc District and San Ha chicken processing facility in Ben Luc District, Long An.

The supply chain of farm produce with clear origin will be strictly controlled. 

The two sides will jointly inspect vegetables, meat and seafood suppliers in Long An to make sure food is secure.

HCMC authorities will create favorable conditions for Long An suppliers to gain access to the city market through fairs and workshops, and cooperate with HCMC partners, such as wholesale markets, supermarkets and retail stores.

Monthly import-export tax revenue in HCMC hits record high

The HCMC Customs Department collected a staggering VND10 trillion (US$440.3 million) in import and export taxes from May 15 to June 15, a record high in months.

The city’s import and export tax revenue in January-June has amounted to VND53.2 trillion, increasing 9.9% compared to the same period last year and accounting for 48.8% of the full-year target of VND109 trillion.

Therefore, the department will have to collect VND55.8 trillion in the rest of the year.

The department credited the rise to a pickup in tax collections from key imported products, including iron, steel, completely-built-up (CBU) autos under nine seats, computers, and electronic products and parts, according to a report the department sent to the General Department of Vietnam Customs.

However, the department noted, imports of some major products have been in decline, thereby dealing a budget collection shortfall. For instance, fuel imports have plunged, with 981,800 tons imported in the first half of this year, down from over 2.15 million tons a year ago.

The city imported more than 2,500 CBU autos under nine seats worth US$35.08 million in the second half of May while the respective figures in the first half of this month were over 1,600 units and US$20.07 million.

The city saw its January-June export turnover rising 16.8% year-on-year to over US$19.96 billion and its import bill surging 19.3% to US$23.1 billion, leaving a trade deficit of US$3.14 billion.  

Mekong Delta rice production to increase despite possible early flooding

The Ministry of Agriculture and Rural Development has called for an increase in fall-winter rice production in the Mekong Delta this year although flooding is forecast to come early.

Speaking at a conference on rice production in the Mekong Delta in Can Tho City on Friday, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh told local authorities to take measures to ensure safety for rice production in the fall-winter season.

According to Doanh, this rice farming season is an important rice season as the price of this food staple is increasing but rice output in the winter-spring season dipped as weather anomaly brought early rain and fewer days of sunshine.

Le Thanh Tung at the ministry’s Department of Crop Production said rice output in the Mekong Delta this fall-winter season is estimated at 4.65 million tons, up by over 446,000 tons compared to the same period last year. The delta’s rice acreage will reach 832,000 hectares, up by 7,071 hectares against 2016, with rice productivity projected at 5.6 tons per hectare, up half a ton per hectare year-on-year.

According to Tung, a spike in rice output in the fall-winter crop can make up for a decrease of 226,095 tons in the winter-spring crop. The rice export outlook is brighter as rice export is expected to grow in both volume and value. All the 13 Mekong Delta provinces now grow fall-winter rice, up from just five around 10 years ago.

Tung said those areas not prone to flooding will be given priority to develop the fall-winter rice crop. Measures will be taken to minimize impacts of flooding on rice farming, including reinforcing dykes, selecting suitable rice varieties and changing harvest, transport and drying methods.

The southern weather center forecast flooding may come in the Mekong Delta sooner than normal this year. In late July, upstream water levels of the Mekong River in Tan Chau District, Dong Thap Province and Chau Doc District, An Giang Province could rise to 2.5-3 meters, exposing Tan Hung and Vinh Hung districts of Long An Province and some farming areas in An Giang and Dong Thap provinces to flood risk.

Data of the Vietnam Food Association showed the country’s January-May rice exports reached 2.3 million tons, up 9.71%, with a total FOB value of nearly US$975 million, up 11.29%, and the CIF value of over US$1 billion, up 12.29% compared to the same period of 2015.

The average FOB price was US$427.17 per ton, up US$6.06 per ton. Vietnamese rice traders signed contracts to export over 3.5 million tons of rice while rice inventory was over 1.15 million tons.

According to the Ministry of Finance, the average rice production cost of the Mekong Delta in the summer-fall crop is estimated at VND3,992 (US$0.18) per kilo, up VND154 per kilo versus the same period last year. Ben Tre Province has the highest rice production cost, VND5,192 per kilo, and Ca Mau Province has the lowest cost, VND3,148 per kilo.

Vietnam’s private sector overburdened with costs

Vietnamese private enterprises are overburdened with formal costs, let alone informal expenses and harassment, so they can hardly develop, experts said at a forum in Hanoi on June 22.

Ho Sy Hung, head of the Enterprise Development Department under the Ministry of Planning and Investment, told the Vietnam Enterprise Development Forum jointly organized by the ministry and Economy and Forecasting magazine that the cost burden imposed by the State is too heavy for private enterprises.

Citing a survey by the Japan External Trade Organization in 2016, Hung said the minimum wage increase in recent years was around 8-12% a year, outpacing annual labor productivity growth of 4-5%. Specially distressful is the high social insurance, at 22% of the total salary fund, far higher than in regional countries, such as 13% in Malaysia and 10% in the Philippines.

The rate of return at private enterprises is worryingly low, at a mere 1.72% compared to the average rate of 6.04% at State-owned enterprises and 6.95% in the foreign investment sector.

Regarding the overall business community, 97.7% of firms are small and medium in terms of labor force, and 94.8% of enterprises are small and medium by capital scale.

For the private sector, such rates are even worse. Up to 98.6% of private enterprises are small- and medium, but the number of medium-sized private enterprises makes up a mere 1.6%. Most private enterprises have fixed assets of VND7-8 billion, and this trivial scale had barely improved throughout the 2011-2015 period.

“Domestic private enterprises are financially incapable of building up fixed assets like machinery and technology to cut costs and improve business efficiency. This is food for thought to policymakers to mull new supportive policies for the sector,” Hung of the ministry said.

Dau Anh Tuan, head of the Legislation Department of the Vietnam Chamber of Commerce and Industry, said bigger enterprises tend to be subject to more inspections by authorities than smaller ones.

“Many small and medium enterprises are satisfied with the business scales since they are fretful over inspections by State administration agencies and the taxman. Some enterprises complained that the day before, they were inspected by the tax agency, and the day after, they were inspected by other State bodies on environment or social insurance,” Tuan told the forum. He added that up to 65% of private enterprises face difficulties in land access.

Vu Dinh Anh, an economic expert, said it is urgent to clarify the role of the private sector in the economy. “When the private sector grows, the economy will also grow. Therefore, it must be clarified that the private sector and the State sector are not mutually exclusive. Rather, they supplement each other in growth,” he said.

HCM City property market to change

HCM City’s real estate market in the 2017-20 period will see major changes as supply and demand will gradually adjust, stabilising and strengthening the market, according to the city’s Real Estate Association.

In its latest report on the real estate market in the second half of 2017, the association said there would be a switch from high-end projects to mid- and low-end segments to meet demand from people with lower incomes.

The emphasis on the low- to mid-end market segment began early this year, the report said.

Thirty-two new housing projects were approved in the first half of the year with a total of 16,505 apartments. Of these, more than 68 per cent were in the mid- and low-end market.

“This is a good sign because developers are re-structuring their products to develop apartments with one or two bedrooms to meet the huge demand of people with lower incomes,” said Lê Hoàng Châu, chairman of the association.

The association said that in the last half of the year, co-operation among developers would be more common as the development trend continues.

Merger and acquisition activities are also expected to increase as the National Assembly’s resolution to reduce bad debt becomes effective in mid-August.

The market is expected to become more stable and transparent when new policies related to tax, credit, planning and administrative procedures become effective.

The association said that investment flows would come mostly from foreign investors and overseas remittances.

Châu said that in the first half of the year, 20 per cent of US$2.1 billion in overseas remittances was poured into real estate.

Nearly 13 per cent of foreign direct investment (FDI) was invested in the real estate market, equivalent to $50.3 million.

“FDI to the sector in the last six months of the year will surge because many contracts to develop property are under negotiation,” he said.

Châu said that infrastructure upgrades, including metro lines and rapid bus routes, would create advantageous conditions for companies to develop in the mid- and long-term.

Developers are expected to focus on projects friendly to the environment to meet the demand of consumers who want modern technologies, including the internet of things (IoT) and artificial intelligence, he added.

In the first half of this year, the city developed 1.92 million sq metres of housing.

During the period, the city continued to upgrade housing, and targeted rebuilding 50 per cent of 474 old apartment buildings until 2020.

As of the end of last year, the city had 13,220 real estate companies.

In the first half of the year, one-third of 18,000 new companies established in the city were real estate companies, with most of them providing real estate services.

SAV & ICAEW sign MoU

The Institute of Chartered Accountants in England and Wales (ICAEW), a world leader in the accountancy and finance profession, and the State Audit Office of Vietnam (SAV) have signed a memorandum of understanding (MoU) to work more closely together.

The agreement between the two was signed on June 26 by ICAEW’s CEO Mr. Michael Izza and Deputy Auditor-General Mr. Cao Tan Khong at a ceremony in Hanoi. It sets out detailed activities that will see the two exchange professional experience and information while tightening cooperation for mutual benefit.

Speaking at the ceremony, Mr. Khong said the development of human resources and international integration are the two core priorities within the strategy for SAV’s development to 2020. “The MoU sets the foundation for SAV and ICAEW to conduct supportive programs in improving professional experience, contributing to the development of talent in Vietnam’s auditing industry to integrate on a regional and global scale,” he added.

“The partnership with SAV will legalize commitments and ICAEW’s will to contribute to Vietnam’s development,” said Mr. Izza said. With ICAEW’s vision of operating for the sustainable development of the global economy, “the operation and activities of ICAEW in Vietnam during recent years have had a positive impact on the enhancement of talent within the accounting sector in general and the auditing field in particular.”

In 2011, ICAEW also signed an MoU with the Vietnam Association of Certified Public Accountants (VACPA) to establish a framework to work together to develop talent and advance the accountancy profession in Vietnam and Southeast Asia.

Mr. Izza affirmed that during the time to come it will continue with these commitments while at the same time conducting more activities to bring State authorities and Vietnamese organizations and businesses closer to the most up-to-date and modern financial and accounting standards.

As an official member of the International Organization of Supreme Audit Institutions (INTOSAI) and the Asian Organization of Supreme Audit Institutions (ASOSAI) since July 1996 and January 1997, respectively, SAV has participated more actively in global cooperation. It has developed and retained extensive relations with numerous external organizations, including a large number of prestigious supreme audit institutions (SAIs) and foreign agencies around the world that have signed bilateral cooperation agreements with SAV.

SAV has defined its development goals and vision to 2020 as to attain enhanced operational capability and legal effectiveness and quality and efficiency in State audits so as to make it a strong tool of the State in controlling and monitoring the management and use of State budget funds and assets, and to build SAV into a highly professional agency that is modernized from phase to phase into a responsible and prestigious position in the field of public finance control, with a view to better meeting the requirements of the country’s industrialization and modernization and being in line with international practice and standards.

With a philosophy “Transparency, Integrity, Professionalism and Brightness”, SAV is now doing its utmost to become a responsible and renowned public finance control agency to ensure Vietnam’s sustainable and prosperous development.

MWG launches BigPhone store in Cambodia

The Mobile World Group (MWG) officially launched its first overseas store, “BigPhone” in Phnom Penh, Cambodia, on June 23, to approach Cambodians and visitors to the country and with a look similar to its stores in Vietnam.

Initially, BigPhone will focus on mobile phones and tablets, which account for 85 per cent of all products in the store. Samsung phones and tablets are in the majority, followed by those from Huawei, OPPO, Camfone, and LG, while Apple and Nokia products will be available in July. The remaining 15 per cent are accessories and SIM and phone cards.

Due to the low consumption in Cambodia, laptops will only be sold when other core products have generated stable revenues. The first BigPhone store is projected to earn average revenue of $100,000 per month.

The launch of other BigPhone stores will depend on the business performance in the first three month of the initial store, which is currently being promoted by roadshows, leafleting, and other marketing activities.

“The fake phone market in Cambodia is an issue, while the training of staff for long-term planning also needs to be considered further,” said Mr. Ho Viet Dong, CEO of MWG in Cambodia.

BigPhone is a trial for MWG in seizing overseas opportunities and testing the company’s systems when operating outside of Vietnam. If things go according to plan, it will calculate the possibility of expanding into Myanmar or Laos, according to the company.

MWG and HAGL signed MoU

MWG also signed a strategic partnership agreement on June 23 with the Hoang Anh Gia Lai Group (HAGL), a multi-sector group from Vietnam that engages in fields from agriculture to power generation, to provide fresh fruit to MWG’s Bach Hoa Xanh chain in Vietnam. This will bring the partnership between the two to the strategic level, with HAGL to accompany Bach Hoa Xanh’s nationwide expansion plans in the future.

The partnership agreement makes clear that HAGL will prioritize Back Hoa Xanh over other exporters or local buyers while at the same time providing a preferential pricing system for Bach Hoa Xanh to ensure its market competitiveness.

Speaking at the signing ceremony, MWG CEO Mr. Tran Kinh Doanh said he believes Bach Hoa Xanh will grow quickly in the time to come, and “our ambition is to grab a substantial share in the consumer retail market” and “we are glad to have HAGL as our companion,” Mr. Doanh added.

For its part, HAGL CEO Mr. Vo Truong Son said that as of now the group has planted thousands of hectares of 17 types of tropical fruit in Vietnam, Laos, and Cambodia, which are all high-quality products. “We believe the Bach Hoa Xanh chain will create prestige within the consumer retail market and via this cooperation will bring our trusted products to consumers nationwide,” Mr. Son added.

According to its 2016 financial report, MWG recorded net sales of VND44.6 trillion ($1.97 billion) and after-tax profit of VND1.57 trillion ($69.5 million), increases of 77 and 47 per cent, respectively, compared to 2015. Its revenue also exceeded the initial annual target by 14 per cent. Over the last five years, MWG’s revenue and after-tax profit have increased by 43.87 and 65.7 per cent per year on average.

UPCoM marks eighth birthday     

The capitalisation of the Unlisted Public Company Market (UPCoM) has rocketed 100 times to reach VND444 trillion (US$19.73 billion) after eight years of operation.

The number of traded companies has also risen from about 40 in 2009 to 568 in 2017, making the scale of UPCoM 2.4 times bigger than the listed market on the Ha Noi Stock Exchange.

The secondary market for unlisted companies also recorded a 50-times increase in its daily trading value, which has reached an average of VND197.7 billion from VND4 billion in 2009.

UPCoM was first launched by the HNX on June 24, 2009 to narrow and limit the trading of companies’ shares on the free, unmanaged market and expand the Government-managed market.

After eight years of operation, UPCoM has undergone significant changes to draw attention from businesses and increase its attractiveness to investors by improving its trading criteria and applying the online trading mechanism.

Those efforts have helped companies, whose shares are traded on UPCoM, become listed companies on the HCM and Ha Noi stock exchanges and raise the transparency of both markets and their businesses.

To celebrate the eighth anniversary of UPCoM, the HNX has issued a new mechanism that divides UPCoM into three categories by companies’ market capitalisation in order to improve trading conditions for the secondary market.

The three levels are the UPCoM Large for 40 companies, which have more than VND1 trillion in their charter capital, UPCoM Medium for 70 companies, which have charter capital of between VND300 billion and VND1 trillion, and UPCoM Small for the remaining 379 companies that have charter capital of between VND10 billion and VND300 billion.

The new firm categorisation also marks new efforts of HNX to improve its monitoring and supervision over UPCoM, which has a variety of companies, capitalisation, quality and sectors.

Other markets on the northern securities exchange like bond and listed markets also posted big improvements in their operation.

In the Government bond (G-bond) market, the HNX has raised approximately VND1.4 quadrillion from G-bond auctions between 2006 and 2016 for the country’s socio-economic development.

Investors have become more interested in long-term bonds in recent years, especially 20- and 30-year bonds. By June 2017, the average maturity of G-bonds reached 13.8 years compared to that of 2016 G-bonds at 8.27 years.

In 2016, the G-bond market recorded its repo (repurchase agreement) trading value was equal to 40 per cent of total trading value in the G-bond market, nearly close to outright trading value.

Repo trading value has also risen in the first half of 2017, occupying 47.9 per cent of the total market’s trading value and nearly balancing the outright trading value.

On the listed market, the number of listed companies has increased to 377 in 2017 from 257 in 2009 with total market capitalisation of VND183 trillion and average market trading liquidity in each session reaching VND500-600 billion.

A lot of large-cap firms have become listed on the northern bourse, such as Asia Commercial Bank (ACB), Hai Phong Port JSC (PHP), insurance-finance group PVI Holdings (PVI) and PetroVietnam Technical Services (PVS).

In the future, the HNX will apply the market maker mechanism to increase and improve the trading of listed shares.

Market makers will be able to connect investors together, creating opportunities for low-liquidity shares to be attractive to investors.

In the past eight years, listed companies have raised more than VND69 trillion for their business activities in the context that they have difficulties getting access to bank loans due to high lending rates.

The HNX has worked with the Viet Nam Securities Depository (VSD) and the State Securities Commission (SSC) to develop the derivatives market in order to provide a new product for investors and improve the quality of the Vietnamese securities market.

To make sure the derivatives market operates properly in its early stage, the HNX will launch the first product, which is the futures contract for the VN30 Index, which contains shares of the 30 largest companies by market capitalisation.

After two years of preparation, the HNX has completed developing the facility and infrastructure for the new market and connected with banks, as settlement units, and brokerages, as market members.

Transforming from the Ha Noi Securities Trading Centre on June 24, 2009, the HNX has risen and affirmed its positive position in Viet Nam’s securities market and received a lot of honourable awards from the Government, the State and the finance ministry.  

NCB sees major growth from core products and niche markets

From standing at the edge of the abyss, the National Citizen Bank (NCB) has recorded among the highest revenue of commercial banks in Vietnam. This success comes from the determination of its leaders to shift development towards niche markets and also design tailor-made products for each customer segment.

Throughout the recent years, NCB’s net profit has consistently grown at an average of 30 per cent a year. Total assets in 2016 rose 43.1 per cent against 2015 to VND69 trillion ($3.03 billion) and net profit by 90.9 per cent to VND210 billion ($9.2 million), or five times higher than the period prior to its restructuring in 2012.

As at the end of 2016, mobilized capital stood at VND42.76 trillion ($1.9 billion), up 24.9 per cent compared with 2015, while customer deposits were up 24 per cent to VND25.4 trillion ($1.12 billion). Significantly, the bank’s bad debt rate was kept below the 3 per cent threshold, standing at 2.07 per cent of total outstanding credit as at December 31, or three times lower than in the period before restructuring, while loans in Groups 3, 4 and 5 were tightly controlled.  

Instead of becoming involved in a race with giant banks, after restructuring it chose its own path by providing specific tailor-made products for customers in each segment. “Trying to win customers from major banks in the retail and wholesale markets would be like hitting our heads against a brick wall,” one NCB Director said. “Major corporate customers have been with banks like Vietcombank and BIDV for a long time, while the individual customer segment has seen fierce competition between large commercial banks and 100 per cent foreign-owned banks.”

Immediately upon restructuring, the bank decided its core customer segment would be most suitable and developed products that would become the specialty of its individual loan segment. In the time to come, “we will continue to design tailor-made products with ‘state-of-the-art’ technology for each and every individual customer, so that NCB will become the most friendly and efficient financial consultant,” the Director added.

The bank’s niche products, such as home loans, car loans, and household business loans saw the highest revenue compared to other products and services in 2016, with total customer loans last year rising two-fold from 2015 to VND26 trillion ($1.14 billion).

From a small bank with only some saving products, after more than 22 years of development and three years of restructuring, 2016 marked a turning point for NCB with the launch of significant new products such as the NCB app for smartphones, NCB Visa Credit Card, and the NCB Priority Customer Center, among others. It now has 2,400 employees and 90 transaction points in major cities and provinces in Vietnam.

During the 2016-2020 period, NCB plans to focus its business in the north while improving customer awareness in the south and in the central region. At the same time, it will transform each transaction point to become a revenue center. After 2018, it will expand its network to the north-west, south-central, and central highlands markets.

It was recently named among the Top 5 leading banks in Bac Ninh, Bac Giang, Thue Thien Hue and other large provinces. Not only gaining success in its business, NCB is also the best bank in Vietnam regarding corporate social responsibility (CSR) activities.

In 2012, it established the NG Community Fund, operating as a non-profit, voluntary organization, raising funds from NCB’s employees and partners. NCB has efficiently used the community fund to create social and welfare bridges, schools for remote children, charity houses for poor people, and sponsorships to people affected by natural disasters and by war.

Maritime Bank provides auto cashback for Clingme users     

Maritime Bank on Thursday signed an agreement with Gingatum Viet Nam to provide auto cachback services for users of the startup’s shopping app Clingme.

Accordingly, Clingme users with accounts at Maritime Bank will receive money immediately in their bank accounts when they want to withdraw money from Clingme accounts.

Normally, it takes five days to withdraw cash from Clingme accounts.

Clingme is an app via which users will get cashback of up to 40 per cent on their shopping bills from the company’s partner stores. At present, Clingme has partnered with 2,700 stores in Ha Noi and HCM City.

Founded in 2013, Gigatum has raised funding of US$3 million. The company plans to have one million users at Clingme and 10,000 partner stores by the end of this year. 

Sacombank to launch three affiliates     

Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) will establish three affiliates between now and 2020, the bank announced.

One of the affiliates will be a financial limited liability company operating in the fields of credit-consumer finance services, finance leasing, credit card services and other related services. It is projected to have chartered capital of VND500 billion (US$22 million). The other two affiliates will be a life insurance company and a general insurance company, with chartered capital of VND500 billion and VND300 billion, respectively.

Sacombank’s annual general shareholders’ meeting will be held on June 30 after being postponed two times. At the meeting, shareholders will discuss the election of the new members of the Board of Directors and the Supervisory Board for the 2017-22 period. 

They will also work on the establishment of the three affiliates.

Sacombank’s leaders said that in order to serve the needs of customers, the bank needed to specialise its consumer lending services through the operation of financial companies.

The establishment of new financial company would help professionalise consumer lending services and improve risk management, the bank said.

Regarding insurance services, Sacombank has diversified customers who would help the bank exploit potential in the field and boost cross-selling of products, gradually penetrating the market.

Previously at the 2015 annual general shareholders’ meeting, Sacombank’s plan of establishing a financial company and two insurance companies was approved. However, the plan has not yet been implemented. In 2017, Sacombank aims to increase total assets by 16 per cent to VND384.6 trillion. Total mobilised capital is expected to reach VND356.1 trillion. Total outstanding loans are projected to touch VND277 trillion and pre-tax profit is estimated to be VND585 billion. 

Korea scouts for investment opportunities in Can Tho     

Officials of Can Tho City in Mekong Delta met with a delegation from South Korea on Friday to explore opportunities for enhancing cooperation in the healthcare and construction sectors.

Haeseung Shin, director of Korea’s Gumi Gangdong Hospital, who is leading the delegation on this investment promotion trip, said Can Tho is among their six destinations, the others being Ha Noi, HCM City, Thai Nguyen, Bac Ninh and Soc Trang provinces.

The delegation had meetings with the Can Tho municipal People’s Committee and People’s Council, Can Tho General Hospital, Hoan My Cuu Long Hospital, and some construction companies, to understand local mechanisms and policies on foreign investment, especially in these two fields, Shin said.

He expressed hope that the city would support Korean businesses in building medical equipment factories, and distributing medical equipment and materials. Shin added that they are also looking to invest in construction, building materials supply, and construction consultancy and supervision.

Truong Quang Hoai Nam, vice-chairman of the municipal People’s Committee, said Korea ranks first among foreign investors in Can Tho City. To create an optimal investment climate for foreign firms, aside from administrative procedure reforms, Can Tho has also paid attention to upgrading both its hard and soft infrastructure, focused towards large healthcare and education projects, Nam said.

In the first half of 2017, the city sent many investment promotion delegations to step up cooperation with Korea in smart city building, hi-tech agriculture and education training, Nam said.

As of this May, Can Tho had nine Korean investment projects with a total registered capital of US$247 million, and the $17.7 million Korea Vietnam Incubator Park, which uses official development assistance (ODA) from Korea.

Another ODA project on supporting agricultural mechanisation in Can Tho is being considered by the Ministry of Planning and Investment, the municipal Department of External Affairs said.

Four other projects sponsored by Korean non-governmental organisations are also underway in the Mekong Delta city, which include healthcare for children and women; and teaching Korean language and culture to Vietnamese women who wish to marry Korean citizens.

In 2016, Can Tho posted $9.5 million in exports to and $6.9 million in imports from South Korea. The figures were $2.1 million and $1.7 million, respectively, in the first four months of this year. 

HCMC requests extra VND18 trillion for key traffic and environment projects

The HCMC People’s Committee has proposed the central Government allocate an extra VND18 trillion (US$192.6 million) for two major traffic infrastructure and environment rehabilitation projects.

Metro Line No.1 connecting the Ben Thanh Market in District 1 and the Suoi Tien Park in District 9, and phase two of a water environment rehabilitation project in the basin of Tau Hu-Ben Nghe-Doi-Te canals are in dire need of funding.

Total demand for official development assistance (ODA) capital from the State budget of the two projects is over VND29.5 trillion, with VND20.9 trillion for the city’s first metro line and VND8.5 trillion for the environment project in 2016-2020.

Speaking at a working session last Friday with Prime Minister Nguyen Xuan Phuc, city vice chairman Le Thanh Liem said the city had thrice called for the central Government to inject more finances, otherwise the two projects could stall.

The Ministry of Planning and Investment has so far allocated a mere VND7.5 trillion for the metro line and VND4.01 trillion for the environment project, meeting a slight 39% of the total financial needs of the two projects.

The city cannot complete the projects on schedule if it continues to struggle with funding delays, Liem stressed.

He noted work on the projects has been on schedule but the city is running short of cash to pay contractors in a timely manner. If the situation remains unresolved, the contractors would suspend construction work, which would entail tremendous losses for the city.

The city asked the Government to guarantee as sufficient capital for the projects by 2020 as required in a bid to ensure they can be carried out in line with contract terms to avoid cost overruns and penalties on overdue interest payments, and bring them into operation by 2020, Liem suggested.

At the meeting, PM Phuc approved a city proposal for using proceeds from the sale of shares at State-owned enterprises (SOEs).

The city plans to use about VND67 trillion in proceeds from the equitization and divestment of State-owned stakes at enterprises from 2017 onwards to fund its medium-term public investment plan in 2016-2020 in which urgent projects will be executed.

Besides, the city asked the Government for approval to use more than VND9.9 trillion from the budget of the State Capital Investment Corporation (SCIC) to finance vital flood control projects.

It asked for an extra VND10 trillion to finance traffic and port infrastructure projects like the Tan Son Nhat International Airport, Cat Lai Port, and Hiep Phuoc Port to keep up with growing demand for export and import activities.

Challenges facing State firm equitisations     

Most State-owned enterprises still face difficulties after being equitised due to a lack of changes in management, delegates heard at a seminar on Friday.

“The goal of equitisation is to help enterprises re-arrange their structure, but many enterprises do not meet this expectation because there are no changes in management, especially for those firms where the State still keeps a 51 per cent stake,” Le Trong Sang, head of the HCM City Board for Enterprises Management Renewal, was quoted as saying in the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

Of a total of 32 equitised enterprises during 2013-2015, only 4 of them registered to list on the stock market.

“Turnover of the equitised firms has reduced 1.5 per cent in comparison with the past and only 30 per cent of them are profitable and contribute to the State budget,” Sang added.

Poor management and the price of renting land increasing 12-15 per cent were the reasons for losses.

HCM City still has 42 enterprises which are seeking to be equitised, of which, the Government has a stake of under 50 per cent in 39 of them and over 50 per cent in three.

In addition, 22 public utility enterprises at the district level face a lack of a legal framework to be equitised.

“The most difficult work is how to assess the value of an enterprise, and we should hire an international consultancy to do this work,” he suggested.

By the end of last year, HCM City withdrew a total of VND3.5 trillion ($155 million) from core businesses, such as real estate, banking and insurance and this year, the city will take its capital back from an additional 10 enterprises.

“Right now, there is around VND2.4 trillion ($106 million) needed to be withdrawn,” Sang added.

By the end of 2018, the city plans to equitise 51 enterprises and complete a management model to supervise State assets in equitised enterprises.

At the seminar, delegates thought that the most difficult work in equitisation was how to deal with real estate related matters in joint-ventures because the legal framework for valuing enterprises within joint venture projects hasn’t been released yet, including the value of real estate.

“Meanwhile, strategic investors mostly pay attention to assets and real estate,” Huynh An Trung, general director of Cho Lon Investment, Import-Export Joint Stock Company (Cholimex) said.

Trung revealed that his company spent nearly half a year to identify the value of real estate.

He also pointed out that if the Government only sells a small proportion of its shares, investors did not want to buy because there is no chance for them to change the businesses.

“Another thing we should be concerned about is if we give a high value to enterprises it will be difficult to sell shares because it makes the return on equity (ROE) low,” he added.

“To speed up equitisation for State-owned enterprises, a legal framework should be completed along with improving staff capacity,” Le Thi Hong Hau, party secretary of the HCM City Enterprises Bloc, concluded.