VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 7

Lao Cai asked to finalise proposal for construction of Sa Pa Airport

VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 7

A mock-up of Sa Pa Airport in the northern mountainous province of Lao Cai. (Photo: baogiaothong.vn)

Deputy Prime Minister Trinh Dinh Dung has urged the People’s Committee of northern Lao Cai province to finalise its proposal for construction of Sa Pa Airport, with opinions of relevant ministries and agencies taken into account.

The proposal must be submitted to Prime Minister Nguyen Xuan Phuc for review before it would be approved in-principle, Dung said in an official dispatch sent to the Lao Cai People’s Committee on August 3.

In 2018, Lao Cai proposed building an airport in Sa Pa resort town at a total cost of nearly 5.8 trillion VND (252 million USD) to the Ministry of Transport.

The airport will cover 371ha in Cam Con commune, Bao Yen district. Its construction will last four years under a public-private partnership. Once completed, it will be capable of serving 3 million passengers per year.

Located on the economic corridor of Kunming – Lao Cai – Hanoi – Hai Phong, Lao Cai is an economic belt based on trade development among provinces in Southwest China.

Currently, the province’s transport system incorporates only roads and railways. Therefore, an airport is viewed as crucial to improve local transport network, creating new engine for the development of Lao Cai and the northwest mountainous region at large./.

Domestic gold prices break new record peak amid global uncertainties

The domestic price of gold surged to reach an all-time high of VND59.85 million per tael on the morning of August 6 after the precious metal skyrocketed to US$2,055.1 per ounce in the global market. 

The opening of the market saw one tael of SJC gold at the Saigon Gold, Silver and Gemstone joint stock company being purchased for VND58.6 million per tael and sold at VND59.85 million per tael, marking an increase of between VND700,000 to VND750,000 per tael in comparison to trading on August 5.

Simultaneously, the DOJI Gold and Gems Group were trading at VND58.4 million for buying and 59.5 million for selling per tael, representing a similar rise of VND650,000 per tael from the previous day.

Elsewhere, gold firm Bao Tin Minh Chau at 10:38am listed its prices for the precious metal at VND58.75 million for buying and VND59.60 million for selling.

The recent fluctuations occurring in domestic gold prices can largely be attributed to the impact of the global gold market which has seen prices witness a sharp rise of 0.9% to US$2,035.8 per ounce, with prices even reaching US$2,055.1 per ounce during the opening session of August 6.

HCMC rejects Saigon Co.op’s capital rise

The HCMC Department of Planning and Investment has rejected Saigon Co.op’s 34th business registration certificate, in which the cooperative raised its chartered capital from VND3.2 trillion to VND6.797 trillion.

The department did not accept the additional capital of VND3.597 trillion, which was contributed by 20 member cooperatives of Saigon Co.op, and, as such, recovered the 33rd business registration certificate, following which the cooperative’s chartered capital is now VND3.2 trillion.

A leader of Saigon Co.op said the cooperative has been informed of the decision. The additional capital of VND3.597 trillion has not been used so the decision will not affect the operations of the cooperative.

On July 27, the HCMC Inspectorate unearthed a number of violations at Saigon Co.op, including wrongdoings in raising its capital.

The inspectorate announced that Saigon Co.op did not comply with the Cooperative Law while raising its chartered capital in 2020.

At its members general meeting on January 30, Saigon Co.op adopted a resolution to raise its chartered capital from VND3.2 trillion to VND6.797 trillion. Twenty of 26 Saigon Co.op’s member cooperatives contributed VND3.597 trillion.

However, some member cooperatives that posted an after-tax profit of approximately VND5-6 billion between 2018 and 2019 did not contribute capital, while member cooperatives with a trivial after-tax profit ranging between VND24 and VND500 million contributed hundreds of billions of dong.

According to the HCMC Inspectorate, some member cooperatives of Saigon Co.op mobilized capital from sources that are not members of Saigon Co.op, going against the cooperative’s resolution at the January 30 members general meeting.

Moreover, Saigon Co.op’s member cooperatives contributed capital before they completed the certification registration, violating article 1, clause 28 of the Cooperative Law and did not provide documents relating to the capital contribution, violating article 2, clause 61 of the Cooperative Law.

Besides this, signs of capital appropriation at Saigon Co.op since the cooperative was founded infringed the retained asset ownership rights, affecting the economic security of HCMC and the country as a whole.

Founded in 1989, Saigon Co.op is currently one of the leading retailers in HCMC. The cooperative’s revenue in 2019 reached more than VND35 trillion.

Hoa Phat steel sales surge in July

Leading steel manufacturer Hoa Phat Group sold 300,000 tonnes of construction steel in July, a rise of 19 percent over that in June and 27.5 percent year on year.

According to the firm, last month it exported 53,500 tonnes of steel, doubling the volume recorded in the same period last year.

Sales in the southern region rose two times year on year to 75,000 tonnes, mostly thanks to civil construction works. The launching of public infrastructure projects also helped push Hoa Phat’s steel sales up.

In the first seven months of 2020, Hoa Phat supplied to the market 1.81 million tonnes of construction steel, up 14.5 percent year on year, including 256,500 tonnes shipped to foreign markets, an increase of 73.3 percent and equivalent to the total export volume in the whole year of 2019.

Major export markets of Hoa Phat steel included Japan, the Republic of Korea, Laos, Malaysia, Australia, Canada, Thailand, and Cambodia.

Along with ready-to-use steel, Hoa Phat also sold 1 million tonnes of steel billets for construction steel production in seven months, with 169,000 tonnes in July alone.

The completion of Hoa Phat Dung Quat port also made great contributions to the transport of Hoa Phat steel, thus promoting its sales. Recently, the port received a 176,000 tonne capsize vessel, the biggest of its kind it had ever served.

HD Bank’s profit up 31.5 pct. in H1

The HCM City Development Joint Stock Commercial Bank (HD Bank) reported impressive results on August 3 for the first half of 2020, with pre-tax profit growing 31.5 percent year-on-year to over 2.9 trillion VND (124.3 million USD).

Its non-performing loan ratio was kept firmly under control, at 1.1 percent, the lowest among all the domestic banks.

Several indicators for the first half posted strong growth. Total mobilised capital, for instance, reached close to 213.94 trillion VND, a year-on-year increase of 18.2 percent, while total outstanding loans rose 10.3 percent to more than 168.77 trillion VND.

The bank also recorded a 22.7 percent increase in total consolidated operating income, exceeding 6.34 trillion VND. This included over 5.66 trillion VND in net interest income; 30.1 percent higher than in the same period last year.

Operating costs were well-managed and stood at2.74 trillion VND, making its cost income ratio (CIR) fall to 43.1 percent from last year’s 47 percent.

Its return on equity (ROE) and return on asset (ROA) stood at 21.6 percent and 1.97 percent, respectively; much higher than a year earlier.

In the face of COVID-19, HD Bank has designed credit packages to support affected borrowers, including a preferential credit package worth 24 trillion VND for small- and medium-sized enterprises and a 10 trillion VND soft credit package for individuals and micro enterprises.

Indonesia to provide cash transfers, working loans for 12 mln MSMEs

The Indonesian government is set to provide cash transfers and working capital loans for micro, small and medium enterprises (MSMEs) in its latest bid to boost economic growth amid the COVID-19 pandemic.

Deputy Minister of State-Owned Enterprises Budi Gunadi Sadikin, who is also head of the national economic recovery task force, said on July 29 that the government would provide 2.4 million rupiah (165 USD) in cash each for 10 to 12 million MSMEs, as well as working capital loans of 2 million rupiah for MSMEs.

The assistance is expected to maintain people’s income and be used as working capital to support their businesses, he told reporters during a press briefing. The government will also add working capital loans with low interest for those who have already started businesses.

President Joko Widodo has asked the national economic recovery task force to focus on boosting economic growth in the third quarter of 2020, as well as to maintain employment and income levels to prevent a recession this year, Budi went on to say.

MSMEs have been particularly hit hard by the economic downturn, as the government expects the economy to grow by 1 percent at best or shrink by 0.4 percent at worst this year. It also forecasts a contraction of around 5 percent in the year’s second quarter due to large-scale social restrictions to curb the spread of COVID-19.

The government has allocated 695.2 trillion rupiah to strengthen the country’s virus response and boost economic growth, expanding the fiscal deficit to 6.34 percent of gross domestic product (GDP).

On the same day, the government also guaranteed working capital loans worth 100 trillion rupiah for labour-intensive businesses to help them survive the pandemic.

Finance Minister Sri Mulyani Indrawati stated that to be eligible for the loan guarantee programme, firms are required to employ at least 300 individuals, prove that their activities have been affected by the pandemic, and have a good track record of paying back loans, according to the minister.

Amid the uncertainty about how long the COVID-19 pandemic battle will need to be fought, the government has announced that it will raise its 2021 state budget deficit assumption to 5.2 percent of GDP. The change will be proposed to the House of Representatives, which previously agreed to the government’s proposal of a deficit between 4.17 percent and 4.7 percent of GDP.

Indonesia allows oil and gas investors to choose contract options

The Indonesian government has announced that it had revised a 2017 law that will give oil and gas investors more flexibility when choosing their contract options for exploration, according to Reuters.

The revisions, which came into effect on July 16, allow contractors to choose between different sharing contracts including the “cost recovery” and “gross split” systems in an effort to boost investment.

Indonesia adopted the “gross split” scheme for oil and gas production deals in 2017, in which contractors shoulder the cost of exploration and production in exchange for retaining a bigger portion of the oil and gas they recover.

That represented a shift from the “cost recovery” scheme used previously, in which the government reimbursed the exploration and production costs borne by the contractors in exchange for a higher share of companies’ oil and gas earnings.

Under the revised law, expiring contracts no longer have to be converted to gross split production sharing contracts from cost recovery contracts.

In the case where state oil company PT Pertamina or its affiliates are appointed, the ministry will determine the cooperation contract.

VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 7

Cambodia extends tax breaks for tourism-dependent businesses

The Cambodian government has decided to extend tax breaks for another two months for tourism-dependent businesses to overcome difficulties during the COVID-19 crisis, the Ministry of Tourism said on August 3.

The exemption, which takes effect in August and September, is granted to hotels, guesthouses, restaurants and tour companies in capital Phnom Penh and in Siem Reap, Sihanouk, Kep and Kampot provinces, as well as in Bavet and Poipet cities, according to the ministry.

It added that the government will continue transferring 40 USD per month for staff and workers in the tourism sector for another two months.

Tourism Minister Thong Khon said over 3,000 tourism-related businesses in Cambodia have been closed due to COVID-19, leaving more than 50,000 workers unemployed.

Last weekend, the government announced that it will continue supporting unemployed workers in the garment-textile sector for another two months. Each will receive 40 USD per month from August to September 2020 and additional 30 USD per month from their employer.

PMIs in Southeast Asia see normalisation but far from sustainability

Gradual improvement in the purchasing managing indices (PMIs) across Southeast Asia shows some return to normalisation, but a sustained recovery is still far away, according to a report released by Barclays Research on August 3.

PMIs continue to be capped by still-weak demand, the report said, adding that confidence about the business environment in the near-term remains low, mirrored in the employment sub-index, which remains deep in contraction territory for all of Southeast Asia.

According to the report, it is likely that business sentiment is largely impacted by external demand conditions - the export orders sub-index remains materially below pre-COVID-19 levels, even for countries that showed large month-to-month improvement in the index reading.

The PMI reading for July in Indonesia and Thailand showed improvement over June's data following some lifting of restrictions last month, Barclays noted.

However, it said the improvement in Thailand has been much slower than expected, despite the country urgently re-opened its economy.

Meanwhile, the Philippines' manufacturing PMI declined to 48.4 points, down from 49.6 in June, due to impacts of tightening rules to prevent COVID-19 in some parts of the country such as Cebu, it said.

As Manila moves back into a tighter lockdown from August 4, Barclays said it is expecting the Philippines' PMI to fall deeper into contraction territory in August.

For now, Malaysia is the only country in Southeast Asia that has its PMI to be around 50-point level, reaching 51 in June and 50 in July.

'One-trillion-dong profit club' led by Vinhomes JSC

Twenty-five companies have entered the “one-trillion-dong profit club” for January-June, despite the economy being ravaged by the COVID-19 pandemic.

Leading the chart is residential real estate firm Vinhomes JSC – a member of conglomerate Vingroup JSC.

Vinhomes in the first six months recorded 11.45 trillion VND (490.2 million USD) of post-tax profit, up slightly from last year’s figure, though post-tax profit in the second quarter dropped 55 percent year-on-year to 3.8 trillion VND.

The real estate company attributed the growth of post-tax profit in January-June to successful sales of real estate projects, especially in the first quarter when coronavirus hardly had any impact on the Vietnamese economy.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) ranked second with a six-month post-tax profit of nearly 8.8 trillion VND.

The figure was down 3 percent year-on-year.

Five companies which had post-tax profits of between 4 trillion VND and 6 trillion VND are PetroVietnam Gas (PV Gas), steel producer Hoa Phat, the Vietnam Prosperity Joint Stock Commercial Bank (VP Bank), the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), the Vietnam Dairy Products JSC (Vinamilk), and the Joint Stock Commercial Bank for Industry and Trade (Vietinbank).

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and Asia Commercial Joint Stock Bank (ACB) recorded post-tax profits in the first six months of 3.06 trillion VND and 3.47 trillion VND, respectively.

The HCM City Development Joint Stock Bank (HD Bank) announced its post-tax profit in the first half of the year was 2 trillion VND.

Other companies such as PetroVietnam Power Corporation (PV Power), real estate firm Novaland, Saigon-Hanoi Joint Stock Commercial Bank (SHB), brewer Sabeco and Vingroup JSC reported post-tax profits ranged from 1 trillion VND to 1.93 trillion VND.

Banks continued performing well in the first half of the year despite the impact of the pandemic as half of the 21 companies in the “one-trillion-dong profit club” are in the banking sector.

The securities sector had one representative, Techcombank Securities Co (TCBS), recording a 1 trillion VND post-tax profit in the first six months.

Local businesses promise there will be no shortage of essential goods as COVID-19 returns

Producers and distributors of essential goods are striving to ensure sufficient supply amid the return of COVID-19.

Retailers in Viet Nam are increasing their stocks of essential goods to ensure they can meet the rising demand during the fresh COVID-19 outbreak. 

The HCM City Department of Industry and Trade has, for instance, worked with large food producers and retailers to ensure there is no supply shortfall, while the businesses are increasing their output and stocks of raw materials.

Currently fresh farm produce, face masks, hand gels, and instant noodles are the most in demand at supermarkets.

Retailers such as Saigon Co.op and Big C have increased their stocks of essential goods to ensure there is sufficient supply.

Saigon Co.op, for instance, has enough stocks to last five months, including 2.5 million medical masks, 10 million antibacterial cloth masks and 100,000 bottles of hand sanitisers.

Nguyen Anh Duc, Saigon Co.op's general director, told Nguoi Lao Dong newspaper that the company is working with its suppliers to offer discounts and promotions, organise mobile selling trips to remote areas and industrial zones and promote online shopping to reduce the number of visitors to its stores.

Masan Group, which operates 3,000 VinMart and VinMart+ stores across Viet Nam and is hoping to ensure sufficient supply until December, has in stock over 2.5 million antibacterial cloth masks and three million bottles of hand sanitisers, which will last through September.

The company has also promised not to increase the prices of essential items.

MM Mega Market is increasing its supply of masks to Da Nang and offering promotions. 

Vietinbank posted US$319.6 million before-tax profit

 Vietinbank, listed as CTG, posted pre-tax profit of more than VND7.4 trillion (US$319.6 million) in the first half of the year, representing a 40 per cent year-on-year increase.

Vietinbank has announced its financial report, saying that in the context of weak growth in net interest income due to the reduction of lending interest rates to support customers, its non-credit business segment showed positive growth results.

In the first six months of 2020, the bank’s net interest income only increased by 0.2 per cent over the same period to VND16.2 trillion.

In return, the bank shifted its income structure, boosting non-credit income to bring positive results. Profit from service activities in the period increased by 10.5 per cent over the same period, reaching VND2.16 trillion. Profit from foreign exchange trading increased by 31.7 per cent to VND1 trillion.

Earnings from securities trading increased by 185 per cent to VND389 billion. Other operating profit also increased strongly by 36 per cent to VND470 billion.

In the first half of the year, interest from non-credit activities contributed 21.5 per cent to the bank's total operating income, up from 17.3 per cent in the same period of 2019.

Similar to many other banks, VietinBank began tightening operating expenses, down 3.8 per cent in the period, to VND6.6 trillion.

Risk provision expense decreased by 10.6 per cent to VND6.6 trillion.

As of June 30, VietinBank's loan balance is VND941.4 trillion, up by 0.7 per cent from the same period last year. Its total assets reached nearly VND1.24 quadrillion, down slightly by 0.1 per cent compared to the beginning of the year. Customer deposits increased by 2.3 per cent to VND913.3 trillion.

VietinBank's bad debt on June 30 was VND15.9 trillion, accounting for 1.7 per cent of total loans.

In the first six months, the bank bought over VND6 trillion of bad debts at Viet Nam Asset Management Company (VAMC), bringing the total value of debt purchased to date (after about 1.5 years) to nearly VND6.8 trillion. VietinBank also made a risk provision of about 50 per cent of the debt value, speeding up the restructuring plan associated with handling bad debts in the period of 2016-20. 

Industrial production expands at the lowest rate in many years

Industrial production struggled in July, expanding at just 3.6 per cent over June and 1.1 per cent over the same period last year, the lowest rate since 2013, latest updates of the General Statistics Office (GSO) revealed.

For the January-July period, the index of industrial production (IIP) increased by 2.6 per cent, much lower than the expansion of 9.4 per cent recorded in the same period of 2019 and also the lowest rate in many years.

The global outbreak of COVID-19 together with the reoccurrence in some provinces and cities of Việt Nam in the past two weeks pushed industrial production activities into difficulties again, causing disruptions in supply chains, despite a robust growth in June when the virus was successfully contained. In comparison, IIP in June expanded by 10.3 per cent against May and 7.2 per cent against the same period last year.

For the seven-month period, the manufacturing and processing industry rose by 4.2 per cent, compared to 10.7 per cent of the same period last year, electricity production and distribution up 2.1 per cent, water supply and waste treatment up 3.3 per cent.

Several industries saw significant drops. The mining industry production fell by 7.8 per cent, causing a drop of 1.2 percentage point in overall IIP expansion rate.

The production of motor vehicles dropped by 15.4 per cent, crude oil and gas down by 11.3 per cent and beverage products by 6.3 per cent.

Of note, the production of medicine, pharmaceutical chemicals and medicinal materials was up by 27.1 per cent.

The number of labourers woking in industrial production companies as of July 1 was 1.3 per cent higher the previous month but 1.8 per cent lower than the same period last year.

Experts predicted that the industrial production might continue to struggle in the remaining months of this year, especially when COVID-19 community transmissions have reoccured in Việt Nam and the Government must strive to contain the virus.

ETFs attracts capital despite COVID-19 resurgence

Despite the COVID-19 resurgence, exchange-traded funds (ETFs) still attracted hundreds of billions of dong in the second half of July.

The Viet Nam's stock market has faced a gloomy period since the resurgence of community COVID-19 transmission in Da Nang City on July 24.

The VN-Index has fallen sharply from 870 points to below 800 points, equivalent to a decline of more than 8 per cent in just half a month.

Still, the major ETFs on the market such as Vaneck Vectors Vietnam ETF (VNM ETF), FTSE Vietnam ETF, VFMVN30 ETF, VFMVN Diamond ETF and SSIAM VNFin Lead ETF drew nearly VND500 billion (U$21.3 million).

VNM ETF attracted $9.16 million. The proportion of Vietnamese stocks currently accounts for about 70 per cent of VNM ETF’s portfolio, so it is estimated that the fund net bought $6.4 million of Vietnamese stocks over the past two weeks.

FTSE Vietnam ETF also lured $2.8 million in the second half of July. This fund drew $6.3 million in the whole month.

The largest domestic ETF in the market, VFMVN30 ETF, also attracted capital of $2.8 million in the second half of July.

Other domestic ETFs such as VFMVN Diamond ETF and SSIAM VNFin Lead ETF drew $3.2 million and $4.3 million in the second half of July, respectively.

With the ETFs attracting capital and the inception of new funds such as SSIAM VN30 ETF or VinaCapital VN100 ETF, market sentiment can be improved in the context of complicated COVID-19 pandemic. 

ACB get nod to raise charter capital

The State Bank of Viet Nam has approved Asia Commercial Bank (ACB)’s plan to raise its charter capital from VND16.6 trillion (US$721 million) to VND21.6 trillion.

The plan will be implemented via dividend payment in shares to shareholders.

ACB plans to issue 498.8 million shares to pay the dividend, equivalent to a total value of VND4.98 trillion.

The payment ratio is 30 per cent, meaning every shareholder will receive three new shares for every 10 they hold.

The expected issuance time is the fourth quarter of this year.

 

Previously, ACB planned to pay a 2019 dividend in shares and cash. However, due to the COVID-19 pandemic, the State Bank required banks to use resources to reduce interest rates, support businesses and not pay dividends in cash.

ACB also plans to pay the 2020 dividend at a rate of not less than 20 per cent.

In the first six months of this year, ACB recorded a consolidated pre-tax profit of VND3.8 trillion, up 5.4 per cent over the same period last year.

The bank plans to earn a pre-tax profit of VND7.6 trillion this year. 

Viettel Global posts US$50.7 million before-tax profit

Viettel Global, a foreign investment unit of telecoms giant Viettel, posted a before-tax profit of VND1.17 trillion (US$50.7 million) in the first half of this year, equivalent to the same period last year.

Viettel’s Global revenue rose 9.7 per cent to VND8.6 trillion in the period thanks to growth in its three markets of Southern Africa, Latin America and Southeast Asia despite the impact of the COVID-19 pandemic. Its gross profit increased by nearly 19 per cent to VND3.3 trillion.

A total of 51 per cent of its revenue came from Southeast Asia, where its partner companies Viettel Myanmar, Star Telecom (Laos) and Metcom (Cambodia) saw double-digit growth in revenue.

Net revenue from business activities increased by 6 per cent to VND4.3 trillion the second quarter alone due to major currency fluctuations in its markets caused by the pandemic.

As of June 30, Viettel Global's total assets and owner's equities were VND59.3 trillion and VND29.4 trillion respectively.

Established in 2006, Viettel Global currently operates in Cambodia, Laos, Timor Leste, Mozambique, Burundi, Haiti, Peru, Cameroon, Tanzania and Myanmar. 

Japan to promote trade document digitalization platform to ASEAN

The Japanese Government plans to promote a platform to member countries of the Association of Southeast Asian Nations (ASEAN) for digitalizing all trade-related documents, Kyodo News cited sources close to the matter as reporting on August 5.

Japan expects the platform to strengthen the supply chain in the region where many Japanese companies have production bases while deepening economic ties with the 10-member bloc, they said.

The digitalization platform, currently being developed by a consortium of 18 Japanese companies, utilizes a blockchain technology to prevent data hacking, the sources said.

The consortium, whose participants include NTT Data Corp., Mitsubishi Corp. and Nippon Express Co., will run a trial of the platform this year in Vietnam, the chair of ASEAN for 2020, the sources said.

By eliminating massive exchanges of paper between trade stakeholders, the platform is expected to sharply reduce the costs and time required for customs documentation work. It can also digitalize procedures for credit letter issuance by banks and trade insurance contracts.

As the system accumulates data, it can help search for alternative suppliers based on past trade and credit histories in the event of supply chain disruptions, the sources said.

The platform's development comes as the Ministry of Economy, Trade and Industry is providing funding for creation of new businesses through digitalization projects in Asian countries.

ASEAN groups 10 members - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Vietnam works to boost longan exports to China

Vietnamese Deputy Minister of Agriculture and Rural Development Le Quoc Doanh on August 5 worked with Commercial Counsellor of the Chinese Embassy in Vietnam Hu Suo Jin to boost exports of farm produce, especially longan, to China.

Doanh said the Chinese Embassy in Vietnam has been closely working with the ministry to remove difficulties in the shipment of Vietnamese agricultural products to China.

In the recent time, the export and import of agro-forestry-fishery products between the two countries have been declining due to the COVID-19 pandemic, he added.

The Deputy Minister hoped the Chinese Embassy and relevant agencies will continue addressing difficulties in the field since the pandenic remains complicated.

Vietnam wants to boost longan and lychee exports to China as these fruits could be processed into many other products, he added.

Hu said China is a major and traditional market of Vietnam which is also the biggest trade partner of China in the Association of Southeast Asian Nations (ASEAN).

Vietnam has shipped many fruits to China, he said, adding that China has purchased over 60,000 tonnes of lychees from the northern province of Bac Giang – the largest lychee producer in Vietnam.

For longan, Hu said he had worked with the Department of Industry and Trade of Hung Yen – which is well-known for this specialty fruit – and the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade to boost exports.

The Chinese Embassy is willing to coordinate with Vietnamese relevant agencies to remove difficulties such as holding virtual meetings, contacting with major businesses in China, and facilitating the shipment of Vietnamese longan, he promised./.

Thailand backs economic recovery projects

Thailand’s cabinet on August 4 approved a budget of 884.62 million baht (28.5 million USD) to fund 157 economic recovery projects in 57 out of 77 provinces nationwide that have been hit by the COVID-19 pandemic.

Deputy government spokeswoman Rachada Dhnadirek said the money would be allotted to support many farming businesses, including organic agriculture, goat farms and mulberry farms. Some of it would also be used to promote businesses linked to tourism in the provinces, he added.

For the first time since 2014, the Thai economy has decreased by 1.8 percent year-on-year in the first quarter of 2020.

The Bank of Thailand (BoT) has just estimated that the Southeast Asia's second largest economy could see a record drop of 13 percent in the second quarter of this year when economic activities are delayed due to restriction measures against COVID-19.

Vietsovpetro exploits 500 million cubic metres of gas at Thien Ung field

The Russia-Vietnam oil and gas joint venture (Vietsovpetro) has pumped up 500 million cubic metres of gas from Thien Ung field, which has been in operation since late 2016.

The Thien Ung field development project, 270 km southeast of Vung Tau city, is a component project under the gas development plan of the Vietnam Oil and Gas Group (PetroVietnam).

As planned, exploited products from Thien Ung will be brought offshore via the Nam Con Son 2 pipeline - Phase 2.

Vietsovpetro will drill new fields to provide recipients with an estimated gas output of up to 2 million cubic metres per day.

The operation of the BK-TNG rig at the Thien Ung field aims to create infrastructure connectivity and promote the exploration and exploitation of gas-condensate fields in the Nam Con Son basin area and the southern continental shelf of Vietnam, as well as contribute to ensuring national energy security and asserting national sovereignty over seas and islands.

Indonesia's economy contracts for first time in two decades

Indonesia's economy contracted in the second quarter for the first time in more than two decades as it was slammed by coronavirus restrictions, with warnings that the recovery could be among the weakest in Southeast Asia.

Output in the region's biggest economy slumped 5.3 percent on-year in April-June, the country’s statistics agency said. That marked Indonesia's first contraction since the first quarter of 1999 during the Asian financial crisis.

“Economic activity in Indonesia collapsed in the second quarter," research house Capital Economics said in note after the figures were published. "A failure to contain the virus effectively and inadequate policy support means the recovery is likely to be one of the slowest in the region," it added.

Last month, Indonesia's central bank cut interest rates for the fourth time this year in a bid to boost the struggling economy. The country has announced a stimulus package worth more than 48 billion USD to help offset the impact of the virus, which forced a large-scale shutdown that hammered growth.

Indonesia, home to nearly 270 million people, has been easing movement restrictions in a bid to head off economic collapse but COVID-19 infections are mounting, with cases topping 115,000 with and more than 5,300 deaths.

Binh Duong’s wood exports up slightly in first half

Wood and wooden product exports in the southern province of Binh Duong hit more than 1.7 billion USD in the first half of 2020, up 0.6 percent year-on-year and accounting for 14.5 percent of the local total export value of 11.9 billion USD.

Local companies producing wooden products are expected to benefit from the opportunities the EU-Vietnam Free Trade Agreement (EVFTA) offers and have targeted growth in the remaining months of the year.

According to the Binh Duong Furniture Association (BIFA), many companies had to limit production because of the COVID-19 pandemic and have seen a decline in new export orders.

BIFA Chairman Dien Quang Hiep said Binh Duong is home to 1,600 furniture enterprises, or 40 percent of those found nationwide.

Amid the difficulties caused by the pandemic, local businesses are making every effort to seek domestic raw material resources to replace imports, while promoting sales via e-commerce platforms.

Hiep added that nearly 50 percent of total export orders held by local businesses are reported to have been placed through e-commerce platforms.

The country’s exports of wood and wooden products in the first four months of 2020 were worth nearly 3.2 billion USD, a year-on-year increase of 6 percent, according to the General Department of Customs.

Thanks to its efficient pandemic control, Vietnam has become an attractive investment destination for many wood processing companies, with turnover in billions of dollars.

The country expects wood processing exports to top 12.5 billion USD this year, up 10 percent against last year, according to the Vietnam Timber and Forest Product Association (VIFORES).

ASEAN+3 countries discuss financial cooperation

The ASEAN+3 Finance and Central Bank Deputies’ Meeting (AFCDM+3) was held via video conferencing on August 5 under the chair of Vietnam and Japan.

This is an important meeting in a series of ASEAN and ASEAN+3 financial cooperation events chaired by Vietnam this year to prepare for the ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting slated for September.

Deputy Finance Ministers and Deputy Governors of the central banks of ASEAN member states and China, the Republic of Korea, and Japan discussed the region’s financial cooperation initiatives, such as the Chiang Mai Initiative Multilateralisation (CMIM) and the Asian Bond Markets Initiative (ABMI), and approved policies and plans for the mid-term operations of the ASEAN+3 Macroeconomic Research Office (AMRO).

Participants expressed their appreciation of the progress made in the continuous completion of the CMIM to meet new requirements in the financial market and to be in accordance with a coordination mechanism between CMIM and the International Monetary Fund (IMF).

They spoke highly of efforts made by AMRO to carry out macro-economic supervision and to support member states in improving their policy-making capacity.

They also hailed the achievements made by ABMI working groups in researching measures to better the investment environment, developing new investment tools, completing the legal framework, upgrading infrastructure for the bond market, and carrying out technical assistance programmes to improve the bond markets of member economies.

In the hope of intensifying regional economic and financial stability, delegates considered the pace of implementation of new initiatives within the framework of the Strategic Directions of ASEAN+3 Finance Process.

During this meeting, the Deputy Finance Ministers and Deputy Governors of central banks had a special discussion session to share policy measures in response to the impact of the COVID-19 pandemic and to update the situation in and assess the macro-economic prospects of regional countries.

Hai Duong longan to conquer global tastes

Some 250 tonnes of longan from the northern province of Hai Duong are now ready to be shipped to demanding markets such as Europe, Australia, and Singapore.

The province’s Chi Linh city has 673 ha of longan trees, primarily in Hoang Tan, Hoang Tien, Le Loi, and Hoang Hoa Tham wards and communes.

According to Nguyen Van Ha, deputy head of the city’s economic bureau, agencies have granted four longan growing area codes in the city, covering 43 ha, while providing training on longan growing to local farmers.

Nguyen Van Vien from Hoang Tien ward is one of 60 farmers in Chi Linh receiving a longan growing area code for export to Australia.

Unlike previous crops, longan grown this year by Vien and other farmers was observed closely by agricultural scientists.

He harvested 3 tonnes from his 3 ha this year, with each kilo selling for 15,000 VND (0.65 USD) - double the market price.

Hai Duong is home to 2,100 ha of longan, of which more than 50 ha meet international standards. This year’s output is expected to reach 10,000 tonnes, with 250 tonnes standardised for export to fastidious markets.

In addition to providing technical training, the provincial plant protection sub-department has also worked to link exporters with farmers.

The Red Dragon Service Trading Manufacture Co. has purchased between three and eight tonnes of longan a day for export to Singapore, Australia, and Europe via sea.

Licensed housing projects rise in Q2

The number of licensed housing projects rose sharply in the second quarter, the Ministry of Construction announced on August 4.

During the period, there were 325 licensed projects with more than 70,300 apartments, 1,425 underway projects with over 246,000 apartments, and 73 others completed with 8,901 apartments.

Hanoi was home to eight lisenced projects while Ho Chi Minh City had four. Both cities had no licensed projects in the first quarter.

The number of tourism property projects also increased quarter-on-quarter,with 92 projects licensed, 91 under construction and 12 completed.

The progress of construction was better than the previous quarter.

Successful real estate transactions were equivalent to about 130-140 percent from those in the first quarter.

There were 29,600 successful deals in the second quarter, including over 1,300 in Hanoi and 3,900 in Ho Chi Minh City, up 40.6 percent and 16 percent from the first quarter, respectively.

Despite difficulties, the real estate market still sees development opportunities, the ministry said.

EVFTA expected to help boost Vietnam-Czech trade ties

The Czech Ministry of Industry and Trade’s website mpo.cz has recently published an article titled “The Vietnamese market is opening up, a free trade agreement can save millions of crowns for Czech companies.”

It said the EU-Vietnam Free Trade Agreement (EVFTA) entered into force on August 1, after eight years of negotiations, gradually eliminating up to 99 percent of all mutual duties.

"This opens up new opportunities for the Czech Republic in the rapidly growing market of almost one hundred million in the attractive region of Southeast Asia. In contrast to current protectionist trends, the agreement can be seen as a positive signal towards open international trade based on rules," Deputy Prime Minister and Minister of Industry and Trade Karel Havlíček was quoted as saying.

"According to preliminary estimates, 100 million Czech crowns, an even higher amount will be saved by the removal of non-tariff barriers. The biggest opportunities will open up for Czech companies in the automotive, engineering and electrical engineering industries,” he added.

According to Minister of State for EU and Foreign Trade Martin Tauberová, after the experience of the pandemic, the agreement may also greatly help efforts to diversify supply, which could in the future make it possible to better deal with any similar global crises.

The newly agreed framework has the potential to revive trade between the Czech Republic and Vietnam, which is currently the Czech Republic's 25th largest trading partner in the world.

Vietnam is one of the fastest growing economies in the world, the article said, adding that the country's economy has grown steadily by 6 to 7 percent a year over the past decade.

In addition, Vietnam has a young, active population, which gives its economy the potential for further rapid prosperity.

Vietnam’s economic situation does not seem to be dramatically affected by the COVID-19 pandemic. Vietnam has not resorted to a blanket curfew, but has targeted measures at specific areas with the disease, keeping the economy going.

According to the World Bank's forecasts, the local economy should grow by up to 4 percent this year as well. In addition to favourable economic indicators, Czech businesses can also benefit from human capital. Close historical ties between the two countries gave rise to a significant Vietnamese minority in the Czech Republic and a large group of Vietnamese who, thanks to studies in the former Czechoslovakia, still speak Czech after returning to their home country.

The newly agreed trade framework has the potential to develop trade relations between the two countries, the article said.

The Czech Ministry of Industry and Trade affirmed that it is ready to advise entrepreneurs.

EVFTA will also be one of the main topics of the next meeting of the MIT Expert Team on Free Trade Agreements, which will be convened during the autumn. In the following period, the evaluation of the real impacts of EVFTA on the Czech Republic is also planned, according to the article.

Vietnam Motor Show 2020 cancelled due to COVID-19

The Vietnam Motor Show 2020, scheduled for October 29 – November 1, will be cancelled due to the complicated developments of COVID-19, announced the Vietnam Automobile Manufacturers’ Association (VAMA) and the Vehicles Importers Vietnam Association (VIVA) on August 4.

The next edition of the event is scheduled for October 2021 at the Saigon Exhibition and Convention Centre (SECC).

VAMA and VIVA will continue to choose the Asia Trade Fair and Business Promotion JSC (ATFA) – Vinalink alliance as a co-organiser of the event.

RoK fashion firms expected to benefit from EVFTA: KITA

The Republic of Korea’s fashion firms based in Vietnam are expected to benefit from the free trade agreement between the Southeast Asian country and the European Union (EVFTA), which came into effect this month.

Under the agreement, clothes producers based in Vietnam can enjoy the benefit of the latest free trade agreement for goods made with materials of the RoK, the Korea International Trade Association (KITA) said in its report.

The RoK implemented its own FTA with the EU in 2015.

Vietnam's imports of the RoK’s materials to produce clothes reached 1.7 billion USD in 2019, accounting for 11.5 percent of the total.

KITA said exports of the RoK’s materials to the Vietnam may also increase down the road on the back of the EVFTA.

According to the association, the EVFTA is expected to increase demand for Vietnamese clothes in Europe as well.

Vietnam was the third-largest export destination for the RoK - Asia's No. 4 economy - in 2019.

PM: EVFTA like an expressway bringing EU, Vietnam closer

Prime Minister Nguyen Xuan Phuc chaired a video conference on August 6 regarding the implementation of the EU-Vietnam Free Trade Agreement (EVFTA), during which he described the deal as a broad and modern expressway bringing the EU and Vietnam closer together.

He emphasised that Vietnam has signed 13 free trade agreements (FTAs) but one of the country’s greatest shortcomings is that local businesses have limited awareness about these deals and have failed to take advantage of the opportunities they present.

Many bodies have been slow in preparing relevant legal documents, while overlaps in enforcement guidance are hampering businesses, he noted.

He highlighted the importance of communications on international economic integration in general and FTAs in particular, as well as improvements in human resources.

Noting that the requirement on sustainable development is an important part of the EVFTA, the PM said there are higher standards on increasing economic efficiency and stricter requirements on social responsibility, labour, employment, and environmental protection.

He also recalled the technical assistance offered to Vietnam by President of the European Commission Ursula von der Leyen during their phone call on July 29, saying that this represents valuable support for the country.

The Vietnamese Government has adopted a plan of action with five groups of missions and 41 specific tasks for ministries, sectors, localities and the business community, he said, requiring proactive implementation by all concerned parties.

According to a survey conducted by the Ministry of Planning and Investment, in normal circumstances the agreement can help Vietnam’s GDP increase by 3.2 percent in the first five years, by 5.3 percent in the next five years, and by up to 7.72 percent in the subsequent five-year period.

With the EU’s commitment to remove nearly 100 percent of import tariffs, the EVFTA is expected to help Vietnam’s export turnover to the bloc rise 42 percent by 2025 and nearly 45 percent by 2030.

The agreement was signed by both sides on June 30, 2019, and officially came into effect on August 1, 2020.

State Bank of Vietnam cuts some interest rates

The State Bank of Vietnam (SBV) on August 6 announced its decision on cutting some policy rates with immediate effect, the second time this year following the adjustment on March 16.

Accordingly, the interest rate of compulsory reserves in VND at banks will be 0.5 percent per annum, and the interest rate on dong deposits from banks that exceed the minimum 3 percent requirement will be zero percent per annum, down 0.5 percent compared to the rates stipulated in a decision on March 16 this year.

Meanwhile, the interest rate for deposits in VND by the Vietnam Development Bank (VDB) and Vietnam Bank for Social Policies (VBSP), both state-owned banks; People's Credit Funds and microfinance institutions will be reduced by 0.2 percent to 0.8 percent per annum.

The interest rate for deposits of the State Treasury, and the Deposit Insurance of Vietnam with the SBV is revised down to 0.8 percent per annum, down 0.2 percent.

The SBV said the adjustment was made based on macro-economic developments and the level of interest rates in the market.

CPTPP countries discuss post-pandemic recovery plan

Economic and trade ministers of signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) met online on August 5 to discuss how best to intensify cooperation and prepare a plan of action to boost post-pandemic economic recovery.

The third meeting of the CPTPP Commission was held via video conference under the chair of Mexico’s Economy Secretary Graciela Márquez Colín and reported on issues relating to the implementation of the agreement.

The ministers issued a joint statement supporting trade liberalisation as a driving force for economic growth, especially in face of the COVID-19 pandemic. The statement also highlights the importance of maintaining a strong, rules-based multilateral trading system so as to ensure sustainable development.

Participants also agreed on the establishment of an office in charge of developing the digital economy, while calling on Brunei, Malaysia, Peru, and Chile to soon ratify the agreement so it may be implemented fully.

The CPTPP comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Together they have a combined economy of 13.5 trillion USD.

 
 

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