BUSINESS NEWS HEADLINES MAY 3

Foreign investment inflows dip nearly 15% in first 4 months

Total foreign investment inflows recorded a year-on-year decrease of 14.5% to US$12.33 billion as of April 20, according to the Ministry of Planning and Investment.

The figure, however, was higher than that of the same period of 2018 and 2017with US$5.8 billion, US$9.2 billion, respectively, the ministry said.

Of 984 newly-licensed projects in the first four months, the Bac Lieu LNG-to-power project marked the first billion-dollar foreign direct investment project in 2020 with investment capital of US$4 billion, accounting for 59% of the total registered capital volume.

Foreign investors pledged to pour capital in 18 sectors, in which manufacturing and processing took the lead with total registered capital of nearly US$6 billion, followed by power production and distribution (US$3.9 billion), wholesale and retail (US$776 million), and real estate (US$665 million).

Singapore was the biggest foreign investor as the committed volume accounted for 41.1%, or US$5.07 billion, followed by Thailand and Japan with total registered capital of US$1.46 billion and US$1.16 billion, respectively.

The ministry also said disbursed volume of foreign investment decreased by 0.6% from the same period last year to US$5.15 billion.

Foreign-invested sector’s exports rose by 1.5% compared to the same period last year, to US$55.75 billion, making up 69.3% of the nation’s export value.

Meanwhile, the sector’s import value also picked up 2.9% to 46.32 billion, accounting for 57.6% of the nation’s import volume.

Despite negative impacts of the COVID-19 pandemic, the sector gained a trade surplus of US$10.2 billion, according to the ministry. 

COVID-19 risk assessment indicators for businesses

The Ho Chi Minh City Steering Committee for COVID-19 Prevention and Control has issued a set of indicators to assess the risk of novel coronavirus infection for businesses.

Any business that scores more than 80% on the index will be asked to shut down completely. This assessment tool will help businesses decide whether it is safe to resume their work during the current pandemic.

The indicators are based on factors like the number of workers, density of workers, percentage of workers who wash their hands with alcohol-based sanitizers when entering or leaving the workplace, and percentage of workers who wear masks while working.

Other factors include the percentage of workers whose temperatures are checked before entering the workplace, distance between workers in the cafeteria, number of workers traveling to or from work in a shared vehicle, availability of facemasks, and number of workers who work a night shift. Higher scores indicate greater risk.

Nguyen Duc Trung, Deputy Head of the Labor, Invalids, and Social Affairs Section of Thu Duc district, said the indicators have been used at 9 companies with more than 1,000 employees each. One company scored 35% due to short distances between workers. The others had lower scores.

Mr. Trung noted the indicators are relative, but they make all enterprises more aware of the need for disease prevention measures.

"The companies have made prompt adjustments as recommended. They all praised the indicators and cooperated with us in applying them," said Trung.

The Ho Chi Minh Center for Disease Control and Prevention has set up teams to review the use of the indicators at 51 businesses.

Nguyen Thien Nhan, Ho Chi Minh City’s Party Secretary, said it’s important to get local enterprises to use the indicators to assess their disease prevention. He asked the teams to gather feedback in order to improve the indicators.

Mr. Nhan said, "We need to use the indicators to assess safety when allowing enterprises to resume their work. We must make sure that every enterprise gets assessed."

The Department of Environment Management of the Ministry of Health wants to use Ho Chi Minh City’s assessment tool in factories with more than 5,000 workers.

Airlines launch discount programmes to boost domestic flights

Airlines are offering various discounts to mark their resumption of domestic flights after the social distancing period ended.

Vietnam Airlines started the same-price programme that offers VND99,000 one-way flight, not including taxes and fees, for all domestic flights. The prices are only offered to customers who buy tickets for flights that fly from September 6, 2020, to February 21, 2021, on websites or mobile app during April 24-30 period.

On April 23, Vietnam Airlines Group that include Vietnam Airlines, Jetstar Pacific and Vasco announced that they would resume six return flights a day on Hanoi-HCM City route and two flights on Hanoi-HCM City-Danang route. Starting from May, the number of Hanoi-HCM City flights will be 11. There will be four flights on Danang-Hanoi and five on Danang-HCM City route. Other routes will also have more flights gradually.

Vasco started to launch one flight a day on April 25 and 27 on Hanoi-Dien Bien and HCM City-Con Dao and HCM City-Ca Mau routes. From May, it will remain one a day on the HCM City-Con Dao route while increasing the number of flights on other routes to three.

Vietjet Air offers VND9,000 tickets, not including taxes and fees, for all domestic routes for who book tickets from 12 pm-2 pm from April 23 to 25. According to Vietjet Air, it is operating 10 cargo flights a day, many of them are free-of-charge flights carrying medical supplies for Covid-19 mitigation efforts.

Bamboo Airways doesn't offer any discount but announcing that special members would be offered discount programmes at nationwide hotels and resorts.

From April 23 to 30, Bamboo Airways has four return flights a day on Hanoi-HCM City route, one flight on Hanoi-Nha Trang route, two flights on Hanoi-Danang route and one flight on Hanoi-Phu Quoc route.

Noi Bai Airport in Hanoi has also received more passengers since social distancing was relaxed. On April 23, the airport received 88 flights, 18 more flights compared to the previous days. There were 45 domestic flights, including 37 passenger flights and 3 cargo flights, and 43 international flights which were all cargo flights.

On the following day, Noi Bai received 109 flights. 58 of them are domestic flights including 47 passenger flights and 11 cargo flights. The other 51 international flights only carriedcargo.

Indonesia’s central bank injects 32.7 billion USD into financial system

The Bank Indonesia (BI) has injected 503.8 trillion Rp (around 32.7 billion USD) into banks and the debt market to stabilise the rupiah and help support the government’s financing needs to combat the economic shocks of the COVID-19 pandemic.

BI Governor Perry Warjiyo said that banks would be obliged to buy government bonds after the central bank freed up 102 trillion Rp in liquidity. Starting on May 1, the reserve requirement ratio will be lowered by 200 basis points (bps) for commercial banks and 50 bps for sharia banks.

BI’s policy to revoke banks’ obligation to fulfil the Intermediary Macroprudential Ratio (RIM) would add another 15.8 trillion Rp of liquidity, said Perry.

This is in addition to the 386 trillion Rp worth of liquidity freed by the central bank since the beginning of the year to support the country’s crashing currency and boost banks’ liquidity, Perry said.

The central bank has bought 166.2 trillion Rp worth of government bonds in the secondary market as investors dumped Indonesian assets over fears about COVID-19, resulting in a slump in the value of the rupiah, which depreciated as much as 18.5 percent in early March.

The rupiah has started to gain against the greenback over the last few weeks, strengthening to 15,394 Rp per USD as per 11 a.m. on April 29 from this year’s low of 16,625 per US dollar, according to Bloomberg data./.

Da Nang calls for 587.3 million USD in investment in IZs

The Da Nang Hi-Tech Park and Industrial Zones Authority (DHPIZA) has offered bidding documents for preliminary selection of investors for infrastructure development of three industrial zones in 2020-2023.

DHPIZA’s head Pham Truong Son said the international bidding will help seek eligible domestic and foreign investors developing infrastructure works on two new industrial zones (IZs) of Hoa Nhon, Hoa Ninh, and the second stage of Hoa Cam IZ on total 880ha with an estimated investment capital of 13.8 trillion VND (587.3 million USD).

He said the IZs have been designed as ‘green’ and ‘clean’ IZs, calling for hi-tech and environmentally-friendly industries in 2020-2023.

The bidding of the three projects will open for all qualified investors on May 28, and the winners would commence construction later this year.

To date, the Da Nang Hi-Tech Park and six other industrial zones have drawn 505 projects worth 2.6 billion USD. These projects earned revenue of 35.6 trillion VND (1.51 billion USD) in 2019, contributing 213 million USD to the local budget./.

Indonesia’s central bank injects 32.7 billion USD into financial system

The Bank Indonesia (BI) has injected 503.8 trillion Rp (around 32.7 billion USD) into banks and the debt market to stabilise the rupiah and help support the government’s financing needs to combat the economic shocks of the COVID-19 pandemic.

BI Governor Perry Warjiyo said that banks would be obliged to buy government bonds after the central bank freed up 102 trillion Rp in liquidity. Starting on May 1, the reserve requirement ratio will be lowered by 200 basis points (bps) for commercial banks and 50 bps for sharia banks.

BI’s policy to revoke banks’ obligation to fulfil the Intermediary Macroprudential Ratio (RIM) would add another 15.8 trillion Rp of liquidity, said Perry.

This is in addition to the 386 trillion Rp worth of liquidity freed by the central bank since the beginning of the year to support the country’s crashing currency and boost banks’ liquidity, Perry said.

The central bank has bought 166.2 trillion Rp worth of government bonds in the secondary market as investors dumped Indonesian assets over fears about COVID-19, resulting in a slump in the value of the rupiah, which depreciated as much as 18.5 percent in early March.

The rupiah has started to gain against the greenback over the last few weeks, strengthening to 15,394 Rp per USD as per 11 a.m. on April 29 from this year’s low of 16,625 per US dollar, according to Bloomberg data./.

Intellectual property vital for firms: experts

The Intellectual Property Office of Vietnam has implemented measures to encourage research, innovation and application of creative achievements in science and technology into life and production in response to World Intellectual Property Day 2020 (April 26).

The office has supported several effective programmes and projects, such as the programme on intellectual property development, which has protected 118 key agricultural products of localities and supported 600 businesses in terms of intellectual property.

The programme has also supported the protection and application of invention practices for 51 technical solutions.

In addition, the network project for innovation and technology support centres has promoted intellectual property activities and technology transfer in universities and research institutes.

Nearly 60 research institutes and universities nationwide have registered to participate in the network.

Innovations and inventions have appeared in many industries, fields and localities. However, there are still some units, businesses and people who are not fully aware of sustainable development, so innovations mostly focus on economic growth without considering environmental factors.

The office said that start-up groups only focused on forming businesses and seeking investment but have not thought about registering intellectual property rights.

Data from the office showed that 80 percent of start-ups do not understand the importance of intellectual property.

Vu Thi Thuan, chairwoman of the board of directors of Traphaco Joint Stock Company, said in the pharmaceutical field, there were many creative values that needed to be protected.

However, the current understanding of intellectual property protection in Vietnam was incomplete, leading to lots of intellectually property theft, she said.

To develop sustainably and integrate, businesses themselves must first respect intellectual property rights, she added.

Do Thien Hoang, a representative from the Intellectual Property Office, said to solve this problem, it was necessary to complete the law on intellectual property for emerging objects and strengthening international co-operation.

For intellectual property rights management and enforcement agencies, it is necessary to improve the capacity of applying new technologies for management and processing, focusing on human resources training.

For businesses, there should be guidance on implementing intellectual property rights, raising awareness about intellectual property.

Many experts said that in the age of technology, inventors need to register intellectual property for their products as quickly as possible.

The office and the authorities have been focusing on perfecting systems of intellectual property regulations./.

Thailand targets to become ASEAN’s processed food hub

The Cabinet of Thailand has approved an action plan for food processing industry development for 2019-27 and a supporting budget of 6.6 billion baht (203 million USD) with a hope of turning the Southeast Asian nation a processed food hub in the region.

According to Rachada Dhanadirek, the government spokeswoman, the goal is to upgrade the processing of targeted food such as rice, fishery products, vegetable and fruits, livestock and biofood as well as beef up food packaging and digital technology to support innovative food.

The plan also centres on developing innovative food to commercial scale; food development and smart packaging development.

The Thai government is also committed to assisting all levels of entrepreneurs to access local and global markets by using existing digital platforms; developing local economy and infrastructure to support entrepreneurs and food tourism as well as upgrading Thai food to achieve world-class standard.

With the action plant, Thailand hopes to become a processed food centre in ASEAN and one of the top 10 food exporters to the global market by 2027.

According to the spokeswoman, the Thai government plans to allocate 6.6 billion baht in nine years, with the private sector likely to contribute an estimated 2.22 billion baht.

The government will also establish a national committee to supervise food processing development to ensure that it aligns with the action plan.

The government aims the food industry to generate 1.42 trillion baht (43.8 billion USD) worth of income by 2027, with related food industries such as packaging contributing 4.5 trillion baht (138.74 billion USD) and investment worth 48 billion baht (1.47 billion USD) a year.

Thailand is currently the 11th-largest food exporter in the world market, with food shipments generating 33.1 billion USD in 2019, up 3 percent from 2018./.

April CPI down 1.54%

The consumer price index (CPI) in April fell by 1.54 per cent over the previous month and by 1.21 per cent compared to December 2019, the General Statistics Office (GSO) reported in Ha Noi on Wednesday.

However, the April CPI rose by 2.93 per cent year on year, the office said. The average CPI in the first four months of this year also increased by 4.9 per cent over the same period last year.

Do Thi Ngoc, head of CPI’s Price Statistic Department, said the CPI reduction in April was mainly due to strong decrease of petrol and gas prices as well as lower prices of many non-food products.

Six of the 11 groups of commodities and services used to calculate the CPI had a price decline in April. Of which, the transport group had the strongest reduction in price with 13.86 per cent, followed by the group of housing and building material with 2.33 per cent.

The domestic petrol and gas prices had strong reduction in April as the average Brent oil price for April was at US$27.69 per barrel, a decrease of 17.9 per month on month, the office said.

From March 25 until April 24, the prices were cut two times on March 29 and April 13 by VND4,880 per litre in total for A95 petrol, VND4,710 per litre for E5 bio-petrol and VND2,210 per litre for diesel oil month on month. Therefore, the average petrol price in April decreased by 28.48 per cent compared to the previous month.

The gas price in April also fell by 19.74 per cent compared to the previous month due to the domestic gas price reduction of VND69,000 per 12-kilo tank according to the world gas price.

Besides that, housing rent fell by 0.97 per cent month on month as many households reduced rent for their consumers to cope with the COVID-19 pandemic, the GSO said. Prices of garments, headwear, footwear, home appliances, and entertainment and travel services plunged by between 0.5 per cent and 3 per cent due to lower demand on those products during the social distancing period.

However, some goods and service groups had price increases in April, including the group of food and catering services (0.66 per cent), the group of beverages and tobacco (0.13 per cent) and the group of equipment and home appliances (0.06 per cent).

Specifically, food and tapped water prices rose by 0.62 per cent and 0.31 per cent, respectively, because people consumed more of those products at home during the social distancing period, the office said. Of which, the price jumped by 1.62 per cent for pork, 0.55 per cent for beef, 1.48 per cent for eggs, 3.54 per cent for vegetables, 1.04 per cent for processed meat and 1.4 per cent for processed seafood.

Rice price increased by 2.51 per cent because of higher demand on domestic consumption and national reserves during the pandemic. In addition, the export rice price surged due to the increasing demand on importing rice of countries worldwide while the rice exporting countries reduced export rice volume.

Higher demand on medical equipment and medicine during the pandemic also pushed prices of those products up by 0.1-0.3 per cent over the previous month.

In April, the domestic market had strong growth in average gold price with 0.69 per cent to VND4.6 million per tael month on month because of the increase in the world gold price. The world price on April 24 was up by 6.74 per cent to $1.708.9 per ounce month on month.

Price of US dollar on the local market also rose by 0.95 per cent in April to VND23,315 per dollar compared to March.

During this month, CPI in rural areas decreased by 1.63 per cent month on month while it dropped by 1.45 per cent in urban areas, according to the GSO.

Rural areas had higher reduction in CPI than urban ones because the price decline rate of the transport group at 14.55 per cent in rural areas was higher than the rate of 13.2 per cent in urban areas, while the price growth rate at 0.48 per cent for food in rural areas was lower than the rate of 0.78 per cent in urban areas.

According to the GSO, core inflation (CPI excluding food items, energy products and commodities under the State management like medical and educational services) in April decreased by 0.15 per cent month on month but increased by 2.71 per cent year on year. The four-month core inflation climbed by 2.96 per cent from the same period of 2019. 

Viet Nam’s plain MDF board faces anti-dumping investigation in India

Viet Nam is among several countries to face India’s anti-dumping investigation on plain medium density fibre (MDF) board with thickness of less than 6mm, the Vietnamese Ministry of Industry and Trade (MoIT) has said.

The Indian Ministry of Commerce’s Directorate General of Trade Remedies (DGTR) has began its investigation into alleged dumping of products coded 4411.12, 4411.13, 4411.92, 4411.93 and 4411.94 originating in or exported from Viet Nam, Malaysia, Thailand and Indonesia, the authority said.

The period of investigation is from January to December 2019 (12 months). The DGTR would also look into the data during the period from April 2016 to 2019.

The DGTR would send questionnaires to known producers/exporters while other producers/exporters of those products need to actively contact the DGTR to get those questionnaires, said MoIT’s Trade Remedies Authority of Viet Nam.

They are required to send answers, feedback and relevant materials within 60 days since the notification on this investigation was issued on April 22.

The authority has recommended associations and producers/exporters to have comprehensive cooperation with DGTR during the investigation. If not, the investigators have the right to use available data for analysis.

Meanwhile, the authority is available to support them during the investigation.

Besides that, they should also exchange information about this case with their partners in India to ensure their interests in India, it said. 

First White Book on Vietnamese Co-operatives released

The General Statistics Office (GSO) released its first White Book on co-operatives in Viet Nam on Tuesday.

The paper provides information about the development levels of co-operatives in the country and its localities from 2016 – 2018. It also proposes solutions for co-operative development.

The white book was compiled based on data collected from the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development, and the Viet Nam Co-operative Alliance.

It shows that 2,569 new cooperatives were established in 2018, adding up to a total of 22,861 by December 31, 2018. The figures respectively increased by 9.5 per cent and 8.8 per cent year-on-year.

Also in 2018, the net revenue of the 13,958 surveyed co-operatives hit VND88.59 trillion (US$3.77 billion), up 9.6 per cent year-on-year. However, their pre-tax profit declined by 27.8 per cent to VND2.57 trillion.

The monthly per capita income of those co-operatives was VND3.84 million on average, increasing by 3.2 per cent from 2017 but still much lower than the VND8.82 million reported by businesses.

“The collective economy, of which co-operatives are the most important element, has gradually become a solid foundation of the national economy,” said GSO General Director Nguyen Bich Lam.

“Developing the collective economy is a consistent policy of the Party and State. However, co-operatives still need to make strong reforms to develop amid the country’s intensive integration,” Lam said.

 

“While the world saw profound global instability in the last few years, co-operatives across the country still developed stably. The number of co-operatives increased with their operational quality gradually enhanced,” Lam said.

Business White Book

The GSO has also released the 2020 White Book on Vietnamese Businesses.

The first edition of the White Book on Vietnamese Businesses was launched in July last year.

The White Book contains essential information assessing the development of enterprises across the country with a specific view of each locality from 2016 to 2019.

“The publication, to be published on an annual basis, provides an overall picture of the development of domestic businesses arranged according to sectors, business types and localities, serving as a reference for the Government, ministries, sectors and localities to design strategies, plans and policies for the sustainable and effective development of businesses on both national and local scales," Lam told Viet Nam News.

The business sector contributed over 60 per cent to the gross domestic product (GDP) in 2019, the book said.

In 2019, the country had 758,610 active businesses, 67.1 per cent of which operated in the service sector, 31.6 per cent in industry and construction, and 1.3 per cent in agro-forestry-fishery.

In the year, Viet Nam recorded economic growth of 7.02 per cent, marking the second consecutive year with growth of over 7 per cent.

According to business results as of December 31, 2018, the number of profitable businesses accounted for 44.1 per cent, break-even ones 7.5 per cent, and unprofitable ones 48.4 per cent.

“In order to improve the efficiency of enterprises, we must focus on the improvement of the legal environment, mechanisms and policies for the business sector, stronger reforms of the business environment, and cutting administrative procedures,” Lam said.

Head of the GSO's Industrial Statistics Department Pham Dinh Thuy said there needed to be mechanisms and policies to promote the restructuring of industries with a focus on manufacturing and processing, whilst making the most of the opportunity created by the Fourth Industrial Revolution to restructure businesses towards sustainability and creativity. 

HDBank profits increase by 13.5% in Q1

The HCM City Development Joint Stock Commercial Bank (HOSE: HDB) has released its financial statements for the first quarter showing a total consolidated operating income that increased by 27.8 per cent year-on-year to VNĐ3.15 trillion (US$134.4 million) and pre-tax profit that increased by 13.5 per cent was VNĐ1.25 trillion ($53.4 million).

It had total consolidated assets of VNĐ231.8 trillion ($9.88 billion), and high levels of asset quality and liquidity.

The non-performing loan ratio of the parent bank continued to be strictly controlled, with its 1.08 per cent rate placing it among the banks with the lowest ratios in the industry, a status it has enjoyed for many years.

Its capital adequacy ratio (CAR) topped 11.1 per cent, much higher than the minimum of 8 per cent prescribed under Basel II standards and placing it in the group of banks with the highest CAR.

Deposit and lending activities saw positive growth.

Deposits were worth VNĐ204.9 trillion ($8.7 billion), of which deposits from residents and economic organisations increased by 4.61 per cent to nearly VNĐ158 trillion. The total consolidated loan balance was VNĐ162.06 trillion ($6.9 billion), up 5.92 per cent compared from the beginning of the year, which rate was higher than the industry average. The bank recorded steady growth across all loan segments, including individual customers, small and medium-sized enterprises and consumer loans.

In the context of the COVID-19 pandemic, HDBank has implemented risk management programmes to ensure safe operations and at the same time deployed credit packages to support SMEs, enterprises that produce and distribute essential products and others in supply and distribution chains to help them overcome the tough situation.

The credit programmes are designed specifically to support each target customer group, including a preferential credit package worth VNĐ24 trillion ($1.02 billion) for corporate customers who supply goods to supermarkets to help stabilise the prices of essential goods, supplement working capital and pay salaries to their employees and a VNĐ10 trillion ($425.8 million) preferential package for individuals and micro enterprises.

The bank has also adopted automation and digital solutions to offer customers convenience and safety. In the first quarter, online transactions by its customers grew at 112 per cent and the number of new payment cards it issued went up by 67 per cent over the same period of 2019.

HD SAISON maintained its leading position among consumer finance companies in terms of its distribution network, putting it among the top three in the market.

Its outstanding loans grew by 4.9 per cent in the first quarter, exceeding its target.

In April 2020, Moody’s said it maintained the B1 credit rating for HDBank though it had announced many banks were likely to have their ratings lowered.

It underlined HDBank’s stable financial capacity, low risk and long-term development opportunities.

Also in the first quarter, HDBank was honoured as the best domestic bank in Việt Nam by The Asset, Asia’s leading banking and finance magazine.

In 2020, HDBank will select a bancassurance partner to increase revenues from cross-selling insurance products to customers in its large eco-system.

Việt Nam is among the countries to recover fastest from the pandemic, which is a premise for growth for its banking industry, including HDBank. 

Fitch downgrades Home Credit Vietnam to 'B'; outlook negative

Fitch Ratings has downgraded Home Credit Vietnam Finance Company Limited's (HCV) long-term issuer default rating (IDR) to 'B', from 'B+'.

The consumer finance company's outlook is negative.

The downgrade reflects the probable pressure the coronavirus pandemic will place on HCV's credit profile, as well as rising challenges to the finance company's business model and profitability as a result of increased industry competition and new regulations finalised in late 2019.

Viet Nam's open economy is exposed to a global demand slowdown as a result of the coronavirus. GDP growth had already slowed to a seven-year low of 3.8 per cent in the first quarter of this year, from 7 per cent in the last quarter of 2019.

Fitch expects Viet Nam’s GDP growth to remain muted, with the assumption that the economy starts to recover in the latter half of 2020. However, Fitch’s GDP forecasts remain subject to downside risk.

According to Fitch, it viewed Viet Nam's unsecured consumer finance companies as being at risk of asset quality deterioration in the current environment, as they are typically exposed to less affluent borrowers with more limited resilience against financial distress. The slowdown will weigh on consumer spending and consumer loan growth, affecting volume and profitability. 

Corporate bonds lure individual investors

The corporate bond market attracted double the number of individual investors in the first quarter of this year compared to 2019.

In the quarter, individual investors bought more than VND9.5 trillion (US$404.9 million) of corporate bonds, of which foreign individuals only bought VND9.6 billion. The rest were bought by domestic individuals.

The proportion of individuals buying corporate bonds in Q1 accounted for 20 per cent of the total number of investors buying bonds in the market, double the figure of last year.

Real estate bonds accounted for the largest amount of bonds purchased in Q1 at approximately VND6.3 trillion.

According to SSI Securities Company, VND5.35 trillion of bonds issued in 110 batches by TNR Holdings in Q1 were all purchased by domestic individual investors.

Last year, individual investors also purchased all of the VND5.34 trillion of bonds issued by this company.

Some other real estate bond issuances in Q1 also lured individual investors such as Phu Hung Real Estate Investment JSC with VND400 billion, Paradise Bay Resort Company Limited with VND166 billion and Hai Phat Investment JSC with VND147 billion.

Bond yield rates of these real estate companies were mostly fixed from 11-13 per cent per year.

Regarding bonds issued by banks in the quarter, individual investors also bought all VND710.3 billion of bonds of TPBank and VND421.7 billion of bonds of MB Securities. The yield rates of these bonds ranged from 8.5 to 9.5 per cent per year.

The public offering of VND3 trillion of bonds issued by Masan Group also raised nearly VND1.15 trillion from domestic and foreign individual investors.

The active participation of individual investors in the first quarter helped the corporate bond market maintain growth, according to the Ha Noi Stock Exchange.

A leader of a securities company attributed investors' interest in the bond market to the increase in bond yield rates compared to last year.

Deposit interest rates at most banks also tended to decrease further, therefore investors tried to diversify their investment channels, he said. 

Noi Bai International Airport catering to more flights

Hanoi’s Noi Bai International Airport has seen a significant increase in domestic flights over the April 30 - May 1 holiday, a representative said on April 30.

There were more than 180 flights per day before the holiday compared to 37 on April 6, carrying over 15,000 passengers against only 1,000 passengers on April 3.

Some 184 flights landed at the airport on April 29, including 126 domestic flights with more than 15,000 passengers and others from overseas carrying cargo.

There were 126 domestic and 59 international flights on April 30.

Public transport services to the airport resumed on April 29.

To ensure passenger safety, the airport will maintain existing epidemic prevention and control measures./.

Woodwork exports might experience no growth this year

Given the heavy impact of the Covid-19 pandemic, Vietnam’s woodwork exports might have zero growth this year, heard attendees at an online workshop on April 28.

The industry targets US$12 billion exports this year but might see no growth this year, said Ngo Sy Hoai, vice chairman and general secretary of the Vietnam Timber and Forest Products Association.

The pandemic started in mid-March to strike the major markets for Vietnam’s woodwork products, which account for 80% of total exports, including the United States, Japan, China, South Korea and the European Union. The governments of these markets have taken aggressive steps to keep the pandemic under control, such as border closures which have resulted in supply chain disruptions.

According to a survey conducted among 124 enterprises in late March, all the respondents were affected by the pandemic. Three-quarters of these firms lost an estimated VND3.07 trillion.

Besides this, more than half the firms have had to downsize, 35% will suspend operations and 7% have already shuttered. Meanwhile, only 7% of the surveyed firms are still operating as usual.

According to the workshop, the Government should quickly introduce new policies to support wood processing firms, but firms should also work harder to adapt to a new situation. It is essential that firms change their focus, boost connections with other businesses in the industry, build domestic supply chains and invest in supporting industries.

The pandemic has also revealed the weaknesses of Vietnam’s woodwork supply chains, which depend on imported materials, particularly from China.

This dependence can be reduced through trade agreements Vietnam has signed in previous years, such as the CPTPP, EVFTA, VKFTA and AEC. The woodwork industry should thus respond to shifts in production, order and investment as well as restructure its supply chain to help stimulate development.

Employers entitled to 0% interest rate loans

The prime minister has signed Decision 15 on support measures for residents affected by Covid-19, allowing employers in financial difficulty to take out loans with a 0% interest rate from the Vietnam Bank for Social Policies to help pay salaries to their employees who have lost their jobs due to the coronavirus pandemic.

Specifically, the preferential loan policy is applicable to employers who are facing financial distress and have paid 50% of salaries to employees who have been laid off; they must also be recognized by municipal or provincial authorities.

To qualify for 0% interest rate loans, these employers must have endured bad debts at credit institutions or branches of foreign banks, as of December 31, 2019.

These employers are required to commit to paying off the entire loan on time.

Apart from this, they will be allowed to borrow up to 50% of the regional minimum monthly wage for each worker for three months, from April to June.

The bank will offer the special loans until July 31, the local media reported.

HCMC breaks ground for 13 traffic projects

The HCMC management board for traffic projects broke ground for 13 large traffic projects with total investment of over VND3.5 trillion today, April 29.

The 124-meter My Thuy 3 Bridge project is part of the second phase of the My Thuy Intersection project. The six-lane bridge is expected to ease traffic congestion at Cat Lai Port in HCMC’s District 2 when in place.

The overpass project in front of the new Mien Dong coach terminal on Hanoi Highway, with a total estimated cost of some VND440 billion, includes a footbridge and a number of roads. The project will help secure traffic connections once the coach terminal is put into operation, the local media reported.

Among the 13 projects, the construction of infrastructure for nine land lots covering over 77,600 square meters of land in the first functional area for the Thu Thiem New Urban Area in District 2 is aimed at raising the land-use value when the land is put up for tender.

The remaining projects include the construction of a steel bridge to replace An Phu Dong Ferry, the second phase of the Soai Rap waterway dredging project, the upgrade of Huynh Tan Phat Street in the city’s outlying district of Nha Be, the construction of the drainage system on Huong Lo 11 Street in Binh Chanh District and the expansion of Dong Van Cong Street in District 2.

Building the Kenh A and Kenh B bridges in Binh Chanh District, upgrading Duong Quang Ham Street in Go Vap District and Tran Van Giau Street in Binh Tan District, and constructing the infrastructure system at Nuoc Den Canal are also among the 13 key traffic projects in the city.

Luong Minh Phuc, head of the management board, noted that to save money for the budget and to strictly follow Covid-19 infection prevention measures, it allowed contractors to start work on these projects without holding groundbreaking ceremonies.

The management board is also cooperating with the contractors to speed up projects to upgrade Nguyen Huu Canh Street, the Y-shaped bridge, An Suong Tunnel, To Ky Street, Do Xuan Hop Street and Phuoc Long Bridge.

Earlier, on April 22, the first phase of the tunnel project at Nguyen Huu Tho-Nguyen Van Linh Intersection in District 7 got off the ground.

German companies optimistic about business in Vietnam despite Covid-19

German companies are understandably concerned about the impact of Covid-19 on their businesses in Vietnam but are still optimistic and have higher expectations compared with all averaged indicators among German companies in the Association of Southeast Asian Nations (ASEAN), whose members include Vietnam.

According to the World Business Outlook 2020 conducted online by the Delegate of German Industry and Commerce, with the participation of more than 3,500 German companies and their partners worldwide, many German companies in Vietnam have been hurt by the virus.

Cancellation of trade fairs and large-scale events and the decline in travel have affected the service sector, especially in the areas of logistics, trade, gastronomy and tourism.

German companies’ revenue expectations have dropped significantly. Over 80% reported lowering revenue targets due to the coronavirus, while 9% have serious problems and expected a significant decline of more than 50%. Some 60% of them calculated losses of 10%-50%.

Some 14% of German companies expected their business performance to be weaker in 2020, while 59% expected their company’s operations and financial position to be stable this year. Only 27% rated their current business situation in Vietnam as good (compared with 77% in 2019).

“However, compared with other German firms in the ASEAN, the German community in Vietnam has an optimistic perspective and expectations for the upcoming year. Two-thirds of respondents believed that their business situation would become stable or improve in 2021,” the survey found.

Over 70% of German companies in Vietnam intend to keep investing in Vietnam and 27% assume an increase in employment.

“The fact that the Vietnamese Government is committed to creating the most favorable conditions for foreign investors and businesses as well as the upcoming free trade agreement between the European Union and Vietnam, which will probably come into effect this summer, will boost the economic growth of this country and attract more investors to Vietnam,” the survey said.

“Implementing aid packages is essential for Vietnam to mitigate the impact of the coronavirus. It shows that the Vietnamese Government has taken decisive and forceful action against the impact of the coronavirus crisis. These measures should be taken as quickly as possible to counter the economic impact of the coronavirus to bring the economy back onto a growth path as soon as possible,” it added.

VAT cut proposed to support businesses amid pandemic

The Government's Private Economic Development Research Board and business associations have petitioned to halve the standard value-added tax (VAT) rate from 10% to 5% to reduce costs for consumers and stimulate consumer demand during and after the coronavirus pandemic.

This proposal was made from feedback for a draft Government Resolution on measures to remove difficulties for businesses, accelerate the disbursement of public investment and ensure public safety and security amid the coronavirus outbreak, reported Nguoi Lao Dong newspaper.

Businesses are currently in dire need of working capital to maintain their operations. Paying a VAT rate of 10% and having to wait until the end of the year to receive VAT refunds could trigger difficulties for enterprises and leave policies to stimulate consumer demand hard to be effectively executed, stated the Board.

Besides this, the Board and business associations suggested adding a regulation under which a land lease rate cut of 50% over a six-month term can be applied to lodging businesses such as hotels and resorts.

Operators of lodging facilities have been hit hard by the pandemic and are expected to recover slower than businesses in other sectors. Further, land lease rates account for a substantial portion of service prices among lodging businesses.

Accordingly, the reduction in land lease rates will encourage them to lower service prices to attract customers when the pandemic eases, the Board explained.

JICA keen on railway station project in Danang

The Japan International Cooperation Agency (JICA) wants to help the city conduct research on railway station relocation and urban development through a public-private partnership (PPP).

This was announced late last week by the Danang Department of Planning and Investment after an online meeting between JICA experts and city leaders. At this meeting, the two sides also signed a memorandum of understanding on the development of Danang Port, including Lien Chieu Port and Tien Sa Port.

According to the department, two weeks ago, the City People's Committee sent a letter to the prime minister asking for approval to complete the railway station relocation and urban development project through a PPP under a build and transfer (BT) contract.

The Saigon Times found that the project, with total estimated investment capital of VND12.6 trillion (US$540 million), was mentioned in the Politburo's Resolution No. 33-NQ/TW dated October 16, 2003, on Danang’s development and again in Resolution No. 43-NQ/TW dated January 24, 2019, on Danang’s development until 2030, with a vision toward 2045.

The project is divided into two small projects with several phases and is expected to be completed in 2035.

The first small project with capital of VND10.24 trillion involves building the new railway station in Lien Chieu District, the new residential area on the site of the current railway station in Hai Chau District, the residential area for those being relocated from other sites and the traffic system for the new railway station. Meanwhile, the remaining VND2.4 trillion is for compensation and site clearance activities.

However, similar to the Lien Chieu port project, which was also mentioned in 2003 and needs a large amount of investment capital, this railway project still lacks the necessary investment procedures and is facing difficulties related to capital mobilization, compensation and site clearance.

Uniqlo to open second store in HCMC this month

Japanese apparel retailer Uniqlo will open its second store in HCMC at SC VivoCity shopping mall in District 7 on May 15, indicating its continued interest in this market.

This will be Uniqlo’s third outlet in Vietnam, following the opening of the first store at Parkson shopping mall in HCMC’s District 1 and the second store at Vincom Pham Ngoc Thach shopping mall in Hanoi’s Dong Da District.

With a sales floor of over 2,000 square meters, Uniqlo SC VivoCity provides customers a full line-up of LifeWear products for men, women, children and babies; a Spring/Summer collection; and other limited offers during its opening week.

“We are doing our best to create a world-class store to showcase LifeWear products to meet the needs of everyone’s daily lifestyles in harmony with the community around us. Through the opening of our third store in Vietnam, we remain committed to contributing to the local community,” said Osamu lkezoe, general director and chief operating officer of Uniqlo Vietnam.

Using the government’s guidance to ensure safety for customers and employees during the Covid-19 pandemic, Uniqlo will strictly follow sanitization measures, including providing masks and hand sanitizers and conducting body temperature checks.

 
 

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