180118Intellasia Finance Vietnam - HKBAV · With Chinese competition, new glass licences on hold 19...

18 January 2018

finance & business news

FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Reference exchange rate up 15 VND 1Real estate credit up nearly 9pct from December 31, 2017 2Which banks will have difficulty in raising capital to meet Basel II? 2Why do banks' profits increase unexpectedly? 3Many banks cautiously set profit plan for 2018 3Will P2P lending compete directly with banks and finance

companies? 5EIB loans to help ease ODA departure 6TPBank receives PCI DSS 3.2 certification 7ACB's profit in 2017 estimated to swell 59pct y-o-y 8VIB posts strong profit growth in 2017 8Sacombank to sell over 81 million treasury shares 9Japanese insurer records strong growth in Vietnam 9CPTPP Serving Vietnam as Opportunities and Challenges 10Standard Chartered forecasts 6.8pct GDP growth for Vietnam 12Experts skeptical about high economic growth in 2017 12Capital Economics: Growth to slow from 10-year high 13VN effectively uses ODA from Korea: KOICA 14Vietnam runs $5.9 billion trade deficit with SEA region 14Auspicious start to Vietnamese rice export in 2018 15Japanese auto makers halt exports to Vietnam in wake

of tightened quality checks 15Go slowly on VAT 16Govt should offer more tax incentives for auto parts 18Environment tax hike on fuels postponed 19With Chinese competition, new glass licences on hold 19Binh Duong plans to lure $1.4 billion FDI capital in 2018 20Investment in startups expanded 21'Shop and Store' a new kind of event 21Experts decry Vietnam's risky coal compulsions 22Plastics growth garners strong interest 24Real estate still facing unresolved legal issues in 2018 25Co-living and green: the latest trends to sweep Vietnam's

real estate market 26

Local brands outperform multinational rivalsreports 2780pct of shops report revenue growth in 2017 28More firms register investment in renewable energy in Bac Lieu 28Ha Nam pledges favourable conditions for foreign investors 29Infrastructure ups Thu Thiem's appeal 29G20 billions feed coal-fired future 31Kagoshima prefecture's firms wish to invest in Vietnam 32More UK businesses expected to invest in Vietnam 32

BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33Business Briefs 18 January, 2018 33UPCoM the only index in positive territory 34VN Index surge is cause for concern 35'Golden real-estate land' running out in HCM City 36Vietnamese using more premium products as incomes rise 37Vietnam caps promotions for prepaid mobile subscribers 37Vietnam Customs proposes building bridge to China to

facilitate border trade 38Vietnam helps Cambodia increase cashew output 38Vietnam sees sharp rise in cruise ship visits 39HCM City suspends several BOT projects 39Con Dao airport to be upgraded for bigger aircraft 40Defense ministry approves VietBamboo Airlines project 40Direct flight launched between China and Hanoi 41Doosan Vina urged to expand operation in Vietnam 41Long An power centre hits delays 42Billionaire Thao's company replaces Posco E&C in Splendora 42Jollibee celebrates 100th store in Vietnam 43Pegasus Vietnam to carry out Outward Bound Vietnam

with BIDV aid 43US firm eyes Vietnam's petrochemical industry 44Vietnam's top taxi firm fears bankrupcy in the era of Grab, Uber 45

FINANCE
FINANCEReference exchange rate up 15 VND
18/JAN/2018 INTELLASIA| VNA

The State Bank of Vietnam raised the daily reference VND/USD exchange rate by 15 VND to 22,406 VND/USD on January 18.With the current trading band of +/- 3 percent, the ceiling rate applied to commercial banks during the day is 23,075 VND/USD and the floor rate 21,739 VND/USD.The opening hour rates at commercial banks stayed rather stable, with Vietcombank and Vietinbank maintaining the same rates as on January 17. The greenback is bought at 22,675 VND/USD at the two banks, and sold at 22,745 VND/USD.Meanwhile, BIDV cut both rates by 5 VND, listing the buying rate at 22,675 VND/USD and selling rate at 22,745 VND/USD.https://en.vietnamplus.vn/reference-exchange-rate-up-15-vnd/125076.vnp

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Vietnam finance & business 18 January 2018

Real estate credit up nearly 9pct from December 31, 2017

18/JAN/2018 INTELLASIA| DTCK

According to the State Bank of Vietnam (SBV), the total credit limit for BOT, BT projects in transportation sectors was nearly 169 trillion dong as of September 30, 2017 compared to the outstanding credit of nearly 91 trillion dong, up nearly four percent from the end of 2016, accounting for about 1.5 percent of oustanding credit to the econ-omy.Credit to real estate sector as of November 30, 2017 was 416 trillion dong, up nearly nine percent from December 31, 2016, making up approximately seven percent of the oustanding credit to the economy.The outstanding loans for housing demand as of November 30, 2017 was more than 552 trillion dong, up more than 24 percent from January 2017, representing about nine percent of the general oustanding credit.

Which banks will have difficulty in raising capital to meet Basel II?

18/JAN/2018 INTELLASIA| DIEN DAN DOANH NGHIEP

The Capital Adequacy Ratio (CAR) of joint stock commercial banks participating in the pilot of Basel II including ACB, VPB, MBB, TCB, VIB and MSB is always very high. Therefore, these banks may not face many obstacles with the aforementioned road-map. On the contrary, some banks will encounter this problem.That statement was given in the recently updated report about the banking sector by Viet Dragon Securities Company (VDSC). Accordingly, the Basel II will be implement-ed from 2019 for 10 pilot banks and 2020 for the remaining ones.Since the end of 2016, the State Bank issued Circular No.41 on CAR for banks, foreign bank branches. Accordingly, 10 banks participating in the Basel II pilot must officially apply CAR in accordance with Circular No.41 and by 2020; all the remaining ones will have to apply CAR following this Circular.The CAR at the end of Q2/2017 slightly decreased compared to the end of 2016 due to strong credit growth. The CAR varies widely between state-owned banks and non-state joint stock commercial banks. Accordingly, CAR of joint stock commercial banks participating in the Basel II pilot including ACB, VPB, MBB, TCB, VIB and MSB has al-ways been very high. Therefore, these banks may not face many obstacles with the aforementioned roadmap.On the contrary, CAR of VCB is approximately 10 percent and that of BID and CTG is less than 10 percent. As such, state-owned banks will have to race to increase capital to be able to meet the aforementioned roadmap. As a result, the growth potential as well as the risk of dilution in the next 2-3 years will be relatively large in state-owned banks.VCB with good asset quality and carefully managed lending portfolio, high risk pro-visioning is supposed not to have too large dilution pressure after raising capital.According to VDSC, after having the information that BID signed memorandum of un-derstanding with Hana Bank (South Korea), the market expects that this bank will be BID's strategic partner in the near future. If this deal is successful, on the one hand, it will lead to dilution pressure. On the other hand, it will bring about many positive im-pacts to the bank such as the significant improvement in Tier 1 capital, the support in terms of management and technology from strategic partner.Among three listing state-owned banks, CTG is unlikely to raise capital because the state ownership rate at CTG has reduced to the minimum prescribed level (about 65 percent). The additional issuance to existing shareholders is also infeasible when the State plans not to invest more in the banking sector. The current measure for raising CTG's equity is to make dividend payment by shares, and this method was mentioned by the government in the regular meeting at the beginning of 2017 and is expected to be realised and issue non-voting shares in order to ensure the dominating right of the state bank.Beside the separate issuance and dividend payment by shares, VDSC realised that banks are also restructuring their investment portfolio to increase equity because in-vestment in other credit organisations and insurers are items that must be excluded from the calculation of Tier 1 equity. Typically was VCB's capital divestment from

Intellasia 18 January 2018 2 / 46

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credit organisations and other consumer finance companies or CTG's capital divest-ment from Aviva insurance. For VCB, it is estimated that the bank's Tier 1 capital may increase to more than 12 percent after divesting from other credit organisations.

Why do banks' profits increase unexpectedly?

18/JAN/2018 INTELLASIA| TIEN PHONG

At this point, some commercial banks have announced business results in 2017 with significantly improved profits. While the group of state-owned commercial banks have reported profits surpassing the plan, profits of the group of joint stock banks also surged.So far, all the four state-owned commercial banks have announced 2017 business re-sults. Vietcombank officially led the system with the pre-tax profit of 11.018 trillion dong after having put sufficient provision. Vietinbank's pre-tax profit also touched more than 9.2 trillion dong. BIDV also surpassed itself compared to the previous year with the additional profit of more than one trillion dong, bringing the profit in 2017 to 8.8 trillion dong. Agribank, after a period of restructuring, also unexpectedly bright-ened with the pre-tax profit of 5.5 trillion dong.Currently, Military Bank (MB) is leading in the group of joint stock commercial banks having no more dominating state capital with 5.355 trillion dong. However, this posi-tion may be "occupied" by such banks as VPBank or Techcombank that has not an-nounced its profits yet. Meanwhile, the pre-tax profit of Asia Commercial Bank (ACB) is forecasted to reach 2.290 trillion dong. This profit will bring ACB back to the "golden age" of 8-9 years ago.A few days ago, Eximbank announced to reach more than 1.118 trillion dong profit, an increase of more than 2.5 times compared to 2016. The newly listing bank i.e. HDBank is also expected to reach the profit target of nearly two trillion dong. Meanwhile, Lien Viet Post Bank said it will exceed the profit target of 1.7 trillion dong and reach the tar-get with nearly 1.8 trillion dong. TPBank reported the profit of 1.250 trillion dong and An Binh Bank achieved the profit of 600 billion dong.Where do banks' improved profits come from? Bankers' analysis shows that this year, banks have improved revenues from service rather than just relying on credit. At Vi-etcombank, Vietinbank and MB, this ratio increases sharply, accounting for few tens of percent of total revenue, thereby increasing profit. Along with that, the handling of bad debts after having for provision also caused banks to "save" a significant amount.Lower level banks such as Eximbank or Sacombank, whose market share and profits have decreased over the last few years due to the strongly increased bad debt have seen the bad debt settlement as the major source of income that brings about good business results. For example, in Eximbank, Nguyen Van Quyet, CEO of Eximbank said 2017 was the first year after the past 3-4 years that Eximbank returned with the profit of more than one trillion dong. That was because Eximbank has strongly han-dled bad debt and will continue strengthening the settlement of oustanding debt in 2018.Commenting about the profit picture of the banking sector last year, Nguyen Tri Hieu said the high profit of the banking system in 2017 was firstly thanks to very positive credit growth this year. "Credit has always been the biggest source of income for banks. With the profit growth of 18.1 percent in this year, banks' positive profit growth is a matter of course", said Hieu.

Many banks cautiously set profit plan for 2018

18/JAN/2018 INTELLASIA| DTCK

In spite of having achieved the 2017 profit plan early, leaders of many banks said there are many challenges that need to be solved. Therefore, they will carefully consider 2018 business targets before submitting to the upcoming annual general meeting.In 2017, many banks achieved positive profit results thanks to the strongly improved income from credit and service, and the reversed provisioning when the bad debt set-tlement progress was strengthened after the Nation Assembly issued Resolution No.42/2017/QH14 on pilot bad debt settlement of credit organisations (effective from August 15, 2017).


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Le Van Quyet, CEO of Eximbank said in 2017 the bank's major business targets reached and exceeded the plan, especially the pre-tax profit of more than one trillion dong, 2.5 times higher than in 2016 and completing more than 169 percent of the plan.With positive results in terms of finance, Eximbank completed the process of adjusting capital and credit structure in order to ensure regulations on capital safety of the State Bank. This is the basis for the stable and sustainable development of the bank while the cumulative loss and transaction warning of Hochiminh Stock Exchange for EIB shares over the last two years will be removed soon.However, Quyet said in 2018, besides basic advantages from operating results in 2017, Eximbank will still have to focus on settling challenges and outstanding things from many previous years in the restructuring process to healthilise operations.First is to improve the profitability by focusing on settling bad debt and large scale non-profitable backlog.Second is to strengthen the growth of total assets by expanding operation network in provinces having much potential for development as well as expanding customers, gradually narrowing market share gap with competitors.Third is to simultaneously carry out New Eximbank project in all levels to improve the quality of governance, management, operation effectiveness and labour productivity across the system.Regarding profit plan, the Board of directors and Management Board of Eximbank will consider to propose a suitable level with the business situation in the context that cred-it is expected to improve but is difficult to have unexpected development.Sacombank said the bank's total assets as of the end of 2017 will reach more than 364 trillion dong, up 10.6 percent; the total capital mobilisation from credit organisations and the people reached nearly 323 trillion dong, up 11.4 percent; the oustanding credit was more than 219 trillion dong, up 12.6 percent from the beginning of the year.Especially, Sacombank's profitability has gradually improved with the total income of 8.2 trillion dong, up 33 percent from 2016, creating financial resources to settle backlog. Sacombank's income from service in 2017 achieved good growth, reaching 2.395 tril-lion dong, of which income from traditional service swelled 29.6 percent.At the end of 2017, the bank settled more than 19 trillion dong bad debt and oustand-ing assets. Of which, the liquidity of receivables was nearly 2.8 trillion dong, 2.6 trillion dong debt was sold following market price to the Vietnam Asset Management Com-pany (VAMC); more than 14.2 trillion dong bad debt and receivables were recovered. Sacombank's bad debt proportion at the beginning of 2017 decreased to 4.28 percent and is expected to decrease to three percent in 2018.Sacombank soon surpassed its profit target in 2017 when reaching more than one tril-lion dong as of September 2017. However, when being asked about the operating plan in 2018, Duong Cong Minh, Chair of Sacombank said "The most important thing is that we have to accelerate the restructuring process following the scheme, giving priority to the bad debt settlement to improve asset quality. The goal is to strengthen retail pro-fession, increasing revenue from service segment to make positive contribution to the bank's profit".According to Minh, the bank's management view is transparent and thorough settle-ment of cross-ownership, diversifying shareholder structure and saving costs reason-ably during operation process.Vietcombank has just announced the profit of 10 trillion dong in 2017, up 20 percent from 2016 and 8.7 percent exceeding the plan. This was the highest profit level among banks that gave the expected profit in 2017. According to the forecast of Saigon Secu-rities Company (SSI), Vietcombank said it may earn 13.046 trillion dong profit in 2018.BIDV earned the record profit of more than 8.8 trillion dong in 2017 while other major indicators exceeded the plan. The total assets touched 1.176 trillion dong, up 16.7 per-cent from 2016 and maintaining the No.1 position in asset. The total mobilised capital was over 1.106 trillion dong, up 17.9 percent from 2016.The total credit and investment scale was 1.136 trillion dong, up 18 percent from 2016, in which lending to the economy was 862.604 trillion dong, up 17 percent and reckon-


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ing 13.12 percent of the credit scale of the entire banking sector. The difference between income and spending achieved the best results ever with 24.032 trillion dong, up 44 percent from 2016.Earlier, if the "trillion dong" profit club belonged to state-owned joint stock banks and leading banks, there are many medium scale banks now. For example, last year, HD-Bank earned 2.420 trillion dong profit, TPBank earned 1.205 trillion dong profit and OCB earned one trillion dong profit.Profits surged last year but many banks were not so optimistic about the prospect in 2018 because competition in the maintenance and expansion of the mobilisation/credit market share is increasingly intense; lending rates must gradually decrease, while in-put costs are difficult to go down.

Will P2P lending compete directly with banks and finance companies?

18/JAN/2018 INTELLASIA| TRI THUC TRE

Peer-to-peer (P2P) lending is considered the most successful model of the world's fi-nancial technology (fintech) which has caused banks' revenue to drop by billions of USD.Recently, the term P2P lending has been mentioned quite a lot in the market of Viet-nam, especially after Hung Viet Green Agriculture Company a listed firm on Hanoi Stock Exchange (HNX) renamed into HVA Investment Joint Stock Company and changed its business line from agriculture to investment and financial consulting, with the expectation of achieving trillion dong profit after six years of operation.Prior to HVA, Tima was also noted in the market. This is a company operating in tech-nology and financial consulting, providing services such as consultancy, connection, customer appraisal, and services supporting the operations of lenders.In the context when mobilisation rates are low while lending rates are high, P2P organ-isations around the world have been established and started booming in recent years. There are many assessments mentioning that the boom of P2P lending (which directly connect two people without having to go through banks) in the world is the most suc-cessful model of fintech a new trend that links technology and finance. In late 2014, Lending Club, the biggest P2P lending company officially listed its shares. John Mack (a former Morgan Stanley executive) and former US Secretary of the Treasury Larry Summers are both members of Lending Club.Similar to Uber and Grab which connect people having available cars with people in need of mobility, P2P lending companies have replaced the role of banks, creating a system in which two parties can directly contact each other and come to an agreement. These companies rate credit score and charge for connectivity instead of enjoying the interest rate difference between mobilising and lending.There are currently five largest P2P lenders in the world, including Lending Club, Prosper, SoFi (all in Sanfrancisco), Zopa and RateSetter (in London), which have cre-ated millions of loans. In the Europe and China, the P2P model is also developing fairly strongly but in a smaller scale.The operation of fintech companies in Vietnam is still primitive and has not reached the standards of the global P2P. These companies are earning from the difference be-tween lending and mobilisation rates, and may charge additional fees from users.However, these companies are mobilising at higher rates than banks, and lending at lower rates than finance companies. Therefore, they have been noticed by many con-sumers.There are some well-known names in Vietnam's fintech market, such as Tima, SHA, and Mobivi, etc. Nevertheless, according to Nguyen Van Thuc, general director of Ti-ma, most of these companies are running trial, and only Tima is leading the market with significant scale of transactions and number of customers, thanks to its serious and methodical investment in this model.It is said that as having high lending rates, P2P is similar to black credit lending. How-ever, like the operations of finance companies, P2P companies like Tima have full busi-ness registration in accordance with the law and their operations have a clear foundation.


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In addition, P2P companies like Tima are applying technology to simplify loan appli-cation, quickly connecting borrowers and lenders, supporting the lenders to minimise the appraisal time, and making decision based on multi-dimensional credit scoring system. The purpose of launching P2P model in the world is to help borrowers access capital easily at the most reasonable costs, while helping financial units save time and operational costs, and expand their customer base. P2P companies in Vietnam are also following this direction.What users get when borrowing P2P loans?According to Dr Bui Quang Tin, P2P is the mechanism of direct and unsecured lend-ing. This is a way to connect people having idle fund and people in need of capital via a new online platform with advanced technology. Dr Tin also assessed that the re-markable convenience of P2P lending and the complicated appraisal process and strin-gent requirements of banks will help this model thrive. Some P2P companies in Vietnam have even received investment of foreign investors.There are concerns that lenders must prevent risks in the direct lending activities be-tween banks or finance companies with customers, but the risks of P2P lending go along with borrowers and lenders, and the middleman will not bear any risks. How-ever, according to Thucgeneral director of Tima, these companies are still have respon-sibility. They must look for good customers and control the risks of bad debts in order to not only earn profits via P2P activities but also retain credibility with customers the most important thing in business."We always monitor the loan from negotiation process between the two parties to the disbursement and settlement processes so that we can get feedbacks from both sides to optimise our process, technology and products in order to provide the best services to customers. In the future, we will cooperate with insurance firms to engage in loan insurance, ensuring that lenders will not lose money if risks may occur", said Thuc.Are P2P companies the rivals of banks and finance companies?According to Thuc, banks and finance companies are one of the key partners in P2P model with the role of being lenders. P2P companies do not compete but support fi-nancial organisations in finding customers and run the business, which is a win-win relationship. Rivals are only those operating in the same model.However, like banks or finance companies, P2P units or electronic-wallets will not pay much attention to fees, but target certain groups of customers to sell products. Accord-ing to Thuc, his company in the near future will boost the provision of credit scoring services and will apply fees to VIP accounts of lenders operating on the exchange, cor-responding to the value that the company brings to customers. These will be the prof-itable platforms for Tima in the near future.

EIB loans to help ease ODA departure

18/JAN/2018 INTELLASIA| VIR

While Vietnam will no longer receive preferential loans from the World Bank and the Asian Development Bank starting this year, the gigantic European Investment Bank is amplifying its presence in the country, with loans offered at an interest rate of almost 0 per cent and focused on infrastructure projects.Asked by VIR whether the European Investment Bank (EIB) is interested in investing in many large-scale domestic infrastructure projects in Vietnam, such as Long Thanh International Airport now in the design and site clearance stage, the expansion of Noi Bai International Airport, and the North-South Expressway, Jonathan Taylor, EIB vice president responsible for Asian operations, said that EIB would need to look at details of each project much more closely before making any investment decisions."But in principle, these are areas that are full of great potential and can be done [by EIB]," said Taylor, who was paying a working visit to Vietnam, the first high-level visit by EIB to the country in the past five years. "All projects that we invest in must be thor-oughly appraised, have added value, and be able to generate profit."Leaders of Vietnam's government and ministries want EIB to invest into more infra-structure projects in Vietnam, and I have suggested that they come to EIB's headquar-ters in Luxembourg to propose new projects."


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Ambassador Bruno Angelet, head of the Delegation of the European Union to Viet-nam, told VIR that this visit by Taylor "is very important to EIB's investment policy in Vietnam, meaning the bank will invest more in the country via competitive loans."Last week, Taylor announced that EIB will provide euro 143 million ($170.63 million) for construction of Line 3 of the Hanoi Metro and purchase of new trains on the route.Once operational, the 12-station, 12.5 kilometre line will transform public transport in Hanoi. "Daily travel for hundreds of thousands of people will be transformed by ex-panding urban transport in Hanoi with construction of this new line of the Hanoi Met-ro," Taylor said. "It will also help reduce transport costs and cut polluting emissions."This new loan will raise EIB's total loans for Vietnam to euro 710 million ($852.8 mil-lion) since 1998, when the bank provided the country with its first loan.Under EIB's business strategy, Vietnam is a key partner for the European Union in Asia. "I would affirm that we want to increase our presence in Vietnam via more com-petitive loans. The strengthened EIB engagement in Vietnam will unlock new invest-ment across crucial sectors in the years to come," Taylor added.With a budget of over euro 550 billion ($654.5 billion), EIB is the long-term lending in-stitution of the European Union, owned by its member states. The bank, which annu-ally uses euro 80 billion ($95.2 billion) for investing in new projects, makes long-term finance available for sound investments in order to contribute toward EU policy goals.The first loan of EIB to Vietnam was for euro 55 million ($66 million) in 1998, used to-ward the construction of a 400km-long gas pipeline from the Nam Con Son basin in Vietnam's East Sea to the region around HCM City.In recent years, EIB has also supported transport, renewable energy, and energy effi-ciency projects across Vietnam in partnership with Vietnamese banks.EIB loans for Vietnam do not qualify as official development assistance (ODA), which has a grant element of at least 25 per cent, but are loans with very low interest rates.The Asian Development Bank plans to cut preferential ODA for Vietnam from January 2019, becoming the second international financial institution to do so after the World Bank stops supplying the country with preferential ODA this year.

TPBank receives PCI DSS 3.2 certification

18/JAN/2018 INTELLASIA| VNS

Tien Phong Commercial Joint Stock Bank (TPBank) in Hanoi received the Payment Card Industry Data Security Standard (PCI DSS) certification on Tuesday.PCI DSS, the latest version 3.2 from the US ControlCase, is a comprehensive set of re-quirements for enhancing cardholder data security around the storage and handling of a customer's credit card information.TPBank met with 12 strict requirements relating to information safety policies, IT in-frastructure and data processing to ensure safety for card information. With the high security, the bank's customers can be protected when using card services.Nguyen Hung, TPBank's general director, said information security has been the most important factor for banks in the digital area. "This showed the bank's interest and se-rious investment in ensuring system security," Hung said.Suresh Dadlani, ControlCase's managing director, said he valued the implementation of PCI DSS at TPBank. He forecast that the bank would continue to see rapid growth in digital banking services based on the security system.Earlier, TPBank also cooperated with different card organisations, such as Visa to de-velop contactless TPBank Visa Paywave cards, and with Napas to issue domestic chip cards. It was the first bank in Vietnam to introduce cards with two latest technologies in the market.Thank to the IT foundation, TPBank has been one of the banks with a strong growth in new cardholders.Last year, it issued hundreds of thousands of new cards nationwide.PCI DSS standard was established by the Standards Council of Security for payment cards, including the founders: Visa, MasterCard, American Express (AMEX), Discover Financial Services and JCB International. PCI DSS standard was developed to help or-ganisations protect card payment data against fraud and illegal data usage.


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ACB's profit in 2017 estimated to swell 59pct y-o-y

18/JAN/2018 INTELLASIA| NDH

According to the latest data from Asia Joint Stock Commercial Bank (ACB), as of the end of 2017, the bank's total assets increased 18 percent, the deposits swelled 17 per-cent and credit hiked 20 percent.The bank is estimated to achieve the pre-tax profit of 2.650 trillion dong, up 59 percent from 2016.ACB exceeded the whole year profit target with two-digit percentage, while the accu-mulated debt ratio in Groups 3-5 at the end of the year is being controlled at 0.72 per-cent.Recently, ACB was selected to be one of the six pilot banks to cooperate with the Viet-nam Asset Management Company (VAMC) to settle bad debt thoroughly.ACB share price in 2017 had spectacular growth. By the end of the trading session on December 29, 2017, ACB stood at 36,900 dong per share, doubling from the end of 2016.Recently, on January 9, Vietnam Security Depository Centre (VSD) announced to have transferred the ownership rate of more than 154 million ACB shares. Accordingly, the transferor was Standard Chartered APR Limited and Standard Chartered Bank (Hongkong) Limited.As such, after 12 years of sticking with this bank, Standard Chartered officially with-drew from ACB. Earlier, Andrew Colin Vallions representative of the equity at Stand-ard chartered also left the position as member of ACB's Board of directors in November.

VIB posts strong profit growth in 2017


The Vietnam International Bank (VIB) has reported pre-tax profit of over VND1.4 tril-lion (US$62 million) in 2017, surging 100 per cent year-on-year or far surpassing the yearly target.VIB's total assets also saw a positive yearly increase of 18 per cent to VND123 trillion ($5.4 billion), while the bank's total credit balance amounted to approximately VND90 trillion ($3.95 billion), up 26 per cent year-on-year, according to its business results, which were released on Tuesday.As per the results, the bank's capital adequacy ratio (CAR) was 13.1 per cent, its ratios of non-performance loan (NPL) and return on equity (ROE) stood at 2.49 per cent and 12.7 per cent, respectively. Earnings per share were VND2,000, which was considered a high rate among domestic banks.On January 17, 2017, VIB debuted more than 564.4 million shares on the Unlisted Pub-lic Company Market (UPCoM), a move that the bank hoped would create transparen-cy in its activities, share price, market capitalisation and share liquidity, to make it easier for investors to make decisions.After 12 months, the bank's share price has increased by 71 per cent to VND29,200 per share from VND17,000 on the first trading day.Meanwhile, VIB has also been in the top ranking of Moody's for many consecutive years. As one of 10 banks selected by the State Bank of Vietnam to pilot Basel II, VIB said it will carry out Basel II before the deadline set by the State Bank."We are making greater efforts in ensuring the bank's operation with the best and most transparent standards," VIB general director Han Ngoc Vu said.In the years to come, VIB will focus on expanding its scale and continue perfecting the quality of products and services, the bank said.Top priority will be given to expanding its retail operations, consolidating its leading position in a number of products catering to individuals, small and medium-sized en-terprises, bettering customer service, improving labour productivity and bettering risk control in line with international standards.The bank's 2018 shareholders meeting will be held in late March.http://bizhub.vn/banking/vib-posts-strong-profit-growth-in-2017_291495.html


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Sacombank to sell over 81 million treasury shares

18/JAN/2018 INTELLASIA| NHIP CAU DAU TU

On January 15th, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank, HoSE: STB) has accounted the resolution of the Board of directors on the sale of more than 81.56 million treasury shares, equivalent to 4.33 percent of the bank's charter capital. This deal is based on the Sacombank's post-merger restructuring Scheme approved by the State Bank of Vietnam.At STB's market price of 15,100 dong per share, Sacombank may gross over 1.232 tril-lion dong after this sale of treasury shares.In the early days of the year, the trading of STB shares have been fairly exciting. Par-ticularly, after the bank announced positive information about the settlement of bad debts, STB liquidity has sharply risen, regularly reaching over 15 million shares per session. In the session on January 10th, the trading volume of STB was up to over 49 million shares, the highest liquidity in many years.Along with the growth in volume, STB shares have recorded increase in price. STB's price has jumped from 12,850 dong per share on December 29th 2017 to 15,100 dong per share at the time of this writing, equivalent to an increase of over 17 percent, more than two times larger than the increase of VN Index.In early 2012, Sacombank repurchased 100 million shares at around 13,000-15,000 dong per share with the aim to stabilise the stock market and protect the interest of Sa-combank shareholders. However, at that time, there was rumour about an acquisition of Sacombank and many people questioned the true purpose of Sacombank's repur-chase of treasury sharesa defensive move to avoid being taken over or the divestment of major shareholders?Currently, not only Sacombank wants to sell treasury shares, large banks like Export Import Commercial Joint Stock Bank (Eximbank) and Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) have also registered to sell Sacombank shares.Le Van Quyet, member of the Board of directors cum general director of Eximbank, talked to the press that the bank wants to take advantage of the favourable stock mar-ket to accelerate the divestment in Sacombank. Eximbank said that it now only holds 50 million STB shares from the 165.2 million shares in the previous time.

Japanese insurer records strong growth in Vietnam


Life insurer Dai-ichi Life Vietnam collected $350 million in premiums in 2017, securing its foothold in one of Asia's fastest-growing insurance markets.Dai-chi Life Vietnam has just released its 2017 business results, which states that the insurer now takes up 12 per cent of the market share in the Vietnamese life insurance segment. The total premium gained in 2017 amounted to VND8 trillion ($350 million).With these positive results, Dai-ichi Life is now Vietnam's third biggest life insurer in terms of total premiums. The firm now serves two million Vietnamese customers via a network of 1,200 employees and 70,500 professional advisors.Throughout 11 years of operations in Vietnam, Dai-ichi Life has built the third largest distribution network among all life insurers, running 260 offices in all provinces across the country.The firm also received the Third Class Labour Medal today in HCM City. At the cere-mony, managing director Takashi Fujii noted that Dai-ichi Life Vietnam would contin-ue its strategy as a socially responsible insurer."We would like to blend our growth with social responsibilities. This is the core mis-sion of Dai-ichi Life Vietnam," said Fujii.According to the General Statistical Office, the Vietnamese life insurance market grew by 29 per cent in terms of new premiums in 2017, reaching VND65 trillion ($2.8 bil-lion). The country is now one of Asia's fastest-growing markets thanks to a young pop-ulation, a burgeoning middle class, and the low penetration rate of insurance products.http://www.vir.com.vn/japanese-insurer-records-strong-growth-in-vietnam.html


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CPTPP Serving Vietnam as Opportunities and Challenges

18/JAN/2018 INTELLASIA| MODERN DIPLOMACY

CPTPP is originated from the Trans-Pacific Strategic Economic Partnership Agree-ment (TPSEP) (it is also so call P4) signed in 2005 by Singapore, Chile, New Zealand and Brunei. Since September 2008, the United States, Australia, Peru, Vietnam, Malay-sia, Canada, Mexico and Japan have jointly negotiated at the aim of setting up the Trans-Pacific Partnership Agreement (TPP). The TPP negotiation process ended in 2015 under the agreement of the 12 member states; however, Trump administration announced its withdrawal from the agreement in January 2017. After a number of ad-justments, including postponing the implementation of the 20 TPP provisions with the expectation that the United States would return to the Agreement, the 11 remaining TPP members unanimously continued to promote this process by establishing Com-prehensive and Progressive Agreement for Trans-Pacific Partnership -CPTPP). After completely reviewing the content and approved by the member parliaments, estimat-ed by March 2018, CPTPP will officially become a large economic zone in Asia-Pacific with a population of over 460 million, contributing 14 percent of world GDP and 1/6 of global trade.The agreement is expected to establish a new common framework for regional free trade arrangement for Asia-Pacific countries, to support trade, to attract foreign invest-ment, and to promote institution reformation in those countries. CPTPP has the basic advantages as the members of the negotiation are the countries that have been strongly committed to the trade liberalisation. Given the disclosed commitments, CPTPP is con-sidered as a model treaty for the 21st century because of its overwhelming scale and influence in comparison with other trade agreements regionally and globally.Given the competitiveness, the economic size and the inadequacies of the current in-stitutional system, it is surprised that Vietnam has strongly participated in CPTPP. Compared with other members, it has the least competitive economy and the loosest legal system. Despite its 20-year-old experience in the process of international econom-ic integration, Vietnam lacks the practices in a highly competitive and demanding in-tegration environment since it is only familiar with first-generation FTAs, where the open commitments and reform pressures are readily accepted in a transitional and dis-tinctive economy.Meanwhile, CPTPP's regulations set out in the negotiations are evaluated as far be-yond the ability of the current economy of Vietnam. What is the motive of Vietnam to join CPTPP?Given the economic size of the members and the terms of trade liberalisation, joining CPTPP is obviously advantage to empower Vietnamese economy in the Southeast Asia in terms of economic growth, trade as well as FDI attraction. In the economic per-spective, Vietnam is a country to achieve the most benefit from the CPTPP.Firstly, the opportunities to increase the export of goods that are the advantages of Vi-etnam (i.e. textiles, footwear, electronic products and equipments) are relatively high by combining the tariff reduction and the experiences in these markets.Secondly, the attraction of foreign investment into Vietnam is greatly promising. The access to large markets such as Japan and Canada together with the clearer commit-ments to improve the investment environment and protect intellectual property rights will become a significant attraction for international investors. Moreover, Vietnam, un-der the framework of CPTPP, is able to attract large inflows from the member coun-tries through the membership of regional economic organisations such as Afta and ACFTA.Thirdly, the chances of faster economic growth are strongly wide. The expansion of the major export industries such as textiles, footwear, fishery, etc., will help stimulate the income growth from domestic production, thereby support the increase of the overall demand.Fourthly, Vietnam will have an opportunity to form a more comprehensive economic structure. CPTPP will urge the domestic investors as well as the regional ones to invest in the supporting industries to create local material resources given the extremely high standards on the place of origin.


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Fifthly, it is a chance to complete the institutions that govern the market economy. CP-TPP sets out a clear legal framework for not accepting concessions to any business. Be-cause of its high and foreseen requirements on policy transparency, compared to many other agreements, CPTPP could become one of the important premises for Vietnam to carry out institutional and market reforms thoroughly and comprehensively.However, among the countries participating in CPTPP, Vietnam achieves the lowest level of development and faces big challenges.Firstly, the production industry structure is not consistent with the provisions of CP-TPP. The economy is not well-prepared and the supporting industry is weak. With re-gard to the requirements of origin, the sectors which are the advantages of Vietnam's export sector are not able to exploit the concessions from the CPTPP because their in-puts do not contain domestic factors.The second challenge is from the stagnation of the enterprise system. The adaptability to the market economy of Vietnamese enterprises is weak. The lack of an effective in-vestment strategy for the supporting production industry and "traditional outsourc-ing" works have made the overall benefit of the economy declined.Thirdly, the limitation of state enterprises' role in the national economy becomes a con-tent of CPTPP. The external pressure is positive only if it meets the community bene-fits. If the selection of CPTPP is purely commercial-economic aspect, it will not cause the objection against the reformation within the SOE system.The fourth challenge is from the increasing competition of goods from the members of CPTPP. At present, Vietnamese enterprises are well-protected by the high tariffs. The trend and demand for zero tariff reduction will be applied to CPTPP members in the near future. In the analysis of the export structure of CPTPP countries, it can be seen that the manufacturing industries of Vietnam facing difficulty are automobile industry and agriculture, especially the husbandry which remains mall and fragmented, and unable to compete against the large, experienced and traditional competitors.The fifth challenge from the requirements of intellectual property protection in CPTPP is much more critical. The continuing possibility of "appearing to court" by infringing intellectual property law is present in countries previously without adequate prepara-tion of intellectual property law. Furthermore, the requirements for increasing the lev-el of protection of intellectual property rights over inventions, copyrights, and trade marks can lead to the escalation of drug prices and create a health burden to the emerg-ing economy like Vietnam. More than that, the measures to protect intellectual prop-erty related to biology also affect agriculture which accounts for more than 60 percent of the population of Vietnam. The prices of agricultural products such as veterinary drugs, fertiliser, etc. will thereby grow significantly, which increases costs and reduces the efficiency of agricultural production in general.In regard of the need for economic reform and the promotion of economic growth, the process of further integration into the world economy is not allowed to slow down. The question is what Vietnam needs to do to facilitate the upcoming integration road-map. Firstly, administrative reform and severely corruption offence are the most im-portant things. It is shown that the WTO supports free market economy so that it could operate and develop only in a healthy competitive environment. Since the joining in the WTO, Vietnamese economy has not really created a healthy competitive environ-ment. Meanwhile, corruption has created more conditions for interest groups to ramp up and distort even the good national policies. If the administrative procedures remain cumbersome and troublesome, corruption will still restrain the required transparency in corporate management. In accordance, CPTPP is not an opportunity, but a challenge to the whole system.Secondly, the reformation of the legal environment and policies to ensure a single "standard" prescribed by CPTPP is a difficult for Vietnam. But in the long run, this re-form of the institutional environment towards the international "rules" is a necessary condition for growth in the context of globalisation. In this perspective, although ad-justing the policy system involving the regulation of CPTPP is a difficult and costly process, Vietnam's commitments can be seen as an external "push" to provide addi-


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tional momentum for domestic efforts towards a transparent institutional environ-ment and economic growth.Thirdly, it is needed to organise the perfect communication to all classes of people, es-pecially the business and the production circles in the countryside. The participation in CPTPP without fast updating to the farmers might cause the loss of market, the high pressure of competition, and even the legal disadvantage in disputes and sues.Fourthly, the reform of SOE and the development of SMEs is the key solution. Given the population and economic growth, the number of enterprises in Vietnam is relative-ly low. This is a major constraint in economic development, employment, creation of competitive markets and the mobilisation of resources from society.In the context of limited resources and high demands of work, the development of these types of enterprise is appropriate not only to the internal capacity but also the preferences of CPTPP. Hence, it is essential to reform SOEs in a substantial way and enable them to have a transparent business environment.https://moderndiplomacy.eu/2018/01/17/cptpp-serving-vietnam-opportunities-chal-lenges/

Standard Chartered forecasts 6.8pct GDP growth for Vietnam


Standard Chartered Vietnam in HCM City on January 17 issued a global economic re-port, forecasting that Vietnam's GDP will expand 6.8 percent in 2018.Nirukt Sapru, the bank's CEO for Vietnam and Asean and South Asia Cluster Markets, said almost all macro-economic indicators of Vietnam improved in 2017, helping the country minimise risks of market volatility and increase competitiveness in export in comparison with other Asean member nations.Increasing attraction of foreign direct investment (FDI) and the State Bank of Viet-nam's management ability and policies have contributed to building the trust in the business community, the report said.Vietnam's manufacturing sector was predicted to reach a double-digit growth in 2018 thanks to FDI flows and increasing demand of electronics in global markets.The bank also forecasted that Vietnam is likely to lure nearly 15 billion USD in FDI this year, mainly in term of electronic production.The service sector will also be one of the main contributors to the nation's GDP growth, it noted.According to Chidu Narayanan, economist for Asia at Standard Chartered Bank, Viet-nam is benefiting from joining free trade agreements (FTA) in the region and the world.He said the young, well-educated workforce and low costs will also help Vietnam at-tract more FDI in the near future.https://en.vietnamplus.vn/standard-chartered-forecasts-68-percent-gdp-growth-for-vietnam/125063.vnp

Experts skeptical about high economic growth in 2017

18/JAN/2018 INTELLASIA| THE SAIGON TIMES

Economic experts have cast doubt on last year's higher-than-expected economic growth of 6.81 percent, saying it might not have been that high.Speaking at a workshop held in Hanoi on January 16 to launch a macroeconomic re-port for the final quarter of last year and all of 2017, Nguyen Duc Thanh, director of the Vietnam Institute for Economic and Policy Research (VEPR), said his institute had calculated the Vietnam Economic Performance Index (VEPI), whose results are not as impressive as GDP growth.VEPI is based on data on indicators like commercial electricity output, export-import turnover and credit growth. The index in quarter four last year was 7.28 percent, high-er than in previous quarters and the same period of 2016, while the officially an-nounced GDP growth this quarter was 7.65 percent.The fact that GDP growth was way above VEPI is seen as abnormal, Thanh noted.According to economic expert Pham Chi Lan, there is a differential between the figures announced by VEPR and the government's General Statistical Office (GSO). When


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GSO announced economic growth results, many people asked what led to phenome-nally high economic growth in the last two quarters of last year.Lan described VEPR's figures as more subjective.Former minister of Trade Truong Dinh Tuyen threw his weight behind VEPR's calcu-lations. He said that his growth forecast for last year was not at all close to what was published by GSO.As estimated by VEPR, economic growth this year might reach 6.65 percent. Growth is expected at 6.02 percent this quarter and 7.27 percent in the second quarter.According to the VEPR, the macro economy has become more stable but there are many problems still unsolved, including low labour productivity, rising budget deficit and heavy dependence on the foreign direct investment (FDI) sector.Economic growth has yet to be driven by labour productivity. Vietnam's labour pro-ductivity is still lower than in regional countries, making up just one-fourth of Singa-pore's, one-sixth of Malaysia's and one-third of Thailand's, the VEPR report said.If there are no comprehensive measures for increasing labour productivity in the near future, Vietnam will find it hard to maintain its current growth momentum.FDI enterprises make up half of industrial production value, 72 percent of export turn-over and 20 percent of gross domestic product (GDP). This sector makes substantial contributions and changes to labour productivity, whereas almost no change is seen in the private sector, according to Tuyen.According to Lan, development of the private sector must be examined through two angles: new enterprises and dissolved enterprises. "There are more startups but the number of dissolved businesses remains high."However, positive changes have been seen such as a declining proportion of mining, an increase of processing and manufacturing and a shift to high-tech agriculture, she added.Budget deficit and high public debts are also seen as major impediments to economic development. According to the report, against the backdrop of less international aid, Vietnam needs to rely on domestic resources to spur growth.Regarding a GSO request to include the informal economic sector in GDP, Nguyen Duc Thanh was quoted by VnExpress as saying that an increase in GDP could pave the way for the government to borrow more, so it should be carefully considered.english.thesaigontimes.vn/58057/Experts-skeptical-about-high-economic-growth-in-2017-.html

Capital Economics: Growth to slow from 10-year high

18/JAN/2018 INTELLASIA| REUTERS

Hard landing a distinct possibility if risks not addressed, according to Capital Eco-nomics' latest report.Strong export demand will continue to drive growth in Vietnam during the forecast period of 2018 and 2019, but risks are starting to build as rapid credit growth is fuelling vulnerabilities in the financial sector while there are also mounting concerns about the fiscal position, Capital Economics wrote in its latest emerging Asia economic outlook.Vietnam's GDP grew 6.81 per cent in 2017; the highest since 2007. A key driver of this growth was exports, which in nominal terms grew by more than 20 per cent.Exports are likely to remain strong over the next couple of years, given buoyant global demand and a combination of low labour costs, an improving business environment, and rising costs in China that are pushing low-end manufacturing to cheaper locations elsewhere in Asia.The decision by US President Donald Trump to withdraw from the TPP is a blow to Vietnam, which was expected to be among the main beneficiaries of the deal. Although the remaining eleven members are pushing ahead with plans to ratify the deal, with-out the US the gains to Vietnam will be much smaller.In the near term at least, another driver of the economy is likely to be loose monetary policy. Interest rates were cut in July and with inflationary pressures subdued, policy is likely to remain supportive for some time.While low interest rates should support growth in the short term, they could be storing


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up problems later in the forecast period. Private sector credit is currently growing by around 20 per cent year-on-year; roughly twice the pace of nominal GDP growth."Economic history tells us that a credit boom on the scale that Vietnam is experiencing is not sustainable over the long term. Another sharp rise in non-performing loans looks inevitable," the report stated.To make matters worse, the country's banks have still not fully recovered from the last banking crisis in 2011 and are poorly placed to cope with another hit to their balance sheets."Incorporating the risks of another banking crisis into our forecasts is made difficult by the fact that crises do not tend to develop according to fixed timetables," the report not-ed. "Previous emerging market crises have been preceded by credit booms that have lasted from as little as two years to as much as nine years."The other main risk facing the economy concerns the government's poor fiscal posi-tion, which has deteriorated markedly in recent years. Although economists at the London-based economic research consultancy don't think the country faces an immi-nent fiscal crisis, government spending growth will need to slow or taxes will have to be raised to put the finances on a more sustainable footing.After beating almost all GDP forecasts last year, a gradual slowdown in Vietnam's eco-nomic growth over the next couple of years is expected, according to Capital Econom-ics. "But with risks building, there is a possibility of a much harder landing for the economy," it believes.http://vneconomictimes.com/article/vietnam-today/capital-economics-growth-to-slow-from-10-year-high

VN effectively uses ODA from Korea: KOICA


Vietnam is one of the countries that has effectively used the official development as-sistance (ODA) provided by South Korea over the past few years.This was revealed by Chairwoman of the Korea International Cooperation Agency (KOICA) Lee Mi-kyung, at a meeting with head of the Central Economic Commission Nguyen Van Binh on Tuesday.Binh emphasized that Korea is one of the most important economic partners of Viet-nam, the largest foreign investor with more than $50 billion and the fourth largest trad-ing partner.The Vietnam -- Korea Free Trade Agreement, which came into force on December 20, 2015, has created a new impetus for the achievement of the goal of increasing bilateral trade between the two countries to $100 billion by 2020.Appreciating the effective cooperation of the government of Korea and KOICA in con-tributing to the overall development of relations between the two countries, Binh asked the Korean government, including KOICA, to continue to expand its coopera-tion with Vietnam in all areas, especially vocational training and management capacity projects, in order to support the country in sustainable development and to carry out the five-year socio-economic development plan in the 2016-20 period.Binh also asked South Korea to share its experiences with Vietnam over financial and capital market development, industrial development, and tax and fiscal policies. Meanwhile, Mi-kyung affirmed that the agency would continue to support Vietnam in the future to contribute to its socio-economic development and promote further coop-eration between the two countries.http://bizhub.vn/news/vn-effectively-uses-oda-from-south-korea-koica_291498.html

Vietnam runs $5.9 billion trade deficit with SEA region

18/JAN/2018 INTELLASIA| VOV

The value of trade between Vietnam and the Southeast Asia region increased 18.8 per-cent to $49.4 billion last year, of which exports accounted for $21.7 billion (up 10.4 per-cent) and imports $27.7 billion, up 14.9 percent on the previous year.According to the Asia-Africa Market Department under the Ministry of Industry and Trade, Vietnam is running a $5.9 billion trade deficit with the region, a year-on-year decrease of 9.5 percent, due to petroleum imports.


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Vietnam's primary sources of imported products were Thailand, Indonesia, Singa-pore, and Malaysia. Imports from Thailand jumped 16.3 percent to an estimated value of $10.3 billion, with trade dominated by products such as machines, equipment and tools (US$944 million), petroleum (US$910 million), fruit and vegetables (US$866 mil-lion), plastic materials (US$639 million), computers and components (US$621 million), and chemicals (US$372 million).Meanwhile, imports from Malaysia surged by 10 percent to $5.7 billion with key prod-ucts being petroleum (US$1.18 billion), computers and electronic products (US$1.10 billion), machines, and tools and equipment (US$643 million).Imports from Singapore are estimated at $5.3 billion, up 11.5 percent on the previous year, with petroleum imports accounting for 42 percent at $2.2 billion.Vietnam also bought more than $1 billion worth of products from Cambodia, a year-on-year rise of 41.4 percent, with key products being wood and timber goods, cashew nuts, and rubber.http://english.vov.vn/trade/vietnam-runs-us59 billion-trade-deficit-with-sea-region-366877.vov

Auspicious start to Vietnamese rice export in 2018


Vietnamese rice exports have got off to a positive start right from the outset of the year, with promising signs from traditional rice importers like the Philippines and Indone-sia.The Ministry of Trade of Indonesia has recently approved the import of 500,000 tonnes of rice from Thailand and Vietnam to fix the insufficient rice supply and price hike in the domestic market.Average-grade rice in Indonesia is currently sold at 14,100 rupiah per kilogramme, a far cry from the regulated floor price of 9,450 rupiah.The Indonesian government worked to expand rice distributing network to ensure rice supply to local residents; however, rice price still scaled up as demand outstrips sup-ply. The Indonesia Logistics Bureau (BULOG) said that the country only had 950,000 tonnes in stockpile.Indonesia planned to purchase rice from its neighbouring nations from the end of Jan-uary.Earlier, the National Food Authority of the Philippines also agreed to import 250,000 tonnes of rice and planned to open rice purchase bidding right in January. The coun-try's rice stock is enough for use in only three days while the minimum amount must satisfy demand for 15 days.The Vietnamese rice market, as a result, has become more vibrant. After one month, average free-on-board (FOB) price of one tonne of rice increased to 400 USD from 390-395 USD. Prices of dried grain and material rice surge by 350 VND per kilogramme as compared to the end of December, 2017.According to the Vietnam Food Association, local businesses exported nearly 5.8 bil-lion tonnes of rice and earned 2.5 billion USD in revenue. As of January 11, cities and provinces in the Mekong Delta region harvested 2017 autumn-winter rice on 860,000 hectares and planted 1.35 million hectares of the winter-spring 2017-2018 crop.https://en.vietnamplus.vn/auspicious-start-to-vietnamese-rice-export-in-2018/125040.vnp

Japanese auto makers halt exports to Vietnam in wake of tightened quality checks

18/JAN/2018 INTELLASIA| VNEXPRESS

Vietnam's new decree is aimed at protecting the local auto industry now that import taxes within the region have been eliminated.Japanese auto manufacturers have decided to suspend exports to Vietnam following stringent quality regulations the Vietnamese government put in place on January 1 this year.Toyota said on Tuesday that it has halted all production for export to the Vietnamese market, Nikkei said in a Wednesday report.The firm manufactures auto components in Vietnam, but imports of completely built


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units (CBUs) from Thailand, Indonesia and Japan account for around one-fifth of what it sells in the market, said the report.Fellow Japanese giant Honda had previously planned to consolidate all production of its SUVs in Thailand to take advantage of a new tariff rule that also took effect this year to cut import tariffs for autos built and sold within the Association of Southeast Asian Nations (Asean) from 30 percent to zero.The company has since abandoned that plan, and production of vehicles intended for the Vietnamese market has been suspended since early January.In a similar move, Mitsubishi Motors has suspended production in Thailand of its Pa-jero Sports SUV designed for the Vietnamese market, according to Nikkei.Vietnam's new decree is aimed at protecting the local auto industry now that import taxes within the region have been eliminated, according to officials.And it looks like the rule is doing its job and causing difficulties for both importers and exporters of CBUs by costing them more time and money.The decree stipulates that traders are only allowed to import automobiles if they can provide valid vehicle registration certificates issued by authorities from the countries of origin.Original quality control certificates for each vehicle and letters of authorisation regard-ing recalls of defective vehicles from the manufacturers are also required, along with copies of quality assurance certificates provided by the countries of origin.The decree also requires importers to have one car from each batch shipped to Vietnam to go through emissions and safety tests.Under the previous regulation, only one certificate was required for each model of car, regardless of how many batches were imported.Toyota Motor Thailand President Michinobu Sugata was quoted by Nikkei as saying that the company had been expecting "a big jump in 2018", but due to the non-tariff barriers, "it cannot export to the market at all".In November last year, the Vietnam Automobile Manufacturers Association wrote to the prime minister urging the government to reconsider the regulation.The association said it was extremely difficult for traders to get valid vehicle registra-tion certificates issued by authorities from the countries of origin, and the process would take both importers and exporters a lot of time and effort.Regarding the requirement for emissions and safety tests on every batch of imports, it said the move would raise the cost by an estimated $10,000 per shipment because trad-ers would have to pay for storage while the cars were checked, rather than selling them straight away.But the Ministry of Industry and Trade claimed the decree would protect consumers and create fair competition between local auto assemblers and CBU importers.Vietnamese spent $2.15 billion importing 94,000 CBUs last year, down 16.8 percent in volume and 9.6 percent in value against 2016, customs data showed.https://e.vnexpress.net/news/business/japanese-auto-makers-halt-exports-to-viet-nam-in-wake-of-tightened-quality-checks-3700103.html

Go slowly on VAT 18/JAN/2018 INTELLASIA| VNS

Dr Bui Duc Thu, deputy chair of the National Assembly's Committee for deputy Af-fairs, speaks to Tien phong (Vanguard) newspaper on the negative impacts of the rise in value-added tax on the economy.Do you think it is time for Vietnam to increase value added tax (VAT)?VAT in other countries is higher than here. For example, in European nations, the VAT rate is up to 20 per cent, so is the VAT in South America. Meanwhile, in Vietnam, the average VAT on popular goods is about 10 per cent while the VAT levied on input ag-ricultural materials is only 5 per cent and for export products is at zero percent. So, VAT in our country is at a low level.Our State budget has been in a state of shortage for many years with high public debt and budget overspending. The question right now is whether to reform our tax policy. In my opinion, we should adjust our tax policies, including VAT, but not right now.


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We need to develop a road map for it.Why should we not adjust the VAT right now?There are three reasons.First, VAT is a kind of indirect tax. It is included in the price and the consumer has to pay. Our current average GDP remains low, which means if we increase VAT, it will have negative impacts on the public. That's why we have to consider carefully before making such a decision.Second, this year it is projected that VAT will play an important part in the State budg-et. While the direct-tax component will be low, including the enterprise revenue tax, workers' income tax, asset tax and others will all be increased. So if we decide to in-crease VAT, that means the people who will be affected the most will be the general public, including consumers. This is a question we should consider carefully.And thirdly, among the 600,000 -- 700,000 enterprises, most of them are small and me-dium enterprises and they face many difficulties in approaching capital, land, new technology and others. In such circumstances, if we increase VAT, this means all the burden will then be shifted on consumers as the goods price increase. And the result will affect enterprise competitiveness. I'm quite worried about it!There is no doubt, the VAT increase will lead to some discrepancies in our current pol-icies and no doubt will poke our national economic development. So, we need to re-consider the decision to increase the VAT.Many people have suggested that instead of increasing VAT, we should focus on solv-ing the problems of overdue tax and tax fraud while cutting down State spending. Do you agree?There is no doubt our current budget collection has faced many challenges, particular-ly the problems of tax fraud or invasion. It is estimated tax fraud and other bad tax practices have lost a huge sum of money for the State budget. In addition, is the issue of outstanding tax debt, which is estimated at about VND70,000 billion ($3.08 million). Of course, this is an aggregation of many years. Of the VND70,000 billion, about a half of it could be recovered.In my opinion, we need to review our tax-collection policy to make it fair for all tax-payers, including enterprises and individuals.According to my observation, big businesses, including real-estate agents, make big earnings, yet their tax payments have been very small. This is a loophole in our policy that we need to fix!What do you think of the impacts of VAT on poor and low income people?Many people have raised this question. Some say that the VAT increase does not im-pact much on the poor or people on low incomes.As I have mentioned, VAT is an indirect tax levied on the consumers. That's why high VAT means buyers have to pay more, regardless of whether they are rich or poor. That's why those who buy more will have to pay more VAT.But all in all, for the poor, the increase in VAT will affect their lives. In reality, low-in-come people don't have much money to save for rainy days. What they earn every month is mostly used to cover their daily expenses. Meanwhile VAT is levied on all items sold in the market. As a result, the percentage of tax that the poor have to pay is considerable compared to their earnings. So, the increase in VAT will become a prob-lem for the poor. This is food for thought for policy makers.Do you think VAT will have impacts on the inflation rate?The government's policy on inflation rate control in recent years has been very good. The inflation rate is capped below 4 per cent. I'm confident that with the current eco-nomic recovery rate coupled with good macro policies, including the monetary policy, we'll be able to maintain the inflation rate under 4 per cent.If we adjust the VAT at a moderate rate, I'm pretty sure that inflation will still be under the control. But, principally speaking, the increase of VAT will make product prices in-crease. As a result, the VAT will become one of the factors making market prices rise. In other words, it will make the inflation rate higher.In European countries, VAT adjustment makes market prices rise. In Vietnam, we


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need to have a road map for VAT adjustment.http://english.vietnamnet.vn/fms/business/194059/go-slowly-on-vat.html

Govt should offer more tax incentives for auto parts


Hyundai Thanh Cong Vietnam Auto JSC has proposed the government offer more tax incentives for cars and auto parts to make domestically assembled cars more compet-itive than completely-built-up (CBU) cars to be imported from other Asean countries.Le Ngoc Duc, general director of Hyundai Thanh Cong, the car distributor of South Korean automaker Hyundai, was quoted by Nguoi Lao Dong newspaper as saying at a review conference held by the Ministry of Industry and Trade in Hanoi City on Jan-uary 15 that the government has clearly set targets for the domestic auto industry.The government wants the local auto industry to become a major sector which can meet domestic demand.Besides, the auto sector will serve as a driving force for other industries, and improve its competitiveness to become a provider of parts and accessories in the global auto production chain.Therefore, the government has issued Decree 116/2017/ND-CP on auto manufacture, assembly, import, maintenance and warranty services, and Decree 125/2017/ND-CP exempting auto producers from paying import tariffs on auto parts to fulfill the target.General director Duc said these policies are aimed at encouraging local auto producers to make big investments in the short- and long-term periods to boost output of domes-tically assembled vehicles, and localisation, as well as export cars to neighbouring countries.However, he said the incentives provided in Decree 125 are not strong enough to cre-ate distinct advantages for domestically assembled autos compared to CBU cars im-ported from other Asean countries. Instead, according to him, they solely help shorten the competitiveness gap between them.He said prices of locally assembled autos can fall 12-15 percent at best in line with De-cree 125 while import tariffs on CBU cars from Asean countries are down to zero from the previous 30 percent, leading to their prices dropping 23-25 percent.Local investors shoulder numerous costs in the process of developing and operating their factories and warehouses, and in the promotion and distribution of their prod-ucts, he added.Given those difficulties, he suggested, the Ministries of Industry-Trade and Finance should work together to amend relevant tax and fee policies.In particular, he proposed the government remove special consumption tax from lo-cally made auto parts.He said Malaysia, Indonesia and India have long used this method to prop up their auto industry, encouraging enterprises to make heavy investments in supporting in-dustries and raising the ratios of local content.Earlier, the finance ministry rejected this option, saying it is not in compliance with the general Agreement on Tariffs and Trade (GATT), an agreement between many coun-tries whose overall purpose is to promote international trade by reducing or eliminat-ing trade barriers such as tariffs and quotas.The leader of Hyundai Thanh Cong also proposed slashing material import tariffs for foreign parts producers who have factories in Vietnam. However, they should commit to long-term investment and technology transfer.He said the solution may help attract auto parts makers at home and abroad. With low-er input costs, they can offer locally-made products at more competitive prices than imports.As such, they may easily join in the value chain of the global auto industry, thus reduc-ing prices for domestically assembled cars.He expects the government to come up with mechanisms and policies to lure multina-tional corporations to invest in large-scale projects.english.thesaigontimes.vn/58046/Govt-should-offer-more-tax-incentives-for-auto-parts.html


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Environment tax hike on fuels postponed


A plan to slap the environmental protection tax of VND3,000-8,000 per litre on fuels, up from the current VND1,000-4,000, will be resent to the National Assembly (NA) in October next year, effectively putting off the tax hike.According to news website Dan Tri, deputy prime minister Vuong Dinh Hue assigned the Ministry of Finance to coordinate with the Ministry of Justice and other relevant ministries, agencies and localities to review and complete the draft of the amended en-vironmental protection tax law including the new environment protection tax rates and submit to the NA for approval next year.On September 13 last year, the NA Standing Committee discussed the draft law.NA chairwoman Nguyen Thi Kim Ngan said the government should increase State budget revenue by enhancing fee collection management, reducing tax arrears and fighting tax evasion and trade fraud, instead of hiking taxes.The proposal to raise the environment protection tax on fuels is unreasonable as the products do not cause the most serious environmental pollution while tax revenue from fuels accounts for over 93 percent of the total environment protection tax reve-nue, Ngan said.Therefore, NA chairwoman Ngan proposed the Ministry of Finance prepare the draft law more carefully and comprehensively to ensure benefits for local people and enter-prises.http://english.thesaigontimes.vn/58044/Environment-tax-hike-on-fuels-post-poned.html

With Chinese competition, new glass licences on hold


With the Vietnamese glass market experiencing severe oversupply, new glass projects will not receive licences in the country.The only exceptions are special types of glass, which may be invested with the prime minister's approval.This information was confirmed by the Ministry of Construction (MoC) in its report on the glass market. MoC reported that the total capacity of glass production in Vietnam is currently 285 million square metres per year. With seven facilities, float glass makes up 248 million sq.m of this, and patterned glass stands at 37 million sq.m per year."In addition, five float glass projects are currently invested with a total planned capac-ity of 181 million sq.m per year, which will increase Vietnam's glass production to 466 million sq.m per year," the report reads.The report is in line with Decision No.1469/QD-TTg, dated August 22, 2014, approving the master plan on the development of Vietnam's construction material industry through 2020, with a vision towards 2030. New glass projects will therefore no longer be licensed.According to the Vietnam Glass Association, glass makers have reported in recent years that they had to run production below capacity, even temporarily suspend pro-duction due to high inventories and tough competition from cheap imported products from China.For instance, in the southern province of Ba Ria-Vung Tau's My Xuan A Industrial Zone, Japanese glass producer Nippon Sheet Glass suspended production of thin flat glass used for displays for a few months starting in May 2016.The production of special types of glass can still be licensed on a case-by-case basis, as projects may be invested after obtaining the prime minister's approval. The prime min-ister also demands the use of state-of-the-art technology in the extraction process, with minimal usage of explosives to limit environmental damage.In July 2017, construction was started on a production facility for ultra-clear float glass, mainly used in solar panels, in Ba Ria-Vung Tau, to meet the rising demand of the solar power industry.The project is developed by Phu My Ultra Clear Float Glass Co., Ltd, a consortium of local firm Viglacera, Vietnam Urban and Industrial Zone Development Investment Corporation, and China's Kaisheng Group. It is estimated that Phase I, capitalised at


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$110 million, will be completed this year. It is expected to churn out 600 tonnes of prod-uct per day, with output rising to 1,500 tonnes of product after Phase II is completed.Viglacera general director Nguyen Anh Tuan said at the company's annual sharehold-ers' meeting that ultra-clear float glass is a new field that requires high technology, prompting Viglacera to seek out tech-savvy partners.This kind of glass meets quality standards for use as solar panels and screens for tele-visions or telephones. It is a special glass product as stipulated in Decision 1469, thus this type of product can only be invested when approved by the prime minister.http://www.vir.com.vn/with-chinese-competition-new-glass-licences-on-hold.html

Binh Duong plans to lure $1.4 billion FDI capital in 2018

18/JAN/2018 INTELLASIA| THE HANOI TIMES

The southern province of Binh Duong sets target of attracting $1.4 billion foreign direct investment (FDI) capital in 2018, Tran Thanh Liem, chair of the province People's Committee, said.However, the province will select investors carefully with focus on large economic groups and partners with strong economic potentials in high technology, high added value, less labour-intensive and environmentally friendly industries and sectors.The investment attraction will also give priority to industrial parks and industrial clus-ters in the province, Liem said.\He pledged that the province will continuously improve investment environment and infrastructure to ease investors besides enhancing the province's competitive edge."The province will issue a range of policies and incentives to further attract investment in hi-tech industries and take advantage of the fourth industrial revolution," he said, adding that the improvement will be taken in administrative procedures, and land and facility construction.To create a better investment climate, the province's leaders and authorities will also regularly meet with investors and businesses to help them resolve problems."Improving the infrastructure system and creating an open dialogue with foreign in-vestors are the keys to attracting investment," Liem said.Binh Duong last year experienced a prosperous year in FDI attraction with more than $2.51 billion, up 125 percent against last year and surpassing the yearly target of 79 per cent, according to the province's Department of Planning and Investment.With the surge, the total FDI capital to the province has so far reached $28.28 billion. The capital was poured in 3,027 projects of investors from 64 countries and territories. Taiwan (China) has so far surpassed Japan to become the province's largest investor with $5.8 billion, accounting for roughly 20 percent of the province's total FDI capital.Vu Ngoc Khiem, chief representative of Global Sources, a Hong-Kong based B2B me-dia, said that many FDI firms, especially those from Taiwan, had been expanding and shifting their production to Vietnam, especially Binh Duong, which is home to manu-facturers of garments, textiles, furniture, shoes and hardware.Binh Duong Province is Vietnam's second-highest FDI recipient, following HCM City. To gain this success, the province has made great strides in improving its water and power supply, road network, waste treatment facilities, and in providing available land for new projects.The province has invested a great deal in road infrastructure, facilitating connections with HCM City, the Mekong Delta and the Central Highlands region. Major transport routes, including Binh Duong Boulevard and My Phuoc-Tan Van Highway, connect local Industrial Parks (IPs) with seaports and airports in the southern region.The province is also the leading province in the country in IPs, new urban areas and services. In addition to the existing IPs, the province plans to open new industrial zones to attract more foreign investment.http://hanoitimes.com.vn/investment/2018/01/81E0C071/binh-duong-plans-to-lure-us-1-4 billion-fdi-capital-in-2018/

Investment in startups expanded


More than 300 enterprises have been certified as science-technology firms, along with


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43 organisations recognised to operate in high technology area, according to the Min-istry of Science and Technology.At the same time, eight technology exchange floors are operating in Hanoi, HCM City, Da Nang, Quang Ninh, Hai Phong, Bac Giang, Thai Binh and Nghe An, while 63 cen-tres for the application and transfer of science-technology advances.Particularly, the startup ecosystem has been expanded with 40 adventure investment funds, 30 incubation facilities, 10 organisations for business promotion, contributing to rapidly increasing the number of startups to more than 3,000 firms, nearly doubling that in 2015.Both number and value of investments have remarkably increased. Notably, food app Foody sold 64 million USD worth of shares while the Mekong Capital investment fund announced an investment of 4.9 million USD in the English teaching system YOLA.The online trade website Tiki.vn received 44 million USD of investment from Chinese firm JD.com, and online tourism service provider Vntrip said that it has got a 10 mil-lion USD from Hendale Capital, a Hongkong-based company.https://en.vietnamplus.vn/investment-in-startups-expanded/125036.vnp

'Shop and Store' a new kind of event


With its growth in urbanised population and domestic consumption, Vietnam is brim-ming with opportunities for franchises and retail businesses.To respond to the trend, Thailand's Reed Tradex, a leading event organiser in Asean, is launching an international conference exhibition named "Shop and Store Vietnam", which is an industry event that defines new business concepts for retail and franchis-ing. Reed Tradex deputy managing director Suttisak Wilanan sheds some light on the event.How did the "Shop and Store Vietnam" idea come about?As the consumer business continues to embrace the wider international community, multinational retail and franchise groups have taken active steps to penetrate the Vi-etnamese market. They are attracted by the large and young population of consumers, with 60 per cent aged under 30.According to figures from Vietnam's Ministry of Industry and Trade, Vietnam wit-nessed the arrival of 164 foreign franchises bringing 201 brands between 2007 and 2016. Food and beverage franchises alone account for 40 per cent of them.Meanwhile, local retailers with the upper hand as first movers will also need to pre-pare themselves for more intense competition. It's not just in a high-quality location that is affordable.Technology is now also a key competitive issue for any franchisor and retailer consid-ering the rapid change of the consumer market.The idea for the event came from the market's demand. Reed Tradex started research-ing the retail and franchise industry in Vietnam, especially the latter, which is not new but still has ample space to develop.We found out that every prospective franchisee has the same questions. How can you guarantee success in franchising? What is the most important in the relationship be-tween franchisor and franchisee? How do training and support work? Is the invest-ment worth it and is the marketing support effective?The retail and franchise industry has a promising future, while specialised play-grounds providing practical knowledge to develop the industry are scarce. To respond to these opportunities and challenges, Reed Tradex decided to launch the international conference-exhibition (confex) "Shop and Store Vietnam 2018" (SSV18), which will ca-ter to the needs of all businesses in expanding their business comprehensively. The proposed date for the first edition is March 28-30, 2018 in HCM City.What is the concept and mission of "Shop and Store Vietnam"?We will introduce the new concept of a confex, which focuses on delivering enriched content and a 360-degree view of the industry through a combination of conference and exhibition.The "Shop and Store Vietnam" exhibition will gather world-class solution providers


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from retail technologies, finance software, store management systems, catering and hospitality equipment, professional retail services, and e-commerce systems.The exhibition is also designed to be a business meeting place and a hub for franchise brands to meet with aspiring entrepreneurs, investors, and potential buyers who are eager to join world-class franchising networks or retailer brands.During the exhibition, the participants will have a chance to meet face-to-face with rep-resentatives of more than 100 companies from over 15 countries and territories.At the same time, the "Shop and Store Vietnam" conference offers a unique lineup of useful advice and tips from experts on both professional and personal levels, local in-sight information for investors, new trend updates for local businesspeople, and net-working in the simplest and most effective way.There will be many inspirational activities such as a 'digital supermarket', which show-cases a demonstration of tomorrow's store, showing the way toward a cashless society.Do you have any advice for prospective new businesses who are in the middle of searching for the right opportunity?The Vietnamese consumer industry is set to continue on a stable and positive trajecto-ry. In the research report "Asean connected 2016", HSBC confirmed that Vietnam's middle class has the fastest growth rate in Southeast Asia and is expected to grow from 12 million in 2012 to 33 million by 2020.Consumer spending is on the increase due to a young population, rapid urbanisation, and an increasingly open economy with increased employment, business, and income opportunities. More than ever, this is a golden time to start or expand a business, in order to serve this increasing consumer demand.http://www.vir.com.vn/shop-and-store-a-new-kind-of-event.html

Experts decry Vietnam's risky coal compulsions


With Vietnam planning to signigicantly increase its number of coal plants over the next decade, potentially posing great risks to the environment, international experts have advised the country to work on a cleaner path forward. Nguyen Thanh reports.Last week, John Kerry came to Hanoi to attend an international conference on green energy and sustainable economic growth for Vietnam. The former US Secretary of State now acts as a senior energy expert, working with Vietnam's government on an alternative to its coal plan. The aim is an alternative that could provide the same amount of electricity, but use hydroelectric dams and solar panels instead of fossil fu-els."It is a scheme that would help save Vietnam billions of dollars, prevent pollution-re-lated deaths, and keep greenhouse gases (GHGs) out of the atmosphere," Kerry said.Under Vietnam's revised Power Development Plan, the ratio of coal-fired power in Vi-etnam's total energy mix will rise from 30.4 per cent in 2015 to 49.3 per cent in 2020, 55 per cent in 2025, and 53.2 per cent in 2030.Vietnam currently has more than 20 coal-fired power plants with total capacity of over 13,000 megawatts ( MW)."I've learned that Vietnam is planning to build a massive number of coal plants until 2030. I think this is not a smart decision, as it will cause great risks to the environment and make it hard for Vietnam to fulfil its international commitments to cut down GHGs," he said."Currently, Vietnam's energy industry largely depends on fossil fuels, but coal is one of the most harmful materials to the environment. In addition, the majority of technol-ogies in coal-fired power plants in Vietnam are of low quality, contributing to environ-mental pollution in the country."According to a report by US-based Natural Resources Defense Council (NRDC) re-leased two weeks ago, Japanese domestic plants use a process called selective catalytic reduction to reduce nitrogen oxide emissions, while plants financed by Japan abroad use low nitrogen oxide burners, a less effective technology. For example, the nitrogen oxide limit at Vietnam's Hai Phong II plant a Japanese-financed plant operating since 2013 is nearly 29 times higher than the Japanese standard, at 438 parts per million.


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In another case, environmentalists organised protests in 2015 because of the air pollu-tion from the Vinh Tan thermal power complex, which was financed by China, South Korea, and Japan. Local communities have expressed similar concerns around ongo-ing projects such as the Long An coal-fuelled power centre near HCM City, which would pollute water and air, and affect the 13 million residents of the area, according to the report.USAID Vietnam mission director Michael Greener also advised that Vietnam create fa-vourable conditions for renewable energy development, instead of focusing on coal-fired power.He said that the country has been a net importer of coal since 2015, because of its nar-rowing domestic supply. This could lead to high power prices due to dependence on the world market.Moreover, heavy reliance on coal power will also deprive Vietnam of opportunities to attract high-quality foreign direct investment, Greene said. Many large foreign firms tend to use renewable energies for their production and business, a need that is hard to satisfy in Vietnam.Barriers for renewable energy developmentDeputy minister of Industry and Trade Hoang Quoc Vuong said at the conference that even though coal-fired power can cause environmental pollution and be harmful to health, Vietnam still has todepend largely on fossil fuels to produce power."Due to the high costs of renewable energy and an annual 10-15 per cent rise in domes-tic demand for power, we will have to boost coal-fired power development," Vuong said. "We clearly want to develop renewable energies, but it remains very difficult to do due to technical difficulties and the lack of stability of wind and solar power in the country."As proof of the government's willingness to lure more investment into solar power projects, Vuong named the prime minister's Decision 11/2017/QD-TTg on supporting the development of solar power projects in Vietnam. Under its provisions, the Electric-ity of Vietnam (EVN) is responsible for buying all electric output from on-grid solar power projects at a feed-in-tariff (FiT) of 9.35 US cents per kilowatt hour (kWh)."We have received solar energy investment proposals for over 15,000 MW in the prov-inces of Ninh Thuan, Binh Thuan, Dak Lak, and Tay Ninh. We have added 4,000MW of this to the national powerdevelopment plan, and may do the same for another 4,000MW," Vuong said. "Howev-er, it may be difficult to absorb this new volume of electricity, because the current pow-er infrastructure remains weak."According to a representative of a wind power firm in Vietnam, this particular firm spends 10-11 US cents to produce 1kWh of power. "However, the FiT is only 9-10 US cents, making it hard for us to recoup investment capital and gain profits," he said.Climate change expert Koos Neefjes told VIR that Vietnam should not go against the global trend of developing renewable energy."I think that Vietnam needs to stop investing in coal power, including projects with foreign investment, because of social, environmental, and economic benefits from the alternatives in renewable energy," he said. "People keep saying that it is too expensive which they cannot actually prove and give other objections, like the intermittency of wind and solar power or the electrical grid capacity. This can be dealt with in other countries, so why not in Vietnam?"These are myths that have been busted already, on the international stage as well as in Vietnam," he said.Electricity of Vietnam (EVN) estimates that around $123.8 billion will be needed to de-velop the national power system within the next twenty years. Spending would aver-age $6.8 billion per year. Of this, 66.6 per cent would be spent on power plants, with the remaining 33.4 per cent earmarked for network development.Vietnam plans to invest in up to 98 power plants with a total capacity of 59,444MW. EVN would build 48 of these, producing 33,245MW with an estimated total invest-


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ment of $39.6 billion.However, Kerry said that Vietnam could mobilise sufficient capital and call for more investment into renewable energy development, "if the government had more favour-able policies for this type of energy."According to Neefjes, the government should stimulate this investment through poli-cy, including better agreements on build-operate-transfer projects. Foreign companies and investors would need to feel that the risk of not getting paid for the power they produce is low, backed by bankable, enforceable power purchase agreements."That is lacking at the moment and the perception is that investing in Vietnam's power sector carries high risks, which makes banks especially nervous," he said."By tackling this issue and a few other things, Vietnam could see a boom in renewable power generation to the benefit of all. I recently saw the windpark in Bac Lieu as well as the new, nearly-completed coal power plant in Soc Trang. The first is becoming a tourist site, and the second will displace more and more people because of solid waste production and transport needs. It will become a very dirty place and a source of pol-lution for land, rivers, the sea, and for millions of people all over the south of Vietnam for decades to come. For me, the choice is easy," Neefjes said.http://www.vir.com.vn/experts-decry-vietnams-risky-coal-compulsions.html

Plastics growth garners strong interest


Vietnam's plastics and packaging industry is luring in a new wave of foreign investors due to the sector's strong growth.Last week, a delegation of 43 Indian companies led by the Plastics Export Promotion Council of India (Plexconcil) paid a working visit to Vietnam to join a complete plastic exhibition known as Complast 2018. Indian companies showcased a variety of prod-ucts for the plastics processing industry including raw materials, processing machines, and technologies.K. Srikar Reddy, Consul general of India, said that India's plastics industry has devel-oped a complete product supply chain, high-quality plastic materials, and manufac-turing equipment at globally competitive prices. Thus, India could become an important supplier of plastic materials and plastic manufacturing equipment at low costs to Vietnam.India exports plastics to more than 185 countries. In the current financial year 2017-2018, plastics exports are expected to grow by 6 per cent, reaching a turnover of $8 bil-lion. India's total plastics exports to Asean reached $533 million in the 2016-2017 peri-od. Indonesia, Vietnam, and Thailand were the top export destinations, with India's plastics exports to Vietnam valued at $109 million.Ravinda Limaye of manufacturer Polygel said that opportunities are huge in the mar-ket. As the plastics and packaging sector grows, the company intends to continue im-porting materials and equipment to manufacture plastics. Vietnam imports about 80 per cent of the required raw materials annually, as the domestic market can supply only 900,000 tonnes per year."Polygel manufactures various catalysts and additives for plastic pipes, so we see Vi-etnam as a target market for expansion in the near future," he said, noting that Polygel is looking for local distributors to export its products to Vietnam.Ho Duc Lam, chair of the Vietnam Plastics Association, said that the plastics sector in Vietnam will continue to grow on the back of a strong growth in domestic demand. Plastics consumption per capita is projected to increase to 45 kilogrammes in 2020, mainly due to growth in the packaging and construction segments.In addition to Indian investors, Vietnam's plastics and packaging industry has been on the radar of other Asian investors from Thailand, South Korea, and Japan in recent years. These Asian investors prefer striking up deals with local partners, which has re-sulted in an increase of mergers and acquisitions in the field.Lam noted that an increasing number of European and US investors have also upped their presence on the domestic market. Unlike Asian investors, the Western companies prefer to develop their own facilities in Vietnam rather than acquire local assets.


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Many European companies have set up representative offices in Vietnam to sell ma-chines and equipment for the plastics and packaging industry. In October, Switzer-land's Tetra Pak began construction of a packaging manufacturing facility in Vietnam-Singapore Industrial Park in the southern province of Binh Duong."The capital inflow into the field shows no signs of slowing down. Indeed, the flow of foreign direct investment capital into Vietnam's plastics and packaging sector has in-creased by 15 per cent year-on-year, which is in line with the robust domestic demand in the market, " Lam added.http://www.vir.com.vn/plastics-growth-garners-strong-interest.html

Real estate still facing unresolved legal issues in 2018


The real estate market expects 2018 to be another great year for foreign investment. Lawyer Le Net of LNT and Partners spoke to VIR's Le Son about the difficulties real estate developers are facing and the legal issues they hope will be resolved this year.Could you tell us about the conditions that have created a need for legal amendments related to the real estate sector in 2018?There are three main issues that we anticipate to be addressed in the year ahead: the legal concern over condotels, red books for foreigners [ensuring land rights], and bet-ter control over the real estate bubble.Condotel investors are not currently granted a pink book [conferring ownership rights for buildings], which is an issue not explicitly outlined by the law. The red book is a certificate of ownership, but it is also an administrative decision, and as such it can be cancelled if it is illegal. Therefore, it is important we have laws to confirm the legal sta-tus of the pink book regarding condotels.Another concern that needs modification is the tax on real estate. There has been much controversy over the state's strict stance on tax revenue. However, we also need to think about the enormous tax revenues of the second home segment.There have been many proposals from developers on improving the business climate in 2017, hoping to make the investment environment more secure. Firstly, this safety is needed as it affects buyers who are the direct clients of the condotels or other hous-ing units such as townhouses and villas. Once this is ensured, citizens will be more in-clined to buy.Next comes safety for banks, as the property bought by those citizens holds a huge in-vestment value, one which they will have to pay off for many years to come. As in oth-er countries, many people take 10-20 years to fully own their apartments. When the buyers are placing such high loan demands on the banks, we have to ensure security for them. Then, when the people are safe and the bank is safe, there are investors to think of. Investors are not necessarily only made up of the wealthy; an investor can be someone with initiative, someone who knows how to raise capital with those who have money or land. As such, if the law is adjusted to protect homebuyers, by protect-ing the property itself or banks in particular, the market will naturally grow.What are the difficulties foreign developers are facing in terms of legal status?Banks are primarily lenders, but when customers are unable to pay back debts, the state has to give them the right to handle it. Last year's Resolution No. 42/2017/QH14 has resolved some of the bad debt problems. However, this is still only applied to do-mestic enterprises, with foreign investors left less recourse in dealing with their bad debt issues. The main concern is whether or not real estate mortgages should be grant-ed to those who are borrowing to pay back bad loans.These matters do not only concern foreign buyers, but local buyers too, as well as do-mestic corporations who wish to borrow from foreign financial organisations. Since they are seeking to borrow from cheaper sources, they are required to have collateral for the loan. However, using property as collateral is simply not an option with foreign banks, which is a key legal issue. So, it is important that we also assist foreign financial organisations.What are the pros and cons regarding foreigners' rights to house ownership?One of the advantages for foreign real estate developers, if the red book mechanism is


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guaranteed, is that they will be able to offer Vietnamese real estate to overseas markets such as Singapore, South Korea, Japan, and many other countries. There will be a much wider market, or so-called 'on-the-spot export'. Yet in order to do this, the law must remove certain restrictions, for example those which stipulate that foreigners cannot buy more than 30 per cent of apartments in a building, or no more than 250 apartments for individual housing in a residential area, equivalent to a ward adminis-trative unit.However, even with changes already made to the law, not many foreigners have rushed to Vietnam to buy houses. Those buying homes are, so far, only those who ac-tually want to live in Vietnam. So why do we not grant them greater tax benefits? Be-cause real estate is also property. Using the development of Singapore's tax rate over time as a study is useful. Here we see the tax rate gradually changing after one year, the tax rate is at 10 per cent, after two years it is at 8 per cent, and after five years the tax rate is at 2 per cent. Thus, housing prices do not have to increase rapidly for a boost in tax revenue to be possible.http://www.vir.com.vn/real-estate-still-facing-unresolved-legal-issues-in-2018.html

Co-living and green: the latest trends to sweep Vietnam's real estate market


From co-living spaces to smart offices, these are the new trends that promise to change Vietnam's property market in 2018.Owning real estate will no longer be a priority for millenials across the world, who will make up half of the global workforce by 2020, according to PriceWaterhouseCooper's latest Millenials at Work report.The latest trends in real estate development show that environmentally-friendly and smart co-living and co-working models promise to change Vietnam's property market in 2018.Co-livingShared accommodation is forecast to be the leading trend, as co-living and co-working spaces are becoming more popular among young people. A recent report on Global Market Perspective by Jones Lang LaSalle Vietnam shows that the main target for shared accommodation is young people, and investments have started pouring in.Just last year, Ascott Limited, an international serviced residence owner-operator, in-troduced a new co-living brand called Lyf (pronounced "life") which is designed for and managed by millenials who wish to experience local life.Shanghai, Tokyo, London and Paris are forecast to be the cities where demand will rocket to satisfy the increasing need for co-working space among both transnational corporations and startups.Green and smart officesGreen offices have been popular in Vietnam for the past two years, but demand has only recently started increasing for offices that are both green and smart, especially in Saigon.According to a representative from JLL Vietnam, Deutsches Haus, located in HCM City's District 1, pioneers the trend for smart-green offices. The building is designed to save energy and integrates the latest German technology.Real estate experts say that this building is the first in Vietnam and among the few in Southeast Asia to be awarded both a silver DGNB Certificate for a sustainable, green building, and the LEED Certification (Leadership in Energy and Environmental De-sign).The market for smart-green offices is forecast to expand in Saigon's golden areas such as District 1 in 2018.The rise of homestaysThe condotel or hotel-condo, a form of hotel that offers short term rentals, will face ma-jor competition in the real estate market in 2018, forecast Phan Cong Chanh, CEO of Phu Vinh real estate company.Homestays, garden houses and co-living spaces will be more favoured, and will be the new trend in 2018.


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Homestays or similar forms of lodging have already appeared in tourist areas such as Hoi An, Sapa and Cu Chi, but on a small scale, Chanh added. But their popularity and investment in them is likely to rise in 2018.Though less fancy compared with condotels, homestays and garden houses are legally managed and more tourist-friendly. The low management costs are also beneficial for both customers and investors, Chanh said. Homestays will add more variety to the real estate market, and promise sustainable profit returns of about 6 percent per year.HCM City was ranked third in a survey of 50 cities worldwide for property rental growth by a survey conducted by real estate firm Savills released in late 2017. Viet-nam's southern metropolis was also ranked fifth in terms of investment prospects, and second for development prospects.https://e.vnexpress.net/news/business/co-living-and-green-the-latest-trends-to-sweep-vietnam-s-real-estate-market-3699605.html

Local brands outperform multinational rivalsreports


Local brands in the fast-moving consumer goods (FMCG) sector in Asian countries, in-cluding Vietnam, have made distinct improvements which have helped them surpass multinational rivals, according to recent market research reports.Market research firm Kantar Worldpanel yesterday released its second annual Asia Brand Power zeroing in on the powerful partners behind Asian brands' success, re-sponding and tailoring to consumers' changing needs, driving and reshaping the FMCG market in Asia.According to the report, local brands are outperforming their foreign counterparts in several FMCG sectors, and are especially dominating a huge consumer base in rural areas which their rivals have not fully tapped.In particular, local brands account for a combined 78 percent of the market, 3.5 times higher than their multinational rivals in rural areas. Meanwhile, the figure for urban areas is 71 percent."Their advantage is not only a deeper understanding of local tastes but also a wider distribution supported by local retail partners from traditional trade to modern trade," said David Anjoubault, general manager of Kantar Worldpanel Vietnam.The report also reveals that having a strong partnership with local retail power players has kept them grounded and continued to advance and outperform multinational brands. Local retailers are regarded as gatekeepers of these brands.Nguyen Thanh Nhan, general director of the Saigon Union of Trading Cooperatives (Saigon Co.op), said the company has consciously decided not to focus on imported products with a high price tag. Instead it has supported high quality Vietnamese prod-ucts."We developed a win-win relationship and partnership with local suppliers. At the same time, we have encouraged a spirit of national pride: Vietnamese people prefer Vietnamese goods. As a result, we have an affordable pricing strategy and a very strong shopper preference," he stressed.Marcy Kou, managing director of Asia at Kantar Worldpanel, explained that local re-tailers have helped make local brands more mentally available than their multination-al rivals. Besides, they support innovative retailer strategies that are both anticipating and responding to Asia's changing shopping habits.Earlier, global market research firm Nielsen conducted an analysis of the Top 100 FMCG players across Asia Pacific in 2016, with super categories surveyed: food, bev-erage, household and personal care.According to Nielsen, multinational companies reported growth of a mere 2 percent in 2016, down from 5 percent in 2014. Meanwhile, local players in Vietnam posted growth of 7 percent, up from 5 percent, and contributed 42 percent to total FMCG sales.The analysis indicates food and beverage categories have long been hailed as the stronghold of local players accounting for 69 percent and 45 percent market share re-spectively.


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Despite the domination of multinational companies, local players secured strong growth in household care and personal care categories at 13 percent and 9 percent re-spectively.Local firms are offering products of increasingly higher quality with competitive pric-es. They often have a strong on-the-ground presence and a sustained distribution net-work that ensures their products are readily available to consumers, not just those in major cities, but in secondary cities and regions where consumption is accelerating, said Nguyen Anh Dung, head of Retail Measurement Services at Nielsen Vietnam.http://english.thesaigontimes.vn/58056/Local-brands-outperform-multinational-ri-vals---reports.html

80pct of shops report revenue growth in 2017


Average revenue of shops in Vietnam last year was VND1.3 billion each, and 80 per-cent of them recorded higher revenue than in the previous year, according to a survey of Sapo.The survey was conducted with 1,000 shops among a total of some 10,000 using Sapo sales management software nationwide. The participating shops have one to three branches and seven employees per shop on average.The survey showed that shops tended to combine offline and online sales, with 90 per-cent of them making use of online platforms to win more customers and expand busi-ness. Of nearly 80 percent of the shops that posted revenue growth last year, 44 percent recorded growth of over 10 percent.Fashion, and mother/baby care products were the groups that posted the highest growth, at 92 percent and 83 percent respectively. Meanwhile, 60 percent of pharma-cies saw their revenues unchanged or down last year.The survey pointed to a correlation between revenue growth and marketing spending. 33 percent of shops with no increase or a decline in revenue said they did not spend on marketing, and 65 percent of shops said they spent less than VND20 million per month.Around 62 percent of shops with monthly marketing cost of higher than VND20 mil-lion achieved revenue growth of over 30 percent against 2016.Shops generating less than VND500 million in annual revenue each accounted for 30 percent, VND0.5-1 billion 32 percent and over VND1 billion 38 percent. A fashion shop earned some VND1.8 billion on average.The five channels credited for good sales were physical shops with 87 percent, Face-book 80 percent, websites 53 percent, Zalo and Instagram 51 percent, and agent net-works 49 percent.Among the favourite marketing channels in Vietnam, Facebook took the lead with 87 percent, followed by physical shops with 70 percent, and online marketing like email marketing, online forums and YouTube with 51 percent.As for payment methods, direct cash payment was most common, 41 percent of shops accepted payments by credit and debit cards, and e-wallets accounted for 18 percent.The survey found offline and online sales channels were supporting each other. Well-performing shop owners were those understanding and making use of multiple sales channels, and knowing how to utilise technology to boost sales.http://english.thesaigontimes.vn/58058/80-of-shops-report-revenue-growth-in-2017-.html

More firms register investment in renewable energy in Bac Lieu


A number of businesses in the Mekong Delta province of Bac Lieu have registered in-vestment in renewable energy with a total capital of over 100 trillion VND (4.4 billion USD).It was unveiled during a conference on January 17 to provide information about the Bac Lieu Investment Promotion Conference 2018 scheduled for January 29-30.Speaking at the conference, Chair of the provincial People's Committee Duong Thanh Trung said it will be the first large-scale investment promotion event after 20 years of


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the province's re-establishment.A series of activities during the event aim to attract investment resources from differ-ent economic sectors and popularise the image of Bac Lieu to businesses at home and abroad, he said, adding that feedback at the event will help Bac Lieu seek proper solu-tions to socio-economic development.Around 500 delegates at home and abroad are expected to attend the event during which construction on the third stage of 142MW Bac Lieu wind power plant, high-tech shrimp farming complex, and the largest symbol of Vietnamese shrimp will begin.Bac Lieu has a coastline of 56km with expansive alluvial ground. Wind power averag-es nearly 7m per second and sun hour exceeds 2,900 hours per year, which is advanta-geous to renewable energy development.https://en.vietnamplus.vn/more-firms-register-investment-in-renewable-energy-in-bac-lieu/125061.vnp

Ha Nam pledges favourable conditions for foreign investors


Ha Nam pledged to create favourable conditions for production and business at a meeting on Wednesday with more than 200 foreign investors investing in the northern province.Chair of the provincial People's Committee Nguyen Xuan Dong said the province was focusing its resources on improving infrastructure and services to make it easier for in-vestors.In 2017, Dong Van 3 and 4 Industrial Zones completed their infrastructure system and were ready to receive investments. Muong Thanh Trade and Services Complex and Fugi Engineering's housing complex for lease also became operational.Dong said those were important factors to draw investors to Ha Nam Province.Regarding the proposal of enterprises, Dong asked the power providers to carry out regular maintenance, enhance quality of the power system and speed up the construc-tion of transformer stations at industrial zones to ensure adequate power supply for production.He also said the focus should be on finding solutions to prevent submergence in Dong Van 1 and 2 industrial zones before the end of June 2018.Ha Nam Province authorities asked investors to hasten the implementation of their projects, use land efficiently and promote savings in production while renovating technologies to enhance productivity and product competitiveness, and lower prices.Dong also urged investors to pay attention to the legitimate rights of labourers.According to the Foreign Investment Agency, Ha Nam Province attracted $244 million FDI in 2017, ranking 20th among 63 provinces and cities in terms of attracting FDI. As of December 20, there were 213 exiting FDI projects in the provinces, worth $2.35 bil-lion.http://bizhub.vn/news/ha-nam-pledges-favourable-conditions-for-foreign-investors_291499.html

Infrastructure ups Thu Thiem's appeal


The ongoing improvement of Thu Thiem New Urban Area's infrastructure system is connecting it better with neighbouring areas and making it a magnet for investment.According to experts, when established, Thu Thiem will relieve some of the pressure HCM City currently faces.The infrastructure within HCM City's existing central business districts (CBDs) is starting to buckle under the rapid expansion of the last three decades."The master plan for Thu Thiem is set to alleviate the lack of supply faced in the exist-ing CBDs," said Stephen Wyatt, country head of JLL Vietnam. "As infrastructure im-proves within Thu Thiem, we anticipate that larger firms will start considering Thu Thiem as a viable alternative to the existing CBDs and set up their head offices there."Caleb Lau, head of Investment and Asset Management at CapitaLand Vietnam, said that even though CapitaLand does not yet have any projects planned for Thu Thiem, he is very optimistic about the area's future.


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"Over the last months we have seen a remarkable increase of infrastructure activities and this has created favourable conditions for attracting developers and investors," Lau said at a recent real estate market insight forum organised by CBRE Vietnam.According to Yong Beom Kim, functional manager at South Korea-based infrastruc-ture developer GS Engineering and Construction Corp., Thu Thiem has been designed to become HCM City's new CBD."After the completion and operation of the infrastructure, including Metro Line No. 2 and bridges 2, 3, and 4 connecting to districts 1 and 7, Thu Thiem will be operating as planned," Kim said.Nhan Vo, general director of Empire City, said that besides the 'hard infrastructure' de-veloped during the last few years and a developed master plan implemented by the government, investors and the local community are beginning to recognise the strong growth potential of the area."However, to make it a desirable place to live, work, play, and learn, Thu Thiem will need soft infrastructure such as a convention and exhibition centre, schools, healthcare facilities, outdoor sports facilities, and entertainment sites to truly become a new fully-serviced urban financial centre of HCM City," said Nhan.Under pressureThu Thiem is a strategic getaway from HCM City, pointing towards future develop-ment areas to the east, including the proposed Long Thanh International Airport. Add-ing to the connectivity brought by Thu Thiem Bridge 1 and the Thu Thiem tunnel, Thu Thiem Bridge 2 is now under construction and will be put into operation in 2019. Once the three bridges in their planning stages are completed, travel between HCM City's other CBDs and Thu Thiem will be much easier.Thu Thiem will also benefit from the future Metro Line No. 2, which stretches from Thu Thiem (District 2) and ends in An Suong (District 12), with a total length of ap-proximately 19 kilometres. Once complete, the metro line should be able to handle ap-proximately 480,000 passengers per day.Dai Quang Minh, the developer of the Sala project, has been granted the area's largest land bank in return for constructing four main internal roads (Crescent Boulevard, Central Lakeside road, Saigon Riverside road, and a road through the ecological forest located in the area's southern delta), Thu Thiem Bridge 2, and a pedestrian bridge.In addition, other sections of Thu Thiem have been entrusted to Dai Quang Minh to build a 20ha Central Plaza square and 9ha riverside park, the 1/500 master plans of which are in progress.HCM City Infrastructure Investment JSC (CII) is to construct a technical infrastructure network for the northern residential area, which consists of neighbourhoods 3 and 4 and the main North-South arterial road. Phat Dat Real Estate Development JSC has also been approved by the HCM City People's Committee to conduct a study on the construction of Thu Thiem Bridge 4, which would link the peninsula to District 7.An eastern gatewayAs an eastern gateway to HCM City, Thu Thiem consists of District 2 and 9, and Thu Duc along the Saigon River. By 2020, over 10 infrastructure projects will be constructed in this area, with total investment capital of up to VND250 trillion ($11.3 billion).This will account for more than 70 per cent of the new investment capital poured into HCM City's infrastructure. Upon completion, Thu Thiem could have a residential pop-ulation of 150,000, with a daily workforce of 220,000.Thu Thiem's developable space consists of 176 land parcels. This includes approxi-mately 3.4 million square metres of commercial space, which can accommodate 217,000 employees, and 3.2 million square metres of residential space for a residential population of 145,000.So far some big investors are implementing large-scale projects in Thu Thiem. Among these, Dai Quang Minh was the earliest investor with a large-scale project in a 150ha venue on the southern part of Thu Thiem peninsula. The project will include 234 villas, 395 houses, 5,600 luxury apartments, a five-star hotel, and a hospital. Another big in-vestor is Quoc Loc Phat JSC, which is investing $323 million into developing the com-


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mercial complex Song Viet in Functional Area 1.The foreign-backed $1.2 billion Empire City Complex is keeping to its schedule, with the completion of the first residential blocks and the start of an 88-storey building which could become the tallest building in Vietnam when it is finished.http://www.vir.com.vn/infrastructure-ups-thu-thiems-appeal.html

G20 billions feed coal-fired future


Vietnam is expected to receive loans in the billions of US dollars from some G20 na-tions for its many coal-fired power projects, helping the capital-thirsty country further ensure its growing demand for power.The US-based Natural Resources Defense Council (NRDC), an international non-profit environmental organisation with over three million members, two weeks ago released a report stating that Vietnam will be the second-biggest borrower from G20 nations for its coal-fired power development. G20's five largest coal financiers include China, Ja-pan, Germany, Russia, and South Korea.With Bangladesh up for $4.5 billion in G20 loans, Vietnam's predicted tally comes to $3.9 billion for its 12 gigawatts (see box for details), followed by Indonesia ($3.8 bil-lion), Brazil ($2.6 billion), and Pakistan ($2.4 billion).Of the total $3.9 billion in loans for Vietnam, Japan will potentially provide almost $2.3 billion, with the rest of the prospective loans coming from South Korea.For example, PetroVietnam's under-construction Long Phu 1 coal power project is said to be up for financing from several export credit agencies, including Servizi Assicura-tivi del Commercio Estero and the Export-Import Bank of the United States. However, with many of PetroVietnam's former executives going on trial for corruption charges related to the bidding for engineering, procurement, and construction contracts, do-mestic and international groups have filed a complaint with potential funders to halt the project, according to NRDC.Nguy Thi Khanh, founder and executive director of the Green Innovation and Devel-opment Centre (GreenID), told VIR that under GreenID's report on coal finance in Vi-etnam released last May, Vietnam has mobilised nearly $40 billion to build its coal-fired power plants, with another $46 billion needed to complete the country's coal-fired power development through 2030.According to NRDC, during the 2013-2016 period, Vietnam was also the biggest bor-rower of G20 financing portfolios, with a total capacity of 9 megawatts enjoying loans provided by China, Japan, and South Korea.According to Khanh, total foreign investment into coal-fired power projects in Viet-nam has amounted to about $20.5 billion, including $4.5 billion from individual for-eign investors, and $16 billion from 23 international financial organisations of eight nations and a multilateral organisation.Experts said that such loans for Vietnam are often provided via bilateral agreements, and via loans for private investors to carry out these projects in Vietnam.Tran Van Quang, a senior energy expert from one of the largest foreign fund manage-ment groups in Vietnam told VIR, "Japan Bank for International Cooperation has pro-vided a loan for Marubeni Corporation to carry out the Nghi Son 2 Thermal Power Plant under the build-operate-transfer (BOT) format this loan is not provided for Viet-nam's government. Similarly, the Export-Import Bank of Korea has also provided a loan for KEPCO to carry out the Nghi Son 2 plant."According to Quang, in the time to come, the question of whether Vietnam can have new loans for its coal-fired power projects will depend on the country itself."[The estimates are that Vietnam will] need another $46 billion for coal-fired power de-velopment, but I think that $46 billion or even $460 billion are also the same. It is be-cause before any investment decision, investors or national governments must carefully consider all relevant factors," he said."In the electricity industry, the important factors include regulatory frameworks, pow-er-purchasing agreements (PPAs), materials, and technologies. Of which, the regula-tory frameworks and PPAs are in the hands of the Vietnamese side. Thus whether


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Vietnam will be able to secure new loans completely depends on Vietnam."Meanwhile, senior climate change expert Koos Neefjes told VIR Vietnam's govern-ment cannot increase public debts or expenditures, or provide many more loan guar-antees while state-owned enterprises like Electricity of Vietnam (EVN) or PVN borrow more. "Therefore private funding is needed, and much of that must be foreign invest-ment, although there are also domestic banks participating already in the coal power plant consortia of financiers, working with project developers, construction compa-nies, and equipment manufacturers," Neefjes said."The private foreign investors need to operate and get revenue during the time that they own the plant and after a certain period they may transfer to EVN under the BOT format, and at that time the outstanding debt will get on the books of EVN."www.vir.com.vn/g20 billions-feed-coal-fired-future.html

Kagoshima prefecture's firms wish to invest in Vietnam


Chair of the Chamber of Commerce and Industry of Japan's Kagoshima prefecture Yoshitaro Iwasaki has expressed wish to connect the two countries' businesses across aquaculture, farm produce and aquatic processing and personnel training.During a recent meeting in Hanoi with Chair of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc, Iwasaki said Kagoshima is strong in agriculture, fisheries and food processing.Japanese localities have devised their own strategies to seek business opportunities abroad and call for foreign investment in Japan, he said, adding that he hopes the two nations' firms will understand more about each other to form specific linkages on the back of the VCCI's support.He said the Kagoshima Chamber of Commerce and Industry will work closely with VCCI to arrange exchange of business visits, thus helping their companies to learn about the other market, and hold business dialogues and forums.Loc agreed with the guest's proposal to enhance exchange and connectivity between Vietnamese and Japanese enterprises.He pledged to provide support for Kagoshima firms to fully tap existing business op-portunities.Considered a gateway to Southeast Asia due to its location in southern Japan, Kagoshi-ma prefecture advocates cooperation with Southeast Asian countries, including Viet-nam. It is home to nearly 1.6 million people with annual income per capita of roughly 2.5 million JPY (over 22,300 USD).Its economy mostly relies on light and processing industry, animal husbandry and cul-tivation.https://en.vietnamplus.vn/kagoshima-prefectures-firms-wish-to-invest-in-vietnam/125054.vnp

More UK businesses expected to invest in Vietnam


Deputy prime minister Trinh Dinh Dung called on businesses from the UK to make in-vestment in Vietnam during a reception for Lord James Mayer Sassoon, Executive di-rector of Jardine Matheson Holdings Limited, in Hanoi on January 17.He emphasized the positive development of the Vietnam-UK strategic partnership over the past time, especially in the fields of trade, investment and tourism.The UK is the second biggest European investor in Vietnam, after the Netherlands, with 267 foreign direct investment (FDI) projects worth 3.75 billion USD and the third largest trade partner of Vietnam in Europe, after Germany and the Netherlands. Two-way trade grew rapidly to reach 5.7 billion USD in 2017, he noted.The deputy PM welcomed Jardine Matheson, one of the leading groups in the UK, to make early investment in Vietnam with significant outcomes.The operation of UK businesses, including Jardine Matheson, has helped deepen the coop-erative relations between the two countries, he said.He hoped the UK and Vietnamese enterprises will forge connectivity to promote the two nations' strategic partnership in a more active and practical manner for mutual benefits.


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SVietnam finance & business 18 January 2018

The government of Vietnam is implementing policies to stabilise the macro economy, curb inflation, speed up growth, and develop the private sector, as well as refine insti-tution, build a healthy business environment for investors, and accelerate the modern-isation and industrialisation, which create brilliant cooperation and investment opportunities for foreign investors, including those from the UK, he noted.James Mayer Sassoon expressed his impression on Vietnam's socio-economic develop-ment achievements and highly valued the country's policies to improve the invest-ment environment and the government's commitments to facilitating business production in the long run.https://en.vietnamplus.vn/more-uk-businesses-expected-to-invest-in-vietnam/125046.vnp

BUSINESSIZ NEWSBusiness Briefs 18 January, 2018

18/JAN/2017 INTELLASIA |

* Cat Loi Company (CLC) will conclude its shareholder list on January 30 in prepara-tion for issuing 6.55 million shares at a 2-for-l ratio to raise its chartered capital. Be-sides, CLC will sell 6.55 million shares to existing shareholders at VND20,000 each, raising over VND131 billion to invest in equipment purchase and pay short-term debts.* Phuoc Hoa Rubber Company (PHR) estimated its 2017 pre-tax profit to jump by 61.5 percent versus the previous year to VND420 billion on revenue of VND1.62 trillion. According to Viet Capital Securities Company, PHR sold 29,400 tonnes oflatex at an average price ofVND40.4 million per tonne last year, among the highest prices in the local rubber industry. In 2018, PHR plans to reach a pre-tax profit ofVND600 billion and starts to book the earnings from investments in industrial zones, wood trading and the high-tech agricultural segment.* Vietnam National Seed Company (NSC) made a net profit of VND233 billion last year, rising 21.1 percent compared to 2016 and exceeding the full-year goal by 2 per-cent. Its revenue reached VND1.5 trillion in 2017, up 13 percent and meeting 99.4 per-cent of the year's target.* Eximbank has sold over 12 million shares of Sacombank (STB) to cut its ownership to 5.4 percent, or 97.5 million shares. The move aims to meet the central bank's cross own-ership reduction rules. Earlier, Eximbank held over 165 million shares at STB.* Ben Tre Aquaproduct Import and Export Company (ATB) will pay an interim divi-dend ofVNDl,OOO per share for 2017 in February. Currently, ABT has 11.56 million outstanding shares. The enterprise planned to pay a dividend ratio of 40 percent to 50 percent in 2017.* Truong Thanh Vietnam Group will be buying 1.6 million shares of Tecgroup Com-pany (TEG) between January 18 and February 13. The investor is holding over 1.6 mil-lion shares, or a 9.2 percent stake.* Postal Con truction and Investment Company has announced to buy maximum 5.2 million shares ofNam Mu Hydropower Company (HJS). Earlier this week, the investor acquired over 1.6 million shares ofHJS to raise its ownership to 24.4 percent, or 5.1 mil-lion shares. Stocks correct slightly18/Jan/2018 Intellasia| The Saigon TimesThe local stock market broke its six-day winning streak with a mild decline on January 16, as the VN Index fell 0.05 percent against the previous day at 1,062.96.Turnover on the HCM City exchange jumped 15.5 percent in volume and 10.8 percent in value to over 340 million shares worth VND8.2 trillion. Block deals contributed VND1.2 trillion to the overall value, including large transactions of lender HDB and property firm NVL.Oil and gas stocks became biggest gainers, among which GAS added 1.3 percent at VND103,500 per share on the matching volume of over 1.1 million shares. PLX and PVD increased 0.6 percent and 1.4 percent at VND91,000 and VND28,300 a share on volume of 1.5 million shares and 2.9 million shares respectively.In contrast, leading brewery company SAB, property firm VIC and its retail affiliate


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VRE made the most negative moves. VIC and VRE saw high turnover of over four mil-lion shares and 2.4 million shares respectively.Among bank stocks, CTG, BID and MBB advanced, VCB moved flat while STB, HDB and VPB lost ground. Most lenders reported matching volumes of between four mil-lion and seven million shares each, except for EIB that saw 1.5 million shares changing hands.STB, which took the lead for liquidity with 42.1 million shares exchanged, fell 2.6 per-cent at VND14,950 per share and extended its losing streak to the third straight session. Foreigners, however, net bought over two million shares of the lender.Notably, some small caps advanced nicely amid strong turnover in the afternoon phase. HAG, a real estate enterprise, was the volume leader in this group with 23.8 mil-lion shares traded, followed by mining firm AMD with 9.7 million shares and agricul-tural firm HAI with 6.5 million shares.The HNX-Index dropped 0.36 percent at 121.59 as losers outnumbered gainers by 81 to 74. Trading volume on the Hanoi bourse slid a slight 2 percent versus the previous day at 66.3 million shares but value contracted 11.5 percent at nearly VND908 billion.Most blue chips such as SHB, ACB, PVS and PVC encountered profit taking pressure. Lender SHB remained the volume leader with over 16 million shares traded, followed by oil and gas stock PVS with 5.7 million shares and bank stock ACB with nearly 3.4 million shares.Property firm HUT was the only gainer in the blue chip group with a 1.7 percent rise and matching volume of 5.1 million shares. DST, which is active in the book and edu-cational equipment sector, hit the upper limit of VND7,800 per share with its matching volume reaching a one-month high of 3.1 million shares.http://english.thesaigontimes.vn/58047/Stocks-correct-slightly.html

UPCoM the only index in positive territory

18/JAN/2018 INTELLASIA| VN ECONOMIC TIMES

Other main indexes close down on January 17.The UPCoM-Index was the only main index on Vietnam's stock market to close higher on January 17.On HSX, the VN Index finished at 1,034.69 points, down a substantial 28.27 points (2.66 per cent), and the VN30-Index 1,030 points, down 31.78 points (2.99 per cent).On HNX, the HNX-Index closed at 120.42 points, down 1.17 points (0.96 per cent) and the HNX30-Index 235.90 points, down 3.58 points (1.5 per cent). The UPCoM-Index, meanwhile, finished the day at 58.09 points, up 0.23 points (0.39 per cent).Liquidity on HSX reached VND8.668 trillion ($381.56 million) and on HNX was VND1.186 trillion ($52.2 million).STB, HAI, and HAG led in liquidity on HSX, with 27.5 million, 24.1 million, and 15.1 million shares, respectively, changing hands.Sixty-eight shares increased on HSX while 220 fell, with 68 rising and 121 falling on HNX.The VN Index opened at 1,062.96 points and closed at 1,034,69 points; its sharpest de-cline of the year.Most banking large caps lost ground: VCB by 6.3 per cent, CTG 5.3 per cent, HDB 5 per cent, EIB 4.4 per cent, STB 4.3 per cent, BID 2.5 per cent, MBB 2 per cent, and VPB 1.1 per cent, while VPB rose 0.5 per cent.In food and beverages, KDC remained unchanged as most other large caps fell: VNM by 3.5 per cent, MSN 2.4 per cent, SAB 0.4 per cent, and BHN 0.1 per cent.Most large caps in energy also fell: PLX by 5.3 per cent, GAS 4.6 per cent, PVD 3.5 per cent, and NT2 1.7 per cent.In real estate and construction, HBC lost 3.3 per cent, VIC 2.3 per cent, and CTD 1 per cent, while VRE increased 2 per cent and NVL closed at its opening price.Among other large caps, HPG fell 4.3 per cent and FPT, BVH, DHG, MWG, PNJ, and VJC 3.3, 2.8, 2.7, 2.2, 2.1, and 0.9 per cent, respectively.The Top 5 rising shares on HSX were FTS, VSI, RIC, PIT, and CIG, and CET, KSD, MHL, SJ1, and BXH on HNX.


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The Top 5 falling shares on HSX were PXS, CTF, AGF, AMD, and HSG, and ASA, VLA, VIE, CMC, and PPY on HNX.Foreign investors net bought on HSX by VND563.7 billion ($24.8 million) and on HNX by VND5.13 billion ($220,000).http://vneconomictimes.com/article/banking-finance/upcom-the-only-index-in-posi-tive-territory

VN Index surge is cause for concern


As the VN Index breaks the 1,000-point mark and paints a rosy outlook for the rest of 2018, questions have arisen on whether Vietnam is getting too expensive for foreign investors.A New Year's highThe Vietnamese stock market got off to a good start in 2018. Its main gauge, the VN Index, crossed the 1,000-point threshold on January 3 and has returned to its peak 10 years after the speculation bubble burst and crippled the market. Over the past fort-night, the index remained above the 1,000 mark and closed at 1,048 points on Friday morning.In 2017, Vietnam's main index grew by 48 per cent, fuelled by strong gains in blue chips, news of state divestments, and increasing attention from foreign investors. Le Duc Khanh, head of Investment Advisory at PetroVietnam Securities Inc., said that the market was buoyed by Vietnam's stable macro-economics, steady foreign exchange rates, and major foreign investment deals."The Vietnamese economy is embarking on a new growth cycle. I believe that if posi-tive news continues, the VN Index can hit 1,200 points in the first quarter of 2018 and possibly reach 1,400 by the second or third quarter," Khanh said.The analyst then listed some of the upcoming share sales that may shake up the market and lure foreign capital into Vietnam, including the sales of PV Oil, PV Power, and Binh Son Refinery all scheduled for the first quarter of 2018. Major companies such as Genco 1 and 2 as well as Vietnam's Rubber Group are also up for public listings.Moreover, the Ministry of Industry and Trade recently announced the list of divest-ments for 2018, which includes industry heavyweights such as Petrolimex, Vietnam National Textile and Garment Group (Vinatex), Vietnam Steel Corporation (VNSteel), and Vietnam Pharmaceutical Corporation (VinaPharm). The Airports Corporation of Vietnam, managed by the Ministry of Transport, is also up for further state divest-ments, along with the approved plans for Binh Minh Plastics, Tien Phong Plastics, and Domesco Pharmaceutical.In the private sector, various banks are also being listed and selling shares to foreign investors, the most recent one being HDBank. TPBank, LienVietPostBank, and Tech-combank have also revealed plans to list or raise external capital this year.These back-to-back deals are expected to draw the attention of overseas investors, be they strategic partners or investment funds.Too steep a cost?Despite the rosy outlook, there are also concerns that due to the ongoing rally of the stock market, Vietnam is getting more expensive in foreigners' eyes, eroding the ap-peal of Vietnam as a cheap frontier market.In fact, the current price-over-earnings ratio of Vietnam is 20.2x, placing it higher than Thailand's 18x, and significantly above Pakistan's 8x and China's 16x. According to Mac Quang Huy, CEO of Maritime Securities, this means Vietnam is no longer an af-fordable market when compared to its neighbours in the region."Rising prices mean that Vietnam cannot rely on its cheap valuations to attract over-seas investors anymore. It's time to focus on other factors such as the business results of listed firms, which are forecast to grow by 20 per cent this year. In addition, we need more state divestments and major share sales to increase the supply of stocks for in-vestors," said Huy.Nguyen Duc Hung Linh, head of Retail Research and Investment Advisory at Saigon Securities Inc., also acknowledged that the Vietnamese market is no longer a cheap


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destination for foreign capital. According to Linh, the stock exchange welcomed many high-profile newcomers in 2017, such as shopping mall operator Vincom Retail and budget carrier Vietjet Air, which helped to boost the VN Index."The market was on a bull run last year as these new stocks appreciated a lot in value. I expect a similar occurrence this year, as we have many state divestments and listings coming up," Linh noted.In the first week of 2018, foreign investors net bought $73 million of securities in Viet-nam, including $45 million in stocks and $28 million in bonds. The National Financial Supervision Council expected stocks in banking, retail, consumer goods, and aviation to lead the gains in 2018.In its latest report, the council also expected overseas investors to continue flocking to Vietnam despite external factors, such as the US Federal Reserve raising rates or geo-political pressures around the world.http://www.vir.com.vn/vn-index-surge-is-cause-for-concern.html

'Golden real-estate land' running out in HCM City

18/JAN/2018 INTELLASIA| VIETNAMNET

As the land fund in HCM City has declined, fewer investors are interested in develop-ing infrastructure projects under the BT (build-transfer) mode.Many important infrastructure projects with huge capital have been implemented in HCM City thanks to the 'exchange of land for infrastructure' initiative.Nguyen Van Linh Boulevard and Pham Van Dong Road are two large works in HCM City implemented under the BT mode.According to the HCM City Planning & Investment Department, 130 more projects with total investment capital of VND395 trillion will be implemented under the BT mode, accounting for 73 percent of total PPP (public/private partnership) projects.The avenue along Sai Gon River is one of the most noticeable 'exchange of land for in-frastructure' projects. Tuan Chau Group, the investor, wants a land area of 12,000 hec-tares, or 5 percent of the total land fund of HCM City, in exchange for project implementation.Sources said the land plots Tuan Chau wants are mostly situated in Cu Chi district and others are located along Provincial Route No 7, in Binh Thanh, 12 and Hoc Mon dis-tricts.Another large project is the anti-flood work implemented by Trung Nam Group, cap-italised at VND10 trillion. At least 50 percent of the construction workload has been fulfilled and the project is expected to be completed by 2018.Asked about the land area the city had promised, a representative of Trung Nam said the group had eyed several land plots, but the land assignment has yet to be done.In 2015, Trung Nam proposed to assign two land plots in district 7 (5 hectares in total), including a 1.8 hectare land plot in the new urban area in the south of the city, and a 3.3 hectare land on Dao Tri street along Sai Gon River.However, as the land plots had legal problems, the investor then eyed three other land plots. According to the city's planning & investment department, the value of the total land plots has yet to reach 15 percent of the project's total estimates.As the investor which built the Tham Luong waste water treatment plant in district 12 under the BT mode, Phu Dien Investment, Construction & Trade JSC now does not want to continue applying the BT mode when building a sewer system, a component project of the waste treatment plant project.The company has suggested another investment mode, under which it will build the sewer system with its own money and take back the investment capital by collecting fees for waste water treatment, VND1,500 per cubic metre, for 15-20 years.A real estate expert said investors are no longer interested in the BT mode because the land plots in advantageous positions are running out.http://english.vietnamnet.vn/fms/business/193795/-golden-real-estate-land--running-out-in-hcm-city.html


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Vietnamese using more premium products as incomes rise


With significantly improved income, Vietnamese consumers are not only buying more goods, but also spending more money on premium products.Premium products have selling prices at least 20 percent higher than other products of the same kinds in the market.The Vietnam Consumer Confidence Index released by Nielsen, a market analysis firm, has been increasing since 2012, reaching 117 in the second quarter of 2017. This is a record high and puts Vietnam among the five countries with the highest indexes in the world.A report, also by Nielsen, in late 2016 showed that Vietnam had the highest percentage of consumers in South East Asia who believe their personal financial situation will im-prove in the future (81 percent).Vietnam's GDP growth rate has been one of the highest in the world for many years. Vietnam ranked fourth among 15 countries with high population in terms of GDP per capita, at 10 percent per annum, in 2007-2016.Nielsen found that from September 2014 September 2016, the high-end FMCG (fast moving consumer goods) market segment grew rapidly in both urban and rural areas with growth rates of 37-42 percent in HCM City, Hanoi, Da Nang, Can Tho, Hai Phong and Nha Trang.The beer market is a typical example. According to Heineken Vietnam, the high-end market segment expanded from 16 percent in 2011 to 21 percent in 2015, while the mar-ket segment for low or mid end consumers fell from 14 percent in 2011 to 8 percent in 2015.This explains why premium and affordable premium product lines such as Saigon Special and Tiger gained satisfactory growth rates in recent years.The trend can also be seen in other industries. The 2016 report by Nielsen showed that 40 percent of polled consumers said they planned to buy more luxury electronics, cos-metics, clothes, meat and seafood, while 30 percent targeted high-end dairy products, hair care and entertainment products.Meanwhile, Michael Kokalari, chief economist of VinaCapital, said at an event held by LBC (Leading Bussiness Club) in HCM City, that the Vietnamese middle class, which accounts for 20 percent and will be one-third of the total population in 3-4 years, is a 'gold mine' for goods and service manufacturers and suppliers.Regarding Vietnam's economic growth, the economist predicted that GDP growth rate would be 6.6 percent in 2018.Vietnam is expected to achieve GDP growth of 6.81 percent in 2017, surpassing the government's target of 6.7 percent.http://english.vietnamnet.vn/fms/business/193770/vietnamese-using-more-premium-products-as-incomes-rise.html

Vietnam caps promotions for prepaid mobile subscribers

18/JAN/2018 INTELLASIA| TUOITRE NEWS

No more than 20 percent of a service's value is to be offered as a bonus to prepaid usersMobile carriers in Vietnam will have less freedom in their promotions to prepaid sub-scribers following a circular by the Ministry of Information and Communications en-forcing a ceiling on how much 'free value' can be offered.Specifically, telecom providers in the country are now only allowed to offer no more than 20 percent of a service's value to prepaid subscribers as a bonus during promo-tional campaigns.The limit will apply to different forms of promotion, including bonus credits, in-kind benefits, and other perks.Previously, the maximum promotional value was set at 50 percent for both prepaid and post-paid subscribers. This limit remains unchanged for the latter.According to the Ministry of Information and Communications, the new promotion ceiling aims to promote post-paid subscriptions and represents a crackdown on the abuse of prepaid SIM cards to send out spam messages, a technique typically em-ployed by advertisers and online scammers.


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The regulation will also ensure fairer competition in the telecom market and better protect the rights of mobile subscribers, the ministry said.Prepaid users who switch to post-paid subscription plans will enjoy the 50-percent promotion limit after the switch."Mobile carriers found to be in violation of this new regulation will be subject to ad-ministrative penalties and tax arrears for illegal promotional campaigns," a ministry official said.Recently, three major providers in Vietnam Viettel, MobiFone and VinaPhone were forced to stop offering data plans that granted subscribers unlimited data to access Fa-cebook and YouTube.These plans were found to be in violation of pricing regulations for telecom services.https://tuoitrenews.vn/news/business/20180117/vietnam-caps-promotions-for-pre-paid-mobile-subscribers/43635.html

Vietnam Customs proposes building bridge to China to facilitate border trade


The general Department of Vietnam Customs had written to the Investment Depart-ment under the Ministry of Finance proposing building a bridge over the Red River in the Vietnam-China border area to facilitate border trade, news website Dan Tri re-ports.The department has thrown support behind the Lao Cai Province government's pro-posal to build the bridge connecting Bat Xat District of Lao Cai Province and China's Yunnan Province.At a conference on economic cooperation in November 2017, leaders of the two prov-inces reached agreement on construction of the bridge to promote trade. The bridge is also expected to boost economic development in border areas of Vietnam and China.Hoang Quoc Khanh, director of Lao Cai Province's Department of Planning and In-vestment, said the provincial government has assigned the Department of Transport to draw up a detailed plan for the project.Trade between Lao Cai and Yunnan has been growing rapidly, according to Khanh.Nong Van Hung, director of the Transport Department of Lao Cai Province, said the location, scale, construction method and financing of the project should be finalised before a detailed plan is submitted to the Ministries of Transport, Foreign Affairs, and National Defense.The Chinese government earlier offered a $300 million loan for Vietnam's Quang Ninh Province to build Van Don-Mong Cai Expressway in August 2016 and a $300 million loan for Cao Bang Province to build Dong Dang-Tra Linh Expressway under a project for improving connectivity between Vietnam and China's localities in May 2017.In September 2017, Quang Ninh Province and China's Guangxi opened Bac Luan II Bridge to traffic, with a total length of 618 meters, of which 463.5 meters was built by China and 154.5 meters by Vietnam.http://english.thesaigontimes.vn/58063/Vietnam-Customs-proposes-building-bridge-to-China-to-facilitate-border-trade-.html

Vietnam helps Cambodia increase cashew output


The Vietnam Cashew Association (Vinacas) will help Cambodian agriculture sector in-crease cashew output to 1 million tonnes in the next decade.An agreement to this effect was signed by Vinacas Chair Nguyen Duc Thanh and Cam-bodian minister of Agriculture, Forestry and Fisheries Veng Sakhon in Phnom Penh on January 17, under which both sides will work to increase cashew cultivation acreage and output, transfer technology, access markets and study and develop cashew trees in 10 Cambodian provinces.Vinacas will also mobilise funding and technology from its members in the effort, to-wards mitigating post-harvest loss and increase cashew's added value in the country.Cambodia is now home to over 100,000 ha of cashew trees with a total output of more than 100,000 tonnes, most of them are sold to Vietnam. With abundant land, the coun-try is looking to grow 500,000 600,000 hectares of cashew to reach targeted output.


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At a reception for the Vinacas delegation, Vietnamese Ambassador to Cambodia Vu Quang Minh spoke highly of the project, contributing to strengthening traditional friendship between the two governments and peoples.https://en.vietnamplus.vn/vietnam-helps-cambodia-increase-cashew-output/125062.vnp

Vietnam sees sharp rise in cruise ship visits


Vietnam has become an attractive Asian destination for international cruise ships, with more than 400 cruise ships arriving last year, according to data of the Cruise Lines In-ternational Association (CLIA).Farriek Tawfik, director of Southeast Asia for Princess Cruises, said CLIA's data showed Vietnam was sixth most-visited by cruise ships in Asia last year. Most of the cruise ships visited the country's popular coastal tourist attractions like Danang, Hue, Nha Trang, Ba Ria-Vung Tau and Halong.According to Tawfik, the cruise tourism sector in Vietnam will maintain growth mo-mentum this year. Princess Cruises will send 31 cruise ships to Vietnam this year, with a total of 80,000 foreign tourists aboard.In the past, travel firms only arranged cruise ship visits to Vietnam between November and February. At present, many cruise lines offer tours from November until April or even all year round.Speaking at a press conference on Princess Cruises' plan in Vietnam on January 16, Tawfik said the cruise line expects 40 percent growth in the number of visitors to Viet-nam this year.In 2017, Princess Cruises ships made 22 visits to Vietnam, with more than 58,000 pas-sengers on board.This year, six ships of the cruise line Majestic Princess, Sapphire Princess, Diamond Princess, Golden Princess, Sun Princess and Coral Princess will make 31 visits to the country, with a total of 80,000 international passengers aboard.From February 10 to 11, Princess Cruises will organise a fair in Vivo City commercial centre in HCM City's District 7 to introduce its cruise tours on Majestic Princess and Sun Princess vessels from Vietnam to Taiwan and Japan, and some cruise tours to Eu-rope.Tawfik said Princess Cruises targets high-income Vietnamese customers aged be-tween 20 and 39.According to Tawfik, the number of Vietnamese travelling on cruise ships has grown strongly. In addition to visa support, tour operators have interpreters for large groups of tourists along the journeys.english.thesaigontimes.vn/58059/Vietnam-sees-sharp-rise-in-cruise-ship-visits.html

HCM City suspends several BOT projects


The government of HCM City has put off several projects that would upgrade and widen highways under the build-operate-transfer (BOT) format, said the director of the city's Department of Transport.Bui Xuan Cuong said his department has reviewed BOT projects that would be carried out in the city. Due to shortcomings associated with BOT road investment, the munic-ipal government has decided to suspend a number of BOT projects and is seeking oth-er financing methods.Particularly, a BOT project for expanding a 58-kilometer-long section of National Highway 22 from An Suong to Moc Bai border gate and another for widening a Na-tional Highway 1A section between HCM City's An Lac and neighbouring Long An Province have been put on hold.Cuong said BOT would be chosen for new roads only and that where to locate tollgates and how to determine toll fees would be carefully weighed.Data of the department shows the city now has nine operational BOT infrastructure projects, of which seven are managed by the city and the other two by the Ministry of Transport.


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Toll collection is ongoing at three BOT projects An Suong-An Lac section of National Highway 1A, Phu My Bridge and Nguyen Van Linh Parkway. Four projects under construction are the second phase of Binh Trieu 2 Bridge, a road connecting Vo Van Kiet Avenue and HCM City-Trung Luong Expressway, Hanoi Highway expansion and a road connecting Nguyen Duy Trinh Street and Phu Huu Industrial Zone.english.thesaigontimes.vn/58042/HCM City-suspends-several-BOT-projects.html

Con Dao airport to be upgraded for bigger aircraft


Con Dao Airport will be upgraded to receive larger aircraft like Airbus A319, A320neo and A320ceo to meet increasing air travel demand to and from Con Dao Island off the country's southern coast.According to the Civil Aviation Authority of Vietnam (CAAV), the Ministry of Trans-port has submitted an amended plan for upgrading airports, including Con Dao Air-port, until 2020, to the prime minister for approval.The airport will be expanded so that it will be able to handle Airbus A319, A320neo and A320ceo aircraft, which are among the most modern jetliners being used by na-tional carrier Vietnam Airlines and low-cost carrier Vietjet.According to the original plan approved in 2006, Con Dao Airport would be able to handle 500,000 passengers a year by 2025. However, the airport achieved average growth of 22.7 percent in the number of passengers between 2010 and 2016. Last year alone, it received 400,000 passengers, up 29 percent year-on-year.The French-built Con Dao Airport was upgraded in 2003 by Southern Airports Corpo-ration to accommodate ATR 72 (twin-engine turboprop, short-haul regional airliner), Fokker 70 (narrow-body, twin-engine, medium-range aircraft) and similar planes.In May 2004, Vietnam Air Services Company (VASCO) launched HCM City-Con Dao service, becoming the only airline to operate air services to and from Con Dao. At present, only ATR 72 aircraft are used for flights to Con Dao Airport due to the short runway.In related news, CAAV has sent a letter to Hai Au Aviation Joint Stock Company showing its support for the company's plan to operate hydroplane flights between Halong City and Co To Island.Quang Ninh Province government has asked the Ministry of Transport to support Hai Au Aviation to complete essential procedures to put Halong-Co To hydroplane flights into service this summer.In addition, there should be more take-off and landing locations for hydroplanes, es-pecially in Van Don District and Mong Cai City. Hydroplane service should also be launched in other localities.After three years of operation, Hai Au Aviation has operated nearly 3,500 flights and served 29,000 visitors to Halong. Around 90 percent of them are foreign tourists from 47 countries and territories.http://english.thesaigontimes.vn/58062/Con-Dao-airport-to-be-upgraded-for-bigger-aircraft.html

Defense ministry approves VietBamboo Airlines project


The Ministry of National Defense has given the nod to an air transport project of Viet-Bamboo Airlines, a subsidiary of FLC Group JSC, Giao Thong newspaper reports.Lieutenant general Phan Van Giang, deputy minister of National Defense, has written to Binh Dinh Province saying the airline will have to ask for a business license in line with Vietnamese law.The airline has provided details about its structure, capital, flight network, aircraft fleet and plan to use Phu Cat Airport in Binh Dinh Province in accordance with the Law on Civil Aviation of Vietnam and the government's Decree 92 on conditional busi-ness sectors or activities in the civil aviation industry.Under the project, VietBamboo Airlines will provide air transport services at home and abroad.VietBamboo Airlines would be the first airline to be headquartered in Binh Dinh Prov-


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ince, instead of Hanoi and HCM City. The carrier with total chartered capital of VND700 billion (US$30.8 million) will combine normal and low-cost services.In 2019, VietBamboo Airlines will operate domestic flights using Airbus A320, Airbus A321 and Boeing B737 narrow-body aircraft.The airline has plans to operate 24 domestic routes, mainly to resorts of FLC, and 16 international routes to some Northeast Asian countries such as South Korea and Japan by 2023. VietBamboo Airlines expects to hold 3-5 percent of the local air passenger transport market and contribute some $52 million to the State budget.http://english.thesaigontimes.vn/58064/Defense-ministry-approves-VietBamboo-Air-lines-project.html

Direct flight launched between China and Hanoi


China-based Chongqing Airlines launched a direct service on Tuesday connecting Chongqing, a major city in southwest China, and Hanoi.The flight departs from Chongqing at 9:15am (local time) on Tuesday, Thursday, Sat-urday and Sunday and returns from Hanoi at 14:45pm (local time) the same day.Chongqing Airlines, which has used Airbus 320 aircraft for the direct route, expects to have 150 passengers on board each flight.Founded in 2007, Chongqing Airlines operates domestic flights in mainland China.It is jointly owned by China Southern Airlines and Chongqing Municipal Develop-ment and Investment Company.In recent years, the airline has expanded its services overseas, with flights connecting Chongqing and major cities in the region, including Bangkok and Phuket in Thailand and Singapore.http://bizhub.vn/news/direct-flight-launched-between-china-and-ha-noi_291493.html

Doosan Vina urged to expand operation in Vietnam


Prime minister Nguyen Xuan Phuc suggested Doosan Heavy Industries Vietnam Co., Ltd (Doosan Vina) further expand its production and provide more important equip-ment for key projects in Vietnam.During a reception for general director of Doosan Vina Park Hoong Ook in Hanoi on January 17, the PM congratulated Doosan Vina on its successes in Vietnam, especially in manufacturing and export of heavy industrial equipment.Vietnam will increase investment in infrastructure development in the central region to promote economic development, he affirmed, expressing his hope that Doosan Vi-na's operation will contribute to fostering the multifaceted cooperation between Viet-nam and of the Republic of Korea (RoK).For his part, Park Hoong Ook praised the Vietnamese government's efforts in solving difficulties facing enterprises, including Doosan Vina.He said Doosan Vina wishes to make more contributions to Vietnam's economic de-velopment, especially joining industrial projects, thus improving capacity for Viet-nam's manufacturing and mechanical industry.The firm has been active in social activities in the country, he noted, adding that it also pays attention to training labour force for Vietnam and improving working environ-ment for employees.Located at the Dung Quat Economic Zone in the central province of Quang Ngai, Doosan Vina is one of the largest overseas manufacturing factories established through joint investment from the RoK-based Doosan Heavy Industries & Construc-tion and Doosan Engineering and Construction.It comprises of five factories, including a boiler factory, a petrochemical factory as well as a pier and port facilities.4https://en.vietnamplus.vn/doosan-vina-urged-to-expand-operation-in-vietnam/125066.vnp

Long An power centre hits delays


The southern province of Long An will put constraints on the technology used in the


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estimated $5 billion Long An power centre project, even asking the plant for a total fuel source changeover from coal to natural gas in the wake of environmental concerns. In a meeting to collect comments and resolve issues, deputy Chair of the Long An Peo-ple's Committee Nguyen Van Duoc asked to tighten technology usage for the Long An thermal power centre as well as site clearance. A change of fuel source from coal to nat-ural gas was also put on the table in the meeting.The power centre will include two power plants that will use coal imported from Aus-tralia and Indonesia, in line with the National Master Plan for Power Development for 2011-2020, with a vision to 2030, known as the Master Power Plan VII, which was re-vised and released in March 2016.The Mekong Delta-based power centre is expected to be constructed and put into op-eration by 2024, with a total capacity of 2,800 megawatts ( MW) in both plants, supply-ing about 17.7 gigawatt-hours per year to the national grid helping to alleviate future pressure in the southern provinces.Several foreign investors showed interest in participating, evidenced by Daewoo E&C's pitch for the $2.7 billion build-operate-transfer Long An 1 coal-fired project, and Korea Electric Power Corporation's plan for the $3.1 billion Long An 2 coal-fired project.According to a report by the Ministry of Industry and Trade (MoIT), the proposed site for the centre is in Can Giuoc district in Long An, which is the only area in the province accessible to vessels of up to 50,000 tonnes.HCM City has expressed concerns that air pollution would affect the business hub if this site is chosen, as the location is on the right bank of the Soai Rap River, which is the border between HCM City and Long An.The MoIT document noted, "MoIT only approves the location as long as it meets all re-quirements on planning, technology, and environmental solutions."Former chair of the Vietnam Chamber of Commerce and Industry Pham Chi Lan warned that such coal-fired power projects must be considered carefully, especially concerning the site for the 1,320MW Long An 1 project, which is just 30-50 kilometres away from HCM City and the Mekong Delta province of Tien Giang.Tran Viet Ngai, chair of the Vietnam Energy Association, said, "There is still potential for hydropower, gas power, and wind power left untapped. We have yet to explore coal in abundance, but the reserves found so far are poor in quality. We will have to import coal if we set up coal-fired power stations, which can consume many resources. So I believe we should first try to run on resources at hand."Ngai said that seeking coal sources also remains a headache, as only Australia and In-donesia keep exporting. However, neither source has said anything about whether and for how long they can ensure coal supplies for Vietnam.http://www.vir.com.vn/long-an-power-centre-hits-delays.html

Billionaire Thao's company replaces Posco E&C in Splendora


The whole share volume owned by Poso E&C Co. (South Korea), equivalent to 50 per cent of the total shares at Splendora in Hanoi, has been transferred to Phu Long Real Estate JSC of billionaire Nguyen Thi Phuong Thao.Phu Long, which is under Sovico Holdings Company, is a big real estate company in HCM City. It has carried out major projects like Dragon City (33 hectares), Dragon Riv-erside City (3.1ha), Dragon Village (21.6ha), and developed HDBank Tower and Sovi-co Phu Quoc.Before acquiring 50 per cent of Splendora's shares from Posco E&C, at the end of 2017, Phu Long raised its charter capital from VND700 billion ($30.85 million) to VND3 tril-lion ($132.2 million).The deal marks the appearance of Phu Long on the Hanoi real estate market. This is also a good opportunity for Phu Long to acquire the 50 per cent left from Vinaconex because the corporation has been planning to divest from Splendora for a while now.Besides Splendora, Vinaconex has invested into various projects, such as a building complex at 97 in Lang Ha Street, 2B Vinata Tower at 289 Khuat Duy Tien Street, a


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project at 93 Lang Ha Street, and an apartment building at 25 Nguyen Huy Tuong Street.At a recent roadshow, director general of Vinaconex said that Splendora could earn a total revenue of around VND1.2 trillion ($53 million) in 2018 with a profit of VND430 billion ($19 million). According to the plan, Splendora could gain VND2 trillion ($88.1 million) of revenue and VND500 billion ($22 million) of profit by 2020.Splendora is one of the largest-scale real estate projects in the west of Hanoi with its area of 264ha. An Khanh Joint Venture Company of Vinaconex and Posco E&C (now Phu Long JSC), is the project developer.http://www.vir.com.vn/billionaire-thaos-company-replaces-posco-ec-in-splendo-ra.html

Jollibee celebrates 100th store in Vietnam


The third largest restaurant chain in the country marks a new milestone in Can Tho and solidifies commitment of spreading boundless joy in Vietnam.Jollibee, home of the world-famous Chickenjoy and the largest Asian food service company, celebrated today the grand opening of its 100th store in Vietnam in the Me-kong Delta city of Can Tho with an event that brought boundless joy to huge crowds of customers who love the restaurant's renowned range of dishes."Vietnam is home to our largest Jollibee restaurant network outside of the Philippines, and as such, this country will always hold a special place in Jollibee's history," said Er-nesto Tanmantiong, chief executive officer of Jollibee Foods Corporation (JFC). "From our humble beginnings as a small ice cream parlor in the Philippines, it gives us joy that more and more people are coming to love Jollibee, helping us grow to become one of the biggest global food service companies to-date. This inspires us to stay true to our mission of spreading the joy of eating with everyone."To celebrate this milestone, Jollibee is giving away 100 buckets of its famous Chicken-joy along with other freebies at its stores across the country to bring even more joy to Vietnamese families. Various special treats and surprises also welcomed customers at the 100th store grand opening in the Can Tho store."Since opening the doors of our first store in Vietnam in 2005, it has been such an hon-our to see the nation embrace Jollibee," said Dennis Flores, head of International Busi-ness at JFC. "For many, Jollibee is one of their first experiences of a memorable family bonding, whether by enjoying great food together or having a kiddie party. These, among many other moments, contribute to the boundless joy we have shared together with Vietnamese families over the years. As such, our business in Vietnam has been a core pillar of our international operations, and will continue to be one of our most im-portant markets as we continue reaching more families around the world."Jollibee opened its first branch in Co.op Mart Xa Lo Hanoi in 2005 and has been ex-panding steadily since then. Now it is one of the top three largest restaurant chains in the country as it stays true to its commitment of bringing joy to customers."At Jollibee, we are dedicated to spreading the joy of eating to everyone. Now with 100 stores nationwide, we are even more ecstatic in bringing our unique brand of joy to families everywhere in the country -- from the very south to the very north of Viet-nam," said Lam Hong Nguyen, general manager of Jollibee Vietnam.http://www.vir.com.vn/jollibee-celebrates-100th-store-in-vietnam.html

Pegasus Vietnam to carry out Outward Bound Vietnam with BIDV aid


On January 15, 2018 at Saigon Quy Nhon Hotel in the central province of Binh Dinh, Pegasus Investment and Consultancy Binh Dinh JSC and Bank for Investment and De-velopment of Vietnam (BIDV)'s Binh Dinh branch signed a sponsorship contract for Outward Bound Vietnam.This strategic cooperation between two organisations further strengthens the develop-ment of the unique outdoor educational project Outward Bound Vietnam.Located at Tan Thanh Tourism Zone -- part of the province's Nhon Hoi Economic Zone -- Outward Bound Vietnam is part of the Pegasus Intergrated Education and Eco-tour-


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ism Development project with a total area of 60.86 hectares and three development phases.As part of the Outward Bound International network with 38 member countries worldwide, Outward Bound Vietnam hopes to inspire young people to be responsible to society, the community, and the environment through a holistic learning and devel-opment model adhering to the highest standards of training and security of all Out-ward Bound schools.In addition, the project will be developed with the combination of an eco-tourism and wellness centre to provide comprehensive services to customers, including families and business organisations.Ricky Tan, chair of KinderWorld Education Group, shared that as part of the corporate social responsibility initiative to support the development of local youth and students, Outward Bound Vietnam has committed to offering 100 training scholarships for Cat Hai Secondary School students and Binh Dinh Youth Union.Moreover, KinderWorld Education Group commits to investing VND500 billion ($22.01 million) into the province through the establishment of Pegasus Integrated Eco-tourism Development and Singapore Vietnam International School (SVIS).The implementation of the eco-resort component will commence in April 2018. KinderWorld looks forward to receiving support from local authorities and the contin-ued collaboration with BIDV in this upcoming venture.In Vietnam, KinderWorld plans to develop several Outward Bound Vietnam campus-es in Hanoi, Vinh Phuc, Quang Ninh, Quang Tri, Danang, and Binh Dinh. Particularly, the project in Binh Dinh commenced operation in 2016 offering a variety of courses for students, the local Youth Union, and internal training for the group's employees.In 2018, Outward Bound Vietnam plans to expand its training programmes to partici-pants from Singapore, including Outward Bound Singapore, Republic Polytechnic, Hwa Chong Institute, and National Trade Union Congress of Singapore (NTUC) -- a union of 58 affiliated organisations, two associations, 10 social enterprises, and 6 or-ganisations with about 900,000 members.Speaking at the ceremony, Nguyen Tuan Thanh, deputy Chair of the Binh Dinh Peo-ple's Committee, emphasized that Outward Bound Vietnam contributes greatly to both education and tourism in Binh Dinh. He strongly believed that this sponsorship is an important milestone marking the progress of the project and expressed the prov-ince's commitment to creating a favourable environment for investors.Nguyen Quang Dong, director of BIDV Binh Dinh, said that as a pioneer in consulting and supporting foreign invested enterprises in investing in the province, BIDV Binh Dinh is willing to cooperate and commit to meeting the demand for credit and banking services of Pegasus to carry out Phase 1 of Outward Bound Vietnam.http://www.vir.com.vn/pegasus-vietnam-to-carry out-outward-bound-vietnam-with-bidv-aid.html

US firm eyes Vietnam's petrochemical industry


The chair of the Vietnam Energy Association, Tran Viet Ngai, said that foreign compa-nies see great development potential for Binh Son Refining and Petrochemical Co Ltd (BSR), the operator of the Dung Quat Oil Refinery in central Quang Ngai province.It will hold an IPO (initial public offering) of 7.79 percent of its charter capital, or 242 million shares, on the HCM City Stock Exchange with a starting price of $0.64 (VND14,600) per share.Binh Son is expected to be the biggest ever IPO in Vietnam, slated for January 17.The US-based Polestar, through a representative in Vietnam, wants to buy the entire 49 percent of BSR stake to be offered at the IPO.The representative said if Polestar can become the strategic partner of BSR, it will up-grade and expand the oil refinery and build bonded warehouses to lease to businesses which import petroleum products temporarily for later re-export.It has also promised to be responsible for outlets selling products from BSR.Commenting about the US investor's interest in BSR, Ngai said Polestar is aiming to


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make a profit, not from oil refining, but from petrochemistry. The long-term develop-ment prospects of BSR are in petrochemistry."Vietnam still doesn't have a petrochemical technology. Petrochemicals can bring great added value with products such as polymer particles, fibers and bitumen which are very expensive in the world," Ngai commented."At present, BSR earns money from oil refining, and producing petrol and oil products, which cannot bring high value," he explained.The expert believes that the US firm is eyeing a 49 percent BSR stake because it wants to become a strategic partner of the Vietnamese company.BSR also had large workshops, seaports and good transport conditions which develop 40-50 million tonnes of oil a year. In general, BSR's long-term prospects are excellent.Local newspapers report that Vitol, an energy group, will also attend the IPO. More than 4,000 investors have registered to buy 652 million BSR shares, or 2.7 times higher than the offered amount.Ngai said that only large investors like Polestar can buy a BSR stake, because BSR will need further investment capital of tens of billions of dollars.Ngo Tri Long, an economist, said that the US investor can see the great potential of the petrochemical industry in Vietnam.Long believes that investment from the US company would be good for Vietnam be-cause it has powerful financial capability and advanced technology.http://english.vietnamnet.vn/fms/business/193925/us-firm-eyes-vietnam-s-petro-chemical-industry.html

Vietnam's top taxi firm fears bankrupcy in the era of Grab, Uber


Mai Linh has asked for its debts to be frozen for the next 20 years to fight off the threat of imminent insolvency.Vietnam's leading taxi company Mai Linh has asked the government to ease its social insurance responsibilities, saying that popular ride-hailing apps are pushing it to the brink of insolvency.The company has sent the request to the legislative National Assembly, Vietnam Social Security and the Ministry of Finance asking to be released from loan interest payments and penalties for social insurance debts.As of the end of October last year, the company owed nearly VND182 billion ($8 mil-lion) in workers' social insurance contributions, it said.The company is asking for its interest and penalties to be frozen for the next 20 years, promising to clear the debt by then and fulfill all its insurance payments from now on.Starting this year, businesses now face criminal responsibility for workers' social in-surance contributions, according to Vietnam's revised Penal Code.Ho Huy, chair of the company, said "intense and unfair" competition from Grab and Uber had caused its revenue to drop by 30 percent from previous years.The company, which launched its own ride-hailing motorbike taxi app last year, now only makes enough to cover daily expenses and cannot afford to clear its debts and in-terest payments, he said.Mai Linh could be driven out of the market soon, leaving its 24,000 drivers jobless, he said."Without support from government agencies, Mai Linh will go bust very soon," Huy said in a letter obtained by VnExpress.The company's communications officer later refused to comment on the issue.A financial report from Mai Linh showed accumulated losses of nearly VND800 billion ($35.2 million), 80 percent of its registered capital, at the end of June 2017. Its workforce has also dropped by 20 percent from late 2016.These figures should raise doubts about its ability to maintain stable operations, ac-cording to auditors.Grab and Uber arrived in Vietnam in 2014 and operate both car and motorbike taxi services. The two services have been running on a trial basis since early 2016 and will be officially authorised soon, according to a proposal made by the transport ministry


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earlier this month.Since their arrival, Vietnamese traditional taxi firms including Vinasun and Mai Linh have repeatedly reported losses and sliding revenues, blaming "unhealthy" competi-tion from the new players.Taxi firms have accused the two of tax evasion and devaluation tricks.https://e.vnexpress.net/news/business/companies/vietnam-s-top-taxi-firm-fears-bankruptcy-in-the-era-of-grab-uber-3700126.html End


180118Intellasia Finance Vietnam - HKBAV · With Chinese competition, new glass licences on hold 19...

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