Pathway to revamp legal corridor to promote digital banking
With Vietnam currently being home to 70 credit institutions along with payment intermediaries such as e-wallets which provide financial services through the Internet and mobile phones, experts in the field have underlined the need to complete the legal corridor to promote the development of digital banking in the future.
Statistics indicate that the value of financial transactions has reached over VND7 million billion via the Internet and approximately VND300,000 billion through mobile phones. These figures show that the transaction volume remains small in comparison to the overall size of the economy.
Among economies throughout Southeast Asia, Vietnam enjoys advantages in terms of developing a digital economy due to a relatively strong digital infrastructure when compared to other economies regionally. There also exists plenty of advantages in order to transform the digital economy into a digital space, therefore promoting digitalisation among businesses.
Within the banking sector, in contrast to the traditional banking model, digital banks and e-wallets have several differences and competitive advantages due to all communication channels with customers being conducted online through mobile platforms with a rich, intuitive, and cohesive interface, serving to create greater customer engagement.
Despite the nation making progress to build a legal corridor for digital payment services, there remains paperwork obstacles amid the current system of documents which has ultimately served to impede digital payments from expanding in a rapid manner.
Nguyen Tri Hieu, a financial expert, emphasized that it is essential to first develop a standard legal framework without moving into areas that are not fully controlled.
According to Pham Tien Dung, head of the Payment Department of the State Bank, the country has a form of legal framework suitable for digital payments but the question remains on how to develop new models.
Moreover, it is considered necessary to complete the digital technology infrastructure system with a focus being placed on building and refining the technology infrastructure within the banking industry, whilst also strengthening applications used by the banking industry with other service sectors as a means of expanding the digital ecosystem.
Dung also stressed the necessity of building a national database for the population that protects user data and transactional security, a factor that is critically important for digital banking development.
Mytel has 10 million subscribers in two years
Mytel – a telecom brand of Viettel Group in Myanmar on Thursday announced it would have 10 million subscribers after only two years of operation.
The result has made Mytel the second largest telecom provider in Myanmar and is 2.5 times higher than that of the fourth position. Mytel also completed its set targets six months before schedule.
Myanmar is also Viettel’s international market with the highest number of customers. Earlier, Mytel also reached two million subscribers in a record time of just a month.
Myanmar is the 10th international market of Viettel with the largest population and investment. At the time of launching, Mytel has a fibre optic cable infrastructure of 36,000 kilometres, accounting for 50 per cent in Myanmar. This was also the first telecom provider covering 4G across Myanmar.
Mytel is the first telecom firm in the country providing Voice over Long-Term Evolution (VoLTE) – a standard high-speed wireless communication for mobile phones and data terminals, eSIM and 5G network. Currently, 75 per cent of Mytel’s customers are using 4G services. This is the highest rate among international markets of Viettel Group.
In the first quarter of 2020, Mytel posted profit of US$25 million thanks to strong growth in terms of subscribers and new services under its digital transformation strategy. The telecom has achieved profit two years sooner than expectation.
Since its participation in the telecom market, Mytel has helped promote internet services in Myanmar with coverage rising from 31 per cent in June 2018 to 55 per cent in September 2019. Mytel is also the most popular operator in Myanmar with a Net Promoter Score (NPS) of positive 11.
TMV opens new dealership in Da Nang
Toyota Vietnam Motor (TMV) on Friday officially opened Toyota Okayama Danang in the central city of Da Nang, bringing the total number of Toyota authorised dealers and branches to 65.
This is part of TMV’s expansion plan of its dealer network and authorised service stations in the central region to meet the growing demand of the market and bring quality products and services to customers nationwide.
The dealership was constructed on an area of more than 12,000sq.m, covering a showroom, customer lounge and service area.
The service area is designed with 59 compartments for repairs, including 19 compartments for express and general repairing and 40 modern compartments for painting including paint mixing and colour mixing systems in closed areas, which ensures environmental safety.
Toyota Okayama Danang possesses modern equipment and environmentally-friendly technology such as automatic washing machines using Japanese Banzai technology and environmentally friendly water-borne paint technology.
Up to now, TMV's network has reached 65 dealers/branches and authorised service stations, located in 31 provinces and cities nationwide.
Origin of goods- important requirement to enjoy EVFTA tariff preferences
In order for Vietnamese goods that are exported to the EU to enjoy preferential tariffs in the European Union-Vietnam Free Trade Agreement (EVFTA), businesses must obtain a thorough grasp of the provisions set out in the trade deal which stipulate very strict requirements regarding the origin of products, according to insiders.
Phan Van Chinh, director of Import and Export Department under the Ministry of Industry and Trade, said that methods to ensure that the rules on the origin of goods are followed is viewed as a primary task when it comes to importing and exporting activities with the EU once the EVFTA is implemented.
There exists some advantages of the "cumulative" provision set out in the EVFTA, with enterprises needing to know them in order to be able to take full advantage of Vietnamese goods and products when exporting items to the EU, he noted.
According to experts, local exporters to the EU market must update new content such as the mechanism of self-certification of origin, a process which sees exporters declare the origin of their products as stipulated within documents submitted to the customs office of the importing country, as opposed to having to apply for a traditional certificate of origin from relevant agencies.
Nguyen Thu Trang, director of the Center for WTO and Integration of the Vietnam Chamber of Commerce and Industry (VCCI), said along with the timely promulgation of a Circular on the origin of domestic exports to the EU once the EVFTA takes effect, it is also necessary to issue a Circular to regulate rules and origin of goods from the EU to Vietnam.
The agricultural sector is viewed as one of the biggest beneficiaries of the EVFTA, largely due to rice, one of the country’s key export products, being forecast to increase by 65% to the EU by 2025, with the EU set to impose a tax rate of 0% on rice products in line with the roadmap set out in the trade agreement.
Consequently, the EVFTA will present a wave of fresh opportunities for Vietnamese businesses if they are suitably prepared and ready to capitalise on the benefits brought about by the trade pact.
The Import and Export Department is set to strengthen the State management over the granting of certificates of origin whilst simultaneously combatting fraud relating to goods. As a result, local firms will be supported when dealing with issues regarding verification of origin of goods as required by the EU as part of protecting the legitimate interests of Vietnamese businesses.
E-commerce promoted to boost Vietnam's digital economy
Last month, the Vietnamese government approved a master plan on national e-commerce development through 2025. The plan is part of efforts to promote the digital economy whose advantages are tapped to boost competitiveness and productivity, and expand the market and exports.
The national plan on e-commerce development in the 2021-2025 period is integrated with current Vietnamese strategies and policies on participating in the Fourth Industrial Revolution toward developing a digital economy and promoting national digital transformation.
Its overall goals include promoting the application of e-commerce in businesses and the community, narrowing the gap between major cities and localities to promote online trading, building a sustainable virtual market, boosting production and consumption of Vietnamese goods, and increasing cross-border online trade.
Vietnam expects online shoppers to account for 55% of the population by 2025, with average spending projected to hit US$600 million a year.
It forecasts revenue from e-commerce in the buyer-to-customer (B2C) model to surmount US$35 billion, or 10% of retail sales and services nationwide, thus raising the use of cashless payment 50%.
Nguyen Binh Minh of the Executive Committee of Vietnam E-Commerce Association said, “COVID-19 is a test for the entire world to restructure its economy. In the pandemic, e-commerce has proved its high stability in a crisis. Nobody can say exactly when COVID-19 will end. For the time being, e-commerce is a good solution and will continue to be in the future. Promoting e-commerce as the core in the national economic development will no longer be a direction, but a right solution.”
Under the plan, the Ministry of Industry and Trade proposed six ways to develop e-commerce in Vietnam including fine-tuning policies and mechanisms; improving management capacity; fighting trade frauds, infringement of intellectual property rights and unfair competition in online environment; strengthening domestic consumer confidence; and promoting cross-border online trade.
Dang Hoang Hai, Director General of the Ministry of Industry and Trade’s Department of E-commerce and Digital Economy, said: “We have to develop e-commerce nationwide instead of only in big cities. Second, it’s necessary to apply new technologies to better manage product quality and reduce costs for e-commerce. Third is to develop Vietnamese goods.”
“These will be the foundation for making full use of e-commerce to bring benefits to people in remote areas, create healthy competition among Vietnamese manufacturers, and drive the national economic development. To help e-commerce develop more comprehensively, we will revise the decree on e-commerce and work with other ministries and sector to promulgate strict punishments to prevent violations of goods quality,” Hai added.
Once the master plan is put into practice, Vietnam’s e-commerce will likely move up to second place in Southeast Asia and become the most potential market in the region by 2025.
Economist Nguyen Tri Hieu said, “I totally agree with the master plan because, in fact, e-commerce is an inevitable trend. It has been widespread in developed countries. To achieve this goal, the government and functional agencies need to speed up the cashless payment system. We also need to change consumers’ shopping habit by enhancing trust-building activities for customers.”
Consumption habits have changed significantly due to the COVID-19 epidemic. Consumers now prefer online shopping to traditional shopping methods. Many individuals and businesses are turning to online channels to promote their products and trade.
COVID-19 impact puts businesses in fight for survival
Plenty of local enterprises have made great strides to adapt to the new situation whilst struggling to maintain production and their business activities despite numerous difficulties as a result of the impact of the novel coronavirus (COVID-19).
Indeed, many industries have been strongly affected over the past few months due to the effects of the COVID-19.
Despite this tough economic picture, the country’s seafood exports have successfully enjoyed a rapid recovery due to the confidence of investors, importers, and retailers for Vietnamese seafood to grow significantly over time, according to Truong Dinh Hoe, General Secretary of Vietnam Association of Seafood Exporters and Producers (VASEP).
Hoe went on to express that while other seafood exporters have encountered numerous challenges as a result of the pandemic, the country has begun to recover production moving into the post-pandemic period as a means of maintaining seafood supply sources for the world, noting that this has also created a range of opportunities for Vietnamese seafood in the near future.
In addition, the nation’s supply chain of essential materials for aquaculture and processing have not been dependent on the Chinese market.
According to Hoe, a shift in production from China to Vietnam will begin to emerge, especially due to the lasting effects of the ongoing trade war between the United States and China trade war, along with the COVID-19 pandemic, with demand for aquatic products expected to increase sharply ahead in the post-pandemic period.
Recent times have seen the apparel and garment industry overcome plenty of challenges caused by the COVID-19 by shifting production to medical equipment such as protection gear and face masks, therefore helping to generate jobs for local workers.
Nguyen Triet, a representative of a local textile firm based in Hai Duong province that exports products to the US market, said that the company has been able to maintain signed orders and has created stable jobs for 300 employees, whilst trying to negotiate with partners not to cancel contracts for new orders.
Amid numerous difficulties, firms have been striving to seek new markets and secure orders while pining their hopes that consumption demand will pick up with more export orders in the post-pandemic period, Triet added.
With a market of nearly 100 million people, there remains plenty of room ahead for the consumption of local products amid the complicated nature of the COVID-19 pandemic globally.
Vu Quoc Vuong, director of Dong Ky Wood Investment and Development Joint Stock Company cum Chairman of Dong Ky Fine Arts Wood Association, said several countries have moved to impose lockdowns and have sealed their borders due to the pandemic, causing great difficulties for import and export activities.
Vuong elaborated that the company and its members have been active within the domestic market, making improvements in terms of design, approaching customers, diversifying products to maintain production, and creating jobs for workers in order to overcome the challenging time.
Hoang Duc Vuong, General Director of Vinh Thanh Joint Stock Company, said that numerous manufacturing and export firms are facing difficulties, especially with regard to the plastic industry.
He noted that plastic exports now account for between 60% and 70% of business, with the domestic market becoming an alternative option for local businesses in which to overcome disruption in the global production chain as a result of the COVID-19.
Most notably, when the Government's economic support packages are deployed and public investment disbursement is strengthened, these moves ultimately create fresh impetus for the gradual recovery of enterprises, Vuong emphasised.
Dr. Nguyen Minh Phong, an economic expert, pointed that the domestic market of nearly 100 million people can act as a magnet for local firms in the near future, noting that businesses must ensure the quality of goods, enhance their processing stages, improve their designs, reduce prices, and increase incentives for customers.
ManpowerGroup and MoLISA seek sustainable employment and business model in new normal
ManpowerGroup Vietnam in collaboration with the Ministry of Labour, Invalids and Social Affairs (MoLISA) on June 3 organised a webinar titled “Solutions to Sustainable Employment & Business – Sharing from International Experiences” to explore solutions to a sustainable employment and business model to fit the new normal.
The webinar “Solutions to Sustainable Employment & Business – Sharing from International Experiences”
The forum welcomed executives from the MoLISA, the Vietnam Chamber of Commerce and Industry (VCCI), and the International Labour Organisation (ILO), along with two ManpowerGroup country managers in the Asia-Pacific and Middle East, to share international experiences with the Vietnamese business community.
With the current unprecedented challenges on people and economies around the world due to COVID-19, the global workforce ecosystem has been heavily affected. Vietnam is no different. According to the MoLISA, over 47,000 people have applied for unemployment insurance in February 2020, an increase of 59.2 per cent compared to January 2020 and over 70 per cent from the same timeframe last year.
Le Van Thanh, Deputy Minister of Labour, Invalids and Social Affairs said, “In Vietnam, COVID-19 has impacted the bottom lines of almost all organisations and workers in various sectors, from hospitality, manufacturing to agriculture, travel, and export-import. When the economy is reopened in what will be the new normal state, one of the top priorities of the Vietnamese government is to create employment for people who have lost their jobs, ensuring that the local workforce can re-join the labour market; promoting the role of enterprises from all economic sectors and actively participating in economic development, production, and value chains brought by the newly-signed free trade agreements.”
“We welcome international partners to share best practices and lessons on measures to help impacted workers and employers in Vietnam improve their resilience,” he added.
It was noted that unparalleled collaboration and co-ordination by diverse stakeholder groups, ranging from employers and governments to labour unions and institutes, is needed to prepare for the new normal in the workplace.
“In this new reality, a disciplined return to work will be key to economic recovery. Great efforts have been made to re-deploy/reallocate labour across a range of industries such as aviation, ground services, and ride-hailing, among others in Singapore, Malaysia, Thailand ,and elsewhere,” said Sam Haggag, country manager of ManpowerGroup Malaysia, director and executive sponsor, TAPFIN – Asia Pacific & Middle East.
An optimal talent strategy in the new normal is at the forefront of any organisations’ success. Simon Matthews, country manager of ManpowerGroup Vietnam, Thailand, and the Middle East highlighted that, “With 84 per cent of organisations to be upskilling their workforce by 2020, companies need a newer approach to accelerate upskilling and to develop the talent they need to remain competitive. Employers also need innovative engagement and hiring strategies to differentiate.” He also shared how the HR services industry with large global networks covering all relevant stakeholders have proven its agility to keep up with changing circumstances and in helping clients and talent to prepare for the future.
In addition to the issue, the webinar also helped to reiterate the fact that to limit the economic downturn and its impact on people’s ability to earn a living, the labour market and all its stakeholders must quickly adjust to the new normal, where physical distancing and other strict measures will be integral to all workplace processes for a considerable time to come.
Also at the event, representatives from Bosch Vietnam and IKEA Vietnam shared their solutions to ensure sustainable employment and business model in the new normal state.
ManpowerGroup, the leading global workforce solutions company, helps organisations transform in a fast-changing world of work by sourcing, assessing, developing ,and managing the talent that enables them to win. ManpowerGroup develops innovative solutions for hundreds of thousands of organisations every year, providing them with skilled talent while finding meaningful, sustainable employment for millions of people across a wide range of industries and skills.
Its expert family of brands – Manpower, Experis, and Talent Solutions – creates substantially more value for candidates and clients across 80 countries and territories and has done so for 70 years.
In 2019, ManpowerGroup was named one of the World’s Most Ethical Companies for the 10th year and one of Fortune’s Most Admired Companies for the 17th year, confirming its position as the most trusted and admired brand in the industry.
Vietnam’s rice export revenue up 18.9% in first five months
Vietnam exported a total of 2.9 million tonnes of rice in the first five months of 2020, bringing in US$1.41 billion, an increase of 5.1% in volume and 18.9% in value.
According to the Ministry of Industry and Trade (MOIT), Vietnam is seeing plenty of opportunities to outstrip Thailand in rice exports this year thanks to more competitive prices and a strong rally in shipment volume after the removal of the export quota.
During the first four months of 2020, the Philippines was the largest buyer of Vietnamese rice, purchasing 902,100 tonnes for US$401.3 million, up 11.4% in volume and 26% in value.
Vietnam also saw substantial increases in rice shipments to China, Indonesia, Taiwan (China) and Ghana, but exports to the Ivory Coast fell sharply by 44.5%.
As Vietnam fully resumed rice exports from May 1, prices of the Vietnamese grain during the month rose to the highest level for years, reaching an average of US$527 per tonne, up 5.6% from the previous month and 21.4% compared to a year earlier.
Vietnamese rice prices in the first five months of 2020 averaged at US$485 per tonne, up 13% compared with the same period of last year.
Average cost per unit of North-South expressway at VND 115.8 bln one km
The Ministry of Transportation on June 6 announced that the approved cost per unit for the North-South expressway is at VND115.8 billion per kilometer, much lower than that in the Decision No.44/2020 of the Ministry of Construction.
According to the Ministry of Transportation, in the total preliminary investment of about VND118.72 trillion, the cost structure for the project included VND11.43 trillion for site clearance, VND67.92 trillion for construction and equipment cost, VND7.78 trillion for project management, consulting, and other costs, and VND12.35 trillion for provision.
Based on cost calculation, the ministry decided to approve the average cost per unit of the North-South expressway at VND115.8 billion per kilometer.
The cost per unit includes the costs for construction of bridges and tunnels, reinforcing soft ground, smart traffic system, non-stop electronic toll collection system, and frontage roads to serve people’s livelihood. In excluding the Cam Lo – La Son project with a scale of two lanes and a total length of 98.4 kilometers, and the My Thuan 2 Bridge project with a length of 6.6 kilometers, the average cost per unit of the North-South expressway will be around VND95.6 billion per kilometer.
Earlier, at the Decision No.44/2020, the Ministry of Construction announced the cost per unit for four-lane roads for the region 1 in the North, region 2 in the Central, and the region 3 in the South. Of which, the cost per unit for the region 2 was VND 157.48 billion per kilometer. If excluding the construction costs for bridges and reinforcing soft ground, the cost per unit would be VND 124.98 billion per kilometer.
Inflation control becomes top priority in second half of 2020
Inflation control target will be the top priority in monetary management policy from now until the end of 2020, announced Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong at a press conference in Hanoi yesterday.
Of these, the focus will be on interest rate and exchange rate management, market movements, credit scale control for quality improvement and Covid-19 developments to meet the economy’s capital demand in a timely manner.
In addition, SBV will continue asking credit institutions to implement solutions to solve difficulties for customers affected by Covid-19 such as debt restructuring and interest reduction or exemption.
According to SBV, under impacts of the Covid-19 pandemic, credit demand posted low growth in the first six months of 2020. As of May 29, it reached only 1.96 percent compared to the end of 2019, much lower than 5.74 percent and 6.16 percent during the same period in 2019 and 2018 respectively.
Currently, credit institutions are positively implementing programs to support residents and businesses under the impacts of the pandemic with interest rate as low as 3-4 percent a year. By May 25, the banking system had restructured debts for nearly 224,000 customers with the total outstanding loans of VND152 trillion (US$6.53 billion), applied interest exemption and reduction to over 326,000 customers.
With the above results, SBV believed that the monetary management policy has positively worked to assist the economy’s recovery from Covid-19, contribute to macroeconomic stabilization and inflation control from now until the end of the year.
HCMC prioritizes preventing businesses from going bankrupt
HCMC is set to focus on preventing businesses from going bankrupt by putting in place specific measures from now until the end of this year, said the municipal government at a meeting on the city’s January-May socioeconomic situation held on June 4.
Data of the HCMC Department of Planning and Investment revealed that between January and May, 2,015 businesses were shutting down and over 7,250 others were temporarily suspending operations in the city, up 16.4% and 29.9%, respectively, compared with the same period last year.
At the same time, there were over 14,250 newly established enterprises with total registered capital of VND185 trillion, down 85.5% and 70.3%, respectively, compared with the same period last year.
Addressing the meeting, HCMC chairman Nguyen Thanh Phong asked municipal departments and agencies to take specific measures to support businesses affected by the Covid-19 pandemic, especially those facing a high risk of bankruptcy.
“Preventing bankruptcy means preventing unemployment. Most businesses in HCMC are micro and small, which are the most vulnerable to the Covid-19 pandemic,” he noted.
Commercial banks have reduced interest rates for some 17,500 clients and restructured debts for many businesses.
The city’s chairman noted that tourism was the hardest hit sector and had seen a steep decline in the number of tourists and revenues.
To help the tourism market recover, the city’s government has tasked the Department of Tourism with launching new products and collaborating with other cities and provinces to boost the demand for local travel.
Phong asked the pillars of the economy including banking, insurance, taxes and customs to put in place specific measures to help businesses recover.
The city will also promote innovation, implement social security policies, reduce the unemployment rate and accelerate the disbursement of public investment. According to the World Bank, a 10% increase in public investment disbursement will lead to a 0.6% increase in gross domestic product.
Ministry proposes picking Song Da Corporation as expressway’s contractor despite its VND11t debt
The Ministry of Construction has proposed picking Song Da Corporation as the contractor for some sections of the North-South Expressway project despite the corporation being over VND11 trillion in debt.
The ministry justified this, saying Song Da Corporation was chosen because of its human resources, available equipment and experience in constructing large projects.
Meanwhile, the corporation has been struggling with financial difficulties in recent years.
As of late 2019, it incurred a debt of VND11,135 billion including VND5,302 billion in financial lease debt, according to the Ministry of Finance. The corporation’s debt to equity ratio was 2.8, approximating the financial risk level.
Song Da Corporation’s debt came from its subsidiaries and affiliates including Halong Cement Company (VND2.7 trillion), Viet Lao Power JSC (over VND800 billion), Nam Chien Hydropower Company (some VND700 billion), Xekaman 1 Power Company (some VND300 billion) and Xekaman 3 Power Company (VND560 billion).
Quang Nam sets its sights on green tourism model
While the Covid-19 pandemic has caused serious damage to the tourism industry, it is also an opportunity for many localities to look back on their tourism models and pave the way for a green and sustainable tourism industry.
A seminar themed “Quang Nam Tourism Market Reconstruction” on June 10 at 1.30 p.m. at the Silk Sense Hoi An River Resort in Hoi An City seeks to discuss exactly that.
The event will be organized by the Quang Nam Tourism Association in collaboration with the provincial Department of Culture, Sports and Tourism. It will be held under the auspices of the Quang Nam People’s Committee and sponsorship of Silk Sense Hoi An River Resort, Hoiana Nam Hoi An Development Co., Phu Ninh Lake Ecotourism and Hoi An Impressive Park, among others. The Saigon Times Group is the main media sponsor.
Topics to be discussed at the seminar include a strategic market structure for tourism in the future, orientation for cruise tourism development, preserving heritage in tourism development, identifying tourism brands, digital and media technology solutions towards the experience tourism and green tourism models, increasing revenues from big data and the introduction of a green criteria for tourism in Quang Nam.
“We believe the Covid-19 pandemic has caused serious damage. It is also an opportunity for us to look back on our past journey, forcing the community to come together to seek better ways to adapt to the crisis and plan further development,” said Nguyen Son Thuy, QTA’s General Secretary, adding, “It is also a good time to promote the green destination model.”
Exports and industrial production bounce back in VN's biggest economic engine
The export value of enterprises in Ho Chi Minh City witnessed a year-on-year increase of 6.3%, reaching nearly US$17 billion in the first five months this year, according to the city’s Department of Industry and Trade.
In May alone, the city's export volume rose 10% from the previous month to US$3.384 billion, with key items like rice (up 47.7%), crude oil (up 30.6%), rubber (up 8.4%) and aquatic products (up 2.4%).
China remained the largest importer of Ho Chi Minh City with nearly US$4 billion in five months, up 38.5% and making up 25.7%. It was followed by the US and Japan.
Meanwhile, exports to the economies that signed free frade agreements with Viet Nam decreased in the reviewed period, in which exports to Europe fell by 11.6% to US$1.85 billion.
According to enterprises located at the city's high-tech parks, since late April 2020, some firms have continuously launched measures to cope with impacts of the COVID-19 pandemic. In May 2020, the export value of businesses at high-tech parks obtained US$1.5 billion, up 10.7%.
The Index of Industrial Production of the country's biggest economic engine in May picked up 7.9% against the previous month and dipped 15.5% compared to the same period last year./.
Indonesia’s capital market attractive to foreign investors
Foreign investors are starting to put their money back into Indonesian assets as countries around the world begin to ease their COVID-19 restrictions, spurring hopes of a global economic recovery.
Data of the Financial Services Authority showed that foreign investors bought a total of 8 trillion rupiah (564.3 million USD) in Indonesian stocks in May.
The capital inflows boosted the rupiah by 8.7 percent in the past month, reaching 13,877 rupiah per US dollar on June 5. The Jakarta Composite Index (JCI) benchmark stock gauge gained nearly 5 percent within a month.
The 10-year sovereign bond yield also declined significantly to 7.1 percent from 8.02 percent in early May, indicating a decline in risk in investing in the instrument, as bond yields move in the opposite direction of stock prices.
The global market is seeing an abundance of liquidity because central banks in developed countries have been injecting money to support their economies during the COVID-19 risis, BNI Sekuritas economist Damhuri Nasution said.
The relaxing of mobility restrictions is sparking optimism among investors that COVID-19 is under control and that the global economy is starting to emerge back to normal, he added.
Such optimism has sent foreign investors on a buying spree of Indonesian blue-chip banking stocks, driving up the JCI gains.
Damhuri warned that the Indonesian government should keep a close eye on how the relaxation of restrictions could also pose a threat and reverse the positive sentiment in the market.
Bank Indonesia (BI) recorded a current account deficit of 3.9 billion USD, 1.4 percent of the country's gross domestic product (GDP) in the first quarter of this year, down from 2.8 percent in the previous quarter./.
Saudi Aramco withdraws from oil refinery project in Indonesia
Saudi Arabian Oil Co., (Aramco) quit from Cilacap oil refinery project owned by Indonesia's energy firm PT Pertamina after a long discussion, said Pertamina Director Ignatius Tallulembang.
Initially, both producers aims to settle the deal this year, but one of the largest global oil producers Aramco decided to pull out from the project, he said.
The cooperation ended in April 2020 after being extended at the end of December 2019, he said, adding that Pertamina is finding new business partners while preparing for the next development process.
With total investment of 5 billion USD, the project is expected to draw about 130,000 workers during the construction process, and 10,000 others while operating./.
HCM City to organise fair to stimulate consumer demand
Ho Chi Minh City’s Department of Industry and Trade will for the first time in several years allow businesses to offer promotions of up to 100 percent in June and July to boost demand that has taken a hit from the COVID-19 pandemic.
For the last few years, businesses have not been allowed to offer one for one and other similar promotions except during national holidays like the Lunar New Year, Independence Day and Reunification Day.
It will also allow free participation for businesses at the 2020 Consumption Stimulus Fair from July 2 to 5 in ThuDuc District.
There will be supermarkets, malls and electronics retailers like Thien Hoa and Nguyen Kim participating in the programme, according to the department.
It expects the event to boost economic recovery and normalise commercial activities in the city.
The fair, financed by firms and the Government’s trade promotion funds, will have 500 booths showcasing consumer products, agricultural goods, foods, and export items.
There will be promotional and discount programmes to stimulate consumption and help firms liquidate their stocks.
Le Thi Thanh Tam, deputy director of Sai Gon Food Company, said her company would offer promotions of up to 50 percent and free trials of goods.
Le Viet Thanh, director of K&K Fashion, said while major annual promotional programmes such as Black Friday and for Reunification Day (April 30) always attract a lot of customers, many shops mark up prices before them or sell old, counterfeit and poor-quality goods products that disappoint users.
The department therefore needs to strictly control the quality of products to be sold at the fair and take severe action against businesses that violate buyers’ trust, he said.
The promotions need to be promoted on different channels, especially social networks and digital media, to reach more young people, he said.
The city should get banks and financial companies to offer low-interest loans at the fair for high-value of goods such as air conditioners to stimulate demand, he added./.
Malaysia's economic stimulus to double deficit
Malaysia’s fiscal deficit will nearly double to around 6 percent of the gross domestic product (GDP) this year because of the government’s recent efforts to revive the economy, according to Finance Minister Zafrul Abdul Aziz.
He added that the government could seek to raise the debt ceiling to finance the stimulus.
Malaysia has announced incentives worth 295 billion RM (nearly 70 billion USD) to cope with the impacts of COVID-19.
The government vowed to directly inject 45 billion RM of that into the economy, mostly raised through domestic borrowings.
Malaysia aims to bring the fiscal deficit back to under 4 percent of GDP in the next three years, according to the minister.
He added that Malaysia’s public debt is now 52 percent of GDP, and the government could increase the ceiling to 55 percent in support of people and the economy.
Hanoi seeks special mechanisms to speed up major infrastructure projects
Ring roads No.4 and 5 would help ensure greater connectivity between Hanoi and other localities.
The Hanoi city government is proposing special mechanisms to speed up two major infrastructure projects to build ring roads No.4 and 5, local media reported.
Specifically, the special mechanism would be in forms of simplified policies so that the Ministry of Transport (MoT) and provinces and cities involved in the projects could fast-track them.
Hanoi also suggested the MoT consider the construction of the entire ring road No.5 connecting eight provinces and cities to ensure better connectivity, while ring road No.4 is Hanoi’s priority project in the immediate future.
The construction of the route connecting the Phap Van – Cau Gie section to Hanoi – Hai Phong expressway has a length of 13.9 kilometers and investment capital of VND9.8 trillion (US$420 million), to be built by a consortium of Phuong Thanh Transport Construction and Investment Company and Nguyen Minh Infrastructure Investment and Development Company under the build-operate-transfer (BOT) mechanism.
Hanoi’s authorities are looking at three project proposals under the private-public partnership (PPP) made by domestic investors, including the expressway section Noi Bai – Lao Cai – National Highway No.32 – Phap Van – Cau Gie with a length of 34 kilometers and investment capital of VND16.2 trillion (US$694.36 million).
Hoanh Son Corporation proposed the construction of Hong Ha bridge and its 6-kilometer approach roadway with investment capital of VND9.87 trillion (US$423.04 million), connecting Me Linh and Dan Phuong districts.
For ring road No.5, as of May 2020, so far only a tiny section of it, the Vinh Thuy bridge across the Red river, has been completed with investment capital of US$170 million.
Under a prime ministerial decision, ring road No.4 has a total length of 136.6 kilometers connecting Hanoi with Vinh Phuc, Hung Yen, Bac Ninh and Bac Giang provinces.
Ring road No.5, once completed, would connect eight localities namely Hanoi, Hoa Binh, Ha Nam, Thai Binh, Hai Duong, Bac Giang, Thai Nguyen and Vinh Phuc with a length of 331.5 kilometers.
Industrial park helps spearhead Hanoi’s supporting industries
At full capacity, the industrial park could accommodate up to 2,000 enterprises and create 150,000 – 200,000 direct jobs.
Hanoi Sourthern Supporting Industrial Park (HANSSIP) is considered a focal point in attracting both foreign and domestic investors in the field of supporting industries, Nhan Dan newspaper reported.
HANSSIP was designed under the Japanese standard by design consultant firm Nikken Seikkei Civil for on-site production chains.
The industrial park covers an area of 640 hectares and located in Hanoi's Phu Xuyen industrial satellite service urban area to the south of the downtown, adjacent to National Highway 1A and National Highway 1B - Phap Van Cau Gie.
At full capacity, HANSSIP could accommodate up to 2,000 enterprises and create 150,000 – 200,000 direct jobs.
Hanoi expects HANSSIP to be the driving force for Phu Xuyen, one of Hanoi’s five major satellite urban areas.
To date, major global firms have landed at HANSSIP, including the Association of Japanese manufacturers of aircraft components in Kobe prefecture and Onaga, producers of aircraft components for Boeing and Airbus; South Korea – based MBI, which is specialized in manufacturing products using renewable energies; Japan Die and Mold Industry Association, among others.
More importantly, the establishment of HANSSIP helped form Hanoi’s Association of Firms in Supporting Industries, which consists of 200 members being suppliers for multinationals such as Honda, Canon, among others.
The significance of HANSSIP has been growing since the Covid-19 pandemic, during which the world saw a surge in demand for face masks, medical equipment or ventilators, but many of them could not be produced in Vietnam due to the lack of development of the supporting industries.
With an investment capital of up to US$5 billion, HANSSIP is the first specialized supporting industrial park in Vietnam, while the government expects that HANSSIP will become a successful example in creating an impetus to drive up the country's supporting industries.
In addition, enterprises participating in manufacturing supporting industrial products in HANSSIP according to the regulations of the Vietnamese government will receive special incentives regarding corporate income tax, import tax, VAT, personal income tax, among others.
Malaysia reveals tax reliefs for real estate, automotive industries
The Malaysian government will introduce several incentives to stimulate the property market and the automobile sector.
The Home Ownership Campaigns (HOC) will be re-introduced, Malaysian Prime Minister Muhyiddin Yassin has said.
Through this campaign, stamp duty exemption will be provided on the transfer of property and loan agreement for the purchase of home between 300,000 and 2.5 million RM (70,300 - 586,000 USD), he added.
The exemption on the instrument of transfer is limited to the first 1 million RM of the home price while full stamp duty exemption is given on loan agreement effective for sales and purchase agreements signed between June 1, 2020 to May 31, 2021.
In addition, the Malaysian government has also announced real property gains tax (RPGT) exemption for Malaysians for disposal of up to three properties between June 1, 2020 and Dec 31, 2021.
As for the automotive industry, to encourage growth, the government has agreed to grant 100 percent sales tax exemption on sales of locally-assembled passenger vehicles, and 50 percent for imported passenger vehicles.
This will be effective from June 15, 2020 to December 31, 2021.
The Malaysian Automotive Association's President Aishah Ahmad welcomed the move, hoping that it helps the automobile sector of the country to recover./.
Domestic businesses urged to boost export of medical supplies
To capitalise on the global demand for medical protective equipment, Vietnamese companies need to proactively study markets, demand and quality standards, experts have said.
The demand for personal protective equipment and other medical supplies is growing in several European and American countries as the COVID-19 pandemic continues to rage, providing an opportunity for Vietnamese businesses.
Deputy Director of the Investment and Trade Promotion Centre of Ho Chi Minh City Cao Thi Phi Van told a recent seminar in the city that the garment industry was going through an unprecedented crisis due to COVID-19 but the pandemic also brought a significant opportunity for Vietnam to become the world’s face mask factory.
Many garment producers hit hard by the pandemic have switched to producing masks.
The demand for masks, protective equipment and medical gloves in the EU, the US and many other countries is very high whereas supply in the market is low because many factories have had to shut down to contain the spread of the disease.
But with COVID-19 contained to a great extent in Vietnam, the country’s garment industry has moved into recovery mode and is stepping up production. Some have received export orders worth millions of dollars.
Garment 10 Corporation Joint Stock Company said it has received orders for 400 million medical face masks from the US worth 52 million USD, 20 million cloth masks from another US partner and two million cloth masks and six million medical face masks from a German partner.
With domestic demand fully met and surging demand in other countries, enterprises are keen on exports, but it is a unique product with medical standards to meet, and so many businesses have difficulty exporting, especially to the US and EU, Van said.
Nguyen Tran Khanh Hoang, CEO of Super Cargo Service Company, an international logistics firm, said the difficulties most exporters of medical protective equipment currently face are their inability to furnish the documents required for customs clearance, not knowing the import process in destination markets, the lack of transportation options, and high logistics costs.
Vietnamese businesses have no experience in exporting medical protective equipment, and so are not familiar with the requirements, leading to cases where they have shipped goods without necessary documents.
Transportation has been disrupted in many areas, making it difficult for businesses to ship their products or very costly.
Pham Thi Hoang Oanh, CEO of Indochine Vina Trade Promotion Co., LTd, said to take advantage of the opportunity to export medical protective equipment, businesses need to research information related to import markets./.
Chinese firm to construct int’l tourist port in Phnom Penh
China’s Prince Real Estate Group has planned to develop an international standard tourist port at Prince Manor Resort centre in Kandal province of Cambodia, according to the Cambodian news agency Agence Kampuchea Presse (AKP).
The intention was unveiled by the firm’s Executive Director Xu Zhixing during a recent meeting with Cambodian Minister of Tourism Thong Khon in Phnom Penh.
According to Xu, the port will allow his firm to run its cruise ships along Tonle Mekong River, thus promoting tourism development in Phnom Penh and across the Southeast Asian country.
Khon welcomed and supported the Chinese company’s investment plan, stressing that the operation of the port will be a convenient recreational option when Cambodia as well as Phnom Penh hosts international events.
He also suggested Prince Real Estate Group invest more in tourism in Siem Reap and Kampong Thom provinces.
Cambodia is taking measures to recover its tourism sector which is crippled by the impact of the COVID-19 pandemic. Minister Khon on June 5 revealed Cambodia's tourism industry could lose 3 billion USD in 2020.
According to the Ministry of Tourism, Cambodia welcomed about 1.6 million foreign tourists in the first four months of 2020, down 52 percent year-on-year./.
Vietnam wants three expy sections built with State cash
The Government has suggested changing the investment format of three sections of the North-South Expressway from public-private partnership (PPP) to State funding, reducing their combined capital to more than VND100.8 trillion, according to the Thanh Nien Online website.
Minister of Transport Nguyen Van The presented the scheme to the National Assembly.
The Ministry also suggested utilizing the public investment format for three PPP projects -- Vinh Hao-Phan Thiet section, Mai Son-National Highway 45 stretching 63 kilometers and Phan Thiet-Dau Giay section stretching 99 kilometers. The latter two projects are regarded as important because they connect with key political and economic centers in the country.
The three projects have total revised capital of some VND100.8 trillion, compared with roughly VND102.5 trillion approved in the feasibility study. Of this, around VND67.9 trillion will be spent on building and equipment, VND15.4 trillion on compensation and resettlement, VND8.3 trillion on backup cost, VND1.3 trillion on interest payment and VND7.7 trillion on project management and consulting.
Regarding funding, the Government suggested using VND78.4 trillion from the State budget including the VND55 trillion previously allocated for the projects. For the remaining VND23.4 trillion, the Government will present a mobilization solution to the National Assembly following the Law on Public Investment.
Record lychees sold via MoMo e-wallet
More than 8 tonnes of lychees were sold out after 8 hours available online via MoMo e-wallet, said the Saigon Union of Trading Co-operatives (Saigon Co.op) on June 10.
The sales are part of the post-COVID-19 “Supporting Vietnamese farm produce” programme run by Saigon Co.op, MoMo, and Tuoi Tre (Youth) Newspaper.
Lasting until June 30, the online event gives MoMo users discount prices and delivery services when buying thieu lychees, a unique fruit grown in the northern province of Bac Giang’s Luc Ngan district, and ST Xuan Hong rice.
In the first day of the programme – June 10, the highest discount of 30 percent was applied to Thieu lychees. As such each kg of the fruit costs only 19,600 VND (0.85 USD) compared to the original price of 28,000 VND.
According to statistics, in the first three hours after the programme opened, each customer ordered an average of 5 – 10 kg of lychees. However, the figure later escalated quickly to 30 – 50 kg, and even to a record number of 90 kg.
As of 4:30 pm, over 8.2 tonnes of lychees and 200 kg of rice were sold. Buyers will get the products shipped to their places within two or three days./.
Vietjet offers promotional tickets
Vietjet on June 10 announced a promotion of 2.5 million super-saving tickets priced from only 8,000 VND (0.34 USD) across the domestic flight network in order to celebrate the launch of eight new routes.
Promotional tickets are up for grabs at website www.vietjetair.com and Vietjet Air mobile app until the end of June 11.
The flight period is from September 6 to December 31 this year, except eight new routes applied from June 18 to October 24, 2020 (excluding national holidays), according to Vietjet.
These new routes, available for sales from June 9, include ones connecting Hanoi with Dong Hoi in Quang Binh province, Hai Phong with Quy Nhon in Binh Dinh province, Vinh with the pearl island of Phu Quoc and the coastal city of Da Nang with Phu Quoc, Da Lat, Buon Ma Thuot in Dak Lak province, Vinh, Thanh Hoa province./.