BUSINESS NEWS HEADLINES FEB. 6

Vietnam tightens grip on world’s coffee

Vietnam exported 143,000 tonnes of instant and ground roasted coffee valued at 516 million USD in 2019 thanks to the tidal wave of investment in this sector.

The country now houses four coffee factories, each with capacity ranging from 4,000 to 20,000 tonnes.

Despite their limited long-term investment funds, domestic firms such as Tin Nghia Coffee Corporation, Intimex Group, Viet My International JSC, An Thai Group and Vinacafe Bien Hoa have continued to pour capital into coffee plants. Besides, some foreign businesses also plan to invest in this sphere.

In the year, domestic coffee consumption increased 10 percent, and is expected to rise 15 percent in the coming years.

The Central Highlands region has contributed 30 percent to the sector’s gross domestic product (GDP) and generated jobs for more than 2 million people.

However, like other crops, coffee is suffering from adverse impacts of climate change, prompting farmers to replant coffee trees. Total replanted area amounts to 118,000 ha at present, yet to offer high productivity.

Customs statistics unveil that as of December 31, 2019, Vietnam had shipped abroad 1.61 million tonnes of coffee worth about 2.77 billion USD, down 14.2 percent in volume and 21.5 percent in value.

Coffee is the only Vietnamese agricultural product that has its own day. Vietnam Coffee Day (December 10) is to mark the time when President Ho Chi Minh visited the Dong Hieu coffee farm in Phu Quy, the central province of Nghe An.

The event aims to promote Vietnamese coffee as well as coffee culture, and honour coffee enterprises and farmers.

Ho Chi Minh City will host the fourth Vietnam Coffee Day 2020 with the participation of countries from the Association of Southeast Asian Nations (ASEAN)./.

Most processing, manufacturing companies expect production growth, stability

About 84.8 percent of businesses in the processing – manufacturing sector predicted expansion and stability in their production for the first quarter of 2020, the General Statistics Office (GSO) said.

The GSO’s survey, conducted in Q4 of 2019, covered 6,500 companies representing the industry in the 63 provinces and centrally-run cities, with 90 percent of the interviewees responding.

Among them, 46.9 percent expected production growth and another 37.9 percent believed their activities will remain the same in Q1 compared to Q4 last year.

For the first half of 2020, 55.3 percent and 34 percent of the firms forecast expansion and stability in their operations, respectively, compared to the last six months of 2019.

Meanwhile, FDI companies showed the most optimism with 87.9 percent of them expecting growth and stability for January-March. They are followed by State-owned enterprises (85.2 percent) and non-State businesses (83.5 percent).

The respective percentages of firms with similar projections for this year’s first half stand at 91.5 percent, 89.9 percent, and 88.4 percent.

The GSO noted 59.5 percent of the interviewees expected increase in electronics, computer and optical product manufacturing for Q1; pharmaceutical production 56.5 percent; and food production and processing 51.4 percent.

They also predicted higher numbers of new export orders, with 86.6 percent and 91.5 percent respectively believing so for the first three months and the first half of 2020, compared to the same periods last year, the survey shows./.

Customs sector targets collecting 14.6 billion USD in 2020

The General Department of Customs hopes to collect 338 trillion VND (14.6 billion USD) for the State budget this year, a year-on-year increase of 12.5 percent.

The target is built on the basis of 6.8 percent GDP growth, crude oil price at 60 USD per barrel, total export turnover increasing by 7 percent and import turnover increasing by 9 percent.

The goal would be difficult to achieve as new free trade agreements (FTAs) would come into effect this year with many products having import tax rates cut to zero percent, according to the General Department of Customs.

To complete the State budget collection for the year, the customs sector would have to effectively implement proposed budget collection solutions.

The General Department of Customs was assigned a target of over 300 trillion VND for State budget revenue last year. The department claimed State budget revenue of the sector reached 348.7 trillion VND by the end of 2019, 116.05 percent of the set target and up 11 percent compared to the same period in 2018.

This result was attributed to efforts to facilitate businesses and fight revenue loss.

The customs department also issued detailed guidance documents in fields such as classification, origin and tax debt management.

Last year, it strengthened measures to combat loss of revenue such as inspection and examination of enterprises, as well as examination of cases of tax exemption and reduction. It also boosted controls over the price of imports and exports.

These efforts resulted in saving some 4.6 trillion VND of lost revenue./.

Footwear industry likely to hit goals in 2020

The domestic leather and footwear industry was in good shape to reach its goals this year, according to Phan Thi Thanh Xuan, Vice Chairwoman and General Secretary of the Vietnam Leather and Footwear Association (Lefaso).

The industry's industrial production index in 2020 would increase by about 11 percent and the localisation rate of products would hit 60 percent, she said.

The industry’s footwear and bag export value was forecast to reach 24 billion USD in 2020, gaining 10 percent compared to the figure last year.

Xuan said this year, the US-China trade war as well as trade conflicts between the US and other trade partners such as Europe and India would likely decrease, while the global economy would gradually recover.

Besides that, orders for footwear and bag would continue shifting from China to Vietnam to take advantage of preferential tariffs from free trade agreements, she said.

Therefore, Lefaso forecast that the demand for local footwear products in Vietnam’s main export markets would increase this year.

Foreign direct investment (FDI) enterprises would continue to expand production, helping the footwear industry maintain export growth.

According experts, the domestic leather and footwear industry had many opportunities to expand into new export markets. However, businesses needed to target value-added products and high-end brands for higher profits.

In addition to opportunities, free trade agreements would create many challenges for domestic footwear enterprises, so they needed to renew technology, improve production capacity, develop export markets and improve competitiveness.

According to the association, the industry must develop its support industries and raw materials, and increase labour productivity. It should also encourage investment to develop footwear production in central and southern provinces.

The association also said the biggest difficulty facing the leather and footwear industry was quality human resources. Businesses must retrain most of their staff who had not been trained at vocational schools.

In terms of exports, the industry last year gained stable growth and maintained competitiveness in traditional markets. The top five markets accounted for over 82 percent of total national footwear export value, including the US, the European Union, China, Japan and the Republic of Korea.

Xuan said total export value of footwear and bags reached 22 billion USD last year, including 15.1 billion USD, or 75.8 percent, from FDI enterprises.

The gap in export value between FDI and domestic enterprises has been narrowed. Domestic enterprises accounted for 19.7 percent of the nation's footwear and bag export value in 2017, and that figure surged to 24.2 percent in 2019. This confirmed the recovery of domestic footwear enterprises./.

Manufacturing sees modest boost in January

The opening month of this year saw a modest improvement in business conditions in the Vietnamese manufacturing sector, according to a report by a London-based information services firm.

IHS Markit released the Vietnam Manufacturing PMI report on February 3 from responses to monthly questionnaires sent to purchasing managers in a panel of about 400 manufacturers.

The Vietnam Manufacturing Purchasing Managers’ Index (PMI) remained above the 50.0 neutral mark last month, posting 50.6 following a reading of 50.8 in December last year.

The index signalled a modest improvement in the health of the manufacturing sector at the start of this year.

Supporting the improvement in business conditions was a moderate rise in new orders.

The rate of input cost inflation gathered pace but remained relatively muted, while output prices rose slightly for the second month running.

Respondents indicated stronger customer demand had been behind the increase in new orders. Meanwhile, new export orders returned to growth following a slight reduction in December.

Although new orders continued to rise, manufacturing production ticked down last year.

Output has now fallen in four of the past five months, but the pace of reduction remained marginal, said the report.

The combination of rising new orders and a scaling back of production led to a number of firms to use stocks of finished goods to help meet new business requirements.

As a result, post-production inventories decreased, and at the fastest pace in three months. Despite this, firms still reported an increase in backlogged work. The accumulation was the fifth in as many months, albeit only marginal.

Staffing levels rose at a fractional pace in January, with the rate of job creation the weakest in the current three-month sequence of rising employment.

Manufacturers expanded purchasing activity at a slightly faster pace in January.

Despite the rise in input buying, stocks of purchases were broadly unchanged as some respondents restricted stock holdings in line with lower output requirements.

Input prices rose at the fastest pace for eight months, albeit one that was still relatively muted.

Higher costs of imported goods and supply shortages were reportedly behind the latest increase.

Issues in the supply of materials also contributed to a second successive lengthening of suppliers' delivery times, though only fractional.

With input costs increasing, firms raised output prices. Selling price inflation was recorded for the second month running, with a modest rise in line with that seen in December.

Confidence in the 12-month outlook for production improved at the start of the year and was the highest for three months.

Positive sentiment mainly reflected predictions of rising new orders and the launch of new products.

Commenting on the results, Andrew Harker, associate director at IHS Markit, said there was more positive news in terms of new orders in the latest Vietnam PMI, with the expansion taking the current sequence of growth to 50 months.

“Despite this, firms appear to be taking a step back from raising production at present, preferring to utilise inventories to help meet customer orders. This will likely change soon, however, should the upward trajectory of new business continue,” he added.

"The Vietnamese manufacturing sector looks set to be a star performer again in 2020, helping to support impressive growth in the wider economy. IHS Markit forecasts industrial production to rise 7.9 percent during 2020.”/.

Khanh Hoa: ocean tuna boats return to shore

Tens of ocean tuna boats on February 4 moored in the Hon Ro Port in Nha Trang city, the central province of Khanh Hoa, after a month-long voyage that lasted throughout the Lunar New Year (Tet) holiday.

However, local fishermen said tuna output has dropped as compared with the same period last year, with each boat catching about 20-30 tunas weighing about 1 tonnes.

Meanwhile, tuna price now ranges only from 100,000-110,000 VND (4.3 - 4.73 USD) per kg.

According to the management boards of the Hon Ro Port and the south central seafood market, the remaining ocean tuna vessels are expected to return to shore in the next three days.

The boats are expected to bring home a total of about 100 tonnes of tuna, they said.

Vietnam has exported tuna products to 105 markets, with the US, the EU, Israel, ASEAN, Japan, Canada, China, and Mexico being the major ones.

The country has been the fourth largest supplier of canned and processed tuna products to the US behind Thailand, Ecuador and China, and the second largest supplier of frozen fillet after Indonesia./

FTAs to bring both opportunities and challenges: Minister

Joining new-generation free trade agreements (FTAs) will help Vietnam diversify its economic and trade relations, especially expanding import and export markets, avoiding excessive dependence on a specific region and helping the economy cope better with external fluctuations.

The remark was made by Minister of Industry and Trade (MoIT) Tran Tuan Anh in an article sent to the Vietnam News Agency (VNA) recently.

Anh wrote in the article participating in FTAs will continue to promote trade between Vietnam and members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EU countries, especially in areas of Vietnam’s strength. For members of the CPTPP, including major markets such as Japan and Canada, to cut import tax to zero percent for Vietnamese goods will have a positive effect on promoting export turnover.

“Tax on exports, such as agriculture, fishery, electricity and electronics will be eliminated when the agreement takes effect. A MoIT study shows that Vietnam’s exports are likely to increase by 4.04 percent by 2035,” Anh wrote.

According to a study by the World Bank, with this level of commitment, in the context of the basic economic conditions remaining unchanged, Vietnam’s exports may increase by 4.2 percent in the context of productivity growth, while export growth will be 6.9 percent by 2030, he said.

As for the EVFTA, the agreement between Vietnam and the EU will help the country’s exports increase by an average of 6.7 percent for the first five-year period of implementation, 13 percent for the next five years and 20 percent for the period five years later.

The minister said Vietnam’s exports currently account for nearly 1.5 percent of the total EU import turnover. Among them, only about 42 percent of Vietnam’s export turnover is entitled to a tax rate of zero percent (including goods under the GSP universal tariff incentive programme).

“This is a very modest figure compared to the export potential of Vietnam as well as the market size of the EU. With the commitment to cut taxes in the EVFTA and especially the strong complementary trade structure, the potential for the two sides to further develop economic-trade relations after the FTA is huge,” Anh said.

In addition, Vietnam also has opportunities to participate in regional and global supply chains. Currently, countries participating in CPTPP and EVFTA agreements account for 13.5 percent and 22 percent of global GDP, respectively.

According to the General Department of Customs, the total trade turnover between Vietnam and CPTPP countries reached more than 51 billion USD in the first eight months of 2019; while that between Vietnam and the EU reached about 38 billion USD by the end of November 2019.

With the scale of GDP and trade turnover, joining these FTAs will open up many opportunities for businesses when the new supply chain is formed, which is an important condition to raise the level of development of the economy, increase labour productivity, gradually reduce assembly, participate in higher value-added production stages, and then step into the development stage of electronics, hi-tech and green agricultural products.

“This is a great opportunity to improve Vietnam's economy in the next ten years,” Anh said.

Regarding opportunities for institutional reform, improving the business environment, as well as joining the former WTO and joining the new generation FTAs, will be an opportunity for Vietnam to continue improving its legal and business environment.

Along with the ratification of the CPTPP, the National Assembly also decided to amend some contents of the Intellectual Property Law and the Insurance Business Law as a testament to the policy of continuing to improve economic and legal institutions of the Party and the State.

At the same time, the extensive commitments in the service - investment sector will give Vietnam more opportunities to improve the business environment in a more open, transparent and predictable manner, close to national standards. In addition, the economy has advanced, thus promoting both domestic and foreign investment.

“Joining the new generation FTAs also supports the process of renewing the growth model and restructuring Vietnam’s economy, especially in areas such as finance – banking, public spending and agriculture,” Anh said.

The connection with partners, such as the EU, Japan and Canada also helps Vietnamese businesses connect with technology and management capacity at the most advanced level in the world. “This is an opportunity for Vietnamese businesses to learn and strive to meet the demands of the global competitive environment.”

According to research results from the Ministry of Planning and Investment, the CPTPP can help increase the total number of jobs by an average of 20,000 – 26,000 per year. As for poverty reduction, according to a World Bank study, by 2030, the CPTPP is expected to help 0.6 million poor people escape the poverty line of 5.5 USD per day. All income groups are expected to benefit.

However, international economic integration and participation in free trade agreements, especially the new generation agreements, not only bring about opportunities, but also risks and challenges.

“These are economic challenges on completing the legal and institutional framework, implementing commitments in new areas not yet included in previous FTAs such as labour and environmental unions,” Anh said.

“Therefore, in the near future, Vietnam needs to have effective solutions to implement and make good use of the opportunities in these FTAs. At the same time, we will continue to focus resources on promoting the ratification of the EVFTA in the shortest time in order to benefit the people and businesses of both sides soon,” he added./.

AHKFT expected to boost Vietnam’s agricultural exports to Hong Kong

Vietnam expects the ASEAN-Hong Kong Free Trade Agreement (AHKFTA) to boost the country’s exports of farm produce, aquatic products and processed food.

Last year, Vietnam exported 7.15 billion USD worth of commodities to Hong Kong (China), down 10.05 percent from a year earlier, according to the General Department of Vietnam Customs.

Fruits and vegetables, paper and paper products were among the few export items that recorded strong growth, while exports of other agricultural products to Hong Kong remained relatively low.

Vietnam’s exports of fruits and vegetables to Hong Kong tripled to gain 72.08 million USD, while paper and paper products saw a 2-fold year-on-year increase to 24.23 million USD.

Last month, the government issued special preferential import tariffs for the implementation of the AHKFTA for 2019 – 2022.

According to the Ministry of Planning and Investment’s Foreign Investment Agency, Hong Kong took the lead among the countries and territories investing in Vietnam in the first seven months of 2019 with 5.44 billion USD.

The AHKFTA was officially negotiated in 2014 and will take effect from February 20 this year. The agreement looks to offer more legal certainty and easier market access for goods flowing between ASEAN and Hong Kong.

Under the trade deal, Brunei, Malaysia, the Philippines and Thailand have agreed to cut customs duties on 85 percent of goods listed on their tariff schedules within 10 years./.

Tra Vinh lures over 111 billion VND worth of investments in January

The Mekong Delta province of Tra Vinh granted approval decisions and investment licences to four projects with accumulative registered capital exceeding 111 billion VND (4.7 million USD) in January.

The figures represent an increase of three projects and 110 billion VND compared with the same period last year.

The four projects include a fruit and vegetable processing and preservation facility being built by Xuan Thanh Cooperative for Agriculture, Trade, Production and Services, expanded Minh Tam General Hospital funded by Minh Tam JSC, Petrolimex - CH 07 project developed by Tra Vinh One Member Co., Ltd, and a NPK fertilizer plant being built by Phuc My Chemicals and Fertilizer JSC.

During the month, local leaders held working sessions with five delegations of domestic and foreign investors who came to study investment opportunities in wind power, logistics and garment-textiles.

Chairman of the provincial People’s Committee Dong Van Lam pledged that Tra Vinh will create favourable conditions for investors to operate in the locality, adding that Tra Vinh has offered incentives regarding land tax and infrastructure, and provided support for firms in personnel training and employment.

He emphasised that Tra Vinh has streamlined administrative procedures, helping investors reduce unofficial costs and save time.

Currently, Tra Vinh has 355 valid projects, including 41 foreign-invested ones valued at 3.1 billion USD, with 2.41 billion USD funneled into a thermal power plant./.

Disbursement of public investment still low in January

Disbursement of public investment was low in January due to impacts of the week-long Tet holiday, according to the General Statistics Office (GSO).

Nearly 18.7 trillion VND (803.4 million USD) of public investment was disbursed in the first month of 2020, equivalent to 4.2 percent of the yearly plan, and up 8.4 percent from the same time last year.

The disbursement of capital managed by ministries exceeded 2.63 trillion VND (113 million USD), accounting for 3.8 percent of the yearly plan and rising 11.9 percent against 2018’s January. Meanwhile, the disbursed amount managed by localities surged 7.8 percent year on year to over 16 trillion VND (688 million USD), or 4.3 percent of the set plan.

In a bid to improve the efficiency of the disbursed capital, the GSO recommended investors complete necessary procedures soon so that their projects will be carried out in accordance with schedule.

 

The GSO also unveiled that state budget collection in the first 15 days of the month totalled 39.1 trillion VND (1.68 billion USD), or 2.6 percent of the estimates for the whole year.

Of the total amount, domestic collection hit 23.8 trillion VND (1.02 billion USD), while that from crude oil and import-export activities were estimated at 4.2 trillion VND and 11.1 trillion VND, respectively./.

Vietnam’s two big cities lead region in dynamic growth: JLL

Ho Chi Minh City and Hanoi continue to lead the momentum in Southeast Asia, ranking third and seventh among the most dynamic cities in the world, according to the City Momentum Index recently issued by property consultant Jones Lang LaSalle.

The results show a continuing shift in global influence from west to east, with Indian, Chinese and Vietnamese cities dominating the top positions.

Vietnam, with two cities in the top 20, the most of any country in the Southeast Asian region, featured highly in the global ranking driven by soaring exports to the US as its economy profits from the China-US trade disputes, which is forcing companies to shift their supply chains, the report said.

Jeremy Kelly, director of cities research at JLL, said: “The remarkable dynamism in the emerging Asian economies is proof that economic reforms, business growth and infrastructure investment can drive the expansion of industry, significantly in the tech sector, and facilitate a start-up culture. This is now being repeated the world over, as geographical diversity looks to be returning to the Index.”

The index combines socio-economic and commercial property metrics in 130 markets to identify the world’s most dynamic urban centres. It identifies a number of key growth drivers, including talent attraction, the expansion of innovation hubs and better urban planning, they can employ to meet the challenges faced by rapid momentum.

In recent years, Vietnam has entered a journey of international integration and been creating an export-driven economy. Securing a large number of FTAs has set it up for a partnership with 60 countries and on the path to becoming the new global manufacturing hub.

These successful trade pacts are also expected to boost its GDP by 2.18 percent-3.25 percent annually by 2023 and by 4.57 percent-5.3 percent annually between 2024 and 2028, JLL said.

Stephen Wyatt, head of JLL Vietnam, said: “This has strengthened Vietnam’s leading momentum in Southeast Asia, with HCM City and Hanoi retaining their status as the top two cities leading the Index and are set to have among the highest economic growth globally over the next several years.”

However, rapid urbanisation and strong economic growth in Vietnam are putting huge pressure on existing infrastructure.

While many other cities are struggling to keep pace with the growing demands for high-quality transport and utilities, both HCM City and Hanoi are responding to the infrastructure deficit by investing heavily in new metro networks to create large, commuter-intensive public transport systems. Long Thanh Airport is also being constructed near HCM City to replace Tan Son Nhat as the city’s international airport.

In response to demographic growth and the need for quality of life enhancement, smart-city technologies are presented as an appropriate measure to improve the city’s efficiency, livability and sustainability.

HCM City and Hanoi are pushing smart city initiatives and districts to promote sustainable development, and this has attracted foreign investors such as Sumitomo, Lotte Group and ABB Group. Notable developments in progress include Eco Smart City in HCM City and BRG Smart City in Hanoi.

“One common ingredient when looking at cities that succeed at rapid growth is the importance placed on governance and leadership – something often overlooked,” Kelly said.

“The complex nature of city transformation relating to the innovation economy, climate mitigation and a changing geo-political world means a city’s governance system is increasingly critical to a city being ‘future-fit’ for the coming decades.”

Wyatt said: “JLL expects Vietnam’s fastest growing cities to maintain the level of interest from overseas investors, and continue on its growth trajectory, particularly with the help of government policy to resolve infrastructure deficit and city sustainability.”

The company’s City Momentum Index has been published for the seventh year./.

Tien Giang sets export target of 3.4 billion USD in 2020

The Mekong Delta province of Tien Giang has set a target of earning 3.4 billion USD in export turnover in 2020, a year-on-year rise of 9.8 percent.

Director of the provincial Department of Industry and Trade Doan Van Phuong said production and export activities are expected to go smoothly this year thanks to the Government and ministries’ efforts to remove difficulties for businesses, and support startups and innovation.

Additionally, free trade agreements which have come into force will help the province attract foreign investors as well as open up new opportunities for export growth in 2020.

The province has set forth solutions to realising the target such as increasing productivity and competitiveness of local firms, improving business environment, and expanding markets.

Particularly, the locality will adopt policies to make it easier for businesses to access credit and promote trade activities while intensifying administrative procedure reform.

According to the provincial People’s Committee, in the first month of 2020, the local export turnover was estimated at over 178 million USD, equivalent to the previous year.

Key export products with high growth include rice, vegetable and fruit./.

Commercial bank SHD’s pre-tax profit surges 47 percent in 2019

The Sai Gon-Hanoi Commercial Joint Stock Bank (SHB) enjoyed over 3 trillion VND (over 129.2 million USD) in pre-tax profit in 2019, representing a yearly increase of 47 percent.

According to a financial report by the bank, as of December 31, the bank had 366 trillion VND in total asset, up 13.5 percent year-on-year. Its charter capital stood at over 14.5 trillion VND, while some 337 trillion VND in capital was mobilised from individuals and organisations, expanding 13 percent.

The bank’s total outstanding loans were 265 trillion VND, and its credit growth increased by 22 percent compared to the figures at the end of 2018. The credit quality is strictly controlled, with the non-performing loan rate brought sharply to 1.8 percent.

In the last quarter of 2019, SHB bought over 5.7 trillion VND worth of bonds from the Vietnam Asset Management Company (VAMC).

For 2020, the bank has set to continue buying VAMC’s bonds ahead of the maturity, and increase its credit quality with bad debt below 2 percent, thus confirming its position among the top 5 private joint stock commercial banks in Vietnam in terms of scale and market share of business operation.

The bank also aims to fully meet financial criteria in line with Basel II standards as required by the State Bank of Vietnam in the first quarter of 2020. /.

Vietnamese firms attend Fruit Logistica 2020

Nine Vietnamese vegetable and fruit processing businesses are showcasing their products at the Fruit Logistica 2020, the world’s leading fresh produce industry event that opens in Berlin on February 5.

Visiting the Vietnamese booths, Vietnamese Ambassador to Germany Nguyen Minh Vu discussed with General Secretary of the Vietnam Fruit and Vegetable Association (Vinafruit) Dang Phuc Nguyen and the attending firms measures to boost exports to Germany as well as the EU as a whole, particularly when the EU-Vietnam Free Trade Agreement will take effect soon.

During the three-day event, the Vietnamese firms will have a chance to meet with many European customers, including German partners who have imported fresh fruits and vegetables from Vietnam.

A wide range of Vietnamese fruits have hit the shelves of large supermarket chains in Germany such as Netto, Edeka and Selgros. Other products like fresh passion fruits and dried banana and dragon fruit are said to be promising exports in the coming time.

With more than 3,300 exhibitors, the Fruit Logistica 2020 creates opportunities for participants to seek business partners and promote value chain for the fruit and vegetable sector.

Last year, the event attracted 3,239 firms and over 78,000 visitors./.

PetroVietnam exceeds January target

The Vietnam Oil and Gas Group (PetroVietnam) surpassed many targets, including revenue and State budget contribution in the first month of 2020.

Its total revenue reached 66.3 trillion VND (2.85 billion USD), up 16.2 percent from the month’s plan, while contribution to the State budget hit 8.3 trillion VND, exceeding 17 percent of the goal set for the month.

Meanwhile, PetroVietnam’s oil and gas exploitation increased 8.5 percent against the monthly plan. It produced 147,300 tonnes of fertiliser and more than 1.2 million tonnes of fuel, surpassing targets by 2.5 percent and 5.3 percent, respectively.

Despite the week-long Lunar New Year holiday during January, all activities of PetroVietnam were maintained as usual.

Also in January, the group’s affiliate - the Vietnam Petrochemical and Fiber Joint Stock Company (VNPOLY) - produced five tonnes of drawn textured yarn (DTY) to make medical face mask amid the acute respiratory disease caused by the new strain of coronavirus (nCoV).

The group is projected to face difficulties in the domestic and international markets next month due to uncertainties in the crude oil market and decreasing travel and transport demand due to nCoV.

In 2020, PetroVietnam will strive to tap 20.36 million tonnes of oil equivalent and produce 21.6 billion kWh of electricity, over 1.56 million tonnes of fertilisers and more than 11.8 million tonnes of fuel.

Its 2020 turnover is projected at over 640 trillion VND and revenue to the State budget at more than 82 trillion VND./.

HCM City expects stock market to become ‘barometer’ of economy

HCM City will speed up equitisation of State-owned enterprises to bring good ones and their brands into the stock market, its chairman has said.

Speaking at a ceremony on Monday to mark the reopening of the Ho Chi Minh Stock Exchange (HOSE) after the Lunar New Year holidays, Nguyen Thanh Phong hailed its achievements last year.

He said the city would focus on becoming an international financial centre.

“Therefore, the city wants HOSE to be closely linked to the international financial centre and become a ‘barometer’ of the economy.

“The city also hopes that HOSE will optimise its role as a channel to effectively mobilise and allocate resources, create connections and lead businesses and market members towards [adopting] international standards.”

Nguyen Vu Quang Trung, HOSE’s deputy CEO, said despite the global economic instability and trade conflicts, Viet Nam’s stock market remained an attractive destination for foreign investors last year.

This year would be an exciting one with important events in the securities industry, he said.

The amendments to the Securities Law that would come into effect on January 1, 2021, would be a turning point in perfecting the legal framework and improving market quality.

“The new, comprehensive, integrated information technology system created by HOSE is expected to be completed and put into operation this year.

“It will help modernise technology infrastructure, enabling Viet Nam's stock market to get closer to good standards and practices in the world.”

Deputy Minister of Finance Huynh Quang Hai spoke about some key measures envisaged to make the stock market stronger and more efficient in 2020.

They include completing decrees and documents guiding implementation of the amended Securities Law, restructuring the stock market, establishing the Vietnam Stock Exchange by restructuring the two existing markets, strengthening the equitisation mechanism, divesting State capital in enterprises, implementing measures to upgrade Viet Nam’s status from a frontier to an emerging market, and enhancing regulations of the market development, he added.

By the end of last year, the southern bourse had 382 listed companies.

Its market capitalisation is 250 per cent of the city’s GRDP, higher than the target of 70 per cent set for 2020, and the daily average trading is VND4 trillion (US$172 million), or 88 per cent of the country’s total.

SCG announces operating results for 2019

SCG announced Operating Results for 2019 and unveiled business strategies to overcome disruptions spawned by uncontrollable external factors in 2020 with the accelerated transformation of internal factors. It is set to revamp three core businesses and equip human resource development to effectively shift from being a manufacturer to a solution & service provider, winning the customer's hearts throughout ASEAN and maintaining sustainable business growth.

Mr. Roongrote Rangsiyopash, President and CEO of SCG, disclosed the company’s unaudited Operating Results for FY2019, with registered Revenue from Sales decrease 8% y-o-y to 327,584 Billion VND (US$ 14,106 Million), due to the drop in Chemical prices. Without the recognition of the severance pay adjustment, SCG would have recorded 26,192 Billion VND (US$ 1,097 Million), in Profit for the year, a drop of 24% y-o-y. Factoring in the severance pay adjustment of 1,501 Billion VND (US$ 64 Million), SCG’s Profit for the year will stand at 24,626 Billion VND (US$ 1,031 Million), a decrease of 28% y-o-y from the lower chemicals earnings.

In 2019, SCG’s Revenue from Sales of High Value Added (HVA) Products & Services reached 137,832 Billion VND (US$ 5,771 Million), representing a decrease of 3% y-o-y and accounting for 41% of total Revenue from Sales. Spending on Innovation Research & Development totaled 4,356 Billion VND (US$ 182 Million), or 1% of total Revenue from Sales.

SCG’s Revenue from Sales of Q4/2019 dropped by 4% q-o-q to 81,300 Billion VND (US$ 3,507 Million), from lower chemicals and packaging paper prices and decreased 9% y-o-y mainly from decreased chemicals prices. Profit for the Period rose 15% q-o-q to 5,465 Billion VND (US$ 229 Million) attributed mainly from seasonal dividend contributions from the investment business, but decreased 32% y-o-y, mainly due to the decline in performance from the Chemicals business in light of continued trade war concerns and market volatility which resulted in decreased margins. There was an inventory loss of 815 Billion VND (US$ 35 Million) in Q4/2019.

Besides, SCG’s Revenue from performance businesses outside of Thailand including with export sales from Thailand in 2019 registered 138,465 Billion VND (US$ 5,797 Million) or 41% of total Revenue from Sales, a decline of 12% y-o-y, of which, Revenue from export sales from Thailand registered 78,578 Billion VND (US$ 3,290 Million) or 23% of total Revenue from Sales, a decline of 22% y-o-y.

For SCG’s operation in ASEAN (ex-Thailand), the Revenue from Sales in Q4/2019 was flat y-o-y, amounted to 23,319 Billion VND (US$ 1,006 Million), which is 27% of SCG’s total Revenue from Sales. This includes sales from both local operation in each ASEAN market and imports from the Thai operations.

As of 31 December 2019, total assets of SCG amounted to 487,506 Billion VND (US$ 21,073 Million), while the total assets of SCG in ASEAN (ex-Thailand) amounted 175,443 Billion VND (US$ 7,584 Million), which is 40% of SCG’s total consolidated assets.

In the Vietnam market, SCG’s Q4/19 Revenue from Sales amounted to 7,425 Billion VND (US$ 320 Million) which represents a decrease of 11% y-o-y mainly from all business. The 2019 Revenue from Sales in Vietnam, SCG recorded at 29,516 Billion VND (US$ 1,271 Million).

As a proof of SCG’s commitment to continuously develop products for better living of customers, the SCG Concrete Roof Co. Ltd, the first concrete roof tile manufacturing in Vietnam has been certified as Top 100 Sustainable Corporation (Corporate Sustainable Index - CSI). The CSI is governed by Vietnam Chamber of Commerce and Industry (VCCI) to recognize businesses with sustainable approach in operation as well as comply strictly to local regulations.”

SCG ensured the quality of life and better future by continuing its 13-year journey with the flagship Sharing the Dream scholarship in Vietnam. This year’s program is adjusted to response to the need of each province where SCG operates by giving around 300 scholarships worth 2 billion VND in total value and training for leadership skills improvement. Besides, SCG and its partner, Hanoi FC, have brought a festive seasonal football feast to 130 junior players in Hanoi through the exciting Kick & Share football clinic with famous football players during Christmas. The activity aims to grant young generation wishes in becoming football professional players.

For investment, SCG will continue delivering solutions, products, and services of 3 core businesses to satisfy customers throughout ASEAN, especially in Thailand, Vietnam and Indonesia which show high potential and sizeable growth, plus seeking opportunities in emerging market in other regions through collaboration with groups, organizations, institutes, and other sectors at home and aboard to generate business opportunities and enhance the living quality of people, community, society, and environment in line with the commitment of "Passion for Better," better and faster.”

Coronavirus put aviation, tourism, and oil and gas stocks on alert

Similar to the SARS pandemic 17 years ago, the coronavirus outbreak has increased the risk factor of aviation, tourism, as well as oil and gas stocks by a significant margin. Meanwhile, pharmaceuticals, steel, and banking stocks are on the rise.

According to a research by Agribank Securities Corporation (Agriseco Research), in addition to China, Vietnam and Thailand are forecast to suffer the worst hit of the coronavirus outbreak. A fall of 75 per cent in the number of Chinese arrivals within the past three months may result in a drop in Vietnam and Thailand's GDP by 0.37 and 0.58 per cent this year.

Regarding the securities market, the research also showed a correlation between epidemics and stock indexes. The biggest panics over outbreaks were all followed a nosedive by stock markets. Back when the SARS, H5N1, and H1N1 were scaring the populace and stock traders many years ago, the market also recorded sharp downturns and took at least six months to recover.

The local stock exchange has also been negatively impacted by global impacts. 2020’s first session recorded a sharp downturn of 3.2 per cent in the VN-Index, and Agriseco Research was of the opinion that this followed the global trend and forecast the market to fall by 3-5 per cent in total before recovering.

As a result, Agriseco advises that short-term risks are unavoidable, so short-term investors should lower their share rates to preserve capital, and soon sell stocks in sectors flagged to be affected, like aviation, tourism, or oil and gas.

In addition to Agriseco Research, BIDV Securities Company (BSC) also assessed the impacts of the coronavirus outbreak on the local securities market. Accordingly, during the previous SARS outbreak, the local exchange fluctuated and mostly declined in the first three months of the outbreak.

Based on historical evidence, BSC stated that investors should lessen their stock holdings but not sell completely. At the same time, lowering holdings of negatively affected stocks is the best option, while looking to raise their stocks that stand to benefit from the epidemic.

According to BSC, aviation stocks like HVN, VJC, and other stocks from the oil and gas sector have gloomy prospects. Otherwise, healthcare shares like DBD, PME, DHG or jewellery shares like PNJ are forecast to have good prospects.

Ca Mau attracts 925 million USD investment in 2019

The southernmost province of Ca Mau attracted 24 investment projects with total registered capital of more than 21.5 trillion VND (925 million USD) in 2019, bringing the number of projects in the locality to 318, capitalised at 99.66 trillion VND (4.28 billion USD).

Chairman of the provincial People’s Committee Nguyen Tien Hai delivered this information during a meeting between local authorities and 300 businesses in the province on February 3.

Hai praised the contribution of the business community to the province’s development in recent years.

The chairman urged businesses to foster cooperation and comply with their commitments in ensuring environmental protection and speeding up the implementation of their projects.

“Ca Mau province always considers the success of businesses as our success," Hai said.

The province is now home to nearly 3,900 businesses with total registered capital of over 44 trillion VND (1.9 billion USD).

In the future, Ca Mau will implement some major measures to create the best conditions for businesses including reviewing planning of industrial zones and clusters to attract large-scale projects and accelerating administrative reforms, the chairman said.

This year, it will also facilitate the operation of the local business association to help firms address their difficulties and connect them with State agencies.

Hai added the association’s operation is a must to not only assess the satisfaction of enterprises with State agencies but also to improve provincial competitiveness.

A new Investment Promotion and Business Support Centre has been established in the province to attract investment.

Aside from providing consultancy and support for investment, business development and start-ups, the centre will also promote investment, trade and tourism.

According to Quach Van An, director of the centre, local authorities are making every effort to attract investment projects in the Nam Can Economic Zone in Nam Can district and Khanh An Industrial Park in U Minh district./.

 
 

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