Investment - Foreign investor believes in Vietnam’s investment climate
Source: Vietnamews
Abundant human resources with enhanced skills and improved investment attraction policies have made Vietnam attractive to foreign investors, an entrepreneur said at a recent interview granted to Thoi bao Ngan hang (Banking Reviews).
The President of the German Bosch Group’s Gasoline Systems division, Dr. Rolf Bulander, said that Vietnam is a member of the World Trade Organization with political stability and a growing economy as he explained why Bosch decided to inject 55 million EUR into Vietnam.
Bosch also realized that Asia-Pacific is an emerging market with great potential and the Southeast Asian region alone is expected to account for 30 percent of Bosch’s total revenue in 2015.
The group’s investment in Vietnam, including a 30 million EUR high tech production facility for push-belts used for continuously variable transmission (CVT) in automobiles in Long Thanh Industrial Park in the southern province of Dong Nai, reflected its commitment to long-term presence and investment in the Southeast Asian country, Rolf Bulander said.
Boasting a convenient transport location, Vietnam serves as a gateway to many regional countries. Furthermore, the country has set up good trade ties with Japan and China, which are also Bosch’s major markets.
Industry - Better State supervision, transparency would reduce mining industry losses
Source: Vietnamews
The Government should strengthen institutions and policies as well as improve the transparency of mining activities as an effective way of reducing industry losses.
Speaking at a conference on the Extractive Industries Transparency Initiative (EITI) and Viet Nam's Ability to Participate in the Initiative held in Ha Noi on Thursday, deputy director of the Constancy on Development Institute (CODE) Pham Quang Tu said transparency in the industry could help the country benefit more from mining.
Deputy head of the Viet Nam Chamber of Comerce and Industry (VCCI)'s Legal Department Dau Anh Tuan said the mining industry would tackle illegal exploitation in a bid to preserve oil and coal supplies.
Lax State supervision meant that illegal exploration and mining was occurring in many provinces by companies with little experience or knowledge of the industry, complained Tuan.
Laiï Hong Thanh, deputy chief of the office of the Natural Resources and Environment Ministry said according to the law on minerals, revenue from the sector was subject to a mineral tax. However, companies had been declaring false figures to authorities regarding their mining yields, except for oil which was monitored and controlled.
VCCI's deputy general secretary Tran Huu Huynh said transparency in the industry would be an important way of managing and using mineral resources effectively. In addition, it would attract more sustainable investment and force foreign enterprises to publicise their accounts, he said.
The State budget would benefit from more efficient mining activities and it would build people's trust in the Government and confidence in investors.
Experts said that admission to the EITI could help Viet Nam limit losses and ineffective mineral exploitation.
"In particular, the country's participation in the EITI would help boost national confidence in transparency and the fight against corruption," Huynh said.
However, researchers also predicted that the implementation of the EITI in Viet Nam would be difficult, due to regulations regarding human resources and financial issues.
Le Van Khoa, director of CODE, said the country should focus on strategic minerals which contributed considerably to GDP including oil and coal.
Participants also said mining exploitation rights should be auctioned to ensure sustainable development.
EITI participation is considered an option for the sustainable development of the mining industry using environmentally friendly technology.
Reports from the institute showed that Viet Nam had a lot of mining potential, with large deposits of bauxite, titanium and rare earths, along with extensive oil and gas reserves.
The industry's contribution to the country's GDP increased from 4.81 per cent in 1995 to 11 per cent in 2008, while the petroleum sector contributed 24.37 per cent to the State budget in 2008 and the value of mining exports reached US$8.5 billion in 2009.
"Viet Nam needs to develop its mining industry because it is time for the country to take advantage of its rich mineral resources," Tu said.
Viet Nam has already approved the Construction Sector Transparency Initiative and the Integrity and Transparency in Business Initiative for Viet Nam.
Initiative to boost transparency
Source: Vietnamews
The EITI is an initiative based on a voluntary alliance between governments, companies, social and international organisations to enhance transparency in the mining sector.
The EITI is based on two main mechanisms. Mining companies must make comprehensive reports on expenditure for governments, while governments must publicise the revenue it receives from the companies. An independent agency then compares the data.
Over 30 countries were participating in the EITI as of May 2010. Over 50 of the world’s largest mining companies approve of the commitments outlined in the initiative.
Power - Nation to step up nuclear power security precautions
Source: Vietnamews
An estimated VND300 billion (US$1.5 million) from the State budget will be spent over the next ten years on a programme to ensure security in nuclear energy, according to Prime Minister Decision 450.
Two-thirds of the funding will be spent to prevent, discover and fight against threats to national security at radioactive sources, radiation bases and other nuclear energy activities.
Any abuse of the peaceful use of nuclear energy by Viet Nam to infringe national security, promote terrorism or leak confidential information will be severely dealt with.
The programme will also focus on preventing cover-ups and refuting unfounded complaints or concerns relating to nuclear safety.
Over the first five-year period, the Prime Minister requires relevant agencies to prepare the necessary resources for site clearance, while ensuring their security and confidentiality during the design and technology assessment phase.
In the second period, measures must be taken to ensure nuclear power plant safety, and prepare in advance plans and resources to maintain security and safety during the plant's operation cycle.
The programme will be conducted at every city and province with a focus at border gates and at key nuclear energy project sites. The Ministry of Public Security will take the main responsibility for the implementation of the programme.
Biggest hydroelectric power plant’s new turbine commissioned
Source: VOVNEWS
The second turbine of the Son La hydroelectric power plant in the northern mountainous province of Son La started generating power for the national grid on April 20.
The Electricity of Vietnam (EVN) said that the second turbine is expected to ease power shortage during the dry season.
The third turbine of the plant is scheduled to generate electricity by the end of August 2011 and the other remaining turbines, in late 2012.
The first generator has generated 1.1 billion kWh since it was officially commissioned four months ago.
With six turbine groups and a combined capacity of 2,400 MW, Son La is the biggest hydroelectric power project in Vietnam and Southeast Asia with a total investment capital of some VND42 trillion, (US$2.1 billion).
The plant is expected to supply the economy with 10.2 billion kWh of power a year once it swings into full operation in 2012.
Real estate booms in IPs
Source: VOVNEWS
The Vietnamese Government has adopted incentive policies for industrial parks (IPs) and export processing zones (EPZs) and considered them to be a key factor behind strong industrial growth.
Many businesses operating in IPs and EPZs have benefited from tax preferences, simple investment procedures and support in terms of workforce and other resources.
In Hanoi, the number of projects in IPs and EPZs increased from 155, with a total investment capital of US$1.55 billion in 1996-2000 to 1,377 worth US$ 8.08 billion in 2001-2005.
From 2006-2010, Hanoi saw an impressive growth with 2,309 new FDI projects capitalized at US$42 billion.
Up to September last year, more than 3,841 FDI projects and 4,617 domestic projects in IPs and EPZs zones throughout the country got off the ground with a total disbursement of more than US$17.6 billion.
Marketing and Business Development Director of Colliers International Vietnam, Dane Moodie, said the economic downturn in 2007-2009 appeared to have little impact on northern IPs where the average rental fees rose slowly from US$41.3/m2 in 2008 to US$58/m2 in 2010.
Northern key economic zones, including Hanoi, Bac Ninh, Hai Duong, Hai Phong and Vinh Phuc will continue to lure more investors while Thai Nguyen and Hung Yen are becoming more attractive with their good infrastructure facilities, the strong economy and favourable strategic positions near seaports, airports and areas sharing the border with China.
According to Colliers International Vietnam, Vinh Phuc and Bac Ninh have the highest rates of land rental. However, there are certain problems arising from policy, that need to be solved such as a shortage of skilled workers, pay rise, infrastructure development, complex legal and taxation frameworks. For this reason, investors need to make a careful choice of localities which are most favourable for their business, said Dane Moodie.
Anna Lomas, Market Research and Evaluation Manager of Colliers International said the number of tenants who want to rent on a more flexible term is increasing. Thus many IP investors engage in building or supplying a wide range of workshop packages at an average price of US$3-6 per sq.m per month. The business of this kind will develop strongly in the next three to four years.
Increasing demands
Economic experts said the next few years will be a very important period for the industrial sector in Vietnam.
From early this year to March 22, FDI inflows hit US$2.533 billion, up 12.9 percent compared to the same period last year and equal to 12.756 percent of this year’s total target for US$20 billion while FDI in real estate accounted for 25 percent.
Hanoi’s FDI attraction in the first three months of this year reached US$427.7 million, including US$28.93 million from 47 new projects and the remaining from 10 old projects, showing an increase of 19.7 percent over the same period of last year.
"Judging from this fact, we think the rental fees will continue to rise on account of increasing demands and inflation rates", Dane Moodie said. The proportion of rental accommodation will increase slightly thanks to the gradual recovery of industrial production. New IPs are unable to compete with the old ones which enjoy big advantages in location and infrastructure.
“Increasing demands and prices are just telltale signs. Professor Dang Hung Vo argued. “Vietnam should consider developing IPs and IZs carefully as many provinces and cities only want to increase industrial proportions in the local economy. They are vying with each other by granting incentives to attract more investors with almost no conditions attached.”
Vo noted that some countries in the world are based on the provincial competition index (PCI) to create the most favourable environment for investors.
Vo said any planning for sustainable development in provinces or cities must be placed under the overall planning of the country.
Business - Vietnam Airlines to open Hai Phong - Da Nang route
Vietnam Airlines will open a new route from the northern port city of Hai Phong to the central city of Da Nang on April 28.
This is Vietnam Airlines' 36th domestic air route between 20 provinces and cities across the country.
The national flag carrier will conduct five flights a week on Monday, Wednesday, Thursday, Friday and Sunday, using ATR72 aircraft.
Leaving from Hai Phong and flying to Da Nang, the plane will depart at 20:45 and land at 22:30. From the Da Nang to Hai Phong, the plane will leave at 18:30 and land at 20:45.
The price of a return ticket on the route will range between 1,500,000-1,700,000 dong.
The opening of this new route aims to promote tourism and create more favourable conditions for businesses.
Concrete producer approves targeted profit of 13b dong in 2011
Source: Vietstock
Hoa Cam Concrete Joint Stock Co (HNX-listed HCC) has released the resolution approved in the company's annual general meeting (AGM) with targeted year plan of total sales revenue of 187 billion dong, pre-tax profit of 13 billion dong and dividend payment of 15 percent in shares.
Last year, the company gained total revenue of 156 billion dong, and pre-tax profit of 11.6 billion dong.
This year, the concrete firm planned to increase the market shares in Da Nang City, expand and push up production scale in Chu Lai concrete plan, access to potential customers. In the future, the company expected to expand production and trading activities in new markets and establish branches in Kon Tum, Vung Tau.
Local tissue maker to export to Japan
Source: vneconomynews
Saigon Paper Corporation said it had received a $120,000 order for its paper tissues from Japan.
Luu Quy Phuong, head of the company's trade department said this was a positive sign considering foreign paper tissues have to satisfy numerous stringent requirements before they can enter the Japanese market.
Phuong said his company would ship to Japan thirteen 40-foot containers of paper tissues every month in the first half of this year and in the later half, switch to 50-foot containers when its new My Xuan II plant is up and running.
The Japanese importer would sell Saigon Paper Corp.'s tissues at over 200 retail stores in Japan, Phuong said.
The Vietnamese company's brand name and logo would remain on the label.
Hoang Anh Gia Lai aims to obtain pre-tax profit of 3tr dong in 2011
Hoang Anh Gia Lai Joint Stock Co (coded HAG) has released the contents of the resolution approved in the 2011 AGM with targeted pre-tax profit of 3 trillion dong, equivalent to that of 2010.
The management board also sought approval from the shareholders in the AGM for getting their authorisation for evaluating the market situation to select one out of two dividend payment methods from 2010 profit. The first method was to pay dividend in cash at applied ratio of 10 percent and the second one of paying dividend in shares at 15 percent.
Relating to the company's investment projects in 2011, HAG planned to set priority for developing the rubber production sector. By the end of 2010, the group reported growing 23,991 hectares of rubber trees. In 2011, HAG planned to expand rubber tree plantation by additional 12,750 hectare. Therefore, by the end of 2011, the group expected to have 36,741 hectares growing rubber trees.
As for hydropower plant projects, last year the company officially start operation of Dak Srong 2 hydropower plant in late October 2010. The Dak Srong 2A was expected to be put into operation in early May 2011 and two other hydropower plants of Ba Thuoc 2 and Dak Srong 3B in November 2011. By the end of 2011, there will be four hydropower plant projects to be in operation with total designed capacity of 141.5MW. The other hydropower projects of Ba Thuoc 1, Dak Srong 3A and Nam Kong (Laos) have been implemented as scheduled.
Last year, the group reported mining and processing of 240,000 tonnes of refined steel ore. In 2011, the company expected to mine and process 700,000 tonnes.
In real estate sector, HAG completed construction works on Hoang Anh Riverview project, and kicked off construction projects of Kinh Te complex of offices for lease and trade centre, Thanh Binh, Hoang Anh Incomex and Phu Hoang Anh (the second phase) in 2010. This year, the group expected to finish construction projects of An Tien, Phu Hoang Anh (the first phase), Can Tho and Dak Lak.
S.G Food changes name to Saigon Food JSC
Source: Dau Tu Chung Khoan
S.G Fisheries Joint Stock Co (S.G Fisco), one of the member companies of PNJ, has lately announced to change the name into Saigon Food Joint Stock Co. The company planned to expand business scale from processing frozen seafood only to other method of instant food and canned food, using variety of raw materials such as fisheries, pork, beef, chicken and fresh fruits and vegetables.
The company targeted to reach consumption volume in domestic markets of 25 percent and for export purposes of 75 percent.
Saigon Food planned to export 70 percent of the production volume to Japan, 20 percent to EU and other markets of 10 percent.
In the first three months of this year, the company expected to gain total revenue of over 74 billion dong.
Imexpharm obtains nearly 22b dong profit in Q1
Source: DVT.vn
In the quarter fiscal report, Imexpharm Pharmaceutical Joint Stock Co (IMP) reported gaining 176.9 billion dong in revenue, up 8 percent from the same period last year and equalling to 22 percent of the year's target.
The company's combined profit was 90.8 billion dong, up 11 percent from last Q1.
IMP's costs for merchandise and corporate management were 52.8 billion dong and 11.5 billion dong.
Ending Q1 2011, IMP gained 21.6 billion dong after tax profit, rising 13 percent from the same period last year and fulfilling 22 percent of the year's target.
Nui Nho Stone enjoys net profit of 16b dong in first three months
Nui Nho Stone Joint Stock Co (coded NNC) has lately announced to reach total revenue of 56 billion dong in the first quarter of this year, increasing by 12 percent year-on-year. However, the combined profit in the period dropped by 12 percent to 19.7 billion dong.
However, due to sharp increase in all the costs, the company's after tax profit was posted at only 16 billion dong, a year-on-year decrease of 9 percent, equivalent to EPS at 1,907 dong.
Mineral firm's Q1 profit increases by 36pct y-o-y
Source: Vietstock
The southern bourse-listed Binh Dinh Minerals Joint Stock Co (coded BMC) has released the Q1 business reports with after tax profit of 6.44 billion dong, an increase of 36 percent against the same period of 2010.
After the first three months of this year, the company's revenue was posted at 44.44 billion dong, up 107 percent year-on-year. However, due to the high principal sales cost, the combined profit in Jan-March period reduced by 37 percent to 5.48 billion dong.
Meanwhile, the company's financial activities brought in revenue of 6.2 billion dong, equaling to approximate growth of 130 percent.
Tax payment declined slightly, resulting in the company's after tax profit of 6.44 billion dong.
After April 20, BMC-coded share price rose to ceiling price at 25,400 dong per share.
This year, the company aimed to obtain total revenue of 170 billion dong and after tax profit of 28 billion dong.
KDC: expects 2011 pre-tax profit at 550b dong
Source: stockbiz
Kinh Do Joint Stock Co (KDC) has announced its business targets in the fiscal year 2011 whereby the baker will offer 20 million shares to the strategic investors.
KDC plans to organise its AGM on April 23.
According to the audited fiscal statement in 2010, KDC gained 1.934 trillion dong of net revenue, pre-tax profit and after-tax profit at 674 billion dong and 577 billion dong respectively.
If including both NKD and Kido's, the whole system's revenue was 3.317 trillion dong (of which, KDC accounted for 1.934 trillion dong, NKD at 1.021 trillion dong and Kido at 463 billion dong).
Its pre-tax profit gained 801 billion dong (of which, KDC contributed 674 billion dong, NKD at 100 billion dong and Kido at 74 billion dong).
The share issuance to merge NKD and NKD was completed by the end of 2010 so it was not mentioned much in the KDC's fiscal statement in 2010.
The baker's dividend payment in 2010 was expected at 24 percent in cash, of which, 12 percent was advanced already.
In 2011, KDC targets to bring 4.2 trillion dong in revenue, rising 27 percent against the combined figure of the whole system in 2010.
Pre-tax profit is expected at 550 billion dong, falling 25 percent from 801 billion dong in 2010, of which, profit from business operations increased from 420 billion dong to 500 billion dong, or 19 percent increase.
Meanwhile, the company's profit from investment operations saw a fall from 381 billion dong to 50 billion dong.
Finance - New regulations cannot change people's habit of keeping dollars
Source: Vietnamnet
The dollar price on the black foreign currency market was 20,900-20,970 dong per dollar (sale and purchase). The purchase prices on the black market were 5-10 dong per dollar cheaper than the prices quoted by big commercial banks like Vietcombank, Eximbank and ACB; while the sale prices on the black market were higher by 35 dong per dollar than the official prices, things that are rarely can be seen in Vietnam.
No dollar seller
A deputy general director of a big bank remarked that though the bank has raised the dollar purchase price, clients, especially individuals, still do not want to sell dollars to banks.
Asia Commercial Bank (ACB) is now considered the bank which offers the highest dollar purchase prices. Its quoted prices are 5-10 dong per dollar higher than that offered by other banks. However, Dat Viet reported that the bank's branches still could not find dollar sellers late last week. Most of the clients came to ACB's branches just to make dollar deposits.
The same situation could be seen at the branches of Dong A, Vietcombank, Techcombank and Eximbank as well.
Though commercial banks have slashed the dollar deposit interest rates to less than three percent (2.7, 2.8 and 2.9 percent per annum), which has made the dollar less attractive, people still prefer making deposits in dollars to converting dollars into dong and depositing dong at banks.
K.T, a client whom Dat Viet met at a branch of ACB, said that "she still decided to deposit in dollars, because she believes that it is wiser to keep dollars than other currencies."
Meanwhile, T.T, a client who came to deposit dollars at Vietcombank last Friday, said, "he needs to keep dollars, because if he sells dollars at this moment, he will not be able to purchase dollars later when he needs them."
T said, "he had to borrow dollars to build his house in last September, and now he has to collect dollars to pay debts."
A reasonable dollar pricing mechanism is the key
Nguyen Thi Kim Xuyen, deputy general director of Dong A Bank, said "no changes have been seen over the last few days, since banks began applying the ceiling dollar deposit interest rate of three percent as requested by the State Bank."
"We still cannot see the movement of people rushing to sell dollars to banks, while the volume of dollar deposits has not decreased," saidXuyen.
Why don't people still keep dollars and refuse to sell dollars, even though the dollar price on the black market has decreased, and the dollar deposit interest rates have been eased? Le Tham Duong, a banking expert, thinks that the problem with the liquidity remains exists.
Duong states "In order to settle the current problem, it is necessary to set up a reasonable foreign currency pricing mechanism, which can answer the question whether Vietnam will collect fees on foreign currency sales and purchases."
"In other countries, fees will be imposed when purchasing cash, while no fee will be imposed if people buy via transfer," Duong said. "The most important thing is that we must turn "fee" into a kind of "additional price", which may lead to the existence of two kinds of exchange rates".
Vietnam bonds slide for fifth day as inflation concerns mount
Source: Vietbiz24
Vietnam's five-year bonds dropped for a fifth day, the longest losing streak in five months, as inflation concerns and the prospect of higher interest rates sapped demand for fixed-income assets. The dong weakened.
The yield on the debt rose 9.5 basis points to a one-year high of 12.32 percent, according to a daily fixing price from banks compiled by Bloomberg. A basis point is 0.01 percentage point.
"There are no signs that inflation will decline and investors are concerned that the government will further tighten monetary policy," said Luu Hai Yen, an analyst at Thang Long Securities Joint-Stock Co. "The central bank still has room to raise interest rates to 14 percent."
Vietnam's consumer price index is forecast to rise 1.6 percent to 1.8 percent in April from March, online newswire Phap Luat Thanh Pho Ho Chi Minh reported, citing a Ministry of Finance projection. Yen said the actual figure may be even higher as gains of more than 3 percent are estimated this month for Hanoi and HCM City. Consumer prices increased 2.2 percent in March from February, the most since May 2008, and jumped 13.9 percent from a year earlier, official figures show.
The State Bank of Vietnam raised interest rates on April 1 for the second time in less than a month to help rein in inflation. The refinancing rate was increased to 13 percent from 12 percent, while the seven-day repurchase rate was boosted to 13 percent from 12 percent.
The dong fell 0.03 percent to 20,930 per dollar as of 2:58 p.m. in Hanoi, from 20,923 yesterday, Bloomberg data show.
The State Bank of Vietnam fixed the reference rate at 20,728, compared with 20,733 yesterday, its website showed. The currency is allowed to trade up to 1 percent on either side of that rate.
Eximbank to provide foreign currencies to people going abroad for work, study
Eximbank
Vietnam Export Import Commercial Joint Stock Bank (Eximbank-EIB) on April 19 said that it would provide cash foreign currencies such as USD, AUD, CAD, CHF, euro, GBP, HDK, and JPY according to the listed prices for buyers who want to go abroad for purposes of to work, study, medical treatment, tourism and visiting relatives in foreign countries with the maximum volume of up to $7,000.
Customers who want to buy cash foreign currencies must present all types of documents proving the purpose of buying foreign currencies whereby Eximbank will sell the currency of that country.
On April 20, the forex rate at Eximbank was quoted at 20,915 dong/US dollar (buying price) and 20,940 dong/US dollar (selling price).
As for purposes of tourism, relative visit and business trip in foreign countries with the stay of less than seven days, the bank will sell a volume of $2,000 per person and it will be $4,000 per person for the stay of more than seven days.
As for purposes of medical treatment with the stay of less than one week, the bank will sell a volume of $3,000 per person and it will be $4,000 per person at the maximum for the stay of from seven days and longer.
As for purposes of study overseas, customers will be allowed to buy $7,000 per person at the maximum.
At the same time, Eximbank will advise individual customers to open and use international payment cards such as Eximbank Visa and Eximbank MasterCard to serve the payment demand in foreign countries instead of buying cash foreign currencies.
Vietnam BoP forecast to flat in 2011: Le Xuan Nghia
Source: VietmanBusiness.asia
Vietnam balance of payment (BoP) is expected to be flat this year, including current account deficit of $4 billion, capital account surplus of $6 billion and error of -$2 billion
Vietnam balance of payment (BoP) is expected to be flat this year, including current account deficit of $4 billion, capital account surplus of $6 billion and error of -$2 billion, the online newspaper dvt quoted Le Xuan Nghia, vice Chair of Vietnam's National Financial Supervision Commission (NFSC) as saying at a conference on April 7.
Dragon Capital explained the error in Vietnam BoP that was due to smuggling gold for some years. In 2009, the error was -$10.26 billion and slowed down to $4.36 billion in 2010, Nghia said.
Nghia note that pressure from BoP is not significant after Vietnam devaluated domestic currency by 9.3 percent while USD also depreciates against other currency by between 7-8 percent.
The expert also predicted that Vietnam consumer price index (CPI) and gross domestic product would be 10 percent and 6 percent, respectively this year in case of total money supply of 16 percent and unchanged cash circle.
Nghia noted that Vietnam stock market will show a sustainable rebound from the beginning of the third quarter as the interest rate and inflation begin to decline.
The inflation is forecast to stall and slow down at the beginning of the third quarter which is a great condition for interest rates to ease and exchange rates to stabilise, the analyst said.
Earlier, Dr Vo Tri Thanh, deputy director of the Central Institute for Economic Management told the local newswire Tamnhin that Vietnam economy is forecast to grow by 6 percent this year while the inflation target of 7 percent is likely unfeasible.
Saigon-Hanoi bank targets 1.05tr dong pre tax profit in FY2011
Source: SHB
In the fiscal year 2011, Saigon-Hanoi Commercial Joint Stock Bank (SHB) plans to open its branch in Cambodia and credit growth at 19.9 percent (In 2010, its credit growth was 90 percent).
The bank plans to organise its annual general meeting (AGM) on April 21 at Melia Hotel, Hanoi to pass this year's business targets with total assets at 75 trillion dong, up 47 percent year-on-year, total deposits at 42.5 trillion dong, up 36.3 percent y-o-y, and total outstanding loans at 29.23 trillion dong, up 19.9 percent y-o-y.
The bank also expects to hike its registered capital to 4.995 trillion dong and the capital adequacy ratio (CAR) at 15-20 percent.
SHB's pre tax profit is expected at 1.05 trillion dong in 2011, up 60 percent from 2010's and dividend payment at 14 percent on average chartered capital (4.496 trillion dong).
Also in 2011, SHB will open more 15 branches and 88 transaction sites in the domestic market together with one branch in Cambodia.
In 2010, SHB's total assets reached 51.03 trillion dong, rising 86 percent from 2009's, chartered capital at 4.397 trillion dong, total deposits at 45.03 trillion dong, up 82.7 percent y-o-y, total outstanding loans at 24.375 trillion dong, growing 90 percent y-o-y.
Also in 2010, the bank's non-performing loans (NPL) accounted for 1.4 percent of the total outstanding loans, the CAR at 13.81 percent.
The bank's after tax profit was 656.7 billion dong in 2010, increasing 241.5 billion dong or 58.2 percent year-on-year, equalling to 101 percent of the year's profit plan.
HSBC expects to raise holding to 25pct stake into Bao Viet
Source: vietnambusiness.asia
HSBC has sent 15 experts to support Bao Viet in many sectors such as risk administration, human resource development, insurance evaluation and telecommunication, for long term, HSBC will raise its holding to 25 percent stake into the local firm, said David Fried, HSBC (Asia-Pacific) Insurance Co's CEO.
In the morning April 19, Bao Viet Group (BVH) organised its annual general meeting (AGM) 2011.
Representative of the group's director board had a working session with shareholders about the issue of selling the company's stake to HSBC Insurance Co (Asia-Pacific area).
HSBC finalised the purchase of 10 percent stake into Bao Viet Group in September 2007. In October 2009, HSBC officially received approval from the Ministry of Finance (MoF) to buy another 8 percent stake into Bao Viet via offering more shares.
By early 2010, with the purchase of nearly 53.7 million new shares worth 1.88 trillion dong, HSBC raised its holding from 10 percent to 18 percent stake into the local firm.
As a strategic shareholder, HSBC expects to raise its holding to 25 percent into Bao Viet in the future.
HSBC is a large banking and financial institution with more than 9,500 offices in 86 countries and territories. By early last year, HSBC also owned 20 percent stake into Vietnam Technological Commercial Joint Stock Bank (Techcombank).
VPBank plans to hike cap to over 5tr dong
Source: Vietbiz24
In the fiscal year 2011, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) expects its total assets at 80 trillion dong, total deposits to grow 50 percent and credit growth at 20 percent.
The lender's AGM also passed a plan to hike its chartered capital to 5.05 trillion dong from dividend and capital surplus.
This year, VPBank expects to gain total assets at 80 trillion dong, total deposit growth from customers at 50 percent and credit growth at 20 percent with a network of 200 transaction sites by the end of the year.
In 2010, VPBank reached total assets at 59.807 trillion dong, rising 32.264 trillion dong from 2009's (or 117 percent), pre-tax profit after spending on its risk backup fund at 663 billion dong and dividend payment at 16.25 percent.
Also in last year, VPBank scaled up its chartered capital to four trillion dong and expanded its network to nearly 160 transaction offices nationwide.
Interbank forex rate drops to 20,723 dong/US dollar April 21
The State Bank of Vietnam (SBV) today Thursday (April 21) announced to lower the interbank average forex rate to 20,723 dong/US dollar from 20,728 dong/US dollar from yesterday April 20.
With this new forex rate level, the interbank US dollar gained 30 dong from the first day of applying the daily forex rate adjustment (February 11) and 65 dong from the lowest level during past two months (20,658 dong/US dollar).
In the morning April 21, at Asia Commercial Joint Stock Bank (ACB), the US dollar buying price was listed at 20,890 dong and the selling price at 20,930 dong and it was also 20,890-20,930 dong/US dollar at Vietnam Export Import Commercial Joint Stock Bank (Eximbank).
Bao Viet targets profit at 2.8tr dong in 2015
Source: Vietbiz24
On April 19, Bao Viet Group (BVH)'s annual general meeting (AGM) agreed the five-year development strategy during 2011-2015 with average after-tax profit growth at 23 percent per year, to reach 2.6-2.8 trillion dong, or three-fold increase against 2010's.
The group also expects the annual total assets growth at 17 percent, to reach about 100 trillion dong by the end of 2015 and annual revenue growth at 16 percent to reach 26-28 trillion dong by 2015.
As for the holding company, its chartered capital by the end of 2015 is expected to reach 9.5 trillion dong and equity at 14.32 trillion dong in 2015.
Annual revenue growth is targeted at 12 percent to gain 2.1-2.2 trillion dong by the end of 2015, annual after-tax profit growth at 15 percent to reach 1.5-1.7 trillion dong by the end of 2015 and dividend payment in 2015 at 14-16 percent.
As for non-life insurance sector, BVH targets to reach premium from original insurance at 8.8 trillion dong, after-tax profit at 480 billion dong, premium at 6.7 trillion dong, after-tax profit at 580 billion dong.
Regarding the banking operations, the group expects to gain after-tax profit at 1.35 trillion dong, total assets at 70 trillion dong and total deposits at 52 trillion dong.
For securities sector, by the end of 2015, total revenue is expected at 565 billion dong and 370 billion dong after-tax profit.
In 2011 alone, BVH expects total combined revenue at 14.8 trillion dong, growing 15 percent year-on-year and after tax profit at 1.138 trillion dong, up 16.8 percent y-o-y.
The AGM also agreed to pay 12 percent dividend in 2010.
Ending 2010, the holding company's audited profit was 852.1 billion dong and gross profit at 953 billion dong with the earnings per share at 1,526 dong.
HSBC Vietnam launches a new fully integrated payment and cash management solution in Vietnam
Source: Intellasia
HSBC's customers in Vietnam will be the first in the Asia Pacific region to be offered this innovative solution, designed to help them avail of business opportunities faster.
On 20 April 2011, HSBC Bank (Vietnam) Ltd, (HSBC Vietnam) hosted a seminar at Sheraton Saigon Hotel- Ho Chi Minh city to introduce the new Integrated Receivables Solution (IRS) to their customers. Comprising of VirtualAccount, Consolidated collection reporting and Receivables advising, they utilise the latest PCM technology and have been designed to help HSBC customers to manage their receivables more efficiently by improving visibility, transparency and information management.
Vietnam is the first Asia Pacific market in which HSBC is launching this solution.
"The overall purpose of cash management hasn't changed: organisations want to have the cash they need in the right place at the right time," said Puneet Gupta, Head of PCM HSBC Vietnam. "HSBC's new Integrated Receivables Solution comprizes of a number of extremely innovative products that we prioritise to launch in Vietnam first to serve the increasing need of our customers to have more sophisticated PCM solutions. IRS gives companies a comprehensive view of their daily cash position, allowing them to use cash more efficiently and to make decisions based on real time information to create more business opportunities."
The HSBC Integrated Receivables Solution fully integrates all receivables transactions and summarises them into a single consolidated report for easy reference. This report can be downloaded, enabling simple system interface development and allowing customers to interface their treasury, Enterprise Resources Planning (ERP) or
accounting systems with HSBC's global Internet banking platform, HSBCnet, and host-to-host delivery channel, HSBC Connect.
Key benefits include the effective management of accounts receivable status across all business units in multiple countries and territories at anytime via HSBCnet; an expedited collection cycle and enhanced credit control. Invoice reminders and instant payment exceptions advices also help to minimise follow-up costs and sales outstanding.
Another major component of IRS is VirtualAccount. VirtualAccount improves operational efficiency and reduces manual costs in customers' accounts receivable reconciliation process by identifying and attaching payers' information to collections. Additionally VirtualAccount improves management reporting by capturing all VirtualAccount transactions on statements in real time; improves credit control through swift reconciliation of collections information, as well as enhances visibility and communication on exception items through the VirtualAccount and Receivables Advising function.
HSBC's excellence in customer service coupled with the fact that HSBC has continuously pioneered best-in-class solutions for its customers, has been recognised by two key industry awards in Vietnam: The Best Cash Management Bank in Vietnam by Euromoney in 2010 and The Asset Triple A award for Best Foreign Cash Management Bank in Vietnam by The Asset Magazine in 2011.
"The fully interactive seminar on 20 April helped company CEOs to fully understand how the Integrated Receivables Solution could benefit their business," added Gupta, "This is another way we have demonstrated our commitment to serving our customers better and offering cutting edge products designed to help their businesses grow."
HSBC Vietnam
HSBC has been in Vietnam for 140 years. The Bank first opened an office in Saigon (now HCM City) in 1870. HSBC was the first foreign bank to launch its locally incorporated entity on 1 January 2009 as HSBC Bank (Vietnam) Ltd The Bank's current network includes one transaction centre, one branch and five transaction offices in HCM City, one branch and three transaction offices in Hanoi, and four branches in Binh Duong, Can Tho, Da Nang and Dong Nai province. HSBC is one of the largest foreign banks in the country in terms of investment capital, network, product range, staff and customer base.
The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group which, with around 7,500 properties in 87 countries and territories and assets of $2,455 billion at 31 December 2010, is one of the world's largest banking and financial services organisations.
Economy - Vietnam, china to boost economic, trade cooperation
Source: Vietnambusiness.asia and Economic
The 7th session of the Vietnam- China Economic and Trade Committee was held here on Tuesday, with participation of Vietnamese minister of Industry and Trade (MIT) Vu Huy Hoang and Chinese vice minister of Commerce Jiang Zengwei.
Both sides informed each other of the development of trade cooperation since the 6th session. The two-way trade reached more than 27 billion US dollars in 2010, higher than the planned target of 25 billion US dollars.
The two sides reached agreements in areas of mutual concern, such as the imbalance of trade between the two countries, border economy, China's preferential credits for Vietnam's projects in infrastructure, transport, healthcare and personnel training.
Jiang led a Chinese government delegation to visit Vietnam and attend the event at the invitation of MIT.
On the same day, Chinese delegates were received by Vietnamese deputy prime minister Hoang Trung Hai.
Exporters take advantage of Korea trade
Source: Vietnamews
Exports to South Korea in the first quarter jumped 121 percent to nearly $1.17 billion, the general Department of Vietnam Customs reported.
Both export prices and volumes rose, according to companies.
Garment and textiles, footwear, wooden products, confectionary, seafood, and coffee saw the highest export growth rates.
Shipments of garment and textile products were worth $111 million in January and February, an increase of 134 percent year-on-year.
In that period exports of confectionery, cassava, cassava starch and wood products also grew by 100 percent.
Pham Minh Huong, deputy general director of Phong Phu Joint Stock Company, said in the first quarter her company exported $5 million worth of yarns and threads to South Korea, or nearly 50 percent of exports to that country in the whole of last year.
One of the reasons for exports to South Korea to skyrocket was the benefit brought by the Asean-South Korea Free Trade Area (AKFTA) agreement, Huong said.
From last year, under the AKTFA, South Korea has eliminated tariffs on all products imported from Asean member countries.
Vietnam trade deficit hits all-time high at $1.4b in Mar: Vietnam Customs
Source: StoxPlus
Vietnam trade deficit hit all-time high at $1.41 billion in March, revising from the primarily estimation of $1.12 billion by the general Statistical Office(GSO) in late March.
Vietnam trade deficit hit all-time high at $1.41 billion in March, revising from the primarily estimation of $1.12 billion by the general Statistical Office(GSO) in late March, the online newspaper VnEconomy reported on April 20, citing the Vietnam Customs.
The trade gap reached $3.5 billion in the first quarter of this year from the GSO's estimation of $3.03 billion, but nearly equal to the last year's figure of $3.6 billion.
In the first quarter of 2011, Vietnam exported $19.63 billion worth of goods, up 36.4 percent on-year while the country spent around $23.13 billion to import goods, up 26.8 percent on-year.
However, the figure still showed 17.8 percent of total export revenue, higher than the 2011 target of 16 percent, but lower than the same period of last year of 25 percent.
Five staples posted export revenue of above $1 billion including seafood, coffee, textile and garment and crude oil while six staples showed above $1 billion import turnover including petrol and oil, plastic material, fabric, steel, computer components, machine and equipment.
The price factor from 9.3 percent dong devaluation in February boosted export revenue by $1.42 billion and import turnover by $1.65 billion in the first quarter.
The Ministry of Industry and Trade (MoIT) is taking measures in an effort to cut down the trade deficit targeted at $12.62 billion or 16 percent of total export revenue this year compared with earlier target of 18 percent, the online newspaper dvt.vn reported on March 3, citing MoIT source.
Nguyen Tan Dung, prime minister of Vietnam ordered the related ministries to continue measures to restrict the trade deficit as intense exchange-rate volatility and an imbalance in foreign-currency supply and demand.
Hanoi industrial output rises 13.2pct in Jan-Apr
Source: StoxPlus.com
The industrial production of Hanoi city, Vietnam's capital, is estimated to increase by 13.2 percent on year in Jan-April, the local newswire Cafef reported April 20 citing the Hanoi Statistic Office source.
Almost all staples showed higher production value compared with the same period of 2010, excepting machine(-4 percent on-year) and television (-4.4 percent on-year), the office said.
In April alone, the city's industrial production climbed by 3.4 percent on-month and 14.6 percent on-year.
The industrial value of the foreign direct investment sector showed the highest increase of 17.1 percent on-year and 1.8 percent on-month, contributing the biggest revenue with 46 percent of the city's industrial value.
The state sector industrial value rose by 5.8 percent on-month this month and 15.4 percent on-year, the non-state sector increase by 3.7 percent on-month and 12 percent on-year.
Hanoi's consumer price index (CPI) in April is estimated to have risen by 3.28 percent from March, the highest level in many months driven by a jump in prices of transport, food and foodstuff due to higher fuel and electricity prices, said the municipal Statistic Department.
Gross domestic product (GDP) of the capital city, is estimated to have expanded 9.2 percent in the first quarter of this year, the office said.
Vietnam exports to France pick up
Source: VOVNews
Vietnam's export turnover from the French market in January 2011 reached more than 144.74 million euro, up over 34 percent compared to the same month of last year.
Despite fluctuations in the world market, Vietnam's exports tend to grow further through the first half of this year.
Its export earnings include over 25 million euro from garment and textile products, over 24.5 million euro from electronic products and over 12.6 million euro from wooden products.
In January 2011, Vietnam imported goods worth more than 36 million euro from France. A number of France's automobile trademarks such as Peugeot, Citroen are seen in the Vietnamese market. Vietnam will increase the import of made-in-France cars in the future.
Under the economic diplomacy development programme in the 2011-2015 period, Vietnam will continue to facilitate the implementation of projects and agreements signed with French partners, including a project to upgrade Long Bien bridge, a project to build a medical university, a project to build the O Mon power plant, and an agreement to purchase Airbus A380.
Vietnam is also expected to attract more French investors in the fields of pharmaceuticals, food processing technology, aviation, and aerospace.
Vietnam, US boost economic, trade cooperation
Source: VOVNews
Nguyen Xuan Phuc, Politburo member and minister-Chair of the government Office, on April 20 received US Senator James Webb, who is on a Vietnam visit to boost bilateral economic trade and investment cooperation.
At the reception, Phuc expressed his delight with developing Vietnam-US relations in various fields, saying that the two sides see great potential for expanding mutually beneficial cooperation.
He said he wished that the two sides would jointly solve existing difficulties to further enhance their economic trade and investment cooperation.
Minister Phuc also spoke highly of James Webb's contributions to developing the Vietnam-US relationship and expressed his hope that with his role and prestige, the Senator will make more contributions to increasing the mutual understanding and cooperation between the two nations.
The US Senator noted developments in the US-Vietnam bilateral ties since the two countries set up diplomatic ties.
He showed his attention to the effective use of Mekong water resources as well as ensuring means of livelihood for residents along the banks of the river, while stressing that cooperation between concerned countries is very necessary and useful.
On this issue, minister Phuc said that as one of the countries directly connected to the Mekong River, Vietnam wants concerned parties to cooperate in boosting the sustainable management, protection and exploitation of this river.
Moody's: negative outlook on Vietnam reflects uncertainty
Source: Vietnambusiness.asia
Moody's Investors Service Inc. said Wednesday its negative outlook on Vietnam reflects balance of payments uncertainty.
Moody's Investors Service Inc. said Wednesday its negative outlook on Vietnam reflects balance of payments uncertainty, with any change contingent on recent tightening measures arresting inflationary pressures and containing the volatile exchange rate.
The ratings agency also warned, however, that the rating could face further downward pressure if there was continuing erosion of the Southeast Asian nation's foreign-exchange reserves, estimated at $12.2 billion at the end of 2010, compared with a peak of $25.8 billion in February 2008.
Moody's in December downgraded its rating on Vietnamese government debt to B1 from Ba3 because of the threat of a balance of payments crisis, depreciation pressure on the dong, and rising inflation.
In a report released Wednesday, it said the country has struggled to balance growth desires with macroeconomic stability, adding that "policy accommodation over the past few years has directly contributed to overheating pressures, which have in turn led to high inflation and deterioration in the external payments position."
The Vietnamese government has recently reversed its long-standing policy focusing on growth, unveiling a series of measures to combat major imbalances in the economy, which have been highlighted by increasing price pressures. Consumer prices rose 13.89 percent in March from a year earlier, the fastest on-year pace since February 2009, and far higher than the government's target of capping inflation at 7 percent this year.
The government has said it will tighten monetary and fiscal policies, such as by trimming public investment and the budget deficit, boosting domestic production and rebalancing trade. Its credit-growth target will also be lowered, while the State Bank of Vietnam has raised its key interest rates several times in recent months.
At the same time, the government has also announced potentially inflation-stoking policies such as sharp increases in electricity and fuel prices, along with a spike in wages.
"It remains unclear whether the barrage of tightening measures after the Vietnamese new year represents a permanent departure from the previous policy framework, or whether this is merely an extended episode of "stop-and-go" policy making that has exacerbated the imbalances in the economy," Moody's said.
Vietnam's inflation ranks at second highest in the world
Source: Vietstock
If inflation rises above 1.2 percent in April, Vietnam will surely rank second amongst nations with the highest inflation in the world after Venezuela - an economy with high inflation of 29.6 percent, according to the data of Trading Economics.
Mozambique is the economy that ranks third at 15.23 percent in the high inflation chart.
HCM City Statistical Office announced that CPI in the city rose 3.16 percent in April compared with March. CPI in Hanoi and countrywide to be published in few days will likely hit this number.
With an increase of 3.16 percent in April, the city's CPI rose to 8.2 percent in the first four months compared to the beginning of the year, and increased 13.99 percent over the same period last year.
It is assumed that if CPI in April nationwide increased by 3 percent against March, compared with early this year, CPI has been up 9.2 percent, and an increase of 17.15 percent over the same period of last year.
Worldwide inflation tends to grow rapidly as prices of raw materials and energy have increased due to world economic recovery and the instability in North Africa. Also, another reason is many nation continued pumping more money to combat their national economic downturn. However, the too high increase level of inflation in Vietnam is a rare thing.
Most of the neighbouring countries in Asia only saw their inflation at 0-6 percent, which was too lower than Vietnam.
In China, by the end of March, the inflation of this country was 5.4 percent. Although this is not a too high level compared with Vietnam, the inflation has become a very serious problem for this country. China has simultaneously implemented many measures to tighten fiscal, monetary policies and price stabilisation to control inflation.
Vietnam, Egypt to boost cooperation
Source: VOVNews
Vietnam and Egypt have great potential for cooperation, said Egyptian deputy minister of Foreign Affairs Mohammed Hegazy.
Hegazy declared this at his April 17-19 visit to Vietnam, during which he met with his Vietnamese counterparts Pham Binh Minh and Doan Xuan Hung, as well as leaders of the Ministries of Industry and Trade and Agriculture and Rural Development, and the Vietnam Chamber of Commerce and Industry.
At the meetings, he said he was delighted to visit Vietnam and expressed his admiration for Vietnam's great achievements in national construction and development.
Both sides reported on their country's socioeconomic situation and discussed ways to strengthen multifaceted bilateral cooperation in the future.
They agreed that both countries will do their best towards the success of the fifth Vietnam-Egypt Interparliamentary Committee meeting in Hanoi in late 2011.
Hegazy also passed on a letter from the Egyptian Foreign minister to deputy prime minister cum Foreign minister Pham Gia Khiem.
Hanoi April CPI +3.28pct, highest in multi-months
Source: StoxPlus
Hanoi's consumer price index (CPI) in April is estimated to have risen by 3.28 percent from March, the highest level in many months.
Hanoi's consumer price index (CPI) in April is estimated to have risen by 3.28 percent from March, the highest level in many months driven by a jump in prices of transport, food and foodstuff due to higher fuel and electricity prices, said the municipal Statistic Department.
The biggest price increase was seen in transport, soaring 5.82 percent due to over 30 percent price hikes of fuels in two tranches in March.
Restaurant and food service rose 5.06 percent contributed by 5.02 percent rise in food and 5.48 percent in foodstuff and 3.91 percent in restaurant food.
High April CPI is rare, usually CPI peaked in February due to seasonal factor including traditional Tet holiday. But this year, CPI continued to rise sharply in March and April due to 9.3 percent dong devaluation, higher electricity, fuel prices.
Vietnam still keeps inflation target at 7 percent this year while analysts forecast ranges from 9.5 percent to 14 percent.
Hanoi Monthly CPI in 2010 and in the first 4 months in 2011.
Property - Oversupply to cause downward pressure on office rental
Source: Info.vn
An oversupply in office spaces is likely to bring about price reductions in the short term, according to real estate firm Colliers International.
The Vietnamese realty market is still feeling the effects of the global economic downturn, according to Colliers. In addition, at the end of the first quarter of this year, Hanoi had 16 Grade A buildings with a combined 200,000 square metres of space for lease.
The current occupancy rate in Hanoi's office buildings is 86.7 percent, at an average of USD39.2 per square metre. The prices remain unchanged since late 2010, the occupancy rate has slightly decreased.
Despite offering competitive rates, Charmvit Tower on Tran Duy Hung Street is still unattractive to customers, contributing to the stagnant situation of the city's office-for-lease segment.
This year, an additional 240,000 square metres of Grade A and B space is expected to come onto the market. This figure is equal to half the current supply. Two buildings Keangnam Hanoi Landmark Tower and EVN Building account for 45 percent of the amount.
Other large-scaled projects that have recently emerged include MIPEC Towers, BIDV Tower and Charmvit Tower.
Monthly rentals vary according to districts in Hanoi. Hoan Kiem and Hai Ba Trung average at USD34 per square metre, while Cau Giay and Tu Liem are at USD23.5.
Last year, to deal with the low occupancy rate, the Horizon, Fortuna and Vietnam Trade Union hotels converted all their available office space into hotel rooms. Even hotel room occupancy, however, is hovering at around 80 percent, worrying owners.
Some investors have opted to lease one or more floors of a building, for the long-term, to a secondary investor, who will take responsibility for finding occupants.
For instance, IDJ has hired three floors of Charmvit Tower. Colliers forecast that this trend will continue, particularly for big projects.
Grade-B offices have seen better results with a slight rise in the occupancy rate over the past two consecutive quarters. The current occupancy rate for Grade B is estimated at 87.9 percent, with fees at USD26.1 per square metre.
RIC seeks capital for carrying out hotel project
Source: Dau Tu Chung Khoan
The Royal International Joint Stock Co (coded RIC) has lately released the audited 2011 business reports with total after tax profit of over 35.37 billion dong or $1.86 million. This year, the company targeted to reach total revenue of $16.2 million, after tax profit of $3.673 million.
Do Tri Vy, chair of management board said that last year, RIC planned to issue shares to raise capital for completing the ongoing project of the five-star Olive Crown Hotel or Four Points Shearaton Ha Long Hotel. The project has total initial investment capital of $11.85 million in June 2005, but due to fluctuation in raw material prices, up to now, the investment capital for the project increased to $32 million.
However, due to the slump in the company's share prices in the stock market, and negative effects of the global financial crisis on Vietnamese economic situation, the company could not realise the share issuance plan.
At present the company planned to borrow capital from banks in order to finish construction works on this project. Eximbank has agreed in principle for lending the company 200 billion dong. The loan was expected to be disbursed in Q2 of 2011.
Shopping centers expanding but business is not guaranteed
Source: Saigon Times
It is estimated that by 2013, HCM City will have about 740,000 square meters of retail space at shopping centres, double the current space, due to property developers going full steam ahead with new shopping centre projects.
Experts said that even though shopping centres have been mushrooming in Vietnam, recent events prove that some malls don't produce the goods.
Location, location, location not enough
Distributors said that the success of a modern shopping mall depends on its strategic location and professional management. Investors will find it very difficult to succeed if they lack even one of the two the major factors.
Many retailers who operate a wide range of local and world-famous brands of clothes, shoes, and jewellery items had big problems at the premium shopping mall Kumho Asiana Saigon in District 1, on the corner of Le Duan Boulevard and Hai Ba Trung Street.
Some stopped trading there and today, the shopping mall only has a few retailers doing business.
Since its inception the shopping mall has always been quiet with very few customers. Even in peak season, it failed to attract the numbers. Debenhams and Hard Rock Caf, used to stand out at the Kumho Asiana but they didn't rub off on other companies.
Debenhams was the first of its kind in Vietnam but due to the lack of high-quality neighbours Viet Thai International Joint Stock Company (VTI), the local franchise which also owns a chain of Highlands Coffee shops, moved Debenhams to Vincom Saigon Centre and closer to the English and European designer brands.
Some sources, who asked not to be named, said Viet Thai was losing heavily at the Kumho Asiana and had no choice but to move.
Other famous fashion brands including Aldo, Tissot, Elle, Paris Hilton, Aubade, Carita, Converse and Levi's at the nearly 7,000-sqm shopping mall have also relocated.
Similarly, Saigon Paragon shopping mall was said to be poorly performing in Phu My Hung Town and closed in October.
Professional management needed
Why did two shopping malls with modern decor and great locations fail so miserably? Regarding location, the Kumho Asiana Plaza shopping mall on the corner of Le Duan Boulevard and Hai Ba Trung Street, District 1, near Diamond plaza is an ideal position downtown.
Saigon Paragon in Phu My Hung is close to some 10,000 households most of whom are affluent professionals from Vietnam and all over the world.
However, a number of businesses renting spots at the two shopping malls said poor management was the main reason why two commercial centres located in the very favourable areas couldn't bring in the money.
The closure of Saigon Paragon was also due to management failure.
Le Hoai Anh, director general of Kim Cuong Corporation, the management agency who ran Saigon Paragon, admitted it had no experience in managing a commercial centre and the business suffered accordingly.
Anh explained the temporary closure was due to the poor business performance of the shopping section, which was partly due to ineffective management.
It has now signed up professional management firm Parkson to improve the building's performance.
Anh is confident that Parkson can turn its fortunes around as it has six years of operation experience in Vietnam.
Parkson, a well-known shopping brand for high-end fashion, initially managed the Saigon Paragon department store, and then took over it to rename it Parkson Paragon.
It now has a total area of some 15,000 square meters over five floors, includes a Megastar Cinema Complex, a food court and supermarket, said Tham Tuck Choy, general director of Parkson.
A year after shutting its doors to the public, MegaStar Media Ltd Co. this month reopened its Cineplex at Parkson Paragon.
Experts said that, to do good business at a shopping mall, a trilateral relationship between investors, management agency, and retailers is necessary.
The management agency is vital. Besides being an intermediary to sign deals with retailers, it also supplies solutions for brands' strategies in the commercial centre.
However, in Vietnam the management agency doesn't focus on building brands for the centre. That is one of the reasons why some shopping malls struggle to survive.
Several years ago similar hard-luck stories applied to Saigontourist Plaza on Le Thanh Ton Street, District 1 and Thuan Kieu Plaza in District 5.
With more and more international fashion brands to arrive in Vietnam in the future and more shopping malls opening, competition for business will be stronger than ever, so the right management teams have to be in place to deliver success.
The 68-story Bitexco Financial Tower-BFT is scheduled to become operational this year with six floors reserved for a shopping mall of 8,000 square meters. HCM City will also have a new shopping mall on Dong Khoi street, the Eden Trading Centre.
Meanwhile, C.T Group is developing some department stores in Le Van Sy and Nguyen and Dinh Chieu Street, among others. Commercial centres are considered the trend of modern retail and have developed rapidly in Vietnam.
Although the number of commercial centres have increased sharply, according to many companies, doing business in the retail sector is not easy.
The development of the retail market depends heavily on the development of the middle and upper classes, and the demand for luxury goods. Many shopping centres have fallen into difficulties because they sell only luxury commodities. People often come there to relax and go for a weekend stroll rather than buy anything, say retailers
Savills appointed agent for Indochina Plaza Hanoi's office
Source: VNNews
Savills has been officially appointed to be the lead marketing and leasing agent for office space of Indochina Plaza Hanoi by the developer Indochina Land.
Approximately 14,500sqm of Grade A office space scheduled for completion in first quarter of 2012 will be officially opened for leasing registration from April 19, 2011.
Indochina Plaza Hanoi is a mix-used development comprising Grade A office facilities flanked by twin residential towers set above a retail and recreational podium, which surrounds a central landscaped plaza area.
Indochina Plaza's facade road will have a train station stop at the city's subway project. This will create future value while connecting this area with the current centre of Hanoi city.
The grade A office building includes 11 floors, in which each floor has 1,400sqm of open plan efficient office space. Thanks to the advantages of location and facilities of the shopping centre and retail podium, the IPH office tenants could experience the high-class working space with a fully-fledged shopping and entertainment components including supermarkets, restaurants, banks and gym.
Indochina Plaza Hanoi is located at 239 Xuan Thuy, Cau Giay, in the intersection where Xuan Thuy cuts Pham Van Dong and Pham Hung Road, the life-line road of the western gateway of Hanoi.
Evaluating the prosperous success of Indochina Plaza Hanoi, Patrick Gidney, head of commercial leasing for Savills in Hanoi said: "With a unique design, high-quality construction, strategic location, convenient access, preferential leasing price and flexible leasing terms, Indochina Plaza Hanoi will be an ideal choice for office tenants."
According to Daniel Hanson, project director of Hanoi Indochina Plaza project, under the cooperation with the leading brand names in architectural design, construction and high quality management services, Indochina Plaza Hanoi will create top rank working environment in Hanoi.
Savills' partnership with Indochina Land as the lead marketing and leasing agent for office space follows the success whist being the exclusive marketing and sales agent for residential twin-tower of Indochina Plaza Hanoi.
Retail space supply inner Hanoi insufficient
Source: Stockbiz
Differing from the gloomy situation of office-for-lease segment, the apartments and retail space market in inner Hanoi City is seeing busy transactions despite high prices, the local newswire Dat Viet reported.
Dane Moodie, Marketing and Business Development director of Colliers International Vietnam said, good locations are still appealing customers. For instance in office segment, Sentinel Place building in Ly Thai To Street, thanks to good location and suitable rental, is not insufficient supply while few customers ask for renting Charmvit Tower building in Tran Duy Hung Street.
Demand for renting retail space in centre districts like Hoan Kiem, Hai Ba Trung, Ba Dinh and Dong Da is always overloaded against supply because these are seen as traditional shopping addresses with luxury brand names.
According to a report of Collier International Vietnam about Hanoi, centre districts have a higher fulfilling ratio than outskirts (87 percent vs 75 percent) with the higher average rental ($30 vs $21).
Golf course project comes up to par
Source: Vietnambusiness.asia
The Van Tuong golf course project in central Vietnam's Dung Quat Economic Zone has come a step closer.
Quang Ngai People's Committee recently had a working session with HUD Holdings and agreed with the developer's scheme, but demanded the investor take care of the surrounding environment.
The 114.8 hectare Van Tuong golf course will be part of Van Tuong new urban area, which also encompasses holiday villas, restaurants and resort facilities. The course alone will span 76ha and consist of 18 holes up to international standards.
The project's designing consultant is US-based IMG.
Developer HUD Holdings is a key player in Vietnam's property market. In 2010, the group posted over 31 trillion dong ($1.5 billion) in revenue, up 21 percent over 2009, contributed 2.370 trillion dong ($114.4 million) to state coffers, up 40 percent and raked in 2.058 trillion dong ($99.4 million) in pre-tax profits, up 28 percent over 2009.
US-based Infrastructure Management Group, Incorporated (IMG) is an international advisory firm advancing management, finance and development for public and private infrastructure owners and operators in their continuing efforts to perform better.
IMG is a leading source of international experience and innovative methods for infrastructure financing, with experience on the largest transportation and utility private public partnerships in North America.
Speculators manipulating Hanoi's apartment market
Source: Vietnambusiness.asia
Hanoi's apartment market is still being manipulated by speculators and investors who want to make profit. They have a habit of buying goods more daringly and quickly and have ability to push the prices higher in an area in many ways, said Colliers International Vietnam, a consulting firm on real estate sector in Vietnam.
This year supply is quadruple against 2010's.
As reported by Colliers, till the end of the first quarter this year, the total current supply is about 45,000 apartments and estimated to have 11,006 new ones to be marketed. As of the end of 2010-14 period, the total number of apartments in Hanoi would increase rapidly and reach 111,084 units.
The luxury and medium segments will continue to dominate the total new supply in the next three years. The western districts such as Ha Dong, Tu Liem, Thanh Xuan, Cau Giay and Hoai Duc will be the new centre of development.
There were not many successful transactions for condos market for sale in Hanoi in Q1. However, the trading price on the secondary market still increased. Additionally, the land prices are being blown up by speculative rumours about the town planning of Hanoi. In some districts like Dong Anh, Soc Son and Ha Tay, land prices have increased by 15-25 percent over the previous quarter.
In the high-class apartment segment, projects like Indochina Plaza and Keangnam Land Mark Tower are being sold for the final stage, but it has been being sold very slowly after the Lunar New Year. With the emergence of many new projects in districts of Tu Liem and Ha Dong in January and February 2011, buyers have more new options. Total number of apartments in the new supply in 2011 will increase four times against 2010's, creating new opportunities for buyers and investors to take advantage of more competitive prices.
New supply in Q1 mainly located in Hanoi's western districts like Ha Dong with about 28 percent, Thanh Xuan with 29 percent and Tu Liem 14 percent. Luxury and medium segments accounted for 45 percent and 32 percent of total supply respectively. Low-cost segment accounted for 27 percent remaining, although having a higher percentage of sales.
High demand leads increasing prices.
Hanoi's apartment market is still being manipulated by speculators and investors who want to make profit. They have a habit of buying goods more daringly and quickly and have ability to push the prices higher in an area in many ways.
However, the demand from users finally still remains high due to the increasing population.
In comparison to Q4 2010, in Q1 2011, all apartment segments saw a rise in average selling prices. High-class segment (selling price at over $2,500 per square metre) increased slightly 3 percent - 5 percent, medium segment (priced between $1,500 and $2,500 per sqm and medium quality) and the popular segment (priced at less than $1,500 per sqm or acceptable quality) increased by 10 percent and 15 percent. Medium and luxury segments increased from $1,600 per sqm to $1,750 per sqm and popular segment increased from $ 1,150 to over $1,300 per sqm.
However, Colliers forecasted a dismal outlook for the real estate market in 2011. Inflation and budget reduction, tightening monetary policy, lending restriction, along with many other policies aim to curb the too overheated development of the real estate market. In 2011, a large number of luxury apartments will be offered for sale, creating more downturn pressure. The percentage of successful transactions in projects such as Keangnam Landmark Towers, Indochina Plaza and other projects priced at over $2,000 was very low in 2010. Thus, Colliers predicted the competition in this segment will be fierce in 2011, leading to lower successful transaction percentage and the decrease in selling price.
The new urban zones in the new districts are still attractive to the final investors and buyers. Districts such as Ha Dong, Tu Liem, Cau Giay, Long Bien, Hoang Mai and Me Linh will witness a dramatic increase in supply in 2011 and afterward.
Dat Xanh Group supposes to reach 2011 profit of 80b dong
Source: Stockbiz
Dat Xanh Real Estate Joint Stock Co (coded DXG) has approved the proposal of raising chartered capital from 160 billion dong to 320 billion dong in 2011 in the latest AGM.
The company also posted the 2010 business reports and released the targeted year plan for this year. Accordingly, in 2010, DXG estimated to gain total revenue of over 322 billion dong, after tax profit of 76 billion dong.
This year, the real estate trader aimed to reach total revenue of 400 billion dong, after tax profit of 80 billion dong and dividend payment of 20 percent at least.
Luong Tri Thin, the company's chair of management board revealed that the company will continue expanding and completing the group's network in other cities and provinces, focusing on introducing major projects to market such as Phu Gia Hung apartment building in Go Vap Dist, Sunview 3 project in Thu Duc Dist, HCM City, Dragon Tower in Bien Hoa City, Dong Nai province, and Suoi Son urban area in Trang Bom Dist, Dong Nai province.
Real Estate Market and the Challenge of Extravagant Prices
Source: VCCI
One factor leading to the instability of Vietnam real estate in the past years extravagant prices.
One factor leading to the instability of Vietnam real estate in the past years extravagant prices. Meanwhile, policies to curb the heated growth of the realty market fail to catch up with the development. This is a big challenge for market managers in a bid to meet the real demand of people.
Questioned about the effects of extravagant prices over realty demand of the people, deputy minister of Construction Nguyen Tran Nam said that currently the realty price has exceeded the payment capacity of people, expressing that this is a shortcoming of the market.
Not yet in control of the market
Although authorities have offered a lot of measures to curb the heated growth of the market, the real estate market has characteristics unlike other goods markets. Property is a long-term product. Realty traders also pay attention to nothing more than profit. In terms of managers, it is not easy to harmonise the enterprises' profits and the people's demand and benefits.
In fact, the property price in general and the housing price in particular in big urban areas is much higher than average incomes, and also extravagant compared to its real value. The extravagant price of real estate allows the market to become a playground for speculators.
The extravagant realty price also pushes up risks for buyers. Under the rule, the criteria to assess the risk of housing investment are the rate between the loan interest a family pays and their monthly income. Accordingly, the rate of families with medium income is one third, meaning they must spend 30 percent of month income for paying loan interest. However in Vietnam, the rate is currently one eighth and right for families with good income. The figure shows the risk of housing investment is very big, possibly leading to a large scale debt crisis.
The extravagant realty prices are attributed to many causes; mainly increased input prices. Investors trend to decide the prices of their products by themselves, depending on different periods and market demand. Some investors, in a bid to maximise profits, use tricks to pump the prices, contributing to the fact that the realty prices are farther and farther beyond the capacity of buyers who have real demand.
The situation has existed for a long time. Explaining this, some investors said they had spent hundreds of billions of dong for each realty project while it takes from three to four years, even five years, to reclaim investment capital, excluding other huge expenses for site clearance, license and design. All expenses are added to the selling price and the real buyers will be the disadvantaged.
Deputy minister Nguyen Tran Nam said that amid the devalued money, plus with the instability of gold and foreign currency markets and the stock market failing to attract more investors, the realty market is currently a secure choice. Apart from the above-mentioned causes, speculation, rumours and mob mentality also drive the extravagant realty prices.
Need to raise market management capacity
Present challenges in the realty market are mainly due to weakness in planning. The tax is not enough heavy to curb land speculation. The lack of transparency in providing information relating to land leads to many negative influences. In fact, many experts are unable to predict the real demand for realty in the Hanoi market.
Realty experts also said that Vietnam has not yet had a policy to adjust the housing market in order for balanced development, particularly the adjustment of price and segmentation. The buyers with real demand meet financial difficulties while the able buyers speculate properties, contributing to pushing up prices.
The lack of orientation in the realty market has social corollaries, as millions of households with real demand for housing are unable to buy their own apartment, creating difficulties in meeting people's housing demand.
To settle with the situation, experts recommend Vietnam should raise the capacity and effectiveness of state management over the realty market; focus sources to build more housing segmentation and social housing programmes; provide information relating to land and housing market, as well as inspect and timely punish violations in investing and trading properties.
Apartments remain attractive in Hanoi market
Source: Vietnambusiness.asia
Unlike the southern property market where developers are grappling with a host of difficulties owing to oversupply and cautious customers, the northern market, especially the capital city of Hanoi, is enjoying robust trade with prices still on the increase. It is all the more so for apartments.
Latest reports of market research and consultancy firms including CB Richard Ellis Vietnam (CBRE) and Savills Vietnam show that the supply in the residential market in Hanoi will increase significantly in the near future.
According to CBRE, the apartment market in the capital city recorded an abundant new supply with some 8,200 units in the first quarter of this year, equivalent to half of the total supply of the whole last year. Of which, two major projects including Royal City and Times City developed by the local property developer Vincom Joint Stock Company accounted for over 50 percent of total new supply in this quarter, most of them being middle-end apartments.
Statistics from a new report of Savills Vietnam showed that the existing 20 projects are providing the primary market in Hanoi with the same amount, accounting for 70 percent of total primary supply. In addition, about 21,000 apartments in 35 property projects will join the primary market in the rest of this year.
Despite of a significant supply, the northern residential market recorded a positive improvement in sales during the first quarter as compared with the last quarter of last year. Meanwhile Grade A projects, though witnessing better performance than in the previous quarter, recorded the number of sold apartments slower than other grades in the market.
Prices slightly increase
According to Savills, asking prices in the secondary residential market averagely increased 3 percent as compared with the last quarter of 2010; in which projects in Long Bien District saw the strongest increase with 8.5 percent, followed by those in Gia Lam District with a 6 percent increase. Notably, Tay Ho District is offering the highest average asking price in Hanoi residential market with an average price of nearly 50 million dong per square metre.
With the same view, CBRE reported that the apartment price on the secondary market was generally stable, except for the mid-end segment that saw price increase by about 8.5 percent over the previous quarter. According to CBRE, the stable price trend is expected to continue during this year's second quarter due to new supply expected to remain high with some 4,000 units. Some mid-end apartment projects were launched in the first quarter, such as AZ Thang Long, Vinh Hung Dominium, Bemes Cau Buou, Golden Palace, Ha Dong, Rung Co Ecopark and Tan Tay Do apartment projects.
Some property experts projected that although the current abundant supply posing more pressure on investors, project developers whose condo projects have good locations, keep on their construction schedules and have good quality would find it not so difficult to sell their apartments.
Safety channel for investment
The government policies have shifted from focusing on economic growth to controlling inflation in the first quarter of this year, while the credit tightening policy has prompted commercial banks to limit their loans. All these factors have negatively impacted on the property market.
However, CBRE said that as investments into the gold market and the stock market have become less appealing, real estate has emerged as a safe channel of choices for many people to put their investments.
Do Thi Thu Hang, head of research and consultant department for Savills Vietnam, seconded the above ideas, saying that the demand for real estate was very huge, as some 53 percent of Vietnam's population are aged under 30 and have a monthly income below 15 million dong. The growing group is believed to increase the huge demand for apartments in the years to come.
Governance - Prime minister receives Chinese deputy FM
Source: VOVNews
Prime minister Nguyen Tan Dung received Chinese deputy Foreign minister Zhang Zhijun, who headed a Chinese government delegation on border negotiation, in Hanoi on April 19.
PM Dung spoke highly of the results of the talks on border and territory issues between the two countries, describing them as an important step to promote friendship and cooperation between the two nations.
He said Vietnam is pleased to see that bilateral cooperation has proved effective, particularly in politics, diplomacy, culture and education and training.
In 2010, the two countries coordinated in successfully organising Vietnam-China Friendship Year and the 60th anniversary of the two countries' diplomatic ties.
The constant growth of two-way trade benefits Vietnam and China, he said, urging both countries to carry out the one-belt and two-economic-corridor programme and early conclude negotiations to sign a five-year cooperation plan.
Regarding the border and territory issues, the PM approved the agreements reached during talks between the two sides, and urged the two countries to effectively carry out them.
On land border issues, both sides needed a common voice and co-ordinated efforts for the early signing of an agreement to facilitate free travel of ships at the mouth of the Bac Luan river and deal with cooperation and exploitation of tourism potential in the Ban Gioc waterfall area.
Regarding the East Sea, basing on the spirit of both comradeship and brotherhood, PM Dung proposed the two sides talk and seek fundamental and long-lasting solutions which are acceptable to both sides for the common benefit of peace, stability, cooperation and development in the region and the world.
Agreeing with the PM's viewpoint on the East Sea, deputy FM Zhang said that the issue needs to be solved on the basis of the comradeship and diplomatic ties between the two countries, to consolidate and strengthen the traditional friendship and cooperation between the two nations.
He informed PM Dung of the outcomes of his talks with deputy Foreign minister Ho Xuan Son on land and sea border issues between Vietnam and China.
China always attaches importance to its relations with Vietnam and wishes the two sides would continue to boost cooperation in diplomatic, cultural, economic and political areas, deputy FM Zhang affirmed.
Vietnam seeks to promote cooperation with Qatar
Source: VOVNews
The Vietnamese government always wishes to promote cooperative relations with Qatar to bring practical benefits for the two countries.
Prime minister Nguyen Tan Dung affirmed in Hanoi on April 19 during his meeting with Qatar Ambassador to Vietnam Mohammed Jaber Abdullah Al-Sulaiti.
He said he hopes that Ambassador will make an active contribution to promoting the friendship between Vietnam and Qatar during his working term in Vietnam.
PM Dung insisted on promoting cooperative relations between the two nations, especially in the field of trade, saying that it was necessary for both countries to soon sign an agreement on visa exemption to foster bilateral cooperation in the fields of banking, oil and gas, energy and labour export.
For his part, the ambassador expressed his wish that Vietnam would create favourable conditions for effectively implementing the trade agreements between the two countries in the near future.
WTO commitments require legal reforms
Source: Vietnambusiness.asia
Since its accession to the World Trade Organisation four years ago, Vietnam has gradually opened its doors to more foreign competition and strived to harmonise its maze of domestic laws with its WTO commitments.
Sections 502 y(d 503 of the Report of the Working Party on Accession of Vietnam to the WTO confirmed, for instance, Vietnam's commitment to a 51 percent voting requirement for shareholders of enterprises to approve management board proposals. National Assembly Resolution No 71, ratifying the WTO commitments, affirmed this position.
However, Vietnam's Law on Enterprises conflicts with this commitment. Articles 52 and 104 of that law provide that "the required percentage of votes, based on charter capital ownership or shares, to adopt a decision of the Member's Council of a limited liability company or the Shareholder's general Meeting of a joint-stock company, is 65 percent."
It is a fundamental principle of law that, when domestic law conflicts with provisions of an international treaty to which the country is a signatory, the latter should prevail. In fact, Vietnam has adopted this fundamental principle, as made clear in Article 6.1 of the Law on Signing and Accession to International Treaties. That article states: "in cases where a legal normative document and an international treaty to which Vietnam is a member conflict with one another on the same matter, the international treaty shall be applied." This principle is reaffirmed by Article 3.3 of the Law on Enterprises.
In 2007, the Ministry of Planning and Investment proposed a draft decree providing 51 percent as the standard voting percentage applicable to all types of enterprises. However, to date, this draft decree has not been adopted. To the contrary, a number of legal instruments have been adopted by various government entities which reiterate the 65 percent voting rule.
Ministry of Finance Decision No 17/2007/QD-BTC, for instance, proposing a model charter applicable to a company listed on the stock exchange, provides for a minimum percentage of 65 percent to adopt a decision. State Bank of Vietnam Official Letter No 2217/NHNN-CNH of March 2007 also reiterates the 65 percent rule.
Pronouncements from the Vietnam Association of Financial Investors, the State Securities Commission, and the Ministry of Planning and Investment, as well as government Decree No 59/2009/ND-CP of July, 2009, have all upheld the 65 percent voting rule.
In practice, provincial departments of planning and investment, which are the authorities in charge of issuing licenses to enterprises, have refused to allow companies to adopt a 51 percent voting rule.
The departments seem to have adopted a very literal interpretation of Resolution No 71, arguing that it applies only to "joint ventures" jointly established by foreign and local partners, and that it does not apply to any other type of enterprise, such as wholly foreign-owned or State-owned enterprises.
However, if Resolution No 71 only applies to joint ventures, the fundamental principles of WTO and the laws of Vietnam, requiring equal treatment among enterprises, have not been upheld.
Indeed, the Law on Enterprises actually eliminated the concept of a "joint venture" as a distinct form of business organisation. As such, this narrow view of Resolution No 71 applied by many provincial authorities has led to the nonsensical conclusion that the 51 percent rule does not apply to any companies.
Also attracting the attention of the business community was recent Ministry of Finance Circular No 122/2010/TT-BTC on price stabilisation. Under Circular No 122, certain enterprises in Vietnam face new price registration requirements, and possible government intervention in setting prices, for a wide variety of products and services.
Vocal champions of the business community, including EuroCham, AmCham, and the ambassadors of Australia, Canada, New Zealand, the US and the European Commission, have argued that the price registration requirements specified in Circular No 122 appear to be aimed at foreign companies and as such are not consistent with WTO commitments prohibiting discrimination. Further, some have alleged that "implementation of the new law has focused primarily on imports from foreign companies, a clear violation of the letter and spirit of Vietnam's WTO commitments."
Retail competition
Newcomers and visitors to Vietnam are also often struck by the near-total absence of well-known global retailers such as Wal-Mart, Tesco, Carrefour, etc. This lies in stark contrast to many other countries in the region, including mainland China which is home to 189 Wal-Mart stores, a number which is growing rapidly. While some argue that keeping out such global franchise giants is critical to preserving Vietnam's unique historical character, it is nevertheless remarkable that, four years after accession to the WTO, so few global retailers are established in the country.
There is no doubt that the economics and demographics of Vietnam are highly attractive to retailers. With a population of nearly 90 million, rapid economic growth, and a youthful population eager to keep up with the latest material trends, Vietnam is a potential gold mine for retailers.
Foreign investors, however, often find that the regulatory challenges of entering the Vietnamese marketplace outweigh the potential benefits. Vietnamese law requires franchise retailers to fulfill a cumbersome economic needs test (ENT) before being allowed to establish any retail outlets beyond an initial outlet, a requirement that suggests a fundamental lack of understanding of basic economics. Once again, Vietnamese domestic law appears to be at odds with its WTO commitments and with the WTO's spirit of market-driven economics.
The ENT is imposed by Ministry of Industry and Trade Circular 09/2007/TT-BTM, Section 4.3(a) of Chapter I, which states: "the establishment of retail sales outlets in addition to the first retail sales outlet shall be considered on a case-by-case basis and shall depend on the number of retail sales outlets, market stability, population density in the province or city where the retail sales outlet is to be set up, and consistency of the investment project with the master plan of such province or city."
This provision, along with related provisions which provide formulas for the "case-by-case" analysis, explains why Hanoi, with a metropolitan population of over 6 million, has a pathetic grand total of two legitimate supermarkets, namely one Big-C and one Metro.
Admittedly, Vietnam's WTO commitments allow for some level of control over the establishment of multiple retail outlets. According to the Schedule of Specific Commitments in Services in Vietnam's WTO accession documents, Vietnam may establish objective criteria for deciding to grant or deny an application for additional retail outlets, including "the number of existing service suppliers in a particular geographic area, the stability of market and geographic scale."
The argument against Circular No 09 is that it fails to provide truly "objective criteria." For example, Circular 09 requires "the sustainability of the investment project to the plans of the province or city" where the additional retail outlet would be located. Whether or not a proposed retail outlet meets this particular criteria is highly subjective.
Simply put, foreign investors are not willing to make a substantial investment in opening one retail outlet, without some level of confidence that they will be allowed to open additional outlets in the future. The business model of large retailers requires a high volume of product turnover, which cannot be accomplished with only a single outlet.
The Ministry of Justice, in collaboration with other ministries and agencies, has taken the initiative in reviewing Vietnamese regulations in goods, services and intellectual property for consistency with WTO commitments. This initiative demonstrates the good-faith efforts of high-level officials to continue Vietnam's advancement towards international standards of law and market-based economics.
But domestic laws in many areas continue to be inconsistent with Vietnam's international obligations. Whether the root cause is protectionism, bureaucratic inefficiency, or ignorance, the nation is obligated to rectify these inconsistencies.
Aust's FM Rudd heads to Vietnam, Germany
Source: Inhua
Australian Foreign minister Kevin Rudd will travel to Vietnam and Germany, local media reported on Monday.
Rudd will leave Australia on Tuesday to meet with Vietnam's foreign minister, prime minister and president in Hanoi.
The primary focus of the meetings will be the future of the East Asia Summit and the growing bilateral relationship.
During his trip in Vietnam, Rudd will also open a new section of Royal Melbourne Institute of Technology University's campus in HCM City.
After that, Rudd will travel to Berlin of Germany for a North Atlantic Treaty Organisation (NATO) foreign ministers meeting on Afghanistan.
"It (the meeting) also provides us with an opportunity to reiterate to all 48 participating states that we're there until the completion of this task (in Afghanistan)," Rudd told Australia Associated Press on Monday.
Events in Libya are also likely to feature in talks.
3.5tr dong re-invested in PetroVietnam is not from state budget: chair
Source: VnEconomy
The issue that Vietnam National Oil and Gas Group (PetroVietnam) received an investment of 3.5 trillion dong from the State Budget has caused many mixed debates recently.
Talking about this issue, Dinh La Thang, Chair of PetroVietnam's Member Board has told the state-run online newspaper VnEconomy that 3.5 trillion dong is not from the state budget,
According to the explanation of Thang, the amount of 3.5 trillion dong is not too big for a large economic group like PetroVietnam. Recently, PetroVietnam also has had to explain with the Finance - Budget Committee of the National Assembly about the use of this money. However, to date there are several National Assembly members that do not understand this money, so the Congress has no consensus on it yet.
According to Thang, in fact, in addition to operating under the Enterprise Law, this group must also comply with the Petroleum Law, which also has its own financial management with decrees promulgated by the government. "Therefore, although PetroVietnam is a business, it does not enjoy fully the conditions of a normal business," Thang said.
That also means that PetroVietnam does not enjoy all profits after payment of prescribed amounts.
Relating to the investment reduction in accordance with the government's Resolution No 11, PetroVietnam's general director, Phung Dinh Thuc, said in the first quarter of 2011, the group developed eight new projects, inaugurated 14 projects, but also reviewed and delayed 19 projects worth 582 billion dong, made the progress extension for 45 investment projects valued at six trillion dong that are not really urgent and difficult in arranging capital, and total value for delayed and progress-extended projects were estimated at nearly 6.6 trillion dong.
However, although the difficulties lie ahead, the PetroVietnam will not cut or delay power projects.
Vietnam looks to slash public spending
Source: VnEconomy
Vietnam is expected to cut public investment by 50 trillion dong ($2.4 billion) or 7.4 percent this year, the central bank said Thursday, in its latest attempt to restore economic stability.
Prime minister Nguyen Tan Dung, who met with state officials late Wednesday to review the implementation of anti-inflation measures announced last month, asked ministries, provinces and industries to reduce their investment capital in various projects, the central bank said in a statement posted on its website. By reducing investment levels, authorities are hoping to curb the amount of cash circulating in the economy, which in theory should cool growth and help bring inflation down.
The National Assembly in November approved a state budget expense of 605 trillion dong for 2011, which was later revised upward by the Ministry of Finance to 676.36 trillion dong. So far this year, ministries, provinces and state firms have cut 3.4 trillion dong from 1,387 projects, the statement said.
Economist Vuong Quan Hoang from Hanoi-based DHVP Research & Consultancy said the government will find it very difficult to cut such a large amount of spending because many of the projects are run by groups with connections to government officials. "It's not in interests of anyone to cut off the funding," the economist said.
In an effort to reduce the financial burden on lower-income and small companies, the government Thursday also said it will provide poor families with financial assistance of up to 250,000 dong a month, and allow small private companies to defer tax payments for a year. It didn't, however, say how much tax obligations they could defer.
The Vietnamese economy remains confronted by major imbalances that have become so serious that authorities recently reversed their pro-growth policy to one that focuses more on containing surging inflation and producing greater stability.
Via a series of tighter monetary and fiscal policies, the Vietnamese government hopes to tame inflation, which rose 13.89 percent in March from a year earlier, the fastest year-to-year pace since February 2009. The government wants to cap inflation at 7 percent this year.
The trade deficit also remains wide, coming in at $1.15 billion in March and $3.03 billion for the January-March period.
Vietnam has also launched a crackdown on trade in US dollars in a bid to bolster the country's dwindling foreign reserves and restore confidence in the local currency, which has been devalued four times in the past 14 months.
The central bank set the exchange rate Thursday for the dollar at 20,703 dong, up from 20,698 dong Wednesday, marking the highest official rate since the country started embracing a market economy two decades ago.
The central bank said it will soon issue new regulations to eliminate the trading of dollars and gold bullion in the free market, in line with the government's steps to stabilise the domestic market.
Meanwhile, the central bank said Vietnam is estimated to have received foreign investment disbursement of $2.54 billion in the first quarter, up 1.5 percent year-to-year.
The country's total money supply, or M2, was up 1.7 percent at the end of March compared with end-2010, and total outstanding loans at banks rose 3.68 percent during the same period, the central bank said.-by Nguyen Pham Muoi
Vietnam saves 3.4tr dong in public investment in Q1
Source: Vietnambusiness.asia
Minister - Chair of the government Office Nguyen Xuan Phuc while speaking at the periodical government meeting said that implementing all the measures to control inflation, stabilise macroeconomic situation, ensuring social life in Resolution 11 has brought back more positive achievements.
Specifically, ministries, cities and provinces have started to save public expenditure by 10 percent including energy saving (electricity), not buying expensive means of transport and others to cut public investment by 1,387 projects with 3.4 trillion dong (according to preliminary statistics of ministries, sectors and localities).
According to Bui Ha, director of Department for National Economy Management under the Ministry of Planning and Investment (MPI), Vietnam is executing capital investment cuts with the measures such as not extending the time of disbursement, no advance planning for 2012 and absolutely reducing the bond government. Particularly, the government of Vietnam will reduce investment credit of the State (through concessional loans for development banks) by about 50 trillion dong.
The measures given by the government are not allocating funds to businesses for new and ineffective investment projects, but the remaining funds will not be collected into the state budget, but allowing the ministries, sectors and localities to use, transfer to another projects that should be completed in 2010 and has given priority to speed up investment.
But under the government's direction in 2011, investing in social programmes will continue to increase to ensure people's lives. In addition, the government has the necessary measures to support people's lives, such as implementation of the roadmap for salary increase from early 2011, adjustment of student loans, subsidies for those who earn 1.9 million dong per month on electricity to support 30,000 dong/household/month and support 250,000dong/poor household (total of 550,000 dong per poor household per year), and others with total financial support for low-income people up to 3.1 trillion dong.
Vietnam will boost local production and continue deficit reduction, especially luxury items such as expensive mobile phones, cars, alcohol, motorcycles... with technical barriers according to the law.
Prime minister Nguyen Tan Dung made the conclusion on some new measures of monetary policy, gold, dollars, ensure foreign currency for imports (petroleum), accumulation; savings in the whole society, especially saving electricity and other unessential expenses, management of real estate market, stability, the route to ensure market transparency, not for speculation, boost the price management.
Vietnam-Cambodia friendship to develop strongly
Source: VOVNews
State vice President Nguyen Thi Doan has expressed her belief that with efforts by states and people, the friendship between Vietnam and Cambodia will continue to grow and flourish.
The vice State President was speaking at a reception for visiting delegation of Cambodian citizens headed by Khun Chhy, former Cambodian Transport minister, in Hanoi on March 29.
She applauded the traditional friendship and mutual assistance and fostered by generations of Vietnamese and Cambodians during the past struggle for national liberation and the current process of national construction and emphasized the need to uphold these precious traditions.
Khun Chhy appreciated assistance from the Vietnamese people to help the Cambodian people escape from genocide and said Cambodia will never forget the help and devotion of the Vietnamese volunteer soldiers in the past.
He informed the host that during the visit the delegation met Vietnamese volunteer soldiers and experts, who had helped the Cambodian people overcome their past difficulties.
The same day, the Cambodian delegation was received by Vu Xuan Hong, President of the Vietnam Union of Friendship Organisations, who expressed his hope that the visit would contribute to boosting the traditional friendship between the two people.
The Cambodian delegation also paid a tribute to President Ho Chi Minh at his mausoleum.
Legal News - Wine, cosmetic imports may be limited to three ports
Source: vietnambusiness.asia
The government may limit the import of wine and cosmetics products to the three ports of Hai Phong, HCM City and Da Nang, according to the Ministry of Industry and Trade.
The move is being considered as many ports that process imports lack facilities to test the quality of wine and cosmetics products.
Income at 5-8.3m dong/month would enjoy PIT exemption
Source: Dat Viet
Ministry of Finance (MoF) has said it is waiting for the National Assembly (NA)'s resolution to give an exemption on personal income tax (PIT) for some taxpayers to lessen difficulties for people amid high increasing inflation context.
Accordingly, under MoF's proposal, the single people with the income of five million dong per month, peope with income of 6.6 million dong per month but having one dependent, and people with income of 8.2 million dong per month but having two dependents will be subject to the tax exemption. The tax exemption will be from the NA's resolution issuance till the end of 2011.
This draft will be submitted to the NA in the session in July 2011. If the NA approves, the tax exemption duration will be implemented in the last six months 2011.
As expected, there will be about 200,000-220,000 people enjoying this tax exemption, accounting for 40 percent of the total PIT payers.
The PIT exemption will not affect much the state budget revenue because the total budget collection from PIT for the whole year 2011 would reach about 29 trillion dong while the total amount of tax exemption would be only three trillion dong.
Government restrictions unable to stop import of non-essential goods
Source: Tuoi Tre
Despite government insistence to restrict import of non-essential goods in 2011, imports continue unabated.
Imports in the first two months of this year have soared sharply as compared to the same period last year.
The government advocates restricting import of essential goods to allow local home made products to reach the local markets with an aim to boost economic growth.
Products that cannot be made well or in sufficient quantities within the country should be given priority for imports.
Products such as various kinds of equipment, materials, state-of-the-art technology, fuel, fertiliser, steel, textile and garments can be imported, as the country is unable to supply adequate amounts.
Import of unnecessary commodities like cigarettes, consumer goods, small automobiles of less than 12 seats, auto parts, motorbikes, cosmetics and alcohol beverages must be locally made.
According to the Ministry of Industry and Trade, import turnovers of non-essential goods reached nearly $1.1 billion in the first two months of 2011, accounting for 7.4 percent of the total import turnover and up 24.8 percent year-on-year.
As many as 10,600 autos worth $180 million and over 266,000 mobile phones worth $7 million were imported, a year-on-year rise of 177.4 percent.
The import of luxurious goods also soared sharply, with a total turnover of $3.42 million, an increase of 36.1 percent over the same period last year.
Cosmetic imports rose 111.3 percent and hair product imports jumped 69.9 percent.
The hike in import of non-essential goods has raised concerns that relevant agencies might not be strictly controlling the import of goods and people not being encouraged to use domestically made goods.
SMEs owned by large firms denied tax extension
Source: Tuoi Tre
Small and medium-sized enterprises which are at least 50 percent owned by large companies are not eligible for the government's one-year tax deferral programme.
Besides, SMEs' income from property, financial, banking, insurance, and securities transactions and services that attract special consumption tax too will not be eligible under the programme. In other words, tax on these incomes has to be paid in the normal course.
A company is considered an SME if it has a capital of less than 10 billion dong and no more than 300 employees.
Duty on used cars may be raised
Source: Vietbiz24
Import of used cars may be levied on progressive duty in respect to car value, in which absolute import tariff on luxuriously and super-luxuriously used vehicles will be higher than current levels, according to Ministry of Finance's proposal, VnExpress reported.
Time to apply the proposal may be May if being approved by the government.
Currently, the lines of used vehicles imported to Vietnam are subject to the absolute tariffs according to capacity of cylinder. Ministry of Finance said, the imposing triggered a paradox that the sorts of super luxury cars like Maybach or Rolls-Royce with the cylinder capacity of more than 4 litres bear the same absolute import duty as luxury vehicles namely BMW or Audi. So the agency said it is right time to re-adjust tariff benchmark so as to be matched with the present situation.
Ministry of Finance recommended two plans of amending absolute tariffs on used vehicles, including a rise in duty on vehicles with cylinder capacity of over 4 litres from $30,000 to $54,000 per unit or imposing of progressive tariff on car value.
Citing a source from the customs agency, the first plan of increasing import tariff on vehicles with the cylinder capacity of over 4 litres was not supported. It is said that applying progressive tariffs on used vehicles in line with unit value is more appropriate with practical conditions. "It is impossible to impose the same import duty on a $500,000 Maybach car and a $50,000 BMW unit", the source added.
Importers also see that a suitable change in import tariffs on vehicles should be done. However, the Ministry of Finance should offer a roadmap and a plan to amend the tariffs.
MOF proposes to remove dividend income and trading taxes, adjust income tax
Source: vietnambusiness.asia
The Ministry of Finance(MoF) has proposed to the government to remove income tax on dividend payment to the shareholders and transaction tax and adjust personal income tax as well, the online newspaper Phapluat TP HCM reported on April 20.
Current tax shareholders have to pay 5 percent tax on their dividend receipt and 1 percent tax on share transferring.
The prime minister of Vietnam agreed on this proposal at the regular meeting on March, but still waiting for the approval of the 13th National Assembly on this July, MoF said.
On other important issue, MoF also asked for raising the minimum income tax level to 5.6 million dong,
MoF affirmed that the personal income tax adjustment will affect on state budget collection, by still ensure the National Assembly's task to raise state budget collection by 7-8 percent and cut recurrent expenditure by 10 percent as saying on the Resolution 11. Personal income tax collection is estimated to reach VND29 trillion this year compared with total state budget collection estimated of VND595 trillion.
The MoF's proposal appears to bring a good news to investors on Vietnam stock market.
Firms must have at least 7.5tr dong to develop mobile network
Source: Intellasia
Pursuant to the Decree No 25/ND-CP guiding the implementation of some articles of the Law on Telecommunication, businesses those want to be licensed to set up terrestrial telecommunication network using the radio frequency band (virtual mobile network) must have legal capital of 500 billion dong.
At the same time, these enterprises must commit to invest at least 2.5 trillion dong in the first three years and minimum 7.5 trillion dong in 15 years to develop the telecommunication network in accordance with the licence. If the enterprises want to establish the terrestrial telecommunication network without using the radio frequency band (virtual mobile network), they must have the legal capital of only 300 billion dong and commit to invest at least one trillion dong in the first three years and minimum three trillion dong in 15 years for the network development.
Businesses those want to set up satellite fixed and mobile telecommunication network must have a legal capital of 30 billion dong and pledge to invest at least 100 billion dong in the first three years to develop the telecommunication network.
These regulations will become effective from June 1, 2011.
[Thank you for your interest in this topic. This communication may be considered promotional in nature.]
With Compliments
Oliver Massmann
Rechtsanwalt
General Director – Duane Morris Vietnam LLC
Hanoi Office: 13th Floor, Suite 1307/08 Pacific Place, 83B Ly Thuong Kiet, Hoan Kiem District
Ho Chi Minh City Office: 15th Floor, Suite 1503/04, Saigon Tower, 29 Le Duan Street, District 1
Tuesday 26 April 2011
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