BUSINESS NEWS 17/8

Pork prices continue to rise on African swine fever, increasing demand

BUSINESS NEWS 17/8


The price of pork with clear origins has increased sharply all over the country because of the impact of African swine fever (ASF).

At farms in the north and the south, prices have increased by VND5,000 - VND10,000 per kilogramme in the last several days. In the northern region they have gone up by VND4,000 in just the last two recent days.

In northern provinces such as Thai Nguyen, Hai Duong, Ninh Binh, and Hung Yen and Ha Noi, prices are at VND41,000 - 44,000.

Nguyen Van Thanh, a pork trader in the north, said prices are rising because traders are buying to stock for the end of the year festive season, especially Tet (the Lunar New Year), while the number of pigs is reducing rapidly.

ASF has broken out in 60 of the country’s 63 provinces and cities, and more than three million pigs have been culled, severely affecting the balance between demand and supply.

Pork prices in the south have increased from VND30,000 - VND31,000 to VND35,000 - VND36,000.

Nguyen Xuan Duong, acting director of the Ministry of Agriculture and Rural Development’s department of livestock production, said ASF had killed 15 per cent of the country’s pigs while the demand for pork in the last few months of the year is usually very high, especially during Lunar New Year when most traditional dishes are made from pork.

Prices would continue to rise from now, he said.

To combat this, the Ministry of Agriculture and Rural Development had instructed businesses and farming households to expand their pig herds with close monitoring, he added.

VN start-ups eyeing the world must have global mindset: forum

Vietnamese start-ups that wish to go global must have a “global mindset” and “decision-making power” and be willing to “take risks” to capitalise on the opportunities for success in the digital economy, experts have said.

Speaking at a recent forum in HCM City, Nguyen Quang Trung, senior lecturer and discipline lead for the International Business Programme at RMIT University Viet Nam, said first and foremost global start-ups must be passionate about their adventure as “passion gives you vision and energy.”

“They must also have a strong international outlook and international entrepreneurial orientation, and proactively compete in the international market,” he told Viet Nam News.

In addition, they must be willing to take risks, he noted. “Risk gives you quicker education.”

There are four “C risks” in international business, according to the lecturer.

He listed them as commercial risk (weak partner, operational problem, poor execution of strategy), cross-cultural risk (cultural differences, negotiation patterns, decision-making styles, ethical practices), country risk (government intervention, protectionism and barriers to trade and investment, red tape, lack of legal safeguards for intellectual property rights, social and political unrest), and currency risk (currency exposure, asset valuation, foreign taxation, inflation and transfer pricing).

“The specific advantages of taking risks include learning faster than people who do not take risks, having a broader range of experience and being able to overcome or get around obstacles faster.”

Other things needed for global start-ups to be successful include strong people skills such as understanding and treating people well to help build the business and business reputation, according to Trung.

For start-ups that want to go global, the key is to leverage advanced information and communications technology.

“ICT allows you to process information efficiently as well as communicate with partners and customers worldwide at a much lower cost.”

A global start-up is a venture launched to exploit a global niche from the first day of operations.

Start-up eco-system

Also speaking at the event, Dr Nguyen Quan, chairman of the Viet Nam Automation Association (VAA) and a former minister of science and technology, said Viet Nam was emerging as a new start-up hub in the region.

Meanwhile, the Government targeted developing the country into a technology powerhouse, he said.

"One factor driving Viet Nam’s dynamic innovation eco-system is the country’s young and well-educated population, which is a low-cost yet tech-savvy talent," he said.

Global start-ups, especially those that lack experience, would face a lot of challenges, he said, explaining one of them is the conflict between mindsets due to cultural differences between Vietnamese and people in other countries.

To help start-ups go global, the Government has collaborated with global venture funds as part of a national programme to support an innovative start-up eco-system through 2025.

For example, the Korean Venture Investment Corp, in partnership with the Vietnamese Ministry of Science and Technology, has set up a joint venture fund to help Vietnamese start-ups explore the Korean market.

Besides ventures funds, Vietnamese start-ups can also receive support from incubators, mentors and accelerator programmes.

Under the national digital transformation plan, Viet Nam aims to emerge as one of the top four countries in ASEAN in terms of digitisation by 2025 with 80,000 digital technology companies.

Viet Nam is currently among the most dynamic start-up hubs in the world and its well-educated, young entrepreneurs are expected to improve the country’s position on the global start-up map.

There are no official statistics on start-ups in the country, but according to some regional tech sources, there are as many as 3,000 in the country, which makes it the third largest start-up eco-system in Southeast Asia.

The country jumped 12 places to 47th out of 127 economies on the World Intellectual Property Organisation’s 2017 Global Innovation Index, its highest ranking in the last 10 years.

In Southeast Asia, it is only behind two countries, Singapore and Malaysia.

Viet Nam has become one of the fastest growing economies in the world and has begun to change its role in the international economic order, experts said.

A large number of Vietnamese firms are joining the disruptive, innovative global digital economy, which is already estimated to be worth $11.5 trillion world-wide.

These firms can immediately start dealing with international customers and suppliers and, so, are born global.

Titled ‘Born Global: The Future of Viet Nam’s Digital Economy’, the forum was organised by RMIT University Viet Nam.

Nearly 100 business executives, policymakers and academics from around the country took part.

MoIT begins final remedies review for imported steel billets and bars

The Trade Remedies Authority of Vietnam has received all required filings from local producers for the end-of-term review of trade remedies on imported steel billets and steel bars.

On July 18, 2016, the ministry issued Decision 2968/QD-BCT to impose a global scale protection for steel billets and bars imported into Viet Nam. The term of the protection is four years between March 22, 2016 and March 21, 2020, without any extension.

On May 31, 2019, the trade remedies authority announced it would receive filings from steel companies that had asked for the review.

On July 1, 2019, four local steel producers asked the authority to do the end-of-term review of the protection on steel billets and steel bars.

Those companies are Hoa Phat Hai Duong Steel JSC, Southern Steel Company Ltd – VNSteel, Thu Duc Steel JSC and Bien Hoa Steel JSC.

On July 10, 2019, the four companies were asked to provide additional filings for the review as regulated. Added filings were confirmed valid on August 6.

The authority will assess the filings for 30 working days and submit them to the Minister of Industry and Trade to decide whether the investigation is carried out or not, it said in a statement on August 8.

The authority will review the filings to see if import volumes of steel billets and bars increased during the application of the trade protection.

In addition, the data of domestic steel production will be revealed and the review will show how much local firms have adjusted their capacities during the protection period.

Lastly, the authority will see the probability of the local steel industry to be threatened or dampened when the protection ends.

In order to make the best review and assure the benefits of local firms, the authority asked Vietnamese firms to provide data of their production and trade in 2016-18 and in the first half of 2019.

The deadline for information provision is August 15, 2019.

Hai Duong approves seven projects worth $11.6m

Earlier this month, the Hai Duong People’s Committee granted in-principle approval for seven new projects valued at more than VND267 billion (US$11.6 million) in total.

Among these projects were a VND97 billion convention centre and office project, to be financed by Phu Thai trade and investment company; a VND50 billion project producing electronics components to be funded by HTV investment and development company and a petroleum trading project, to be developed by Anh Khoi trade and service company at a cost of VND36 billion.

In addition to domestic investors, Hai Duong has also emerged as an attractive destination for foreign investment in recent years.

Statistics from the Ministry of Planning and Investment’s Foreign Investment Agency show that the province lured $450 million in foreign direct investment (FDI) in the first half of this year, ranking 10th among 46 localities that received FDI in the period.

Of the total, $326 million came from 38 newly licensed projects while the remainder was added to 14 projects already in operation.

As of June, 2019, Hai Duong was home to 438 foreign-invested projects with capital totalling more than $8.15 billion, retaining its position as one of the top ten localities in the country in terms of attracting foreign capital.

In order to lure more investment capital, the province should continue working on administrative reforms, especially in the fields of taxes, fees, land and social insurance, as well as reducing the burden on enterprises during inspections, analysts have said.

They also highlighted the need to improve business consultations and promote the role of provincial business associations to consolidate the trust of the business community.

Provincial leaders and localities need to hold more dialogues with business communities to solve pressing problems quickly, they noted.

Ninh Thuan focus on craft village development

The south-central province of Ninh Thuan spent nearly VND3 billion (US$129,000) to develop local craft villages in a bid to boost rural incomes and build new-style rural areas.

The money will be spent on vocational training, infrastructure building and the formation of cooperatives, while supporting production, environmental treatment and tourism development.

Ninh Thuan also plans to design technical demonstrations, a website for craft villages and help people exhibitions and trade fairs.

To date, the province has three recognised traditional craft villages – Bau Truc for pottery, and My Nghiep and Chung My for brocade weaving – in addition to dozens of others working in seafood processing, as well as producing fish sauce, woodwork products, and grape wine. They have so far created thousands of jobs and contributed to the preservation of the culture of the ethnic communities in the locality.

However, many of them have been struggling to survive due to capital and human resources shortage, as well as poor competitiveness.

Some are looking for ways to boost production quality and spur demand in the market.

According to Ham Minh Thieu, head of the Cham My Nghiep brocade services and production cooperative, Cham ethnic people are working to improve their designs and diversity to meet consumers’ demand but still conserve their cultural identity.

The Bau Truc pottery village has followed suit by developing a modern line of pottery products serving the domestic market and export.

By 2020, Ninh Thuan aims to have four to five more accredited craft villages, including aquatic processing one in My Tan and a fish sauce village in Ca Na commune.

Industry urged to be driving force for VN’s economy

The industrial sector must provide motivation for economic growth, creating breakthroughs in improving productivity, quality, competitiveness and domestic added value of industrial products.

The statement was released by Minister of Industry and Trade Tran Tuan Anh at a meeting to review results and set tasks for the future with the leaders of the Department of Industry in Ha Noi this week.

Anh urged the department to support the protection and expansion of the domestic market, maximising export advantages from signed free trade agreements for key industrial products.

According to a department report, the industrialisation process has greatly contributed to the country’s socio-economic development. However, there are still many problems impacting the value of the domestic industry, including Viet Nam’s production efficiency in terms of added value and exports. The main forces behind restructuring and value are still FDI enterprises, not domestic ones, and Viet Nam’s export of goods still heavily depends on imported materials.

Taking about the automobile industry, director of the Industry Department Truong Thanh Hoai said the automobile industry is currently participating in the low segment of the manufacturing chain, heavily depending on global automobile corporations’ manufacturing assignment.

“The industry has not mastered core technologies such as engines, control systems and transmission systems and has not yet established a system of large-scale suppliers of raw materials and components,” Hoai said.

Hoai said car selling prices are still high compared to other countries in the region. The localisation rate (local part supply) for cars with nine seats and fewer is still lower than the set target, and much lower than other countries in the region.

Meanwhile, the products, which have been localised, have very low technology content such as tyres, seats, mirrors, glass, wires, batteries and plastic products, he added.

For the automotive industry, Minister Anh asked the department to continue working and discussing solutions on the basis of enterprises’ proposals to create momentum for the automobile industry’s development, including tariff reductions and market size expansion for the industry.

“It is necessary to continue to revise the Decree 116 [regulating the conditions for production, assembly, import and business of automobile warranty and maintenance services, issued on October 17] in the direction of protecting domestic production but it must be still suitable to the integration process,” Anh said.

Anh pointed out that there must be investment policies and a long-term industrial strategy, especially specific orientations in the value chains for the automobile industry or textile industry.

"We have a draft circular regulating products and goods of Viet Nam and products and goods made in Viet Nam, which is a tool creating links between the industry and supporting industries. It will contribute to the country's overall economic development,” Anh said.

According to the General Statistics Office, Viet Nam’s index of industrial production (IIP) rose 9.4 per cent year-on-year in the first seven months of this year.

The processing and manufacturing sector, which accounts for nearly 80 per cent of domestic industrial production, led the growth of the whole sector with a significant IIP increase of 10.7 per cent.

MoIT, Thai wholesaler promote Vietnamese goods to foreign chains

The Ministry of Industry and Trade (MoIT) and MM Mega Market Vietnam Co, Ltd signed a memorandum of understanding (MoU) in Ha Noi on Thursday to promote consumption of Vietnamese goods at home and abroad.

According to the MoU, the ministry will help MM Mega Market seek partnerships with reputable Vietnamese processors and manufacturers, raising the rate of Vietnamese goods in the Thai-owned retail chains to 90 per cent.

Speaking at the signing ceremony, Deputy Minister of Industry and Trade Do Thang Hai said that the purpose of this MOU helps promote consumption of Vietnamese goods in MM Mega Market's distribution system in the domestic market as well as exports via international distribution networks and other companies of the TCC Group – the parent company of MM Mega Market Viet Nam.

Thereby, it helps improve the quality of goods and services provided to domestic consumers and enhance business opportunities as well as promote further contribution of MM Mega Market to the development of Viet Nam's economy, he said.

The two sides will also work closely together in organising Vietnamese goods weeks, seminars and training courses to promote Vietnamese products to TCC Group’s foreign distribution channels.

The firm will work with the HCM City Department of Industry and Trade to hold a Vietnamese goods week in Thailand this October.

At the same time, they will help Vietnamese businesses and producers improve their product quality to the standards and requirements of the distributors.

The agreement follows the success of cooperation between the MoIT and other major foreign retailers in Viet Nam, such as AEON from Japan, Central Group from Thailand and Lotte from the Republic of Korea, in supporting Vietnamese manufacturers to develop the domestic market and enter foreign ones.

The cooperation with foreign retailers is one of activities of the Domestic Market Development Project in the period 2014-20 and the project of promoting Vietnamese enterprises to join direct foreign distribution networks by 2020.

After three years of implementing the project of promoting Vietnamese enterprises to join direct foreign distribution networks, according to the MoIT’s Department of Domestic Market, the Central Group has annually exported Vietnamese goods worth US$46 million every year via its Big C supermarket system since 2017. The exports are expected to increase.

Meanwhile, MM Mega Market has established four centres to purchase local agricultural products in Viet Nam such as dragon fruit and sweet potatoes for export to Thailand.

The MM Mega Market exported Vietnamese agricultural products to Thailand for the first time last year. The products include frozen tra fish, squid, star apple, pink grapefruit and dragon fruit.

AEON supermarket is exporting $250 million per year of goods through the Top Value brand. According to AEON's commitment, the export value of Vietnamese goods via its distribution system will increase to $500 million in 2020 and $1 billion in 2025.

This year, it has doubled the export volume to 200 tonnes of Vietnamese farming products per month.

The Ministry of Industry and Trade also said that the foreign distribution system will help businesses bring Vietnamese goods to four million overseas Vietnamese living and working abroad.

Steel companies post low profits on rising iron ore prices

Second-quarter earnings of steelmaking companies showed signs of deterioration as prices of iron ore continued to increase, leading to higher production costs and lower profit.

Hoa Phat Group (HPG), the biggest listing steelmaker, reported revenue of VND15.3 trillion (US$656.7 million) in the second quarter, up 6 per cent year-on-year, but its profit after tax declined 7 per cent in the reviewed period, reaching VND2.05 trillion.

Ending June, the company’s revenue increased 10.3 per cent on-year to more than VND30 trillion, but its net profit dropped 12.8 per cent to VND3.86 trillion.

Hoa Sen Group (HSG) reported its net revenues slumped by 30 per cent to VND7.2 trillion ($309 million) in the third quarter for the fiscal year 2018-19 (April 1 – June) but its net profit rose 94 per cent year-on-year to VND161 billion.

It said it managed to cut management costs by 50 per cent thanks to installing the enterprise resource planning (ERP) and focus on exploring new export markets.

Sharp increases in iron ore prices were attributable to unenthusiastic business results of steel companies, according to analysts at Vietinbank Securities JSC.

The price of iron ore, which account for 30-40 per cent of the cost of steel production, rose to $130 per tonne in some future contracts, the highest since 2016. Higher cost of production accompanied by increasing capacity of domestic enterprises is driving up competition, a July report on the steel industry of Vietinbank Securities JSC showed.

“The increase in capacity is happening faster than in consumption which has pushed many businesses into losses since 2018 and early 2019,” the report said.

Except Hoa Phat which has a high profit margin, other businesses in the industry have very low profit margins and therefore are quite vulnerable when there are adverse developments in the industry, according to the report.

Investment in expanding capacity of large enterprises such as Hoa Phat would create competition and put pressure on many businesses in the coming years, it said.

A number of steel companies have posted their second-quarter and first-half earnings with lower revenues and profits. They included SMC, Vietnam Germany Steel Pipe (VGS), Thai Nguyen Iron and Steel (TIS) and Tien Len Steel (TLH).

For SMC, its revenue grew 8.7 per cent in the first six months but its cost of capital increased by 10.56 per cent, resulting in a decrease of 22 per cent in gross profit.

VGS’s first-half revenue dropped just 1.3 per cent year-on-year to VND3.46 trillion but its profit after tax fell 11.7 per cent to just VND28 billion. Meanwhile, revenue and net profit of TLH declined 16.4 per cent and 72 per cent, respectively.

 

TIS reported a 5.4-per-cent decline in revenue and 10.5 per cent drop in net profit in the first half to VND5.5 trillion and VND38 billion, respectively.

According to analysts, the steel industry is facing many challenges, including the trade war between the US and China, intense competition in the domestic market from cheap low-quality imports and slump of the property market.

In addition, the US imposition of anti-dumping tax on steel sheet products imported from Viet Nam using materials imported from South Korea and Taiwan has also forced steel exporters to seek new material sources.

Viet Nam seeks to boost agriculture and fishery exports

Viet Nam will attract more foreign direct investment and boost its agricultural and fisheries exports through free trade agreements, experts have said.

The recently signed Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) and the EU-Viet Nam Free Trade Agreement (EVFTA) would help the country increase its agricultural and fisheries output, Pham Tuan Long, deputy director of the division of agriculture, forestry and fishery at the Ministry of Industry and Trade’s export-import department, said.

“With commitments under FTAs, import tariffs will be reduced or eliminated in various markets, creating favorable conditions for Viet Nam’s exports,” he told a workshop held in HCM City on Wednesday.

Viet Nam is a leading producer and exporter of a variety of agricultural products, including rice, coffee, pepper, cashew and fish, he said.

Last year exports of its main agricultural products were worth US$27 billion, or nearly 11 per cent of total exports.

Viet Nam exports goods to more than 200 markets.

In the first half of this year, agricultural exports were worth $12.3 billion, with fisheries, fruits and vegetables, coffee, cashew, rice, and pepper exports each fetching more than $1 billion.

However, with technical barriers and strict requirements with regard to food safety and hygiene standards, Viet Nam’s agricultural products face many challenges since agriculture is mostly done on a small scale.

The trade ministry has co-ordinated with the Ministry of Agriculture and Rural Development to update local businesses on technical barriers and trade protection measures in import countries, he said.

Pham Thiet Hoa, director of the Investment and Trade Promotion Centre of HCM City, said it is vital that local firms invest heavily in modern facilities and technology and carefully manage quality and food safety in both the farming and processing stages to fulfil the export potential.

But they need to be offered incentives to enhance capacity, develop brands and update themselves on export markets and market surveys, he said.

The workshop titled “Opportunities to access potential export markets for food and foodstuff sector” was held on the sidelines of the VietFood, Beverage and Professional Packing Machines international exhibition held in HCM City from August 7 to 10.

Binh Duong facilitates local firms

The southern province of Binh Duong will continue improving its investment and business environment, designing policies to support enterprises to deal with difficulties and attracting new projects from now to the end of this year.

Director of the provincial Department of Planning and Investment Nguyen Thanh Truc delivered the statement during a meeting between local authorities and trade associations and businesses here on Wednesday.

As of the second quarter of 2019, Binh Duong had attracted total investment of VND31.15 trillion (US$1.33 billion) from 3,172 new firms and 464 operating ones, Truc said.

Currently, the province is home to more than 39,540 domestic businesses with combined registered capital of VND332.13 trillion.

Sharing Truc's statement, chairman of the provincial People’s Committee Tran Thanh Liem praised the contributions by the firms to the locality over the years, saying that his province considers business development as its own so that local leaders will work hard to remove obstacles facing businesses.

At the conference, enterprises and trade associations in the province discussed a number of issues, including the impact from the US-China trade war, the overloading of the local infrastructure system, traffic connections between Binh Duong and HCM City, as well as warehouse and goods transportation costs.

Businesses also suggested the province establish a centre which can provide them with updated information and help them reduce time and costs for consultations.

Fintech Challenge Vietnam to speed digital banking transformation

The second Fintech Challenge Vietnam (FCV) was launched on Tuesday by the State Bank of Viet Nam (SBV) in Ha Noi.

The SBV is organising the event with support from the Mekong Business Initiative, a programme jointly funded by the Australian Government and Asian Development Bank (ADB).

Following the success of the first Fintech Challenge Vietnam, this year's edition focuses on big data, artificial intelligence, financial service outreach and cybersecurity solutions.

Nguyen Kim Anh, SBV’s Deputy Governor cum Chairman of the Fintech Steering Committee, said the experience and outcomes of the FCV are expected to be useful for regulators in developing a legal framework for the development of the fintech ecosystem in Viet Nam.

“The FCV aims to accelerate financial technology and industry collaboration for financial inclusion and the digital banking transformation in Viet Nam’s fast-growing market,” Anh said.

Eric Sidgwick, ADB Country Director for Viet Nam, said the FCV is an innovative development programme that brings together the regulator, banks and FinTech innovators to find the intersection between private benefits and the public good.

“It is a unique mechanism to accelerate sustainable solutions for reaching the unbanked and the under-banked groups, while enhancing efficiency and financial security in Viet Nam,” Sidgwick said.

The programme’s corporate partners include TP Bank, Vietcombank, Vietinbank, UOB and telecommunication companies with approval to provide payment intermediary services such as ViettelPay, which are seeking technological solutions to enhance their efficiency and promote financial inclusion.

The FCV is also accompanied by technical partners E&Y and Padang&Co, sponsors Mastercard and VISA, investment partner VinaCapital Ventures and other partners Vietfintech and VNBA.

FinTech companies can apply to Fintech Challenge Vietnam through September 25 at fintech.mekongbiz.org. Early- and growth-stage FinTech companies, from anywhere in the world, are encouraged to apply.

Shortlisted FinTech companies will be invited to present at the demo day on November 7 this year in Ha Noi. A panel of independent judges will award cash prizes to three growth-stage and three early-stage FinTech companies. Mastercard will pay for two winning firms to attend and pitch at Mastercard’s customer event at the Singapore FinTech Festival.

VinaCapital Ventures and ADB Ventures have earmarked up to US$500,000 to pilot exceptional solutions with high potential to scale and impact financial inclusion in Viet Nam.

Agribank to issue $215m worth of bonds

The Vietnam Bank for Agriculture and Rural Development (Agribank) will issue five million bonds to the public, with a total value of VND5 trillion (US$215 million).

The bonds will have a face value of VND1 million and tenor of seven years.

The bonds' interest rate will be 1.2 per cent per year higher than the average of 12-month savings deposit interest rates at four commercial banks: Agribank, Vietinbank, BIDV and Vietcombank.

Based on the current interest rates, the rate may reach 8.1 per cent for the first year.

According to Agribank’s representative, the purpose of this bond issuance is to increase long-term capital to meet the demand for loans of the economy, especially serving the needs of agriculture and rural development, small- and medium- sized enterprises.

At the same time, it aims to increase Tier 2 capital to ensure safety ratios and increase attractive and effective investment opportunities for customers.

Agribank is a 100 per cent State-owned bank with a special mission in supporting and developing Viet Nam's agricultural and rural areas.

The lender's pre-tax profit is expected to reach a minimum of VND10 trillion in 2019, a year-on-year increase of 32.9 per cent.

In its development strategy, Agribank is striving to become one of the 150 banks with the largest asset scale in Asia by the end of 2020.

Official channel to feed real estate market with supply info

An official channel that will provide Viet Nam’s real estate businesses with information such as the number of licensed projects and projects awaiting licenses in a given area is being developed by the Department of Properties and Real Estate Management under the Ministry of Construction and the Vietnam National Real Estate Association (VNREA).

Official sources said a pilot programme is underway to collect data from six chosen cities across the country, namely Ha Noi, HCM City, Da Nang, Hai Phong, Khanh Hoa and Can Tho. While the number may be few, the cities account for 80-90 per cent of the country’s total real estate transactions.

The channel was created to address one of the glaring shortcomings of the real estate market to date – the lack of reliable and accurate information on real estate supply. While there are existing regulations that require real estate developers to file reports to the ministry and the association, they are rarely enforced, said Nguyen Tran Nam, VNREA’s President.

The lack of reliable and accurate information on market supply made it very difficult for the Government, businesses, investors and real estate buyers to efficiently make long-term strategic decisions. It also made the market vulnerable to land fevers and price manipulation practices.

There have been incidents in which shady investors and brokers took advantage of the lack of information to deliberately inflate land prices, said Le Hoang Chau, President of HCM City Real Estate Association.

Agricultural land, farmland and other non-housing land in some localities were poorly managed. Some lots were even divided and sold illegally, causing large financial losses for buyers and disrupting localities’ future development plans.

“The project is scheduled to end by the end of this year. Our ultimate goal is to create an official information channel for the whole market,” said Do Viet Chien, VNREA’s General Secretary.

“Information plays a vital role in the development and stability of Viet Nam’s real estate market in the future. Officials from the construction ministry, our association and other organisations in the field are working closely together to make that a reality,” he said.

Holiday Inn & Suites Saigon Airport Hotel to open this September

The InterContinental Hotels Group, one of the worlds leading hotel companies, will open a hotel in HCM City in September.

Holiday Inn & Suites Saigon Airport Hotel is now open for booking, and will offer authentic experiences designed to bring friends, family and business partners together for genuine and joyful memories.

Conveniently located just 10 minutes from Tan Son Nhat International Airport and near the cultural and commercial centre of HCM City, the hotel has been thoughtfully designed to put both leisure and business guests at ease and let them focus on what is important to them during their time in the city.

The hotel will feature one of the largest function areas in the city, which will be able to accommodate up to 1,200 people. The Song Saigon Ballroom is designed to welcome up to 600 guests in banquet style and four additional function rooms can seat a further 360 guests.

State-of-the-art technology throughout the meeting and event space ensures that every guest stays connected, whatever the occasion.

Holiday Inn & Suites Saigon Airport has 350 well-appointed rooms, including 100 suites, offering the world- class hospitality of Holiday Inn.

All guest rooms feature city or pool views while the fourth floor lifestyle zone offers comfortable lounges, a 50-meter swimming pool and 24-hour gym.

The all-day dining Manja Manja Restaurant showcases the very best of authentic Italian and southern Vietnamese cuisines, and the Kids Stay & Eat Free programme and Kids Activity Room ensure a family-friendly environment.

The Deli Cafe and Lobby Lounge are designed to deliver a welcoming and informal ambience in which to unwind after a long day of meetings or exploring the many sights of HCM City.

Morgan Layberry, general manager of Holiday Inn & Suites Saigon Airport, said HCM City is now a major hub in Southeast Asia, and, considering Viet Nams constantly growing tourism industry, having an international standard hotel so close to the airport would offer joyful experiences to leisure and business travellers alike.

“With our expertise in over 80 countries, we are excited to provide a fresh, convenient and welcoming connection for all visitors to the city.”

Hospitality property in Cam Ranh to bring huge profits to buyers

As one of the three most attractive hospitality markets in Viet Nam, Cam Ranh, a tourism hotspot in the south-central province of Khanh Hoa, promises huge profits to customers.

After Da Nang and Phu Quoc, Cam Ranh has become a magnet for both Vietnamese and foreign property developers, especially hospitality developers.

Despite being a new market, Cam Ranh has many competitive advantages, especially the plentiful availability of land facing the ocean compared to other places.

In Da Nang and Nha Trang such land costs an arm and a leg: more than VND300 million per square metre. In any case, not much land to develop hospitality projects is available in these places.

Meanwhile, in Bai Dai (Dai Beach) in Cam Ranh there are huge tracts of land overlooking the ocean and cost only VND20-25 million per square metre.

Experts said Bai Dai in Cam Ranh is the ideal destination for property developers if they want to develop hospitality projects at affordable prices.

Land prices here would surely increase in future and a huge number of tourists would come, they explained.

A report from the south-central province of Khanh Hoa said 3.4 million tourists visited the province in the first six months of this year, a 11 per cent year-on-year rise.

They included 1.7 million foreigners, a 24 per cent jump.

It is notable that the number of tourists from South Korea and Thailand has increased significantly thanks to new international flights.

In future Cam Ranh International Airport will get a new runway at a cost of nearly VND2 trillion.

Many new direct flights from Thailand, China, Cambodia, Malaysia, Hong Kong, Russia, and Indonesia to Cam Ranh will begin in the next couple of years.

Thanks to the development of infrastructure and transportation, the number of visitors coming to the place will surely see a rise.

Draft circular on gold business licensing released

The State Bank of Vietnam (SBV) has publicised a draft circular that would adjust existing regulations managing gold trading, Thoi bao Kinh te Viet Nam (Vietnam Economic Times) newspaper reported.

The draft circular would amend Circular 16/2012/TT-NHNN dated May 25, 2012 to instruct the implementation of Decree 24/2012/ND-CP issued by the Government.

Under the draft circular, the SBV would cut administrative works in spot gold trading management and remove conditions on changing business licences.

For example, when a company wants to change the information on its licence, the firm would be able to send a filing to the SBV and an adjustment will be approved within 15 working days.

In addition, some reporting mechanisms between SBV, its local offices and businesses would be eliminated to reduce the workload and expense for both businesses and Government agencies.

According to the SBV, the draft circular is in line with the Government’s efforts to reform administrative process, improve the business and investment environment and support the development of the business community.

Both the previous circular and the decree have helped re-arrange the domestic gold market and made it easier for the Government to control the market.

“At the moment, the domestic gold market has seen a decrease in trading liquidity. Therefore, it is necessary to amend regulations on gold trading business licensing,” Thoi bao Kinh te Viet Nam cited SBV as saying.

The SBV is also exploring a new decree to amend Decree 24/2012/ND-CP.

SBV has finished collecting feedback from ministries, Government agencies, businesses and specialists on the decree and submitted the draft to the Prime Minister for approval.

Gold prices posted by Vietnamese jewellery and gold companies stood at VND42.2 million per tael or VND31.65 million (US$1,360) per ounce. Gold prices on August 12 were at least VND41.7 million per tael.

On global markets, benchmark gold on the Commodities Exchange traded at $1,535 an ounce on August 13, up 1.17 per cent from August 12.

The uptrend was attributed to investors’ needs to hedge risks on worries about trade tensions, the global economic slowdown and rate cuts across central banks.

Gold prices last week jumped nearly 4 per cent in total, bringing their rally this year to 17 per cent.

Securities firms see large jump in margin lending

The margin lending of 18 large-cap securities firms amounted to VND41.984 trillion (US$1.8 billion) as of late June, a huge increase compared with the figure seen five years ago.

Vietnam Economic Times cited its statistics as showing that the combined margin lending of the 18 firms rose by 18.4 per cent against the beginning of this year and 143 per cent compared with 2015’s figure.

The 2016-17 period saw the margin lending of the reviewed stock brokerage firms jump by 63 per cent, the peak level seen in the past five years. This was matched by impressive growth in market capitalization during the five-year stint.

SSI Securities Corporation recorded the highest margin lending with VND6.256 trillion (US$269 million) by late June, up 6 per cent since the beginning of this year and 76 per cent against 2015.

Of note, four foreign-invested securities firms were named among the top five that reaped the highest profit from their lending and receivable accounts during the first half of this year. These companies also led margin lending activities throughout the past five years.

Mirae Asset Securities Vietnam LLC topped the list. By June, the firm saw its margin lending skyrocket by 63 times to VND4.861 trillion (US$209 million) against the 2015 figure.

It was followed by Yuanta Securities Vietnam Joint Stock Company whose margin lending reached VND1.684 trillion (US$72.41 million) by June, a 22-fold increase in comparison with the 2015 figure.

Elsewhere, KB Securities Vietnam JSC enjoyed a four-fold increase in its margin lending to VND1.951 trillion (US$83.89 million) as of June, a rise from VND436 billion (US$18.74 million) in 2015.

A limited space exists for small-cap securities firms who struggle to gain a larger market share from big players, especially foreign-invested ones. Major foreign-invested securities firms have constantly pumped capital into the market through increasing margin lending activities as a means of enlarging their client network and gaining higher profits.

Principles of best corporate governance makes debut

The set of Principles of Best Corporate Governance for all public companies in Vietnam was publicised by the State Securities Commission of Vietnam (SSC) at the Ho Chi Minh Stock Exchange (HOSE) on August 13.

The principles aim to promote the capital market and the sustainable development of the economy.

The rules, which were developed with support from the International Finance Organisation (IFC) and the Swiss State Secretariat for Economic Affairs (SECO), make recommendations on best corporate governance practices for all Vietnamese public companies.

The set of 10 principles, with detailed recommendations on best principles, centre on addressing priority issues in corporate governance practices.

Notably, six out of them focus on operational functions of boards of directors – something many local firms need to improve.

The remaining four principles are related to corporate supervision, disclosure and transparency, shareholders' rights and relationships with stakeholders.

In addition to the above basic principles, the set also includes responsible business-related provisions, such as promoting gender diversity and encouraging a stronger focus on environmental and social issues in boards of directors.

Tran Van Dung, Chairman of the SSC, said issuing the principles is the latest effort to support all public companies and promote application of international corporate governance standards, thus helping improve the quality of listed companies.

It also marks a new step in perfecting the corporate governance ecosystem in Vietnam, he said.

According to Philippe Le Houérou - Chief Executive Officer of IFC, investors are generally more confident in companies that apply good corporate governance systems and in markets that are supported by strict mechanisms and supervision regulations.

The principles will help Vietnamese companies attract investors and help Vietnamese businesses improve their competitiveness and business performance, he added.

 
 
 
 
 
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