Automobile sales down in first seven months
Sales of automobiles plunged 28 percent year-on-year to 131,248 units in the first seven months of this year, according to the Vietnam Automobile Manufacturers Association (VAMA).
Sales of all types fell, with passenger cars down 29 percent, commercial vehicles 23 percent, and special-use vehicles 39 percent.
The July figure hit 24,065 units, up a mere 0.3 percent against June and down 13 percent compared to July 2019.
The sale of domestically-assembled vehicles rose 2 percent month-on-month in July, to 16,088 units, while imports were down 2 percent to 7,977 units.
The figures, however, do not reflect overall consumption in the automobile market, as they exclude sales of manufacturers that are not VAMA members, such as Audi, Jaguar, Land Rover, Mercedes-Benz, Subaru, Volkswagen, Volvo, and Hyundai Thanh Cong.
Hyundai Thanh Cong’s TC Motor sold 7,606 vehicles in July, up 35.5 percent month-on-month and taking the figure for the first seven months to 35,620.
Meanwhile, some 2,210 VinFast automobiles were sold in July. With an average of 2,200 vehicles being sold monthly, the local carmaker’s sales stand at around 15,270 for January-July.
The combined sales of VAMA members, TC Motor, and VinFast reached 33,885 in July, for 182,138 in the first seven months.
Banks to continually cut costs to aid COVID-19 affected firms
The State Bank of Vietnam has asked banks to further reduce operating costs in the remaining months of the year in order to continue lowering interest rates to support COVID-19 affected firms and individuals.
Under a directive released recently, the State Bank of Vietnam said banks must also cut salary, bonus and profit to further reduce the net lending interest rate for both existing and new loans, which it expected to contribute to the recovery of local production and business in the post-pandemic period.
As the COVID-19 pandemic remains unpredictable, banks have been also directed to promptly update official information on new developments of the pandemic to proactively formulate and apply appropriate response scenarios to ensure the banking system, especially the information technology and payment units, operate safely and smoothly.
HCM City aims to develop 300 cooperatives to 2030
HCM City has prepared plans to develop 300 cooperatives and five cooperative alliances in the 2021-2030 period, thus reaching the targeted growth of 7 percent in the cooperative economic sector.
Under a collective economic development strategy released recently by the city People’s Committee, the sector is expected to contribute 0.6% to the city’s total GDP.
With policies to encourage the expansion of cooperatives, the sector expects to attract an additional 30,000 workhands.
The city will maintain and enhance the quality of effective agricultural cooperatives and gradually improve those that are ineffective, while encouraging all cooperatives to apply high technology.
At the same time, the city will continue to build the model of advanced and modern agricultural cooperatives in five districts, and will also work to ensure all new-style rural communes have cooperatives and production-sales links.
In the industry and handicraft sectors, the city will develop operating cooperatives while associating the expansion of cooperatives with industry encouragement programmes to support cooperatives and businesses alike.
In the area of trade-services, HCM City will continue to reinforce established cooperatives while broadening the retail network and developing retail cooperatives and forming links among trade and agriculture-agricultural service cooperatives. It will also call for small traders in markets to join cooperatives.
In transport and loading activities, the city will work to increase the scale and reduce the number of transport cooperatives, with priority given to those owning new vehicles using environmentally-friendly fuel.
HCM City will also create the conditions necessary for cooperatives to operate in public transport.
The city will design policies to support the formation of environmental sanitation cooperatives, with a target of all districts having such cooperatives by 2030.
Figures from the city show it currently has more than 610 cooperatives, 526 of which operate in trade-services, industry-handicraft, credit, transport, agriculture, and environmental sanitation.
The number has increased over the years. About 50 new cooperatives have been set up each year since 2016, involving more than 58,600 people. The scale and connectivity of cooperatives have also been on the rise.
Foreign banks pour capital into Vietnam
The International Finance Corporation (IFC), a member of the World Bank Group, announced on August 11 that it will provide a 70 million USD loan to Indo Trans Logistics Corporation (ITL Corp), with the aim of improving logistics, trade and competitiveness in Vietnam’s economy amid the COVID-19 pandemic.
ITL Corp General Director Ben Anh said the IFC’s long-term loan and expertise will help the company improve the efficiency of its logistics system and expand portfolios to better serve customers.
Bac Giang LGG Garment Corporation, which specialises in personal protective suits, recently received a 63 billion VND (2.7 million USD) loan in a preferential credit package from Standard Chartered in support of Vietnam’s fight against the pandemic.
Standard Chartered launched the package in March for companies specialising in the production and distribution of pharmaceuticals and anti-pandemic products such as ventilators, medical masks, personal protective suits, and hand sanitiser.
General Director of Standard Chartered in Vietnam Nirukt Sapru said the lender wishes to join hands with LGG in the fight against COVID-19.
HSBC Bank Vietnam, meanwhile, became the first foreign bank to issue bonds in Vietnam recently, totalling 600 billion VND. Each bond, worth 100,000 VND, has a three-year maturity and an annual interest rate of 5.8 percent.
HSBC Vietnam General Director Tim Evans said the move marks the bank’s 150th anniversary in Vietnam and affirms its long-term commitment to the country.
It also plans to regularly issue bonds in Vietnam to contribute to the growth of local companies and the country’s capital market, he said.
Trade development programme yields results in remote, island areas
A trade development programme in remote, mountainous and island areas brought in positive results during 2015-2020, Deputy Minister of Industry and Trade Do Thang Hai has said.
During a conference in Hanoi on August 11 to review the programme and outline tasks for 2021-2025, Hai said it helped develop special trade policies and mechanisms for several island communes and districts.
It also built a special distribution model in several areas such as Ly Son in Quang Ngai province and Con Dao island district in Ba Ria - Vung Tau province, a database of products of strength in remote, mountainous and island localities, and 35 sets of guidelines for specialty products from 35 remote, mountainous and island localities.
Workers were also trained for more than 4,000 enterprises and business households. Over 10 documentaries, nearly 80 reports, and some 2,600 news stories and articles on trade activities have been published.
The portal on products from remote, mountainous and island areas was launched at www.sanphamvungmien.com while a publication entitled “Branded goods from remote, mountainous and island areas” was also released.
Hai said diverse activities over the last five years helped step up goods production and consumption and enhanced capacity in trade development of officials and cadres in communes, districts and provinces, helping to improve lives and ensuring national defence and security in remote, mountainous and island areas.
Deputy Director of the Ministry of Industry and Trade’s Domestic Market Department Le Viet Nga suggested the Prime Minister approve the programme for the 2021-2025 period.
She also proposed allocating enough funds from the central budget for the programme, including for upgrading wet markets and strengthening regional connectivity to boost consumption.
The Government should issue policies to facilitate the involvement of economic sectors in developing trade infrastructure in remote, mountainous and island areas, she said, adding that localities should also earmark some funding from their budget for the programme each year.
Hoa Phat’s steel pipe exports rise 16 pct in seven months
Despite the impacts of the COVID-19 pandemic, steel maker Hoa Phat still sold 422,300 tonnes of steel pipes in the first seven months of the year.
Of which, its export volume of the products rose by 16 percent from the same period last year to 10,800 tonnes in the period. Its importers included the US, Canada, Australia, Mexico and Southeast Asia.
In July alone, Hoa Phat Steel Pipe Company Limited, a subsidiary of the Hoa Phat Group, provided 75,200 tonnes of steel pipes to the local market, a 7 percent year-on-year increase. The northern region had the highest growth rate with 18 percent, following by the southern region with 9.3 percent. Hoa Phat steel pipes continued to lead the industry with a market share of 32 percent.
According to the Vietnam Steel Association (VSA), steel pipe export volume in the first half of the year of its member companies fell by 17.3 percent from the corresponding period last year. However, Hoa Phat steel pipes still had positive results thank to diversified markets and flexible sale policies.
The company has paid attention to investing in improving product quality and introducing new products, especially large pipes with super large diameters. The products have been used for projects across the country.
The products have affirmed the position and stature of the Hoa Phat Steel Pipe Company and contributed to the increase in its sales volume in the first seven months of 2020.
The Hoa Phat Steel Sheet Company Ltd also achieved positive results. Its popular products saw increased market coverage and were highly appreciated by customers. The premium diamond sheet and panel steel products have been initially welcomed by projects.
Hoa Phat's steel sheet unit also recorded positive results with its first export order of more than 10,000 tonnes to the Thai market.
Malaysia’s economy shows signs of recovery: minister
Malaysia's economic growth is expected to improve in the second quarter of this year and recover in 2021, said Minister in the Prime Minister's Department (Economy) Mustapa Mohamed.
He said even though analysts generally opined that the economic performance in the Q2 would experience a contraction due to the COVID-19 impact, however the economic indicators issued by the Statistics Department had shown signs of recovery in stages.
In fact, this was supported by a better labour market in June which registered an unemployment rate of 4.9 percent, down 0.4 percentage points compared with 5.3 percent in May 2020.
The number of unemployment had declined from 826,000 persons in May to 773,000 persons in June, according to the Statistics Department.
The International Monetary Fund and the World Bank have forecast Malaysia's gross domestic product (GDP) to record a growth of 6.3 percent and 6.9 percent respectively for 2021.
The expectation of a V-shaped recovery is following the moves by the Malaysian government which has reopened all economic sectors and implement a economic stimulus package and a recovery plan, he said.
Mustapa explained that taking into account the global economic environment which is very challenging, the country's economic growth would be more focused on the domestic economic activities.
Webinar seeks better regulation for economic growth amid COVID-19
The first webinar of the sixth ASEAN-OECD Good Regulatory Practices Network Meeting took place on August 11.
Titled “Better Regulation for Post COVID-19 Recovery”, the event aimed to exchange viewpoints on reducing regulatory burden, towards better regulation which bolsters economic growth and protect the society.
At the webinar, Minister - Chairman of the Government Office Mai Tien Dung voiced his belief that the event, along with experience shared by OECD and ASEAN nations, will help promote administrative reform and abolish unnecessary regulation, thereby helping businesses overcome crisis and recover.
He underlined that Vietnam is determined to implement the dual targets of fighting the pandemic and recovering and maintaining economic growth.
To fulfil the targets, various measures have been put forwards, such as stepping up disbursement of public investment, stimulating domestic consumption and exports, and ensuring social welfare and security-order, Dung noted.
At the same time, administrative agencies have exerted efforts in switching to online public services. Since the start of the year, nearly 3,900 business conditions and over 6,770 types of commodities subject to specialised inspection and 30 related administrative procedures have been removed.
Notably, after more than eight months of operation, the national public service portal offers nearly 1,000 online services, with 56.4 million users.
As Chair of ASEAN and AIPA in 2020 and a non-permanent member of the United Nations Security Council for the 2020-21 tenure, Vietnam is committed to closely cooperating with countries and regional and international organisations in addressing common challenges, Dung said.
OECD Deputy Secretary-General Jeffrey Schlagenhauf appreciated the ASEAN-OECD Good Regulatory Practices Network as a very effective cooperation programme, adding that COVID-19 has dealt a blow to the socio-economic development of all countries and territories.
For his part, British Ambassador to Vietnam Gareth Ward spoke highly of Vietnam’s response and effective measures of OECD and ASEAN countries in dealing with the pandemic.
The organisation of major events in the form of video conferencing demonstrates the solid determination of Vietnam and other countries towards the common goal of reducing administrative procedures and improving business climate regulation, he affirmed.
Viettel named most influential company in Asia
Vietnamese telecom giant Viettel has been the only company in Vietnam to be recognised as Asia's 'Most Influential Company' at Asia Corporate Excellence & Sustainability Awards (ACES).
ACES is the award for sustainable and pioneering businesses in Asia that influence people and international relationships. Businesses are selected based on growth, manpower, creativity and brand influence in Asia and commitment to sustainability goals.
Viettel has implemented many digital transformation projects in many countries, including five countries in Asia. In all these countries, Viettel focuses on developing e-government, smart city, digital transformation for health, education and transportation.
It has brought five Asian countries including Vietnam, Cambodia, Laos, East Timor and Myanmar to the list of countries with great progress and pioneering in telecommunications and IT in the world.
In the second quarter of 2020, Viettel's data revenue in overseas markets reached 500 million USD, equivalent to 106.2 percent of the plan. E-wallet revenue reached 6 million USD, 127 percent of the plan. The number of e-wallet subscribers reached 154 percent of the set target, accounting for 8 percent of its total subscribers.
In Vietnam, the Viettelpay digital payment ecosystem has been expanding with 300 partners in 15 service industries. Average monthly cash flow is 50 trillion VND with 40 million transactions in 2019 which is ready for providing mobile money service. Viettel is also at the forefront of cybersecurity and has been the core of protection for many important systems of the Government, ministries and large enterprises.
Over 1,600 households install roof-top solar power system in July
The Central Power Corporation (EVNCPC) saw 1,637 customers installing roof-top solar power systems with a combined capacity of 76.729MWp in July.
The results pushed the total number of customers installing those systems in the first seven months of this year to 4,517 with capacity totalling 197.95MWp, reaching 99 percent of the target.
So far, the EVNCPC has developed 8,732 roof-top solar power projects with 295.7MWp of total capacity transferred to the power grid.
To encourage customers to install roof-top solar power systems, the corporation directed power firms in the central and Central Highlands regions to increase communications and make public information related to connection agreement and investment.
At the same time, the firms created optimal conditions for customers to access information, while choosing suitable places for the installation of the system.
Deputy head of the Communications Department of the EVNCPC Hoang Ngoc Thach said that the corporation has also asked its member companies to speed up the implementation of the projects to upgrade middle-voltage power grids in 2020.
At the same time, the firm is encouraging investors and supporting them in developing roof-top solar power projects, thus avoiding overload at 110kV transformer stations.
Currently, 13 power grid upgrading and investment projects serving roof-top solar power systems are underway at a total cost of 145.5 billion VND. They are scheduled to complete in 2020.
Indonesian economy to contract 2pct in 2020: Fitch Ratings
Credit ratings agency Fitch Ratings (Fitch) has forecast that Indonesia’s economic growth will contract by 2 percent in 2020, largely attributable to the impact of the COVID-19 pandemic.
According to Fitch, the country’s economy will witness a rebound to 6.6 percent growth in 2021, partly driven by a low-base effect, and expects growth momentum to continue at 5.5 percent in 2022, supported in part by the government’s renewed focus on infrastructure development.
The Indonesia government has responded swiftly to the crisis with a broad range of relief measures to support households and companies, including small- and medium-sized enterprises, it said.
Accordingly, total coronavirus-related government support amounted to 695 trillion Rp (47.93 billion USD), or 4.4 percent of GDP, and included direct cash transfers, provision of basic foods, guarantees and tax incentives.
Fitch believed the Indonesian government is likely to resume adhering to the 3 percent of GDP deficit ceiling by 2023, in line with its stated intention.
The agency rated, higher government spending and lower revenue due to the slowdown should cause the fiscal deficit to rise to around 6.0 percent in 2020 from 2.2 percent in 2019.
Fitch expects the deficit to narrow to 5.0 percent in 2021 and 3.5 percent in 2022, as most of the pandemic-related expenditure should be temporary.
Meanwhile, the general government debt is forecast to rise to 36.7 percent of GDP in 2020 from 30.6 percent of GDP in 2019, and to peak at 39.1 percent of GDP in 2022.
Cambodia moves to boost domestic tourism
Travel companies in Cambodia’s Siem Reap province have changed their operations to target more domestic tourists.
The move comes after hotels report more than 90 percent occupancy rates for the upcoming Khmer New Year replacement holiday.
Business changes include hotels dropping room rates as well as restaurants and bars offering a more Khmer-friendly atmosphere with live bands, karaoke and local food.
Governor of Siem Reap province Tea Seiha said that his province is preparing to receive more domestic tourists during the upcoming holiday and provincial authorities have organised new programmes to maintain arrivals in the future.
Seiha also announced some of the area’s draft programmes, including more religious events, food competitions, floating market visits as well as adventure programmes such as cycling, boat rides and golf days.
According to the government’s official figures, a total of 740,028 domestic tourists travelled throughout Cambodia in July, representing an increase of 15.2 percent compared with the previous month.
Over the first six months of the year, Siem Reap province recorded 167,061 domestic tourists, representing a drop of 87 percent. It recorded 387,839 international tourists, representing a 68 percent drop compared to the same period last year.
Vietnam’s EVFTA action plan focuses on industrial sectors, agriculture restructuring
Prime Minister Nguyen Xuan Phuc expected the soon ratification of International Labor Organization Convention No.87 on Freedom of Association and Protection of the Right to Organize.
Vietnam’s action plan to implement the EU – Vietnam Free Trade Agreement (EVFTA), approved by Prime Minister Nguyen Xuan Phuc on August 6, would focus on industrial sectors and agriculture restructuring.
Prime Minister Nguyen Xuan Phuc has approved an action plan to implement the EVFTA.
Each government agency is assigned with specific tasks with the aim of implementing the EVFTA efficiently and ensuring the full realization of Vietnam’s commitments in the deal.
Local authorities and agencies are tasked with disseminating information and regulations under the EVFTA as well as those of EU member countries to the business community; perfecting existing institutional frameworks; building up competitiveness and training high quality human resources; speeding up the ratification of International Labor Organization Convention No.87 on Freedom of Association and Protection of the Right to Organize, among others.
Mr. Phuc expected those under direct impacts of the EVFTA, including farmers, fishermen, business associations and enterprises, among others, should be given priority in receiving information related to the deal.
Meanwhile, Vietnam would continue to promote trade and investment activities in EU countries, so that European investors would have more understandings about business and investment opportunities in Vietnam.
Mr. Phuc requested the Ministry of Industry and Trade, along with other agencies, to continue providing training for micro, small and medium enterprises to enhance competitiveness and set up plans to meet international commitments, so that they could further integrate into global and regional supply chains, as well as taking advantages of the EVFTA.
According to the plan, Vietnam is expected to restructure industrial sectors, creating platforms for further industrialization and modernization; speeding up agricultural restructuring efforts towards greater scientific application and environmentally friendly production; promoting stronger linkages between domestic and foreign-invested enterprises to form new supply chains.
The EVFTA, officially signed last June after six years of negotiations, has been dubbed “the most ambitious” FTA the EU has ever reached with a developing country, according to the European Commission (EC). It includes not only the almost full elimination of bilateral tariffs, but also a substantial reduction of non-tariff barriers. Moreover, it includes provisions to protect intellectual property, labor, environmental standards, and fair competition, while promoting regulatory coherence.
A pre-Covid-19 study from Vietnam’s Ministry of Planning and Investment suggested the EVFTA and EVIPA would help Vietnam’s GDP grow an additional 4.6% and boost the country’s exports to the EU by 42.7% by 2025.
Meanwhile, the EC estimated the bloc’s GDP would be added US$29.5 billion by 2035, along with additional growth of 29% in exports to Vietnam.
Vietnam is the EU's second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth US$53.6 billion in 2019.
With a total foreign direct investment stock of US$8.71 billion (2018), the EU is one of the largest foreign investors in Vietnam. Most EU investments are in industrial processing and manufacturing.
Vietnam could afford raising public debt to support post-Covid recovery
By the end of 2019, Vietnam’s public debt had significantly dropped to 55% of GDP from 63.7% in 2016.
Vietnam could afford widening public debt by additional 2 – 3 percentage points of GDP to mitigate negative Covid-19 economic impacts, as the ratio of public debt to GDP in this case would still be lower than the limit 65% set by the National Assembly, according to Vo Huu Hien, deputy director of the Ministry of Finance’s Department of Debt Management and External Finance.
Disbursing such an additional amount, equivalent to VND180–240 trillion (US$7.77–10.36 billion), however, would be a major challenge, Mr Hien warned, given the slow disbursement rate to date.
Mr. Hien pointed to the fact that over US$10 billion is funding from official development assistance (ODA) and preferential loans from abroad that has been signed and needs to be disbursed in the coming time under commitments with donors.
By the end of 2019, Vietnam’s public debt had significantly fallen to 55% of GDP from 63.7% in 2016, Mr. Hien informed, adding this has created room for government agencies to maneuver the fiscal policy and helped boost economic resilience against external shocks, including the Covid-19 pandemic, without putting pressures on macro-economy and national financial security.
Mr. Hien said depending on growth scenarios, Vietnam’s public debt could rise to 57 – 58% of GDP at the end of this year.
Nevertheless, Mr. Hien suggested the low public debt has partially reflected the slow disbursement of public investment, including projects financed by ODA and foreign preferential loans.
This not only limits the impacts from loans for economic growth, but also puts pressure on the state budget with higher commitment fees, which are charged by a lender to a borrower for an unused credit line or undisbursed loan.
Mr. Hien said in 2020, the government plans to borrow VND501 trillion (US$21.65 billion), including VND394 trillion (US$17.02 billion) from the domestic sources and VND107 trillion (US$4.62 billion) from foreign ones.
From international experiences, Mr. Hien said widening fiscal deficit and public debt, as well as taking part in debt service suspension initiatives from international organizations would cause negative impacts on a country’s credit rating.
For example, Cameroon, Senegal, Pakistan, among others, have all been downgraded by credit rating firms after having expressed their intentions to join G20’s debt service suspension initiative.
Prime Minister Nguyen Xuan Phuc at a meeting on July 7 said the country could expand fiscal deficit and public debt to provide additional aids for the economy during the Covid-19 crisis.
PM Phuc suggested finance management should not only focus on ensuring the balance of the state budget, but also nurturing sources of revenue and creating driving forces for economic recovery.
Vietnam Politburo to review progress of US$59-billion North-South express railway
Once completed, the high-speed railway would help reduce travel time from Hanoi to Ho Chi Minh City to around five hours and 20 minutes.
Prime Minister Nguyen Xuan Phuc has tasked the Ministry of Transport (MoT) with reporting the progress of the preparation process for the North-South express railway project with an estimated investment of VND1,350 trillion (US$58.7 billion) to the Politburo, the country’s supreme decision-making body.
The MoT in its pre-feasibility study report for the project proposed the upgrade of the existing railway tracks for freight and the construction of a new North-South railway route for passenger transportation from Hanoi to Ho Chi Minh City. The railway is expected to allow speed of 350 kilometers per hour.
With an investment of VND567.2 trillion (US$24.47 billion), the first phase of the project, scheduled to be implemented in 2020 – 2032, would be to upgrade the railway transportation infrastructure along the routes Hanoi – Vinh and Nha Trang – Ho Chi Minh City.
The second phase from 2032 – 2050 would focus on the construction of the remaining sections, costing an estimated VND783.1 trillion (US$33.79 billion).
Once completed, the high-speed railway would help reduce travel time from Hanoi to Ho Chi Minh City to around five hours and 20 minutes.
At present, the MoT’s pre-feasibility study report is under the review process of the State Appraisal Council for Investment Projects.
In 2018, the ministry revived the North-South express railway project after it was rejected by the National Assembly in 2010 due to its huge estimated investment, at that time estimated at US$56 billion, more than half of Vietnam’s GDP then.
First foreign bank to issue bonds in Vietnam
HSBC’s bonds issuance underscores the bank’s long term commitment to Vietnam.
HSBC Vietnam has a total of VND600 billion (US$25.89 million) worth of bonds to the local market, becoming the first ever foreign commercial bank to issue bonds in Vietnam.
HSBC Vietnam has become the first ever foreign commercial bank to issue bonds in Vietnam.
At a par value of VND100,000 (US$4.32), HSBC Vietnam’s Lotus bond, named after Vietnam’s national flower, offers a fixed coupon rate of 5.8% and a tenor of three years, indicated the bank in a statement.
“As we celebrate the 150th anniversary of HSBC’s arrival in Vietnam, this milestone issuance underscores our long-term commitment to this remarkable country,” said Tim Evans, CEO of HSBC Vietnam. “We plan to be a regular issuer as we look to position our franchise to continue to be the leading foreign bank in the market.”
Evans added that proceeds from the issuance will increase HSBC’s operating capital and diversify VND funding sources in order to further accelerate the bank’s business growth in Vietnam sustainably.
In 2014, HSBC Vietnam also successfully helped the Vietnamese government in its offering of new 10-year USD-denominated global bonds with a value of US$1 billion when the bank acted as a joint Bookrunner and Dealer Manager.
Corporate bonds have been one of the fastest growing channels for capital mobilization in Vietnam recently. In the first six months of this year, the combined value of corporate bonds issuance grew by 50% year-on-year to VND159 trillion (US$6.87 billion).
Vietnam’s corporate bonds issuance in 2019 increased by 25% year-on-year to VND280.14 trillion (US$12.12 billion). However, the size of the corporate bond market was modest at just 11.26% of the GDP, significantly lower than that of in South Korea and Singapore which is at 20 – 50% of the GDP, and remained a fraction of bank credit, standing at 138.4% of the GDP at the end of 2019.
Nissan to sell stake in Indonesian automobile sales joint venture
Nissan Motor Co. will sell its controlling stake in PT Nisan Motor Distributor – a sales joint venture in Indonesia – to a local partner.
Nissan Motor Indonesia said in a recent press release that the two sides have signed a memorandum of understanding on the share transfer.
The move is aimed at forming a strategic partnership with Indomobil to strengthen the Nissan brand in Southeast Asia's largest automobile market, the Japanese carmaker group said.
In Indonesia, Nissan Motor sold 2,798 vehicles in the first half of this year, down 53.3 percent year-on-year.
According to the Association of Indonesia Automotive Industries, Nissan’s market share stood at 1 percent, ranking 10th in the Japanese brand-dominated market.
Nissan Motor announced last May it had decided to close an Indonesian plant in a bid to streamline global operations, focusing Southeast Asian production on Thailand.
The company said last month that it would post a net loss of 670 billion yen (6.3 billion USD) in the business year through March 2021, with global car sales dropping 16.3 percent to 4.1 million units amid the economic storm caused by the global COVID-19 pandemic.
RCEP negotiations enter final round: Indonesian official
The negotiation process on the Regional Comprehensive Economic Partnership (RCEP) has entered its final round and the agreement is expected to be signed in the near future, Indonesian Deputy Minister of Trade Jerry Sambuaga said.
He noted that the process requires Indonesian negotiators to exert efforts in protecting national interests as legal scrubbing is an important process.
Legal language can sometimes have multiple interpretations. Therefore, it is important to make sure that this settlement does not change the substance of Indonesia's interests, he explained.
Iman Pambagyo, Chief of the RCEP Trade Negotiating Committee of ASEAN and Director General of International Trade Negotiations at the Trade Ministry of Indonesia, said that with the completion of RCEP’s trade, economic and investment negotiations, Indonesia is hoped to gain access to larger markets and enhance competitiveness.
At the same time, the country needs to improve quality product, branding, logistics and payment systems, he added.
New coal-fired power plant in Cambodian national park commissioned
The Royal Group, Cambodia’s biggest private firm of tycoon Kith Meng, has secured 168.8 hectares of land in Koh Kong’s Botum Sakor National Park under a leasing agreement to develop a 700 megawatt (MW) coal power plant, according to a government sub-decree.
The sub-decree, signed by Prime Minister Hun Sen and released on August 6, states that the government has reclassified the state-public land of the park, in Thmar Sor and Chamlong Kor village, Thmar Sor commune, Botum Sakor district, to state-private land as sustainable use areas.
The agreement is under the Ministry of Environment as the authority to hold state property and in cooperation with the Ministry of Economy and Finance, as the authority to manage the property in accordance with the laws and principles of the government, according to the sub-decree.
The Cambodian National Assembly in March approved a draft provision of a state guarantee for three new power projects, one of which is a 700 MW coal-fired power plant investment undertaken by the Royal Group.
The 1.344 billion USD value project will comprise two generators. One will be a 350 MW generator that is scheduled to generate power in 2023 and the other a 350 MW generator that is scheduled to generate power in 2024.
According to the National Assembly’s approved draft, the project is contracted under a power-purchase agreement with Electricite Du Cambodge (EDC). The agreement is a state guarantee that pays investors if the facilities fail to operate as per the purchase agreement.
An annual report from the Ministry of Mines and Energy shows that Cambodia’s main electricity sources are hydroelectric dams and coal-fired power plants.
Cambodia has seven Chinese-built hydropower dams with a total capacity of 1,328 MW and three coal-fired power plants in Stung Hav district, Preah Sihanouk province, with a combined capacity of 675 MW.
Power supply rose by 28 percent in 2019 to 3,382 MW, according to the report.
Can Tho City authorities’ efforts for economic revival
Can Tho has taken many measures to combat the Covid-19 epidemic and is determined to achieve the highest possible socio-economic indicators, according to its People’s Committee.
In July, the city’s index of Industrial Production (IIP) increased by an estimated 0.24 per cent, retail sales and services by 2.19 per cent and exports by 3.06 per cent, while the consumer price index (CPI) was up by just 0.64 per cent, it said.
But it admitted that most development indexes declined significantly during the period.
The number of visitors fell by 70 per cent and the number staying for more than one night decreased by 68 per cent.
The agricultural sector too faces many difficulties due to the pandemic, Nguyen Tan Nhon, deputy director of the Department of Agriculture and Rural Development, said, explaining demand for some key items such as fruits and Pangasius was down.
Inventories held by seafood processing companies remain large, causing prices to fall sharply.
Businesses have petitioned city authorities to provide funding for those impacted by COVID-19, develop infrastructure for tourism development and push administrative reforms.
Pham Thai Binh, general director of Trung An Hi-tech Agriculture Joint Stock Company, said the city should urge banks to offer lower loan interest rates to businesses in priority sectors as instructed by the Government and the State Bank of Viet Nam.
Nguyen Thuc Hien, director of the city Department of Planning and Investment, said the department would help the city gain access to credit packages to aid businesses, extend deadlines for taxes, fees, land rents, and social insurance payments and carry out demand stimulation programmes.
Le Quang Manh, chairman of the city People’s Committee, said there would also be promotional policies to stimulate tourism, especially foreign tourism when international flights are allowed in future, and policies to connect producers and consumers of agriculture products.
Rang Dong tops market with highest earnings per share
Light and vacuum flask producer Rang Dong (HoSE: RAL) topped the stock market as it had the highest earnings per share (EPS) in the first half of the year, cafef.vn reported.
In the first six months, Rang Dong earned VND2.03 trillion (US$87.7 million) in total net revenue, up 13 per cent, and post-tax profit jumped 43 per cent on-year to VND138 billion.
After six months, Rang Dong’s EPS was VND12,024, up from VND8,380 made in the first half of 2019. The company ranked fifth in the list of companies with highest EPS.
Improved sales were attributed to the company’s EPS increase.
Sales revenue increased by nearly 17 per cent on-year to VND929 billion in the January-June period.
That was considered a strong effort of the company as its operations had been disrupted by a big fire in late August 2019 and by the COVID-19 pandemic.
The two events had rocked the supply chain, halted the firm’s production and lowered the market’s purchasing power especially in overseas markets.
Rang Dong shares gained 2.6 per cent to end Tuesday at VND94,300 apiece.
Following Rang Dong in the chart was Vinacafe Bien Hoa (HoSE: VCF) – which recorded an EPS of VND9,797.
The coffee company ranked third in the same period last year with EPS of VND9,844.
In January-June, Vinacafe Bien Hoa posted a 7.6 per cent annual decline in total revenue, which was down to VND1.15 trillion.
Its six-month post-tax profit was VND259 billion, slightly down from last year’s figure of VND260 billion.
Vinacafe Bien Hoa shares dropped 2.3 per cent to close Tuesday at VND210,100 apiece.
Lam Dong Investment Hydraulic Construction JSC (HNX: LHC) was the best-improving firm as the company jumped from 10th in last year’s chart to the third position this year.
The company’s EPS in the first six months of 2020 was VND8,832. Last year’s number was VND7,563.
The company’s shares surged 6 per cent to finish Tuesday at VND90,000 apiece.
On the contrary, HCM City-based West Coach Station (HNX: WCS) dropped to the fifth position in this year’s chart from the 1st position last year.
In the first half of 2020, the firm’s EPS was VND7,958 – down nearly 30 per cent on-year from VND11,329 made in the same period of last year.
The company blamed the COVID-19 pandemic for lower performance this year as people were restricted from travelling and the transportation sector suffered a month-long halt in April to fight the coronavirus spread.
Compared to last year, several companies were disqualified from the top-EPS chart such as Tay Ninh Tourist-Trading JSC (HNX: TTT), aquatic producer and exporter Vinh Hoan Corporation (HoSE: VHC), FPT Online JSC (UPCoM: FOC), and industrial park developer Nam Tan Uyen (UPCoM: NTC).
This year’s chart also saw some new names such as consumer staples firm Dabaco (HoSE: DBC), Danameco Medical JSC (HNX: DNM) and Tien Giang Investment and Construction JSC (HoSE: THG).
Dabaco in the first half of the year earned total VND750 billion of post-tax profit, 27 times last year’s figure. The company ranked sixth in the chart with EPS of VND7,825.
Danameco Medical posted an 8.5-times increase in six-month post-tax profit, which reached VND25.5 billion. Its EPS was VND5,836 and the company ranked 10th in the chart.
Moc Chau Milk to sell 39.2 million shares to GTNfoods and Vinamilk
Moc Chau Milk will issue nearly 39.2 milion shares dedicated to its strategic partners GTNfoods and Vinamilk.
Of the figure, more than 75 per cent of stake will be offered to GTNfoods, listed as GTN on Ho Chi Minh Stock Exchange, and the remainder to Vinamilk, as VNM.
The price is expected at VND30,000 (US$1.3) per share.
Moc Chau Milk currently has a total of 66,800,000 shares, in which Vinamilk owns 51 per cent. If Vinamilk buy all newly-issued shares, it will own 68.1 per cent of charter capital in Moc Chau Milk.
In the first half of this year, Moc Chau Milk recorded revenue of VND1.37 trillion and after-tax profit of VND106.3 billion, up 7.6 per cent and 40.8 per cent year-on-year, respectively. It has completed 74.7 per cent of the profit plan.
The company also paid dividend of VND134.3 billion to shareholders.
Indonesia: Retail sales improve in June
A survey by the Bank of Indonesia (BI) revealed that retail sales in the country improved in June, though it is still in a contractionary phase.
Real Sales Index (IPR) in June contracted 17.1 percent year-on-year, improving from a contraction of 20.6 percent year-on-year in May.
Sales improvement was seen in almost all commodity groups surveyed, especially for motor vehicle fuels, food, beverages and tobacco, and information and communication equipment, in line with the easing of large-scale social restrictions.
In July, there were indications that retail sales performance will continue to improve, even though it is still contracting. This is reflected in the forecast for July IPR growth of minus 12.3 percent year-on-year, up from minus 17.1 percent in the previous month.
Inflationary pressure is predicted to ease in the third quarter of 2020, and to increase in the second half of the year.
Indications of a decline in price pressure are reflected in the Q3 General Price Expectation Index (GPIE) of 131.5, lower than the previous GPIE of 138.6.
Meanwhile, the GPIE for the next 6 months was recorded at 156.1, higher than the previous GPIE of 142.5. This increase is in line with the predicted increase in activity during the Christmas and year-end holidays.