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 Foreign banks offer syndicated loan to BIDV; Singapore’s imports from Vietnam continues increasing; Imported vegetable oil subject to CVDs; Vinamilk exports top $136m

Foreign banks offer syndicated loan to BIDV

The Bank for Investment and Development of Vietnam (BIDV) has signed a contract with seven foreign partners to borrow a total of US$140-million loan.

The seven lenders are Cathay United Bank, China Construction Bank, Indovina Bank, Far East National Bank, Shanghai Commercial and Savings Bank, Vinasiam Bank, and Hua Nan Commercial Bank.

The syndicated loan will enable BIDV to increase capital capacity for national development projects. It is the largest sum of its kind ever granted to a Vietnamese bank, showing the lenders’ trust in BIDV performance.

Over the years BIDV has focused on mobilizing capital sources overseas with conceivable interest rates, and the loans have also increased in value year on year.

At the signing ceremony, Juan Feng Li from Cathay United Bank said that BIDV is a good choice for lenders.

BIDV Deputy General Director Quach Hung Hiep said BIDV will follow the strict regulations set out in the contract and use the loan according to the current law.

Singapore’s imports from Vietnam continues increasing

According to International Enterprise (IE) Singapore, Singapore’s cumulative imports from Vietnam in the first seven months of this year reached almost SGD1.8 billion, an increase of 15.7 percent over the same period last year.

Among the key imports from Vietnam, electrical machinery and sound recorders made the highest value of SGD627.8 million, followed by machinery appliances (nearly SGD217 million) and glass and glassware (SGD162.6 million).

The IE Singapore also reports that Singapore’s cumulative exports to Vietnam in seven months were valued at nearly SGD7.8 billion, equivalent to that of the corresponding period last year. Domestic exports to Vietnam almost reached SGD3.54 billion and re-exports, SGD4.3 billion.

Of Singapore’s exports to Vietnam, electrical machinery recorded the highest value (nearly SGD2.2 billion) and also the biggest increase over the same period last year (118 percent).

Topping Singapore’s domestic exports to Vietnam in the first seven months was mineral fuel oils, waxes and products (over SGD1.35 billion); followed by printed books, newspapers and products of printing industry (about SGD395 million) and electrical machinery (about SGD386 million).

Two-way trade between Vietnam and Singapore in 2012 was recorded at SGD15.8 billion, of which imports from Vietnam valued at SGD2.8 billion and exports to Vietnam, SGD12.9 billion.

Vietnamese, Indonesian firms seek closer cooperation

As many as 35 top Vietnamese and Indonesian food processors met in Jakarta, Indonesia on August 28.

At the meeting, Vietnamese Ambassador to Indonesia Nguyen Xuan Thuy spoke of prospects for their closer cooperation, especially in economics, trade and investment.

He said Vietnam and Indonesia have agreed to lift bilateral ties to a level of strategic partnership laying a firm foundation for across-the-board cooperation.

Bilateral trade has grown considerably over past three years, topping US$4.6 billion in 2012. The two countries have been striving to raise the figure to US$5 billion by 2015 and US$10 billion by 2020, he said.

Both nations are still attractive destinations to foreign investors in the context of global economic slowdown, the Ambassador noted.

The Chairman of the Indonesian Chamber of Commerce and Industry Juan Gondokusumo, said he is hopeful that the goal of achieving US$10 billion in two way trade value by 2018 is possible.

Participants agreed that Vietnam Airlines’ recent opening of a direct air route between Ho Chi Minh City and Jakarta, and upcoming direct flights between Hanoi and Jakarta as of September 1 will drive Vietnam-Indonesia tourism and business forward.

The event was co-hosted by the Vietnamese Embassy in Indonesia and the Business Association of Vietnamese High-quality Goods, which is attending the ongoing 2013 Jakarta International Food Expo.

Cooperation deal between Quang Ninh and China’s Texhong

The northern province of Quang Ninh and China’s Texhong Textile Group signed an investment cooperation deal on August 28.

Chairman of the provincial People’s Committee Nguyen Van Doc pledged all-out support for the group to kick-start projects in the locality.

The group is considered a strategic investor in the province.

Texhong Textile Group Chairman Hong Tianzhu noted that local support has made foreign investors become more confident in doing business.

Last year, the group started construction on a US$300 million fiber plant in Hai Yen industrial zone, Mong Cai city. Once completed by 2017, it is expected to generate jobs for 4,500 local people.

Over 100 local businesses attend China-ASEAN expo

More than 100 Vietnamese businesses from 17 provinces and cities will showcase their products and services at the upcoming 10th China-ASEAN Expo (CAEXPO 2013) in Nanning, China’s Guangxi province.

They will have the chance to meet approximately 50,000 entrepreneurs from China and ASEAN member states to discuss the possibility of signing contracts and establishing partnerships.

Vietnamese businesses signed deals worth more than US$90 million with foreign businesses at CAEXPO 2012.

Prime Minister Nguyen Tan Dung will attend the CAEXPO 2013 and the 10th China-ASEAN Business-Investment Summit (CABIS) on September 2-3.  

Can Tho fair showcases global products, technologies

Domestic and foreign enterprises are displaying high-quality products and services at the International Trade Fair 2013 which opened in the Mekong Delta city of Can Tho on August 28.

A wide range of products, featuring specialties from each country, are showcased on 350 stands, including handicrafts, timber, information technology and telecommunications devices, clothes, footwear, electronic appliances, food and beverages, and agro-forestry-fishery products.

The event is a golden opportunity for businesses to introduce their advanced technologies and products, boost trade promotions, and expand markets.

The week-long fair will also hold a series of activities including contract negotiations and signing, and seminars.

Imported vegetable oil subject to CVDs

The Ministry of Industry and Trade (MoIT) will impose countervailing duties (CVD) on imported vegetable oil as of September 7, 2013.

Under a decision signed by MoIT Minister Vu Huy Hoang on August 23, refined soybean and palm oil, coded HS 1507.90.90, 1511.90.91, 1511.90.92 and 1511.90.99, will be subject to a new anti-dumping tax of 5%, and the rate will be slashed to 2% in 2017.

The decision followed a proposal from the Vietnam Vegetable Oil Company urging the ministry to apply temporary measures on imported vegetable oil.

Danang to meet World Bank target

The People's Committee of the central city of Danang has said it will meet its deadline for a sustainable development project funded by the World Bank, according to a statement made by the city’s Vice Chairman Nguyen Ngoc Tuan on August 27.

The US$ 272.1 million project, of which US$ 202.4 million will be provided by the World Bank, will help improve the city's Bus Rapid Transit (BRT) network, build new roads and revamp the drainage system.

The fund will also aid the completion of major infrastructure sub-projects initiated under the Danang Priority Infrastructure Investment Project.

The project will expand access to improved drainage, waste-water collection and treatment services, the road network and public transport in selected areas of the city.

"Danang has invested much in urban development to make it the largest city in the central region and a ‘green city’ by 2025. The sustainable project with a huge fund from the World Bank is the largest sustainable project in the city, aiming to boost socio-economic development," Tuan said.

According to analysts, the WB has built a strong partnership with Danang city over the past decade.

"We hope that Danang residents will benefit from the advanced infrastructure services of a sustainable city. It will provide a ‘green model’ for sustainable urban development, which will hopefully inspire similar development in other cities," said Victoria Kwakwa, WB Country Director for Vietnam.

"The project will be very complicated, and the commitment of the municipal People's Committee is an important factor behind the implementation of the project," she said.

"I hope the city will closely cooperate with our teams in carrying out the project, and the partnership will be strengthened" she said, adding that she hopes the project will help people understand the importance of public transport and change their uses of cars and motorbikes.

Director of the city’s Department of Transport Dang Viet Dung said public transport and current management institutions are big challenges for the city.

"We have experienced from infrastructure projects, but we need technical support and supervision from WB senior teams in public transport and urban management," Dung said.

"BRT is quite new for us with technology, management and institutions of operation."

Danang is Vietnam's fourth largest city and is widely regarded by other cities for its planning, governance and infrastructure.

Promoting e-government model in Vietnam

More than one third of Vietnamese people have access to the Internet, facilitating the e-government model in Vietnam, participants were told at a symposium in Hanoi on August 28.

Leading experts and solution providers discussed directions and measures to leverage the operation of Vietnam’s e-government by adopting the latest technologies.

They encouraged public agencies to use modern communications and information technology (ICT) applications in order to improve public services, management capacity and connections among local governments and between the government and citizens.

They noted that sales of smartphone and tablet grew by 81% and 64%, respectively in 2012, making it easier for local people to access the Internet.

This year, Vietnam overtook India to secure second place on the Japanese market for information technology outsourcing, with local FPT firm among the top 100 software outsourcing manufacturers globally.

Thanks to IT application, 100% of all ministries and local governments have developed official online portals. More than half of them have applied document management software and online management systems.

Under Vietnam’s e-government development plan in the 2013-2015 period, about 50% of all tax reports are made in online forms.

An exhibition was also held the same day to give participants and visitors insights into the latest technologies used in the e-government model and other e-services.

According to Peter Garside, general manager of Scytl in the Asia-Pacific region, 20 countries have so far run internet-based voting and 18 of them have chosen the Scytl technology.

African exports jump by up to 36% in seven months

Viet Nam's exports to some large African countries experienced remarkable increases over the past seven months, according to the General Department of Viet Nam Customs.

During the period, the country's exports to South Africa had seen their strongest rise, up 36 per cent against the same time last year to US$409.8 million with mobile phones and components, footwear, rice and garments being the leading staples.

Export earnings from the Ivory Coast, Ghana, Algeria and Angola have also risen significantly, surging 30 per cent to $142 million, 17 per cent to $133.3 million, 15 per cent to $101.3 million and 9 per cent to $78.3 million, respectively.

Khanh Hoa targets $2.4bn in exports by 2020

The central coastal province of Khanh Hoa has set an export revenue target of $2.4 billion by 2020 with an annual export growth rate average of at least 12 per cent.

Under the province's forthcoming export-import strategy, it will strive for a trade surplus of $300-500 million per year.

During this time frame, the locality will continue its focus on potential sectors for development, such as shipbuilding, seafood processing, garments and textiles, and handicrafts.

Khanh Hoa has prepared a series of solutions to expand the market and promote local brand names, and to continue investing in infrastructure and services for exports.

To fulfill the objectives, the province will upgrade Cam Ranh International Airport and Cam Ranh seaport to become centres for marine and aviation services in the southern central region.

In the first seven months of this year, the province shipped abroad nearly $740 million worth of goods, including ships, seafood, garments and textiles, coffee and wood products.-

Maersk Line increases Q2 volume

Shipping firm Maersk Line Viet Nam and Cambodia has seen its second quarter volume increase by 9 per cent and revenues decrease by 3 per cent over the same period last year.

A company press release cited Nguyen Thi Ngoc Bich, general director of Maersk Line Viet Nam and Cambodia, as saying that Viet Nam was still considered an attractive sourcing destination.

She said the country has enjoyed competitive advantages in low labor costs, a strategically sound geographical location, leading positions within agricultural exports, a high GDP growth rate, long-term political stability, and a government committed to enhancing economic stability and development.

Vinamilk exports top $136m

The Viet Nam Dairy Products Joint Stock Company (Vinamilk) has exported products worth nearly US$136 million in the year-to-date.

Vinamilk, as it is commonly known, has signed export contracts worth $230 million this year, already 28 per cent more than the whole of last year.

Since 2010 its exports have been growing at 45 per cent every year.

Vinamilk exports formula, condensed milk, fresh milk, soy milk, yogurt, and other dairy products to 26 countries including the US, Russia, Japan, Thailand, South Korea, Turkey, and Iraq. — VNS

The company has overcome many strict barriers and food safety regulations of foreign importers, especially British Retail Consortium (BRC) standard-Global standard for Food Safety applied in Australian market.

Stockbrokers to receive CAMEL rating

Brokerages on national stock exchanges will be rated according to new criteria offering greater transparency, under a draft classification produced by the Ministry of Finance (MoF) and the State Securities Commission (SSC).

According to the plan, companies will be rated under the CAMEL criteria; assessing capital adequacy (C), asset quality (A), management quality (M), earnings (E) and liquidity (L).

Currently, investors only have access to rankings for the top 10 companies on the two national stock exchanges, with no ratings assigned to the remaining 104 securities firms.

Each factor of the criteria accounts for a 20 per cent weighting in the company's overall rating.

Companies with capital adequacy ratios (CAR) of 300 per cent will receive the highest rating of 100 points; while CARs ranging from 180 to 300 per cent will receive 80 points. Companies will lower CARs will receive progressively lower ratings.

Kim Long Securities (KLS), FPT Securities, Saigon Securities Inc (SSI) and HCM City Securities (HCM) are among the companies expecting 100 ratings in the CAR category.

First, receivables will be assessed to measure asset quality. Companies with total assets ratio less than 10 per cent will receive 100 points, while a ratio of 75 per cent can expect a zero point rating.

The rating will prove a challenge for brokerages, with many top 10 companies possesing a high proportion of high-margin loans and accounts receivables at the 20-30 per cent level. Smaller firms will also be penalised, due to a high level of receivables comprising total assets.

Average revenue growth will reward stable growth but may face challenges posed by market volatility and seasonal trends affecting business operations and stock value.

During the first six months of this year alone, total revenue of securities-companies declined 30 per cent over the same period last year. Notably, the top 10 brokerages all experienced falls in revenue due to slow share market growth and rising interest rates.

According to experts, brokerages will struggle to meet criteria on management quality due to a churn in high-level management and stiff requirements for company leaders to be working for at least 5 years to achieve a 100 point rating.

Additionally, a 100 point chairman is required to have at least 10 years of experience working in the sector.

Joint efforts help Mekong economy

HCM City's co-operation programmes with southern provinces and Can Tho City have improved business and production links between them in recent years.

Between 2000 and June 2011, the city had invested VND198.7 trillion (US$9.5 billion) in 782 projects in the Cuu Long (Mekong) Delta's 12 provinces and Can Tho City under the programmes, according to the HCM City Development Research Institute.

The projects were in agriculture, industry, trade, tourism, science and technology, healthcare, education, information, culture, transport, and environment protection.

The co-operation has helped foster socio-economic development, according to the localities.

The project have improved the lives of locals and reduced the number of job seekers moving to HCM City.

The city too has benefited by securing supply of products from these projects, especially livestock and agriculture produce.

HCM City can only meet 20 per cent of its demand for livestock and poultry meat and other foods, according to the municipal Department of Agriculture and Rural Development. A trade co-operation programme with the southern localities has helped improve trade one year after it began.

The city has identified the strengths of each province and built production-to-distribution chains for many goods, especially agriculture and food, that it consumes.

Livestock and poultry meat is provided by Dong Nai, Ba Ria – Vung Tau, Long An, Tien Giang, and Tay Ninh provinces.

Eggs are supplied by Dong Nai, Long An, Tien Giang, Kieng Giang, An Giang, and Dong Thap.

Vegetables and fruits mainly come from Lam Dong, Long An, and Tien Giang.

The provinces said they sold around half their output to HCM City, with the rate going up to 70 per cent for some like Dong Nai and Lam Dong.

But the programmes also faced many difficulties, according to the research group at the institute that compiled the report.

One of the biggest problems for the provinces was that they have failed to identify their own strong points when focusing on a certain industry or service to develop, it said.

Syria rattles Viet Nam markets

Both Vietnamese stock exchanges tumbled yesterday following shaky performance in global markets.

Global investors are rattled by the prospect of the US and allies attacking Syria for its deadly chemical weapon attacks on its people. Investors in Viet Nam also unloaded shares across the boards to avert risks.

On the HCM City Stock Exchange, the VN-Index lost more than 12 points, or 2.53 per cent, to close yesterday's session at 473.30 points.

A heavy slump in blue chip stocks dragged the market down.

None of the markets flagship 30 stocks advanced with 29 losing ground. Bao Viet Holdings (BVH) shed 6.3 per cent; Vinamilk (VNM) lost 4.3 per cent; PV Gas (GAS) fell 3 per cent; and Masan Group (MSN) reduced 1.2 per cent.

The VN30 dropped 2.14 per cent to 528.62 points.

However, trading improved as low valuations drew risk-neutral investors. Nearly 69.3 million shares worth VND1.275 billion (US$60.7 million) were traded by the end of the session, more than doubling Tuesday's levels.

FLC Group (FLC) was still the most active code with 4 million shares traded after falling 2 per cent to VND4,900 each.

On the Ha Noi Stock Exchange, the HNX-Index also gave up 1.18 per cent to finish the session at 60.68 points.

Bottom-fishing activities on the northern bourse also pushed up trades here. The market volume doubled over the previous day to reach 23.4 million shares worth VND206.5 billion ($9.8 million).

Sai Gon-Ha Noi Bank (SHB) led the northern market with trades of 3.7 million shares, dipping 1.5 per cent to end at VND6,400 each.

The foreign sector increased their selling in Viet Nam. They concluded as net sellers on both exchanges, unloading combined shares worth over VND70 billion ($3.3 million).

HCM City prepares for sales promotion

The annual sales promotion month in HCM City next month is expected to boost retailers' sales.

Organised by the Departments of Industry and Trade and Culture, Tourism and Sports, the programme has attracted more than 900 businesses, 10 per cent more than last year.

It will kick off with a fair at the Phu Tho Indoor Stadium in District 11 from August 30 to September 3, where more than 400 stalls will sell textile and garments, foodstuff, household appliances, consumer goods and others.

There will be 12 other fairs during the month to take goods to the doorsteps of workers in industrial parks and export processing zones and students living in dorms.

Businesses like supermarket chain Saigon Co-op and Sai Gon Trading Group (SATRA) will send trucks with goods, especially essential ones, as part of the city's price stabilisation programme, to remote areas.

Under the month-long promotion programme, many businesses like Big C, Co.opmart, Maximart, Metro, and Thien Hoa Interior Furniture and Electronics Centre are set to offer big discounts.

Saigon Co.op will have a VND150 billion (US$7.1 million) "Proud of Vietnamese goods" campaign, its biggest promotion of the year, involving more than 600 suppliers.

It will offer discounts of up to 50 per cent on more than 2,000 products at its outlets as well as Co.opXtra Thu Duc and Co.op Food chain from August 28 to September 24.

There will also be attractive gifts and vouchers on offer.

Big C supermarket chain will first offer discounts of up to 50 per cent on 1,500 products until September 2, National Day, and then on thousands of products for the promotion month.

Besides fresh and processed foods, dry foods, household appliances, fashion items, cosmetics, and electronic products, it has also slashed prices on hundreds of products like moon cakes, lanterns, and toys for the Full Moon festival.

Lending rises 5.4% since December

Lending figures on August 20 showed a growth of 5.4 per cent since last December, while non-performing loans and lagging demand continued to blight the nation's economy, according to data from the General Statistics Office (GSO).

The results showed only a minor increase on July data released by the State Bank of Viet Nam, which indicated a 5.3 per cent surge since the end of last year.

Despite low growth in lending, total deposits and total money supply remained consistent with previous years. Deposits surged 9.48 per cent while official money supply rose 8.35 per cent, according to the GSO.

The 8-month figure is less than half of the 12 per cent growth target for 2013.

The director of the Central Bank's Monetary Policy Department, Nguyen Thi Hong, last week said the target would likely be achievable as lending often grew strongly at the end of the year.

In order to meet the 12 per cent growth target, lending will need to increase 1.3 per cent every month until the end of 2013, she added.

Hong said the central bank would see the boost of lending as one of its key priorities for 2013. The central bank is currently developing measures to lend the VND30 trillion housing support package.

Hong also called on the participation of other relevant ministries and bodies to boost lending and consumption.

Measures on credit guarantee will also be developed to help businesses access credit, Hong said.

Market insiders said lending rates had not prevented firms from accessing loans; noting that rates had been cut by up to 4 per cent to a 9-10 per cent annual rate for short-term loans.

Many enterprises with healthy credit ratings have also been able to secure interest rates at around 7 per cent.

The central bank is also finalising the legal framework to settle non-performing loans in Viet Nam's sector.

According to the latest data from SBV, non-performing loans have decreased for the second consecutive month to 4.46 per cent of total credits, down 19 per cent from May this year.

Bad debts increased continuously in the first four months of the year, up from 4.08 per cent late last year.

Viet Nam, Russian trade grows to $3.7bn

Bilateral trade turnover between Viet Nam and Russia is set to increase to US$7 billion by 2015, thanks to the steady growth started since 2007.

A Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times) report yesterday cited experts saying that trade between the two countries has grown at an average of 28 per cent each year in the 2007-12 period.

In just 2012, bilateral trade turnover was $3.7 billion.

The experts further predicted that the turnover would rise to $12 billion when the free trade agreement between Viet Nam and Russia, Belarus and Kazakhstan is signed. The third round of negotiations for the agreement will be held next month.

When the agreement is signed, they said, the Russian market would be open up further to Vietnamese products and those that were exported to Russia will be taken to Belarus and Kazakhstan as well.

A representative of a Russia's trade office was quoted by the newspaper as saying Russian companies were very interested in the Vietnamese market and wanted to expand trade and business relations with the country.

According to the General Department of Viet Nam Customs, Viet Nam's exports to Russia exceeded $1 billion in the first seven months of this year.

Seafood topped the export list at over $34 million, followed by vegetables and fruit, tea, coffee, pepper, rice, garment, footwear and telephones.

Regarding seafood exports to Russia, the prospects for further development are bright because Russians are increasingly using fish and fish-based products in their meals.

Pham Quang Niem, a high-ranking official at the Vietnamese Embassy in Moscow, said that in 2007, Russian per capita consumption of seafood was 12.6kg per year. It increased to 20kg in 2010 and 22kg in 2012.

"This figure is going to be 23.7kg in 2020, which presents a great opportunity for Vietnamese seafood exporters," he said.

However, experts also warned that to increase exports to Russia, local companies should ensure quality and food safety of their products.

In the first seven months of the year, Viet Nam imported goods worth $485 million from Russia.

According to the customs department, exports from Viet Nam to Russia have grown at a faster rate than Russian exports because the latter faces strong competition from European countries.

While Viet Nam mostly exports agriculture products to Russia, it imports machinery, fertiliser and chemical products.

Gold enterprises hit hard by new trading rules

Many gold trading enterprises have faced difficulties and scaled down business as Government Decree 24/2012/ND-CP has regulated stricter rules on the gold trading market.

On Tuesday, Phuong Nam Jewelry Corporation (NJC) held an annual general meeting to adopt conversion from a joint stock company into a limited company. The move aims to simplify organization and reduce expenses after the decree has deeply hurt its business.

Other enterprises have also suffered challenges caused by new gold bar trading regulations. According to a representative of a large gold trading firm, the number of large gold buyers has sharply decreased after small stores have been banned from gold bar trading.

Meanwhile, jewelry sales have tumbled over the past years given rising gold prices. At present, the enterprise has to reduce employee wages and bonuses and may have to dismiss staff in the future.

Nguyen Thanh Truc, general director of Agribank Jewelry Company, said that the firm made a modest profit in the first six months, mainly thanks to the difference from turning AAA gold into SJC gold bars. Meanwhile, earnings from buying auction gold and selling to customers were low.

The enterprise is seeking a new business direction as gold bars do not fetch profits any longer and Agribank has plans to divest capital out of the enterprise, Truc said.

Cao Thi Ngoc Dung, chairwoman and general director of Phu Nhuan Jewelry Company (PNJ), has also mentioned difficulties in gold bar trading during its shareholders meeting. Gold bar business is unpredictable as it is highly sensitive to macro policies.

Over the past year, people have been concerned over gold bar ownership after the Government has tightened gold bar transactions, seeing gold bar investment demand slump.

This year, PNJ still targets gold bar sales at over VND3.2 trillion, up 24% compared to 2012. However, the target is left open as the enterprise will only make gains from the segment given changes in management policies.

Dinh Nho Bang, vice chairman of the Vietnam Gold Business Association, told the Daily that most enterprises in the association have met difficulties. Just a few out of 100 gold trading firms still fare well while others are struggling to survive by scaling down business.

Concerning hardship of enterprises, central bank governor Nguyen Van Binh in a Q&A session in November 2011 said that it is necessary to sacrifice for the sake of the nation and macro economic stabilization target. The central bank has provided time for enterprises to change business direction. However, deputy general director of a large gold firm said that it is hard to stir business to a new direction at present as economic difficulties remain.

The association is preparing to seek approval from the central bank to revise the Decree 24 to help local enterprises cope with current challenges.

Card alliance merger stalls

The merging of two major card alliances on the market, Smartlink Card Service Joint Stock Company (Smartlink) and Vietnam National Financial Switching Joint Stock Company (Banknetvn), is grinding to a halt after nearly two years of implementation.

The merger is among the Government’s policies to integrate three card alliances, Smartlink, Banknetvn and VNBC into a single unit. The central bank will hold a majority stake in the enterprise while commercial banks who are members of three card alliances will hold the remaining stake.

According to a source, the two enterprises have yet to reach an agreement over the past two years, although both sides have completed business evaluation.

Smartlink and Banknetvn have agreed to hire a securities company to provide merger consultancy and assess business value. However, the two sides have yet to agree on share swap ratio.

“Banknetvn did not agree with the share swap ratio suggested by the consulting firm while Smartlink basically approved it,” said a source from the consulting enterprise.

Besides, the two enterprises have yet to agree on strategy, viewpoints in serving the market and member banks, human resources and management mechanism. These problems will challenge the merger to the full.

The central bank targets to merge card alliances to create a national electronic payment firm for serving the banking system and speeding up online payments in the country. However, the tardiness has influenced development plans of the two enterprises and member banks.

A representative of an enterprise joining the merger talk said that administering agencies should intervene in the project as the problem may cause an impact on member banks and development of the non-cash payment market in Vietnam.

Maybank Kim Eng Vietnam to turn 100% foreign-owned

Four individual shareholders of Maybank Kim Eng Vietnam Securities Company at the extraordinary shareholders’ meeting on Tuesday agreed to transfer shares to Maybank Kim Eng Holdings Limited, turning the broker into a 100% foreign-owned company.

Specifically, investor Lam Hoang Loc will sell his four million shares, or a 13.58% stake, and Le Minh Tam will transfer nearly six million shares, or a 19.9% stake, in the broker. Nguyen Thi Thanh Hien and Pham Thanh Tien also agreed to transfer a 10.9% and 7% stake respectively.

Vu Bang, chairman of the State Securities Commission (SSC), has recently told the Daily that the broker has applied to change into a 100% foreign-owned firm. SSC is considering regulatory approval for the conversion.

Maybank Kim Eng Vietnam is the first broker in Vietnam wishing to turn 100% foreign-owned. Most other securities firms want to increase foreign ownership limit to over 49% but still lower than 100%.

The nation has seen around 100 securities companies, including 19 firms with foreign investment capital.

ODA project managing boards hinder capital disbursement

Policy makers blasted the role of official development assistance (ODA) project management boards, saying that too many management boards with limited capability have hindered ODA capital disbursement in the country, heard a conference on Thursday.

“We have too many ODA project management boards in localities and at the central level,” said Hoang Viet Khang, head of the Foreign Economic Department under the Ministry of Planning and Investment.

Khang, who chaired the conference on ODA management boards organized by the ministry, the World Bank (WB) and the Asian Development Bank (ADB) in Hanoi City on Thursday, said that there are up to 500 project management boards for ODA capital provided by the WB and ADB.

The two donors have lent around US$25 billion. With this sum, there have been nearly 10 project management boards in each province. The total figure may soar up to thousands if Japan, which has given around US$25 billion to Vietnam, the United Nations, and 52 bilateral and multilateral donors are included, Khang said.

Too many management boards have led to huge waste. For example, a board has an operation time of five years but directors have been changed five times and finally the project has been cancelled, Khang said.

Nguyen Thi Huong, director of Nha Trang City’s environment hygiene project management board, complained that now that the quality of project staff improved, the project is nearly finished.

Launched in 2007, the project at the time met many difficulties due to unqualified staff with problems being put on the shoulders of consultants.

“We could not fix the shortcomings until 2011, even 2013, but the project will finish in 2014. It is a huge waste of human resources,” Huong said.

Victoria Kwakwa, WB’s country director for Vietnam, said that ODA disbursement does not go smoothly.

“We have central and local management boards. The structure is complicated and has obstructed ODA disbursement,” she said.

A representative of ADB warned that if the nation fails to reorganize the project management board model, it will be hard to improve uses of ODA capital.

“If we do not reconsider the model, it will cause adverse impacts on ODA capital effects. Many management boards have spent all their time on making reports. They are drowning in reports and cannot do anything else,” the representative said.

According to a report of the Ministry of Planning and Investment, between 1993 and 2012, ODA capital disbursement reached nearly US$37.6 billion, or 67% of the total registered ODA capital. During the period, the total registered capital hit US$56 billion, or 72% of the total commitment.

Local firms expect Japan to help break bottlenecks

Enterprises expect the Government to offer policies calling for Japanese investments into supporting industries to break bottlenecks of seafood and textile-garment industries so as to effectively boost exports to the Japanese market.

Speaking at a seminar on boosting export to Japan held on Wednesday in HCMC, To Thi Tuong Lan, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (Vasep), said that Japan has been the biggest single export market of Vietnam’s seafood for many years with an average proportion of 26% of the annual seafood export.

Lan said trade agreements Vietnam and Japan have concluded or are negotiating such as the ASEAN-Japan Free Trade Agreement (AJCEP), the Vietnam-Japan Economic Partnership Agreement (VJEPA) and the TPP are providing many opportunities for seafood enterprises to deeper penetrate this choosy market.

To make full use of such opportunities, seafood enterprises expect policies from the State to attract investments from Japan in marine fish farming, she told the seminar organized by the HCMC Department of Industry and Trade, the Institute for Development Research and the WTO center.

With good fish farming technology, current difficulties in securing sufficient materials for seafood processing and production can be solved. If so, Vietnam does not need to import materials from other countries, according to Lan.

Vietnamese enterprises imported a large volume of sea fish in the year’s first half to make up for the shortage of materials resulting from a drop in catching volume.

Sharing the same opinion, Nguyen Thanh Vinh, foreign affairs commissioner at the Association of Garment, Textile, Embroidery and Knitting, said that the Government should formulate policies to call for Japanese investors into weaving, dyeing and finishing stages in the textile industry as these are strengths of Japan.

At the seminar, representatives of associations as well as management agencies agreed that Vietnamese enterprises will have many chances to send products to this potential market after trade agreements are signed.

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.

Pacific Place tenants row over rights

A dispute between a group of residents and Pacific Place owner, Ever Fortune JSC sees no end in sight despite a pause in development work as both sides await an official response from authorities and avert further escalation of tensions.

Located at 83 Ly Thuong Kiet Street, Pacific Place is one of the most luxurious buildings in central Hanoi.

The operation of a medical clinic in the basement, a restaurant on the roof top and the addition of three more lifts in the office building next to the residential area were issues of contention between the residents and the property owner. Residents complained that waste from the clinic could harm the environment and that the restaurant was too noisy at night despite closing before midnight. The residents also complained the new lifts would spoil the architecture of the building.

According to Cheng Huan Chai, general director of Ever Fortune, Pacific Place’s management company, after the residents put forward their claims, Hanoi Department of Construction carried out an inspection.

“The clinic and the restaurant both operate under licensed permits and the purpose for the additional three lifts is to enhance the quality of the building. The installation of the lifts was also permitted by the Hanoi Department of Construction,” the Ever Fortune spokesman confirmed.

“We’re aware of the regulations related to the upkeep of the building and proper environment controls. These include proper and separate collection and disposal of discards from the clinic and minimising noise disturbances when installing the lifts. In fact, before the start of the work we met with residents in late May to inform them about the expected inconveniences and we were not made aware of any objections then,” he said.

He further explained that a dedicated 24-hour hot line and an email address had been set up for residents to provide their comments and feedback.

However, a group of residents was demanding more. They wanted the investor to remove the clinic and the restaurant from the building, and to stop construction while awaiting a final decision from authorities.

According to Nguyen Hong Minh, director of the PMC property management company, defining public and private areas between residents and property owners in high-rise buildings was one of the main conflicts.

The basic foundation to resolve the dispute however, according to Minh, was to define which kind of the contract was signed between residents and building owner.

Residents would have the right to use areas in the building as outlined in the civil code if a purchasing contract was signed between two sides. If they possessed a lease contract, then the two sides would be bound by the contract’s articles, Minh said.

“As an investor and manager for Pacific Place, our interests are very much aligned with both our residents and office tenants. By improving the quality of the building, we will be able to improve the overall environment as well as positioning for the building, and ultimately, increase value for all,” Chai said.

Apart from the issues of contention, residents also claimed that the company had used one basement for a clinic and there was no longer sufficient room for residents to park their cars.

Pacific Place has five basements. The second to fifth level basements are reserved for car parking leaving ample space for residents as well as office workers to park. In addition, the fifth level basement is not being used.

According to the original plans submitted for approval by the Hanoi Department for Zoning and Architecture in 2005, the first level basement, where the clinic is located, was marked for business use.

Completed in 2007, Pacific Place is now owned by Singapore’s Mapletree group. It consists of 144 long-term leasing units and 35 serviced apartments in one part of the building, while more than 60 companies, enterprises and embassies are occupying office space in another part of the building.



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