Ho Chi Minh City is applying measures to become a leading destination in the region in investment, renovation, and science-technology in 2025, creating a fair and safe business environment for businesses and investors.

Under a new plan issued recently by the municipal People’s Committee for the 2021-2025 period, HCM City will continue to improve the Provincial Competitiveness Index (PCI) while seeking measures to improve the investment and business environment towards easier, more transparent and fair orientations.

Meanwhile, HCM City aims to enter the list of top localities nationwide in socio-economic management quality, with rapid digital transformation.

To this end, the municipal People’s Committee has introduced a number of measures, including strengthening the leadership and direction of improvements to the city’s competitiveness as well as the local business and investment environment, and building plans to speed up administrative reform.

To increase the PCI component indexes, the city targets that at least 93 percent of business registration requests and 40 percent of investment licence issuance will be processed online./.

Long-term plan for post-pandemic economic recovery needed

As the COVID-19 pandemic continues to develop in an unpredictable fashion despite vaccination campaigns being carried out around the world, experts have said that Viet Nam needs to identify and adopt a long-term plan for post-pandemic economic recovery.

They were speaking at a workshop held by the Ministry of Planning and Investment’s Central Institute for Economic Management (CIEM) on Thursday about the findings of a report about post-pandemic economic recovery and institutional reforms.

COVID-19 has damaged the global economy, they said, forcing both developed and developing countries to speed up institutional reforms in combination with accessing the Fourth Industrial Revolution and the digital economy.

Having largely brought the pandemic under control this year, Viet Nam has seen remarkable socio-economic recovery.

The resumption of international flights and the launch of vaccine passports have been discussed, with a view to opening up the economy in a safe manner.

According to CIEM Director Tran Thi Hong Minh, the report highlights several future considerations for economic recovery and institutional reform, including macro-economic stabilisation, economic institutional innovation and international integration, the State's role, and economic space for the private sector.

The time to carry out economic reforms should be studied carefully during a post-pandemic economic recovery, she added.

Regarding the reform process recommended in the report, Nguyen Anh Duong from CIEM said it should continue its COVID-19 prevention work and efforts to remove bottlenecks facing the business community and workers as well as promoting economic institutional reform this year.

In 2022, it is necessary for the country to carry out economic recovery measures in tandem with economic institutional reform. Meanwhile, solutions to support economic recovery should be withdrawn, and focus should be sharpened on economic institutional reform, Duong added.

The country can achieve better economic growth if it loosens monetary and fiscal policies, but it could suffer from higher inflationary pressure, he pointed out.

Loose monetary and fiscal policies could result in higher economic growth and improvements in productivity if combined with institutional reform, he added, describing this as an effective way to develop the economy in a rapid and sustainable manner in the face of global economic risks and uncertainties. 

Vietnamese market offers attractive prospects for Russian exporters: Russian official

With its high food sales and position as a major transshipment hub that supplies goods to ASEAN countries and China, Vietnam offers attractive prospects for Russian exporters, said Vice Chairwoman of the Russia - Vietnam Friendship Association (RVFA) Regina Budarina at a workshop held in Moscow on April 23.

Budarina noted in her speech that Russia’s non-resource export to Vietnam grew by about 45 percent last year.

Also at the workshop that discussed prospects for import and export between the two nations, head of the Vietnam Commercial Affairs Office in Russia Duong Hoang Minh reviewed Vietnam’ growth in 2020 despite the COVID-19 pandemic.

The nation grew 2.9 percent last year and the number is projected to hit 7 percent this year.

According to Russia’s Federal Customs Service, in 2020, the two countries’ bilateral trade stood at 5.7 billion USD, up 15 percent from 2019 and 50 percent from 2016. Russia’s export to Vietnam and Vietnam’s export to Russia hit 1.6 and 4 billion USD, increasing 43 and 7 percent on-year, respectively.

Minh noted that with the implementation of the free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU), Russian firms are seeing an excellent chance for shipping goods to Vietnam as well as investing in production in the nation for exports to ASEAN member nations and to other markets that Vietnam has already secured FTAs with./.

Support for domestic carriers should be fair: experts

The Ministry of Transport has proposed the Government increase support for domestic airlines which were heavily hit by the COVID-19 pandemic.

Policies included tax and fee postponements as well as credit support.

The national carrier Vietnam Airlines in which the State holds the controlling stake, was the only airline to get approval from the National Assembly and Government for a loan package worth 4 trillion VND with a preferential rate. The rate would be equivalent to the lowest rate of debts that Vietnam Airlines raised in the market and the interest would be paid in stocks.

After Vietnam Airlines received the Government’s support, two private airlines, Vietjet and Bamboo Airways, despite reporting profits in 2020 both called for similar support .

Vietjet proposed a loan package worth 4-5 trillion VND with a loan term to 2023 and rate of around four percent interest per year.

Bamboo Airways asked for a loan worth around 10 trillion VND. Bamboo expected the Government would raise mechanisms for commercial banks to provide the airline with long-term loan worth 5 trillion VND while the rest of 5 trillion VND would be provided via refinancing at zero interest rate.

According to Pham The Anh, chief economist of the Vietnam Economic and Policy Research, if the credit support was provided to Vietnam Airlines, similar support should also be provided to other domestic carriers to create a fair playing field, providing they met the same requirements as Vietnam Airlines.

However, Anh said that support for aviation enterprises should be in the form of issuing shares to take advantage of the stock market rather than providing preferential loans which should be considered the last choice.

Can Van Luc, member of the National Financial and Monetary Advisory Council, said that credit support policies must be fair among all carriers.

According to the Vietnam Aviation Business Association, although private carriers reported aggregated profits last year, they all suffered losses in the aviation transportation business, at an estimated sum of more than 18 trillion VND in total.

The association predicted the aviation market would continue to have problems this year and that domestic airlines might face losses of more than 15 trillion VND coupled with the risk of cash flow exhaustion. Domestic airlines needed the Government’s support, the association said.

Besides new loans with preferential rates, the association also proposed Government reduce rates of existing loans by around two percent together with debt restructuring and payment postponements.

Further cuts on environmental protection tax for fuel was also proposed from 2,100 VND per litre to 900 – 1,000 VND till the end of 2021./.

Embassy works promote Vietnam-South Africa economic, trade ties

A working delegation of the Vietnamese Embassy in South Africa led by Ambassador Hoang Van Loi visited KwaZulu-Natal province from April 20-24 to seek measures to strengthen economic and trade partnership between the two countries.

This was the first trip by the ambassador to South Africa’s southeastern coastal province, aiming to lay the foundation for Vietnamese firms to penetrate into one of the localities with largest economic scale and fastest growth of the country.

During his trip, the diplomat had working sessions with local policy consultative agencies and logistics businesses.

Speaking at a working session with representatives of the Trade and Investment Agency of KwaZulu-Natal (TIKZN), Loi briefed participants on the economic situation of Vietnam in 2020 as well as major socio-economic development orientations in the future.

He underlined that Vietnam and South Africa should continue to bolster the already-sound bilateral partnership, especially in trade, investment and tourism.

The embassy was ready coordinate with authorised agencies and companies at home to tap cooperation opportunities with South African partners, initially by increasing meetings between businesses from both sides, he said.

At the meeting, Director of the TIKZN Neville Matjie updated the Vietnamese side on the locality’s policies to attract foreign investors, especially the model of "One-Stop-Shop" that provides quick and effective response to administrative requests and legal support to investors.

He agreed with Loi on the need to increase visits among enterprises of both sides to turn business opportunities into reality.

At a working session with the Chamber of Commerce and Industry of Durban city (Durban Chmaber), the economic hub of KwaZulu-Natal, Loi and CEO of the Durban Chamber Palesa Phili agreed to coordinate closely in organising and supporting visits by businesses of both sides to each other's country to promote trade cooperation.

Palesa Phili asked the embassy to introduce Vietnamese partners for the chamber to sign a deal on collaboration in trade promotion.

During the trip, the embassy’s working delegation also visited Durban port and the Dube Tradeport Special Economic Zone.

The Durban port is the busiest port in South Africa and one of the four most important gateways to Africa. Loi proposed to leaders of the port a plan on coordination and delegation exchange between the two sides to share experience in seaport management and logistics activity operations.

According to the Vietnamese Trade Office in South Africa, trade between the two countries reached 1.4 billion USD in 2020, a considerable rise from 1.1 billion USD in 2019. Vietnam mostly exported phones and components, footwear, computers, electronic products and spare parts to South Africa./.

HCM City focuses on developing infrastructure for e-commerce

Ho Chi Minh City is focusing on developing its infrastructure system serving e-commerce amid the rising trend in online shopping, according to the city’s Department of Industry and Trade.

Figures from the department show that 62.5 percent of local consumers use the internet for shopping, while 17.9 percent choose online payments.

The value of online shopping rose 13.8 percent annual in recent years, the department reported.

According to Ha Ngoc Son, head of the Import-Export Management Office under the city’s Department of Industry and Trade, the city aims to provide training to at least 70 percent of public servants in economic sectors on general knowledge on State management over e-commerce activities, focusing on factors supporting such activities.

However, Son also said the city needs support from the State on planning, land reserves, and financial resources in the form of public investment.

Meanwhile, Tran Thai Son, founder and CEO of e-commerce platform Tiki.vn, said shopping demand via e-commerce floors is rising, adding that in HCM City it is double or even triple the country’s average.

Along with enterprises and e-commerce floors, more small businesses and individuals have also engaged in distributing and selling goods through e-commerce apps, he said, stressing the crucial need to expand infrastructure serving these activities.

Experts held that COVID-19 has hindered the development of international trade activities while encouraging sellers and buyers to join the e-commerce market, thus leading to a new trend of exporting goods via e-commerce channels.

They said that in order to take part in e-commerce activities, businesses need a network of warehouses and delivery centres, and the city needs to pay greater attention to the development of the logistics sector.

Phan Thi Bich Hue, Chairwoman of the Management Board of the Tay Thai Binh Duong Company, said the southern hub should consider logistics as a spearhead sector.

In particular, she pointed out that many logistics firms have faced difficulties in accessing land for their business./.

Digital era - A golden opportunity for tech businesses

The world is entering into the digital era and this represents a “golden opportunity” for technology companies to grow further, according to FPT General Director Nguyen Van Khoa.

It also forces businesses, organisations, and countries to conduct digital transformation, he stressed.

According to IDC - the world’s leading provider of market data on information technology (IT) - investment in digital transformation is still growing and is forecast to increase 15.5 percent in the 2020-2023 period to 6.8 trillion USD.

IDC also forecast that by 2022 up to 65 percent of global GDP will come from digitalisation. By the end of 2022, 70 percent of organisations and businesses will speed up their digital transformation.

According to market researcher Fitch Solutions - an affiliate of Fitch Ratings, a leading provider of credit ratings, commentary and research for global capital markets - Vietnam’s IT market, including IT services, software, hardware, and equipment, will grow about 17 percent by the end of 2021 to 7.3 billion USD. The application of software services and cloud infrastructure will be popular trends in the time to come.

FPT has set a plan of posting 16.4 percent growth in revenue and 18 percent in pre-tax profit in 2021 and hopes to sustainably maintain such growth levels in the future.

Khoa affirmed that FPT will continue to pursue its long-term goal of being in the Top 50 global leading providers of comprehensive digital transformation services and solutions by 2030.

FPT has also determined that digital transformation will continue to be a focus in its next development process, he noted.

Its strategy is built on the vast potential in the global digital transformation market in general and in Vietnam in particular, as well as the strengths and growth results the corporation posted in 2020. Digitalisation services helped FPT earn revenue of over 3.2 trillion VND (nearly 138.9 million USD) last year, up 31 percent year-on-year.

In 2021, it will focus on providing new technology solutions and promoting comprehensive digital transformation, with a target of 50 percent growth, and developing Made-by-FPT solutions with a growth target of 50 percent. It also aims to develop at least 10 new products and solutions every year.

Nguyen The Phuong, FPT Deputy General Director, said the corporation’s revenue from digital transformation services mostly came from foreign markets.

FPT still set a plan to post revenue growth from digital transformation by 30-40 percent this year, mainly from overseas markets.

For the domestic market, it is seeking cooperation with VNR 500 companies (the 500 largest enterprises in Vietnam) with budgets for IT and digital transformation./.

Economy sees positive signs

Credit growth in the first three months of 2021 rose 2.93% quarter-on-quarter, much higher than last year’s figure of less than 1%. First-quarter credit growth is normally the lowest for the year, so insiders have high hopes for the yearly figure.
 
This bank posted negative credit growth last year in the first quarter due to the impact of COVID-19. Its financial picture is much brighter this year, though, thanks to its proper response to the current challenges.

Despite the positive signs, the State Bank of Vietnam remained cautious when assigning credit growth targets to each bank for 2021. For example, the target for Vietinbank this year is just 7.5% - lower than in 2020.

Encouraging credit growth contributed positively to Vietnam’s economic growth in Quarter 1. In order to keep up the good performance, the State Bank of Vietnam has been implementing aggressive measures to regulate capital flows given the circumstances.

According to insiders, given the increasing proportion of the lending to GDP, which now stands at some 140%, keeping credit growth at 12% this year is perfectly feasible.

Rising credit growth is a sign of economic recovery, as it reveals enterprises’ demand for capital to fund business expansion./.

Kiên Giang to spend $1.3 mil on improving co-operatives

The Cửu Long (Mekong) Delta province of Kiên Giang will spend nearly VNĐ30 billion (US$1.3 million) this year to support the development of the collective economy and new co-operatives.

Nguyễn Giang Thành, deputy chairman of the province’s People’s Committee, said the province will focus on improving the operational efficiency of co-operatives.

It will provide professional skills in management, production and business for members of co-operatives and co-operative groups.

It will also organise trade promotion activities for the products of co-operatives and co-operative groups, which will be provided a part of the cost of participating in trade fairs, exhibitions and forums at home and abroad.

The province will help co-operatives and co-operative groups with brand names and origin traceability, and provide them with a part of the cost of renting places for showing and selling their products.

The province will offer support to four co-operatives to build facilities for agricultural processing this year. They include the Tân Huy Hoàng Aquaculture Breeding Co-operative in Hà Tiên City, the Gò Quao Youth Organic Agriculture Co-operative and the Thuận Phát Handicraft Co-operative in Gò Quao District, and the Hiểu Phát Agriculture Service Co-operative in Vĩnh Thuận District.

Tân Huy Hoàng, for instance, will be given financial support to build a workshop for initial processing of products and packaging of products, as well as other production facilities.

New co-operatives

Kiên Giang, the country’s largest rice producer, has 2,228 co-operative groups, including 1,989 agriculture co-operative groups which have a total farming area of nearly 72,000ha and create jobs for 7,000 labourers.

Many co-operative groups rotate rice cultivation and shrimp breeding in the same fields, engage in aquaculture, breed cows, make handicraft products, grow flowers, or provide irrigation services.

They operate effectively and can be developed into co-operatives, according to the province’s Co-operative Alliance.

Under the 2012 Co-Operative Law, a co-operative group must have at least three members, and a co-operative should have at least seven members. 

The province has 462 co-operatives, including 410 agriculture co-operatives, up 200 co-operatives against 2016.

The agriculture co-operatives cultivate rice and other crops on a total of 59,517ha, accounting for 12.8 per cent of the province’s total farming land, according to the province’s Co-operative Alliance.

The co-operatives have helped their members to apply advanced farming techniques and reduce the number of input materials used in agricultural production. This has increased the income of their members by VNĐ700,000 – 3.2 million ($30 - 140) per hectare a crop.

Many co-operatives have developed value chains for the province’s key products as well as linkages with companies that buy products.

The Tân Hưng Agriculture Co-operative in Châu Thành District’s Giục Tượng Commune has co-operated with companies to grow rice and secure outlets for its members.

Lê Minh Hải, chairman of Tân Hưng, said the co-operative’s rice growing areas have farm contracts and the members no longer worry about outlets.

“The life of co-operative members has improved and no one is poor,” he said.

The Rạch Giá Organic Agriculture Co-operative in Rạch Giá City rotates rice cultivation and shrimp breeding under organic standards on a total area of 50ha in An Biên District.

The co-operative’s three rice products - Kim Thiên Lộc Nàng Hương rice, Kim Thiên Lộc red brown rice and Kim Thiên Lộc black brown rice - have been certified as four-star OCOP products under the country’s one commune – one product (OCOP) programme in which the highest level is five stars.

The co-operative produces 125 – 130 tonnes of the three rice products a year and sells them mostly to supermarkets.

Trần Thanh Dũng, chairman of the province’s Co-operative Alliance, said the province will develop co-operatives that produce the province’s key products with value chains and high export value.

“The province encourages co-operatives in sectors and fields suited to the economic zoning plan and with linkages [with companies] to produce high-quality products with brand names for export,” he said.

The province plans to establish 15 new co-operatives, including nine agriculture co-operatives, and 50 co-operatives groups this year.

The province aims to have more than 85 per cent of its co-operatives see profits this year.

Belgian enterprises eye expansion in Viet Nam

Belgian enterprises expressed their interest in Viet Nam’s economic prospects and business opportunities in the Southeast Asian country at a talk held in Brussels on Thursday.

At the event, held by the Vietnamese Embassy in Belgium and Luxembourg, the Vietnamese delegation to the EU, the Flanders Investment and Trade (FIT), and the Belgian – Vietnamese Alliance (BVA), the firms highlighted advantages and challenges brought about by the EU-Viet Nam Free Trade Agreement (EVFTA) and several trade deals Viet Nam has clinched.

They also talked about Viet Nam’s efforts to improve its business climate, incentives for Belgian firms to invest in Viet Nam, as well as Viet Nam’s entry procedures for Belgian experts and businesspeople during COVID-19.

Vietnamese Ambassador Vu Anh Quang updated participants on the outcomes of the 13th National Party Congress, implementation of the EVFTA, and Viet Nam-Belgium trade ties.

He called on Belgian businesses to help push for the ratification of the EU-Viet Nam Investment Protection Agreement (EVIPA) in their country, which would aid companies of both nations.

According to Duong Minh Tri, a representative from the BVA, an increasing number of Belgian firms wish to invest in Viet Nam, particularly since the EVFTA came into force.

Charles Vanderstraeten from DSV Solutions, which has already set up a branch in Viet Nam, told the Vietnam News Agency’s correspondent that the trade pact facilitates Belgian firms’ operation in Viet Nam, adding his business will have more opportunities to develop in this Southeast Asian nation.

Eric Franssen, trade and development director at John Cockerill, said his firm is carrying out several energy and environment projects in Viet Nam, and the company has had more opportunities to develop its business thanks to the EVFTA.

Belgian firms have invested US$1.1 billion in 78 projects in Viet Nam, making the nation the 23rd largest investor among 131 countries and territories investing in the nation. Most of the investments are in seaports, infrastructure, logistics, real estate, sewage treatment, processing and manufacturing, and power generation and distribution, among others. 

Pharmaceutical firms report mixed results in Q1

Despite expectations to benefit from rising healthcare demands amid the COVID-19 pandemic, pharmaceutical companies recorded mixed results in the first quarter.

In its quarterly financial report, Traphaco JSC (TRA) posted a gain of 23.7 per cent year-on-year in net revenue to over VND486.8 billion in the first quarter of 2021.

Its profit after tax still increased nearly 20 per cent to VND35.63 billion, while financial expenses rose dramatically during the period, up nearly 127 per cent, and sales expenses rose 28.7 per cent.

Another company posting outstanding performance in the same period was DHG Pharmaceutical JSC (DHG). DHG's net revenue reached VND1.02 trillion, up 18.5 per cent against last year.

The company's profit after tax also witnessed a climb of 15.3 per cent to nearly VND204 billion.

The positive results were due to higher sales and better management in costs, the financial report showed. Of which, while its financial expenses and general and administrative expenses dropped 5.9 per cent and 27.7 per cent, respectively, sales expenses rose slightly 9.1 per cent.

Business activities of OPC Pharmaceutical JSC (OPC) also brought good results in the first quarter with its revenue gaining 4.5 per cent over last year to VND278.9 billion. The company reported a rise of 13.6 per cent in profit after tax to VND36.8 billion.

Meanwhile, Domesco Medical Import Export JSC (DMC) and Ha Tay Pharmaceutical JSC (DHT) recorded poor results during the period.

The quarterly financial report showed that DMC's net revenue was little change compared to the same period of 2020 at over VND290 billion, while profit after tax declined 44.3 per cent to VND23.76 billion on the higher cost of goods sold and other expenses.

DHT also saw a loss of 26.8 per cent year-on-year in revenue to VND379.9 billion, resulting in lower profit after tax. The company's profit slid 32 per cent to VND21.9 billion.

Better growth outlooks

Even though the first-quarter results were not as great as expected, companies in the industry were still optimistic for 2021.

Most pharmaceutical firms set growth or slight dips in profit, such as DHG expected its profit to stay unchanged at VND821 billion, or Cuu Long Pharmaceutical JSC (DCL) set this year's profit target of VND110 billion, up 59.4 per cent.

Others like DMC and TRA also expected double-digit growth in 2021.

Despite better outlooks, not all pharmaceutical shares have performed well since the beginning of the year, such as TRA shares losing nearly 4.4 per cent for 2021, or DHG shares falling nearly 5 per cent. 

Viet Nam emerges as appealing destination for investors from India

Viet Nam will continue to streamline administrative reform and offer multiple incentives to foreign investors, especially those from India, an official said at the “Investment Opportunities in Viet Nam” conference held on Thursday in HCM City.

Tran Thi Hai Yen, director of the Investment Promotion Centre - South Viet Nam under the Ministry of Planning and Investment, said there was immense potential for improvement in bilateral trade between Viet Nam and India.

“Viet Nam has emerged as an appealing destination for investment for India with its stable political and economic environment, attractive investment policies, competitive labour costs, availability of raw materials, and potential market access due to free trade agreements that Viet Nam has concluded,” she said.

Key attractive investment sectors include hi-tech agriculture, food processing, renewable energy, the supporting industry, healthcare and education, infrastructure, real estate, logistics, and tourism, according to Yen.

Viet Nam plans to set up a task force to facilitate foreign investment, especially after the COVID-19 pandemic ends, she said.

The country is among a few countries that saw positive growth last year (2.91 per cent).

Viet Nam's GDP increased by 4.48 per cent in the first quarter of this year, compared with 3.68 per cent in the same period last year. The country is projected to reach a GDP of 6-6.5 per cent this year.

Realised FDI capital increased by $6.5 per cent ($4.1 billion) in the first quarter compared to the same period last year.

Manoj Barthwal, chairman of the Indian Business Chamber Vietnam (INCHAM), said the uncertainty in global trade due to COVID has exposed the over-dependence of world trade on China, which has enhanced the importance of India - Viet Nam trade in international business.

“There’s a growing realisation from both governments on increasing bilateral trade and investment,” he said.

Fred Burke, partner at Baker & McKenzie Vietnam Ltd, highlighted the positive changes in the Vietnamese enterprise laws for foreign investors. “Foreign investors can now benefit greatly from various free trade agreements that Viet Nam has signed with the EU, the US and other ASEAN nations,” he said.

Robert M King, partner and tax leader at E&Y Vietnam, said the tax rates in Viet Nam were among the lowest in the Southeast Asia region.

Vaibhav Bhanchawat, executive vice president and business head of Marico South East Asia Corporation, highlighted the strength of India and perception around “Brand India”, saying it was important to improve the perception so that goods and services from India can be accepted in Viet Nam.

The event was organised by INCHAM in collaboration with the Investment Promotion Centre - South Viet Nam under the Ministry of Planning and Investment.

The two countries established diplomatic relations in 1972, which was lifted to a comprehensive strategic partnership in 2016.

India is one of Viet Nam’s top 10 trading partners, while Viet Nam is India’s fourth largest trading partner in ASEAN. Trade between the two countries has grown steadily and reached $12.34 billion in the 2019-20 period.

Many Indian investors see Viet Nam as a prominent destination for investment, especially in sectors in which India has competitive advantages such as infrastructure, energy, IT & technology, and pharmaceuticals, among others. 

Seminar identifies high-growth sectors in stock market

Education, technology, freight forwarding, renewable energy, and healthcare companies are expected to maintain their growth, offering stock investment opportunities, a seminar heard in HCM City last Saturday.

Speaking at a seminar on the market in 2021 and wise investment choices, Dr Le Anh Tu, senior advisor at PwC and deputy chairman of the Economists Club, said the tech sector has always attracted interest, and achieved CAGR of 26.1 per cent in 2015-19.

He expected the figure to be even higher in the coming years.

The education sector is expected to attract investors since spending on education would continue to increase, especially by the middle class, he said.

Investment in the sector would also increase thanks to the Government’s policy of encouraging 100 per cent investment by individuals, including foreign.

The healthcare sector would remain attractive since per capita healthcare spending is expected to increase from US$194 in 2019 to $309 in 2024 and the ageing population is increasing rapidly, he said.

According to experts at the seminar, there are many fundamental factors backing the development of Viet Nam’s stock market.

The economy is likely to grow at 6.8‐7 per cent in 2021, FDI investment has boosted the services sector and the competent curtailment of the Covid-19 epidemic has created a momentum for many sectors to boost exports, Dr Nguyen Son, chairman of the Viet Nam Securities Depository, said.

“The price to earnings (P/E) ratio is still low compared to other countries in the region, meaning there is still much potential for it to increase further.”

There is a possibility of foreign capital flows shifting from other markets to Viet Nam when its stock market is upgraded as an emerging market, Son said. It currently meets seven out of nine requirements set by FTSE Russell for the upgrade.

The new securities law has also helped promote the stock market, he said.

To further boost its development, there would be a focus on strengthening regulations and stock exchanges’ IT systems, improving the capacity of financial intermediaries, developing new products such as pension funds, non-voting depositary receipts and depositary receipts, and creating a market for start-ups’ products, he said.

At the seminar, held by the Economists Club, the Ho Chi Minh Securities Corporation and Green Plus Joint Stock Corporation, experts also talked about methods to classify and choose stocks for investment.

Also at the event, Nguyen Truc Son, permanent deputy chairman of the Ben Tre Province People’s Committee granted investment registration certificate to Green Plus for developing a US$1 million functional food plant in the province’s Giao Long Industrial Park.

HAG shares will be under supervision at the end of April

Under new restrictions, shares of Hoang Anh Gia Lai JSC (HAGL, HAG) will only be able to be traded in afternoon sessions.

In a recent statement published on its official website, the Ho Chi Minh Stock Exchange (HoSe) announced the transfer of Hoang Anh Gia Lai JSC (HAGL, HAG)'s shares from the warning list to the supervision list starting April 18.

Accordingly, HAG's shares will be limited in trading time, which is only in afternoon sessions.

The main reason for HoSE's move was the loss of over VND1.25 trillion in profit last year, taking its accumulated deficit to over VND6.3 trillion as of December 31, 2020. The company also carried out a retroactive adjustment of 2018 and 2019's data, leading to an accumulated loss of nearly VND4.8 trillion.

Regarding the retrospective adjustment of the losses in 2019, the company recorded an additional loss of VND5 trillion in the undistributed profit after tax.

HAG said that the outbreak of COVID-19 highlighted risks in the agricultural market and the agricultural sector, therefore its previous risk expectations were not evaluated cautiously and the company decided to retroactively adjust its 2018 and 2019 audited financial reports.

HAG shares, which are traded on HoSE, have entered a bearish period after a strong rally. On Thursday, HAG's shares hit a maximum daily loss of 7 per cent to VND5,410.

As of the end of 2020, HAG reported an accumulated loss of over VND6.3 trillion, with short-term debts exceeding short-term assets. Therefore, the auditor emphasised that the company's financial reports hid crucial uncertainties that might lead to doubts about the ability to operate continuously.

At the same time, the company is also violating a number of commitments to loan and bond contracts.

SSI enjoys high growth in 1st quarter

SSI Securities Corporation reported strong growth in the first quarter, with pre-tax profits increasing 34 times year-on-year to VND528.2 billion (US$22.9 million).

Profits from brokerage activities increased by 276.2 per cent to VND318.6 billion ($13.8 million). Investments saw earnings rise by 157.8 per cent to VND106.8 billion ($4.6 million).

Treasury business and investment banking activities also saw high growth.

The main indices on Viet Nam's stock markets ended the first quarter positively. The VNIndex increased by 7.93 per cent for the year to hit 1,191.44 points on March 31.

The average trading per session was worth over VND15.5 trillion ($671.5 million), up 302 per cent.

Impossible for foreign enterprises to trademark Vietnamese rice "ST25": intellectual property office

It is impossible for foreign companies to register Vietnamese rice "ST25" as an exclusive trademark protection, as affirmed by the National Office of Intellectual Property of Vietnam (NOIP).

Against the information related to the ST25 rice brand name registered by a business in the US, the office confirmed US enterprises cannot trademark the world’s best rice ST25 since it is a generic variety and not a brand.

The trademark "VIETNAM'S ST25 RICE, DAC SAN SOC TRANG" was filed in the US on September 1, 2020, according to registration application number 90151727 of Transword Foods, Inc.

However, the NOIP stressed that the mark "ST25" cannot be registered for trademark protection exclusively in the US for any individual or organisation, because US law does not protect the trademark for the plant variety and as ST25 is the name collectively used to refer to a variety of rice.

The ST25 rice variety was granted Protection Certificate No. 21.VN.2020 according to Decision No. 45/QĐ-TT-VPBH dated March 6, 2020 of the Director of Department of Crop Production (under the Vietnamese Ministry of Agriculture and Rural Development) for the private business Ho Quang Tri and rice breeders Ho Quang Cua, Tran Tan Phuong and Nguyen Thi Thu Huong.

On November 20, 2020, the US Patent and Trademark Office (USPTO) announced its intention to refuse the trademark "VIETNAM'S ST25 RICE, DAC SAN SOC TRANG" as mentioned above.

However, if for any reason, "ST25" is registered for exclusive trademark protection for rice products, the organisations and individuals involved may object to this registration application.

Created by engineer Ho Quang Cua and his colleagues, Vietnam's high-end ST25 rice was honoured as the world's best rice in 2019, after it won the top prize at the World's Best Rice Contest in the Philippines that year, marking the first time a Vietnamese rice variety won the title in the contest’s 11-year history.

Tourism enterprises continue to be eligible for tax and land lease payment extension in 2021

According to the General Department of Tourism under the Ministry of Culture, Sports and Tourism, the enterprises operating in the tourism sector continue to be within the group supported by the Government to overcome difficulties due to the impact of the COVID-19 pandemic.

Specifically, on April 19, 2021, the Government issued Decree No. 52/2021 / ND-CP on the extension of time limits for payment of value-added tax, corporate income tax, personal income tax, and land rent fees to support businesses and people suffering from the COVID-19 pandemic.

Decree No. 52/2021 / ND-CP applies to enterprises, organisations, business households, and individuals operating in production in many different economic sectors.

The Decree took effect from April 19, 2021. The Ministry of Finance is responsible for directing and organising the implementation and handling problems arising in the course of its implementation. This is the third time the Government has introduced tax and land rent payment deadlines since the first COVID-19 cases reported in Vietnam on January 23, 2020.

Earlier, on March 15, 2021, the General Department of Tourism advised the leaders of the Ministry of Culture, Sports and Tourism to sign a document on mechanisms and policies to support the tourism industry for the Ministry of Planning and Investment to synthesize and submit to the Prime Minister.

Vietnam's GDP growth could reach 6.76 per cent in 2021-2023

If breakthroughs in institutional reform succeed, along with proper fiscal and monetary easing measures carried out at the right time, annual GDP growth reach 6.76 per cent in 2021-2023.

At an April 22 Workshop on "Making economic recovery and institutional reforms intertwined after COVID-19: Way forward for Vietnam" held by the Central Institute for Economic Management (CIEM) with the support of Aus4Reform and the Australian Embassy to Vietnam, Tran Thi Hong Minh, CIEM director general highlighted that even as the world is rocked by the pandemic, Vietnam remains keen on its goals.

Thus, the country continues to pursue breakthrough targets to stabilise the economy, manage inflation, and improve economic resilience. There have been great strides ahead in international economic integration by signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the EU-Vietnam Free Trade Agreement and Investment Protection Agreement (EVFTA, EVIPA) in 2019. However, there are some obstacles in reforming and managing policies, and implementation.

"While it is one of the very few countries successfully fighting COVID-19, which provides a strong foundation for recovering and strengthening local production, re-opening in safety, Vietnam should build a long-term plan to mitigate risks and find new growth drivers," said Minh.

She emphasised that if breakthroughs in institutional reform succeed, along with proper fiscal and monetary easing measures, annual GDP growth could reach 6.76 per cent every year in 2021-2023 and productivity could improve significantly. The Vietnamese economy is expected to recover at a quick pace and more sustainably, even while the world's economy is fluctuating strongly.

CIEM has outlined three scenarios for economic growth, based on Vietnam's management of the pandemic this year. Under the first scenario (normality), CIEM forecasts that the Vietnamese economy will grow 5.98 per cent with 3.51 per cent inflation. Economic growth will rise to 6.45 and 6.61 per cent in 2022 and 2023.

Under the second scenario (fiscal and monetary easing), growth will reach 6.43 per cent in 2021 with 3.78 per cent of inflation. The growth is expected to be 6.8 and 6.83 per cent in the next years.

Under the third scenario (fiscal and monetary easing, along with institutional reform), Vietnam's economy will grow by 6.47 per cent in 2021 and 3.56 per cent in inflation, reaching 6.88 and 6.92 per cent in subsequent years.

PwC survey featuring Vietnamese family businesses in COVID times

The first report on family businesses in Vietnam by PwC has uncovered how these businesses are navigating the changing business and social environments.
 
According to PwC's Family Business Survey 2021 – Vietnam Report, 65 per cent of surveyed Vietnamese family businesses predict growth in 2021.

The view for 2022 is more positive, with three out of four respondents saying that they are optimistic about growth, and 33 per cent anticipating that the growth will be “quick” and “aggressive” – higher than the regional and global responses, which stand at 28 and 21 per cent, respectively.

In keeping with such growth aspirations, the findings also reveal that business expansion and technology adoption are the key priorities. 55 per cent of the respondents confirmed a focus on bringing new products and services to the market, with 52 per cent focusing on the increasing use of new technology.

Given that the global pandemic is marking permanent changes, the rethinking or adaptation of new business models is also top of mind for 52 per cent of respondents.

There are also apparent shifts towards business diversification and more externally-managed structures for family businesses. Within five years, 45 per cent of Vietnamese family businesses are aiming to become more diversified, highlighting the need for sustainable revenue streams for future disruptions.

The current operating model – which centres on businesses that are owner-managed and family-managed – is expected to shift towards a “family-owned/externally-managed” or “externally-run” model, increasing from 12 to 60 per cent over the next five years.

Over half (52 per cent) of Vietnamese family businesses expect that the next generation will become majority shareholders within five years' time. However, only 36 per cent of respondents claim to have a formal succession plan in place.

“Family businesses are having to navigate a faster pace of change than ever before,” said Johnathan Ooi, Private Business Services leader at PwC Vietnam. “An equal focus should be placed on strategic planning and succession planning. Making a head start in this area will therefore be helpful for the next generation. They will be equipped with the necessary tools to drive the business forward and in the right direction.”

Although the survey findings indicate a strong emphasis on digital, innovation, and technology initiatives, progress in those areas remains limited. Only 30 per cent of respondents said that they have strong digital capabilities, as compared to 38 per cent globally, while a mere 9 per cent say that their digital journey is complete.

This slow progress could be tied to the reportedly high levels of resistance to embracing change within the company, as revealed by 67 per cent of respondents. This is significantly higher than the perceived sentiment of regional peers (29 per cent) and global peers (33 per cent).

The report also shed light on the growing need for Vietnamese family businesses to factor ESG (environmental, social, and corporate governance) credentials into their plans for securing their legacy.

While the majority of Vietnamese family businesses (85 per cent) are reportedly engaged in some form of social responsibility activities, issues relating to sustainability are currently far down the list of priorities. Only 21 per cent of the surveyed family businesses feel that there is a responsibility to fight climate change, versus 50 per cent in both Asia-Pacific and globally.

Johnathan Ooi commented: “The world is changing, and so is the formula for lasting family business success. Tomorrow's family businesses require a new approach to enhancing their legacy – one that is based on keeping ahead of digital transformation, with a greater focus on sustainability goals and professional family governance.”

The 10th freshly-released PwC Global Family Business Survey surveyed more than 2,800 senior executives across 87 territories, from October 5 to December 11, 2020. Of these, the key decision-makers of 33 family businesses in Vietnam participated in an online interview for the Vietnam report.

Millennium Energy Vietnam proposes to develop $15 billion LNG project in Soc Trang

Millennium Energy Vietnam Co., Ltd., a member of Millennium Group from the United States, has proposed to develop a liquefied natural gas (LNG) project in Soc Trang province. Once approved, it would be the largest LNG project in the Mekong River Delta.

Having total investment capital of $15 billion, the LNG project has a designed capacity of 9,600MW. The investor needs an area of 200 hectares to develop the project. The construction will be implemented in two phases.

According to Lam Hoang Nghiep, vice chairman of Soc Trang People’s Committee, the province will organise a site visit and then the investor will have to build the detailed planning which the province will submit to the government for approval.

The investor committed to using modern equipment and ensuring safety for the environment.

Previously, in August 2020, Millennium Group from the US also issued plans to develop an LNG project in the South Van Phong area of Ninh Hoa town of Khanh Hoa province.

The investor's ambition includes a 600ha project with a capacity of also 9,600MW.

In addition, it will invest in a dock warehouse system to provide gas to the power plant as well as to distribute LNG in Southeast Asia. This system may be located in either Ninh Phuoc or Ninh Hoa commune.

“Once Khanh Hoa province’s leaders approve, the project will be guaranteed by the US government and we will work with the Vietnamese government to discuss implementation plans. Millenium expects to make the LNG dock warehouse in South Van Phong the energy centre of Southeast Asia,” said Sam Chan, chairman of Millennium Vietnam Group, a member of Millennium Group.

Khanh Hoa’s leaders assigned the Van Phong Economic Zones Management Authority to prepare an agreement with the investor, allowing it to arrive at Nam Van Phong area to study the project.

In June 2020, Millennium also had a working session with leaders of Thanh Hoa People’s Committee to develop a $7 billion LNG and warehouse complex project in Nghi Son LNG centre. The project has a total capacity of 4,800MW with a total investment capital of $5 billion and $2 billion for the warehouse. The first phase is expected to start operation before 2030 and the second phase would be launched in 2030.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes