Vietnamese mango finds 40th export market – the US

After 10 years of persistent negotiations, Vietnam has conquered one of the most fastidious markets to export mango, the US.

From February 18 Vietnam is allowed to export Vietnamese mango to the US. Mango is the sixth fruit to gain export clearance to the US after lychee, longan, rambutan, star apple, and dragon fruit, and at the same time, the US became the 40th export market of Vietnamese mango.

The US has many strict requirements for mango exports, including garden conditions, packaging, irradiation treatment, and staying in plant quarantine at import border gates.

From December 2017, the Animal and Plant Health Inspection Service (APHIS) under the US Department of Agriculture has revised regulations to allow the importation of Vietnamese mango.

Accordingly, APHIS experts have determined that Vietnamese mango can be imported into the US according to a systematically co-ordinated management process from planting to packaging and transportation to ensure fruit quality and no residue of pesticides.

In addition, mango will be exported on commercial consignment with a complete certificate.

According to some fruit exporting enterprises, the US can only self-supply 3,000 tonnes per year, equal to 1 per cent of the amount the country has to import annually, which makes it a promising market for Vietnamese producers.

The US has to import nearly 400,000 tonnes of fresh mango mainly from Mexico, Peru, Ecuador, Brazil, and Guatemala. Domestic mango is grown mainly in Florida and Hawaii, with a little from California and Texas.

Vietnam can export about 3,000 tonnes of fresh mango to the US, about as much as the US’ domestic supply.

In Vietnam, mango is grown from the south to the north, mostly in the Mekong Delta provinces like Tien Giang, An Giang, Dong Thap, Vinh Long, Can Poetry, and Ben Tre.

In addition, mango is also grown in Khanh Hoa, Dong Nai, Ba Ria-Vung Tau, Son La, Lang Son, and the Red River Delta region. The mango growing area of the whole country is about 87,000 hectare, with an output of over 969,000 tonnes per year. Vietnam ranks 13th in the world in terms of mango production, but its export volume is still modest and has not made it into the top 10 mango exporters.

Licogi cannot cover debts with tiny profit

Equitised construction giant Licogi earned little after-tax profit in recent years, which cannot cover the instalment payments of its half a trillion dong debts.

The Ministry of Finance (MoF) has just sent a report to related agencies about the financial statement and performance of Licogi in 2017 and the first half of 2018, showing poor results.

Accordingly, in 2017 Licogi’s revenue was VND2.721 trillion ($118.3 million), but pre-tax profit was negative VND58.7 billion ($2.55 million), while the corporation’s revenue in the first half of 2018 was VND1.313 trillion ($57.1 million), with VND9.8 billion ($0.4 million) of after-tax profit.

The report also says that this poor performance has lowered Licogi’s and its holding company’s capital preservation ratios to 0.79 and 0.83, respectively.

Queries have been raised in December 2017, when the company was warned by auditors who noted that its short-term debts exceeded short-term assets by VND1.232 trillion ($53.6 million).

"This, among other factors, cast doubt on the ability of Licogi to continue operating," the report says. It has also revealed an extremely low return on investment (ROI) of 3.06 per cent.

The MoF also outlined that Licogi has difficulties paying short-term debts, especially debts of under three months, because its short-term assets consist primarily of receivables and inventory. Cash and cash equivalents by June 30, 2016 were only about VND40 billion ($1.74 million).

This means that the company is failing to "preserve state investment capital," the report said. The MoF has directed the Ministry of Construction to appoint a representative to submit a report on the causes and identify solutions.

Licogi Corporation, an enterprise operating mainly in construction and infrastructure, was established as a state-owned company in 1960 under the name of Corporation for Infrastructure Construction and Development. The company had been responsible for the construction of many hydroelectric, thermoelectric, industrial, transport, irrigation, and airport facilities, which have important political, economic, and defense significance.

The company was equitised on January 1, 2016 and has been operating as a joint stock company since under the name Licogi. However, Licogi’s post-equitisation business has deteriorated, with accumulated losses reaching over VND530 billion ($22.9 million).

As of the end of June 2018, 40.71 per cent of Licogi was held by State Capital Investment Corporation (SCIC), while two other major shareholders and private investment companies collectively hold the remaining 57.24 per cent.

Business condition reforms fail to meet expectations: experts

Over 3,000 business conditions were simplified and removed throughout 2018, but the outcomes still fell short of expectations.

Under the draft amendments and supplements to the Law on Investment and the Law on Enterprises, a list of 26 conditional investment and business conditions are abolished, much to the approval of experts.

Many assumed that the amendments and supplements mark significant changes in the reforms of local policymakers. 

2018 can be considered a year of reform for business conditions. In total, 25 decrees regarding amendments and loosening of business conditions were issued to replace the previously-approved 80 decrees that lead to shortcomings for development trends.

More than 3,000 business conditions, equivalent to 50 per cent of the total, were amended, supplemented, and removed in 2018.

Experts said at the time that the nation’s efforts to further boost administrative reforms and cut red tape were needed to slash time and costs for enterprises.

However, data cited from the recent "Business Law Flow" report by the Vietnam Chamber of Commerce and Industry (VCCI) showed that controversially, that there has been no spillover effect as expected.

Indeed, the work of reducing business conditions still needs to be looked at as some conditions were removed from the list, whilst others were added to, thus failing to create the impacts expected. 

Phan Duc Hieu, Deputy Director of the Central Institute for Economic Management (CIEM), wondered whether Vietnam should carry on making cuts to the number of business conditions or not. He expressed his worry that the number of abolished business conditions does not reflect the outcomes expected.

Dau Anh Tuan, head of the VCCI Legal Department, said the Government’s Decree 107, which was issued in August 2018 to replace the previous Decree 109 on business conditions related to rice exports, still prescribes unnecessary conditions and bureaucracy.

In a bold move to spur administrative reforms, the Government issued Resolution No. 02 on continuing to perform tasks and solutions to better improve the business climate and national competitiveness from the first day of 2019.

The resolution emphasizes the need to continue to review, abolish, and simplify regulations on business conditions, as well as to implement fully and thoroughly reforms for business conditions made in 2018. 

In particular, ministries and agencies are required to review and propose that the Government abolish and simplify unclear and unfeasible business conditions.

The resolution also requires a full assessment of the real impact on business conditions reforms have had on firms.

Domestic gold soars, still cheaper than global prices

Customers buy gold at a Doji’s store. Vietnamese gold prices are being priced lower than the global prices. — Photo vietnammoi.vn

Domestic gold prices increased sharply on Wednesday morning, in line with gold gains on international markets.

Gold price quotes at Sài Gòn Jewelry Co Ltd (SJC), Việt Nam’s largest gold company, are VNĐ37.07 million (US$1,594) per tael for buying and VNĐ37.27 million per tael for selling, up VNĐ270,000 per tael over Tuesday’s close. (One tael of gold equals 37.8 grammes.)

This is also the highest price in the past one week.

Doji Gold and Gems Group in Hà Nội also raised its gold price by VNĐ240,000 per tael this morning with the selling price quoted at VNĐ37.22 million per tatel.

Other gold businesses made similar moves.

Gold prices at Bảo Tín Minh Châu and Phú Quý jewellery companies also increased between VNĐ150,000 and VNĐ250,000 per tael, depending on gold type.

Thần Tài Phú Quý 9999 gold is quoted at VNĐ36.85 million and VNĐ37.25 million for buying and selling, respectively, while Thăng Long Dragon Gold prices are VNĐ37.04 million and VNĐ37.49 million.

Spot gold in the New York market increased by more than $14, or 1.1 per cent, to $1,341 per ounce on Tuesday, its highest since April 25, 2018. US gold futures rose 0.8 per cent to $1,332.4 per ounce. (One ounce is 1.2 tael)

Gold is trading around $1,343 this morning.

Gold price has gained 4.8 per cent in the last 30 days.

"Gold is still in a bullish mode. Investors are still pricing in a dovish US Federal Reserve," ActivTrades Chief Analyst Carlo Alberto De Casa was quoted as saying on moneycontrol.com.

Gold price has gained 4.8 per cent in the last 30 days and 3.6 per cent so far this year on expectations the Fed will pause its interest rate hikes and better result from trade negotiations between the world’s two largest economies.

Investors have a close watch on the minutes of the Fed’s policy meeting due on February 20 for more guidance on rate increases this year.

In comparison with the domestic price, global gold is being priced VNĐ300,000 higher than SJC’s gold.

This morning, the State Bank of Việt Nam adjusted its benchmark rate for the US dollar down VNĐ2 per dollar. With the exchange rate band of +/-3 per cent, both Vietcombank and Bank for Investment and Development of Việt Nam (BIDV) are quoting USD buying/selling prices are VNĐ23,150 and VNĐ23,250 each. 

PM directs hastening Trung Luong-My Thuan highway construction

Permanent Government members met in Hanoi on February 20 to discuss the acceleration of the Trung Luong-My Thuan highway construction. 

The project is highly significant, connecting the Mekong Delta with Ho Chi Minh City and the southern key economic region. 

According to the Ministry of Transport, the 51km-long, 17km-wide highway will pass through the Mekong Delta province of Tien Giang, costing over 9.6 trillion VND (417 million USD) in the form of build-operate-transfer. The project is scheduled for completion by 2020, but the construction pace is lagging behind schedule. 

At the event, Prime Minister Nguyen Xuan Phuc highlighted the significance of the highway to the development of the Mekong Delta and the country. 

He requested that the progress and quality of the project is ensured, for completion by 2020 as planned. 

The leader agreed that the project will be invested in by the provincial People’s Committee in replace of the ministry. 

Vietnam-Laos trade tops 1 billion USD in 2018

Two-way trade between Laos and Vietnam exceeded 1 billion USD in 2018, up 13 percent annually and surpassing the set target, according to the Lao Laophatthana newspaper. 

The two governments have set the target of a 10 percent rise or more for this year. 

At present, Vietnam ranks third among those countries investing in Laos. Notably, the Xekaman 1 and Xekaman Sanxay hydropower projects were producing and selling electricity to Vietnam, adding revenue to the Lao State budget. 

Additionally, joint work in the development of Vung Ang ports 1, 2, and 3 and the power purchase agreement are also expected to hike bilateral trade. 

Last year, 12 projects making use of assistance funds were put into operation. The two countries’ sectors and localities facilitated meetings to share experience and expand effective, practical collaboration. 

Cooperation mechanisms and policies were also successfully revised in time to suit each country’s realities and international law.

Hoa Binh pledges to remove obstacles facing local firms

Hoa Binh will deploy measures in a timely manner to remove obstacles for investors, prompting investment projects and creating favourable conditions for firms to access capital support, pledged a leader of the northern province.

Hoa Binh presents emulation flags to 11 outstanding enterprises, and certificates of merit to 20 other firms and cooperatives (Source: baohoabinh.com.vn)

Secretary of the Hoa Binh Party Committee Bui Van Tinh made the commitment at a meeting with representatives of more than 200 enterprises, cooperatives and investors in the locality on February 20.

At the meeting, Nguyen Van Than, Chairman of the Vietnam Association of Small and Medium Enterprises, noted that local firms paid over 1.9 trillion VND (81.7 million USD) towards the state budget in 2018, accounting for 78.8 percent of the total budget collection in the province, helping boost Hoa Binh’s GRDP growth to the 19th place among the 63 localities nationwide.

In 2018, the province saw the formation of 420 new companies and more than 110 branches and representative offices of businesses, along with 65 new cooperatives with a combined capital of over 6 trillion VND.

At the same time, Hoa Binh attracted 57 domestically-invested projects worth nearly 13.45 trillion VND, and three foreign-invested with a total capital of 200.24 million USD.

Than proposed that local firms and cooperatives review and reform their management systems, while restructuring capital and business portfolio, creating connection chains, and enhancing management capacity.

On the occasion, Chairman of the People’s Committee of Hoa Binh Nguyen Van Quang presented emulation flags to 11 outstanding enterprises, and certificates of merit to 20 other firms and cooperatives.

Chinese, Korean firms seek investment opportunities in Binh Phuoc

Secretary of Binh Phuoc provincial Party Committee Nguyen Van Loi (fourth from left) welcomes delegation from Food Valley of China 

A delegation from Food Valley of China (FVC) led by former Chinese Ambassador to Vietnam Hu Qianwen made a fact-finding tour to the southern province of Binh Phuoc on February 20 to study the possibility of boosting exports via official channels to China.

Working with the delegation, Secretary of the provincial Party Committee Nguyen Van Loi introduced the delegation to the province’s main agricultural products such as rubber, cashew nuts, pepper, cocoa, mango, durian and orange.

The province has linked many value chains with clean production to ensure quality of the products for export, he added.

Loi voiced his belief that through the working session, the two sides’ enterprises will have better understanding towards long-term cooperation in the time to come.

Hu said that, through the introduction of the Vietnamese Ministry of Agriculture and Rural Development, the delegation chose Binh Phuoc as the first destination to boost trade connectivity.

Speaking of the province’s main products and agricultural strengths, he stated that the delegation will send several experts to Binh Phuoc to study its market and bring more Chinese enterprises to attend the Binh Phuoc’s annual farm produce fair in April.

On the same day, Loi also had a working session with representatives from the Republic of Korea’s Hankuk Carbon Company which is building a factory at the Becamex-Binh Phuoc Industrial Park. The factory is expected to put into operation between June and August.

Highly speaking the capacity of Korean investors, especially in carbon production, Loi hoped that more Korean enterprises would pour capital into Binh Phuoc province.

Binh Phuoc province will create all favourable conditions for investors, he affirmed.

Project on unobserved economy statistics to be launched

Director General of the General Statistics Office (GSO) Nguyen Bich Lam has affirmed that a project on unobserved economy statistics will serve as an important reference for the statistics sector to refine its expertise up to international practices. 

During a press conference in Hanoi on February 20, Lam said the project will help improve the quality of statistics to fully and correctly reflect the socio-economic situation, thus better serving sectors and localities’ socio-economic development planning. 

On February 1, 2019, the Prime Minister signed Decision No.146/QD-TTg approving the project with the aims of fully and comprehensively reflecting the country’s economic scale; improving statistics expertise towards meeting international standards and practices; refining laws, mechanisms, and policies; and improving the efficiency of state management of the economy. 

Nguyen Thi Huong, GSO Deputy General Director, said this year, the office will set out to complete its study of and learn from international experience, determine the scale of the unobserved economy, and select appropriately measured solutions. 

From next year, it will officially begin collect data on the unobserved economy and integrate the data in the country’s gross domestic product (GDP), the GDP of centrally-run cities and provinces, and relevant socio-economic targets.

PM directs hastening Trung Luong-My Thuan highway construction

Permanent Government members met in Hanoi on February 20 to discuss the acceleration of the Trung Luong-My Thuan highway construction. 

The project is highly significant, connecting the Mekong Delta with Ho Chi Minh City and the southern key economic region. 

According to the Ministry of Transport, the 51km-long, 17km-wide highway will pass through the Mekong Delta province of Tien Giang, costing over 9.6 trillion VND (417 million USD) in the form of build-operate-transfer. The project is scheduled for completion by 2020, but the construction pace is lagging behind schedule. 

At the event, Prime Minister Nguyen Xuan Phuc highlighted the significance of the highway to the development of the Mekong Delta and the country. 

He requested that the progress and quality of the project is ensured, for completion by 2020 as planned. 

The leader agreed that the project will be invested in by the provincial People’s Committee in replace of the ministry.

Ha Noi to hold conference on investment, tourism promotion with Japan

The annual Cherry Blossom Festival in Ha Noi is one of the activities promoting investment and tourism between Ha Noi and Japan.— Photo: hanoimoi.com.vn

 Ha Noi will host a conference to promote investment and tourism co-operation between Ha Noi and Japan on March 29, according to the city’s People’s Committee.

This year’s conference is expected to attract representatives from more than 200 businesses, including around 120 delegates from Japan.

During the conference, Ha Noi’s authorities will give an overview of the capital’s investment and tourism co-operation with Japanese partners as well as investment opportunities.

Representatives will hold discussions with Japanese businesses operating in Ha Noi.

The conference was expected to witness the signing of a number of memorandums of co-operation in the investment, trade and tourism sectors, reported the Dau tu (Investment) newspaper.

It is expected to support local businesses operating in the investment and tourism sectors with information about Japanese market demand and direct contacts to expand business co-operation and commodity production.

It will also be a chance to look for experienced and capable investors to call for investment in Ha Noi, contributing to improving urban infrastructure and promoting the socio-economic development of the capital.

Vietnamese representatives will include leaders of ministries and sectors, Ha Noi authorities, the Viet Nam National Administration of Tourism, Vietnam Airlines and associations in investment, trade and tourism operating in Ha Noi.

Sacombank signs up PwC to create asset-liability management framework

PwC Vietnam and Sacombank sign an agreement in HCM City on Tuesday. — Photo courtesy of Sacombank

 Sacombank has hired PwC Vietnam to help upgrade its asset-liability management framework.

This is expected to help the bank manage liquidity risk and interest rate risk by identifying risk thresholds scientifically, clearly and optimally, build a liquidity risk management framework to maintain adequate liquidity ensuring the bank operates safely and continuously in all possible situations and developing models to improve the quality of asset-liability management.

Ha Van Trung, the bank’s deputy general director and director of finance division, and director of the asset-liability management project, said: “Sacombank is one of 10 banks selected by the State Bank of Viet Nam to pilot risk management in line with Basel II norms.

“Besides, Sacombank is always aware and constantly researches and applies new solutions to improve management capacity in general and risk management in particular.”

Dinh Thi Hong Hanh, deputy general director of PwC Vietnam, said asset-liability management is one of the core governance frameworks of banking operations, with the nature of banking operations and assets and liabilities constantly changing, creating risks in terms of liquidity and interest.

The project would help the bank create a comprehensive liquidity risk and interest rate risk management framework in line with Basel and SBV regulations.

The task is expected to be completed late in the third quarter of this year. 

TCH plans to issue 1.2 million convertible corporate bonds

The financial services and investment firm Hoang Huy Group plans to issue 1.2 million corporate bonds, worth VND1.2 trillion (US$51.5 million), to raise capital for future business projects. — Photo vietnamfinance.vn

 Hoang Huy Investment Financial Services JSC (TCH) plans to issue VND1.2 trillion (US$51.5 million) worth of convertible corporate bonds in 2019 at the par value of VND1 million ($43) for each bond.

The bonds will mature in three years from the issuance date and the bond yield rate is set at maximum 7 per cent per year.

Bondholders are able to trade their assets in 12 months from the issuance date. The convertible price for the bonds is adjusted when the company issues additional shares, split, merge and classify shares.

The bond issuance will help TCH increase its capital to fund its business activities and investment projects, TCH said in a statement.

In addition, TCH also plans to curb its foreign capital limit to 3.9 per cent from current 49 per cent, which is expected to keep foreign ownership at the company always below 49 per cent after the corporate bonds are issued.

The two plans will be proposed at the firm’s coming extraordinary shareholder meeting, which is scheduled to take place on February 23.

The list of attending shareholders was approved on November 14, 2018.

TCH is listing on the Ho Chi Minh Stock Exchange with code TCH. The firm shares gained 2.3 per cent to end Tuesday at VND22,500 ($0.96) per share. 

G-bond yields hit seven-month low

Investors were most interested in 10-year and 15-year bonds last week. 

 The yield of Government bonds (G-bond) has continued to decline and hit seven-month lows as the US Federal Reserve (Fed) seems unlikely to hike interest rates and the domestic monetary market has shown positive movements.

Reports on the G-bond market by Saigon Securities Inc showed the local bond market had a very active week ending February 15, with the total bond volume registered to buy four times higher than that offered.

On the primary market, investors paid the most interest on 10-year and 15-year bonds, buying all bonds worth up to VND9 trillion (US$386 million) offered for auction last week.

The winning yields of bonds at all terms continued to drop compared to the previous session, with seven-year bonds seeing the largest reduction of 12 basis points. The declining rates for 10-year, 15-year and 30-year bonds were 10, 9 and 1 basis points, respectively.

The sharp decline of the G-bond yield was also seen in the secondary market with a decrease of 9.63 basis points for one-year to 15-year bonds, in which short-term bonds posted the highest decline. Specifically, the yields for one-year, three-year, five-year, ten-year and 15-year bonds were reduced to 2.61, 3.17, 3.57, 4.63 and 5.0 per cent, respectively.

“The yield of G-bonds has declined strongly since the beginning of 2019 and now returns to the level of seven months ago,” SSI reported, adding investors have recently increased bond purchases in both primary and secondary markets with an expectation of continued decline in yields when there is no longer pressure of Fed interest rate hikes and the domestic monetary market is witnessing positive movements.

Market liquidity in the bond market also continuously improved last week, with total transaction volume reaching VND33 trillion, an increase of 33 per cent compared to the week before the Lunar New Year holiday.

Foreign investors continued to net buy VND724 billion during the week, of which they poured the most in three-year and five-year bonds with VND423 billion. The investors meanwhile net sold VND382 billion for 25-year and 30-year bonds.

MPI confirmed as government general advisory agency

The prime minister affirmed that the MPI (Ministry of Planning and Investment) is the head of the government’s general advisory agency.

This morning (February 19), Prime Minister Nguyen Xuan Phuc had a meeting with the MPI, the PM’s first meeting with a ministry or government agency in the Lunar New Year.

Three years ago, at the beginning of his tenure, the PM confirmed the key role of the MPI in providing general advisory on the country’s strategies, master plans, and plans for national socioeconomic development.

After three years of implementing the PM’s directions, Minister Nguyen Chi Dung proudly reported on the achievements and efforts of the MPI and its whole apparatus to the PM.

Minister Dung confirmed that 2019 will be a time for breakthroughs in the implementation of the Party and the National Assembly’s five-year socio-economic development plans, under which the MPI has been assigned numerous tasks and needs to mobilise the utmost of its officials’ abilities.

According to Minister Dung, in 2019 and the years ahead, the MPI should focus on breakthrough development in the production force, accelerating the process of economic restructuring, as well as improving growth quality, productivity, competitiveness, and the implementation of breakthroughs in three strategic areas (developing infrastructure, human resources, and perfecting the institutional system).

It is necessary to create national innovation centres, accelerate growth, improve the performance of governance, and simplify the apparatus of the political system in line with the institution of a modern market economy and international integration.

Besides, the MPI will provide general advice for the development of the private sector, seizing opportunities to attract foreign direct investment (FDI) capital, improving the performance of state-owned enterprises, mobilising private resources, and overcoming difficulties in public investment.

Speaking at the meeting, the PM spoke highly of the MPI’s role in improving the business and investment environment, its input to the government’s resolution on the action plan to reduce costs for enterprises and establish a plan to supervise unobserved economic sectors.

The MPI has made crucial contributions to attracting foreign investment to Vietnam, he said, adding that Forbes has recently named Vietnam as the hottest investment destination in Asia.

He asked the MPI to provide consultancy for effective strategies to take advantage of the nation’s potentials as well as propose measures to cope with the risks of being left behind and jumping into the middle income trap.

He referred to issues which limit development, including the gap between the rich and the poor, the aging population, as well as climatic and environmental challenges.

The government leader requested the ministry to offer consultancy to create breakthroughs and achieve socio-economic development goals in 2019 and the upcoming years.

He requested the MPI to issue mechanisms and policies to facilitate breakthroughs for the nation in the next decades by promoting the establishment of an innovation economy, encouraging startups, and increasing trust among the people and enterprises.

PM Phuc stressed the need for Vietnam to avoid the middle-income trap or being stuck as a source of cheap labour, low value processing, and backward technology. Additionally, the country aims to be listed among the top four ASEAN nations and approach the Organization for Economic Co-operation and Development (OECD) standards on business environment.

He asked the MPI to propose specific policies and measures to make the private sector a key force for development, especially small- and medium-sized enterprises, the household economy, and the co-operative economy.

The ministry should join hands with relevant ministries and agencies to uphold and mobilise all resources to forge strategic goals and orientations and focus on reforms and innovation with a view of establishing a more effective institution.

At the event, the PM referred to the preparations of establishing a socio-economic development strategy for 2021-2030 and the 2015-2021 five-year plan in the creation of which the MPI plays a crucial role.