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  • 24 March 2017

    finance & business news

    FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Reference exchange rate goes up 3 VND 1 Exchange rate under the control despite Fed rate hike 2 Going against trend, some banks cut deposit rates 3 Consumer interest rates unbelievably high 3 Raising interest rates may derive from banks' asset quality 5 Bad debt settlement needs further acceleration 6 More stringent monitoring of capital inflows into

    construction and real estate sectors needed 8 State Treasury mobilises $193 million in government bonds 9 City remittances race to $1b mark 9 SBV should offer failing banks to foreign investors 9 Singapore's UOB gets nod to open wholly owned bank in Vietnam 10 VietABank changes general director 11 ABBANK committed to environmental responsibility 11 Apec 2017: opportunities for VN's businesses 12 US raises bar on seafood imports to curb illegal fishing, fraud 12 VN imposes anti-dumping duties on steel from China 13 Vietnam & Singapore pledge to strengthen bilateral relationship 14 S'pore, Vietnam ink 6 deals to expand economic ties 15 Japan announces $2 million aid for 18 projects 16 Vietnam looks to expand cooperation with WIPO 17 HCM City customs tariff collection target for Q1 unobtainable 17 Experts: Transparency lacking in mining sector 18 Vietnam suspends meat imports from Brazil 19 Labour ministry eyes high-skilled labour export 19 Seven businesses under health ministry go public 20 Liquidation of public cars to be inspected 20 Vietnam not prepared for retail market expansion 21 From far and wide 22

    BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Business Briefs March 24, 2017 24 VN Index nears 720 points 25

    Blue chips drive VN stocks back up 25 Market retreats after two-day rise 26 VN Index reverses Wednesday's fall 27 SCIC to work with Keppel Land 27 Human resources to drive industry 4.0 27 US$1.3 billion in new investments approved in Binh Duong

    Province 28 Japanese investors shift eye to service sector 29 Asean-China sea transport route opens 30 Vietnam-Dutch food security cooperation to soar 30 Israel introduces agri-tech to Vietnam 31 HCM City partners with Israeli firms to improve business climate 31 Lam Dong looks to develop local coffee brand 32 Clean Vietnamese tea expected to conquer world's markets 33 Vietnamese lose appetite for 'Made in China' household

    electrical appliances 33 Exhibition on machinery, technology to take place in Hanoi 33 Thai products week 2017 kicks off in Hai Phong 34 Casinos still off-limits to Vietnamese 34 HCM City moves on with Saigon Safari project 35 Danang wants master plan for Son Tra tourism site reviewed 35 PetroVietnam projects falling Q2 oil output as low prices

    weigh on revenue 36 E-commerce in Vietnam is still attractive for even more

    players: Tiki's CEO 37 Mapletree Business Centre opened 38 Isuzu Vietnam starts construction of after-sale service centre i

    n HCM City 40 Dacin opens sales for Vision 1 project 40 Bao Viet Insurance the best workplace in non-life insurance 40 Sun Group introduces new apartment block 41 Rosewood to manage Vietnam resort 42


    Reference exchange rate goes up 3 VND

    24/MAR/2017 INTELLASIA | VNA

    The State Bank of Vietnam set the reference VND/USD exchange rate at 22,256 VND/USD on March 24, up 3 VND from the day ago. With the current/- 3 percent VND/USD trading band, the ceiling exchange rate is 22,915 VND per USD and the floor rate is 21,588 VND per USD. In the opening hours, commercial banks increased their rates slightly. Vietinbank listed the buying rate at 22,750 VND/USD, up 20 VND, and the selling rate at 22,820 VND/USD, up 5 VND. BIDV set its buying and selling rates at 22,755 VND and 22,825 VND, per USD, up 20 VND. Vietcombank revised its buying and selling rates up by 20 VND to 22,750 VND and 22,820 VND, per USD.

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    Vietnam finance & business 24 March 2017

    Exchange rate under the control despite Fed rate hike

    24/MAR/2017 INTELLASIA | VIR

    After the Federal Reserve (Fed)'s move of increasing the key USD interest rate by 0.25 per cent up to a range of 0.75-1 per cent, the exchange rate on the domestic market is under control. However, Huynh Trung Minh, a financial and banking expert, told VIR's Van Linh that enterprises should be proactive in exchange rate risk hedging. What is your viewpoint on the development of VND/USD exchange rate after the Fed's adjustment? As forecasted, the Fed has recently raised the federal funds rate to 0.75-1 per cent and is predicted to have other future hikes in 2017. The next increases are expected in June and December this year. Given the increase of 0.25 per cent, the VND/USD exchange rate has showed slight fluctuations. In addition, with the aim of stabilising exchange rates, the State Bank of Vietnam (SBV) said it would sell foreign currency and ensure the legitimate demands of individuals and businesses. Therefore, the exchange rate will be under the control. The VND's de- preciation will be controlled at around 1-2 per cent, thanks to the stable economy, record high foreign currency reserves ($40 billion) as well as the flexible monetary pol- icies. The listed exchange rate at various banks decreased after the USD interest rate increased. What pressure will the upward trend of the greenback exert on the VND/USD ex- change rate? The US economy is expected to have better growth under the leadership of the new president, which will impact the USD. As noted by Fed chair Janet Yellen, the changes in economic policy under the Trump administration might impact the Fed's future in- terest rate adjustment plans. The upward trend of the USD price is expected to contin- ue in the medium and long terms. The market expects Donald Trump's policies in increasing spending and reducing tax- es to boost the economic growth and stimulate inflation. Therefore, they think the in- terest rate will rise in the future and this will result in strong support to the USD in the upcoming time and putting pressure on the VND/USD exchange rate. Not only Vietnam, most countries throughout the world have to deal with exchange rate fluctuations. However, the exchange rate increases due to various factors, prima- rily the seasonal factor. In addition, there are some other reasons, including concerns over the fate of the Trans-Pacific Partnership Agreement or the continuous increases by the Fed. But the SBV has already prepared large foreign exchange reserves. In other words, the pressure of exchange rate increase is existing but under control. What should companies do to prevent exchange rate risks? Normally, the end of the year exchange rate increases are of cyclic nature, when the payment for foreign partners is due, driving up the demand for foreign currencies. Therefore, enterprises should proactively hedge exchange rate risk via purchasing for- eign currencies in future contracts. In other words, this is a kind of exchange rate fluc- tuation insurance. Under the current context, in your opinion, are USD or VND holdings more profitable? In the short term, people who want to send their children studying abroad or seeking healthcare services would do better to keep their money in foreign currency. If there is no demand, switching to VND reserves will be more profitable. Specifically, in case of depositing VND2 billion at a bank, customers will receive more than VND10 million each month and about VND130 million for the whole year. In contrast, if hold- ing USD since the beginning of the year, they would make only VND tens of millions. Many people worry about lacking foreign currency and are flocking to purchase more. This is a favourable opportunity for speculators pushing the price on the black market. In all eventuality, there is little reason to panic.

    Going against trend, some banks cut deposit rates


    The mobilisation interest rates of some banks have risen fairly fast since the beginning of the year. Especially, some banks even offer nine percent per annum deposit rate in

    Intellasia 24 March 2017 2 / 42

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    Vietnam finance & business 24 March 2017

    order to attract capital. This is interpreted as to balance the Loan to Deposit Ratio (LDR). However, some banks have recently lowered deposit rates by 0.1-0.3 percent. Particu- larly, from March 23rd, the deposit rates at the Vietnam International Joint Stock Bank (VIB) were cut by 0.1 percent to 5.1 percent on terms of one-two months, by 0.3 percent to 5.2 percent per annum on terms from three to five months, by 0.15 percent to 5.6 per- cent per annum on terms from six to 11 months, and deposits on terms from 12 months and above declined by 0.05 percent to 7.1 percent per annum. According to representative of VIB, increasing deposit rates to attract idle money is not essential at the present time because the bank's liquidity is currently stable, and the LDR is well maintained. Similarly, Viet Capital Commercial Joint Stock Bank (VietCapital Bank) has adjusted its deposit rate list on March 21st, in which the notable point is the reduction of long terms from 18 to 60 months by 0.1 percent to 7.8 percent per annum. Meanwhile, at the Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank), the long-term