finance & business news 30 June 2017 - HKBAV · 2017-06-30 · Intellasia 30 June 2017 3 / 42...

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30 June 2017 Intellasia No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi © All Rights Reserved Tel: +844 2213 2244 Fax: +844 3759 2034 Email: [email protected] Websites: www.Intellasia.Net www.TriTueAChau.com finance & business news FINANCE Reference exchange rate goes down 1 VND 30/JUN/2017 INTELLASIA| VNA The State Bank of Vietnam set the daily reference exchange rate for VND/USD on June 30 at 22,431 VND, down 1 VND from the day before. With the current trading band of +/-3 percent, the ceiling rate for commercial banks dur- ing the day is 23,103 VND and the floor rate 21,759 VND per USD. The opening hour rates at commercial banks saw a slight drop, with Vietcombank and Vi- etinbank cutting both their rates by 5 VND. At Vietcombank, the buying rate was listed at 22,700 VND and selling rate 22,770 VND, while Vietinbank bought the greenback at 22,690 VND per USD and sold at 22,770 VND. Meanwhile, BIDV kept its rates unchanged from June 29, buying at 22,705 VND and sell- ing at 22,775 VND per USD. http://en.vietnamplus.vn/reference-exchange-rate-goes-down-1-vnd/114105.vnp FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Reference exchange rate goes down 1 VND 1 SBV may consider lifting credit growth targets: Analysts 2 Over 980 million USD worth of G-bond mobilised in June 2 Two bank capital channels temporarily cease 2 Resumption of suspended projects could erase bad debt in property sector 3 Is banks' interest rate raise a trend? 4 Policy credits for Mekong Delta remain modest 5 Vietnam Report lists 2017's top 10 commercial banks 6 Life insurance market share fluctuate in 2017 7 Citi's Korea Desk supports Korean corporations in Vietnam 7 Six nominated for Sacombank board 8 VIB has completed the purchase of a foreign bank branch 9 Kienlongbank shares officially listed 9 GDP grows 5.73pct in first 6 months 9 Vietnam's growth target slowly slipping away 10 Put resources to good use to attain 8-9pct growthexpert 10 CPI up 4.15pct in six months 11 Fiscal discipline indispensible to close Vietnam's budget deficit 12 Vietnam's foreign trade surges 14 Exports remain the 'exit' for economic growth in the second half of 2017 15 HCM City agro-forestry-fishery output reaches VND7.13 trillion in Jan-Jun 16 Son La mangoes irradiated for export to Australia 16 Vietnam's fertiliser imports surge in H1 16 VN to import petrol for next five years 17 Vietnam spends $376 million on fruit imports from Thailand 17 Processing & manufacturing leads in FDI 18 Southern VN attracts major FDI 18 Dong Nai's registered capital hits record 19 Thanh Hoa Province led in FDI attraction 19 Tough talk over pay raise in 2018 19 PM pledges all possible support to workers 20 CIEM encourages equitisation 20 City urged to boost competitiveness 21 The next Silicon Valley? Where to place Vietnam on the global startup map 22 VAMA optimistic about auto sales 24 Funds needed for hi-tech agriculture 25 Vietnamese consumers among most demanding on e-commerce 26 Convenience stores seek ways to differentiate themselves from rivals 26 Online tourism market still big enough for Vietnam's OTAs 27 Condotel growth is not normal: experts 28 China firms eye opportunities in VN 28 Vietnamese firms promote trade in South Africa 29 BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Business Briefs Jun 30, 2017 30 Financial stocks lift local markets 30 Investor caution pushes turnover down 31 HCM City to review master infrastructure plans 31 Fourth bridge to Thu Thiem in the offing 32 Visa invitation and guarantees go online 33 Ministry pushes app based taxi management to localities 33 Tourism plans in Mekong Delta called too ambitious 34 City IT sector salaries balloon 34 Pet breeding a popular business in Ben Tre Province 35 Vietnam rides on Samsung's coattails 36 HCM City to help firms join Samsung's global supply chain 36 Savills Hotels to host 'Meet the Experts' series in Hanoi & HCM City 37 Heineken Vietnam backs sustainable growth 38 Mystery company may continue gobbling up failing steel giant 38 Taxi-Uber clash rasies questions 40 IBM Institute, UBIS University cooperate in management training 40 CAAV head picked as new ACV chair 41 First co-working space for all startup activities opens 41 200 businesses join in high-quality Vietnamese goods fair 42 FINANCE

Transcript of finance & business news 30 June 2017 - HKBAV · 2017-06-30 · Intellasia 30 June 2017 3 / 42...

Page 1: finance & business news 30 June 2017 - HKBAV · 2017-06-30 · Intellasia 30 June 2017 3 / 42 FINANCE Vietnam finance & business 30 June 2017 In addition, the regulator also used

30 June 2017

IN©

finance & business news

FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Reference exchange rate goes down 1 VND 1SBV may consider lifting credit growth targets: Analysts 2Over 980 million USD worth of G-bond mobilised in June 2Two bank capital channels temporarily cease 2Resumption of suspended projects could erase bad debt in

property sector 3Is banks' interest rate raise a trend? 4Policy credits for Mekong Delta remain modest 5Vietnam Report lists 2017's top 10 commercial banks 6Life insurance market share fluctuate in 2017 7Citi's Korea Desk supports Korean corporations in Vietnam 7Six nominated for Sacombank board 8VIB has completed the purchase of a foreign bank branch 9Kienlongbank shares officially listed 9GDP grows 5.73pct in first 6 months 9Vietnam's growth target slowly slipping away 10Put resources to good use to attain 8-9pct growthexpert 10CPI up 4.15pct in six months 11Fiscal discipline indispensible to close Vietnam's budget deficit 12Vietnam's foreign trade surges 14Exports remain the 'exit' for economic growth in the second

half of 2017 15HCM City agro-forestry-fishery output reaches VND7.13

trillion in Jan-Jun 16Son La mangoes irradiated for export to Australia 16Vietnam's fertiliser imports surge in H1 16VN to import petrol for next five years 17Vietnam spends $376 million on fruit imports from Thailand 17Processing & manufacturing leads in FDI 18Southern VN attracts major FDI 18Dong Nai's registered capital hits record 19Thanh Hoa Province led in FDI attraction 19Tough talk over pay raise in 2018 19PM pledges all possible support to workers 20CIEM encourages equitisation 20

City urged to boost competitiveness 21The next Silicon Valley? Where to place Vietnam on the

global startup map 22VAMA optimistic about auto sales 24Funds needed for hi-tech agriculture 25Vietnamese consumers among most demanding on e-commerce 26Convenience stores seek ways to differentiate themselves

from rivals 26Online tourism market still big enough for Vietnam's OTAs 27Condotel growth is not normal: experts 28China firms eye opportunities in VN 28Vietnamese firms promote trade in South Africa 29

BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Business Briefs Jun 30, 2017 30Financial stocks lift local markets 30Investor caution pushes turnover down 31HCM City to review master infrastructure plans 31Fourth bridge to Thu Thiem in the offing 32Visa invitation and guarantees go online 33Ministry pushes app based taxi management to localities 33Tourism plans in Mekong Delta called too ambitious 34City IT sector salaries balloon 34Pet breeding a popular business in Ben Tre Province 35Vietnam rides on Samsung's coattails 36HCM City to help firms join Samsung's global supply chain 36Savills Hotels to host 'Meet the Experts' series in

Hanoi & HCM City 37Heineken Vietnam backs sustainable growth 38Mystery company may continue gobbling up failing steel giant 38Taxi-Uber clash rasies questions 40IBM Institute, UBIS University cooperate in management training 40CAAV head picked as new ACV chair 41First co-working space for all startup activities opens 41200 businesses join in high-quality Vietnamese goods fair 42

FINANCE

ntellasia Tel: +844 2213 2244

FINANCEReference exchange rate goes down 1 VND

30/JUN/2017 INTELLASIA| VNA

The State Bank of Vietnam set the daily reference exchange rate for VND/USD on June 30 at 22,431 VND, down 1 VND from the day before.With the current trading band of +/-3 percent, the ceiling rate for commercial banks dur-ing the day is 23,103 VND and the floor rate 21,759 VND per USD.The opening hour rates at commercial banks saw a slight drop, with Vietcombank and Vi-etinbank cutting both their rates by 5 VND.At Vietcombank, the buying rate was listed at 22,700 VND and selling rate 22,770 VND, while Vietinbank bought the greenback at 22,690 VND per USD and sold at 22,770 VND.Meanwhile, BIDV kept its rates unchanged from June 29, buying at 22,705 VND and sell-ing at 22,775 VND per USD.http://en.vietnamplus.vn/reference-exchange-rate-goes-down-1-vnd/114105.vnp

o. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi All Rights Reserved

Fax: +844 3759 2034Email: [email protected]

Websites: www.Intellasia.Net www.TriTueAChau.com

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SBV may consider lifting credit growth targets: Analysts

30/JUN/2017 INTELLASIA| VNS

The central bank may consider lifting credit growth targets for several banks to sup-port economic growth, according to Bao Viet Securities.Bao Viet Securities analysts said in a report that there was immense pressure on the government to loosen monetary policy as Vietnam was determined to achieve the GDP growth target of 6.7 per cent for the full year, however, the fiscal policy was struggling with disbursement of public investment.Until the end of May, disbursement of public investments reached VND88 trillion, only equivalent to 30.6 per cent of the full year's estimate, according to the General Sta-tistical Office.Bao Viet Securities said when fiscal policy did not support growth well, pressure would intensify on the monetary policy. Lifting credit growth targets for several banks might be an option to consider, the analysts said.When the monetary policy was loosened, the liquidity of the banking system would be increased, which would create favourable conditions for government bond issuance. The State Treasury, to date, has completed more than 70 per cent of the bond issuance plan of 2017.The General Statistical Office revealed that credit growth reached 7.54 per cent in the first six months of this year. The central bank set credit growth target at 18 per cent this year.http://bizhub.vn/banking/sbv-may-consider-lifting-credit-growth-targets-analysts_287235.html

Over 980 million USD worth of G-bond mobilised in June

30/JUN/2017 INTELLASIA| VNA

The Hanoi Stock Exchange (HNX) raised 22.3 trillion VND (980.8 million USD), down 6.3 percent from the previous month, during 16 auctions in June.The five-year bonds have an annual interest rate between 4.90 and 5.05 percent, down 0.15 percent from May, while the seven-year bonds were auctioned at an interest rate of 5.18-5.33 percent per annum, down 0.14 percent.The annual interest rates for 10-year and 15-year bonds were 5.65-5.79 percent and 6.3 percent respectively.Meanwhile, the bonds with 20 years and 30 years have respective coupon rates of 6.67-7 percent and 7.1-7.5 percent, respectively.On the secondary market, the total volume of outright trading reached 912.5 million bonds, or over 97.8 trillion VND (4.30 billion USD), up 5.9 percent in value over the last month.The trading volume through repurchase agreement (repo) was more than 917.8 million bonds, or 90.3 trillion VND (3.97 billion USD), up 0.3 percent in value against last month.http://en.vietnamplus.vn/over-980 million-usd-worth-of-gbond-mobilised-in-Jun/114081.vnp

Two bank capital channels temporarily cease

30/JUN/2017 INTELLASIA| VNECONOMY

Before the 2017 Traditional New Year holiday, banking activities were at peak season of payment. The State Bank had continuously injected capital to support the system's disposable funds.On the one hand, a large amount of capital was injected. On the other hand, the regu-lator still signalled the willingness to withdraw money if there was abundance, through the issuance of T-bills, though the volume got lesser and gradually stopped over the past five months.In other channel, after mediating almost all of the capital injected to support the afore-mentioned period, the State Bank is still offering mortgaged loans in the open market, though the outstanding loans from credit organisations have gradually decreased to only 50 billion dong as of mid-June.And in about one recent week, though the regulator has been steadily offering the cap-ital support of one trillion dong per session, no credit institution relied on this channel. The loan balance as of June 27 continued to be equal to zero.Regarding the regulation of monetary policy and the open market operation, the issu-ance of T-bills of the State Bank is to purchase or sell valuable papers with credit or-ganisations, thereby, directly affecting the system's disposable funds and liquidity. These are also the channels and tools that support the "alignment" of the money supply for interest rates and exchange rates.

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In addition, the regulator also used other tools such as refinancing, adjustment of the required reserve ratio, etc. However, since 2011, the compulsory reserve tool has not had any adjustment; the capital refinancing is also quite blurred in information, which has been partially implemented but limited via special bond channel of the Vietnam Asset Management Company (VAMC).The two major channels including mortgage loan on the open market and issuance of T-bills are still the mainstream and are more flexible. And, as of June 27, both channels suspended in the transaction balance.Accordingly, it can be inferred that the disposable fund status of credit organisations in general is generally rather balanced and stable.Even, in another channel, the capital of credit organisations is also a favourable factor for the issuance of government bonds, contributing to the budget balance, through high successful rate of bidding activities since the beginning of this year, and creating favourable conditions for deposit rates to decrease sharply, lessening the expenses to be paid to the State budget.

Resumption of suspended projects could erase bad debt in property sector

30/JUN/2017 INTELLASIA| VNS

The bad debt in the real estate sector could be resolved if steps are taken to resume sus-pended projects, according to the HCM City Real Estate Association (HoREA).Around 500 real estate projects in HCM City have been suspended for various reasons, including problems related to land clearance, land-use payments, and investors' weak financial capacity.The suspended projects have created a big volume of bad debt, severely burdening both property developers and banks as well as the entire economy, the association has said.The 90ha Phuoc Kien Project in Nha Be District developed by Quoc Cuong Gia Lai Company had been delayed for 10 years, according to a report from Thanh Nien (Young People) newspaper.Eight per cent of the total land for the project has not been cleared.Nguyen Thi Nhu Loan, the company's chairwoman, told Thanh Nien newspaper that the suspended project had placed her company under pressure as it had invested VND5 trillion (US$220 million).The company has to pay more than VND500 million ($22,000) each day in bank inter-est.The situation has also affected the company's partners, she said, adding that the com-pany had decided to sell the project to a new investor.The VND5 trillion Saigon One Town in District 1, which has been delayed for six years, has been sold to another investor.The Kenton project in Nha Be District has resumed after several years of delay after its investor sought an additional VND1 trillion from banks.Pham Cong Chanh, a real estate expert in HCM City, was quoted in Thanh Nien news-paper as saying that bad debt would be handled if 500 suspended projects resume.Along with helping companies and banks, it would create a diverse supply in the city's property market, he said.Chanh added that the authority should focus on projects with high liquidity that can be sold immediately. The others should be divided in different groups with different solutions.Other experts agree that one solution is not needed for all projects.Mortgaged projects that have land clearance and building permit problems should be allowed to resume, while projects which have problems related to planning should be in one group, experts said.Banks should also give more support to developers to solve the problems.Le Hoang Chau, chair of HoREA, said that it was important to reduce the number of suspended projects to handle bad debt.A big cash flow would occur in the market if these projects resumed and more real es-tate products were put on the market, he added.

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He said that it was necessary to create more advantageous conditions to encourage merger and acquisitions (M&A).If M&A deals are implemented well, more cash would flow to the market and there would no need for funds from the State budget.http://bizhub.vn/news/resumption-of-suspended-projects-could-erase-bad-debt-in-property-sector_287240.html

Is banks' interest rate raise a trend?

30/JUN/2017 INTELLASIA| TRI THUC TRE

Recent developments show that the liquidity of the entire banking system has become abundant again. Specifically, the interbank rates have continuously fallen and current-ly remain low. According to the latest data released by the State Bank of Vietnam (SBV), the overnight rate on market 2 was 2.31 percent per annum as of June 20th, while one-week and one-month rates were also stable at respectively 2.68 percent and 3.59 percent per annum. Meanwhile, SBV made no move to inject more capital into the Open Market Operation (OMO) market, and even net withdrew in the recent weeks.However, from early June until now, some banks have raised deposit rates. In partic-ular, the Vietnam Technological and Commercial Joint Stock Bank (Techcombank) in early June increased deposit rates across the terms from four months and more (0.1 percent on 9-month and 15-month terms; 0.2 percent on 4-month and 5-month, and 12-month terms; 0.3 percent o terms from six to eight months, and 10-month term; and up to 0.6 percent on 11-month term).At the same time, Bac A Commercial Joint Stock Bank (BacABank) increased deposit rates by 0.1-0.15 percent on terms from six months and more. Currently, the deposit rates with terms of less than six months of BacABank have been close to the prescribed ceiling deposit rate of 5.5 percent, and the bank can only raise interest rates for terms of over six months.At National Citizen Commercial Joint Stock Bank (NCB), deposit rates were raised by 0.45-0.7 percent on terms from seven to 11 months. Deposit rates on terms of 6-month and less of the bank are currently high at 5.3-5.5 percent per annum.Numerous other banks have also raised deposit rates. Viet Capital Joint Stock Bank (VietCapitalBank) increased deposit rates on terms from seven to 11 months by 0.4 per-cent per annum, as its deposit rates on terms of less than six months are also approach-ing the ceiling limit of 5.5 percent. Meanwhile, deposit rates at An Binh Commercial Joint Stock Bank (ABBank) were raised by 0.2 percent per annum on terms of one and two months, reaching 5.1 percent; and Viet A Commercial Joint Stock Bank raised six-month deposit rate by 0.1 percent and 12-month and 24-month deposit rates by 0.2 per-cent.While small banks significantly pushed up deposit rates for terms from more than six months to 11 months, large banks increased their mid-term and long-term deposit rates (from 12 months and more).The recent interest rate list announced by Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank) showed that the bank raised 12-month and 18-month deposit rates by respectively 0.1 percent and 0.3 percent. After strongly lowering interest rates in late September last year, along with other three state-owned banks including Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcom-bank), Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), and Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), the interest rate list of Agribank had been almost unchanged. Thus, the deposit rate adjustment of Agribank this time is notable.Saigon Hanoi Commercial Joint Stock Bank (SHB) raised 13-month deposit rate to 7.1 percent (up by 0.1 percent), and 18-month and 24-month deposit rate to respectively 7.4 percent, up by 0.3 percent. Meanwhile, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), from June 6th increased 15-month deposit rate by 0.05 percent, 18-month deposit rate by 0.1 percent, 24-month deposit rate by 0.3 percent, and 36-month deposit rate by 0.4 percent.The 0.3-0.4 interest rate raise amplitude as mentioned in the above is very noteworthy.

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It shows that the needs to mobilise capital of these banks are increasing again although the system liquidity is assessed as still excessive.The strong interest rate hike of small banks indicated that their local liquidity is not as plentiful as the system's in general.In fact, the system liquidity plummeted in the recent time was said to be due to the rise of the State Treasury's deposit rates at commercial banks and the shift to term-deposits when the investment in the economy has been slowly disbursed. However, most of the deposits of the State Treasury are located at large banks and state-owned banks, and small banks are completely not benefiting from the increase in State Treasury deposits.The second factor that helped boost liquidity was SBV's injection in VND to the econ-omy via the increase in USD purchases in the recent time in order to enhance foreign currency reserves, especially in the context when the USD/VND exchange rate in the domestic has recently been fairly stable.However, the amount of USD in the form of deposits are also mainly located at state-owned banks such as Vietcombank and VietinBank, or some banks having strengths in import-export payment. Thus, small banks are also not benefiting from the move to purchase USD and inject more VND into the market by SBV.Therefore, the abundant liquidity is mainly seen in large banks, while small banks sometimes still encountered local liquidity difficulties. Thus, they have to increase in-terest rates to accelerate capital mobilisation and ensure liquidity as well as pursue the business development in the near future. And when the deposit rates on terms of less than six months are close to the threshold of 5.5 percent, these banks must raise deposit rates from over six months and more to enhance competitiveness in capital mobilisa-tion.For small banks that have raised medium and long-term deposit rates as mentioned in the above, the reason may be the needs to increase medium and long-term capital to improve the ratio of using mobilisation fund for medium and long-term lending. This ratio has fallen to 50 percent since the beginning of the year. In the context when most of the system lacks medium and long-term fund for lending, banks wishing to boost medium and long-term loans in the near future must strengthen medium and long-term capital mobilisation.Although the internet rate fluctuations in the first half of June were notable, but they only took place in some banks due to their particular activities and difficulties. Thus, the interest rate changes can hardly spread and put pressure on the current interest rate level. The approved Resolution on bad debt settlement is expected to accelerate the pace of handing bad debts, to create premise for further reduction of interest rates.A recent statement of SBV's Governor suggested that the roadmap to lower the ratio of mobilisation fund for medium and long-term lending to 40 percent from early 2018 may be reconsidered. If this plan is postponed, it will lower the pressure to mobilise capital of banks, creating the basis for stabilising interest rates or further reducing in-terest rates as expected by the whole economy.

Policy credits for Mekong Delta remain modest

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

Credits from the Vietnam Bank for Social Policies for the Mekong Delta are quite dis-proportionate to the national average, although this region should be a key beneficiary from the bank's preferential credits, heard a seminar held in Can Tho City on July 28.Deputy prime minister Vuong Dinh Hue stressed at the seminar that of the bank's total outstanding loans of VND157 trillion as of December 31, 2016, credits for the Mekong Delta made up less than VND28 trillion, or only 17.5 percent. The seminar reviewed a scheme to improve the quality of policy lending for the Mekong Delta region.As many as 30 million policy loans had been extended to families countrywide, but the number for the Mekong Delta was only 2.4 million, the deputy prime minister noted.Speaking at the seminar, Duong Tat Thang, general director of the bank, remarked that the quality of policy credits for the region has improved, evidenced by a sharp fall in bad debts.As of December 31, 2016, the total amount of overdue debts in the Mekong Delta was

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a mere VND224.5 billion, accounting for only 0.81 percent of total outstanding loans, he said."Overdue debts in all 13 localities in the Mekong Delta have fallen," Thang said.The ratio of overdue debts in Hau Giang as of the end of last year had fallen by 7.86 percentage points to 0.43 percent, that in An Giang had shrunk by 7.39 percentage points to 0.98 percent, while the ratio in Ca Mau had also been reduced by 5.04 per-centage points to 0.73 percent, Thang gave examples.However, deputy PM Hue said the average ratio of overdue debts at 0.81 percent owed to the policy bank was still higher than the national average of 0.6 percent.He urged the bank and local leaders to make greater efforts to increase policy credits for the people in the Mekong Delta, especially the poor.The goal for the bank in the next three to five years is that all poor families must have access to policy credits so that poor people there do not fall victim to black-market lenders or loan sharks. Credit lines for the people in the region must also be further increased, Hue said.He said that between now and 2020, the government will set aside VND23 trillion for policy lending, comprised of VND15 trillion as interest rate subsidies, VND5 trillion to spur the bank's chartered capital, and VND3 trillion to partially cover interest for bor-rowers to purchase budget homes.Deputy PM Hue at the seminar asked the State Bank of Vietnam to increase the amount of deposits from other commercial banks into the network of the Social Policy Bank. In addition, all provinces in the Mekong Delta must also increase their contributions to the Vietnam Bank for Social Policies, each with at least VND100 billion a year in the next three years, he said.http://english.thesaigontimes.vn/54753/Policy-credits-for-Mekong-Delta-remain-modest.html

Vietnam Report lists 2017's top 10 commercial banks

30/JUN/2017 INTELLASIA| VNS

Vietnam Report has announced the top 10 commercial banks in Vietnam in 2017, based on an evaluation of reputation, financial capacity and growth potential in the 2016-17 period.The top 10 banks all have bad debt ratio of below 3 per cent in the first quarter of this year.However, Vietnam Report said more drastic measures needed to be taken to thorough-ly handle bad debts in line with the credit growth target.A survey by Vietnam Report carried out in May showed that there were three factors affecting the reputation of a bankcustomers' evaluation about service and product quality, evaluation by the media and business results.Vietnam Report said commercial banks were now paying more attention to customer experience rather than just focusing on expanding scale.Meanwhile, customers were more concerned about information safety and security.The survey also found that more than 95 per cent of banks said revenue and after-tax profits were on an increasing trend in the first months of 2017.In addition, banks were optimistic about the growth of the banking sector, which was expected to reach more than 10 per cent this year.Banks have favourable conditions to develop this year, however, bad debts and control over public debts would be challenges, according to Vietnam Report, adding that banks must have appropriate strategies.The list of top 10 commercial banks is being announced annually since 2012.http://bizhub.vn/banking/vietnam-report-lists-2017s-top-10-commercial-banks_287226.html

Life insurance market share fluctuate in 2017

30/JUN/2017 INTELLASIA| DTCK

The overview of the life insurance market in the first three months of 2017 showed that the total new premium income of the entire market was estimated to reach 4.283 tril-lion dong, up by 28.32 percent compared to the same period of 2016.

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Specifically, the market share in new premium revenue is 21.81 percent for Bao Viet Life, 19.68 percent for Prudential, 13.91 percent for Manulife, 13.44 percent for Dai-ichi Life Vietnam, 10.64 percent for AIA Vietnam, 7.33 percent for generali Vietnam 7.33 percent, 4 percent for Chubb Life, 2.98 percent for Hanwha Life Vietnam, 1.47 percent for BIDV MetLife, and 1.09 percent for Sunlife. Other life insurers account for less than 1 percent market share.The ranking in market share of life insurance companies as of April 2017, according to preliminary statistics updated by companies, seems to see no significant change com-pared to the official data released in March 2017 by the authority.Thus, after many years making efforts, Bao Viet Life has officially surpassed Pruden-tial in terms of both new premium revenue and total premium revenue.Assessing this swap, experts said that in addition to the efforts of the company itself, there are supports from the positive movements of the market and the massive chang-es in key personnel and business strategy of Prudential over the past few years. Bao Viet Life is having good opportunity to be the market leader.However, the good opportunity for Bao Viet Life is also the challenge that Prudential has to face. In fact, maintaining growth and speeding up to regain the first position is a difficult task for the leader of Prudential at the moment, although he has experiences in the insurance industry and is also very knowledgeable about the insurance market of Vietnam.In the following positions, Dai-ichi Life Vietnam is emerging as a name which can cre-ate many surprises for the market. Surpassing AIA Vietnam, this insurer is closely fol-lowing Manulife in the market share for new premium revenue.With the strategy to continuously expand general agent offices throughout the coun-try, Dai-ichi Life Vietnam is also having a very good revenue growth rate which is al-ways double the average growth rate of the market. Currently, the revenue from new premium of Dai-ichi Life Vietnam mainly comes from general agent channel. Howev-er, the company still has many advantages with the exclusive distribution channel with VNPost. Not to mention, bancassurance is also considered one of the important sales channels of the company which accounts for over 10 percent of the total premium revenue.Although the strategy to develop general agent offices and the over-the-phone market-ing method of Dai-ichi Life Vietnam receives mixed comments, it can be denied that with the current growth rate, in the near future, Dai-ichi Life will the most potential name for the third position in Vietnam's insurance market.As for the group of insurers having smaller market share, generali Vietnam and Hanwha Life Vietnam are the ones having relatively good steps in premium revenue growth.According to experts in the industry, insurance companies will achieve their plans if the growth rate of new premium revenue is maintained as positive as in the first months of the year. Thus, in the near future, the positions of insurers in the life insur-ance market share ranking will be more volatile.

Citi's Korea Desk supports Korean corporations in Vietnam

30/JUN/2017 INTELLASIA| VN ECONOMIC TIMES

With Citi announcing plans to open a Korea Desk in Hanoi in July, Myung-Soon Yoo, Head of Corporate Banking at Citi Korea, discusses Citi's strategy and the expectations behind the opening of the Korea Desk.Why have you opened a Korea Desk to serve Korean corporations in Vietnam?Vietnam has become an attractive destination for foreign investors, with substantial competitiveness based on political stability, young talen and dynamic and competitive resources. Korean Top Tier Corporations have continued to expand their operations and production in the country, and Korea has long been ranked as the Number 1 source of foreign direct investment (FDI) in Vietnam. Registered investment capital from Korean enterprises stood at over $54 billion in 5,932 projects as at the end of March 2017. Citi Korea has positioned itself as a long-term global banking partner with Korean conglomerates. The Korea Desk will further leverage Citi's knowledge of client

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strategy and needs with Citi Vietnam's capabilities to support and facilitate the activi-ties of Korean clients in the country.How will Korean corporations benefit from Citi's Korea Desk?Clients will be able to use the same platform and services in headquarters and subsid-iaries. Enhanced communication through the Korea Desk will provide timely market updates and transaction execution and facilitate alignment in clients' treasury activi-ties among headquarters and subsidiaries. Financial services provided include corpo-rate banking, investment banking, local debt raising, foreign exchange, cash management, and trade finance.What do you expect when opening the Korea Desk in Vietnam?We expect to further improve efficiency in supporting Korean clients in delivering lo-cal-global solutions and in transaction execution and ultimately improve the client ex-perience. Our corporate clients are expanding their business worldwide based on their global competitiveness and strong brand awareness. The Korea Desk strategy is effec-tive in successfully supporting the local needs of our Korean multinational clients along with Citi's global network, and Citi's strategy to reinforce support and invest-ment for Korean multinational clients is reflected in this expansion.What is Citi's overall strategy in creating the Korea Desk?National desks have proved to be a strong foundation for Citi's strategy of growing its business with Asian multinationals globally. Asian desks are core to Citi's strategy of increasing and growing our relationship with some of the bank's most important and rapidly internationalising clients in the region. Over recent years, Citi has also invested in building a network of Asia desks across the world to support these types of compa-nies in the local markets in which they operate. For Korea, Citi operates Korea Desks in eight locations: Vietnam, Shanghai, Beijing, Singapore, New Delhi, Moscow, Lon-don, and New York, providing institutional banking services to Korean multinational clients in Western and Eastern Europe, India, Asean, China, North America, and Latin America. The bank plans to open more desks to serve Korean enterprises in the key countries where they operate.http://vneconomictimes.com/article/banking-finance/citi-s-korea-desk-supports-kore-an-corporations-in-vietnam

Six nominated for Sacombank board

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

The State Bank of Vietnam (SBV) on July 28 approved six nominees for the board of directors of Saigon Thuong Tin Commercial Bank, or Sacombank, just in time for the HCM City-based bank's annual general meeting set for tomorrow.Earlier, there had been seven nominees Duong Cong Minh, chair of Him Lam Com-pany, Kieu Huu Dung, chair of Sacombank, Nguyen Mien Tuan, vice chair of Sacom-bank, Nguyen Van Cuu, independent board member of the bank, Nguyen Xuan Vu, deputy general director of the bank, Pham Van Phong, director of Vietcombank's Dak Lak branch, and Le Thi Hoa, board member of Vietcombank.However, the central bank disapproved of Nguyen Van Cuu. Among the six nominees are three current board members of Sacombank and three introduced by the central bank, according to a leader from the SBV, the country's central bank.Duong Cong Minh, former chair of LienVietPostBank, has had to sell of his entire stake at LienVietPostBank to qualify for running for the Sacombank board.Minh has previous experience in the banking sector and leads major real estate firm Him Lam, so he can help Sacombank deal with mortgaged assets and debts, said the leader.The central bank has decided to pick people to sit on Sacombank's board to supervise its operations under a restructuring plan and support the bank to cope with its short-comings.The central bank's involvement in the process of selecting nominees for Sacombank led to speculation that Dang Van Thanh, chair of Thanh Thanh Cong Group, would come back to Sacombank where he used to serve as chair.The central bank owns a 53 percent stake at Sacombank after Tram Be and his son Tram

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Khai Hoa, former board members at Sacombank, relinquished all their shares to the SBV in August 2015. Eximbank, meanwhile, holds an 8.76 percent stake in Sacombank.http://english.thesaigontimes.vn/54748/Six-nominated-for-Sacombank-board.html

VIB has completed the purchase of a foreign bank branch

30/JUN/2017 INTELLASIA| TRI THUC TRE

Our own source said that Vietnam International Commercial Joint Stock Bank (VIB) has just completed the acquisition of a foreign bank branch in HCM City.The deal has also been approved by the State Bank and is expected to be announced early next week.Previously, VIB was one of five banks planning to acquire ANZ's retail banking busi-ness in Vietnam. However, Shinhan Vietnam was the bank that reached an agreement with ANZ, in which eight branches and transaction offices of ANZ Vietnam in Hanoi and HCM City as well as employees of retail banking service segment would be moved to Shinhan.At its annual shareholders' meeting in 2017, VIB approved the plan to buy back busi-ness segments of some credit institutions in Vietnam, including assets and liabilities to exploit and do business in VIB system.

Kienlongbank shares officially listed

30/JUN/2017 INTELLASIA| TRI THUC TRE

Kien Long Commercial Joint Stock Bank (KienLongBank) has officially listed its KLB-coded shares on Upcom.Specifically, 300 KLB-coded shares have been registered for trading on the floor with the reference price on the first trading day at 10,000 dong.In the first session, the price ranged from 10,200 dong to 14,000 dong per share, the closing price was 11,400 dong, up 14 percent from the reference price. Totally, 237,900 shares were traded in the first session.As such, KienlongBank was the second bank to list on the bourse since the beginning of this year after VIB and both banks list on Upcom.

GDP grows 5.73pct in first 6 months

30/JUN/2017 INTELLASIA| VNECONOMY

The General Statistical Office (GSO) has announced the Gross Domestic Product (GDP) in the first six months of 2017 with the estimated increase of 5.73 percent from the same period last year whose GDP in Q1 rose 5.15 percent compared to 6.17 percent in Q2.The report also shows that the agriculture, forestry and fisheries sector increased 2.65 percent; the industry and construction sector swelled 5.81 percent, and the service sec-tor hiked 6.85, contributing 2.59 percentage points, two percentage points and 0.43 per-centage points respectively to the general growth.In the agriculture, forestry and fisheries sector, the fisheries sector recorded the highest year-on-year increase with 5.08 percent; the forestry sector improved 4.31 percent, lower than the growth of 5.75 percent in the first six months of 2016; the agricultural sector edged up 2.01 percent compared to the decline of 0.78 percent in the same period last year.In the industry and construction sector, the industry sector grew 5.33 percent, much lower than the 9.66 percent and 7.01 percent in the same period of 2015 and 2016, main-ly due to the decline of 8.2 percent in the mining sector.The processing and manufacturing industry recorded the increase of 10.52 percent, equal to the growth in the period last year at 10.5 percent. The construction sector at-tained good growth in the first six months of the year with 8.5 percent, contributing 0.45 percentage points to the general growth.In the service sector, the contribution of some sectors that have large proportion to the overall growth is as follows: wholesale and retail sales with 7.1 percent year-on-year; accommodation and catering with 8.9 percent; finance, banking and insurance with 7.66 percent; and real estate business with 3.86 percent.Regarding the structure of the economy in the first six months of the year, GSO said the agriculture, forestry and fisheries sector accounted for 15.06 percent, the industry

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and construction sector reckoned for 32.76 percent; the service sector made up 10.34 percent; product subsidy deduction comprised of 10.34 percent.Regarding the GDP use in the first six months of the year, final consumption increased 7.04 percent year-on-year and the asset accumulation improved 9.5 percent. The dif-ference in import and export of goods and services at trade deficit status caused the general growth to decrease 7.01 percentage points.As per the plan approved by the National Assembly, the GDP target in 2017 is to in-crease 6.7 percent. As such, with the GDP growth in the first six months, the growth pressure at the end of the year is very large.

Vietnam's growth target slowly slipping away

30/JUN/2017 INTELLASIA| VNEXPRESS

The country has a lot to do if it wants to hit the government's GPD growth target of 6.7 percent this year.Vietnam's gross domestic product (GDP) is expected to expand by 5.73 percent on-year in the first half of 2017, a long way short of the government's target of 6.7 percent for 2017, said the General Statistical Office.In Q2, the country's GDP rose 6.17 percent, higher than the 5.1 percent posted in the Q1.However, the Q2 figure remains lower than previous estimates made in May by Mai Tien Dung, minister-Chair of the government Office. Dung said Vietnam would need to hit GDP growth in Q2, Q3 and Q4 of 6.26 percent, 7.29 percent and 7.49 percent, re-spectively, in order to hit the annual target.For the first six months, the service sector is likely to post five-year-high growth of 6.85 percent, contributing 2.59 percentage points to GDP.The agro-forestry-fishery sector is estimated to expand 2.65 percent, contributing 0.43 percentage points, while the industry and construction sector is projected to rise by 5.81 percent, contributing 2 percentage points to GDP.These figures are still below targets set by prime minister Nguyen Xuan Phuc, who has continued to show his determination to reach the 2017 target.The agro-forestry-fishery sector has been urged to expand by 3.05 percent and earn over $33 billion from exports, while the industry and construction sector needs to hit 7.91 percent growth to make the national target a reality.The country is also hoping to see a 30 percent jump in the number of foreign arrivals, while the national oil and gas group (PetroVietnam) has been told to pump an extra one million tonnes of oil this year to help realise the goal.In the first six months of last year, Vietnam's GDP grew 5.52 percent, with increases of 5.48 percent in Q1 and 5.55 percent in Q2.The country's economic growth hit 6.21 percent in 2016, lower than the target of 6.7 percent. Vietnam attributed the shortfall to a drop in mining, climate-affected agricul-ture, an environmental incident that caused mass fish deaths in central provinces and fluctuations in global prices. These factors were also to blame for the export sector fail-ing to hit its goal of 10 percent growth last year.http://e.vnexpress.net/news/business/data-speaks/vietnam-s-growth-target-slowly-slipping-away-3606363.html

Put resources to good use to attain 8-9pct growthexpert

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

Vietnam can achieve economic growth of 8-9 percent if resources are effectively used, said the head of the Central Institute for Economic Management (CIEM).Nguyen Dinh Cung told the Vietnam Economic Forum in Hanoi on Tuesday that the economy could potentially expand 8 percent to 9 percent a year, instead of 6.7 percent as targeted for this year by the government.The State corporate sector should be comprehensively restructured, he said, adding State-owned enterprises are sitting on $300 billion worth of assets. Therefore, if those assets increase 1 percent, the economy would have an extra $3 billion, equivalent to 1.5 percent of the country's gross domestic product (GDP).Meanwhile, the private economic sector has total assets of $200 billion, so the economy

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would have an additional $2 billion if this sector expands 1 percent.Moreover, if $180 billion in foreign direct investment (FDI) pledges and $15 billion in official development assistance (ODA) loans are timely disbursed, the country could significantly boost GDP growth.Cung also proposed reducing unnecessary costs for enterprises. Logistic costs account-ed for 21 percent of GDP, so enterprises could save $4 billion if logistic costs fall 1 per-cent. Moreover, 66 percent of enterprises pay informal fees and inspection charges.48 percent of enterprises do not plan to expand business, way below 70-80 percent in the 2000-2006 period.According to Cung, the government should offer more incentives for Hanoi and HCM City, the nation's two largest economic centers which contribute 50 percent of GDP, 70 percent of FDI and over two-thirds of budget revenues.Measures should be taken to improve the business environment, stabilise the macro economy and reduce regular expenditures. Cung suggested the government focus on developing infrastructure for HCM City to improve connectivity between the city and other localities, increase the capacity of Cai Mep Thi Vai port by 70-80 percent and up-grade waterways in the Mekong Delta and the Red River Delta.At the forum, many experts showed disagreement with the government's plan to in-crease oil pumping and coal mining to fuel GDP growth.Nguyen Hong Son, vice president of the Vietnam National University, Hanoi said ex-tracting more oil and coal is risky due to unstable prices of these commodities. Accord-ing to Son, Vietnam's economic growth still depends much on natural resources.In addition, public investment has not been effectively managed, putting great pres-sure on the State budget.Son said assigning higher targets for agriculture could lead to an oversupply while the global market remains uncertain.Son said inappropriate administrative interference into the market would affect long-term growth. "The government should not stick with its growth target at all costs. Short-term solutions can never guarantee sustainable development."Can Van Luc at the Bank for Investment and Development of Vietnam (BIDV), said ex-ploiting more natural resources is not a good solution. The government should instead stimulate domestic consumption, promote tourism and build a more favourable busi-ness environment.http://english.thesaigontimes.vn/54752/Put-resources-to-good-use-to-attain-8-9-growth---expert.html

CPI up 4.15pct in six months

30/JUN/2017 INTELLASIA| VNA

The consumer price index (CPI) in the first half of 2017 rose 4.15 percent compared to the same period last year, head of the Price Statistics Department under the General Statistical Office Vu Thi Thu Thuy reported at a press conference in Hanoi on June 29.Slight price increases were seen in eight out of the 11 commodity baskets, including housing and construction material (0.53 percent); culture, entertainment and tourism (0.19 percent); and beverages and tobacco (0.1 percent).Price hikes were also reported in education (0.09 percent); equipment and household commodities (0.08 percent); garment-textile, footwear (0.05 percent); goods and other services (0.05 percent); and medicine and health care services (0.01 percent).The remaining groups, including restaurant services, transport, post and telecommu-nications, saw respective decreases of 0.59 percent, 0.71 percent and 0.01 percent.The growth of the CPI was attributed to the price hike in health care services and tui-tion fees, Thuy said.Soaring prices in beverages, tobacco, and garments during the Lunar New Year (Tet) also contributed to the rise of the six-month index.During the period, core inflation (the CPI without food and fresh foodstuff, energy and State-controlled commodities such as healthcare and education services) reached 1.52 percent, below the yearly plan of 1.6-1.8 percent.http://en.vietnamplus.vn/cpi-up-415-percent-in-six-months/114069.vnp

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Fiscal discipline indispensible to close Vietnam's budget deficit

30/JUN/2017 INTELLASIA| VIR

If fiscal discipline is upheld in allocating budget expenditures following the approved budget estimates, while revenues are mobilised in line with budget capacity achieved by local governments, the state budget will face less severe deficits and even enjoy sur-pluses in some years.On average, over the 15 years from 2001 to 2015, the average budget overspending was estimated at 5 per cent of the GDP, whereas the value of final accounts was much high-er, reaching 5.4 per cent.It is noteworthy that the deviation of the budget overspending value in final account settlements from budget estimates has been increasingly amplified. Even more alarm-ingly, the average budget overspending calculated in the 2011-2015 budget estimates had only been 5.04 per cent of the GDP, but final accounts reached 5.82 per cent.This somewhat demonstrates the growing gap between commitment and perform-ance. Fiscal security and fiscal discipline, thus, not only failed to improve, but also tended to go downhill.Is it possible for Vietnam to cut its budget overspending? The answer depends on the government's efforts. In order to prove this, let us first look at the possibility of Viet-nam attaining its annual revenue and expenditure targets in strict accordance with the estimated plan.According to the Ministry of Finance's state budget reports, the values in the annual final accounts have always been remarkably higher than the estimates, either in terms of revenues or expenditures.This upsetting trend highlights major inadequacies in estimating Vietnam's budget over the past few years. This situation, sadly, has been prolonged, showing that Viet-nam has difficulties improving it. Meanwhile, estimating the budget apparently lacks practical base and reliable scientific methodologies. In general, the estimated indica-tors remain quite depthless.Looking back at the budget plan estimated for each year, most of these figures are in very high units, such as hundreds of billions, or even thousands of billions. From this point, policy analysts are seemingly unable to refrain from speculating that these are solely guesstimates, rather than meticulously and reasonably calculated forecasts.Such overly generalised figures will naturally lead to arbitrariness, creating too wide a space for government agencies to exploit their budget estimates. Current budget es-timates do not include the forecast for brought forward revenues and expenditures, while these items have been on the rise in recent years.This has made the evaluation of the balance between budget revenue and expendi-tures against their estimates, plus the assessment of the budget deficit in final accounts compared with estimates become less significant and meaningful.Apparently, though the government budget is finalised before the end of the fiscal year, if the state budget is managed in a centrally-focused and systematic manner, it cannot be said that it is difficult to include the estimates of brought-forward revenues and expenditures. Removing this item from the balance of the annual state budget will limit the supervisory role of the National Assembly in overseeing its performance.In terms of budgetary revenue, the final accounts have always been much higher than the estimates. On average, during the ten years from 2003 to 2013, the actual have been almost 20 per cent higher than the estimates.Particularly, in a few years, the difference went up to 33 per cent (2008) and 28 per cent (2004, 2010). 2012 was probably the only exception when budget revenues failed to meet the estimated levels. The discrepancy between the budget revenues in final ac-counts and the annual budget estimates was not insignificant, equivalent to more than 4 per cent of GDP per annum during 2003-2013.The situation of budget revenues always far exceeding the estimated levels is partly due to the fact that some localities deliberately make lower budget estimates than their actual capacity. They, accordingly, seek to easily achieve the assigned budget revenue targets and also get rewarded for the surplus revenue.This incentive mechanism has instigated many localities to conceal parts of their reve-

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nues on purpose, as it is more beneficial in the evaluation of their performance. A strong piece of evidence is that actual budget revenues raised in most localities have clearly surpassed the estimated levels.Regular excess budget revenues in comparison with planned targets suggest that Vi-etnam is completely able to improve its revenues and construct budget plans closer to the actual values and the capacity of each locality.In terms of budgetary expenditure, overspending has been taking place on a regular basis, albeit at a lower rate than revenues. On average, during the ten-year period from 2003 to 2013, actual budget expenditures have always exceeded the estimates by more than 11 per cent.On a side note, it might be also noteworthy to add that much higher final settlements against the estimate, particularly in the case of budgetary expenditures on develop-ment investments, both in absolute terms and as a proportion, is not necessarily good. Some people say that budgetary spending on development investments might be ac-cepted to overrun its estimate, or should even be encouraged, because it helps replen-ish the nation's capital stock and generate growth for the economy.A disturbing thought is that, apart from the issue of budget discipline, budget expen-ditures on development investments rising beyond the budget estimates do not inev-itably help improve economic outcomes.Instead, this situation may partly be a manifestation of the phenomenon in which a large number of public investment projects have suffered from cost overruns and thus triggered a surge in total investment. The differences between these budget disburse-ments against estimates are not trivial, equivalent to more than 2.9 per cent of the GDP per annum over the period 2003-2013.Budget revenues exceeding estimates may be attributable to some localities' intentions of hiding revenues. Overspending against estimates is also due to local attempts to cover expenditure needs, but in a reverse direction. It basically means localities want to increase their budget expenditure estimates as much as possible.This is due to a lack of strict fiscal discipline, which we call a soft budget constraint. If it happened once, one would believe that it would happen again. Likewise, if it hap-pened in a certain locality, other localities also think that it must be applicable in their cases as well. It is the root cause that fosters a sense of heavy reliance on others among localities as well as governments of successive terms.Similarly, the above tendency does not only take place locally, but also happens in ministries and central agencies that are assigned to manage more than half of the na-tional budget. Figure below indicates that in several ministries and government bod-ies, the occurrence of budget overspending is very common and serious.The state of budget overspending in ministries and central agencies in 2014. Source: Data from the Ministry of Finance. Unit: USD millionIf the government, ministries, and local authorities are determined to uphold budget spending discipline in line with the approved budget estimates, while revenues are mobilised in strict accordance with the capacity of local governments, the state budget will face less severe deficits and even enjoy surpluses in some years.If the government manages to adhere to fiscal discipline, budget overspending will be significantly cut down. In a few years, like in 2004, 2008 and 2010, Vietnam even expe-rienced budget surpluses. This is an important policy implication and also a crucial guide for the government to curb budget deficit to committed levels set out a long time ago in Vietnam's Financial Strategy and Strategy for Public Debt Management until 2020.The estimated budget overspending is the amount of budget overspending approved by the National Assembly. The budget overspending calculated in budget estimates is equal to the actual amount of revenues, based on the National Assembly's revenue es-timates, minus the actual amount of expenditures, again, based on the National As-sembly's expenditure estimates.Overspending in final accounts will be measured following the final accounts settle-ments of the National Assembly. This is because the calculation of budget overspend-

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ing in final accounts includes accruals (accrued revenues and expenditures), residual budget revenues, and revenues from investment mobilisation, whereas the measure-ment of budget overspending in budget estimates does not include these items.Another approach is to base calculations on the primary budget balance. Unlike the overall budget balance, the primary budget balance will not cover liabilities. This measurement implies that if the burden of liabilities is disregarded and the main pur-pose is purely to calculate the budget revenues and expenditures of some basic gov-ernment activities, a country's budget balance might experience either a surplus or a deficit. According to this definition, Vietnam's primary budget balance was not so dis-concerting until recent years.My calculations demonstrated that Vietnam's budget overspending would decrease considerably, even turning into small surpluses in some particular years. Until 2011, except for a couple years with minor deficits, Vietnam's primary budget balance gained a surplus accounting for 0.5-2 per cent of the GDP. From 2012 onwards, the sit-uation appeared to be fairly strained as even the primary budget balance experienced severe deficits.On average, in the 2003-2015 period, the primary budget balance only saw a deficit of roughly 0.4 per cent of the GDP, whereas the overall deficits amounted to 5.5 per cent. The point here is that: (i) public debt obligations have been occupying a significant portion of the national budget in each recent year; (ii) if Vietnam dismissed its heavy burden of liabilities at the moment, the country would be completely able to gradually narrow the budget deficit, even to achieve a balance and a slight surplus.The implication for Vietnam is that one thing is possible to change, while the other is impossible. It is impossible to change the fact that Vietnam will still have to continue paying what was previously borrowed. It is, however, possible to change the situation, though much depends on the country's willingness, if Vietnam can maintain its prima-ry budget balance so as not to generate any new debt obligations. This depends on how fiscal discipline is adhered to!Average budget overspending for each period in final accounts and budget estimates (per cent of GDP)http://english.vietnamnet.vn/fms/business/181143/fiscal-discipline-indispensible-to-close-vietnam-s-budget-deficit.html

Vietnam's foreign trade surges

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

The nation's foreign trade in the first half of the year has shot up to $200 billion, accord-ing to the Ministry of Planning and Investment.January-June exports are put at $97.78 billion, an 18.9 percent rise against the same pe-riod last year. The foreign direct investment (FDI) sector has reported total non-oil ex-port revenue of about $69.26 billion, increasing by 20.6 percent year-on-year and accounting for 70.8 percent of the country's total.Domestic enterprises have exported $26.96 billion worth of goods in the period, a year-on-year increase of 13.8 percent.The upsurge of export revenue is ascribed to the price rises of key products including fuels, crude oil, cashew nuts, iron, steel, rubber and coal.Shipments to China have picked up 42.5 percent, much higher than the import growth of 16.8 percent, narrowing Vietnam's trade deficit with the world's second biggest economy.The country's import bill in the first six months is about $100.47 billion, increasing by 24.1 percent versus to the same period last year. The FDI sector has imported $60.6 bil-lion worth of goods, picking up 28.3 percent and accounting for 60.3 percent of the country's total, while the domestic sector's imports have reached nearly $40 billion, up 18.2 percent year-on-year.The trade deficit in the first half is about $2.7 billion, 2.75 percent of total exports.http://english.thesaigontimes.vn/54750/Vietnam percentE2 percent80 percent99s-for-eign-trade-surges.html

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Exports remain the 'exit' for economic growth in the second half of 2017

30/JUN/2017 INTELLASIA| DTCK

The recently released economic report in June 2017 by market research company Mar-ket Intello said that in the first five months of the year, the economy still tended to go sideways or increase but not significantly compared to the early months.This report is also similar to the general Statistics Officie (GSO)'s analytical data that the consumer price index in May dropped 5.3 percent compared to April, bringing in-flation down to 3.19 percent, the record low since September 2016.However, the total retail sales of consumer goods and services in May only increased 0.1 percent compared to April.Generally, in January-May 2017, this index swelled 10.2 percent compared to the same period of 2016 (7.9 percent), if excluding the price increase of 7.4 percent. This reflects the weak domestic demand.Notably, the fact that the US dollar/dong exchange rate went sideways in May was be-cause foreign investors increased the disbursement for the capital contribution and share purchase by about $1.8 billion, while the economy continued to suffer from trade deficit.The trade deficit in May reached about $800 million, increasing the deficit in the first five months of the year to $2.6 billion. The domestic economic sector ran a deficit of $9.5 billion while FDI businesses had a trade surplus of $6.9 billion.As per Dinh Tuan Minh, director of Market Intello, there are two noticeable points in the economic picture in the first six months of the year i.e. decreasing deposit rates and recovery trend of public investment.Specifically, in May, deposit rates still continued to fall despite higher credit growth than deposit growth. This shows the falling trend of inflation as well as interest rates of all terms due to stable exchange rate. The fact that management agencies purchase US dollar and pump dong to the market at the same time helps cool down short-term interest rates.Besides, the growth rate of investment from the state budget recovered in May and June though disbursement progress was uneven.Though it is not really clear, the lower deposit rates will lead to lower lending rates, the increase in public investment will be the motive for investors and construction companies to speed up the implementation of projects while decreased interest rates will help businesses access capital more easily.Accordingly, Market Intello forecasts that the economic situation in the last six months of the year will show signs of improvement, although it is not really clear."Currently, we still forecast that Vietnam's economic growth in 2017 will reach 6.1 per-cent. However, as the government has made some improvements in the disbursement of state budget and the world market has been quite favourable for Vietnam to boost exports, it is highly likely to achieve more positive growth", said Minh.Especially, Minh said in the first two months of Q2, exports have experienced a break-through. In the context of weak domestic demand, the expansion of the export market will still be an "exit" for Vietnam economy.Along with that, the recovery outlook of the global economy is a good opportunity for Vietnam to increase exports and improve trade balance in the last months of the year.Also as per the forecast of Market Intello, the 2017 inflation will be 2.9 percent. The de-cline mainly comes from fresh food and decreased petrol prices. At the same time, in-terest rates will continue the downward trend thanks to declined CPI. However, the decline will not be much due to higher credit growth than deposit growth.Besides, Market Intello also warns that risks, challenges to the economy is still availa-ble in the implementation of short-term growth targets as the diplomatic crisis be-tween Qatar and some Arabian countries may affect the recovery of the world crude oil prices, thereby indirectly affecting the government's plan to exploit an additional one million tonnes of oil.In addition, the decreased optimism of some producers about production prospect in the near future will also be the factor that affects the growth plan.

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HCM City agro-forestry-fishery output reaches VND7.13 trillion in Jan-Jun

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

HCM City has obtained an estimated VND7.13 trillion in agriculture, forestry and fish-ery output in the first half of the year, up 6.5 percent compared to the same period last year, according to the HCM City Department of Agriculture and Rural Development.Data of the department shows the city's acreage under safe and organic vegetable farming has reached 10,200 hectares in the year to date, a 20 percent year-on-year rise. The city also has 1,640 hectares under flower and ornamental tree cultivation, up over 9 percent against the year-earlier period.Meanwhile, dairy cow and pig numbers have declined around 6.5 percent and 2 per-cent to more than 84,000 and 351,000 respectively. The fall is partly attributable to the pig price plunge, which has delivered a blow to local farmers.The city has been shifting towards plants and livestock of higher value. Data indicates the acreage of vegetables and ornamental trees has risen roughly 20 percent and over 9 percent respectively. The city has turned out around 75 million ornamental fish, up more than 34 percent against the earlier-ago period.The city has exported 220 tonnes of seeds, growing by 34 percent against the ago-year period. Especially, about 9.2 million ornamental fish have been shipped abroad, with revenue totalling $11.5 million, up a staggering 64 percent.http://english.thesaigontimes.vn/54740/HCM City-agro-forestry-fishery-output-reaches-VND713 trillion-in-Jan-Jun.html

Son La mangoes irradiated for export to Australia

30/JUN/2017 INTELLASIA| VNA

The first batch of 3.5 tonnes of mangoes from the northern mountainous province of Son La underwent irradiation treatment on June 28 before being shipped to Australia.The mangoes, weighing 450-650 grammes each, were purchased by Agricare Vietnam Co., Ltd at the price of 22,000 VND (0.9 USD) per kilogramme.The fruits are sold at 16,000 VND (0.7 USD) per kilogramme on the free market.The Post-Import Plant Quarantine Centre under the Plant Protection Department worked with the provincial Department of Agriculture and Rural Development to pro-viding training for local farmers and help them set up dossiers on granting codes for two mango cultivating areas in Van Lung village, Chieng Hac commune (Yen Chau district) and Noong Xom village, Hat Lot commune (Mai Son district).The move is part of efforts to make local mangoes qualified for shipment to the Aus-tralian market.Son La is home to more than 4,000 hectares of mangoes, hundreds of which are grown in line with Vietnam Good Agricultural Practice (VietGAP).http://en.vietnamplus.vn/son-la-mangoes-irradiated-for-export-to-australia/114068.vnp

Vietnam's fertiliser imports surge in H1

30/JUN/2017 INTELLASIA| VNS

Vietnam spent $628 million on importing 2.34 million tonnes of fertiliser in the first half of this year, surging 24 per cent in volume and 18 per cent in value compared with the same period last year.In June alone, the country imported 324,000 tonnes of fertiliser, worth $82 million, ac-cording to the Ministry of Agriculture and Rural Development.During the six-month period, urea imports reached 228,000 tonnes, valued at $60 mil-lion, a year-on-year decrease of 9.5 per cent in volume and 1.4 per cent in value. On the other hand, imports of Ammonium Sulfate (SA) fertiliser saw yearly growths of 9.4 per cent in volume and 6.2 per cent in value to 533,000 tonnes, worth $63 million.In 2016, the nation imported 4.16 million tonnes of fertiliser, valued at $1.1 billion, down nearly 8 per cent in volume and 22 per cent in value compared with 2015.http://bizhub.vn/news/viet-nams-fertiliser-imports-surge-in-h1_287238.html

VN to import petrol for next five years

30/JUN/2017 INTELLASIA| VNS

Vietnam is expected to continue importing petroleum products for the next five years as production of major oil refineries is unable to meet the increasing local demand.

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Annual demand for petroleum products is estimated at some 6.5 million tonnes and for diesel at some 8.5 million tonnes in the 2018-22 period, according to a report by Binh Son Refining and Petrochemical Co Ltd, which manages and operates the Dung Quat oil refinery.Meanwhile, the two major oil refineriesDung Quat and Nghi Sonproduce a combined six million tonnes of petrol and some seven million tonnes of diesel per year, meeting 92 per cent and 82 per cent of domestic demand, respectively.Thus, Vietnam has an average annual shortage of some 0.8 million tonnes of petrol and 1.8 million tonnes of diesel, Binh Son said, adding that this shortage would be ad-dressed by importing petroleum products from other countries in the region, includ-ing China, Singapore, Malaysia, Thailand and South Korea.Dung Quat refinery, Vietnam's first oil refinery, at present, has a designed capacity of 6.5 million tonnes of crude oil per year. It produces 2.75 million tonnes of petroleum products and 3.07 million tonnes of diesel per year, accounting for 30 per cent of total domestic demand.Nghi Son oil refinery, scheduled to become operational next year in central Thanh Hoa Province, has a designed capacity of 10 million tonnes of crude oil per year. It will an-nually provide the domestic market with 2.3 million tonnes of petrol and 3.7 million tonnes of diesel.In addition, other condensate processing plants such as PV Oil Phu My, Sai Gon Petro, Nam Viet Oil and Dong Phuong supply some 690,000 tonnes of petrol per year.Binh Son Refining and Petrochemical Co Ltd will make its initial public offering in the fourth quarter of this year, floating up to 6 per cent of capital for the public. The com-pany is implementing works to upgrade and expand the Dung Quat oil refinery. Once completed by the end of 2021, the factory's capacity will increase by 30 per cent to 8.5 million tonnes of crude oil per yearVietnam imported nearly five million tonnes of petroleum products, worth over $2.6 billion in the first five months of this year, down 6.8 per cent in volume but up 27.4 per cent in value against the same period last year, the General Statistical Office reported.http://bizhub.vn/news/vn-to-import-petrol-for-next-five-years_287237.html

Vietnam spends $376 million on fruit imports from Thailand

30/JUN/2017 INTELLASIA| VOV

Thailand became the leading supplier of fruit for Vietnam with $376 million, making up more than half of Vietnam's market share of fruit imports of $507 million during the first half of this year, according to the Ministry of Agriculture and Rural Development.Over the past two years, Thailand has surpassed China to be the biggest fruit exporter of Vietnam.In the first six months, fruit imports from Thailand doubled last year's same period. Other markets like India and the Republic of Korea maintained positive high growth of more than 85 percent.Meanwhile, Vietnam's fruit and vegetable exports in the reviewed period jumped more than 44 percent to $1.7 billion. China, Japan and the ROK remained the top im-porters of Vietnam fruit and vegetables accounting for nearly 85 percent of the coun-try's market share.http://english.vov.vn/trade/vietnam-spends-us376 million-on-fruit-imports-from-thailand-352606.vov

Processing & manufacturing leads in FDI

30/JUN/2017 INTELLASIA| VN ECONOMIC TIMES

Sector accounts for 59 per cent of all FDI attracted as at end-June.Processing and manufacturing had attracted more than $180 billion in total foreign di-rect investment (FDI) capital as at June.Foreign investors have invested in 19 of the 21 economic sectors in the country, with processing and manufacturing securing 59 per cent.Following is real estate, with $50.99 billion, or 16.6 per cent of the total, then electricity, water and gas with $18.83 billion, or 6.1 per cent.As at June, 120 countries and territories had invested in Vietnam, led by South Korea

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with $54.5 billion, or 17.7 per cent of the total, followed by Japan with $46.19 billion, or 15 per cent, then Singapore, Taiwan, the British Virgin Islands, and Hong Kong.HCM City attracted the most FDI, with $41.67 billion, or 13.6 per cent of the total. Southern Binh Duong province followed, with $28.66 billion, or 9.3 per cent, then southern Ba Ria Vung Tau province with $26.72 billion, or 8.7 per cent, and Hanoi with $26.3 billion, or 8.5 per cent.Total registered and additional capital reached $19.22 billion in the first half of the year, up 54.8 per cent year-on-year, while $7.72 billion was disbursed, up 6.5 per cent.There were 1,183 new projects granted investment licenses in the first half, with capital of $11.8 billion, up 57.9 per cent year-on-year, while 549 projects added $5.14 billion in capital, up 35.8 per cent.There are now 3,272 FDI projects from Asean in Vietnam, with total capital of $63.49 billion. In the first half there were 127 newly-licensed projects from the region, with capital of $2.95 billion. Fifty-eight existing Asean projects added 587.5 million in capi-tal.http://vneconomictimes.com/article/vietnam-today/processing-manufacturing-leads-in-fdi

Southern VN attracts major FDI

30/JUN/2017 INTELLASIA| VNS

Besides HCM City, its next-door provinces Binh Duong and Dong Nai have also at-tracted large amounts of foreign direct investment in the first half of this year.According to a report from the Binh Duong People's Committee, FDI in the first six months was worth around $1.62 billion.Its major foreign projects are the $284.75 million Vietnam Singapore Industrial Park III being developed by the Vietnam-Singpore Industrial Park Joint Venture Co Ltd and a $220 million factory to manufacture airbags and industrial fabric for automobile tyres by Kolon Industries Inc of South Korea.According to VSIP, its industrial parks in Binh Duong have attracted around $652 mil-lion in FDI this year, an increase of 60 per cent year-on-year and 80 per cent above its whole-year target.Polytex Far Eastern Ltd, a Taiwanese polyester fibre and cotton manufacturer, has got approval to increase its registered capital by $485.8 million in the period, taking its to-tal investment in the Bau Bang Industrial Park to $760 million.Dong Nai Province attracted $640 million in 37 new projects and 51 existing projects in the first half.Powerknit Vietnam Co Ltd is the largest new foreign project with $60 million coming from the British Virgin Islands.Fabric producer Long Thai Tu of South Korea added $50 million to its ongoing project in the province.Many industrial parks in Binh Duong and Dong Nai have attracted large investments mainly from Asian countries and territories such as Singapore, South Korea, Japan and Taiwan thanks to their highly developed infrastructure and transportation network.They have also signed several MOUs with regions in South Korea and Japan following investment promotion efforts over the last few years.http://bizhub.vn/news/southern-vn-attracts-major-fdi_287241.html

Dong Nai's registered capital hits record

30/JUN/2017 INTELLASIA| VNS

The total registered capital and added capital of businesses in the southern province of Dong Nai amounted to VND24 trillion (US$1 trillion) in the first half of 2017, a year-on-year increase of 115 percent, according to the provincial People's Committee.Of the sum, VND17 trillion (US$747.7 million) came from 1,500 newly established en-terprises, while the remaining capital was added by 275 existing businesses.About 40 branches and representative offices also registered operation in the province in the reviewed period.Dong Nai province has promoted administrative reforms to provide best possible sup-port for the business community, said the department.

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From January to June, some 3,000 firms submitted applications through the depart-ment's public service portal and the national business registration portal.Also in the first six months of this year, about 76 businesses with a combined capital of VND538 billion (US$23.6 million) as well as 74 branches and representative offices were dissolved due to poor performance.http://english.vov.vn/economy/dong-nais-registered-capital-hits-record-352635.vov

Thanh Hoa Province led in FDI attraction

30/JUN/2017 INTELLASIA| DTI NEWS

The northern central province of Thanh Hoa took the lead in attracting foreign direct investment (FDI) in the first six months of this year with $3.06 billion, according to the Ministry of Planning and Investment.According to a report by the ministry's Foreign Investment Agency, Vietnam saw a surge of 54.8 percent in FDI against the same period last year, reaching $19.22 billion, including $ 11.83 billion poured into new projects.Thanh Hoa was the most attractive destination to foreign investors as it received $3.06 billion in FDI, accounting for 15.9 percent of the total FDI poured into 60 provinces and cities.It was followed by the northern provinces of Bac Ninh and Nam Dinh with $2.85 bil-lion or 14.83 percent and $2.19 billion or 11.4 percent, respectively.Foreign direct investment flowed into 18 industries and sectors in which the process-ing and manufacturing sector attracted the biggest of $ 9.48 billion, accounting for 49.3 percent of total FDI registered in the country. Electricity production and distribution ranked second with $5.25 billion or 27 percent, while the mining sector came third with $1.28 billion or 6.68 percent, the report said.By June 20, FDI disbursement experienced a year-on-year increase of 6.5 percent to $7.72 billion, the agency said.There are 1,183 new foreign-invested projects with a total registered capital of $11.83 billion which is an increase of 57.9 percent against the same period last year.Japan became Vietnam's leading investor in the first half of 2017, with FDI of $5.08 bil-lion, making up 26.5 percent of the total FDI. the Republic of Korea came second with investment of $4.95 billion, or 25.8 percent, and Singapore came third with $3.48 bil-lion, or 18.1 percent.http://english.vov.vn/economy/thanh-hoa-province-led-in-fdi-attraction-352565.vov

Tough talk over pay raise in 2018

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

While employers are rallying for a freeze on a wage rise next year, employees are push-ing for a 13.3 percent pay increase.The National Wage Council had a closed-door meeting in Hai Phong City on Tuesday over the possibility of adjusting region-based minimum wages for 2018. This was the first meeting between groups representing employees and employers, and govern-ment agencies. The technical department of the National Wage Council suggested three options, with the first seeking a 5 percent rise, or VND130,000-180,000 (US$5.72-7.92) per month depending on regions, the second a 6 percent increase (VND160,000-220,000) and the third a 6.8 percent spike (VND180,000-250,000).Meanwhile, the Vietnam general Confederation of Labour proposed increasing mini-mum wages by 13.3 percent, or VND370,000-450,000 per month depending on regions.Representatives of employers floated two options, with one proposing keeping wages unchanged and the other suggesting a rise of 2 percent to 5 percent. According to large corporations, the economic gloom and the uncertain future of the Trans-Pacific Part-nership trade pact have made export operations difficult. Therefore, a pay raise this time around would pile pressure on enterprises.However, the general Confederation of Labour said the economy in 2017 has shown signs of improvement, with newly-established enterprises greater than closed or sus-pended businesses, unemployment decreasing compared to 2016 and gross domestic product (GDP) expanding 6 percent.At the first meeting, the parties concerned just presented their views on the matter. The

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National Wage Council's second meeting in early July will delve into details.The National Wage Council in August last year decided to adjust up the minimum wages by 7.3 percent on average in 2017. The minimum monthly wage is VND3.5 mil-lion (US$154) for region one, VND3.1 million for region two, VND2.7 million for re-gion three and VND2.4 million for region four.http://english.thesaigontimes.vn/54741/Tough-talk-over-pay-raise-in-2018.html

PM pledges all possible support to workers

30/JUN/2017 INTELLASIA| VNS

The government will offer all possible support to businesses, start-ups and create jobs for workers, prime minister Nguyen Xuan Phuc has said.He made the statement during a working session in Hanoi yesterday with the Presid-ium of the Vietnam general Confederation of Labour (VGCL) to discuss work between the government and VGCL and set tasks for 2017-18.The PM hailed VGCL chapters for improving workers' lives and dealing with workers' complaints.The VGCL was asked to join the government's mechanism building, with a focus on ensuring rights and interests of workers in the process of building a transparent, con-structive and action-oriented government in service of the people and businesses.The VGCL should step up campaigns to strengthen the working class's trust in Party and State leadership while improving social supervision and the enforcement of la-bour laws, he said.At the same time, it should work with agencies to offer vocational training to labourers amid the fourth industrial revolution.He urged the VGCL to hold more dialogues and meetings between the PM, ministers, heads of sectors and workers.The leader suggested the VGCL partner with the Ministry of Labour, Invalids and So-cial Affairs and the National Wage Council to devise a plan on regional minimum wages to submit to the PM.He also responded to proposals by the VGCL, including amending the Labour Code's terms regarding overtime, retirement age, meals for workers and providing preferen-tial loans for workers in industrial and processing zones.In June, the PM issued a decision approving a project on building trade union institu-tions in industrial and processing zones. The VGCL has built the three first trade union institutions in the northern province of Ha Nam, the central province of Quang Nam and the southern province of Tien Giang.http://bizhub.vn/news/pm-pledges-all-possible-support-to-workers_287228.html

CIEM encourages equitisation

30/JUN/2017 INTELLASIA| VNS

Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM) urged accelerating state owned enterprise (SOE) restructuring and equitisa-tion soon, calling it one of the three pillars of national economic restructuring, at a con-ference held on Wednesday in Hanoi.Cung emphasized that the key to effective restructuring of SOEs is better asset produc-tivity management, claiming that a one percentage point improvement in asset man-agement would generate about $3-4 billion in return, and could push the growth rate of all SOEs up to 7 to 8 per cent per annum."Asset and capital management within state enterprises has long been vague, rarely disclosed to the public. This is yet another low point of business management and shows an obvious lack of inspection in order to predict risks and weaknesses. Ulti-mately, this leads to loss and bankruptcy, all at too late a time to be salvaged," said Cung.Most importantly, no ministry, department or authority can be held responsible for these deficiencies, as there is no clear business model which defines the responsibilities of each department.According to CIEM, from 2011 to 2015, only eight SOEs announced bankruptcy after a long period of loss and only one more went bankrupt from 2016 until now. The insti-

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tute considers this number miniscule compared to the reality of the economy.Another matter discussed at the conference was transferring SOEs to the State Capital Investment Corporation (SCIC). So far, this has proved an effective and promising model, though the implementation of the process is in need of much improvement, due to the large number of documents issued by administrative authorities to stop businesses being transferred to the SCIC.CIEM reported that in 2015, of the 128 businesses' initial public offerings, only 36 per cent of total shares were sold, while the state still held 81 per cent of total charter cap-ital in these businesses. The first five months of 2017 only saw another 15 SOEs equi-tised.Experts at the conference also agreed that the burden of national debts, accumulated through state firms' outstanding loans, would continue to slow growth, necessitating the urgent restructuring of SOEs.The conference concluded that to improve state owned businesses equitisation and re-structuring, comprehensive and strict legal regulations must be applied.http://bizhub.vn/news/ciem-encourages-equitisation_287222.html

City urged to boost competitiveness

30/JUN/2017 INTELLASIA| VNS

HCM City Party Committee Secretary Nguyen Thien Nhan has urged the city to focus on the role of the private sector and continue to improve competitiveness and admin-istrative reform.Nhan was speaking at a meeting of the 10th HCM City Party Committee on Tuesday.The two-day meeting discussed the city's development in the first half of the year as well as key solutions for tasks in the second half.The meeting also discussed the medium-term public investment plan for the 2016-20 period, as well as results of the five-year implementation of an action programme by the Party Central Committee for infrastructure development.It also reviewed the results of administrative reform and the implementation of the Party's resolutions on Party building in HCM City.Speaking at the opening ceremony, Tat Thanh Cang, deputy secretary of the municipal Party Committee, said HCM City had achieved significant results in all fields in the first half of the year.The city's economy continued to grow at a higher rate compared with the same period last year, with the Gross Regional Domestic Product (GRDP) increasing by 7.8 per cent while State budget revenue reached more than 49 per cent, up 17.5 per cent over the same period.The city's plan to develop 500,000 enterprises by 2020 also saw positive results, with a favourable business environment created for over 18,679 newly established enterpris-es, a rise of 10.9 per cent over the same period.More than 550 home-based businesses are being transformed into enterprises.In addition, a number of infrastructure projects have begun or have been completed and put into use, helping to ease traffic congestion and flooding.However, challenges remain. The city's economy has not fully improved, with slow development of the support industry and some projects due to a lack of investment and land clearance problems.Other challenges include traffic congestion, floods and pollution.Nguyen Thien Nhan, HCM City Party Committee Secretary, proposed a number of measures to seek investment.Nhan recommended that the city focus on the private sector, saying the private sector accounts for 59 per cent of the city's economic structure, while State and foreign invest-ment only account for 20 per cent and 15 per cent, respectively.Meanwhile, the non-State sector accounts for nearly 80 per cent of the investments, with the private sector contributing 63 per cent, along with 15 per cent from foreign investment.Regarding the challenges addressed by PM Nguyen Xuan Phuc at a recent meeting with city leaders, Nhan said the proportion of foreign investment in the last five years

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was still lower than the national average, and that serious measures were needed in administrative reform and the fight against corruption.According to a report from the People's Committee, HCM City's economy continued to grow more than before.The Gross Regional Domestic Product (GDP) growth rate has reached 7.76 per cent, higher than the 7.47 per cent rate during the same period last year.Services increased 7.4 per cent, accounting for 58.2 per cent of the total, and industry and construction was up 7.2 per cent making up 23.3 per cent of the total.The agro-aqua-forestry sector grew 5.9 per cent making up 0.7 per cent of the total.Total retail sales of goods and services were estimated to reach VND450 trillion ($19.79 billion), up 10.2 per cent.The city attracted 2.8 million visitors, a year-on-year increase of 14.7 per cent, bringing VND53.6 trillion ($2.36 billion), up 12 per cent.Exports brought $14.23 billion, excluding crude oil value, raising 20.3 per cent over the same period last year.The industrial production index rose 7.5 per cent over the same period last year.http://bizhub.vn/news/city-urged-to-boost-competitiveness_287229.html

The next Silicon Valley? Where to place Vietnam on the global startup map

30/JUN/2017 INTELLASIA| VN EXPRESS

Vietnam has quickly declared itself an aspiring startup nation, but myriad challenges are now giving dreams and ambitions a sobering reality check.Vietnam is trying hard to become a startup nation. The country kicked off its own "Sil-icon Valley" with the hope of transforming from a software outsourcing haven to a ma-jor tech hub last year. This complex, with total investment of $21.5 million, is aimed at nurturing tech-incentive startups.However, when asked if Saigon could become the next Silicon Valley, entrepreneur Anh-Minh Do from the Singapore-based Vertex Venture, smiled and answered with-out hesitation: "I don't think it will ever happen."In the Global Startup Ecosystem Report 2017 released by US research organisation Ge-nome, Saigon was not mentioned in its top 20.Meanwhile, Southeast Asian neighbour Singapore shocked the world by outperform-ing Silicon Valley as the world's number one for tech talents, and was ranked 12th overall.Saigon became known to the global tech market nearly two decades ago as an out-sourcing haven, together with Bangalore in India, which did secure a place in the top 20.When it comes to other up-and-coming tech hubs in Southeast Asia, Kuala Lumpur also has its name on the map.In another report released this month by consultancy firm A.T. Kearney, Saigon stood in 74th out of the 128 most innovative cities worldwide.Those rankings cast doubt on Saigon's Silicon Valley dream. People are getting more realistic, saying it may be out of reach.People have been wondering where the second Silicon Valley will emerge, but even Singapore is not a safe bet, according to some investors. Singapore may have overtak-en the California-based tech hub in some respects, but is still a long way from becom-ing a major rival.It would take a very long time for Vietnam to catch up with Silicon Valley. How can Saigon become the second when you've got New York, Los Angeles, Beijing, Shang-hai? Many cities are far ahead of SaigonFor some entrepreneurs, investors and developers, the term "Saigon Silicon Valley" comes as a surprise."What do you mean Saigon Silicon Valley?" astonished Tuan Anh, a former Google in-tern in the US, asked with wide-open eyes at an Internet of Things conference held last month in Hanoi. He had no idea that Vietnam is constructing its own Silicon Valley, covering an area of over 11,000 square meters. "I am sorry, I didn't know about the project. But considering the situation in Vietnam now, I think Silicon Valley is just a

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name reflecting a government dream."It seems the Vietnamese government is obsessed with the term "Silicon Valley". Nearly five years ago, the government also sponsored an accelerator based in Hanoi called Vi-etnam Silicon Valley, hosting bootcamps aimed at mentoring young startups and giv-ing direction to the fragmented venture capital market.Tech talentsMany investors agree that Vietnam is a great breeding ground for IT workers, and tech companies are constantly hunting for talented candidates.Domestic demand for techies has doubled over the past five years, according to a re-port by human resources firm VietnamWorks.Vietnam is recognised as one of the world's top software outsourcing hubs. The appeal is bolstered by its tech-savvy workforce, which is cheaper than China's and more pro-ductive than other countries in the Asean Economic Community."But when it comes to sophisticated projects that require the ability to appreciate good and user-focused design and critical thinking, Vietnamese developers seem to be struggling," Pham Quoc Dat, founder & CEO of Hatch Ventures Vietnam, told VnEx-press International."Vietnamese IT workers are just above average," Dat added. "On a scale of 1 to 10, they score 7 to 8 in comparison to their Southeast Asian peers, but just 5 to 6 compared to the real Silicon Valley in the US"Clearly, outsourcing is not enough for Vietnamese developers to make their Silicon Valley dream come trueit's the matter of creating new things."The world is now focused on artificial intelligence and automation, but Vietnam has virtually no home-grown talents in this field, only those who were educated overseas," said Anh-Minh. "That means Vietnam is being left behind when it comes to education, which is a key component to keep up in this fast-paced world."On the other hand, Vietnamese high school students have long been known for their excellent performances at math and science competitions, outscoring their US and UK counterparts. It is this foundation for computer science that could give Vietnam an edge."Vietnam has hidden tech potential, but it could take another five years to create mas-sive companies that have global influence," Anh-Minh added.The country is looking at ways to transform from an electronic component producer to a centre for research, innovation and development.In early 2014, the world became addicted to mobile game Flappy Bird, developed by Vietnamese programmer Nguyen Ha Dong. He was said to have pocketed an estimat-ed $50,000 a day thanks to the bird. Not even Mark Zuckerberg became rich that fast.Dong's story is an encouraging example for his peers, but it seems that "Flappmania" was just a one-night hit for him. No more spotlight for descendents of this bird.Since then, no Vietnamese techies have been able to recreate that, not even Dong him-self.When entrepreneurial spirit is not enoughSetting up your own business is part of Vietnamese culture. Seven in 10 startups are family-run businesses, according to the "Vietnam Promised Land for Entrepreneur-ship" report, conducted by USAID and the Vietnam Chamber of Commerce and Indus-try. They start small but hope to grow bigger.The average age of startup founders in Vietnam was 30, said the report, just slightly older than the 28 years reported in Singapore, the world's youngest base."Most young Vietnamese people want to be entrepreneurs," said Chris Zobrist, an American entrepreneur and advisor on the Silicon Valley Project. "A lot of their par-ents started businesses that did really well, and that created an image in young peo-ple's minds that being an entrepreneur is a real path to success in life."Geektime, one of the biggest tech blogs focusing on global innovation, estimated the number of tech startups in Vietnam stood between 1,400 and 3,000 in 2016, making the country the third largest ecosystem in Southeast Asia, only behind Singapore and In-donesia. However, around 95 percent of startups die within 3-5 years.

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Vietnamese people are focusing more on commercial startups like coffee shops rather than doing something tech-related and revolutionary, said Truong Gia Binh, chair of technology giant FPT Corporation. Binh said he would wholeheartedly support any projects that could make a breakthrough in the tech world. Startups that could go glo-bal should have technology as their foundation, he added.The startup trend has fired up in Vietnam for three years.The government has set a target of reaching one million newly established firms by 2020, but quantity should go together with quality.To become the "next" anything, the country needs bigger bets from founders, investors and regulators.Vietnamese startups enjoy significant government subsidies and the country's strate-gists are working to establish local tech startups that can make it big on a global scale."The law needs to regulate the money better. The government needs to be more sup-portive; there needs to be more interaction from Vietnamese-Americans, specifically Vietnamese-Californians because of the 'Valley' connection," Anh-Minh said.Vietnamese startups struggle to succeed because they don't have access to experienced professionals. In Silicon Valley, founders and entrepreneurs have a lot of people who have successfully started companies to go to for advice. Here in Vietnam, a relatively young market, it is not easy to find that depth of experience.Vietnam is a small country with big ambitions.Dat from Hatch Ventures said: "As the first entrepreneurial hub in Vietnam, Saigon is the first choice for investors looking for potential deals.""If any city in Vietnam has the potential to become the next big tech hub, it's Saigon," Dat said.http://e.vnexpress.net/projects/the-next-silicon-valley-where-to-place-vietnam-on-the-global-startup-map-3605959/index.html

VAMA optimistic about auto sales

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

The Vietnam Automobile Manufacturers Association (VAMA) has forecast a 10 per-cent increase in auto sales this year, allaying concerns among some manufacturers and traders that consumption might falter.Speaking at a press conference in HCM City on July 28, Toyota Vietnam president and VAMA chair Toru Kinoshita said the auto market will continue posting positive growth this year.The domestic auto market saw slower sales in the first months of the year as many con-sumers are waiting until early 2018 when import tariffs on autos from Asean countries fall to zero from the current 30 percent.However, Vietnam's higher economic growth has fueled demand for cars. Auto sales in the country in January-May slightly picked up against the same period last year with 102,700 cars sold, said Kinoshita.He expected sales of locally assembled and completely built-up (CBU) autos would grow well when the Common Effective Preferential Tariff (Cept) is cut to 0 percent.The auto industry could achieve sales growth of a strong 20-30 percent if there is no market volatility, he noted.In order to boost auto sales, local auto manufacturers and assemblers have launched many promotion programmes with attractive discounts.Auto buyers can find good prices at the 13th Vietnam Motor Show 2017 and take a close look at different models of cars.http://english.thesaigontimes.vn/54754/VAMA-optimistic-about-auto-sales.html

Funds needed for hi-tech agriculture

30/JUN/2017 INTELLASIA| VNS

Agricultural productivity and quality should be increased by investing more in inno-vation and strengthening links between all stakeholders, including farmers, enterpris-es and research institutes, experts say.At a seminar held in Hanoi on Tuesday, they also said that access to land, capital and markets were factors hindering hi-tech agriculture.

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Cao Duc Phat, permanent deputy head of the Party Central Committee's Economic Commission, said that the agriculture sector had grown strongly in the 2011-15 period, with improved farm produce quality and increasing number of agriculture enterpris-es.He said that in 2013, the government approved a restructuring master plan for the ag-riculture sector, oriented primarily towards value addition.One of the most important changes under this plan was shifting the focus from pro-ductivity to effectiveness and high quality, based on application of science and tech-nology, boosting hi-tech agriculture.Since then, many firms like TH True Milk, VinGroup, and Viet Uc have made big in-vestments in hi-tech agriculture. In addition, many farmers have invested in small scale hi-tech agriculture models.However, the development of hi-tech agriculture had been stalled by land, market and capital barriers. The effectiveness of some key produce had been low, especially rice and tea, Phat said.Nguyen Thi Thanh Thuy, head of the Ministry of Agriculture and Rural Development (MARD)'s Department of Science, Technology and Environment, said the State had is-sued a number of policies to facilitate high-tech agriculture, but administrative proce-dures and the lack of insurance were weakening the effort.Thuy felt firms should be encouraged to establish research centres and forming close linkages between businesses and technological organisations to promote hi-tech appli-cations.She stressed the need to increase negotiations and the signing of trade deals to facili-tate businesses' access to more markets.Nguyen Do Anh Tuan, director of the Institute of Policy and Strategy for Agriculture and Rural Development, said there had not been enough investment in science and technology for agriculture and rural areas. Thus far, investments had been directed mostly to theoretical pursuits, he said.He said there was a need to increase investment in agricultural renovation. For this, among other things, cooperation between relevant associations and big businesses should be encouraged, he added.Participants also called for reviewing and amending regulations on hi-tech applica-tions in agriculture and the Law on Land, as well as providing new incentives for hi-tech farming enterprises.The meeting heard that the southern provinces of Hau Giang, Phu Yen and Bac Lieu are currently home to three hi-tech agricultural zones approved by the prime minister.The MARD has granted licenses to 26 hi-tech firms while Thai Nguyen, Thanh Hoa and Lam Dong provinces have devised plans to establish hi-tech agricultural zones.As of the late March, the State had provided VND156.3 billion (US$6.79 million) for 15 hi-tech projects in agriculture.According to the MARD, firms invested more than VND21.2 trillion in 25 hi-tech agri-cultural projects from June 2016 to February 2017.The seminar, part of the Vietnam Economic Forum 2017, was jointly organised by the MARD and the Party Central Committee's Economic Commission.http://bizhub.vn/news/funds-needed-for-hi-tech-agriculture_287223.html

Vietnamese consumers among most demanding on e-commerce

30/JUN/2017 INTELLASIA| VNS

Vietnam's e-commerce may be one of the world's fastest-growing markets, but the country's customers are also among the most demanding.Nielsen has forecast that the Vietnamese e-commerce market will grow 22 per cent this year and 13.2 per cent by 2020.According to the Vietnam E-commerce Association (VECOM), the local e-commerce sector will become a 10 billion-dollar business in the next five years.However, local consumers are also demanding, with many complaints about price, product information and authorisation, which should be addressed by merchants to improve customers' trust.

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A research conducted by iPrice and Trusted Company based on more than 30,000 re-views on 5,000 websites in Vietnam, Malaysia, Singapore, Indonesia and the Philip-pines found that Vietnamese customers have the lowest trust on e-commerce and spend less money on shopping online.Vietnamese customers complain the most about "fake products", 15 per cent higher than Thailand, the country with the second maximum complaints, given that fact that Thailand ranked 4th worldwide in the fake goods trade.The second maximum complaints on e-commerce sites by Vietnamese customers are about the price of products. Despite being an aggressive promotion hunter, the Viet-namese still think products listed by e-commerce merchants are overpriced.Given that 80 per cent of consumers prefer cash on delivery (COD) payment, the coun-try also has the highest order cancellation rate, with 30 per cent of products not being accepted due to product failure, the research said.Unlike consumers in other Southeast Asian countries such as Singapore and Indonesia that have shared concerns on buying products, the most common queries of the Viet-namese are on product authorisation (store address) and availability. They are re-vealed to often use feedback forms to ask about products.Of all Southeast Asian countries, Vietnam has an average rating of 3.7 out of five stars, the research has revealed. This is due to the fact that only large merchants have devel-oped a rating scheme for a better shopping experience for consumers.http://bizhub.vn/news/vietnamese-consumers-among-most-demanding-on-e-commerce_287233.html

Convenience stores seek ways to differentiate themselves from rivals

30/JUN/2017 INTELLASIA| VIETNAMNET

Brands are trying to fully exploit their advantage to compete with rivals, but most of them are developing a model that is a hybrid between a convenience store and fast food shop.In the past, convenience stores differentiated themselves from privately run groceries by position, diverse goods and modern services. Now, they tend to set up large stores integrated with fast food shops to attract youth and office workers.HCM City residents were reported as queuing up at the first 7-Eleven shop at Saigon Trade centre on June 15, the opening day of the shop.N.N. Huong, who visited with her teenage daughter, said she was curious about the new brand and she wanted to find out if there was any difference with the Ministop shop located next to her house.Seven System Vietnam said 7-Eleven offers hundreds of dishes suitable to Vietnamese taste, and provides lunches to office workers with 20 alternatives. Besides the products with private brands, 7-Eleven also provides facilities such as dining area, wifi and card payment services.After a decade of slow development, convenience stores have been developing strong-ly in the last three years.FamilyMart, Ministop and B's, after changing the joint venture model, have been step-ping up the expansion of the chains.Each of the brands has had 40-50 new shops set up every year. In the last three years, the network of 24/24 convenience stores has grown threefold and expanded to other provinces and cities besides Hanoi and HCM City.Analysts said though the high retail premises rent remains the biggest obstacle for the development of convenience stores (which accounts for 40 percent of operation costs), convenience stores have overcome a difficult period to form large-scale chains.Most convenience store chains are part of large corporations such as Aeon, Central Group, Saigon Co.op, Vingroup and SATRA.Aeon, for example, now owns many retail chains in Vietnam, including Ministop, which is open 24/24 hours, located in central districts; Aeon Fivimart, known as food shops; Aeon Citimart B&B, located in apartment blocks; and Daiso, the single-price chain, which all connect other models, from supermarkets, hypermarkets and shop-ping malls to other potential segments of the retail market.

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Zakkamart, a 100 percent Vietnamese owned chain, established three years ago, opens two new shops every month on average. The difference between Zakkamart and other convenience stores is that the chain sells fresh food, vegetables and fruits and frozen products.Nguyen Van Khoa, deputy general director of Satra, said Satra provides daily meals, and does not only focus on FMCG (fast-moving consumer goods).http://english.vietnamnet.vn/fms/business/180876/convenience-stores-seek-ways-to-differentiate-themselves-from-rivals.html

Online tourism market still big enough for Vietnam's OTAs

30/JUN/2017 INTELLASIA| VIETNAMNET

Having been in Vietnam for a long time, foreign online travel agents (OTAs) now dom-inate the market, but analysts believe there are still opportunities for Vietnamese OTAs.Luong Hoai Nam, CEO of Hai Au airline, said: "With online tourism, Vietnamese trav-ellers have become too familiar with Agoda, booking.com and Expedia. So why don't we create an online tourism tool that only serves Vietnamese?""We don't have the ambition of serving travellers all over the world, but just want to serve Vietnamese who want to travel domestically and abroad," he added.He noted that in Vietnam, people now don't like travelling in large groups of 30-40 people, but tend to travel in small groups of family members and friends. These trav-ellers only need air tickets and hotel rooms, and don't need tour guides and coaches.Nam, when setting up his OTA website, decided to focus on Free & Easy, a service package which offers preferential prices for clients who book air tickets and hotel rooms.In 2014, HG Travel began online tourism via Gotadi. However, to prepare for the com-petition in the market, the firm is undergoing restructuring. The difference between Vietnamese and foreign OTAs is the technology. While foreign firms focus on technol-ogy, Vietnamese OTAs are developed by travel agencies.Ngo Minh Duc, director of HG Travel, told the press that foreign OTAs position them-selves as technology firms, which focus on technology solutions to optimise users' ex-periences and improve access speed. Vietnamese OTAs define themselves as travel firms.Gotadi has joined forces with firms in the same field and e-commerce businesses to cre-ate a network to lure domestic users. It has also changed its business strategy.Two years ago, Gotadi applied the B2C model, targeting final users. However, the firm's managers have decided to develop B2B as well.In 2011, Thien Minh Group (TMG) developed ivivu.com. TMG owns 11 hotels and re-sorts with 800 rooms in three countries in Indochina, 12 representative offices in SE Asia, the UK, Australia, the US and Japan, serve 90,000 travellers, while 140,000 trav-ellers use TMG's accommodation services. These facilities all can give strong support to the operation of ivivu.com.Ivivu now can be financially self-reliant with 100,000 users a day. However, its reve-nue contribution to TMG remains modest (VND100 billion in the first nine months of the year). Expedia Inc had revenue of $8.77 billion in 2016.http://english.vietnamnet.vn/fms/business/180869/online-tourism-market-still-big-enough-for-vietnam-s-otas.html

Condotel growth is not normal: experts

30/JUN/2017 INTELLASIA| DAN TRI

Hochiminh City Real Estate Association (HoREA) has just had a report about the real estate market situation in the first six months of the year and forecast about the situa-tion in the last six months.As per HoREA, the real estate market still has potential risks such as the supply-de-mand difference which mainly deviates to high-end property and resort tourism seg-ments; the sources of credit of banks and social capital poured into real estate are very large and tend to deviate to some large businesses and to high-end property and resort tourism segments.

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At the same time, the market has seen an increase in many secondary investors while in the affordable social housing segment, the supply is insufficient. The real estate mar-ket still has not had transparent, healthy and sustainable development.Notably, the market of officetel, condotel, serviced apartments has been developing very strongly, and there are signs of excess supply."The condotel ratio now accounts for 56 percent, higher than the supply of hotel rooms, resorts (only accounting for 44 percent) while the total supply was unusual because normally, in countries, the supply of condotel apartments is generally lower than that of hotels and resorts", said HoREA.HoREA also said the fact that investors commit the profit amounting to 12 percent/year within 8-12 years "is too high and does not ensure the sustainable development, which has potential risks for secondary investors. Another concern for condotel is the legal settlement of this product as it is currently not explicitly stated in the Housing Act.Regarding the investment in condotel, talking at a recent seminar, Pham Van Truong-Head of Real Estate Management DepartmentHousing and Real Estate Market Man-agement Agency said the Law on Real Estate Business only issues general regulations for real estate transactions but not just for condotel and officetel apartments while the Housing Law only regulates issues related to housing.Thuong said the legal status of condotel products is unclear. The Ministry has repeat-edly asked businesses selling condotels to present the "red book" but has not been met, though businesses investing in this segment have always affirmed that they have had the books.Rudolf Heverdirector of Hotels, Savills Asia Pacific said the worth noticing point is the "tel" in condotel model. In most cases, very few operation and management factors such as hotels are considered for this component. This is especially worth worrying be-cause investors are difficult to ensure the committed profit. To generate revenue for the commitment, condotel must be operated as a hotel and achieve impressive busi-ness results.As per Rudolf Hever, products with this commitment programme are becoming more risky for buyers as some inexperienced investors have developed large scale projects without a strong budget such as equity or capital support from banks. These risks mainly come from the operation after having completed the construction and in case the profit margin is higher than the cash flow from business operation. Then, investors need to supplement capital to ensure this commitment. Currently, the committed prof-it ratio in Vietnam is rather high, amounting to 12 percent in eight years for some projects.

China firms eye opportunities in VN

30/JUN/2017 INTELLASIA| VNS

Executives from 12 companies and business associations in China's Shandong Prov-ince on Wednesday met with more than 50 Vietnamese counterparts in HCM City to discuss the possibilities of collaboration.The visitors specialise in solar energy, farm produce, gantry cranes, small and light lift-ing equipment, agricultural machinery, vehicle accessories, building materials, CNC cutting machines, food imports and others.Speaking at the meeting, Nguyen The Hung, deputy director of the Vietnam Chamber of Commerce and Industry's HCM City chapter, said trade between Vietnam and Chi-na had grown rapidly in the last few years to $71.6 billion last year, with China's ex-ports being worth $49.8 billion.As of last March Chinese companies were the eighth biggest investors in Vietnam with $11.2 billion in 1,615 projects, he said.Zhai Luning, vice chairwoman of the China Council for the Promotion of International Trade, Shandong Sub-council, said Shandong was a major economic player, with its economy growing by 7.6 per cent last year to 6.7 trillion yuan (about $1 trillion) worth, the third largest province in the country.Vietnam is among the province's key trade partners in Asean, she said

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Their trade was worth 28.4 billion yuan last year ($4.17 billion), an increase of 16.3 per cent over 2015, with Shandong enjoying a surplus.Its key imports from Vietnam include electrical and electronic products, garment and textile, foodstuff, synthetic and natural rubber, fresh and dried fruits, seafood, oil and gas, and machinery.Its main exports are iron, garment and textile, electrical and electronic products, ma-chinery and equipment, vehicles, plywood, metal products, fruits and vegetables, and coal.Investment by Shandong-based businesses in Vietnam had increased significantly, es-pecially in the fields of rubber tyres and garment and textile, she said.The delegation's executives were from sectors with great potential to do business with Vietnam, she said.Hung said with a population of more than 10 million and accounting for 22 per cent of Vietnam's GDP and 30 per cent of its revenues, HCM City is an attractive investment destination, including for Chinese firms.Wong Chen Wei of Deloitte Vietnam listed the incentives Vietnam offers investors.Vietnam offers incentives in sectors it has prioritised for developmentsuch as support-ing industries, technology, automobile assembly, electronics, footwear, and garment and textile, he said.http://bizhub.vn/news/china-firms-eye-opportunities-in-vn_287224.html

Vietnamese firms promote trade in South Africa

30/JUN/2017 INTELLASIA| VNA

A Vietnamese business delegation held a number of trade promotion events with South African businesses on June 27-28 as part of their activities at the 24thSouth Afri-can International Trade Exhibition (SAITEX), aiming to seek stronger partnership with local firms.At the events, the Ministry of Industry and Trade, the Trade Office of the Vietnam Em-bassy in South Africa and the Vietnamese firms introduced major products of Viet-nam, mostly farm produce,and peppercorn, household commodities andinterior wooden products.Many local enterprises in Johannesburg and Cape Town showed their special interest in the price, quality, production process and import-export capacity of Vietnam.Vietnamese Ambassador in South Africa Vu Van Dung said that the trade promotion events are a good chance for Vietnamese businesses to introduce strong products to Africa and South Africa in particular.Currently, trade between Vietnam and South Africa has reachedover 1 billion USD, which is a bright spot in Vietnam's trade activities in the region, he noted.The ambassador also stressed the need to further foster economic and trade ties be-tween South Africa, the largest economy in African region, and Vietnam -a dynamic economy with abundant potential.Besides, the two sides should strengthen connection among business communities, while promoting investment and tourism cooperation in the future, he said.South African firms pointed out that a lack of information and exchange channels are among obstacles hindering products of each country to penetrate each other market. They proposed that authorised agencies of both sides create more favourablecondi-tions for business communities of both sides to boost connectivity in the future.http://en.vietnamplus.vn/vietnamese-firms-promote-trade-in-south-africa/114084.vnp

BUSINESSSBusiness Briefs Jun 30, 2017

30/JUN/2017 INTELLASIA |

* Transport and Industry Development Investment Company (TCD) at its extraordi-nary shareholder meeting yesterday approved a scheme to issue bonds to mobilise capital for build-transfer (BT) and real estate projects. The I bonds will have the total value of either VND 1 trillion for dong-denominated papers or $50million for dollar-based ones with maximum bond yields at 12 percent or 5 percent re-spectively. The papers will have a tenor from three to five years. If the bonds are con-

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verted into shares, the prices will be higher than VNDl5,000 each. TCD will also issue 1.2 million shares under an employ- ee stock ownership plan (ESOP) at VND 10,000each with the lock- up period of a year.* Ha Tay Trading Company (HIT) will float 20 million shares on the HCM City market on July 5 at the reference price ofVND12,600 each. In 2016, the enterprise gained VND291 billion in revenue, up 556 percent against the previous year, while its after-tax profit rose 88 percent at VND12.5 billion.* Khang Dien House Trading and Investment Company (KDH) plans to mobilise over VND1.4 trillion by offering 93.6 million shares to existing shareholders to boost its land acquisition. Besides, KDH will issue over 8.4 million shares to its staff to supplement its working capital. As estimated; the firm will sell 93.6 million shares at VND28,000 each, equivalent to a half of its current market price. Meanwhile, KDH will sell 8.4 mil-lion to its staff atVNDlO,OOO each.* Tasco Company (HUT) has passed a plan to issue 50 million shares via a private placement. HUT will sell the shares at 85 percent of the average price of 20 sessions from May 26 to June 22 but they will be not lower than VNDI0,500 per share. The shares will be not available for trading within one year from the issuance date. The en-terprise plans to offer 20.47 million shares to the Vietnam Opportunities Fund, 8.93 million shares to the Vina WealthFund Management Company, 600,000 shares to VinaWealth Hung Thinh Stock Invest-ment Fund, five million shares to Pyn Elite Fund and the remaining shares to five in-dividual investors. Of the proceeds, HUT will spend around VNDI00 billion on a road project in Hanoi, VND300 on Foresa My Dinh project and the remainder supplement-ing its working capital.

Financial stocks lift local markets

30/JUN/2017 INTELLASIA| VNS

Both market indices rose on Thursday morning, backed by the growth of large-cap stocks, particularly the financials.The VN Index on the HCM Stock Exchange was up 0.44 per cent at 772.45 points.On the Hanoi Stock Exchange, the HNX Index also gained 0.44 per cent to close at 98.78 points.Blue chips led the upturn, with 23 of the top 30 largest shares by market value and li-quidity on the main bourse in HCM City advancing.Big banks and securities firms, including BIDV (BID), Military Bank (MBB), Vietcom-bank (CTG), Vietinbank (CTG), Saigon Securities Inc (SSI), HCM Securities Corp (HCM) and BIDV Securities Co (BIS), gained between 0.4 per cent and 2.7 per cent.Other sector-leading companies such as PV Gas (GAS), VinGroup (VIC), FPT Corp (FPT), Masan Group (MSN), Kinh Bac City Development (KBC), Kido Group (KDC), Hoa Phat Goup (HPG) and Mobile World Group (MWG) also performed well.The overall market condition was positive, with 204 stocks rising, 180 declining, and 324 remaining unchanged on the two exchanges.A total of 148 million shares worth a combined VND2.4 trillion (US$105.7 million) were traded in the two markets.The afternoon session starts at 1pm.http://bizhub.vn/markets/financial-stocks-lift-local-markets_287234.html

Investor caution pushes turnover down

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

The local stock market bounced back slightly on June 28 but turnover dropped to a four-week low given cautious trading.The HCM City market saw 203.5 million shares worth VND3.6 trillion changing hands, down 13.4 percent and 12 percent respectively against the previous day. In which, the put-through market reported 19.8 million shares valued at VND571.7 bil-lion.The VN Index closed the day at 769.04, up 1.53 points, or 0.2 percent, versus Tuesday. Large caps were key contributors to the main index's gain, with dairy giant VNM up 1.2 percent, telecom firm FPT rising 1.4 percent, State-run bank CTG up 0.75 percent

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and petroleum firm PVD adding 2.5 percent.Among decliners, SAB made a deep slide in the morning phase before bouncing back in the afternoon due to falling selling pressure. The beverage enterprise lost a slight 0.29 percent at the close to VND206,800 a share on volume of 1.7 million shares.The property sector saw the best performers as many firms such as ROS, NVL, CTD, HQC and FLC increased. ITA hit the upper limit before retreating and closing with a 0.25 percent gain at VND3,940 per share with 17.8 million shares exchanged, followed by HQC with 9.7 million shares and FLC with nearly 6.3 million shares.Financial group OGC again was the most actively traded stock on the HCM City ex-change, going up to the ceiling price with trading volume of 24.1 million shares.The HNX-Index added 0.34 percent at 98.35 with turnover reaching nearly VND474 billion. The put-through market saw 20.2 million shares valued at VND269 billion traded.Realty company VCG was the best gainer, jumping 5.4 percent to the intraday high of VND21,300 a share on matching volume of 2.8 million shares. Bank stock SHB was the most actively traded stock with 7.1 million shares exchanged, followed by investment firm KLF with nearly 3.7 million shares.Foreigners stayed on the buying side on the southern market with a net buying value of nearly VND129 billion. Meanwhile, they net sold VND690 million worth of shares on the northern bourse.On the HCM City exchange, they net purchased VND34.6 billion worth of shares of se-curities firm SSI and VND22.7 billion of confectionery group KDC. On the other hand, they net sold shares of dairy company VNM, lender STB and AAA, a plastic and envi-ronment enterprise, with net selling value at VND14.2 billion, VND13.1 billion and VND10.4 billion respectively.For the northern bourse, they net bought VND2.57 billion worth of shares of VGC, a building material company, while net selling VND3.9 billion worth of shares of deter-gent firm NET.http://english.thesaigontimes.vn/54737/Investor-caution-pushes-turnover-down.html

HCM City to review master infrastructure plans

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

The HCM City government will review all its master infrastructure development plans and make adjustments if need be, heard the 10th meeting of the city's 10th Party Com-mittee on July 28.Nguyen Thien Nhan, secretary of the HCM City Party Committee, said, "Most of the master infrastructure development plans in HCM City were approved more than 15 years ago."It is necessary to review these master plans to see whether or not they still fit the cur-rent circumstances, he noted. Traffic infrastructure plans, including for Ring Road No. 2, Ring Road No. 3, and metro lines, should be adjusted to match the vision towards 2025-2030.Road upgrades, he stressed, should be factored into the master plans for upgrading and developing drainage and irrigation systems to effectively cope with urban flood-ing. Water supply plans should also be reviewed and revised to guarantee their effec-tiveness.Decades ago, the burial of solid waste was seen as a viable solution for the city's master waste management plan. However, he urged competent agencies to consider adopting modern treatment methods.He told the municipal government to prioritise those projects addressing the needs of the local population, instead of merely chasing economic growth targets.In regard to capital, he noted, public-private partnership is a long-term solution, with the private sector able to contribute up to 63 percent of all funding needs. In addition, the local government should select highly competent and skilled investors who are able to finish their projects ahead of schedule.The city Party chief urged the city government to organise conferences to look into press-ing issues like traffic infrastructure and waste treatment and find ways to lure investors.

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The city will focus on infrastructure, canal cleanup and water environment improve-ment projects, said city vice chair Le Thanh Liem said on day one of the Party Commit-tee meeting on Tuesday.He added the city will rebuild aging residential blocks which were built before 1975, and transfer some unused resettlement apartments to social housing projects in a bid to address the housing demand of low-income people.http://english.thesaigontimes.vn/54755/HCM City-to-review-master-infrastructure-plans.html

Fourth bridge to Thu Thiem in the offing

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

The Ministry of Planning and Investment (MPI) is working with HCM City, the Min-istry of Transport and other relevant agencies over a project to build a fourth bridge to Thu Thiem Peninsula which will be developed into a modern financial and commer-cial centre. According to a document issued by the government Office, deputy prime minister Trinh Dinh Dung has assigned the MPI to take charge of coordinating with HCM City, the Ministry of Transport and others to evaluate the project and pass it to the prime minister for approval.The 2.16-kilometer bridge would connect District 2 where Thu Thiem is located and District 7, and require a total of VND5.2 trillion (US$230 million).Last year, HCM City sought to award a no-bid contract to an investor to construct the bridge under BT (build-operate) form in which the investor would be allocated land in exchange for the bridge it builds and transfers to the city.The bridge will connect Saigon South and Thu Thiem New Urban Area, thus reducing traffic congestion on the roads from Binh Thanh and Thu Duc districts to districts 7, 8, Binh Chanh and Nha Be as well as in the city centre.The city plans to have four bridges to Thu Thiem by 2020. Thu Thiem 1 Bridge is now in use while the second is under construction. Thu Thiem 3 and 4 and a pedestrian bridge connecting District 1 and Thu Thiem have not got off the ground.Before work on Thu Thiem 2 Bridge began, experts said Thu Thiem 1 Bridge and Thu Thiem Tunnel were enough to ensure smooth traffic between Thu Thiem and the rest of the city, so no new bridges would be needed.However, the HCM City Department of Transport said the city would need four bridg-es to Thu Thiem New Urban Area and a pedestrian bridge to facilitate movements of 120,000 future residents and about 350,000 other people who would work in Thu Thiem.In related news, two branches of Nguyen Van Cu Bridge will be opened to traffic on July 29, said the Saigon River Tunnel Management Centre, the investor of the project.The VND168 billion project will help facilitate traffic between districts 1 and 5 and dis-tricts 4, 7 and 8. The N1 branch connecting Vo Van Kiet Avenue in Binh Chanh District and Nguyen Van Cu Bridge is 167 meters long and 6.5 meters wide while the N2 branch with a length of 142 meters will link to Vo Van Kiet Boulevard in District 1.The two branches of Nguyen Van Cu Bridge are complete five months earlier than ex-pected.Nguyen Van Cu Bridge over Ben Nghe Canal links downtown HCM City and south-ern urban areas.As the bridge has no exits to Vo Van Kiet Avenue, vehicles from districts 4 and 8 must pass through Tran Hung Dao-Nguyen Van Cu Intersection to enter the avenue, thus causing traffic congestion.http://english.thesaigontimes.vn/54767/Fourth-bridge-to-Thu-Thiem-in-the-offing-.html

Visa invitation and guarantees go online

30/JUN/2017 INTELLASIA| VNS

The Ministry of Public Security's Immigration Management Department will officially launch online invitation and guarantee procedures for Vietnam-based agencies, or-ganisations and enterprises applying for Vietnamese visa for foreigners on July 1.The move follows Article 10 of government's Decree 07/2017/ND-CP, dated January

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2017, on processes and procedures for pilot issuance of electronic visa to foreigners who wish to enter Vietnam.This move is an administrative reform in the immigration sector and promotes the use of science and technology in State management.Agencies, organisations and enterprises that wish to invite or/and give guarantee for foreign visitors must register for an online account by submitting a document via the portal www.xuatnhapcanh.gov.vn.or directly at the department headquarters on 44-46 Tran Phu Street, Hanoi.http://bizhub.vn/news/visa-invitation-and-guarantees-go-online_287230.html

Ministry pushes app based taxi management to localities

30/JUN/2017 INTELLASIA| SGGP

Deputy minister of Transport Nguyen Hong Truong has said that the ministry does not license the number of cars attending a pilot project on app-based taxi service ap-proved by the prime minister, saying localities can manage that by themselves without asking the ministry's opinions.If local authorities want to manage logos and barges of ride-hailing firms, they can as-sign authorised agencies to do so, said Truong at a conference organised by the min-istry in Hanoi yesterday.He was speaking in response to traditional taxi firms' complaint that the quick increase of Uber and Grab cabs has broken plan and contributed in traffic jam in HCM City and Hanoi.According to the prime minister's decision, the ministry's pilot project will be imple-mented in two years.When the project ends this yearend, the ministry will review the ride-hailing service to have better management solutions, said Truong.The ministry will work with the Ministry of Finance to improve tax management to Grab Taxi and Uber Vietnam and the Ministry of Industry and Trade to cope with anti-dumping from their discount programmes.A representative of the Taxation general Department under the Ministry of Finance re-ported that tax agencies have met difficulties in fighting tax loss to Uber Vietnam.The department said that the company should establish a legal entity in Vietnam and conduct tax duties like other businesses to ensure fairness.The department suggested being provided with data about the number of ride sharing cabs, their routes and revenue to collect tax arrears.The Ministry of Transport called on traditional taxi firms to change fare policy and im-prove drivers' serving manner as well as car quality; and Uber Vietnam and Grab Taxi to abide by Vietnam's law.Reports at the conference show that HCM City now has over 22,000 cars and Hanoi has over 7,000 cars attending the pilot project. These numbers are far exceeding taxi cab plans in the two cities.Chair of HCM City Taxi Association Ta Long Hy wanted to make clear the truth of Uber and Grab business in Vietnam as the number of ride-sharing cars has increased unceasingly, broken plan and caused traffic jam.Sharing the same view, Nguyen Tien Long, head of the Secretarial Board of Hanoi Taxi Association, said that after 17 months of the pilot programme, the number of Grab and Uber taxi cabs have been half as many again the country's taxi number for the last 30 years.He said there was an unfair competition among traditional and technology applied taxi firms as managerment agencies can easily identify cabs of traditional firms while they cannot know Grab and Uber cars because of lacking logos and barges.That poses a danger of tax loss.http://english.vietnamnet.vn/fms/business/181144/ministry-pushes-app-based-taxi-management-to-localities.html

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Tourism plans in Mekong Delta called too ambitious

30/JUN/2017 INTELLASIA| VIETNAMNET

The Mekong Delta expects 34 million travellers by 2020, but the goal is out of reach if local tourism continues to operate in the traditional way.Thirteen provinces and cities in Mekong Delta received 7.6 million travellers in 2016, including 900,000 foreign travellers, or 10 percent of total foreign travellers to Vietnam.Under the plan for Mekong Delta tourism development, the region would have turn-over of VND25 trillion by 2020, or VND15.3 trillion higher than last year's turnover.Some experts commented the plan is too ambitious, because the number of travellers to Mekong Delta has not increased sharply like other regions. With the overlap in tour-ism products, poor infrastructure and services, and bad marketing, Mekong Delta tourism agencies should not set a high target in the number of travellers.An analyst commented that there could be a 'one for all' tour, in which travellers visit one locality to experience all the products of the whole region.If travellers visit My Tho, they will not need to go to Can Tho, and if they visit Can Tho, they can go straight to Chau Doc or to Cambodia, and there would be no need to stop over in neighbouring localities.My Tho and Ben Tre's tourism has become nearly saturated as all tourism resources such as don ca tai tu (amateur music in southern Vietnam), hand rowing and craft vil-lages.Travel firms report that travellers to Mekong Delta stay for 1-2 nights or go home with-in the day. While the central region can exploit its advantages to provide resort tour-ism or MICE, Mekong Delta has few large groups of 500-1,000 MICE travellers because of the lack of hotels and services.Nguyen Thi Hoa Le, CEO of Hoa Binh Tourism JSC, said that provinces and cities need to provide tourism products with 'specific taste'.She has urged local authorities to make heavier investments in infrastructure and serv-ices. "All localities want to develop tourism, but how they can attract more tourists if they hesitate to make big investments?" she said.Some businesses think Mekong Delta has become less attractive because of rapid mod-ernisation. Many rural areas have lost the charm of the southern countryside.In Tien Giang and Can Tho provinces, for example, there are floating markets, an orig-inal characteristic of the southern region. However, the markets have become smaller as people now have other modern trade channels.http://english.vietnamnet.vn/fms/business/180875/tourism-plans-in-mekong-delta-called-too-ambitious.html

City IT sector salaries balloon

30/JUN/2017 INTELLASIA| VNS

A salary "bubble" is forming in the IT sector, posing challenges to employers, a work-shop heard in HCM City yesterday.Startups had hired these people at salaries many times higher than the industry stand-ards, creating a salary bubble, according to Nguyen Phuong Mai, managing director of Navigos Search, a leading executive search and management consultancy company."The fourth industrial revolution is inspiring IT startups, pushing up human resources demand and salaries," Mai said.Start-ups need many employees to develop their business, and to attract human re-sources they offer "too high" salaries, according to Mai.The salaries of 20-25 per cent of IT specialists are higher than that of IT project manag-ers.The consequence is that many IT engineers and specialists quit their existing jobs and move to work for start-ups.There is a keen competition for human resources even among non-start-ups in the sec-tor.They offer many benefits such as overseas travel focusing on motivation and recogni-tion.One in four IT professionals gets free training from their companies and more than half also get training in non-technical subjects like English and leadership.

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"Job switching is causing a shortage at the mid-management level," she saidMai said the annual IT demand is for 80,000 people while the number of students grad-uating is only 30,000.According to Lam Quang Vu, deputy head of the IT faculty at the HCM City Univer-sity of Sciences, IT companies routinely call for increasing the number of students ad-mitted every year, but it is difficult to do it.Last year it enrolled 1,056 students to its university and college IT courses.New graduates get an average salary of VND8-9.5 million a month, higher than the amount earned by students from other faculties at the university.Within three year the salary rises to nearly VND18 million.Mai said: "The shortage of labour supply causes a loss of competitive advantage. Inter-national companies choose India or China to invest in ICT rather than Vietnam."She suggested that IT companies, human resource training facilities and the authori-ties should closely cooperate with each other to puncture the bubble and address the shortage.The workshop was held by Vietnam IT Outsourcing Alliance.http://vietnamnews.vn/society/379175/city-it-sector-salaries-balloon.html

Pet breeding a popular business in Ben Tre Province

30/JUN/2017 INTELLASIA| VNS

Many residents in the southern province of Ben Tre are raising dogs and other pets, gaining significant achievements and respectable profits.In recent years, professional systems that take care of breeding, veterinary services, and the buying and selling of pets have emerged in the province.Tran Tan Dat, a resident in Chau Thanh District's Huu Dinh Commune, for example, invested in a pet-raising business after retirement.Initially, he had a couple of poodles but now has 20 poodles of different sizes, includ-ing teacup, toy, miniature and standard.He said that demand for poodles was high since the breed was friendly and easy to train.Nguyen Thanh Dong, a farmer in Ben Tre City's Son Dong Commune, has raised a va-riety of breeds, including pugs, border collies, rottweilers, and Phu Quoc and berger dogs.Raising multiple breeds has allowed him to earn a profit from the most difficult buy-ers.Dong added that raising foreign dog breeds required more attention and resources compared to pure Vietnamese breeds.They need to be bathed regularly and given vaccinations to prevent disease, he said, emphasising that food sources must also be chosen carefully.If dogs are taken care of well, they can give birth three times per year, with four to six puppies each time.Besides the economic value, raising pets can bring joy and social connections, especial-ly to retired workers like Dat.Last year, the Ben Tre Province's Pet Association launched a dog-raising group with the aim of bringing together breeders and providing a platform to exchange ideas on the industry.The group has hosted several seminars and invited dog food companies to share their experience in raising quality pets.Le Van Huyen, director of the group, said that a thriving dog-breeding business re-quired passion as well as thorough understanding.The group now has 40 official and about 60 unofficial members.Ben Tre, Tien Giang, HCM City and China are the most common destinations where locals sell their dogs, Huyen said.Nguyen Quoc Phuong, a resident who does not breed dogs, said that pet-raising was also an educational activity that helps children learn to love animals.http://english.vietnamnet.vn/fms/business/181122/pet-breeding-a-popular-business-in-ben-tre-province.html

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Vietnam rides on Samsung's coattails

30/JUN/2017 INTELLASIA| NIKKEI

GDP rebounds as South Korean giant's business recoversVietnam's economic growth picked up in the three months through June thanks large-ly to a recovery in Samsung Electronics' exports.The Southeast Asian nation's real gross domestic product climbed 6.2 percent on the year for the quarter, according to government figures released Thursday. This puts growth back above 6 percent, after a dip to 5.1 percent in the January-March period.Much of this recovery is attributable to a single company: Samsung, which makes smartphones and ordinary mobile phones at enormous factories at various locations in Vietnam. Fallout from the widespread recalls of the fire-prone Galaxy Note 7 phones depressed exports through March. This left a mark on Vietnam's economy, since the company accounts for roughly 20 percent of the country's total exports by value. But business bounced back starting in April as new models were launched.Samsung is not the only South Korean business driving the growth of the Vietnamese economy. LG Electronics, the Lotte group and others are expanding their own foot-prints here. South Korea has been the top source of foreign direct investment in this country three years running, starting in 2014. While reliable flows of funding are nec-essary for economic growth, many are concerned Vietnam is too dependent on South Korea for its continued success.Meanwhile, even as foreign companies invest heavily in their own Vietnamese facili-ties, infrastructure investment lags. Funding for construction of HCM City's first met-ro line, for example, ran short at the end of last year, after the central government released only around 30 percent of the money it had promised. The resulting delays could cause the line to miss the 2020 target for operation start.The contractors building the line include Japan's Sumitomo and Shimizu. The Japanese government in May asked Vietnamese prime minister Nguyen Xuan Phuc to step in and remedy the situation. But Vietnam's shaky finances can hardly support more in-frastructure spending. Rampant borrowing over the years in the form of official devel-opment assistance loans from Japan and others put the country's debt-to-GDP ratio at 64.7 percent in December, perilously close to the government-set cap of 65 percent.While forays by South Korean companies have fueled GDP growth thus far, Vietnam's manufacturing sector as a whole is too weak to enable the country to compete with leading Southeast Asian economies. Failing to develop railroads, highways and other infrastructure in a timely manner could keep other potential investors at bay, putting the brakes on further expansion.http://asia.nikkei.com/Politics-Economy/Economy/Vietnam-rides-on-Samsung-s-coattails

HCM City to help firms join Samsung's global supply chain

30/JUN/2017 INTELLASIA| VNA

HCM City is ready to work with Samsung in boosting local enterprises' capacity in support industry, helping them qualify for the Korean group's global supply chain, said Secretary of the municipal Party Committee Nguyen Thien Nhan.He made the remark while receiving Samsung Vietnam general director Shim Won Hwan on June 29.The official commended the company's significant contributions to Vietnam's export value.He said the company has responded well to Vietnamese leaders' request on increasing the localisation rate in its products, thus creating opportunities for local small- and me-dium-sized firms to produce spare parts and components for Samsung.Nhan asked Samsung Vietnam to continue working with Vietnamese universities and public agencies in the implementation of various education and construction projects.On behalf of his company's executive board, Shim Won Hwan thanked the Vietnamese government for its assistance, which helped Samsung Vietnam grow substantially and contribute to Vietnam Republic of Korea ties.The director underscored the firm's intention to expand investment in HCM City and help local enterprises improve management skills and technical competency.

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He said Samsung Vietnam wants to see more local companies join its supply chain, which will lead to higher localisation rate in the company's products.Shim Won Hwan pledged to connect with Vietnamese students by holding tours for students to visit Samsung's factories and research centres, while working to boost ca-pacity of Vietnamese workers at Samsung Vietnam.http://en.vietnamplus.vn/hcm-city-to-help-firms-join-samsungs-global-supply-chain/114089.vnp

Savills Hotels to host 'Meet the Experts' series in Hanoi & HCM City

30/JUN/2017 INTELLASIA| VN ECONOMIC TIMES

Second event set for August following success of June event.Savills Hotel will organise a new "Meet the Experts" series in Hanoi and HCM City in early August. The topic will be Limited Service Hotels, where Savills Hotels will give an overview of the sector and invite an operator to provide their unique insights on this exciting model.This follows on from the success of its first "Meet the Experts" series with leading brand Hilton, where hospitality experts were invited to share their valuable insights with Vietnamese developers. The event was held in HCM City and Hanoi in June and had an encouraging turnout, with almost 100 senior industry attendees in total.In the June event, Rudolf Hever, director of Savills Hotels Asia Pacific, and Nhung Pham, Senior manager, Business Development, Savills Hotels Asia Pacific, presented the "Vietnam Hospitality Market Overview and Opportunities". Representatives from Hilton explained the involvement and support of an operator during the design proc-ess, the role of brand standards, and the technical and operational aspects of hotel planning and design.According to Savills Hotels, Vietnam welcomed 10 million international tourist arriv-als in 2016, up 26 per cent against 2015. There remains large potential for growth, how-ever, as Vietnam lags behind its peers in terms of arrival numbers. Thailand welcomed 10 million international arrivals in 2001 and 32.5 million in 2016, while Malaysia wel-comed 10 million in 2000 and 26.8 million in 2016.On a longer-term growth basis, Vietnam is among the top of its peers, having achieved a 12.1 per cent compound annual growth rate (CAGR) from 2010 to 2016. Thailand re-corded 12.7 per cent during the same period, while the Philippines saw 9.2 per cent and Indonesia 7.5 per cent.Savills Hotels also highlighted certain risk factors on the horizon for Vietnam's hospi-tality market. The country is still too dependent on a limited number of international source markets. In 2016, just two source markets accounted for 42 per cent of all inter-national arrivals: China with 27 per cent and South Korea 15 per cent. Vietnam is sim-ply not doing enough to diversify its sources of international arrivals and therefore remains exposed to the risk of global instability.Meanwhile, supply and demand fundamentals in the second home markets in Nha Trang and Cam Ranh, Da Nang, and Phu Quoc Island are challenging. In these mar-kets, if just considering confirmed future supply in the midscale to luxury segments, supply will increase by almost 30 per cent in each of the next three years in each of the three markets. Hence, a very challenging trading environment is expected in these markets over the coming years, despite the consistent international and domestic ar-rivals growth.Most of this future supply has been successfully launched to the market but is still un-der construction and has not yet been tested in operational performance. On top of this, many developers have promised high guaranteed returns, which greatly increas-es the risk for both the developer and end-user/ buyer. Therefore, developers are ad-vised to exercise caution in the initial planning stage of developments and to fully take into consideration the risks of guaranteeing returns, hospitality market performance volatility, and future trends. In particular, developers need to carefully plan for the fu-ture management to ensure the financial performance is satisfactory once operations commence.

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Heineken Vietnam backs sustainable growth

30/JUN/2017 INTELLASIA| VNS

Heineken Vietnam has announced its achievements and future direction for sustaina-ble development through the release of its 2016 Sustainable Development Report.The report focuses on six key areaspromoting responsible drinking, protecting water resources, reducing CO2 emissions and supporting communities, as well as sourcing sustainability and promoting health and safety."In 2016, we moved closer to brewing 100 per cent from renewable energy at all our breweries, whilst creating close to zero waste. We strengthened our partnerships and programmes that promote responsible drinking and continued to invest heavily in de-veloping our people and our communities," Matt Wilson, corporate affairs director of Heineken Vietnam, said."We believe that our "Brewing a Better Vietnam" journey will continue to add more value to people, the planet and prosperity in Vietnam," Wilson said.Heineken Vietnam invested more than 8 per cent of Heineken brand's media budget to promote drinking Heineken responsibly and more than VND16 billion for training and community development. It also provided more than 17,000 hours of road safety training and more than VND25 billion in community sponsorships, including five ma-jor clean water projects.Heineken Vietnam has committed to using local suppliers to create more jobs for the people. 100 per cent of Heineken Vietnam's packaging materials are purchased locally. The company contributed VND33.5 trillion (US$1.5 billion) to Vietnam's economy, equivalent to 0.75 per cent of the country's total GDP.http://bizhub.vn/corporate-news/heineken-vietnam-backs-sustainable-growth_287231.html

Mystery company may continue gobbling up failing steel giant

30/JUN/2017 INTELLASIA| VIR

Over the last few months, Thai Hung Trading Joint Stock Company (Thai Hung) re-peatedly purchased huge numbers of Thai Nguyen Iron and Steel Corporation's stocks (TiscoTicker TIS on HoSE, HNX, and UPCoM), and it is rumoured that it will continue expanding its ownership in Tisco.Unclear futureVietnam Steel Corporation (VnSteel) is now the biggest shareholder of Tisco, with 42.11 per cent. The second biggest one is Thai Hung, with 20 per cent. However, over the last few months, Thai Hung repeatedly raised its stakes in Tisco.In particular, at the end of April 2017, Thai Hung completed the purchase of 17,817,900 TIS shares from State Capital Investment Corporation (SCIC) at the price of VND11,216 ($0.5) per share, and an additional 290,000 shares from the stock exchange. Thus, Thai Hung's stake in Tisco increased from 14.2 million shares (7.72 per cent) to 32.3 million shares (17.55 per cent).A few days ago, at the beginning of May 2017, Thai Hung purchased 4.5 million more shares, increasing its holdings to 36.8 million shares, an equivalent of 20 per cent stake in Tisco.However, it seems that Thai Hung is not satisfied with its current position. Thai Hung is planning to purchase more stocks from the number one giant of the Vietnamese steel industry, VnSteel.Nguyen Tong Thang, marketing director of Thai Hung, said that currently, the com-pany cannot give a definitive answer to whether it would purchase TIS shares from VnSteel. Regarding VnSteel, a representative said that it is waiting for guidance from the government agency in charge of this matter.Previously, at the 2017 annual shareholders' meeting, Tisco passed an important doc-ument that gives investors the right to not publicise their purchases of TIS shares from shareholders who own at least 25 per cent and have voting rights. Therefore, any in-vestor can raise its ownership in Tisco without the complex procedures of public pur-chase, which attracted heavy attention. Notably, as a representative of the state capital in Tisco and also the biggest shareholder, VnSteel voted in favour of this document.Tisco also had some changes in human resources recently.

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Particularly, at the beginning of May 2017, Tran Anh Dung was elected for the position of control chief to replace Tran Man Huu. At the middle of May 2017, Thai Hung dis-missed three board members, including Nguyen Quoc Huy (former board chair), Vu Hoang Long, and Nguyen Tien Dung (former deputy general director).Thai Hung, an emerging giant in the steel industryThai Hung is an emerging name in the Vietnamese steel industry. It used to be a pri-vate enterprise in Thai Nguyen province. The company's main activities are manufac-turing construction steel and other products related to steel and iron, forestry business, transport, hotel, restaurant services, and so on.At present, this enterprise has VND1 trillion ($44 million) of chartered capital and its annual revenue is about VND15-18 trillion ($600-720 million). In 2017, Thai Hung tar-gets to generate about VND15.5-16 trillion ($620-640 million) in revenue, and VND320 billion ($12.8 million) in after-tax profit.Before purchasing TIS, in November 2016, Thai Hung came to control another steel gi-ant called Vietnam-Italy Steel Joint Stock Company (VISticker VIS on HoSE). In Au-gust 2016, when Song Da Corporation divested from VIS, Thai Hung purchased the entire divested amount, as well as a huge number of VIS stocks from the market at the same time.In particular, in November 2016, Thai Hung purchased an additional 12.8 million VIS stocks, an equivalent of 25.99 per cent stake, thus increasing its total stakes in VIS to 50.98 per cent. In April 2017, Thai Hung released its plan of purchasing 14.22 per cent more of VIS. If this plan is implemented, Thai Hung will hold more than 75 per cent of VIS.About ten years ago, Tisco signed a contract with Metallurgical Corporation of China (MCC), making MCC the main EPC (Engineering, Procurement, and Construction) contractor for the second phase of Thai Nguyen Iron and Steel plant, with a total in-vestment of over VND3.8 trillion ($152 million).The project was implemented in 2007, but it was delayed due to the financial crisis. In 2009, it was resumed, but the total capital needed has increased to over VND8.1 trillion ($324 million), making it difficult for Tisco to collect the funds.In July 2012, the project was delayed again, because MCC withdrew to China, leaving behind the unfinished project. Since then the project has been left abandoned for five years now.According to a report, the main reasons behind the capital shortage was the increased costs for part C (construction and installation), which was assigned to Vietnamese con-tractor Vietnam Industrial Construction Corporation (Vinaincon), while the capital of parts E and P (electro and mechanics), assigned to MCC, stayed in line with the con-tract.The second phase of the expansion of Thai Nguyen Iron and Steel plant is one of the twelve heavy loss-making projects of the Ministry of Industry and Trade

Taxi-Uber clash rasies questions

30/JUN/2017 INTELLASIA| VNS

The mounting clash between traditional taxi firms and ride-hailing platforms Uber and Grab has raised the question of how to ensure fair competition in the passenger transportation market.At a Wednesday dialogue between the Ministry of Transport and transport firms, tradi-tional taxies demanded to clarify Uber's and Grab's operations and management policies, adding that traditional cabs face unfair competition form ride hailing services companies. Meanwhile, car-hailing services firms said that their services are not incompliant with the established laws.Ta Long Hy, chair of HCM City Taxi Association, proposed that the Ministry of Transport clarify whether Uber and Grab are technology platforms or transportation companies in order to carry out appropriate management policies.Hy said that Uber and Grab are doing things outside the functions of technology plat-forms.The booming growth enjoyed by Uber and Grab cars are creating pressure on traffic in

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major cities, traditional taxi associations said.Do Quoc Binh, chair of Hanoi Taxi Association, estimated the total number of taxies, including traditional, Uber and Grab, at 30,000-35,000 at the moment in the capital city, far beyond the planning of 20,000 taxies by 2020.Under the HCM City's taxi planning, there should be 12,000 cars by 2020. But now, with Uber and Grab, the number of taxies even already doubles that figure.Hy proposed the transport ministry halt the pilot project of applying science and tech-nology in transportation and providing logos for contracted cars.According to deputy director of Hanoi Department of Transport Ha Huy Quang, there is now a shortage of management policies regulating ride hailing services firms like Uber and Grab. "This business model must be revised to raise appropriate manage-ment policies," Quang said.Representatives from Uber and Grab at the dialogue said that they are compliant with the established laws and have fully implemented tax obligations.Nguyen Tuan Anh, CEO Grab Vietnam, said the company's discount programmes is all registered at municipal departments of industry and trade and transportation. In addition, low fares are based on the application of technology, which has helped im-prove efficiency.Deputy minister of Transport Nguyen Hong Truong said that the two-year pilot project of applying technology to support the management and to connect passenger transporation by contract cars will be finished at the end of this year. After that, the project will be evaluated to issue better management policies.Truong said the transport ministry will work with the Ministry of Finance to have bet-ter taxation solutions and with the Ministry of Industry and Trade to ensure fair com-petition.Truong urged traditional taxi firms to strive to improve services and lower fairs to compete. He also urged Uber and Grab strictly follow Vietnamese laws and regula-tions.As of May, nine companies participated in the pilot project, namely Grab Car, V.Car, Thanh Cong Car, S. Car, Vic. Car, Home Car, Uber, Mai Linh Car and Lb. Car.Recently, the ministry said that the initial application of technology in transportation has been highly appreciated by citizens.http://bizhub.vn/news/taxi-uber-clash-rasies-questions_287242.html

IBM Institute, UBIS University cooperate in management training

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

The Institute of International Business Management (IBM Institute) and the University of Business and International Studies (UBIS University) of Switzerland have signed a cooperation agreement on leadership and management training.IBM Institute director Pham Quang Vinh said UBIS University will transfer European training know-how to the institute and send professors to Vietnam to provide training and advice for trainees at the institute.Local trainees can also come to UBIS campuses in more than 40 countries for study and exchange.The cooperation will help develop human resources for HCM City and other parts of the country, especially finance and banking managers.The two will also jointly hold seminars on business administration, strategies and leadership, training courses on finance and banking, and enterprise management training programmes, Vinh added.Established by the HCM City Association of Science for Economy and Management and the HCM City Department of Science and Technology, IBM Institute specialises in business administration, management training and technology transfer.The institute has trained numerous leaders for domestic and international corpora-tions and State agencies. The institute has also teamed up with foreign partners to hold short training courses on leadership and management and those at the request of busi-nesses.

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CAAV head picked as new ACV chair

30/JUN/2017 INTELLASIA| THE SAIGON TIMES

Lai Xuan Thanh, director general of the Civil Aviation Authority of Vietnam (CAAV), has been elected chair of the board of the Airports Corporation of Vietnam (ACV) for a five-year term starting 2016.Thanh has been authorised by the Ministry of Transport to serve as representative of the State's stake in the corporation. His election to the chairmanship of ACV took place at an annual shareholder meeting of the company on July 28.Thanh has held different positions at CAAV such as head of the Air Transport Divi-sion, and head of the authority since October 2012.According to a company report, ACV has total assets of VND45.7 trillion. The firm is sitting on huge debts, VND21.7 trillion, including long-term debts of VND14.02 tril-lion, mainly Japan's official development assistance (ODA) loans used to finance two passenger terminals at Tan Son Nhat and Noi Bai international airports.Turned into as a joint stock company in April 2016, ACV last year obtained revenue of VND10.1 trillion, 13.54 percent higher than estimated, and pre-tax profit of VND3.1 trillion, an increase of 159.25 percent.This year ACV looks to attain around VND13.3 trillion in revenue and VND3.7 trillion in pre-tax profit, and pay a 9 percent dividend.ACV has carried out some airport upgrade projects, including Tan Son Nhat airport with around VND2 trillion, Noi Bai airport with VND1.2 trillion, Phu Quoc airport with VND2 trillion, and Phu Cat airport with VND500 billion.http://english.thesaigontimes.vn/54747/CAAV-head-picked-as-new-ACV-chair.html

First co-working space for all startup activities opens

30/JUN/2017 INTELLASIA| VN ECONOMIC TIMES

VuonLuxury Garden Office opens in Hanoi on June 29.The VuonLuxury Garden Office, a co-working space belonging to the Vietnam Agency Group (VAG), opened on June 29 in Hanoi.All startup activities are fully catered for at the co-working space, said Ha Anh Tuan, CEO of VAG, making it the first in the country to do so."When presenting projects, startups can meet investors at Vuon," he explained. "Not only startups working at Vuon can access our support. Any startup seeking invest-ment can forward documents to us and we will help them find investors."The co-working space also helps investors manage finance when investing in startups.The space will also host meetings of VAG, which comprises 108 agencies in marketing and communications in the north of Vietnam. "About 50 VAG events will be held each year at Vuon, providing opportunities for startups to develop their projects," he said.Besides areas for startups, Vuon also has public rooms and private rooms for freelanc-ers and foreigners, which can seat up to 150 people.The co-working space received VND120 billion ($5.2 million) in investment and is lo-cated at the D2 Giang Vo building, Giang Vo ward, Ba Dinh district, Hanoi, on 1,300 sq m."Vuon" not only means growth, with an expectation that startups will develop strong-ly, but also means garden, as it is a green space in the city, where people will feel com-fortable and fresh innovations can be nurtured, Tuan said.VAG is a cooperative effort between local marketing and communications agents and aims to allow them to be strong enough to compete with international branding com-panies.http://vneconomictimes.com/article/business/first-co-working-space-for-all-startup-activities-opens

200 businesses join in high-quality Vietnamese goods fair

30/JUN/2017 INTELLASIA| SGGP NEWS

The fair and exhibition, " Honor Vietnam products" 2017 will be organised at at Phu Tho Stadium in HCM City's District 11 from July 5-9.The event attracts more than 500 display booths of over 200 enterprises featuring a large numbers of diversified products in various fields, such as garment and textile, food, sea-food, agriculture, handicrafts, IT, electrical machinery and appliance and others.

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SVietnam finance & business 30 June 2017

The annual fair aims to give businesses a chance to present their products to consum-ers, promote local brands and seek cooperation opportunities; as well as honoring Vi-etnamese high quality goods.http://sggpnews.org.vn/business/200-businesses-join-in-highquality-vietnamese-goods-fair-67572.html End

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