HCM City works to solve difficulties facing property enterprises

The People’s Committee of Ho Chi Minh City held a conference on November 7 to help local real estate enterprises solve difficulties.

Le Hoang Chau, President of the Ho Chi Minh City Real Estate Association, said the local property market faces several bottlenecks affecting enterprises’ business and investment activities, including approval of investment intentions, ground clearance, land use feess, project acquisition, using land funds to pay for Build-Transfer (BT) contracts, and credit and financial procedure issues.

The slow settlement of these bottlenecks is one reason for the significant decrease in the supply of real estate products in 2018, which is forecast to continue reducing in 2019, Chau affirmed.

At the event, local enterprises shared difficulties facing them during project implementation.

Chairman of the municipal People’s Committee Nguyen Thanh Phong admitted that there remain several difficulties facing local property firms, including overlaps of legal regulations, credit crunch and long inspections by the Government Inspectorate.

Regarding the granting of certificates on land use rights, Phong assigned the municipal Department of Natural Resources and Environment to pay more attention to this matter.

He said that Vice Chairman of the local People’s Committee Tran Vinh Tuyen and Director of Construction Department Tran Trong Tuan are slated to chair monthly meetings with firms to help them solve difficulties as soon as possible.

Japan’s Sumitomo Corporation, in collaboration with the Thang Long Industrial Park (Vinh Phuc) Corporation, inaugurated the first phase of its third Thang Long Industrial Park (TLIP III) in Thien Ke commune, Binh Xuyen district, the northern province of Vinh Phuc on November 8.

Technical infrastructure has been completed in the first phase, including wall, transport and water supply and drainage systems, among others since the industrial park’s ground-breaking in September 2017.

The 213-hectare park has drawn eight Japanese investors so far, and it is waiting for a huge wave of foreign capital. When operational, the park is expected to attract 79 Japanese investments and create jobs for around 30,000 local labourers. It prioritises projects in non-polluting industries, supporting industry, spare parts production in the auto and motorcycle sector, and precision engineering, among others.

Speaking at the inauguration ceremony, Chairman of the provincial People’s Committee Nguyen Van Tri affirmed that the TLIP III opens up a new phase in the province’s industrial development and investment attraction.

He ordered Sumitomo and the Thang Long Industrial Park (Vinh Phuc) Corporation to carry out the second phase as soon as possible. Also, he expressed his hope that the enterprises will join hands with local authorities to ensure social welfare, protect the environment, and build a strong business association in the province.

Vinh Phuc will continue support for investors from Japan, he added.

Earlier, Sumitomo built the TLIP I and II in Hanoi and Hung Yen province.

Jewelery exhibitions take place in Ho Chi Minh City

The 27th Vietnam International Jewelery Fair – VIJF 2018 opened in Ho Chi Minh City’s Phu Tho Exhibition Centre on November 8.

The five-day fair sees 240 pavilions displaying jewelery products, and jewelery making machinery and equipment. 

Besides, international jewelery brands from Italy, Turkey, Thailand, Sri Lanka, Poland, Cambodia and China are on the display along with domestic brands like SJC, DOJI, and Phuc Loc.

The fair is divided into sections to well serve visitors and customers, including areas for domestic and international jewelery, diamond and gems selling, machinery, equipment and technology in the industry, after-sales and warranty services, and reception, and a space for businesses.

Dao Cong Thang, head of the fair’s organising board and Deputy Director of the Saigon Jewelry Company Limited (SJC), said the VIJF has been organised in 26 consecutive years, thus becoming a traditional festival of the sector and a destination for product promotion and partnership formation.

The same day, the Phu Nhuan Jewelry Joint Stock Company (PNJ) launched the biggest-ever jewelry week in HCM City’s Saigon Centre, introducing about 90 works from three new collections.

Within the event’s framework, PNJ also introduces its 17 masterpices on ao dai (traditional long dress).

On the occasion, PNJ and Swarovski announced their cooperation with the introduction of the sole product PNJ Suncut, marking 30 years of the formation and development of PNJ. 

The event will run through November 11. 

Auto support industry needs to take development initiative     

The domestic automobile parts industry has failed to reach the set target despite support from the Government, said Nguyen Thi Tue Anh, deputy director of the Central Institute for Economic Management (CIEM).

Speaking at a seminar on policies, barriers and solutions to developing the industry in Ha Noi on Tuesday, Anh said the industry still had a low localisation rate, or rate of local part supply.

She said Viet Nam needed to promote the development of support industries to compete with other countries in the region.

"It is important to have policy research related to the automotive and automotive support industries to promote the use of domestic automobile parts," said Anh.

Viet Nam has 358 automobile-related manufacturing enterprises, including 50 auto assembly businesses, 45 car chassis and body manufacturers and 214 auto part producers.

The number of auto part producers is reportedly much lower than in Malaysia and Thailand, which have 385 units and 2,500 units respectively.

The industry produces a number of simple parts such as components for chassis, trunks, cabinets, car doors, tires and tubes, radiators, brake lines, electrical wires and wheel rims. Vehicles with nine seats or fewer typically have low localisation rates.

According to Luong Duc Toan, an official from the Ministry of Industry and Trade’s Department of Industry, firms only achieved high localisation rates in the production of trucks and buses of 10 seats or more. Locally manufactured special-purpose vehicles had a local parts rate between 45 and 55 per cent.

He said the parts were mainly produced and imported by enterprises funded by foreign direct investment (FDI). More than 90 per cent of all part suppliers in Viet Nam were FDI firms.

Deputy General Director of Toyota Motor Vietnam (TMV) Shinjiro Kajikawa said the Vietnamese automobile market had not had stable regulations, leaving investors hesitant and keeping domestic production low.

TMV’s output in Viet Nam is much lower than in other ASEAN countries, according to Kajikawa.

He said market fluctuations and low output kept the localisation rate low and limited the network of parts suppliers. The cost of making automobiles in Viet Nam was 10-20 per cent higher than production costs of imported cars from other ASEAN countries.

Toan said market capacity was limited by auto assemblers and many different models, which makes it difficult for automakers and part producers to invest in developing production. Part suppliers also found it impossible to access the automobile production chain in foreign countries.

Kajikawa said the auto industry could not develop without the growth of the market, domestic assembly, manufacturing and support industries. The domestic support industry’s parts need to be more competitive in quality, cost and delivery.

In 2017, Viet Nam imported nearly US$3.17 billion of parts for automobile production. Exports of components and spare parts reached $4.4 billion.

About 300,000 vehicles were sold, making up about different150 models. Some of the best selling cars were from Toyota Motor Vietnam, Truong Hai Auto Corporation and Thanh Cong Hyundai Company. 

National Assembly debates automobile prices amidst tariff cuts

In a question sent to the Minister of Industry and Trade Tran Tuan Anh at the National Assembly in Ha Noi yesterday, Deputy Cao Duc Thuong from the northern province of Phu Tho expressed concern about the loss of auto import tariffs when the rate was lowered to zero for ASEAN countries.

Thuong quoted statistics from the General Department of Vietnam Customs showing that about 32,000 cars had been imported to Viet Nam since early this year, 90 per cent of which came from within ASEAN. Although the import tariff dropped from 30 per cent to zero per cent, the price of cars imported from ASEAN countries was not reduced, and was even higher for several models.

“If this situation continues, the State will lose tax revenue while consumers will also lose,” said Thuong. “Only auto importers benefit. How do you explain this? Who will be responsible?"

Answering the delegate, Minister Anh said the import tariff on auto products was zero per cent under the ASEAN Free Trade Area (AFTA) Agreement signed between Viet Nam and ASEAN. Viet Nam plans to sign and implement other agreements including CPTPP and EVFTA, which will continue to reduce tariff barriers.

Anh said besides opening up the market to automobiles, AFTA products and some European imports, the country will work to increase exports. Existing incentives and safeguard policies have helped domestic automobile companies and foreign investors develop Viet Nam’s automobile brand.

"In addition to tax cuts, there are conditions to raise other tax revenues from businesses and other sources to the State budget,” said Anh. “This will help Viet Nam gain balance for entering into FTAs with other countries, including ASEAN countries.”

Thuong reiterated that in the past year, taxes on cars imported from ASEAN countries decreased from 30 per cent to zero per cent. Voters expected to enjoy 30 per cent lower prices; however, consumers saw prices rise or stay the same.

NA chairwoman Nguyen Thi Kim Ngan requested the ministers of Industry and Trade and Finance reply to the deputies in writing in the coming time.

Vinfast launches new e-scooter     

Automaker VinFast on Saturday launched its first e-scooter model at the opening ceremony of its factory in the northern city of Hai Phong.

The company also revealed its comprehensive e-scooter ecosystem for the factory that meets international standards and demands of less noise and air pollution.

The first e-scooter model, named “Klara”, was a combination of elegance, fashion, efficiency, good performance and smart features, Vinfast said in its statement.

Designed for the domestic market only, the new e-scooter product would suit Vietnamese drivers and traffic and environmental conditions.

The new e-scooter can travel without producing noise and emissions, and it could help save a lot of money compared to other products.

It is also equipped with modern features such as 3G internet, GPS, remote locking and trip data synchronisation.

The new model has two versions that use either lithium-ion battery or lead-acid batteries, and is able to travel for 80 kilometres on a single charge.

Vinfast also plans to launch four new e-scooter models by the end of 2019, and later three for students.

Vinfast’s e-scooter factory covers an area of 6.4 hectares with its first-phase capacity of 250,000 scooters each year. The capacity designed for the second phase is 500,000 scooters each year and could reach one million.

It targeted to become Southeast Asia’s most modern e-scooter factory, Vinfast said. 

Vinamilk reports higher revenue, lower profit in Q3     

The Vietnam Dairy Products Joint Stock Company (Vinamilk) has reported its Q3 combined revenue rose 3.3 per cent year-on-year to VND13.73 trillion (US$610.2 million).

However, pre-tax profit was down 5.9 per cent to more than VND3 trillion as costs increased by 14 per cent year-on-year to VND3.4 trillion.

In the first nine months, Vinamilk recorded more than VND39.5 trillion in revenue, up 2 per cent compared to the same period last year.

The main revenue source for the company was the domestic market, where sales reached VND33.9 trillion. Sale revenue from overseas markets was VND5.7 trillion, about the same as last year’s figure.

However, revenue growth could not offset rising production costs, so combined profit fell slightly to VND18.4 trillion in the first nine months of 2018 from last year’s VND18.6 trillion.

Costs in the first three quarters rose 6.8 per to VND8.9 trillion, resulting in nine-month pre-tax profit of VND9.37 trillion, down by VND800 billion from last year.

Poor quarterly earnings have pulled the share price of Vinamilk, listed on the Ho Chi Minh Stock Exchange as VNM, down since early this month.

Shares have lost 15.2 per cent in value since October 4 to end Wednesday at VND116,100 ($5.16). 

Food giant Vissan to increase supply for Tet

Vissan Joint Stock Company, the country’s leading food producer, will increase supply by 15-20 per cent for Tet (Lunar New Year) in early 2019, including 3,200 tonnes of fresh meat and 2,800 tonnes of processed foods.

The company started making production plans for the year’s biggest holiday a few months ago.

Speaking at a ceremony to launch new products in HCM City on Tuesday, Nguyen Ngoc An, general director of Vissan, said sales of processed foods went up by 20 per cent in the first 10 months of the year.

This has been thanks to regular market research, which enables it to come up with new products that meet customers’ demand and make packaging more eye-catching, he said.

Packaging designs have been improved for seven processed product lines: canned food, pasteurised sausage, traditional sausage, meat paste, ham, frozen foods, and dried processed foods, he said.

Many kinds of traditional sausage and meat paste products to be introduced during Tet would have completely new packaging, he said.

Every year the company launches around 10 new products, and this year it has introduced 13 new products, including dried meat floss with seaweed, dried pork skin, fish balls with cheese, sausage with salted egg, meal combos, liver pate, fish with tomato sauce, special seafood spring roll, and meat seasoning, he added. 

BIDV to sell shares to South Korea’s KEB Hana Bank     

The Bank for Investment and Development of Vietnam (BIDV) expects to issue 603 million new shares to South Korea’s KEB Hana Bank in a move to raise its charter capital to VND40.22 trillion (US$1.72 billion).

In a document released on Wednesday seeking approval from the bank’s shareholders, Viet Nam’s second biggest bank by market value said the new shares will be issued in 2018 or 2019.

The new shares under this private placement will be transfer restricted for five years after Hana Bank becomes BIDV’s shareholder.

At the current price, the planned BIDV share sale is worth $735 million. BIDV intends to use the new capital for lending, investment and expanding its network.

Shareholders will have until November 15 to vote on the share sale.

After the private placement, foreign investors will hold 15 per cent of the bank’s charter capital. According to regulations, foreign ownership ratio at Vietnamese banks is capped at 30 per cent of charter capital.

The State currently owns 95.28 per cent of BIDV. After the planned share sale to KEB Hana, State ownership will be reduced to 80.99 per cent.

The private placement was among BIDV’s proposals shared at the bank’s annual general shareholder meeting in April to increase its charter capital by 28 per cent to VND43.65 trillion this year.

BIDV will issue 965 million ordinary shares with a face value of VND10,000 per share. More than 171 million of these shares will be sold to the public through an initial public offering or private placement, 603.3 million will be sold to foreign strategic investors under private placement and over 171 million will be sold under the Employee Stock Ownership Plan (ESOP).

The increase in charter capital is part of BIDV’s plan to increase its equity to meet the minimum capital adequacy requirement of eight per cent set by the State Bank of Viet Nam for 2020, which is aligned with Basel II.

The move is also expected to help the bank improve the credit ratings of international institutions, enhance prestige in its business operations and improve its capacity and competitiveness in domestic and international markets.

The bank has committed to use the added capital in its business areas with reasonable guidance to ensure it is used efficiently to maximise benefits for shareholders.

BIDV reported a pre-tax profit of more than VND7.25 trillion in the first nine months of the year – up 30.6 per cent over the same period last year – meeting 78 per cent of its annual target. By the end of September, the bank’s total assets rose by 12.67 per cent to over VND1,268 trillion.

The bank targets pre-tax profit of VND9.3 trillion this year, up 7 per cent from 2017, with bad debt under 2 per cent of total loan value.

BIDV shares closed at VND30,400 on Wednesday, up 3.1 per cent from the previous day. 

Yeah1 Group reports surge in revenue, profit     

Yeah1 Group (YEG), Viet Nam’s first listed media company, announced growth was strong in the third quarter, including in foreign markets.

Revenues during the quarter jumped by 111 per cent year-on-year to VND378.5 billion (US$16.24 million).

Net profit was VND44.89 billion ($2.71 million), a 187 per cent rise.

In third quarter, revenues were worth over VND1 trillion or ($44.41 million), a 110 per cent increase.

The company said revenues from traditional media saw growth of 50.9 per cent in the third quarter as a result of higher inventory sales and a number of strategic agency contracts with larger TV channels in Viet Nam.

Revenue from digital media was up 179.3 per cent on the back of a larger number of views, higher proportion of views and continued optimisation of existing and new premium contents.

During the quarter the company announced the launches of the Universal Music TV Channel in Viet Nam and SGO48, an idol group in partnership with AKS Japan.

Founded in 2006 Yeah1 Group has enjoyed phenomenal success across verticals and media channels to become a top-ranked multi-channel network in Asia.

The company is now expanding its digital arm into the region and beyond. It operates a range of divisions, leveraging its massive community to build its movie, television, digital and publishing businesses.

It listed on the HCM Stock Exchange last June. 

Hoang Anh Gia Lai’s nine-month profit triples     

Hoang Anh Gia Lai Joint Stock Company (HAG) has announced its consolidated third-quarter earnings, with post-tax profits hitting nearly VND403.2 billion (US$17.3 million), 3.3 times higher than in the same period last year.

This is an impressive number on the back of the company’s loss of VND3.7 billion in the second quarter of this year.

In the third quarter, HAG’s net revenue reached VND1.52 trillion, up 20.8 per cent from the third quarter last year. Sales from fruits accounted for nearly 60.8 per cent.

Capital cost declined in most segments, helping lift the company’s gross profit to VND740 billion, double that of the same period in 2017. Gross margin recorded strong growth of 56.7 per cent, up from 23.3 per cent.

Its financial income also increased sharply from VND294 billion in the last period to VND740 billion in the third quarter, thanks to a profit of VND516 billion from the sale of shares of Hoang Anh Construction and Development House JSC.

Ending in September, HAG posted a total revenue of VND4.4 trillion, completing 71.3 per cent of the yearly target. Profit before tax reached VND519.8 billion, exceeding the yearly target by 160 per cent.

However, its financial expenses increased 33.6 per cent to VND442.7 billion, with interest expense making up VND407.5 billion of the total. Cost of sales and corporate management also rose 53 per cent and 21 per cent, respectively.

In the first nine months of the year, HAG’s interest expense amounted to VND2.85 trillion on total liabilities of over VND31.3 trillion, up 33.4 per cent over the beginning of the year.

Other expenses also soared to VND785.2 billion, nearly four times higher than the same period last year. Most of these costs were not clearly explained.

HNG posts losses

One of HAG’s main subsidiaries, Hoang Anh Gia Lai Agricultural Joint Stock Company (HNG), unexpectedly posted a loss of VND227.5 billion in the third quarter despite seeing revenue rise 14 per cent to over VND1 trillion.

For the period ending in September, the company incurred a loss of VND174 billion, a poor result compared to a profit of VND953 billion in the same period of last year.

The loss was caused by rising expenses while financial and other incomes declined substantially.

Shares of both companies rose on Friday morning. HNG climbed nearly 4 per cent to VND14,700 ($0.63) per share while shares of HAG rose nearly 2 per cent to VND5,180 ($0.22) per share. — 

Batdongsan.com.vn joins Asia’s largest property technology group     

Singapore-based property technology group PropertyGuru has increased its investment in batdongsan.com.vn to hold a controlling stake in Viet Nam’s leading property portal, the two companies announced at a press conference in Ha Noi on Wednesday.

Accordingly, batdongsan.com.vn is now a fully consolidated member of PropertyGuru.

No financial details of the deal were disclosed.

PropertyGuru made its first strategic investment in batdongsan.com.vn in 2016 when the property portal was ranked first in South East Asia by traffic.

Batdongsan.com.vn had over four million monthly property seekers generating 70 million page views together with over one million new property listings added every month, statistics showed.

As a member of PropertyGuru, batdongsan.com.vn could open up regional opportunities for Vietnamese property seekers, investors, agents and developers to have easier access to PropertyGuru’s other markets including Singapore, Malaysia, Thailand and Indonesia.

Hari V. Krishnan, chief executive officer of PropertyGuru Group, said: “We look forward to making our regional expertise fully available to Vietnamese property seekers as well as to help the country’s real estate industry benefit from ASEAN integration.”

PropertyGuru would bring leading technology solutions to batdongsan.com.vn to deliver a quality property search experience to Vietnamese property buyers and business efficiency.

Le Xuan Truong, founder and managing director of batdongsan.com.vn: said: “Batdongsan.com.vn will be upgraded towards more professional and friendly services while accelerating the development of quality content in order to provide users and the market with exact and practical information."

Truong will continue to lead batdongsan.com.vn and work closely with PropertyGuru.

PropertyGuru owns property portals including PropertyGuru in Singapore and Malaysia, DDProperty.com in Thailand, Rumah.com in Indonesia. It has over 25 million property seekers every month.

The group also runs Asia’s most prestigious property awards brand “Asia Property Awards” in 11 key markets.

OneHub Saigon’s first tenants move in     

Ascendas-Singbridge Group and its joint venture partner Saigon Bund Capital Partners on November 1 handed over the first office tower at the OneHub Saigon in District 9 to its first tenants, IKEA Purchasing & Logistics Southeast Asia and AAH Corporation.

The six-storey tower, which has a total lettable area of 10,199sq.m, has attracted strong leasing interest from companies in the information technology, business process outsourcing, finance, and back office outsourcing sectors, according to the developers.

Kim Lindell, regional manager, IKEA Purchasing & Logistics Southeast Asia, said: “IKEA wants to have a positive impact on people and the planet. Moving our office to a LEED (Leadership in Energy and Environmental Design) certified building at OneHub Saigon is aligned with this strategy.” LEED is a global green building certificate.

Nguyen Van Hung, board member, AAH Corporation, said his company decided to move its office to OneHub Saigon since “we would like our colleagues to experience a brand-new working environment where collaboration and creativity are promoted. The location is also convenient for us to commute to our representative office in CBD.”

The 12-hectare OneHub Saigon has seven office towers, a mixed-use commercial block, an education centre, and recreational amenities with sustainable features.

EZ Land signs up CBRE to manage HCM City apartment project     

The EZ Land Development & Investment JSC on Tuesday appointed CBRE as the operations and management agent for its HausNeo apartment project in HCM City’s District 9.

The project, spread over more than 8,000sq.m, will have two 18-storey blocks with 560 apartments and eight shophouses.

It has obtained EDGE certification from SGS Vietnam for meeting stringent criteria on energy and water utilisation.

Units in the project are expected to be handed over to buyers in the third quarter of 2019.

CBRE is the global leader in asset services, with over 350 million square meters of commercial, retail, residential, and industrial real estate under management.

In Viet Nam it manages 1.3 million square metres comprising 700,000sq.m of commercial/retail space and 600,000sq.m of residential properties. 

HCM City to auction 14,000 apartments     

HCM City has decided to continue auctioning 14,000 vacant apartments at resettlement sites following the successful sale of 200 in Phu My in District 7.

Pham Van Sy, director of the Property Auction Service Centre at the Department of Justice, said Duc Khai Company was the main developer of the Phu My project.

It was completed in 2014 with over 1,000 units. The city earmarked 270 apartments for moving in people affected by public projects.

The successful auction of 200 apartments fetched VND224 billion (US$9,6 billion) for three companies, Duc Khai, Thinh Phat Company and another company from the southern province of Long An.

The city plans to next auction 3,790 apartments in the Thu Thiem New Urban Area in District 2, Sy said.

Earlier, in February this year, they had once gone under the hammer at VND9.1 trillion ($392,287) but attracted no bidders, but would now have a reserve price of VND9.936 trillion ($428,326), he said.

After this, the city plans to sell another 1,000 apartments in Binh Chanh District’s Vinh Loc B Commune in a project unsold for years.

The department said policy changes and failure to accurately determine demand have resulted in so many unsold apartments.

The large sums involved have made many firms reluctant to participate in the auction, it added.

To address this problem, the construction department has urged the city People’s Committee to use public funds to buy some of the apartments and redesignate some of the resettlement apartments as commercial apartments to encourage firms to buy them.

Property analysts have said it is necessary to change certain policies related to financial conditions and deposits to attract buyers. 

Novaland revenues jump 53 per cent but fall short of ambitious target     

Property developer Novaland Group said it expects revenues for this year to jump by 53 per cent to VND17.8 trillion, but fall short of the target it has set.

It said it is likely to achieve only 82 per cent of the target, attributing it to difficulties it faces in fulfilling legal procedures before handing over houses to buyers.

It said due to these difficulties VND6.4 trillion would not be added to its revenues this year and would go into the books in the next few quarters.

This year it has handed over 5,000 units to buyers in The Sun Avenue in District 2, Wilton Tower in Bình Thạnh District, Golden Mansion, Orchard Parkview and Newton in Phu Nhuan District, Botanica Premier in Tan Binh District, and Sunrise Riverside in District 7.

It said it would continue to focus on luxury housing.

It recently launched an ultra-luxury apartment project called The Grand Manhattan in District 1 at a price of around US$6,000 per square metre.

It would have around 1,000 units.

The company revealed plans to invest in tourism property projects in places with huge potential like Cần Thơ, Bà Rịa – Vũng Tàu, Phan Thiết, and Cam Ranh.

In Mui Ne – Phan Thiet, the company is launching the NovaHills Mui Ne Resort & Villas.

It will have 600 villas facing the ocean and be managed by foreign operators.

Novaland has developed around 40 house, condo and villa projects, all in HCM City market. 

Fintech the key to a modern digital banking strategy     

Fintech is gaining popularity around the world as Southeast Asia, including Viet Nam, becomes a target for fintech’s global expansion.

On the cusp of the Fourth Industrial Revolution, with the rapid development of Blockchain technology, Artificial Intelligence (AI), the Internet of Things and Big Data, financial technology (fintech) has created a groundbreaking change in the financial industry, introducing a whole new shopping experience to consumers.

Fintech has evolved into a global wave. Many fintech companies have developed new business models and new products, bringing greater access to financial services.

The global fintech sector raised US$57.9 billion in the first half of 2018, surpassing last year’s record number. Investment in fintech companies in Asia hit $16.8 billion, only behind Europe’s $26 billion, according to data compiled by Traxcn, the US’s largest startup platform.

After achieving success domestically, a number of large fintech companies (primarily from China, Japan and South Korea) have set their sights on countries within Southeast Asia.

With a large population, relatively similar macroeconomics and large underbanked populations, the region is seen as a stepping stone to further global expansion.

According to the ASEAN Fintech Census 2018, 87 per cent of responding companies said they have plans to expand beyond their current markets.

Speaking at the Korea ICT Day 2018 in Ha Noi this week, Nguyen Toan Thang, general secretary of the Viet Nam Banks’ Association said Việt Nam is a potential market for fintech development given its big population and the high percentage of people accessing the internet and using mobile phones.

"According to the latest statistics, about 46 million people have access to fintech and this number will continue to increase rapidly in the future,” Thang said. “Viet Nam is a potential market for both local and international fintech businesses."

He emphasised effectively employing fintech was key for banks to maintain and improve their competitive edge in the transition to digital banking.

One in three fintech companies are engaged in the payment sector, which grows to more than 54 per cent if money transfer or remittance is included, according to the ASEAN Fintech Census 2018.

The development of fintech is in line with the Government’s push towards national digitisation and its promotion of non-cash payments.

According to the Viet Nam’s banking sector, the Government aims to reduce the ratio of cash to less than 10 per cent of total payments and less than eight per cent by 2025.

Blockchain technology

Blockchain is the digital and decentralised ledger technology that records all transactions without the need for a financial intermediary like a bank.

With outstanding advantages in transparency, reduced transaction costs, faster transactions, traceability and security, this technology is expected to create a wave of startups in the finance and banking sector, which was previously known to require a lot of capital to penetrate, said Nguyen Dang Trieu Thien, CEO of LINA Network, which provides blockchain solutions to a wide range of business sectors.

“The application of blockchain technology in fintech covers most of the financial sector including deposits, settlements, money transfers, insurance, consumer lending, trade finance, risk management, forex and securities transactions,” Thien said.

“Besides supply chain management applications, LINA Network is trying to build a platform that supports settlement and transactions between parties using blockchain to increase transparency,” he said.

The company is cooperating with foreign partners, expanding to ASEAN markets in Laos and Thailand and moving to other Asian markets such as Japan and South Korea.

At the Korea ICT Day 2018, the Fintech Centre Korea signed memoranda of understanding with four Vietnamese institutions including Vietnam Fintech Club, Southern Blockchain Research Institute, Viet Nam Internet Association and Vietnam Silicon Valley.

PV GAS and Alaska Gasline boost co-operation on LNG     

PV GAS and Alaska Gasline Development Corporation (AGDC) signed a Letter of Intent (LOI) to provide PV Gas with liquefied natural gas (LNG) from the Alaska LNG project.

The LOI was signed during a working visit of a Vietnamese delegation, including representatives of the Ministry of Industry and Trade and PV Gas, to Alaska from October 18 to 24.

The visit of the Vietnamese mission and the agreement mark increased co-operation between the two sides in supplying LNG for import projects at the most competitive prices. This also opens up new opportunities for PV GAS to develop the market and expand co-operation with potential partners in the LNG sector.

AGDC is a subsidiary of Alaska operating in the financing, construction and development of gas projects.

The Alaska LNG project has an estimated investment capital of about US$43 billion. A Memorandum of Understanding between PV GAS and AGDC was signed on November 12, 2017 in the presence of late President Tran Dai Quang and US President Donald Trump.

The project includes a gas processing plant with an average capacity of 3.5 billion cubic feet per day and a natural gas pipeline of approximately 1,300 km for a combined LNG production capacity of 20 million tonnes per year.

At the meeting with Alaskan leaders, Governor Bill Walker introduced the Vietnamese delegation the State’s gas potential.

Governor Walker said the Alaska LNG project had received special support from the local authorities and people.

Deputy Minister of Industry and Trade Dang Hoang An informed the Governor about Viet Nam’s socio-economic situation in 2017-18 as well as incentives to attract investment of the Vietnamese Government in energy.

He expected the two sides to create favourable conditions for businesses to seek opportunities and promote co-operation in the future.

At the meeting, the two sides agreed to support each other’s businesses in developing energy projects. They agreed to focus on LNG projects.

In addition, AGDC expressed its desire to invest in LNG infrastructure in Viet Nam to foster closer co-operation between the parties. 

Enterprise in the new economic era of transforming from traditional to digital economy must choose sustainable development of significant breakthrough to reach outstanding level of business scale and effectiveness, a seminar heard in HCM City on Friday.

“Company chiefs and managers should clearly understand the nature of the economy in the technologising era,” Dang Ngoc Minh, editor-in-chief of the Nhip Cau Dau Tu (Investment Bridge) magazine said in his opening speech at Economy 4.0: from Evolution to Revolution.

“From that, better development trends will emerge, enterprise profits will maximise and contribute to national economic strength.”

Tran Dinh Thien, director of the Viet Nam Institute for Economics, said: “The private sector has played a very important role in Viet Nam’s economy, and if the private economy had received attention since the beginning of doi moi 30 years ago, Viet Nam’s economy would have seen remarkable change.”

He quoted statistics for the last 30 years to show the private sector only contributes around 41 per cent of GDP, while State-owned enterprises account for the rest.

“An economy which depends on State-owned enterprises and households cannot be strong and must change.

“The domestic private sector, though still weak, has started to move forward as the national economy is transforming from natural resource exploitation to processing.”

The Vietnamese business environment has become more attractive, he said.

According to the 2017 World Investment Report, after APEC 21 Viet Nam was the Asian leader in attracting foreign investment, and according to a Thornton report in April the country ranked top in Southeast Asia.

Thien said: “Viet Nam has good development trends with active integration through CP-TPP, VN-EU FTA and AEC, a stable economy, good growth potential, increasing foreign investment, and effective administrative reform.

“However, we are restructuring institution very slowly, have too many procedures, weak enterprises, economic growth too dependent on foreign investment.

“The economy has achieved good results but there is no great belief.”

He pointed out that Viet Nam was facing serious problems with regard to land, government spending and equitisation of State-owned enterprises.

“We are stuck on three key issues: infrastructure, human resources and institutions.”

He said the country had need for intensive institutional reforms and should consider the private sector as the spearhead of its economy.

“This is a historic opportunity for Viet Nam to catch up with developed nations by taking advantage of industry 4.0.

“Let us focus on information technology, digital economy, luxury tourism, and high-tech agriculture. We should focus on smart cities and becoming a regional economic hub.”

He said authorities expected a new economic boom in HCM City after the National Assembly passed the special resolution on the city’s finances.

“[But] a resolution is not enough for the city to erase many old challenges and we have a lot of work to do.”

Do Hoai Nam, co-founder of Up Co-working Space said: “Sharing economy has different ways of living and working. The sharing economy will optimise all kinds of resource and appear in all spheres of life.

“The sharing economy will benefit enterprises which know how to take advantage.”

The seminar was the 11th annual one organised by Nhip Cau Dau Tu and it attracted 500 CEOs.  

Vietjet Air opens first direct route from Hanoi to Japan

Budget carrier Vietjet Air officially launched its first direct flights to Japan, connecting the capital city of Hanoi and Osaka city.

The new route is hoped to help boost tourism, trade and integration between the two countries.

The opening ceremony took place at Kansai Airport in the special traditional “Kagami Biraki” of Japan. All passengers onboard both inaugural flights received charming gifts such as brocade bags, special pens and caps from Vietjet Air representatives.

“We are honoured that Kansai International Airport has been chosen as Vietjet’s first destination in Japan from Hanoi and soon from HCM City,” said Jeremy Goldstrich, Corporate Executive Vice President and Chief Operating Officer of Kansai Airport.

“Hanoi is an amazing city and is also the gateway to world famous tourist destinations such as Ha Long Bay, Ninh Binh and Sapa,” he said, expressing his hope that more people from Japan and Vietnam as well as international travellers can enjoy travelling, touring and trading between the countries thanks to Vietjet’s affordable flights.

Using Vietjet’s modern new A321neo aircraft, the Hanoi-Osaka route operates a daily return flight with a time of just over four hours per leg. The flight departs from Hanoi at 1.40am and arrives in Osaka at 7:50am (local time). In the other direction, the flight takes off in Osaka at 9:20am (local time) and lands in Hanoi at around 1:05pm.

This is the first international route in the code-share programme between Vietjet Air and Japan Airlines. The code-share service is also applied to domestic flights connecting Ho Chi Minh City and Hanoi, Ho Chi Minh City and Da Nang, and Hanoi and Da Nang.

Vietjet’s new service to Osaka brings the airline’s total number of international routes up to 64, with a network that spans 11 countries and territories. The carrier will soon launch two other routes to Japan from Vietnam, including HCM City-Osaka (Kansai) from December 14, 2018 and Hanoi-Tokyo (Narita) from January 11, 2019.

To celebrate the new Hanoi-Osaka route, Vietjet is offering 10,000 promotional tickets on flights to Japan, priced from zero dong, from November 7-9. 

They are applicable for Hanoi-Osaka flights from November 8, Ho Chi Minh City-Osaka flights from December 14 and Hanoi-Tokyo flights from January 11, 2019, to March 30, 2019. 

The promotional tickets are available on www.vietjetair.com and www.facebook.com/vietjetvietnam.

With a fleet of more than 60 aircraft, Vietjet operates 385 flights each day. The airline has already transported more than 60 million passengers on a network featuring 93 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, the Republic of Korea, China’s Taiwan and Hong Kong, mainland China, Malaysia, Indonesia, Myanmar and Cambodia.

The carrier plans to operate more than 120,000 flights and serve some 24.1 million passengers by the end of 2018 on a total of 39 domestic and 61 international routes.