New real estate enterprises soar in Q1

The number of new enterprises in the real estate sector in the first quarter of this year surged 48.5% compared to the same period last year, according to the Business Registration Agency.

The agency under the Ministry of Planning and Investment did not provide the exact figure of newly-established firms in the period but ranked business startups in the sector after new firms in technology, recreation and entertainment with a year-on-year rise of 127.1% but above those in agriculture-forestry-aquaculture with 36.4%.

Statistics of the Ministry of Construction supported the agency’s report when showing that January-March real estate deals in HCMC and Hanoi tripled over the first quarter of 2014. The number of successful real estate transactions in the period was 4,250 in Hanoi and 3,950 in HCMC.

According to the agency, nearly 19,050 enterprises were registered in the first quarter of this year with total capital of VND111.2 trillion, up 3.8% in number and 13.5% in capital over the same period last year.

In the period, more than 4,740 firms applied for adding nearly VND173 trillion to their operational projects.

Overall, the capital registered by business startups and operational firms totaled VND284.1 trillion (more than US$13.1 billion) in the period.

The average registered capital of an enterprise in January-March was VND5.8 billion, up 3.6% year-on-year. New firms generated 265,000 jobs, rising by 3.6% over the same period last year.

More firms stop operations

More than 16,170 enterprises suspended operations in the first three months of this year, increasing 14.2% against the same period last year. The number included 10,627 firms waiting for business code closures.

However, the number of enterprises going bust and shutting operations in the three-month period edged down 0.6% year-on-year to more than 2,560. Most of the dissolved firms had registered capital of less than VND10 billion each.

More than 5,090 temporarily closed firms resumed operations in the period, rising by 10.2% over a year earlier. This signaled a recovery of the economy, which is offering opportunities for enterprises to weather the doldrums.

Commenting on business shutdowns in the first quarter, Minister of Planning and Investment Bui Quang Vinh said the number was normal given some 500,000 operational enterprises in Vietnam.

Vinh said dissolved and suspended firms in Vietnam were less than 20,000, or only 4% of the total, much lower than in Australia and New Zealand which he learned during his recent business trip to these two countries.

“Most of the dissolved firms are very small and have registered capital of less than VND10 billion each… I think this is very normal in our market mechanism,” Vinh said.

US$537 million spent on auto imports in Q1

Vietnam spent US$537 million importing completely built-up (CBU) autos in the first quarter of this year, surging 154.7% compared to the same period last year, according to the General Statistics Office (GSO).

The GSO’s report showed that there were 23,000 imported CBU units in the period, up a staggering 116.4% over the first three months of 2014. The number comprised of 8,000 autos in March, or 3,000 units higher than in the previous month.

The rises were much stronger than in the first quarter of 2014 when CBU auto imports grew some 50% in both volume and value, and contributed a considerable part to the country’s trade deficit of US$1.8 billion in the period.

Local automobile enterprises have strongly increased imports since the beginning of last year to cash in on tariff cuts on auto imports in line with Vietnam’s commitments to the ASEAN Trade in Goods Agreement (ATIGA). Accordingly, the duty on CBU autos of under 10 seats imported into Vietnam from other ASEAN countries will be reduced to 0% in 2018.

Industry insiders said the import duty reduction will affect sales of popular car models assembled domestically because Toyota, Honda, Ford and Mazda all have factories in other ASEAN countries.

A report released by the General Department of Customs showed that more popular cars imported into Vietnam from India, South Korea, China and Thailand and luxury units from Germany, Japan and France.

Though domestic auto assemblers have not released their business reports in the first quarter of this year, experts forecast their sales in the period fared well given increasing demand.

According to the GSO, the total imports of CBU autos and parts in January-March amounted to US$1.1 billion, soaring 73.6% year-on-year.

Last year, Vietnam imported US$1.57 billion worth of 72,000 CBU autos, up 103.8% in volume and 117.3% in value compared to 2013. The volume accounted for nearly half of the autos sold on the domestic last year.

Around 157,800 autos were sold last year, up 43% year-on-year, according to the Vietnam Automobile Manufacturers Association.

Huge loans pledged for firms in price stabilization program

Banks in HCMC have signed nearly VND11.9 trillion loans for enterprises joining the city’s program to stabilize consumer prices this year and during 2016’s Lunar New Year holiday, or Tet.

Speaking at a review seminar on the 2014 program and plans for 2015 Tuesday, Le Ngoc Dao, deputy director of the HCMC Department of Industry and Trade, said 85 enterprises will join this year’s program, or nine firms more than last year.

They include 11 credit institutions, 40 food and foodstuff companies, 16 enterprises serving the new school-year season, four dairy firms and 14 others for the medicine program.

This is the third year the program has been in place, using private capital sources. Local banks have pledged to provide loans of nearly VND11.9 trillion, up over VND3.5 trillion against 2014. Lending rates will be cut by 0.5 to two percentage points.

The city will launch four credit packages, including VND6.1 trillion worth of short-term loans for enterprises to supplement working capital at annual lending rates of 5-6%, down one to two percentage points versus last year, and VND2.75 trillion for enterprises outside the program to help them supply materials to participating producers.

Enterprises will also take out VND2.1 trillion worth of medium- and long-term loans to upgrade production facilities at lending rates from 7-10% per annum. The remaining VND900 billion will go to companies in need of funding to boost exports with lending rates at 2-4% per annum.

Besides, Sacombank has registered a VND1.5-trillion credit package to support small traders at traditional markets. The bank will also cooperate with the department to launch sales person training courses for enterprises and traders.

Dao said the city will expand the sales network this year, focusing on worker and student dormitories and the kitchens at schools. Enterprises will also pilot e-commerce application at sales points.

The department will speed up cooperation with neighboring areas in supply-demand connection, training and information exchange. Enterprises will also receive support to speed up exports.

HCMC vice chairwoman Nguyen Thi Hong asked the department to extend the market stabilization program to industrial parks and export processing zones, and residential areas to benefit more consumers.

The program will run from on April 2 to March 31, 2016.

In last year’s program, enterprises supplied more goods to the market with prices being 5-15% lower than market levels. Goods supplies increased by 10.4-35%.

Ending 2014, the city had developed over 8,960 sales points under the program.

Clear path for foreign capital

Merger and acquisition (M&A) activity began to accelerate in 2013 and is projected to undergo more drastic changes in 2015. Last year’s total M&A value amounted to US$3.4 billion, 17 times a decade ago, said Volker Becker, corporate finance director at Viet Capital Securities Co. (VCSC). He was emphasizing the surge in foreign investment into Vietnam, one of the most concerned topics of the four-day event Vietnam Access Day held by VCSC in HCMC. On two days of this event, foreign investors attended and directly contacted the leading enterprises.

Experts discussed banking landscape at Vietnam Access Day held by Viet Capital Securities Corporation ( VCSC)

Typical examples of the recent M&A deals includes BJC taking over Metro for US$876 million; International Mondeles spending US$370 million acquiring a 80% stake in Kinh Do; Power Buy buying a 49% stake in Nguyen Kim; and Metro Pacific spending US$90 million purchasing a large proportion of shares in HCMC Infrastructure Investment JSC (CII). In the future, there will be more investment opportunities as multiple businesses are now preparing for their initial public offerings or sale of state capital through public auctions, such as Saigontourist, Vissan, Satra, SABECO, MobiFone, ACV, PetroVietnam Power Corporation and Ben Thanh Corporation.

Vietnam is in need of capital for certain areas such as energy development, traffic infrastructure, real estate and essential consumer goods. These needs are associated with the efforts to improve the business environment through the renewal of the Investment Law, the Enterprise Law, the Bankruptcy Law and the Land Law, the participation in the Trans-Pacific Partnership Agreement (TPP) and the European Union-Vietnam Free Trade Agreement (EVFTA). Nguyen Xuan Thanh from the Fulbright Economics Teaching Program updated investors on the latest economic data for the first quarter of 2015 with GDP growth of 6.03%, inflation of 0.9%, export rise of 8.4% and industrial production increase of 9.1%.

Giving additional information for the first quarter, Ralf Matthaes, managing director of Infocus Mekong, remarked that some positive signals could not be ignored, including the warming of the real estate market and the jump in sales of automakers and distributors.

However, Ralf Matthaes also noted that the fast-moving consumer goods (FMCG) sector is faced with a decline in growth rate, regarding the value and volume of consumption in urban areas. For example, while the value growth was 10.3% in 2013, it dropped to 5.3% in 2014. Meanwhile, consumption in rural markets keeps its upward trend and helps manufacturers expand the scale of consumption.

Furthermore, consumer behavior is changing. For the first time ever, the growth in sales of a modern channel like supermarkets last year gave way to the growth of the traditional model, namely traditional markets and grocery stores. “Consumers are paying more attention to their spending and commodity prices. They tend to buy goods at traditional markets and grocery stores where the price is cheaper than supermarkets for the same product,” said Matthaes.

Currently, the majority of investment funds which were founded in Vietnam or in neighboring countries yet investing in Vietnam have disbursed more or less in essential consumer goods.

Albizia Capital, a Singapore’s US$500-million investment fund, has disbursed 10% of its capital mainly in Vinamilk and Kinh Do. Vo Van Linh, the fund’s representative, said consumer goods are highly appreciated due to their stable growth.

The consumer trend has expanded to electronic products such as mobile phones, tablets and laptops. According to Henry Nguyen, managing general partner of IDG Venture Vietnam, given the 43% of Vietnam’s population using the Internet and one in three possessing a handset, the future of online shopping is mostly bright, especially when the middle income class—those who earn a monthly salary ranging between VND13.5-20 million and over VND20 million—is rapidly rising.

Vietnam’s realty market is waiting patiently for foreign investment. Marc Townsend, CBRE managing director, said state capital is being poured into infrastructure projects, such as metro lines in HCMC, Thu Thiem 2 Bridge and Long Thanh-Dau Giay Expressway, which may lead to better sale of apartment projects. CBRE’s price breakdown of the costs of projects shows that the prices are way lower than those quoted a few years ago. Also, CBRE quoted a study which surveyed 2,000 customers of Nam Long, an estate developer in HCMC, which indicates that 66% of the respondents want to buy houses for permanent residence, over 80% wants a house in the next three years, and 81% want to get bank loans for their accommodations.

Another concern of foreign investors is whether they may face any challenge in market approach. Fred Burke from Baker & McKenzie listed protectionism, the performance of the state sector, corruption, the slowdown of Chinese economy and the increase in labor costs as one of the possible challenges.

During break time, an investment fund which originally operated in the insurance sector said another challenge should be included. It is market opening and tariff removal in accordance with the bilateral and multilateral agreements Vietnam has signed, which may put the competitiveness of many listed companies to a test. Falling prices of agricultural items on the world market, such as rice and natural rubber, and of raw materials and energy, like crude oil, copper and iron ore, have both positive and negative effects on export and import.

AWR Lloyd, an international consultancy firm, presented a profound and in-depth analysis of the local oil and gas industry—from growth in oil product consumption in comparison with regional countries to the key players on the market. Vietnam is desperately in need of investment in not only oil prospecting and exploration but also infrastructure which connects gas wells with complexes such as fertilizer, chemical and power plants—particularly, oil refinery projects requiring long-term investment.

AWR Lloyd saved an entire section for analyses on oil and gas companies listed on both bourses where high scores were given to such firms as GAS, Phu My Fertilizer, Petrolimex Petrochemical Corporation (PLC), Petrolimex Gas (PGC), and Saigon Fuel Joint Stock Company (SFC).

Up to 25 listed and unlisted companies in various sectors made contact with investors at Vietnam Access Day. It’s still hard to ascertain whether a specific enterprise has concluded a deal considering such a huge volume of macro- and micro-economic information disseminated at the event by speakers and business people alike. Aside from necessary figures, investment promotion involves the entire process of attracting foreign capital to the domestic market. It is this reason that events similar to VCSC’s Vietnam Access Day should be heartily supported.

HD SAISON Finance makes its debut

HDBank and Japan’s Credit Saison have finalized capital contribution formalities for a strategic cooperative plan to promote the retail and financial sector in Vietnam towards stronger socio-economic development.

Accordingly, HDBank and Credit Saison will take full advantage of human resources, experience and their powerful network to turn itself into a top player in the retail and financial sector in the country.

Credit Saison will hold stakes of HDFinance and will be renamed as HD SAISON Finance.

A HDBank Representative said the strategic cooperation will contribute to developing the financial market, diversifying products for consumer loans in Vietnam in a safe and effective manner, adding that the move will help stimulate the socio-economic development and generate jobs for Vietnamese citizens.

Credit Saison will greatly benefit from its approach to the highly lucrative market with the support from HDBank, its shareholders and members.

Credit Saison- the largest credit card issuer in Japan- owns an online shopping channel at Eikyufumetsu.com with revenue of more than US$10 million.

The group’s representative offices are also based in China, Singapore and Vietnam.

Steering committee to oversee farm exports

Worried about a significant drop in agricultural exports, the Ministry of Agriculture and Rural Development (MARD) has decided to establish a steering committee that will gather information on problems faced by traders and identify possible solutions.

The ministry's personnel department has been asked to set up a permanent office of the committee this month. The committee will collect regular feedback on obstacles as well as recommendations from traders of farming, seafood and forestry products, MARD Minister Cao Duc Phat said at a Monday meeting that brought together associations in the three industries.

Phat said establishing the committee is one of the urgent measures being taken to deal with export challenges that the sector has faced in the first quarter of this year.

A report on the government website chinhphu.vn also said that the difficulties involved a fall in consumption demand and technical barriers in export markets that had to do with hygiene and food safety.

High input costs and foreign exchange fluctuations were other challenges, it said.

It cited Phat as saying that to maintain export growth, the sector should enhance trade promotion activities.

He also proposed that Vietnam's rubber associations co-operate with their counterparts in Thailand, Indonesia and Malaysia on controlling prices and volumes in the world market. The nation's coffee associations should do the same along with counterparts in Brazil, Colombia and Indonesia, he said.

The onus is on Vietnam to make this happen, he added.

The Ministry as well as the farming, fisheries and forestry associations would collect recommendations on tax, land rents and transportation fees from enterprises until April 15. These will be forwarded by the Ministry to the Government, seeking solutions, Phat said.

Meanwhile, the Veterinary Department, the Plant Protection Department and the National Agro, Forestry and Fisheries Quality Assurance Department (Nafiqad) have been asked to work with enterprises to reduce the time taken in carrying out import and export procedures by 50 per cent, he said.

The report said that first quarter agricultural exports, including farming, fisheries and forestry products, fell by 13.2 per cent year-on-year r to US$6.13 billion.

A Vietnam Television (VTV) report on Tuesday quoted Duong Phuong Thao, deputy head of the Import and Export Department under the Ministry of Industry and Trade, as saying the export value of key products including coffee, seafood and rice had fallen sharply.

However, she also explained that last year's first quarter figures had suddenly increased due to advantages in export activities at that time, including high demand and low supply.

"For instance, seafood exports in the first quarter of 2014 saw a sudden surge in value due to low supply of shrimp from India and Thailand as a result of diseases, and Vietnam was able to meet the world demand. Therefore, export prices of Vietnamese shrimp increased sharply."

"But, in the first quarter of this year, such advantages have been absent, and last year's growth in export value of between of 20-30 per cent could not be replicated."

She said the second factor in the drop in export value was impact of foreign exchange. The US dollar had increased in value against several other currencies like the euro, yen and rouble, and exports to the EU, Japan and Russia had reduced.

"If export contracts for farming products used euro and yen currencies in payment, the importers would tend to buy fewer quantities of such goods. So Russian traders will not import farm products that they have to pay for in rubles.

"Meanwhile, Vietnamese exporters of farming products who'd signed contracts at the end of last year using payments in euro and yen, would be very careful in implementing them as the currencies depreciate," Thao said.

An increase in the supply of products to the world market, such as shrimp from India, also affected Vietnamese exports, she added.

Duong Ngoc Minh, deputy chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP), also chairman of the Hung Vuong JSC, concurred with Thao.

"The export value of Vietnamese seafood reduced 25 per cent due to depreciation of yen and euro since the end of last year," Minh said cafef.vn's online dialogue on Wednesday. "Our exports have also been affected by the high supply of shrimp from India."

He also said that Vietnam could enjoy some advantage in shrimp exports since the third quarter of this year, because India would finish harvesting shrimp in April.

Vietnam raises the bar for national competiveness

The National Assembly recently passed and the Prime Minister signed into law a new resolution outlining major tasks and solutions for improving the business environment and national competitiveness over the next two years.

The new resolution is based on the premise that ministries, sectors and localities should take the initiative to focus on improving the business environment and resolving the issues reflected in the nation’s World Trade Organisation (WTO) ease of doing business rating.

If they do this successfully, then large foreign multinational companies in manufacturing and retail will come to Vietnam and invest, create jobs and bring technology and integrate Vietnam into globally competitive supply chains.

By contrast, 2015 acknowledges the underlying economic reality that rigid governmental content requirements burdened down with complex laws and regulations will most assuredly dissuade businesses from coming to Vietnam and thereby thwart the economic advancement of the nation.

“It’s time for Vietnam to rise to the occasion and step into a new period of development. Specifically, the country should increase the attractiveness of its business environment. If it’s done well, Vietnam's position will be enhanced regionally and globally,” said Minister of Planning and Investment Bui Quang Vinh.

“We must elevate our national competitiveness in light of the Vietnam-EU Free Trade Agreement, and the Trans-Pacific Partnership (TPP) Agreement in the offing if we are to effectively compete in the global marketplace.”

Deputy Foreign Minister Bui Thanh Son in turn emphasised that Vietnam is entering a new period of international integration with the ASEAN Economic Community (AEC) in sight and set to officially come into existence on December 10 of this year.

“Vietnam has its own special advantages and potential. If it is successful in invigorating its competitiveness, it will create more opportunities to develop quickly and firmly,” said Son.

Over the two-year period, 2015-16, the country collectively should focus on improving the business environment by  streamlining administrative procedures, making them less complex, less costly to comply with and making them less time consuming.

All of these objectives should be accomplished within the context of ensuring transparency, enhancing the accountability of state administrative agencies and enacting regulations on a basis consistent with international norms.

Specifically, the resolution sets out a target to raise the country’s business environment indicator to at least the level of the ASEAN-6 group (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand) in 2015.

The targets include reducing the average time required to comply with the tax laws and file annual returns to no more than 121.5 hours and social insurance returns to a maximum of 49.5 hours per annum.

As a corollary goal the government aims to raise the number of businesses that file their returns online tax to 95%.

In 2016, the resolution evidences a strategy to reach the average ease of business indicators to that of the ASEAN-4 group (Singapore, Malaysia, Thailand and the Philippines).

In addition, the goal is to capitalise upon advancements in science and technology to restructure the agricultural sector toward mass production of agricultural products, promote product quality and competitiveness, while ensuring national food security, food hygiene and safety.

The resolution also focuses on increasing value-added in industries like finance, banking, insurance, communications, logistics, petroleum processing, seaport services and sea shipping, marine product processing and sea and island tourism.

Ministries, sectors and localities are also urged to contemporaneously implement restructuring measures to increase operational effectiveness of state-owned enterprises.

Special policies and mechanisms should also zero in on formulating the development of small and medium sized businesses, or more specifically smallholders and small mom- and-pop family businesses, providing them with equal access to credit, land and natural resources.

In addition, it sets forth measures of public service socialization, including restructuring public non-business units and giving them more autonomy and accountability following the mechanism applicable to enterprises, especially those in the fields of education, health care and technology.

Song Da Corporation to make stock debut in 2015

After a two-year overhaul, the State-owned Song Da Corporation with its reputation for building hydroelectric plants across Vietnam will hold its initial public offering (IPO) in 2015, the company unveiled.

This year, the firm plans to produce 18.7 trillion VND (871.5 million USD) worth of commodities and earn 16.8 trillion VND (783 million USD) in revenue with pre-tax profits of 300 billion VND (14 million USD).

It has thus far prioritised self-promotion as well as domestic and regional auctions, targeting to secure contracts worth 7 trillion VND (326.2 million USD).

Founded in 1961, the Song Da Corporation has long operated in the construction sector and real estate.-

Insurance market forecast to grow 15 percent in 2015

The entire insurance market is expected to expand between 12 and 15 percent in 2015, according to the Ministry of Finance.

The ministry forecasted that the general or non-life insurance market will rise between 12 and 14 percent and the life insurance market will jump 20-22 percent.

A number of measures need to be taken in order to achieve those targets, the ministry said, one of which is to comprehensively develop the insurance market to meet demand.

Another measure is to increase the financial and business capacity of insurance companies to meet competitiveness and international integration.

The ministry also highlighted the need to restructure insurance companies to develop the market safely, effectively and sustainably.

In 2014, the market grew by 14.2 percent with revenue of 52.7 trillion VND (2.4 billion USD) from insurance fees. Of the figure, life insurance accounts for 27.4 trillion VND (1.3 billion USD) and the remaining is sourced from general insurance.

Total payment for damage claims in 2014 was 18.6 trillion (862 million USD), up 4.1 percent from 2013, in which life insurance companies paid 8.2 trillion (380 million USD) in compensation.

Last year also saw an increase in enterprise and community confidence in insurance services and its management agencies after the Ministry of Finance and insurance companies worked to resolve damage claims promptly.

Guidelines on the enforcement of the Insurance Business Law and relevant legal documents were issued and revised in 2014, helping create a favourable legal framework for the healthy and sustainable development of the market, fulfilling bilateral and multilateral commitments in international integration.

Insurance companies also tapped potential markets and developed new insurance products last year, such as voluntary retirement plans, aquaculture insurance, agriculture insurance and export credit insurance. More than 300,000 farmer households have joined agriculture insurance during the pilot three-year period.

Expansion of ASEAN credit transfer system discussed

Representatives from over 25 member universities of the ASEAN University Network (AUN) gathered at the annual Steering Committee Meeting of the ASEAN Credit Transfer System (ACTS) in Hanoi on April 1-2.

Hosted by Vietnam National University, Hanoi (VNU - Hanoi), the 7 th event focused on how to develop the network sustainably and smoothly.

Participants debated the expansion of the Credit Transfer System at both university and postgraduate education programmes. They also promoted credit transfer between the AUN and other universities outside the network.

Southeast Asian universities focus on enhancing integration and access to international education standards.

The conferences offered a forum for regional universities to designate a common AUN education standard, increasing the effectiveness of cooperation among the universities.

VNU – Hanoi Vice Rector Nguyen Kim Son affirmed that his university will contribute actively to building AUN policies as well as developing scholarship sources for students as part of its efforts to ensure sustainable operation of the network’s credit transfer system.

AUN Management Director Nantana Gaiaseni said since its first meeting in 2009, ACTS activities have increasingly developed, adding that she hopes additional non-AUN members will join the ACTS.

By February 2015, as many as 1,518 credit transfer programmes had been implemented within the network.

The ACTS now groups 32 universities from 10 ASEAN member nations and Japan. Vietnam has three universities participating in the network, including Can Tho University, VNU-Hanoi and VNU – Ho Chi Minh City.-

Despite strike, Vietnam is Asia's new manufacturing powerhouse

If you thought Asia's manufacturing giants are just China, the Republic of Korea and Thailand, say hello to a new one: Vietnam.

Its benchmark purchasing managers' index for manufacturing has expanded -- a reading above 50 -- every month since Aug. 2013, according to HSBC and Markit Economics.

That feat is unmatched by any other Asian country that HSBC and Markit track. By contrast, China's manufacturing PMI has contracted in eight months in that same period. Thailand's manufacturing, as measured by the government, contracted for 22 months through January.

"Central to the latest improvement in business conditions were further rises in both output and new orders," HSBC and Markit said in a note accompanying the release of Vietnam's March data.

Vietnamese firms were able to secure more new orders from both domestic and export clients and "falling commodity prices in world markets continued to feed through to lower input costs," said Andrew Harker, senior economist at Markit.

Vietnam last year became the biggest exporter to the US among the 10 Association of Southeast Asian Nations, or Asean. And with its strategic location, younger population and lower costs than China, it has drawn the likes of Samsung Electronics, Intel and Siemens, besides apparel and shoe makers.

In Vietnam's favor, wages are still low, with the average monthly wage at US$197 in 2013, compared with US$391 for Thailand and US$613 for China, according to the International Labor Organization. Its population is younger: only about 6% is above the age of 65, compared with about 10% in China and Thailand and almost 13% in the Republic of Korea.

Of course, much of Vietnam's work now is in low-end manufacturing in textiles, garments, furniture and electronics. That may change, as companies invest in training and R&D.

What has raised some questions is worker unrest. Thousands of workers at a Ho Chi Minh City factory struck work this week over a government pension change, the worst labor unrest since last May’s anti-China riots that led to factory closures.

It may be the one wrinkle in Vietnam's rise to manufacturing greatness.

Farm sector sees advantage in Japan investment

Domestic agriculture is seeing opportunities to expand markets and acquire new technology as several Japanese investors show interest in hi-tech farming in Vietnam.

Since 2013, there are a number of cooperation between Vietnam and Japan in this sector, such as the fresh vegetable project in Lam Dong Province and the tuna fishing plan in Binh Dinh Province. Japanese farmers also visited Da Lat and expressed desire to create a "fresh vegetable hub for Asia" there.

During a conference on developing the agriculture sectors in both Vietnam and Japan held last year in HCM City, many Japanese firms committed to make high investments for Vietnam.

Japanese investors said Vietnam had potential to develop hi-tech farming and produce quality products. But young Japanese people are not interested in farming, leaving mostly old people to work in this sector, so in the coming years, Japan will need more agriculture imports from Vietnam.

When Japan joins the Trans-Pacific Partnership (TPP), it will have to remove subsidies to its farmers.

Vo Tri Thanh from the Central Institute for Economic Management said average growth in the agriculture sector was 4 percent, while the growth rate in service sector is 10 percent. Investors fail to see profits in farming and farmers abandon land to find other jobs.

However, in the past eight years, food prices have increased sharply and people are starting to recognise the importance of farming and food security. Not only Japan, but domestic and other foreign firms from South Korea are also focusing more on this sector.

Economists urged domestic firms to find foreign partners so they can learn new technologies in farming and get a foothold in a growing export market expected to become extremely competitive due to growing demand for quality produce.

Quang Ninh bolsters support for local enterprises

A business meeting to foster the support and remove obstacles for local enterprises was convened in the northern province of Quang Ninh on March 31.

Addressing the event, Deputy Chairman of the provincial People’s Committee, Nguyen Van Thanh, asserted that the effectiveness of businesses determines the province’s development. He pledged that local authorities will join forces with companies to remove obstacles and promote production.

Pham Ngoc The, the Director of Hoang Ha Group Joint Stock Company (JSC) and Chairman of the Quang Ninh Business Association, said such business meetings created opportunities for local firms to take advantage of preferential policies in investment and project implementation.

According to Luong Hoang Thai from the Ministry of Industry and Trade, enterprises should take more initiative in improving product and service quality, especially as a raft of international trade agreements will be officially signed in the next two years, increasing market competitiveness. These will include the Vietnam-ASEAN free trade agreement (FTA) and the Trans-Pacific-Partnership (TPP) agreement.

In 2014, the province held such several business meetings, talks and forums yielding significant achievements.

By the end of last year, the province licensed 849 new businesses, creating a total of over 10,000 units firms with registered capital of 118.1 trillion VND (5.6 billion USD).

EVN holds key responsibility in developing power system: Deputy PM

The Electricity of Vietnam (EVN) is responsible for developing the national power system.

Speaking at a ceremony to announce the appointment of the Chairman of the EVN Member Council on March 31 in Hanoi, Deputy Prime Minister Hoang Trung Hai urged the group to seek alternative energy sources for the long-term to ensure an adequate, stable and continuous supply of electricity for the national economy and the sustainable development of the sector.

He also requested the EVN build on its positive momentum and improve its transparency, competitiveness and effectiveness.

Deputy PM Hai congratulated new EVN Chairman Duong Quang Thanh, expressing his belief that Thanh and the group’s steering committee work together to reap achievements.

Thanh said the Member Council will focus on the efficient operation of existing systems and mobilising resources to accelerate construction initiatives, thus ensuring a stable electricity supply for the economy and the society.

According to the new Chairman, the EVN will accelerate the implementation of a project enhancing its business production productivity as well as its restructuring roadmap as approved by the Prime Minister.

Other priorities will also be given to enhancing publicity campaigns and technological application in business and services to facilitate service access and environment, Thanh added.

The new Chairman also rolled out three strategic approaches to promote the council’s operations and performance, including improving human resource quality; increasing management in tandem with enhancing staff autonomy; and strengthening science and technological application in production and management.

The State-run EVN specialises in producing, transmitting and trading electricity. It also manages the national grid, power imports and exports, and electric operations.

Last year, the EVN expanded its power network to 99.59 percent of all communes nationwide, bringing electricity to 98.22 percent of rural households, surpassing the goal set by the 11th National Party Congress for 2015 by 0.22 percentage points.

The Prime Minister has approved a plan to raise Electricity of Vietnam's (EVN's) charter capital to 160 trillion VND (7.62 billion USD) by the end of 2015.

According to the Ministry of Industry and Trade’s latest report, EVN's total profit in 2013, including affiliates and subsidiaries, reached more than 4.938 trillion VND (230.8 million USD). It was estimated that EVN alone generated almost 300 billion VND (14 million USD) in 2014.

Government to improve IPO procedures

The Government and the State Securities Commission (SSC) will have to improve the policies that have been preventing State-owned companies from being privatised, said officials and experts on April 1.

Bui Hoang Hai, the SSC's Deputy Director of Securities Issuance Management, said that 60 percent of IPOs last year were successful. They had a total value of 11.4 trillion VND (530.23 million USD).

Hai said that during the first three months of this year, the percentage of successful IPOs and divestment was 44 percent, with a total IPO value of 1.25 trillion VND (58.14 million USD).

He said that the reason for the lower numbers was slowness in information disclosure, adding that State-owned enterprises had to publish their profiles for IPO at least 20 days before they were auctioned.

However, many of them published their profiles much later, causing difficulties for investors to prepare capital and information about the auctioned enterprises, he said.

In addition, the auctioned enterprises only published basic information which was not attractive to strategic investors, he said.

The SSC's representative suggested that state-owned enterprises reveal more about their profiles and speed up the information disclosure to attract investors in a highly competitive market with limited sources of capital.

Nguyen Thi Hoang Lan, Vice General Director of the Hanoi Stock Exchange (HNX), said her company asked the SSC and the Ministry of Finance to improve the Unlisted Public Company Market (Upcom) to attract strategic investors by dividing the market into smaller sectors and developing specific indexes for those sectors.

She said that these recommendations will help investors get easier access to information and reduce administrative procedures to support auctioned enterprises.

She said that HNX will work with securities companies and consulting companies to assist the auctioned enterprises.

During a conference in Hanoi on April 1, participants suggested ways of improving the quality of IPO and divestment for State-owned companies.

Hoang Nguyen Hoc, Vice General Director of the State Capital Investment Corporation (SCIC), said that the SSC should allow State-owned companies to sell their stakes in even lots, which is an order for a security account of 100 shares for stocks.

He said that investors will find it cheaper, easier and more convenient to acquire state capital in even lots, raising the efficiency of IPO and divestment.

Vu Anh Minh, Director of the Transport Ministry's corporate management division, said that IPOs will help State-run companies improve their performances and make larger contribution to the state budget.-

Can Tho sees strong growth in Q1

The Mekong Delta city of Can Tho saw an 8.5 percent economic growth in the first quarter of 2015, the highest Q1 figure in the last three years, said the municipal Party Committee on April 1.

Over the period, Can Tho’s retail sales and service revenue exceeded 21.2 trillion VND (995 million USD), representing an annual increase of 15.5 percent.

Meanwhile, the city welcomed about 343,000 tourists, including 67,000 foreign arrivals. Tourism revenue reached 342 billion VND (11.9 million USD) in the three months, expanding by 13 percent from the same period last year.

Industrial production reached 19.5 percent of the yearly target with nearly 12.8 trillion VND (845 million USD) in value, up 6.7 percent from a year earlier.

Also in the first quarter, Can Tho collected more than 2.85 trillion VND (133 million USD) for the State budget.

However, its export earnings recorded only 206 million USD, down 14.7 percent annually with volume and value declines seen in rice and aquatic products, the city’s two export staples.

In the coming time, the city’s authorities need to take measure to push administrative procedure reforms to facilitate the development of production and business, said municipal Party Secretary Tran Thanh Man.

Banks to invest 4.7 trillion VND in Northwest region

The banking sector will provide the Northwest region with about 4.7 trillion VND (218 million USD) for projects on hydropower plants, mining, processing industry, transportation, and agriculture.

The announcement was made by Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu during a press conference held on April 1 in Hanoi to introduce the Conference for Investment Promotion and Social Security for the Northwest, scheduled to be organised on April 3-4.

According to the SBV, the banking sector, in accordance with the Party and Government’s policies towards Northwest region, has gradually helped alleviate hunger and poverty, raise living standards, ensure social security, and upgrade technical infrastructure and rural areas.

By December 31 last year, bank branches in the region’s 12 provinces mobilised nearly 113.2 trillion VND (5.31 billion USD), rising 21.35 percent from a year earlier and accounting for 2.54 percent of the entire economy.

Total outstanding loans were estimated at close to 149.4 trillion VND (7.02 billion USD), representing an annual increase of 16.1 percent and 3.76 percent of the country’s total lending last year.

At the 2013 Conference for Investment Promotion and Social Security for the Northwest, held in Tuyen Quang province, commercial banks signed 14 credit contracts for over 20 trillion VND (940 million USD) worth of loans for the region.

The Northwest is considered the poorest region in Vietnam and consists Hoa Binh, Son La, Lai Chau, Dien Bien, Yen Bai, Lao Cai, Lang Son, Tuyen Quang, Phu Tho, Bac Kan, Cao Bang, Ha Giang and part of Nghe An and Thanh Hoa provinces.

The Singapore-based Maybank Kim Eng held a workshop in the country on March 31-April 1 to highlight business opportunities in ASEAN in 2015 and onwards.

Experts said the integration opportunities remain open for all ASEAN businesses given the ASEAN Economic Community (AEC) will be established by late 2015.

Steven Chan, regional head of the banking and financial research at Maybank Kim Eng Securities Hong Kong, told Vietnam News Agency correspondents that the AEC will bring huge benefits for Vietnam with its targets of promoting trade, increasing the labour force, and improving the internal GDP.

Specifically, the AEC formation will help Vietnam maintain stable economic development and consolidate trust of foreign investors so that to draw bigger investments from the insiders and outsiders of the bloc, he added.

According to Sadiq Curimbhoy, Maybank Kim Eng Global Investment Strategist, the infrastructure, financial services, tourism, and trade sectors will benefit most from the AEC if businesses could spot opportunities and seize them.

During the workshop, experts talked about the role of women in economic development and how to grasp opportunities in ASEAN emerging markets and use technology to develop operations.

Founded in 1967, the Association of Southeast Asian Nations (ASEAN) groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

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