Shares gain on liquidity growth

Shares managed to creep up last week on both national stock exchanges.

The VN-Index rose by 0.46 per cent to 51.12 points, while the HNX-Index in Ha Noi advanced 1.38 per cent to 66.09 points.

On the southern bourse, trading volume averaged 99.5 million shares with an average value of VND1.343 trillion (US$63.85 million).

The bourse witnessed the highest liquidity on Tuesday, with trading value touching VND1.766 trillion ($84.09 million) on the exchange of 125.5 million shares, but liquidity eased towards the end of the week.

The VN-Index entered the resistance band of 510-513 points this week and fluctuated around 510 points. The benchmark index advanced on Monday and Tuesday but fell mid-week before making a slight recovery on Friday.

On the Ha Noi Stock Exchange, the HNX-Index decreased on Monday and Thursday, but still managed to finish up 1.39 per cent week-on-week at 66.09 points.

With an average of 42.47 million shares changing hands, the average trading value reached VND328.63 points ($15.64 million).

A new set of benchmark indices was launched on the capital city's bourse at the beginning of last week, including the HNXFF-Index comprised of stocks with a minimum free-float rate of 5 per cent.

The HNXFF-Index will co-exist with the HNX-Index and then replace it in a year.

The new indices also include the HNX Large Cap, the HNX Mid/Small Cap and indices for financial, construction and industrial sectors.

Pressure from profit-takings hit several blue chips and speculative stocks last week, especially in the transportation and warehouse sectors as well as stocks which witnessed rapid increases recently such as Mirae JSC (KMR), Mien Dong Joint Stock Company (MDG) and Idico (PXL).

Speculative cash continued to flow into active stocks in securities, construction, real estate and mining, which helped ease investor fears and stimulated the market rally.

However, investors became more cautious on the last trading day of the week as liquidity declined, according to vietstock.vn.

Foreign investors concluded the week as net buyers with VND30 billion ($1.4 million).

According to Bao Viet Securities, the market was waiting for information about the restructuring of two exchange traded funds and the possibility of increasing room for foreign investors in some sectors.

Analysts also said that CPI would also affect the stock market this month, but not too much thanks to stable supplies, the price stabilisation programme and budget tightening, and the CPI target for the year of 7 per cent would be achieved.

Investors also expected business results in the last quarter would draw more speculative investment in large caps, food and confectionary, mining and transportation at this time of year.

Stocks in the banking and securities sectors might also attract investors. However, real estate shares would not be so active following a difficult year for the property market, experts said. 

State Bank confirms no adjustment in foreign exchange rate

To quash rumors on adjustment of foreign exchange rates, the State Bank of Vietnam on December 6 issued a notice confirming that foreign exchange rates will remain unchanged from now until the end of the year.

Le Minh Hung, Deputy Governor of the Central Bank, said the exchange rate of the greenback is lower than the ceiling price of VND21,100 a dollar stipulated by SBV.

Accordingly, the Central Bank has bought a large quantity of the greenback for stocking. However, in two recent days, the selling and buying rate of US dollar has increased slightly.

The highest selling price quoted by banks on December 6 was VND21,150 a dollar. The central bank said that supply and demand of foreign currency is very low as Vietnam’s trade deficit in November fell while November trade surplus went up more than US$50 million.

Vietnam's trade surplus reached US$7.2 billion from the beginning of the year to the third quarter, equivalent to four percent of Gross Domestic Product. The figure is higher than in previous years.

In addition, selling and purchasing of credit institutes is normal and the forex liquidity remains in good shape; accordingly there is no reason to adjust the forex rate. Demand for the greenback has risen due to expectation that the Central Bank would adjust the forex rate.

Traditional market showcased at supermarkets

The unique traditional features of rural markets and their specialities are being showcased at many modern distribution channels in an effort to promote Vietnamese products as well as earn higher revenue in difficult economic times.

Several weeks ago, wholesaler Metro Cash & Carry Vietnam announced a new pilot model at its Metro Thang Long store in Hanoi with the hopes of bringing traditional features of the Vietnamese people to their customers.

With this plan, floor space has been set aside and designed to look like a rural market. The area in the store in Hanoi sells food and other products, and offers promotions.

Khuat Quang Hung, head of the Metro's general affairs and corporate communications, told Viet Nam News that with food hygiene and safety being the highest concern of consumers, such trading methods had made their customers feel more secure.

He explained that the products were provided by suppliers and farmers from areas that grow clean vegetables and fruits in Dong Anh district of Hanoi and northern Hai Duong province.

"We have signed contracts with farmers and suppliers so that we can ensure the quality of our products as well as food hygiene and safety. Moreover, thanks to the co-operation, the price of many products such as carrots, corn, watermelons and many vegetables, is about 10-15 percent lower compared with wholesale markets," he said.

Although they have not set up specific areas for rural specialities, other big supermarkets such as Big C and Co-op Mart, for a long time, have begun to sell these kinds of foods.

At Co-op Mart, customers can find many rural specialities but they are all packaged. Meanwhile, at Big C, there are many choices.

A representative from Big C said that for many years their supermarkets in Ho Chi Minh City sold Pia cake, a speciality from Soc Trang province in the Mekong Delta, bean cakes and many kinds of noodles, which are specialities of southern provinces.

"The supermarket decided to sell these specialities to meet the demand of customers and to advertise rural specialities," she said.

The new business method has brought good results to the model distribution channel.

Hung of Metro said that thanks to the new model, their revenue had increased. "The revenue rose, especially on initial days. We also received many supportive ideas from customers," he said.

According to Hung, the pilot will be run until Tet (Lunar New Year). If the pilot goes smoothly, it will be expanded and applied to their systems in the entire region.

Meanwhile, Big C said that sales had been good and in the coming time it would expand the model. It plans to co-operate with small- and medium-sized enterprises to bring more rural specialities to its system.

Individual customers have also traded these products in social networks.

Just with one click on a link about rural specialities, customers can find favourite foods on many pages, such as Facebook, online forums or other sites like dacsanvungmien.com.

However, experts warned that customers must carefully consider choices before purchasing because online markets, unlike brick-and-mortar supermarkets, do not ensure the quality of the products that are sold online.

Over 100 companies from 15 countries and territories have gathered at the 20th Viet Nam International Hospital, Medical and Pharmaceutical Exhibition, which opened in the capital city on Wednesday.

The fair aims to provide an opportunity to introduce medical products and modern treatment techniques from advanced countries.

Pharmaceutical products, dietary supplements, packaging and processing machines, as well as analytical and testing equipment, and medical equipment are on display at over 150 trade booths.

Cocoa industry begins to flourish

Increasing global demand for cocoa beans, especially fermented ones, augurs well for the industry in Viet Nam, delegates said at a forum in HCM City Thursday.

The country has suitable climate and soil for cocoa cultivation, experts noted, expressing confidence that inter-cropping the beans with coconut and cashew gardens would increase farmers' incomes.

This, in turn, would ensure effective development of areas under all three crops, officials of the Department of Crop Production said.

Although cocoa was introduced to Viet Nam way back in 1950, it was only about 10 years ago that cocoa plantations began to prosper with the total output reaching about 6,700 tonnes of dried beans a year.

The area under cocoa has increased from 9,000ha in 2007 to more than 22,000ha now, mainly in the Central Highlands, south-eastern and Cuu Long (Mekong) Delta provinces.

Export has given a boost to local cocoa production, with nearly 3,000 tonnes of fermented cocoa beans exported last year.

Pham Dong Quang, deputy director general of the department, said, "Demand for cocoa in the world market has risen so strongly in recent years that current increases in world output cannot keep lace. In many major producing countries, production has shrunk dramatically due to climate change impacts, offering Viet Nam an opportunity."

Agreeing with Quang, Cas Van Der Horst, Deputy Head of Mission at the Netherlands Embassy in Viet Nam, said that with surging demand for cocoa in Asia and shrinking production in West African and other countries, there will be a shortfall of about 1 million tonnes in the world market by 2020.

This presents a great opportunity for Viet Nam to become one of major cocoa suppliers in the world, he said.

However, he cautioned that the industry must focus more on improving productivity and quality if it is to take advantage of the opportunity.

The Netherlands government and other organisations have supported Viet Nam to develop its cocoa industry through a Public Private Partnership project, he said.

The project, expected to continue until 2014, will lay the foundations for the future development of Viet Nam's cocoa industry, he said.

Quang said the project would help Viet Nam develop its cocoa industry in a sustainable manner both in terms of volume and quality, contributing to meeting the target of having 33,500ha under cocoa cultivation by 2015 and 50,000ha by 2020.

While there was agreement on its growth potential, some contradictions were apparent in the analysis of challenges facing the cocoa industry in Viet Nam.

The usual stock reasons of small-scale production, lack of qualified technical staff, low productivity and weak linkages in the cocoa value chain were mentioned at the forum.

Several participants pointed out that farmers were still reluctant to plant cocoa because they lacked the experience, compared to cultivation of other crops.

Dinh Hai Lam, Viet Nam Cocoa Development Manager for Mars Incoporated, said that given small-scale farming and stiff competition with other crops, cocoa cultivation in Viet Nam must follow the intensive farming model to ensure high productivity while maintaining quality.

"If Viet Nam produces low quality cocoa, Vietnamese cocoa must compete with Indonesian cocoa in prices."

Furthermore, Viet Nam has to find measures to meet with increasing demand of global consumers for evidence of sustainable and socially responsible production, he said.

Phan Huy Thong, head of the Viet Nam Cocoa Committee, said they would co-operate with relevant agencies and localities to review zoning plans for cocoa cultivation with a view to ensuring sustainable development of the industry.

The committee will work with the Department of Crop Production and other agencies to recommend appropriate policies to the Government, especially to support farmer in intercropping cocoa with other suitable crops.

The forum was organised by the Department of Crop Production, the Viet Nam Cocoa Committee, the Ministry of Agriculture and Rural Development and the Netherlands Embassy in Viet Nam.

It gathered more than 200 delegates, including Vietnamese cocoa farmers and traders, chocolate manufacturers, government officials, and representatives of international organisations.

Glass expos set to open doors

Two international exhibitions – Glasstech Viet Nam and Window and Doors Viet Nam, will be held at HCM City's Tan Binh Exhibition and Convention Centre from December 4-7.

The exhibitions, which the organiser says is the first of their kind to be held in the city, will together have more than 75 booths where over 50 local and international exhibitors will display their wares.

Products on display will include machinery and equipment for the glass industry, a wide range of glass products, windows, doors and accessories, he added.

The two exhibitions are part of a series of international exhibitions being held in tandem under the theme "Viet Nam – Integration and Sustainable Development.

Other exhibitions, Vinamac, Vinachem, Vinacoatings and Lighting Viet Nam, at the same venue focus on industrial machinery, equipment, chemicals, coating, steel, metalworking and lighting industry.

Covering a total of 5,000sq.m and 215 booths, the exhibitions have attracted a total of 180 firms from 10 countries and territories, including China, Thailand, Korea, Singapore, Japan, Malaysia and Viet Nam.

Several conferences, seminars and business meetings will be held alongside the four-day event, said Nguyen Van Ngan, general director of the Viet Nam Advertisement and Fair Exhibition Joint Stock Company.

Co-organised by Vietfair and other international organisations, these events are said to be a good chance for Vietnamese manufacturers and foreign companies looking for new business opportunities, technology exchange, quality improvement and increased competitiveness.

Seminar eyes better product assessments to boost trade

A calibration seminar on "Successful Measurement Management" was held by the Japan Quality Assurance Organisation (JQA) in HCM City on Thursday.

The two-day seminar also included a training session on measuring instruments.

The seminar was aimed at people who are engaged in measurement control management in the quality control sector, while the practical training targetted technicians who need to learn about measurement control.

Together with the growing trade between Japan and Viet Nam, the demand for conformity assessment, including testing, inspection, certification and calibration, by a third party is becoming more important.

This is especially important in winning business partners' confidence and promoting trade facilitation, according to the local Quality Assurance and Testing Centre 3 (QUATEST 3).

QUATEST 3 is a third-party conformity assessment agency.

JQA, established in 1957, has been providing certification service and developing certification systems in co-operation with Japanese electrical home appliances and consumer electronics manufacturing companies, transport equipment companies, and others.

JQA also provides services such as calibration and verification of measuring instruments, testing and inspection of construction materials and machinery, and Japanese Industrial Standards certification.

Similar seminars and practical training was held in Ha Noi on Tuesday and Wednesday.

Firms show distaste for local salt

Local enterprises have asked the state to give them quotas on importing industrial salt for chemical and health care sectors while the local raw salt inventory remains high.

Vietnamese industrial salt has a higher price than imported salt, even when transport fees and duties are included. For this reason firms have imported salt to save money, said Pham Tat Thang, a trade expert.

The State should offer support by giving loans and technological support to salt farmers in order to enable the local salt industry to develop and meet local as well as export demands, Thang said.

He added that the State should have policies to encourage local firms to purchase all salt from local farmers and enterprises where possible.

The Ministry of Industry and Trade has given quotas on importing industrial salt to three local enterprises for manufacturing and production in the chemical and health care sectors.

The quota was 20,000 tonnes of industrial salt for the South Chemical Ltd Company, 10,000 tonnes for Viet Tri Chemical Joint Stock Company and 21,000 tonnes for Vedan Viet Nam Ltd Company.

The ministry said the refined industrial salt it permitted the local enterprises to import is the result of a deficit in the local supply.

Meanwhile, the Ministry of Agriculture and Rural Development (MARD) said by the end of October, the national raw salt inventory from farmers and local enterprises stood at 118,146 tonnes.

The ministry also said many foreign food firms in Japan, South Korea, Taiwan and the US have imported Vietnamese raw salt in order to refine it.

Ngo Tan Ban, former leader of the Viet Nam Salt Corporation, tells Dan Viet online that many foreign firms imported high volumes of Vietnamese raw salt for production purposes.

Ban says the production of industrial salt needs considerable investment. He believes the State needs to support farmers by providing support for both input capital and for upgrading manufacturing equipment.

Last year, Viet Nam exported a total of 20,500 tonnes of salt to Japan, South Korea, Taiwan and the US, MARD said.

The Thanh Hoa Salt Company alone sent 554 tonnes of salt to the US and Japan. The company expected to export 600 tonnes of salt to the two markets this year and to expand its exports into other foreign markets.

Central Thanh Hoa Province exports 4-5 containers of raw salt monthly, while southern Bac Lieu Province, which is the largest salt producer in Viet Nam, recently signed a partnership to export high quality raw salt to Japan.

Exporters neglect Malaysian market

Exporters have not fully exploited the potential of the Malaysian demand for food, a representative of the Malaysian Small and Medium Enterprise Association in Viet Nam told the Asian Connection Conference in HCM City yesterday.

Pham Thi Thanh Ha said that Viet Nam's food export value to Malaysia accounted for only 3.3 per cent of Malaysia's total while Thailand's exports to Malaysia accounted for more than 20 per cent.

Four years ago, Viet Nam's food and foodstuff export value was only 2.1 per cent.

Export value could be higher, as the two countries are located near each other and trade promotions in Malaysia are not costly.

Vietnamese exporters also have an opportunity to export Halal food favoured by many Malaysians, even those who are non-Muslim. About 2.1 million Muslims live in Malaysia.

She noted, however, that companies must have proper halal certificates or have a halal logo on their exports.

Businesses were encouraged to participate in fairs and exhibitions in Malaysia to access partners and buyers quickly, she said.

When doing business in Malaysia, Vietnamese companies should have staff who speak English and Chinese, since Chinese accounted for 80 per cent of the economy, even though they comprise only 20 per cent of the population, she added.

Ha advised Vietnamese exporters to conduct extensive surveys to learn about the market and then seek trade partners.

Ly Truong Chien, chairman of the Tri Tri Group, said market research was a key factor in becoming successful.

The world has changed rapidly, requiring businesses to have updated information and databases.

Market information is valid for only two years, he added.

Moreover, business plans must be based on what the market needs and a company's capacities.

"Confidence must be built based on a thorough investment and preparation," he said.

The Asia Connection event is part of activities included in the "economic pillars" of the ASEAN Community.

The Asia Connection conference is expected to take place every six months in Viet Nam and in other Asian countries and territorries, including Malaysia, Singapore, Thailand, Indonesia, Myanmar, Hong Kong and Taiwan.

Dong Nai property attracts investors

Southern Dong Nai Province's land plot segment is most attractive to investors/speculators.

Buyers purchasing villas/ townhouses buy property as second homes, or for future residences, according to Savills Viet Nam, a foreign property consulting firm.

The average price of active apartment projects ranges from approximately US$690 to $900 per square metre, or $58,000 to $90,000 per unit.

The population of Dong Nai in 2011 is 2.66 million people, 70 per cent of which are at working age.

There are 31 operational industrial parks (IPs) in Dong Nai covering a total area of 9,300ha; more than 6,200ha are leasable.

The large supply of industrial parks attracts employees and expatriates, increasing residential demand.

The weak infrastructure development and lack of social facilities are obstacles to attracting immigrants from adjacent areas. Therefore, the market is dominated by investors/ speculators rather than end users.

Binh Duong reallocates land

The Ministry of Construction agreed with a Binh Duong proposal to transfer land for a golf course to develop urban, service and trading areas.

The action is part of a broader move to better utilise land for development projects, the ministry said.

The ministry has asked the province to develop specific plans to develop the area.

PM approves Phu Quoc plan

The Prime Minister approved a plan to develop infrastructure on Phu Quoc Island, including construction of a joint Viet Nam-Singapore Industrial Park and modifications for the island's casino.

The Prime Minister has asked southern Kien Giang Province to work with the Ministry of Construction and cooperate with a Singaporean partner to study and adjust the plan to develop Phu Quoc Island,

Under the plan, the province would develop a special administrative and economic region with specific policies to attract more foreign investment.

Developer inks loan deal with KDB

The T.H.T Development Ltd Co has signed a contract to borrow money from the Korea Development Bank (KDB) for the Ho Tay urban area.

Under the lucrative contract, KDB will provide US$200 million to develop infrastructure for the urban area.

The T.H.T Development Ltd Co has invested $94 million to carry out site clearance for the first stage of the project.

The Tay Ho Tay Urban Area will be a synchronous urban area including office buildings, trading and financial centres, cultural complex, residential space and schools.

The project is expected to have a total investment of $2.5 billion and finish the first stage in 2019.

Peugeot 3008 to be made in Viet Nam

French automaker Peugeot will transfer its manufacturing and assembling of the Peugeot 3008 to its Vietnamese partner, Thaco Group.

The Peugeot 3008, a five-seater compact crossover launched in 2009, is one of the carmaker's strategic ventures into the global market and will provide a competitive option for Vietnamese customers.

The 2.0L diesel engine and six-speed manual model will be manufactured and assembled at Chu Lai Open Economic Zone in central Quang Nam Province.

This is the second contract signed by the French automaker and Thaco Group. The first deal was signed in April to provide a distribution network and local production for its 408 model.

SSI lauded at Asiamoney Brokers

Saigon Securities Inc (SSI) received several prestigious awards, including being recognised as the "best local brokerage in Viet Nam," at the Asiamoney Brokers Poll 2013, the company announced on Monday.

The 24th annual award ceremony, hosted by Asiamoney, one of Asia's leading publications, marks the second time Viet Nam has been nominated, competing with major corporations from 13 Asian countries.

The results were based on surveys from nearly 2,500 institutions, with a total 5,490 valid individual responses, according to the organiser's website asiamoney.com.

Vietinbank launches new ATM withdrawal service

Vietinbank launched a new service on Monday enabling customers to withdraw money from automated teller machines (ATMs) with registered codes instead of bank cards.

Another service, ATM Deposit, allows card users to deposit money at the machines without having to go to the bank.

The bank also provides MPOS (mobile point-of-sale), Merchant Online and E-Fast On services, which aim to make payments through mobile devices and in global e-commerce more convenient.

In Viet Nam, the bank has 23 per cent share of the domestic card market, 35 per cent of the international card market and 30 per cent of the point-of-sale market, according to the Viet Nam Bank Card Association.

Bkav launches new security software

Vietnamese security firm Bkav released its latest round of security products for computer and mobile phone users yesterday in Ha Noi.

The 2014 version of anti-virus software offers Anti Leak to protect users from being secretly recorded via their webcams and features new technology that protects bank and credit card information.

The software also aims to prevent users from downloading viruses and targets fake anti-virus software.

Customers can update old versions of Bkav anti-virus software from November 26, while internet users will be offered free sign-ups to the software.

Stock market set for steady growth

The stock market would be on steady upward trend next year, but no strong surges were expected, according to a forecast by MB Securities (MBS).

An MBS report said that the Trans-Pacific Partnership (TPP) would stimulate the market, adding that it would encourage foreign speculative cash to flow in.

However, it also said there was little chance of the TPP being signed next year because agreement was not likely to be reached among members until the end of next year.

Still, the report added that the stock market would be an attractive investment channel when investors seeking opportunities.

It forecast that next year, benchmark indices would fluctuate about 6 per cent around this year's ranges.

This meant the VN-Index in the southern bourse and the HNX-Index in the northern bourse would fluctuate around 492 to 561 points and between 61 to 68 points, respectively.

The report said the market would go up steadily next year thanks to the recovery of the economy. However, no strong surges were expected unless there was stimulating information.

Expectations arising from the signing of the TPP would help boost shares, especially those in the garment and textile sectors and blue chips.

Joining TPP would help Viet Nam attract more foreign capital, from which financial markets and stock markets might both benefit.

According to the MBS report, there was a likelihood of achieving a gross domestic product (GDP) growth rate of 5.8 per cent, providing the country hastened its economic restructuring.

Investors boycott loss-making shares

Many stocks have not seen successful transactions for half a year.

Minh Huu Lien Joint Stock Company (MHL), Tien Son Cement Company (TMS), SolaVina (SVN) and Viglacera Ha Long 1 (HLY) did not see any transactions for months. The last trading of MHL was on May 6, with 100 shares changing hands; that of TMS was on June 6 with the exchange of 1,400 shares. These shares kept their reference prices.

HLY was put under control in February for incurring losses. The stock price increased to VND20,000 (US$0.98) in June and stopped there without any more transactions.

Statistics of Vietstock showed that 60 per cent of nearly 700 listed stocks on both bourses had low trading volume during the past three months, below 10,000 shares per trading session.

Of those, 35 codes had average trading volume of less than 100 shares per session.

Notably, most of the unmarketable stocks were listed on the Ha Noi Exchange and reported losses for many consecutive quarters.

However, shares of many companies with good business results also encountered the same situation.

Bach Dang Construction Company (BHT), Ngo Quyen Seafood Processing and Export Company (NGC), Song Da Urban Development and Construction (SDU) and No 5 Construction Company (SC5), despite having net profits in the first seven months of this year, suffered low liquidity.

Viglacera Ha Long (VHL), Dong Hai Ben Tre Joint Stock Company (DHC) and Hang Xanh Auto Services (HAX) which were among the top companies shifting from losses to profits, were also not attractive to investors.

Stock analysts said that some of this was due to the impact of bad business results, lack of information for investors or stock prices already reaching high levels.

In addition, shares also became less attractive to investors because a majority of stakes were currently held by internal holders, making trading difficult for outside investors.

State agencies must use locally-made products

Agencies and units using the State budget for procurement have been regulated to prioritize Vietnamese products by 2015, said the vice chairman of the Vietnam Central Fatherland Front Committee, Le Ba Trinh.

Speaking at a training conference on the “Buy Vietnamese” campaign organized for the press in HCMC on Tuesday, Trinh said the target was set during a review of three years of implementation of the campaign.

However, many enterprises still have bought imported goods such as automobiles. And large numbers of civil servants and high-income earners still prefer foreign products to locally-made goods.

Therefore, to realize the preset targets, it is necessary to request State agencies, political and social organizations to choose Vietnamese goods for procurement via current regulations, Trinh added.

Nguyen Loc An, deputy head of the Industry and Trade Ministry’s Domestic Market Department, said that the solution is to further promote the campaign so State-run agencies have the right awareness about the campaign and prioritize procuring Vietnamese goods.

The State also needs specific policies to encourage agencies to carry out the scheme.

Bui Hanh Thu, deputy general director of Saigon Co.op, said that many enterprises cannot select suitable Vietnamese appliances such as vehicles, photocopiers and facsimile devices. Similarly, consumers do not have many choices as Vietnamese products cannot meet their needs.

Saigon Co.op has also met challenges in selecting domestic products for its distribution channel. At present, the retailer can only offer all Vietnamese products for the Fast Moving Consumer Goods (FMCG) sector.

The core problem of the campaign is developing goods production, of which local enterprises can turn out high-quality products to meet demands of consumers, Thu said.

The Government has assigned the mission to a number of ministries and agencies. However, the Ministry of Science and Technology has yet to play a clear role in helping enterprises access latest scientific and technological achievements, the foundation for production development.

Therefore, relevant agencies should have solutions to assist enterprises such as setting up product development and the application of research funds, Thu added.

Stricter VAT rebate rules challenge businesses

Local enterprises are expected to face tougher procedures for valued added tax (VAT) rebate applicable in the country early next year.

Under amendments to the Law on VAT, if the input VAT is not completely deducted after at least 12 months, the enterprise shall receive a tax refund. Meanwhile, the current required period for such tax rebate is only three months.

In addition, when the non-deducted VAT on exported goods and services of a business reaches VND300 million, the business shall receive a VAT refund compared to the current amount of VND200 million or more.

Earlier, upon strong rejections of many seafood and farm produce associations, the Ministry of Finance on October 15 released Document 13706/BTC-TCT providing some new instructions in terms of VAT reimbursement to support enterprises.

Under the document, businesses enlisted by the Ministry of Industry and Trade as reputable export companies of 2012-2013 will receive tax reimbursements before tax examination.

This tax reimbursement process will also apply to businesses exporting agricultural, forest products and seafood, which have been operational for two years and not subject to any penalties for tax evasion.

Tax offices are required to deal with tax reimbursement procedures within not more than six working days since they receive applications from corporate taxpayers that are allowed to be reimbursed before being inspected, and within not more than 40 days in cases where the inspection work must be carried out before tax reimbursement.

HCMC, Netherlands agency discuss cooperation

Representatives of HCMC and the Center for the Promotion of Imports from Developing Countries (CBI), an agency of the Dutch Ministry of Foreign Affairs, on Wednesday discussed cooperation to bring about mutual benefits.

The representatives talked about preparation for a Holland business group that will seek investment opportunities in the city. They also had plans to establish a flower auction center here and help the Association of Garment Textile Embroidery-Knitting find customers and material supplies in the European Union (EU).

Rob van Eijbergen, special representative of International Relations of CBI, said that Vietnam has become a developing country with rising income per capita. Hopefully, Vietnam will create favorable conditions for private enterprises from the Netherlands to do business in the country.

To prepare for the fact finding trip of Holland enterprises, a meeting between CBI and related agencies will take place today so as participants can further discuss cooperation.

Seven-in-one industrial products expo in city

The seven-in-one international exhibition on industrial machinery, chemicals, paint, lighting, glass and doors will

be organized at Tan Binh Exhibition & Convention Center in HCMC’s Tan Binh District from December 4-12.

According to Vietnam Advertisement and Fair Exhibition Joint Stock Company (Vietfair), the event consists of Vinamac Expo 2013, Vinachem Expo 2013, Chinachem Expo 2013, Vina Coatings 2013, Lighting Vietnam 2013, Glasstech Vietnam 2013 and Window & Door Vietnam 2013.

Nguyen Van Ngan, general director of Vietfair, said that the exhibitions are expected to attract around 180 local and foreign enterprises with 215 booths. In addition to product displays and meetings between enterprises, there will be seminars of leading experts from Japan, Malaysia, Singapore, Thailand and Vietnam.

HCM City to resume online business registration soon

The HCMC government will resume the online business registration procedure for enterprises two years after the job was suspended, said a local official.

Nguyen Anh Tuan, deputy director of the municipal Department of Information and Communications, told a meeting on the topic here on Wednesday that his department and the Department of Planning and Investment (DPI) had proposed resumption of this procedure to make life easier for entrepreneurs.

The city’s information technology system for online business registration was suspended two years ago when the Ministry of Planning and Investment launched the unified National Business Registration Portal. However, the new system managed by the ministry failed to meet the demand of enterprises, such as complicated registration formalities and the requirement on using digital signature.

“Therefore, this system (by the ministry) attracted only 100 city-based enterprises to make online registration over two years, while the city’s IT network between 2001 and 2011 had processed as many as 40,000 registrations,” Tuan said.

As such, the IT system will be resumed at the DPI, assisting entrepreneurs to complete business registration dossiers online before submitting them to the department, Tuan explained.

The investment department will receive dossiers from enterprises, and help them transfer the dossiers to the Ministry of Planning and Investment via the ministry’s IT system.

In addition, Tuan said, the two departments are working with the HCMC Post Office and other postal service companies to launch the home delivery service, sending approved dossiers to enterprises at their registered addresses.

“As such, enterprises only have to complete business registration dossiers online, and will receive results at their homes, which will help them save on time and cost while easing the burden of overcrowding at the investment department,” he said.

HCMC Vice Chairman Le Manh Ha at the meeting told relevant agencies, especially the two departments, to complete procedures and database by mid-December to quickly resume the IT system operation. The online business registration system must be operational by early January, Ha said.

Ha noted that the introduction of a unified IT system by the ministry was an effort to improve business management, but the big problem was the incompatibility of the system with other provincial networks that hindered connectivity.

“In the coming time, HCMC and related sides will propose ways to improve connection between the ministry’s IT system and the city’s to make it more convenient for enterprises and the people,” he said.

VF1 withdrawal lower than expected

Vietnam Securities Investment Fund (VFMVF1) under Vietnam Fund Management Company (VFM) has seen lower-than-expected capital withdrawal by investors during the process of changing from a closed-end fund to an open-ended fund, said a VFM representative.

During the process, investors who wish to divest capital out of VFMVF1 can sell fund certificates to the fund.

VFM deputy general director Pham Khanh Lynh on Wednesday told the Daily that the fund manger earlier conducted a survey concerning expectations of investors to forecast withdrawal levels. VFM had prepared a backup of 40% of the fund but the withdrawal by investors as of Wednesday was lower than expected.

In the first conversion on Wednesday, investors sold 20% of fund certificate volume to VFMVF1, cutting the fund’s capital from VND1 trillion to VND800 billion. The second conversion will take place today.

VFM on Wednesday closed the list of shareholders who will sell fund certificates to VFMVF1 today. Although specific data will remain unknown in the next three days, capital withdrawal is expected to slow down, Lynh said.

Experiences show that capital withdrawal pressure only surges up in the first conversion and then declines sharply.

For instance, during converting Vietnam Active Fund (VFA) into an open-ended fund, the fund saw no extra withdrawals of capital as they had already been completed in the previous stage. Investors sold less than 30% of fund certificates to VFA in the first two stages, Lynh said.

According a report posted on VF1’s website, most withdrawers are local investors, while foreign investors are still holding 59.4% of its capital.

Lynh said that for open-ended funds, investors only judge assets held by the funds and information publicly announced. VF1 are investing in high-profile stocks such as VNM, DPM and FPT.

VF4, another fund under VFM, was delisted from the Hochiminh Stock Exchange (HOSE) on Wednesday to become open-end in January.

By November 21, VFI had total assets of over VND1.5 trillion, or net asset value of VND19,182 per unit. MAFPF1 managed by the fund manager Manulife is the only closed-end fund listed on HOSE now.

SBV’s local gold purchase unlikely, bankers say

Although an official of the State Bank of Vietnam (SBV) recently announced a gold purchase plan from local sources by the central bank to increase the nation’s foreign reserves, local banks and gold trading enterprises have predicted that the scheme won’t happen.

Nguyen Cong Tuong, deputy sales manager of Saigon Jewelry Company (SJC), said that the central bank will certainly not buy gold at the moment. As domestic gold prices are nearly VND4 million higher than the world price for a tael, buying gold will cause adverse impacts on foreign reserves.

In addition, the central bank’s gold purchase will raise gold demand on the market, further widening the gap between domestic and global gold prices, Tuong explained.

Only if rather than when domestic gold prices tumble and gold demand turns weak, SBV will buy gold to stabilize gold prices and serve exports. At present, the central bank is the only entity allowed to perform gold exports and imports.

Speaking to the press recently, Nguyen Quang Huy, head of SBV’s Foreign Exchange Department, said that the central bank is considering a plan to buy gold from local sources. However, the agency will only realize the scheme if needed, but not at the moment, said Tuong of SJC.

A deputy general director of a local bank said that commercial banks cannot sell gold to SBV as they do not have supplies right now. As the precious metal has dropped sharply in price, banks currently mainly sell gold to residents while there are just a few gold sellers.

Banks primarily buy gold from the central bank’s gold bar auctions, so selling back the precious metal to the central bank looks ridiculous, the banker said.

Under the Government’s Decree No. 24/2012/ND-CP dated April, 2012 on gold business activities, SBV is responsible for purchasing and selling gold in the domestic market, and mobilizing gold as regulated by the Prime Minister.

Earlier, Le Minh Hung, SBV’s deputy governor, told the Daily that when credit institutions have a demand to sell gold to the State, the central bank will join the market as the final buyer.

The State will only buy gold to increase foreign reserves. If the gold market sees abnormal developments or faces liquidity problems, the central bank will sell gold to support the market but at prices beneficial to the State, Hung said.

Domestic gold prices on Wednesday hovered around VND35.3 million a tael, or some VND3.67 million higher than the gold price on the New York market. Gold transactions slightly improved on Monday and Tuesday this week, Tuong said.

Road toll right sold for VND2 trillion

The Ministry of Transport has approved the price of a toll collection right to the HCMC-Trung Luong Expressway at around VND2 trillion, which won an auction a few days ago.

The winning bidder, HCMC-based Yen Khanh Trade Production and Service Company, will hold the toll collection right for five years starting from January 1, 2014. The money will be paid in three phases over six months.

The ministry has assigned Cuu Long Corporation for Investment, Development and Project Management of Infrastructure (Cuu Long CIMP) to sign and manage a toll collection right contract with Yen Khanh Company while carrying out transfer procedures.

Deputy Minister of Transport Nguyen Hong Truong earlier told the Daily that it would be difficult for investors to mobilize capital to buy the right for a longer period. Therefore, the right this time around lasts only five years.

BIDV Expressway Development Company earlier had purchased the right to toll collection for more than VND9.1 trillion. However, financial woes forced it to give back the project and the ministry then assigned CIPM to collect tolls.

The VND9.88 trillion HCMC-Trung Luong Expressway has a total length of 62 kilometers, with the expressway section stretching 40 kilometers.

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