Vietnam's per capital GDP ranks 7th in ASEAN region

Vietnam’s per capital GDP reached USD1,908 a year in 2013, ranking it seventh in the 10-member ASEAN region, according to the General Statistics Office (GSO).

The GSO said the report by the ASEAN Statistics agency (ASEAN Stats) about Vietnam’s economic growth in 2013 showed that by 2013, Vietnam’s per capital GDP was higher than Cambodia, Laos and Myanmar and the gap with regional countries has been considerably narrowed.

Vietnam’s GDP reached USD171bn in 2013, up 5.4 percent from a year earlier and was higher than the ASEAN’s average GDP growth rate of 5.2 percent in the same year, on the back of economic development and despite difficulties in the industrial sector.

Vietnam also ranked the sixth in terms of GDP growth rate in 2013 after Laos, Myanmar, the Philippines, Cambodia and Indonesia.

The service sector contributed most to Vietnam’s economic growth in 2013, accounting for up to 43.3 percent of its GDP. However, the rate is still 7.4 percent lower than the average rate in the 2005-2012 period.

The construction and industrial sectors continued to see a fall since 2010, contributing 38.3 percent to GDP in 2013, compared with 38.6 percent in 2012.

Even though the agro-forestry-fisheries sector was considered a “buffer” of the national economy in economic downturns in the past, the sector also reported a fall in recent years, contributing only 18.4 percent to GDP, the lowest rate so far.

BIDV to extend $176 million loan to Laos

The Bank for Investment and Development of Viet Nam (BIDV) will lend over US$176 million to Laos to help the country develop its traffic infrastructure.

The State Bank of Viet Nam has given permission to the bank to sign a credit contract with the Lao government, which plans to use the loan to implement road projects, other traffic works and for irrigation projects in Houaphanh and Luang Namtha provinces.

BIDV will also be responsible for arranging finances so as to be in accordance with foreign exchange and foreign debt management regulations of both countries, the bank said.

Japanese economic troubles hurt country's investment in Viet Nam

Japanese investment has temporarily fallen in the first quarter due to difficulties in the Japanese economy, said an official of the Foreign Investment Agency (FIA).

The agency, under the Ministry of Planning and Investment, said total Japanese investment capital in the first three months reached some US$295 million for 81 existing and new projects.

Overall investments saw a year-on-year increase of 13 projects, but also a decrease of 30 per cent in total registered capital during the same period.

Dang Xuan Quang, deputy head of FIA, noted that the reduction in investment capital to Viet Nam would be temporary due to lower growth rates in the Japanese economy during the second half of last year, along with the depreciation of the Yen. For the long term, however, Japanese investors are expected to continue investing in other countries.

Further, Fuji Xerox President Tadahito Yamamoto said their factory in Viet Nam remains one of the leading manufacturing facilities for Xerox in the world, reported vnexpress.net, a local online newspaper.

Investors remain attracted to Viet Nam because of low labour costs and the many government investment incentives for foreign investors, he said.

Meanwhile, Japan's IHI group, specialising in investment to develop infrastructure, had allocated $34 million to open a factory in Hai Phong and begin operations in the first quarter of this year.

Therefore, a representative of FIA said Viet Nam was still an attractive destination for Japanese investors, as 60 per cent of Japanese investors in Viet Nam have remained profitable, while 70 per cent of Japanese export goods producers and processors have also remained profitable.

The FIA reported in the first quarter of this year, that of 33 countries the Japanese were the third largest investors in Viet Nam, after South Korea and British Virgin Islands – who were first and second.

During the first three months of 2015, Viet Nam attracted $1.84 billion in foreign investment, a reduction of 44.9 per cent against the same period last year, though disbursement of foreign investments in Viet Nam had a year-on-year increase of 7 per cent to $3.05 billion.

Support industry needed to amp up production

Viet Nam should boost the development of support industries to improve the production chain for multinational corporations, as it can meet a modest portion of local demand for raw materials.

According to the Ministry of Industry and Trade, domestic firms in support industries currently meet only 10-15 per cent of the local procurement demand with mostly simple and low-value components and materials, even though incentive policies for developing support industries were raised three years ago.

There remains a large gap between the demand of multinational corporations and the manufacturing capacity of domestic firms, the ministry said, adding that Viet Nam had still failed to provide technology-intensive components.

A report by the Industrial Strategy and Strategy Institute revealed that the support industries of Viet Nam had failed to meet the demand of many industries, including automobile production, garments and textiles, mechanics and electronics.

Specifically, the automobile industry aimed to reach a local procurement rate of 60 per cent by 2020, but the current rate is a mere 7-8 per cent. The local procurement rate of the garments and textiles industry was expected to reach 60 per cent by 2015 and 70 per cent by 2020. However, in 2013, the sector imported 99 per cent of its cotton, 60 per cent of its fibre and 70 per cent of its cloth.

Domestic firms were urged to pay attention to intensive investment in technology and equipment rather than production scale expansion and were tasked with ensuring three factors were maintained: stable quality, on-time delivery and reasonable prices for the production chain.

An expert from the institute said incentives of tax, credit, land and infrastructure for domestic firms to invest in support industries must be clarified.

The national programme to develop the support industries aims to see these industries meet some 45 per cent of local procurement demand by 2020 and 60 per cent by 2025.

E-commerce critical for global integration

Vietnamese companies, especially small and medium-sized enterprises, need to use e-commerce more to strengthen their competitiveness in foreign trade, Le Dang Doanh, an economist and former member of the Government Advisory Council, has said.

Speaking at the 4th annual Supplier Day event organised in HCM City on Tuesday by leading global wholesale online platform Alibaba.com, he said e-commerce had become more important with the Vietnamese economy's regional and global integration.

This year Viet Nam was likely to conclude a series of multilateral and bilateral trade agreements.

Many free trade agreements would possibly be signed this year – like the Trans Pacific Partnership, EU-Viet Nam FTA, South Korea-Viet Nam FTA, Viet Nam – European Free Trade Association FTA, and Viet Nam-Russia-Belarus-Kazakhstan Customs Union.

The low tax rates as part of these FTAs would expand Viet Nam's foreign trade.

The Viet Nam Textile and Garment Association expected the TPP to yield an additional US$30 billion in textile exports by 2020 and $55 billion by 2030.

"Domestic businesses at that time will become global businesses with easy access to partners around the world".

E-commerce would be a key in helping businesses reduce marketing expenses, eliminating distances and do 24/24 online transactions with customers in various forms like B2B, B2C, and B2E.

Timothy Leung, head of global business development at Alibaba.com - one of the B2B websites with the greatest participation by Vietnamese exporters – said, "We see significant growth in the number of registered members from Viet Nam (129 per cent) providing valuable products to buyers in different countries including the US, India, and China."

On average, 6,600 new members registered per month, he said.

Alibaba.com is an English-language global wholesale platform with registered users in over 240 countries and regions and thousands of product categories in more than 40 industries.

Leung added that in the near future new tools such as AliSourcePro to help suppliers identify quality buyers and Alibaba Biz Circle tool for Alibaba.com members to exchange ideas and enable suppliers and buyers to better understand each other to explore new business opportunities would be launched.

Doanh said e-commerce revenues in Viet Nam were set to hit $1.3 billion this year. But if e-commerce was to develop, Vietnamese consumers needed to change their habit of using cash for payment.

Tran Dinh Toan, deputy director of OSB Co., said e-commerce was a useful tool for businesses to explore and expand markets and take advantage of untapped opportunities for global trade in the context of a fast-changing global economy.

As of the end of last year Viet Nam was seventh in Asia in terms of internet growth and 18th in the world.

According to the Internet World Stats, by June last year 43.9 per cent of the country's population, or 41 million people, had access to the internet.

Supplier Day brought together over 300 businesses and experts who discussed how to grow their businesses globally.

Banks to speed up sales of non-performing loans

Banks plan to speed up the sale of non-performing loans (NPLs) to the Viet Nam Asset Management Company (VAMC) to meet the central bank's deadlines, Voice of Viet Nam reported.

Eximbank will sell VND1 trillion (US$46.7 million) of NPLs to the national debt dealer, while OCB, HD Bank and Nam A Bank will sell NPLs worth roughly VND100 billion ($4.67 million) each.

In mid-March, the central bank sent an instruction to credit institutions, saying that credit institutions will have to sell at least 75 per cent of the NPLs they had registered for sale to VAMC by June 30.

The deadline for selling all NPLs is September 30.

The central bank noted that the sales of NPLs to VAMC was compulsory and that all credit institutions must meet the regulated deadlines.

General Director of Kien Long Bank Vo Van Chau said the central bank's requirement to speed up the sales of NPLs was necessary to help the banking industry bring down NPLs to below three per cent by the end of 2015, from the 4.7 per cent recorded at the end of the third quarter last year.

Despite admitting VAMC had not so far handled all NPLs it had bought from credit institutions, a deputy general director of another bank, who declined to be named, also said the handling of NPLs would face certain difficulties. So it will be hard for banks, especially those that have just acquired or merged, to reduce NPLs without selling them to VAMC.

In SCB, for example, the bank's NPLs at the end of last year was slightly more than one per cent, thanks to its NPL sale, worth VND12 trillion ($560.7 million), to VAMC.

HD Bank's NPLs are currently about 1.4 per cent, though its bad debts increased significantly after a merger with DaiA Bank in 2013.

National Advisory Council for Financial and Monetary Policy member Tran Du Lich said VAMC would have better opportunities to handle NPLs thoroughly from this year, when the economy rebounds and the regulation to open the property market to foreigners takes effect from July.

Investors would also have more choice to buy NPLs from VAMC as it had bought a significant amount of NPLs, Lich said.

VAMC plans to buy NPLs worth VND100 trillion ($4.76 billion), or 2.5 per cent of banks' total outstanding loans, this year.

Last year, VAMC bought NPLs worth about VND96 trillion ($4.57 billion), raising the total bad debts it had purchased from credit institutions to VND135 trillion ($6.43 billion), or 3.4 per cent of the total outstanding loans.

PM supports $840m for HCM City's metro plan line 5

PM has approved of technical specifications for "HCM City Urban Railway line 5"project from Thu Thiem, (District 2) to Can Giuoc (District 8) and Phu Lam (District 6) with total investment US$840m.

The People's Committee of HCM City will manage the project.

The establishment of the railway project aims to reduce the heavy traffic congestion.

The Asian Development Bank and the Vietnamese government approved the feasibility of the project.

The first phase of the Metro 5 route between Sai Gon bridge and Can Giuoc station would stretch 17km with a 25ha – area for railway maintenance.

The metro route between Bay Hien intersection and Sai Gon bridge will be constructed with total investment $857m in stage one.

HCM City urban railway is expected to serve about 526000 passengers every day when in operation in 2018.

PM urges speeding up SOEs' equitisation

Prime Minister Nguyen Tan Dung has urged State-owned enterprises (SOEs) to speed up their equitisation after reviewing the process in the first quarter of this year.

Only 29 out of the 289 enterprises, which were expected to be equitised this year, have reportedly completed the process. The enterprises sold State-owned stakes worth nearly VND7 trillion (US$324.59 million).

At present, SOEs have assets worth VND3,000 trillion ($139.11 billion), including about VND 1,200 trillion ($55.64 billion) State owned stakes. During their equitisation process in the last five years, VND100 trillion ($4.64 billion) worth of State-owned stakes were sold.

Prime Minister Dung said this result was too modest.

"The SOEs' equitisation needs to be sped up to generate funds for more important fields and to improve enterprises' efficiency," he said.

Fuji Xerox, Kyocera, and Canon are strengthening the role of their Vietnamese production facilities so as to cater to the growing global demand.

Fuji Xerox is planning to raise the utilisation of its only plant in the northern port city of Haiphong up from its current 50 per cent usage and turn it into a production hub which will serve the entirety of the fast growing Asia Pacific region. Fuji Xerox Haiphong started production in November 2013. The plant, which cost $120 million, is now able to produce two million unit per year and currently employs 1,600 people.

Fuji Xerox’s president Tadahito Yamamoto cited the approaching ASEAN Economic Community and Trans-Pacific Partnership as contributing to the firm’s  decision to expand the plant.

Moreover, “labour costs in China as well as additional costs are rising. Fuji Xerox’s plants in China have reached full capacity and the incentives given to Fuji Xerox by the Chinese government are expiring,” he said, “so rather than investing in China, we chose Vietnam.”

Another Japanese printer manufacturer, Kyocera recently announced that it intended to invest an additional $57.8 million in its operations in Vietnam. By August, a new plant will be built that can manufacture metal moulds and plastic parts. Meanwhile, the company’s current assembly plant, which has the total investment capital of $250 million, started operating in 2013 in Haiphong. This will be expanded so that by the end of March 2018 it will be able to produce two million units a year, a four-fold increase.

At present, Kyocera globally makes more than two million multifunctional printers annually, primarily in China. After the expansion in Vietnam, the company’s multifunction printer output will rise by more than 70 per cent to 3.5-4 million units a year.

Meanwhile, Japanese laser printer and camera manufacturer Canon has already set a strong foothold with four operating factories and employing 25,000 workers in Vietnam, with the total committed capital of $400 million.

Most recently, in 2014 Canon invested an additional $27 million fund in its Tien Son printer plant to bring the output up to 10.8 million products a year and the factory’s total workforce to 5,400 employees by 2016.

While increasing production, the Japanese manufacturers also hope to increase local content in their products. Fuji Xerox Haiphong hopes its domestically produced parts will contribute over 90 per cent of the product value generated in its first Vietnam-based plant, increasing upon the current 50 per cent. However, Fuji Xerox Haiphong’s current suppliers are not Vietnamese firms. Instead, the company uses Japanese, Taiwanese, and Chinese firms located in Vietnam.

Japan’s Lixil to increase investment in Vietnam

Building materials and housing equipment producer Lixil Global Manufacturing Vietnam, a subsidiary of Japan’s Lixil Group, is going to increase investment in Vietnam and extend its product lines at its Vietnamese factories according to president Shinji Ito.

The firm intends to raise its localisation rate of components up from the current 85 per cent. Lixil Vietnam currently produces sanitary ware brands American Standard and Inax and aluminium doors and windows under the Tostem trademark. The company currently has plants in Hanoi, Hung Yen, Quang Nam, Ba Ria-Vung Tau and Binh Duong with the total investment capital of $222 million.

Real estate company to double its charter capital

Shareholders of Hoang Quan Consulting, Trading and Real Estate Services Joint-Stock Co's agreed last Saturday (March 28) on a plan to double the company's charter capital to VND4 trillion (US$190.4 million) this year.

Truong Anh Tuan, chairman and general director of Hoang Quan Consulting, Trading and Real Estate Services Joint-Stock Co said the company will double its charter capital to VND4 trillion in this year/Photo Courtesy of Hoang Quan Co.  VNS Photo

This year's revenue and after-tax profits are expected to see an increase of 10 times compared to the results in 2014.

Truong Anh Tuan, chairman and general director of HQC, said his company's profit in 2015 would come from many large projects, and these targets were viable.

This year, the company will implement 15 projects in 12 provinces and cities and put large key projects into use, such as HQC Plaza, HQC Hoc Mon, Can Tho City's Tuong Thach residential area, and HQC Royal Tower. It would complete building phase 1 of Mekong Delta University.

The company will also strengthen investment in social housing projects this year. Fifty per cent of this year's revenue and profits will come from social housing projects.

For instance, the HQC Plaza project is of the biggest social housing projects that have received a loan from the Government's VND30,000 billion ($1.42 billion) loan package.

HQC Royal Tower is expected to bring VND100 billion ($4.7 million) in profits every year and HQC Hoc Mon over VND400 billion ($19.04 million) in profits when these projects are put into use.

Hoang Quan plans to complete infrastructure and build more workshops for lease to attract more investors to two industrial parks, Binh Minh-Vinh Long and Ham Kiem-Binh Thuan. They aim for an occupancy rate of 50 per cent at the two parks.

The company will implement many mergers and acquisition transactions this year in the property, financial and education sectors.

At the meeting, the company said it would offer VND630 billion ($30 million) of shares to existing shareholders at a face value of VND10,000 per share to raise capital to implement its projects, including Binh Minh industrial park, Mekong Delta University's phase 1 project and HQC Hoc Mon.

Sacomreal unveils social housing project

Sacomreal launched on Sunday its Jamona Apartment social housing project in HCM City's District 7, which is eligible for support from the Government's VND30 trillion (US$1.42 billion) credit programme for low-income and certain other categories of people.

Lenders like OCB and Vietin Bank will offer a loan of 80 per cent rate of the apartment value for 15 years at 5 per cent interest.

It has two towers consisting of 1,290 units of 46-69sq.m, which cost a minimum of VND636 million ($30,285). It will have a 7,500sq.m swan-shaped lake.

It will have a mall, gymnasium, restaurants, clinics, and a kindergarten.

On the occasion, Sacomreal launched a fund to help disadvantaged people like orphans and poor patients to which it will donate VND1 million ($47.6) for every unit it sells in any of its projects.

Rice stockpiling likely to reach target in Mekong Delta

Businesses have bought about 760,000 tons out of one million tons under the Government’s rice stockpiling program this year as of March 29, reported the Vietnam Food Association (VFA).

This is considered to be a great effort by the businesses because the purchase was very slow early March. With this momentum, they have to plan to buy all one million tons by April 15 when the program ends.

VFA is said to have assisted some companies to access bank loans to purchase rice for stockpiling.

Vietnamese businesses have signed contracts to export two million tons of rice this year. Of this number, they have delivered 540,000 tons.

Vietnam’s public debt on track to unhealthy high levels

Vietnam’s public debt rate may climb to 60 percent of the country GDP in 2016 and economists say the rate may be much higher than the Asian Development Bank (ADB) has forecast.

ADB economist Dominic Mellor said Vietnam may face public debt risks as the country may experience widening state budget deficit.

“If Vietnam’s state budget revenues are lower that the set target, the government will prefer state budget deficit rather than expense cut. So, the country’s public debt rate may account to 60 percent of its GDP in 2016,” he said.

The statement comes as corporate income tax cuts and exemptions, the removal of the tariffs and lower oil prices are expected to seriously affect Vietnam’s state budget revenues as state spending continues to rise, by between 5 percent and 20 percent depending on sectors.

Vietnamese economist Le Dang Doanh, former director of the Central Institute for Economic Management (CIEM), said the country’s current method of calculating public debt is inappropriate and its real public debt rate may be much higher than the current rate, surpassing the acceptable rate of 65 percent of GDP.

“I’ve warned for several times that the country’s public debts are sharply increasing," Doanh said. "The state budget must spend around VND282trn, or 31 percent of state budget revenues, on paying public debts in 2015, while its regular expenses account for 72 percent of the state budget revenues. This means that that country has no money for investment and this is really dangerous."

Apart from measures to strictly manage public debts and prevent budget wastefulness, the government should work out a specific strategy for public debt payment, Doanh said.

HCMC wants impacts of power, fuel price hikes assessed

The government of HCMC has asked local agencies and enterprises to assess the impacts of electricity and retail fuel price spikes on their production and business plans as these increases will certainly make inroads into their operations.

Speaking at a review meeting on socio-economic performance in the first quarter of 2015 last Friday, HCMC chairman Le Hoang Quan requested relevant agencies to review how the price hikes would affect the operations of local production and trading enterprises in April and charges of passenger and cargo transport.

The first quarter has seen the city’s economy performing better than in the same period last year. However, Quan warned that enterprises should be prepared well as electricity and fuel price increases might be major challenges for them in the coming time.

Thai Van Re, director of the HCMC Department of Planning and Investment, said the city’s gross domestic product (GDP) in January-March has reached VND202 trillion (US$9.38 billion), up 8% versus a year ago. The city has enjoyed a trade surplus of US$700 million.

The city’s economy has regained high-growth momentum with the first quarter’s GDP steadily growing over the past three years, from 7.4% in 2012 to 7.6% in 2013 and 7.7% in 2014. Each percentage point in the economic growth is equivalent to more than VND60 trillion.

The consumer price index (CPI) in March inched up 0.16% from the previous month and commodity prices have seen mild volatility after the Lunar New Year holiday (Tet), which ended late February.

The city’s exports in the first three months of this year have dropped by 1.9% year-on-year to US$7 billion, while its imports have edged down 0.2% to US$6.3 billion. Japan, the United States. and China make up 41% in the city’s imports.

Notably, the city has got US$1.2 billion in incoming remittances in the period.

Regarding foreign direct investment (FDI), Re said the city has seen nearly US$735 million registered for fresh and operational 100 projects in the period, down 2% year-on-year. But the total investment pledges by domestic firms have jumped 10% to VND58 trillion (US$2.69 billion).

Budget collections in the January-March period have increased by nearly 12% compared to the first quarter of last year, with tax and fee revenues from exports and imports up nearly 3.3%.

Dao Thi Huong Lan, director of the HCMC Department of Finance, said the city’s total State budget revenue has neared VND68.3 trillion, up 5% against the same period last year. Of which, collections from domestic sources have increased by 14% year-on-year.

The city’s budget collections in one quarter exceed VND64 trillion in all of 2006.

Cong Ly to expand wind farm in Bac Lieu

Cong Ly Construction, Trade and Tourism Company Limited will build 150 more wind turbines with a combined capacity of 300 megawatts (MW) in its wind farm in the Mekong Delta province of Bac Lieu after the successful implementation of the first and second phases of the project.

The U.S. Trade and Development Agency (USTDA) last week inked an agreement to award a grant of US$1 million for Cong Ly to conduct a feasibility study for the third phase.

The feasibility study will help Cong Ly expand the wind farm through the examination of technical challenges that may arise from an offshore location. “The study will include a wind resource and energy assessment, a review of permitting and land control issues, an electrical grid interconnection and foundation design, construction cost estimates, and a financing plan,” USTDA said in a statement on its website.

Sarah Randolph, USTDA country manager for Southeast Asia, said the agency wanted to support the increase of renewable energy production in Vietnam through the expansion of the Bac Lieu wind farm.

“This grant represents the next step in a series of successful partnerships with Vietnam’s wind power sector,” said Randolph, who signed the grant on behalf of USTDA.

This project is a key deliverable of the U.S.-Asia Pacific Comprehensive Energy Partnership (USACEP), a whole-of-government initiative aimed to build U.S. business engagement in the region’s clean energy development, while stimulating infrastructure and grid improvements, according to USTDA.

To Hoai Dan, general director of Cong Ly, told the signing ceremony that 10 wind turbines with 16MW of the first phase have generated around 60 million kWh of electricity since its operation in May 2013. The company now sells one kWh of electricity at 9.8 U.S. cents and has its first phase connected to the national power grid.

Cong Ly expected 52 wind turbines with a total capacity of 83MW of the second phase will start commercial generation on May 29 this year.

The Bac Lieu wind farm has a total designed capacity of 480MW and is the first coastal wind power project in Vietnam. The investment of the project includes US$1 billion financed by the Export-Import Bank of the United States.

Under the renewable energy development plan approved by the Government, Vietnam will have a total wind power capacity of 1,000 MW in 2020 and 6,200 MW in 2030. The combined capacity of operational wind farms nationwide is estimated at 54 MW.

Total compensation for protest-hit firms at VND430 billion

Non-life insurance companies paid out a total of VND430 billion (US$20 million) for 370 enterprises in different provinces over the damage caused during the worker protests against China’s illegal placement of a giant oil rig in Vietnamese waters in May 2014.

The compensation figure was announced at a conference on life insurance, non-life insurance, reinsurance and insurance brokerage held by the Insurance Supervisory Authority under the Ministry of Finance last week.

In mid-May last year, many workers at industrial parks in HCMC, Binh Duong, Dong Nai and Ha Tinh took part in protests against China’s illegal deployment of Haiyang Shiyou-981 oil rig well within Vietnam’s exclusive economic zone and continental shelf, and some of them were incited by ill-intentioned elements to storm foreign-invested firms. However, the central and local governments swiftly took actions to restore order at the affected industrial parks.

The authority reported at the conference that non-life insurers had paid a combined VND10.85 trillion in compensation last year and VND38.94 trillion in the 2011-2014 period.

Non-life insurance and reinsurance companies posted stable growth despite economic difficulties in the period. Insurance premiums increased by an average of 11% per year and neared VND27.31 trillion last year.

Meanwhile, the life insurance sector maintained an annual growth rate of 21% in the four-year period and mobilized over VND85 trillion in idle capital from the economy via insurance premiums payment and long-term contracts.

However, the local insurance sector is still underdeveloped. Many firms focus more resources on market share expansion than business efficiency, triggering unhealthy competition.

Corporate representatives at the conference proposed setting up a common database for authorities and insurers to better supervise individuals and organizations with signs of money laundering and insurance frauds, and establish competent agencies for solving insurance disputes.

HCM City to invest heavily in hi-tech agriculture parks

The government of HCMC will spend big on hi-tech agricultural parks to attract more domestic and foreign investments, said Do Viet Ha, deputy head of the park’s management board.

Ha told the Daily that the city government has approved a budget of at least VND1.1 trillion (US$51 million) for developing the high-tech agriculture sector, including VND400 billion for the 98-hectare hi-tech agricultural park in Can Gio District and VND700 billion for expanding another hi-tech agricultural park in Cu Chi District by 200 hectares.

Ha said an agricultural hi-tech park covering 100 hectares is under way in Binh Chanh District.

The reason for expanding such parks is that some 70 investors have expressed interest in implementing their projects in the park. Ha, however, said the city will transfer the projects which are not suitable for hi-tech agricultural parks to other localities.

The park in Cu Chi District will be used for cultivation, freshwater fish and aquatic plants, while the park in Binh Chanh District is for breeding and producing breeder dairy cows, pigs and chicken, among others. Can Gio District will be home to fisheries and bio-products for the aquaculture sector.

Banking, realty stocks forecast to attract investors

Aside from petroleum tickers, investors may rush to acquire banking and real estate stocks this week as their prices tumbled in previous sessions, securities firms predicted.

Nguyen Vu Phong, deputy director of SEABANK Securities Company, was quoted by Dau tu Chung khoan newspaper as saying that shares of the realty and banking sectors made milder increases than other groups during the market’s uptrend before the Lunar New Year (Tet) holiday.

However, they performed better than other stocks despite a steep decline of the market last week.

On the other hand, the domestic real estate sector is expected to grow this year while many banks are preparing for merger deals in the coming time. Therefore, the banking and real estate groups would be attractive to stock traders this week, Phong expected.

With five sessions falling last week, the VN-Index shed nearly 20 points, or around 4%, against the week earlier to end at 551.42 while the HNX-Index also tumbled 3.21% at 82.4.

Liquidity contracted as matching volume on the Hochiminh Stock Exchange shrank 15.7% at around 422.7 million shares and 10% on the Hanoi market at 182.1 million shares.

Large-caps namely VIC, MSN, VCB and VNM dragged the market down while blue-chip GAS plunged to the floor prices several times last week. According to Viet Dragon Securities Company (VDSC), portfolio rebalancing by exchange traded funds (ETFs) and foreign selling also fueled the market’s downtrend.

Foreigners net sold a hefty VND613 billion worth of shares on the southern bourse, mainly PVD, GAS and MSN, while picking DXG and BID worth VND64.4 billion and VND35.6 billion respectively.

Excluding the net selling value during the week, foreign investors had net bought just VND226.7 billion worth of shares this year, said VDSC.

The Hanoi Stock Exchange reported foreign net selling of VND97.6 billion with PVS, VCG and TIG being sold mainly.

Cash flowed into HAI, FLC, HAG and ITA of the construction and realty sectors but they rarely closed in the green. The securities and mining groups also turned volatile although they attracted much speculative money.

Banking and petroleum stocks bounced back at the last session of the week but could not support the indexes. The positive sign for the market now is that bottom fishers have actively acquired shares at low prices in recent sessions.  

HCM City records strong growth in first quarter

The high growth in retail sales and services and a taming of inflation in the first three months of the year indicate the HCM City economy's "robust" growth, People's Committee members heard at a meeting last Friday.

According to figures released at the meeting held to review the city's socio-economic performance, the city's economy grew by 8 per cent year-on-year to over VND202 trillion (nearly US$9.4 billion).

The rate is higher than in the comparable period of the previous three years when it was well below 8 per cent.

Retail sales and services topped VND159.37 trillion, an increase of 11.5 per cent.

The real estate sector saw a turnover of over VND23.5 trillion, up 20 per cent.

Thai Van Re, director of the Department of Planning and Investment, said the city focused on easing the difficulties faced by the corporate sector and creating a favourable environment for production and business by speeding up reform in taxation, customs, social insurance, land and house management, construction and company establishment and bankruptcy.

Loans to enterprises in the five priority sectors of agriculture, rural development, small and medium-sized enterprises, supporting industries, and enterprises using technologies were worth VND137.6 trillion for a marginal rise.

Loans to small and medium-sized firms accounted for 65 per cent of this.

Industrial output grew by 5.6 per cent.

Authorities said industrial production had been promoted with a focus on the processing and manufacturing sectors and a decrease in mining.

Le Hoang Quan, Chairman the People's Committee, said the growth in the first quarter would pave the way for growth in the second quarter as well as the whole year.

The city has taken measures to fulfill its targets for the year and mobilised resources to boost the economy by improving the investment environment and promoting production and business.

It has also boosted its programme to restructure the economy, changing the model and improving the quality of growth by boosting nine kinds of services and four major industrial sectors that use high technology and offer value addition.

The city plans to strengthen the programme to link banks with businesses, farmers and rural areas to encourage credit growth and create conditions for businesses to get access to funds.

Conditions have been ushered in to support businesses for the time when Viet Nam signs the Trans-Pacific Trade Agreement and joins the ASEAN Economic Community.

Quan urged the Departments of Transport and Natural Resources and Environment to speed up work on major infrastructure and find ways to improve the infrastructure to save fuel and transport costs involved in goods transport and boost economic development.

He also called on them to look for measures to revive delayed projects that were a drain on the economy.

Japanese firms partner with Nam Long

Japanese companies Hankyu Realty and Nishi-Nippon Railroad have decided to invest into an affordable apartment project developed by the Ho Chi Minh City-listed Nam Long Investment Company (HOSE: NLG).

The Flora Anh Dao is Nam Long’s first Flora branded-product targeted at middle and upper class earners. The total investment for the project is estimated at VND500 billion ($23.8 million).

According to Toshihiro Matsuo, executive officer of Nishi-Nippon’s housing division, the Japanese partners appreciate Nam Long’s commitment to providing value and lifestyle.

“Both of us are railway companies, and the role of railway companies in Japan is to establish connections between the city centre and suburbs, helping expand economic zones from the centre of the city to the suburbs as a way of providing life-related facilities, including homes, offices, hotels, shopping centres, and entertainment facilities. That is why we feel Nam Long’s motto ‘about enjoying yourself through a new lifestyle in the suburbs’ matches our aspirations,” Matsuo said.

Matsuo added that Vietnam’s property market was extremely attractive as it offered huge growing demand in the future, which was an added consideration for the Japanese firms deciding to invest in Vietnam.

He said demand for housing was rapidly growing in Ho Chi Minh City and the first metro line would also add to the attractiveness of more further-flung projects in the city’s suburbs.

“We believe that with the further development of Ho Chi Minh City and the high growth in demand for housing in the city, we are sure that this project will prove very successful,” he said.

Apart from contributing investment, the Japanese companies will also share their ample development experience, as well as providing products based on a 3G concept: gettable, green and greater.

Nam Long chairman Nguyen Xuan Quang said that Flora was an upscale brand of the company’s existing EHome concept which leads the affordable housing segment in Vietnam.

“Flora Anh Dao is the first product targeted at mid and higher level income earners,” Quang said.

Quang also said that the Flora product would provide profits of 12 to 15 per cent and account for about 15 per cent of Nam Long’s total turnover in 2015.

Located at Nam Long – Phuoc Long B residential area in District 9, Flora Anh Dao has good transport links.

Set for completion in 2016, the 16-floor Flora Anh Dao block will offer 500 units, a Japanese-style garden, community club, children's playground and other amenities. Ranging from 54 to 67 square metres, Flora Anh Dao apartments will cost around VND18.9 million ($900) per square metre.

According to CBRE Vietnam managing director Marc Townsend, Nam Long’s ‘affordable premium’ product was unique.

“The concept is very new and it combines all necessary requirements for apartments. They are affordable, green, beautiful, and high quality,” said Townsend.

‘It should be a popular project, particularly with its Japanese investors,’ he added.

Nam Long is one of the pioneering township developers in Vietnam. With 23 years of development experience, it is well-known for projects in Ho Chi Minh City, Binh Duong, Can Tho, Long An, Ba Ria-Vung Tau, and Dong Nai, currently holding 572 hectares of land for development.

Having supplied more than 3,300 units since 2008, Nam Long’s EHome brand is known in Vietnam for its affordable flats.

The company intends to develop 6,000 Flora apartments in the next three to five years in Ho Chi Minh City and is keen to acquire suitable land plots to develop this product.

Footwear exports surge high

Footwear exports in the first quarter of this year jumped 19.5% to an estimated value of US$2.5 billion, the highest growth over the last two years, according to the Vietnam Leather, Footwear and Handbag Association (Lefaso).

A series of free trade agreements (FTAs), including the Trans-Pacific Partnership (TPP) and the EU - Vietnam FTA, which soon come into effect will create a motive to attract more investment from foreign and domestic businesses.

Lefaso Vice President Diep Thanh Kiet revealed that many footwear businesses have concluded export contracts for the third quarter, even for the fourth quarter of this year. Exports prices to major markets like the US, Japan, Australia, and South America remain stable. However, prices of some renowned brand names have surged slightly as importers took account of recent minimum wage hike in Vietnam.

Export businesses are facing difficulties in the EU market due to the devaluation of the Euro. Importers have asked them to lower the price in case they signed a contract in US dollar.

Campaign to lift intellectual property rights

The Ministry of Science and Technology launched a month-long campaign yesterday to commemorate the World Intellectual Property Day (April 26) with the support of the Software Alliance (BSA).

The campaign is aimed at improving public understanding of intellectual property laws to enhance the recognition, application, development and protection of intellectual property rights; promote research and innovation, apply science and technology for greater productivity and socioeconomic development in Vietnam, and help the society be well-prepared for Trans-Pacific Partnership (TPP) accession.

From March 31 to April 30, the ministry will organise a series of activities to enhance public awareness about intellectual property, such as contests for university students and conferences for businesses.

Speaking at the launch ceremony, Deputy Minister Tran Viet Thanh, said educational and training activities will be held during the next one month, and an inspection of the implementation on legal regulations will also continue to be carried out in May and the ensuing months.

Attending the ceremony, Roland Chan, senior director of BSA's Compliance Program in Asia Pacific, said the Alliance appreciated the strong efforts and remarkable initial progress made by Vietnamese governmental agencies in intellectual property right protection over the recent years, especially in relation to computer software.

"There is no doubt that software has changed the world. Vietnam is one of the greatest beneficiaries and a global symbol for what an economy can achieve through technology. I am confident that the one-month campaign will advance further awareness of intellectual property. This is a time for Vietnamese businesses to pay for what they use and manage what they have," Chan said.

During the 2013 to 2014 period, inspectors and monitors at ministries, and for local authorities imposed fines in more than 32,000 cases, worth VND139 billion (US$6.61 million) for counterfeit, sub-standard goods, and intellectual property infringements.

Last year, inspectors from the Ministry of Culture, Sports and Tourism had conducted checks at 82 enterprises for compliance with current computer software ownership laws and fined violating companies a total of VND1.57 billion (more than US$74,000).

Green, energy-saving solutions on display in Hanoi

The International Exhibition Fair for Environment and Energy Technology (ENTECH HANOI 2015) will convene from May 20 to 22 at the Hanoi International Exhibition Centre in Hoan Kiem district, Hanoi.

The 6,000 square metre fair features between 160 and 200 booths run by 150 domestic and foreign organisations and enterprises in the field.

Energy saving equipment and solutions are on display at the event as will green energy products in the industrial production, transportation and construction industry.

A series of seminars will be organised on improving the efficiency of energy use in industrial production and commercial offices alongside presenting energy saving solutions for small- and medium-sized enterprises.

Other side events include a trade forum between Vietnam and the Republic of Korea and a public contest on energy-saving and environmental protection.

The fair also provides a platform for business partnership development and technological transfer.

Hosted by the Hanoi Industry and Trade Department, ENTECH HANOI 2015 has been held annually since 2009. It is intended to help businesses seek and employ advanced, energy-saving and green technologies towards cost reduction and improved competiveness.

RoK province seeks medical engagement with Binh Duong

The Republic of Korea (RoK) province of Deagu is working to expand its medical collaboration with the southern Vietnamese province of Binh Duong, said Kim Yon-Chang, Deputy Mayor of Deagu during a meeting with Vice Chairman of the Binh Duong People’s Committee Tran Thanh Liem on March 31.

Kim Yon-Chang pledged to promote investment in Vietnam among the Korean business community.

Liem said Binh Duong welcomed Korean enterprises to engage in the local economy and spoke highly of the healthcare services available to residents as provided by a medical delegation from Deagu.

From March 30 to April 1, My Phuoc General Hospital and the Deagu delegation of 52 medical personnel and 30 volunteers have offered free medical checkups and medicines for an estimated 2,500 disadvantaged people.

With a recent annual growth of 14.5%, Binh Duong is among the top four localities with highest amount of foreign capital in Vietnam, and a total of US$9 billion from the Republic of Korea makes it the third largest foreign investor in the southern province.

Deagu has a reputation for its strong development in the medical, electricity and electronic product sectors.

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