finance & business news 20 November - hkbav.org · payment: study 10 Da Nang to host ... in Vinamilk 60 ... time, the Governor said the case of a group of large shareholders holding

20 November

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FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Reference exchange rate down by 4 VND at week's beginning 1Exchange rate will be kept stable: SBV governor 2Vietnam's forex reserves continue to increase to $46b 3Loans in foreign currency to be continued in 2018 3Banks announce upcoming divestment plans 3Vietnamese fintech market looking at bright prospects 4Not on radar 5SBV leader believes in healthier banking activities in coming time 6Finance minister: Public debt, while high, is under control 6SBV Governor: Tighten credit for high-end property developments 7Startups still looking for capital from venture funds 8New regulations on use of credit cards 8Visa study highlights economic benefits of cashless cities 9Hanoi will have additional $600m a year if not using cash in

payment: study 10Da Nang to host Asean Banking Council Meeting 10Women-led SMEs still struggle with financing 11Capital for real estate, BOT projects to fall 12Transparent policies needed to draw foreign capital 12Experts: Tax, customs reform needed 14Government to target 'reasonable' wealth distribution 15PPP law to be drafted in 2018 17PM demands measures to tackle shortcomings of

public-private partnerships 17WEF to propose policies for Vietnam to seize 4IR opportunities 18Promoting VN innovation critical: PM 19Special economic zonesnew impetus for economic development 19FDI pursuit should focus on US and EU: expert 22Workforce growth turns modest 23Recruiting & retaining 23Rising global coal prices a threat to budget 25MoIT's power tariff proposals will benefit hotels 26Ban on casino entry lifted 27Leather, footwear industries expand exports to EU 29US exports to Vietnam resume with first shipments delivered 30Trillion-dong street food market remains unexploited 30Is e-commerce sector no longer available to Vietnamese

businesses? 32Foreign brands up the ante in fashion market 33Property market stays strong 35Vietnam continues to see strong interest from developers 36$69.4m housing fraud discovered 37No foundation to prove $3 billion flow from Vietnam to US

for house purchase 37Part of the puzzle 38VN auto sales set to miss target 40Start-ups face recruiting difficulties due to poor finance 42Startups a 'promised land' for new graduates 42Startup movement helps increase new enterprises 43

Hotel occupancy rises in HCM City 44Inland waterway holds small transport market share 44

BIZ NEWS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45Business Briefs 20 November, 2017 45VN Index drops from 10-year high 46Vietnamese stock market eyes development trends 46Fund manager optimistic on VN stock market 47SCIC to sell 21.79pct stake at Vinaconex 48Sao Ta Foods becomes Ben Tre Aquaproduct affiliate 49Petrolimex stocks fall with sinking performance 49Real estate inventory value approximates $1.14bil 50VN firms urged to trade with HK 50Mekong Agriculture Technology Challenge programme starts 51Da Nang property surges after Apec 52Strong industry, trade sectors account for 33pct of HCM

City's GRDP 53HCM City steps up cooperation with IFC 54Industry, trade sector see strong growth in HCM City 54Companies pledge VND40 billion for local tourism publicity 55Japanese backs Da Nang tourism 55Vietnam trade fair begins in Cambodia 56Vietnam Expo 2017 promotes new products for 2018 56Vietnam gets ready to celebrate 20 years of internet 57Management of product origin to be enhanced 57Sales & Marketing Camp 2017 officially opens in HCM City 58Dung Quat EZ attracts more than $11 million investment 59Stripe International's ambition to redraw Vietnamese

fashion map 59Jardine Matheson firm builds up over $900 million stake

in Vinamilk 60Finnish firm pours over $33 million into clean energy project

in Hanoi 60Company to build factory to increase chicken exports 61Debt-ridden firm resumes mammoth theme park

construction in southern Vietnam 61Local firms may not be qualified as major suppliers of Walmart 62Sao Ta Foods becomes Ben Tre Aquaproduct affiliate 63Mai Linh to join hi-tech motorbike taxi game 63Vingroup launches 2 new Vincom centres 64VNPAY & Thang Long Transport sign MoU 65Tran Anh reveals larger loss before MWG merger 66iPhone X available in Vietnam from December 8 66Russian markets in HCM City 67Vietnam attends largest Asia-Pacific food fair in Singapore 67Jica workshop on construction projects 68Office rental price to increase at an average of 8.4pct/year

within the next 3 years 68Vietnam Airlines expects to open direct flights to the U.S by 2020 68

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Vietnam finance & business 20 NovemberFINANCE
FINANCEReference exchange rate down by 4 VND at week's beginning
20/NOV/2017 INTELLASIA| VNA

The State Bank of Vietnam set its reference VND/USD exchange rate at 22,442 VND/USD on the morning of November 20, down by 4 VND from the end of last week.With the current +/- 3 percent VND/USD trading band, the ceiling exchange rate is 23,108 VND per USD and the floor rate is 21,771 VND per USD.Major commercial banks kept their rates stable.Vietcombank set 22,675 VND (buying) and 22,745 VND (selling), per USD, unchanged from the end of last week.Vietinbank cut its rates by 5 VND to offer 22,675 VND (buying) and 22,745 VND (sell-ing), per USD.Meanwhile, BIDV retained its buying rate at 22,680 VND and their selling rate at 22,750 VND, per USD, unchanged from the end of last week.https://en.vietnamplus.vn/reference-exchange-rate-down-by-4-vnd-at-weeks-begin-ning/121983.vnp

Exchange rate will be kept stable: SBV governor

20/NOV/2017 INTELLASIA| VNS

State Bank of Vietnam (SBV) Governor Le Minh Hung said yesterday he was confident that the Dong/dollar exchange rate will remain stable for the foreseeable future.Hung was responding to a question from a deputy as he took the floor once again on Friday morning after almost three hours on Thursday in his first parliamentary Q&A session since assuming office.Acknowledging difficulties in keeping the exchange rate steady, Hung said applica-tion of the "central exchange rate" mechanism since early 2016 has resulted in positive market developments.He said since the beginning of 2017, the central bank has bought more than $7 billion in foreign exchange, raising reserves to a record high of over $46 billion."With this scale of foreign exchange reserves and current management policies, keep-ing the exchange rate steady is definitely possible," he said.On the issue of secure card payments, Hung admitted that instance of payment fraud through ATM cards has risen to an alarming level in the country, although the damage only amounted to one-third of the global average.He attributed the situation to weaknesses in the banks' security systems and the failure of card users and card acceptors to protect individual information.The central bank has issued several policies and regulations and increased monitoring of bank cards to make them more secure, he said.On intricate cross-ownership in the banking system that has been in vogue for a long time, the Governor said the case of a group of large shareholders holding sway over bank operations has been identified and dealt with, making them more transparent."So far, no individual owns more than five per cent of the total equity of a bank. The instances of a pair of banks holding shares in each other have reduced from seven in 2012 to two. Instances of pairs of banks where one bank owns shares in the other bank have reduced from five to two," he said.He added that if the NA approves the draft law on credit institutions, the situation will be resolved more thoroughly. Besides this, the central bank would step up inspections to monitor banks' shareholders and related people, and strictly deal with violations on share ownership, he said.Responding to a question from deputy Bui Van Xuyen of Thai Binh Province on non-performing loans (NPLs), the governor said the bad debt ratio as of September this year was 2.34 per cent.However, if potential NPLs and those sold to the Vietnam Asset Management Compa-ny were taken into account, the total value of NPLs amounted to VND556 trillion ($24.5 billion), or 8.61 per cent of total outstanding loans, more than one percentage point lower than that at the end of last year.Deputy Dang Ngoc Nghia from the central province of Thua Thien Hue asked if the central bank could waive debts or reduce interest rates on loans taken by victims of re-cent typhoons in the central region to ease their burden.Hung said the central bank had, in fact, instructed banks to estimate damage caused by the disasters and restructure people's debts. The Vietnam Bank for Social Policies would continue to check and reviews the situation and decide to waive or reschedule the debts of disaster victims, he added."If needed, commercial banks can ask the central bank and the Ministry of Finance to

Intellasia 20 November 2017 2 / 69

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Vietnam finance & business 20 November

forgive their debts," he said.Responding to the concern that too much money had flowed into real estate, raising the risk of a property bubble, the central bank governor said loans to the real estate sec-tor amounted to VND400 trillion, accounting for some 6.5 per cent of total outstanding loans.He emphasized that the central bank had implemented several measures to control loans to this sector, including: raising the risk coefficient of real estate loans; adjusting the ratio of short-term funds for medium- and long-term loans; and restricting bank loans to houses in projects for low and average income earners.http://vietnamnews.vn/economy/417744/exchange-rate-will-be-kept-stable-sbv-gov-ernor.html#hLi7vcPoYrkZJeTo.97

Vietnam's forex reserves continue to increase to $46b

20/NOV/2017 INTELLASIA| VNECONOMY

Vietnam's forex reserves have continued to increase, according to State Bank Governor Le Minh Hung who responded to National Assembly deputies' queries for the first time on November 16.The Governor said the national forex reserves have now reached $46 billion.Earlier, on October 11, 2017, at the closing ceremony of the sixth meeting of the 12th Party Central Committee, general Secretary Nguyen Phu Trong mentioned the forex reserves at $45 billion.Thus, the national forex reserves have continued rising within a short time. The Gov-ernor said since the opening session of this National Assembly's meeting (October 23), the State Bank of Vietnam (SBV) has purchased an additional of $1 billion and in the first months of 2017, SBV purchased $7 billion.On October 10, for the first time, the State Bank lowered the buying price of US dollars as well as made purchase of term foreign currency with commercial banks. The US dollar buying price of the State Bank had three consecutive decreasing sessions and was kept stable at 22,710 dong.On the interbank market, the US dollar price has also ranged around 22,710 dong since then. The selling price of US dollar on the list of commercial banks was stable, popu-larly ranging from 22,745 dong to 22,750 dong. On the free market, the US dollar sell-ing price, after exceeding 22,800 dong at the end of October, has also been adjusted down to about 22,750-22,780 dong.

Loans in foreign currency to be continued in 2018

20/NOV/2017 INTELLASIA| VNECONOMY

Answering queries of National Deputies in this morning (November 17) regarding the State Bank's direction on foreign currency credit when the policy on foreign currency loans will expire on December 31, 2017, Governor Le Minh Hung said the State Bank will continue offering short-term lending in foreign currency, at least in 2018, to sup-port the production of businesses, especially export companies.However, the long-term direction is to limit this credit channel following a step-by-step approach to shift from borrowing-lending to buying-selling relationships.In addition, the State Bank will continue implementing measures to stabilise exchange rate. This helps consolidate the capital resource value, limit risks to businesses when borrowing in foreign currency.\

Banks announce upcoming divestment plans


Several banks announced they would auction the shares they are holding in compa-nies, in the last two months of the year, on the Hanoi Stock Exchange (HNX).According to an announcement on the exchange, on November 21, OceanBank will sell four million shares equivalent to a capital contribution of VND40 billion (US$1.7 mil-lion), or 8 per cent of outstanding shares of the Petroleum Vietnam-SSG Real Estate Joint Stock Company, at an initial price of VND10,638 per share.The Petroleum Vietnam-SSG (PV-SSG) Real Estate Joint Stock Company, formerly known as the Petroleum Housing Service Trading, Construction and Investment Com-pany, was jointly established by PetroVietnam and the SSG Group.


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Currently, SSG Group holds the controlling stake at PV-SSG, with 81.2 per cent of shares. OceanBank's stake is 8 per cent and FECON Infrastructure Joint Stock Compa-ny's stake is 6 per cent.On Thursday, the HNX also announced that there are five investors who have regis-tered to buy 4.26 million shares of the Petroleum Vietnam-SSG. Among them, one is institutional investor who wants to buy four million shares.On November 20, the Bank for Foreign Trade of Vietnam (Vietcombank) will also auc-tion 6.6 million shares worth VND66 billion, equivalent to 10.9 per cent of the charter capital of the Cement Finance Joint Stock Company (CFC) at an initial price of VND11,549 per share.As of Wednesday, there were nine individual investors registering to buy 6,671,000 shares of CFC.In a similar move, the Vietnam Agricultural and Rural Development Bank (Agribank) will divest its capital contributed to the Vietnam Agriculture Trade and Tourism Joint Stock Company and the Vietnam Agribank Gold Corporation Joint Stock Company on December 15.Agribank will sell 5.29 million shares of the tourism company at an initial price of VND18,990 per share and 12,615,440 shares of the gold company at VND13,900 per share.http://vietnamnews.vn/economy/417748/banks-announce-upcoming-divestment-plans.html#8KIh32eDzyAV12oZ.97

Vietnamese fintech market looking at bright prospects

20/NOV/2017 INTELLASIA| VIR

Vietnam is considered a tremendously potential market by Korean fintech enterprises, setting off an avalanche of deals looking to expand business operations and find in-vestment and cooperation opportunities.There are 40 fintech companies operating in Vietnam at the moment, providing diver-sified financial services, such as payments, transfer, capital mobilisation, and financial management, to meet the high demand of users.As the Fourth Industrial Revolution is blossoming, fintech companies around the world are expanding and evolving to rise in an emerging banking-finance services market.As a result, Korea Internet and Security Agency (KISA) organised a business-to-busi-ness (B2B) meeting named "Fintech Company Global Business Meeting 2017" in Hanoi on November 16, 2017, to create a network between Korean and Vietnamese fintech companies. Eight Korean and 13 Vietnamese fintech companies attended the event.Almost all Vietnamese businesses appreciated new technologies presented by Korean enterprises, such as the robo-advisor, an offline payment platform, biometrics and se-curity solutions (palmprint), as well as a cryptocurrency exchange platform, and looked for opportunities to cooperate with Korean patners."Vietnam and Indonesia hold the greatest potential and are the primary destinations of Korean fintech companies when investing overseas," confirmed Jongil Jeong, senior researcher of KISA.He assessed that the fintech sector has great future in Vietnam because of the large population and the significant IT human resources. The Vietnamese government has also promulgated socio-economic development plans and policies, including the pro-motion of the fintech sector."Riding on this trend, along with ample technological capabilities, the fintech sector will evolve drastically in the near future, even faster than the Korean sector two years ago," said Jeong.Talking about cooperation and business orientation, Kim Jong Geuk, managing direc-tor of Lotte Card, said that the company is focusing on the consumer credit segment. "Particularly, Lotte Card is submitting all documents to the State Bank of Vietnam to be incorporated, after which it will acquire shares of TechcomFinance," he said.TechcomFinance, formerly known as Vietnam Chemical Finance JSC before the 2015 acquisition by Techcombank, carries a chartered capital of VND600 billion (US$26.5


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million). According to the bank's report, in 2016, TechcomFinance earned VND33 bil-lion (US$1.5 million) in revenue and VND28 billion (US$1.23 million) in pre-tax profit.If this deal is carried out successfully, Lotte Card will join the vivid consumer finance market in Vietnam, which grows at 30 percent in the past several years.http://english.vov.vn/economy/vietnamese-fintech-market-looking-at-bright-pros-pects-362796.vov

Not on radar 20/NOV/2017 INTELLASIA| VN ECONOMIC TIMES

Local banks have largely ignored the upcoming introduction of International Financial Reporting Standards 9.The new International Financial Reporting Standards (IFRS) 9, effective from January 1, 2018, will be a momentous accounting change for banks, as it requires they move from an "Incurred Loss" model (IAS 39) to recognising and providing for expected credit losses (ECL).ECL estimates are generally subject to a high degree of estimation uncertainty. Appli-cation is complex for both preparers and audit committees, and are demanding for au-ditors as well. For preparers and audit committees, it may be difficult to understand how the standards and estimates of ECL apply in detail, and what the implications for the systems and controls will be. For auditors, high-quality audit approaches will probably rely on documented, well-controlled, high-quality ECL estimation processes.With only a couple of months to go until IFRS 9 takes effect, it will take a significant effort from auditors to audit the transition in 2018 as well as the 2017 financial state-ment disclosures about the expected impact of the new standards.Reported credit losses are expected to increase and become more volatile under the ex-pected credit loss model. A recent survey carried out by the European Central Bank reported that the loan loss allowance (the charge that goes through the income state-ment) could increase by 18 to 30 per cent.Migration to IFRS 9 would also have a negative initial effect on capital, raising the vol-atility of earnings and regulatory capital ratios, according to Fitch Ratings. "Moving to an expected-loss approach would require significant process changes, including great-er integration of credit risk management and internal accounting systems," the ratings agency noted. "Banks would also need more data on how portfolios perform through the credit cycle, and will need to build complex models of expected losses. The transi-tion is likely to be more operationally manageable in sophisticated banking systems, where there is better access to robust data."The expected-loss model requires banks build a new set of credit models and exercise significant judgement to determine loan losses for each reporting period. It has been observed that larger banks mostly carry out extensions of their Basel II capital and stress-testing models, while for smaller banks who have not yet adopted the advanced Basel capital approach this is a bigger challenge.The IFRS 9 implementation also introduces operational risks, as complex models will need to be built, vetted, maintained, and coupled with significant estimations and judgements in order to calculate the new allowance and loan loss numbers.The challenge is that IFRS 9 is principles-based and does not provide any standard model for ECL, and banks must therefore create their own ECL model. In fact, al-though the ECL models may be built as extensions of the Basel capital models at some banks, the standards and requirements are different from the capital standards, and another set of books therefore needs to be maintained.While global banks and regional banks are rushing to prepare for the application of IFRS 9, local banks in Vietnam seem to be ignoring the coming sea-change. The ques-tion is whether local banks will be impacted when IFRS 9 becomes effective.Very few local banks who prepare IFRS financial statements, in KPMG's view, have even begun to understand IFRS 9's requirements and the potential impact on their IFRS accounts. The fact is that local authorities like the Ministry of Finance (MoF) and the State Bank of Vietnam (SBV) have not issued regulatory requirements or guidance that forces local banks to apply IFRS 9.


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Accordingly, the application of IFRS 9 by 2018 is likely to have no effect on the opera-tions of local banks, except for those who prepare their IFRS accounts. Without guid-ance from regulators, local banks are not forced to study the impact of IFRS 9 or plan for the implementation of one of the most challenging accounting standards. Howev-er, for some leading banks who want to issue IFRS financial statements to foreign in-vestors and/or partners, the impact is significant just for the purpose of estimating credit losses and presenting IFRS-compliant figures.Otherwise, their IFRS accounts will not be prepared in compliance with IFRS 9, and a qualified auditor's opinion should be expected. Bank executives, the supervisory board, and board members at these banks should engage their auditors to develop plans to apply IFRS 9 sooner rather than later.http://vneconomictimes.com/article/banking-finance/not-on-radar

SBV leader believes in healthier banking activities in coming time


Governor of the State Bank of Vietnam (SBV) Le Minh Hung on November 17 contin-ued taking part in lawmakers' question-and-answer session, making clear issues relat-ing to the baking system's issues, including credit growth, debt rescheduling for storm victims, and credit institution restructuring.Regarding credit growth, he said the SBV has solutions to control credit for risky sec-tors like securities and real estate, elaborating that it may adjust the rate of short-term capital used to provide medium- and long-term loans or only give loans to social and low-income housing segments.Meanwhile, only banks with bad debt percentage of under 3 percent are allowed to provide loans for the field of securities. Loans for investment in securities must be within 5 percent of banks' charter capital, Hung said.The central bank believes that these regulations are strict enough to control risks, he added.The SBV requested banks to restructure and freeze debt owed by people affected by typhoons Doksuri and Damrey, which respectively hit Vietnam in mid-September and early November, and continue assessing damage.The Vietnam Bank for Social Policies will continue making review to freeze or resched-ule debt and provide more loans, the Governor noted, adding that it can ask the SBV and the finance ministry for debt cancellation if necessary.In terms of credit institution restructuring, Hung said the move is meant to improve credit access. The State will make drastic steps to restructure the banking system and handle non-performing loans to ensure the safety of the system, he noted.He expressed his belief that banking activities will become safer and healthier in the time ahead.The central bank governor was among officials set to answer lawmakers' questions re-garding issues within their remits. The question and answer sessions are part of the on-going fourth session of the 14th National Assembly.http://english.vov.vn/economy/sbv-leader-believes-in-healthier-banking-activities-in-coming-time-362767.vov

Finance minister: Public debt, while high, is under control

20/NOV/2017 INTELLASIA| VN ECONOMIC TIMES

Public debt growth lower this year than last, minister tells NA.Vietnam's public debt growth has slowed and will only rise by an estimated 9 per cent this year compared to 15 per cent last year, minister of Finance Dinh Tien Dung has said."Public debt has been closely controlled and this is demonstrated by lower year-on-year growth," minister Dung told a Q&A session at the National Assembly on Novem-ber 15, though he also acknowledged that the country's public debt remains high, cre-ating significant repayment pressure.National debt had reached more than VND2,600 trillion ($116 billion) as at the end of 2015, equal to 62.2 per cent of GDP, the country's Finance and Budget Commission wrote in a report on the country's debts and obligations for 2016-2020.


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The government has gradually cut State budget overspending, aiming to ensure public debt safety, he said.The government has set a target of keeping State budget overspending at 3.5 per cent in 2017, 3.7 per cent in 2018, 3.6 per cent in 2019, and 3 per cent in 2020.Last year, the government did not offer loan guarantees to any State-owned enterpris-es (SOEs), the finance minister said, adding that it will continue to tighten such loans.There are concerns that when an SOE can't repay its own debts, the government steps in and assumes responsibility. More than 100 major SOEs had borrowed a combined VND1,500 trillion ($67 billion) by the end of last year, with a large part owed to foreign creditors. These SOEs have borrowed $15.6 billion from overseas, of which more than 60 per cent was either official development assistance loans at low interest rates or loans guaranteed by the government.Speaking at the session, deputy prime minister Vuong Dinh Hue said the government has taken control of guaranteed loans and will not raise the public debt ceiling.Some lawmakers and experts have suggested raising the government's debt ceiling to fund its budget obligations from the current 50 per cent of GDP to 55 per cent.Vietnam's government debt in 2015 rose above the maximum, totalling VND2,133 tril-lion ($95.6 billion), or 50.9 per cent of GDP, according to the General Statistical Office.The National Assembly has also set a ceiling on public debt of 65 per cent of GDP and a limit on foreign debt of 50 per cent.The World Bank forecasts that Vietnam's public debt will climb to 63.8 per cent of GDP this year and 64.4 per cent next year. The growing debt will impose a steadily increas-ing burden on the economy and make it harder to cut the budget deficit, which hit 6.1 per cent of GDP last year.http://vneconomictimes.com/article/banking-finance/finance-minister-public-debt-while-high-is-under-control

SBV Governor: Tighten credit for high-end property developments


Draft circular directs banks to prioritise lending for low-cost and social housing.The State Bank of Vietnam (SBV) plans to issue a circular to the country's commercial banks instructing them to prioritise credit for low-cost housing and social housing projects while slashing lending for high-end and mid-level developments.SBV Governor Le Minh Hung made the remarks at a National Assembly (NA) Q&A session on November 17.Banks will be limited to using 50 per cent of their short-term funds for medium- to long-term purposes, including mortgages, until the end of this year. The ratio will then be cut to 45 per cent in 2018 and 40 per cent in 2019, according to the draft circular re-leased by the central bank.Long and medium-term credit accounts for 53-55 per cent of all loans offered by com-mercial banks while long and medium-term funds make up only 13-15 per cent of total mobilised capital. The imbalance in using short-term funds for medium-to long-term purposes could pose huge risks to banks, experts have said.The central bank has also raised the risk ratio of property loans at commercial banks to 200 per cent from 150 per cent.Property loans have reached VND400 trillion ($176.12 million), accounting for 6.5 per cent of all outstanding loans in the country, Governor Hung said.Some legislators have expressed concern that banks could offer more property loans in a bid to reach credit growth targets for the year. Governor Hung spoke against such remarks, saying the target was set by the government and banks are not under pres-sure to reach it at all costs.Credit growth stood at 10.6 per cent in the first nine months of this year, leaving the annual growth target of 18-20 per cent seemingly out of reach.The official bad debt ratio stood at a low 2.34 per cent at end-September. Taking into account potential non-performing loans and those sold to the Vietnam Asset Manage-ment Company, however, NPLs total VND556 trillion ($24.5 billion), or 8.61 per cent of all outstanding loans.


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The central bank has bought more than $7 billion in foreign exchange since the begin-ning of this year, bringing reserves to a record high of over $46 billion. "With this scale of foreign exchange reserves and current management policies, keeping the exchange rate steady is definitely possible," Governor Hung said.http://vneconomictimes.com/article/banking-finance/sbv-governor-tighten-credit-for-high-end-property-developments

Startups still looking for capital from venture funds

20/NOV/2017 INTELLASIA| VIETNAMNET

Few venture funds have been set up in Vietnam, and few startups have successfully called for capital from the funds.Vietnam is striving to become a 'startup nation', but the number of venture funds op-erating in Vietnam remains so modest that all their names are known by startups.These include FPT Ventures (Vietnam), Seedcom (Vietnam), IDG Ventures (the US), Cyber Agent (Japan), Golden Gate (Singapore) and 500 Startups (US).Some funds have been set up, but they just exist on paper because they are still under the fundraising process. These include the IDT startup fund, and the fund of First project and VSF.The number of venture funds is small, while the number of projects successfully call-ing for capital is even smaller. There are over 15,000 startups in Vietnam, mostly in Ha-noi and HCM City. But only 20-30 startups have successfully called for capital from the funds in Vietnam.The number of investment deals worth $1 million or more is modest. The investments in Momo, Lozi, vatgia and ononpay are among them.Analysts said Vietnamese startups don't have feasible business strategies which can convince venture funds to make investments. Many funds have money, but they can-not find potential startups.The problem is that most startups have small targeted markets which do not fit ven-ture funds. In general, funds have requirements on capital management and minimum investment amounts ($500,000 at least), while Vietnamese startups cannot satisfy the requirements.In developed countries, venture funds can easily divest from businesses at any time by selling a stake on the stock market. But this is not an easy thing in Vietnam. Mean-while, the success rate of investments, according to experts, is just 10 percent.In many countries, investment funds are established by the government, aiming to give support to startups. But there is no such fund in Vietnam.Though Vietnamese startups cannot call for much capital from venture funds, they still have close relations with the funds. In many cases, they receive advice, which to some extent is more valuable than money.CEO Tran Nguyen Le Van of Vexere said his company received strong support from CyberAgent Ventures. The investor even gave consultancy and helped Vexere success-fully call for capital the second time from Pix Vine Capital.CEO Nguyen Ngoc Diep of vatgia.com has expressed his gratitude to Nguyen Hong Truong, former vice president of IDG Ventures, for Truong's strong support to Vatgia, including development strategy planning.http://english.vietnamnet.vn/fms/business/190264/startups-still-looking-for-capital-from-venture-funds.html

New regulations on use of credit cards


Credit cardholders will not be allowed to withdraw cash worth more than VND5 mil-lion for domestic transactions and no more than VND30 million for foreign currency.The State Bank of Vietnam (SBV) recently released a draft circular amending and sup-plementing Circular No 19/2016/TT-NHNN on bank card operation.Accordingly, for the withdrawal of cash by cards abroad, to limit the use of cash as for-eign currency spent for improper purposes that are not allowed by the law, the draft stipulates that cash withdrawal transactions will be subject to a daily cap limit.For a withdrawal of foreign currency in a foreign country, a card holder can withdraw


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a maximum amount of cash in foreign currency equivalent to VND30 million (US$1,300) per day.For cash withdrawal at domestic card accepting units, each card holder can withdraw maximum VND5 million in one day.The draft also stipulates that in case of issuance of credit card with security assets, the credit limit granted to the cardholder shall not exceed 80 percent of the value of the se-curity assets, which is valued at a maximum of VND1 billion.In case of credit card issuance without security assets, the credit limit granted to a card-holder is VND500 million.These stipulations have no precedent, therefore credit institutions should review them carefully.The draft also supplements regulations on the issuance of cards to foreigners to pre-vent the case where foreigners enter the country for a short period and then exit the country to carry out criminal activities by using the credit cards issued by institutions in Vietnam.http://english.vov.vn/economy/new-regulations-on-use-of-credit-cards-362753.vov

Visa study highlights economic benefits of cashless cities


Hanoi could potentially gain an economic benefit of $600 million annually by transi-tioning to an "achievable level of cashlessness".Visa has recently announced the results of an independent study conducted by Roubi-ni ThoughtLab, commissioned by Visa, to examine the economic impact of increasing the use of digital payments in major cities around the world.The study estimates that relying more on electronic payments, such as cards and mo-bile payments, could yield a net benefit of up to $470 billion per year across the 100 cit-ies studied; roughly equivalent to 3 per cent of the average GDP for these cities.Hanoi, one of the subjects of the study, saw some particularly strong potential gains from going cashless. The study found that the city's economy could see an extra $600 million per year as a result of moving away from physical money and conducting the majority of transactions electronically, while employment could jump an extra 3.5 per cent. Hanoi's GDP, meanwhile, is predicted to grow by 36.4 basis points."Cashless Cities: Realising the Benefits of Digital Payments" is a unique study that quantifies the potential net benefits experienced by cities that move to an "achievable level of cashlessness", defined as the entire population of a city moving to digital pay-ment usage equal to the top 10 per cent of users in that city today.The study does not look at eliminating cash. Rather, it seeks to quantify the potential benefits and costs of significantly increasing the use of digital payments. By reducing reliance on cash, the study estimates the immediate and long-term benefits for three main groups: consumers, businesses, and governments."This study demonstrates the substantial upside for consumers, businesses, and gov-ernments as cities move toward greater adoption of digital payments," said Ellen Rich-ey, Visa's vice Chair and Chief Risk Officer. "Societies that substitute digital payments for cash see benefits from greater economic growth, less crime, more jobs, higher wag-es, and increased worker productivity.""While Vietnam is still a heavily cash-oriented society, we're seeing very positive moves across the board from consumers, merchants, and the government, with atti-tudes towards electronic payments now better than ever before," said Sean Preston, Visa Country manager for Vietnam, Cambodia, and Laos."Visa fully supports the State Bank of Vietnam's roadmap for non-cash payments by 2020 and is committed to driving the adoption of electronic payments and expanding acceptance to ensure that the transition to a cashless economy is both efficient and smooth."As cities increase the use of digital payments, the positive impacts can extend beyond financial benefits to consumers, businesses, and government. The shift to digital pay-ments may also have a catalytic effect on the city's overall economic performance, in-cluding GDP, employment, wages, and productivity growth.


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"The use of digital technologiesfrom smartphones and wearables to artificial intelli-gence and driverless carsis rapidly transforming how city dwellers shop, travel, and live," said Lou Celi, Head of Roubini ThoughtLab. "Without a firm foundation in elec-tronic payments, cities will not be able to fully capture their digital future, according to our analysis."Visa and Roubini Thoughtlab created an online data visualisation tool as a companion to the study. Using the data visualisation tool, individuals can increase or decrease the level of digital usage in each of the 100 cities included in the study to better explore the benefits of a world less dependent on cash.http://vneconomictimes.com/article/banking-finance/visa-study-highlights-econom-ic-benefits-of-cashless-cities

Hanoi will have additional $600m a year if not using cash in payment: study

20/NOV/2017 INTELLASIA| VNEXPRESS

Results from the study namely "Cashless City: Realising the benefits of e-payment" show that Hanoi may have an additional of $600 million each year if the majority of transactions are electronised, replacing cash".Along with that, the number of jobs may increase 3.5 percent, and the city's GDP is ex-pected to swell 36.4 basis points.The study was conducted by Roubini ThoughtLab and Visa in 100 cities in the world in order to quantify the potential net benefits when a city achieves "no cash availabili-ty".This is the state when all residents of the city switch to using digital payment with the same level to top 10 percent of users in that city at the current moment."Though the Vietnamese society still mainly uses cash, we realise that all subjects of the economy from consumers, retailers to the government have positive attitude to-wards e-payment more than ever", said Sean Preston, director of Visa in Vietnam, Cambodia and Laos.The study shows that as cities increase their e-payment applications, positive effects are not only limited in financial benefits to consumers, businesses and the government but also further.That can be a catalyst for increasing efficiency for the economy in general, including GDP growth, employment, salary and labour productivity.Accordingly, the promotion of electronic payment may contribute nearly $470 billion to the direct net benefit of 100 cities analysed.Specifically, consumers will receive direct benefits estimated at nearly $28 billion each year, thanks to saving 3.2 billion hours of transaction at banks, retail outlets and money transfer points, while reducing offences related to cash.Businesses may attain direct benefits with more than $312 billion per year thanks to saving more than 3.1 billion hours in handling expenses and revenues, plus the in-creased revenue from the expansion of online and in-store customer portfolio.The study also suggests that when using cash and cheque, businesses have to spend up to 7.1 cents for each US dollar earned compared to just five cents if using digital method.The government of 100 cities may gain an estimated direct benefit of nearly $130 billion each year thanks to the increased revenue from tax, economic growth and cost savings from administrative efficiency and legal proceeding costs due to reduced crime related to cash.The study also gives 61 recommendations to policy makers to enhance electronic pay-ment applications.The recommendations include the implementation of financial education programmes to bring external sources into the banking system; implementation of innovation en-couragement methods, focusing and scaling up new payment technologies; and im-plementation of safe payment systems throughout the entire transportation network. "The use of digital technology from smartphones, smart wear, and artificial intelli-gence to self-driving automobiles will rapidly change the way that people do shop-ping, travel and live".


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"According to our analysis, without a solid foundation on e-payment, cities will not be able to obtain their entire digital technology in the future", said Lou Celi director of Roubini ThoughtLab.

Da Nang to host Asean Banking Council Meeting

20/NOV/2017 INTELLASIA| VOV

The 47th Asean Banking Council Meeting hosted by the Vietnam Banks Association (VNBA) is scheduled to take place at Furama Resort in central Da Nang City on No-vember 23-24.The major annual event of the regional banking community will be presented by bank-ing associations of Asean countriesBrunei, Cambodia, Indonesia, Laos, Malaysia, My-anmar, the Philippines, Singapore, Thailand and Vietnam.This is the third time the VNBA has held such a meeting with the first one in 2000 and the second in 2007.The meeting will focus discussions on sustainable financial development, financial in-clusion, the application of state-of-art technologies, human resource training and oth-ers as well as proposing cooperation initiatives and action plans.It will be an excellent opportunity for participants to share experience and strengthen cooperation among regional banks and partners.http://english.vov.vn/economy/da-nang-to-host-asean-banking-council-meeting-362740.vov

Women-led SMEs still struggle with financing


IFC workshop hears that most banks in Vietnam continue to deny financing for SMEs owned or led by women.Vietnam's women entrepreneurs are one of the significant forces within the small and medium-sized enterprise (SME) sector but banks fail to meet their capital needs, ac-cording to a study by the International Finance Corporation (IFC).A workshop held by the IFC entitled "Women-Owned Enterprises in Vietnam: Percep-tions and Potential" held on November 16 revealed that investing in women and pro-moting gender equality helps businesses reach new markets and also enables them to attract and retain skilled employees.In Vietnam, for instance, the financing gap is estimated at $1.19 billion for women-owned SMEs. Running nearly 45,000 SMEs across sectors, women entrepreneurs bring in similar average annual revenue as men and are growing at a pace of over 20 per cent.Australian Ambassador to Vietnam, H.E. Craig Chittick, told the workshop that Viet-namese women are great at doing business. "They are more aware of risk than their male counterparts, which allows them to better run their businesses," he said.While the common perception is that there are no differences between the challenges facing female and male heads of SMEs, the study reveals biasesconscious or uncon-sciousthat directly impact upon women's abilities to access formal financing and other desired services necessary to develop and grow their enterprise.Only 37 per cent of women-owned SMEs have accessed bank loans in the last two years, compared to 47 per cent of those owned by men. Though the country's invest-ment climate is positive for women, most banks feel no need for a different approach to women entrepreneurs or perceive the segment as less profitable, of higher risk, and lacking in financial management skills.The IFC report identifies women entrepreneurs as one of the significant forces within the Vietnam's SME sector and reframes the perceived challenges of serving women en-trepreneurs in Vietnam as an opportunity for banks and other service providers, ena-bling them to capture a growing market of savvy businesswomen and unlock the under-tapped potential of this segment in Vietnam. Rubin Japhta, Senior Operations Officer at the IFC's Banking on Women/SME Bank-ing, said that one of the key difficulties that women-owned businesses find is limited capital access at banks. "They feel they are not taken seriously as a customer segment," he said. "Banks need to change their services and see women-owned SMEs as a distinct market segment."


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Kyle Kelhofer, IFC Country manager, Vietnam, Cambodia, and Laos, said it is an op-portune time for banks to recognise women-owned SMEs as a separate and strategic customer segment, with uniquely tailored products and services.In its commitment to advancing gender equality, the IFC has invested more than $1 bil-lion in private-sector banks via its Banking on Women programme and has provided advisory services to banks that want to better serve this market segment. The IFC also works with client firms to identify opportunities and strategies to improve the work-place so that both women and men can perform their jobs well, which makes good sense for business performance and employee morale. Dao Gia Hung, deputy Head of SME Banking at the Vietnam Prosperity JSC Bank (VPB), said the bank initiated a pilot women strategy a year ago and the percentage of businesswomen in its SME portfolio increased from 15 per cent to 25 per cent this year.http://vneconomictimes.com/article/business/women-led-smes-still-struggle-with-fi-nancing

Capital for real estate, BOT projects to fall

20/NOV/2017 INTELLASIA| THE SAIGON TIMES

The State Bank of Vietnam has demanded increased controls on loans for build-oper-ate-transfer (BOT) road and real estate projects despite their high demand for finances, Le Minh Hung, governor of the State Bank of Vietnam, was quoted by local media as saying.Answering National Assembly deputies' questions on investment in property and BOT projects, Hung said banks would continue offering loans, mainly medium- and long-term loans, if projects are feasible. However, supervision is being tightened.Loans for BOT projects have decreased, accounting for only 1.5 percent of total out-standing loans. Real estate loans have also gone down to 6.5 percent from over 10 per-cent last year.Hung said credit had expanded 13.6 percent in the year to end-October, up a mere one percentage point over last year. The target for all of 2017 is 18 percent.During the first ten months of the year, capital was mainly poured into small and me-dium enterprises in the processing and manufacturing sector.The governor affirmed the central bank would control credit growth, ensure credit quality and curb inflation.The average interest rate has declined over the past time. The central bank has asked credit institutions to continue reducing interest rates by cutting costs and lowering bad debt to reduce expenditures of enterprises.http://english.thesaigontimes.vn/57099/Capital-for-real-estate-BOT-projects-to-fall.html

Transparent policies needed to draw foreign capital


Clear, transparent and efficient policies are needed to encourage more foreign inves-tors to jump into the Vietnamese securities market if it is to reach its considerable po-tential.According to the State Securities Commission (SSC), the local market is valued at $124 billion and has been among the seven fastest-growing in the world in the past two years. It has made significant developments and become more attractive to foreign in-vestors. But although over 1.86 million accounts have been opened so far, only 1.1 per-cent of them belong to foreign investors, showing the market could absorb more foreign investors."We saw foreign investors escape from the local securities market in 2016, but they have returned with focus on both stock and bond markets," said Tran Van Dung, SSC chair.At the end of October, the total value of indirect foreign investment in the securities market rose 47.4 percent year-on-year from the end of 2016.As of October 25, foreign investors purchased a total of VND93.9 trillion (14 percent of the market's trading value) and sold a total of VND79 trillion (11.94 percent of the mar-ket's trading value), resulting in a total net buy value of VND14.9 trillion.


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The total value of assets possessed by foreign investors has reached $27.2 billion in the first nine months, an increase of 34 percent from last year.There are several factors that could help Vietnamese securities market draw more for-eign investment in the near future, Dung said.Firstly, macro-economic conditions should be stable. The country's growth is estimat-ed to be above 6.7 percent for 2017 and the next five years, inflation is kept under con-trol, and foreign exchange and lending rates should be stable, he said."Vietnam has made changes in its view to the private sector as the government now sees private businesses as the most powerful force for the country's socio-economic de-velopment," he said. "This favours the development of the capital-securities market in the future."Secondly, the equitisation and privatisation of State-owned enterprises (SOEs) should be enhanced to transform those firms into joint-stock companies in the next one to two years. Then their shares could be traded on the stock market, increasing the number of available high-quality stocks and attracting more foreign investment, Dung said.In the first three quarters, the government offloaded its stakes in 34 of the 44 targeted SOEs that are slated for the equitisation process.In the remaining months of the year, the government is speeding up the equitisation of the PetroVietnam Oil Corporation (PV Oil) and PetroVietnam Power Corporation (PV Power), while it will continue selling its ownership in brewer Sabeco and dairy producer Vinamilk.The government will sell its capital in 64 others companies next year, including Viet-nam Paper Corporation and mobile service provider MobiFone. Deals expected to come in 2019 include Vietnam National Coffee Corporation (Vinacafe), telecom oper-ator Vietnam Posts and Telecommunications Group (VNPT), Vietnam National Chem-ical Group (Vinachem) and Vietnam Coal and Minerals Industry Group (Vinacomin).Thirdly, new financial products should be introduced to the market, increasing the op-portunities for investors, Dung added.Incoming products include covered warrants, which will be launched late this year or early next year, and the government bond futures contracts, which will be available on the derivatives market in 2018.In addition, new derivatives products are being assessed so that they may become tradable in the next one or two years, meeting investors' demand for tools to prevent market risks, he said.Fourthly, the legal framework for the capital-securities market will be supplemented in the near future, starting with the amended Law on Securities to be released in 2019, according to the SSC chair.Others, such as the Law of Enterprises 2016 and relevant regulations will also be amended, allowing businesses to raise funding through share and bond issuance, and helping market regulators improve the monitoring of the market, he said.Nguyen Viet Duc, market analyst at MB Securities Company, said that more foreign investment is being drawn into the Vietnamese market as investors note the quality of local assets and market trading liquiditythe two most important factors to draw higher foreign capital, Duc said.Many large-cap companies debuted on the securities market this year, such as VP-Bank, gas station operator Petrolimex and aviation firm Vietjet, offering a large number of high-quality shares for the market, he said.Those listing also helped boost trading liquidity a factor that helps foreign investors increase their purchases easily as they are able to offload existing shares as soon as pos-sible, he added.Major barriers to foreign investors now include English information disclosure, the re-striction on exchanging the dong to foreign currencies and the limits on foreign own-ership in listed companies whose business involves national security issues, Duc at MB Securities said.The government "needs to work with the Morgan Stanley Capital International and other foreign institutional investors on their standards and make adequate changes to


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the current legal system," he said.Of the problems, it appears that the restrictions on foreign ownership remain the big-gest challenge for foreign investors.Foreign investors are not allowed to freely become strategic shareholders of listed companies, though the government has made its efforts to improve existing policies.A decree that took effect in September 2015 limits the foreign ownership in conditional businesses to 49 percent in sectors involving national security issues, such as real es-tate, telecommunications and banking.According to the Foreign Investment Agency under the Ministry of Planning and In-vestment, there are about 113 conditional sectors, in which foreign ownership is limit-ed.Most of the companies in those sectors are State-owned firms, operating in commodity production, transportation, construction, agriculture and aquaculture.According to Phan Duc Trung, head of the enterprise renovation and development de-partment at the Central Institute for Economic Management (CIEM), the current poli-cies limiting foreign ownership may help protect the country's young industries but will make those businesses less attractive to foreign investment.Foreign investors are discouraged from buying stakes in the companies as they are not guaranteed a chance to participate in the business management and governance, he said.In large-cap SOEs, foreign investors do not have controlling stakes, though they have spent millions of dollars buying stakes in those companies, he added. "Concerns have been raised among foreign investors as they could be outnumbered by a majority of shareholders and benefit less from the investments."CIEM director Nguyen Dinh Cung said that limits on foreign ownership will discour-age strategic shareholders from fulfilling their obligations stated in the agreements and contracts."Foreign investors could avoid implementing the contracts and agreements properly as they do not have the rights to make decisions but still have to provide assistance for the businesses," he said.According to Adam Sitkoff, executive director of the American Chamber of Commerce in Vietnam, the Vietnamese government needs to come up with a transparent proce-dure to evaluate SOEs accurately and allow foreign investors to buy larger stake in the SOEs, ensuring foreign shareholders are able to make decisions and have positive im-pacts on the business governance and management.Economist Can Van Luc said that to draw more foreign investment into the local mar-ket and keep the flow stable year after year, Vietnam must be consistent with its mac-ro-economic growth targets, speed up the restructuring of the economy and encourage the development of the private sector."The government needs to make ensure the securities market operates transparently to reduce the chance of cross-ownership among companies and the manipulation of share prices," Luc said.Market regulators should offer more securities products, and market members must operate transparently and meet the standards on corporate governance and risk man-agement, he said.http://english.vov.vn/economy/transparent-policies-needed-to-draw-foreign-capital-362782.vov

Experts: Tax, customs reform needed


Taxation and customs general departments must simplify their administrative proce-dures and eliminate unnecessary licences to attract more overseas Vietnamese inves-tors, experts said."Vietnamese taxation and customs policies were reformed in recent years to create fa-vourable conditions for local and foreign enterprises to do business," Peter Hong, dep-uty chair of the Business Association of Overseas Vietnamese, said."However, Vietnamese taxation and customs policies change regularly, which makes


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it difficult for Vietnamese to have information. Also, the overseas Vietnamese business community does not receive much information about incentive projects and fields," he added.Hong said overseas Vietnamese send a huge number of remittances every year to Vi-etnam, but only a small amount of the money was used to invest and conduct business.For the first 10 months of the year, a total of 2.7 billion USD of remittances were sent to HCM City, of which only 260 million USD were channelled into investments."It means that most remittances have been spent for individual purposes and they ha-ven't created any new value at a time when the city lacks huge capital for socio-eco-nomic development," he said.Chau Ba Long, general director of Minh Nguyen enterprise, said the government had given priority to supporting industries, but machinery imports for these industries had not received preferential taxes and customs procedures as several other industries had."More importantly, import licenses for secondhand machinery are out of date," he said.The law stipulates that enterprises cannot import 10-year-old machines, but in reality many machines have operated over 10 years and retain their quality and efficiency bet-ter than many new-tech domestically made machines.David Ngo, a businessperson, cited the example of automated and engineering ma-chines from Germany, France and Sweden."Such machines operate for a long time and their precision is still much better than brand-new Asean products," he said. "Furthermore, Vietnamese authorities regulate old and new technology based on the amount of time, which is inappropriate. Such regulations have restricted many overseas Vietnamese from importing machines."Many overseas Vietnamese businesspeople have also complained that their vehicles such as cars and motorbikes could not be brought into Vietnam because of regulations on equipment, machinery and private vehicle imports that require time of usage rather than certain levels of efficiency and environmental protection.They are also concerned about financial regulations which do not limit the amount of money that overseas Vietnamese can bring into Vietnam, but limit the amount that can be sent out."The regulation allows us to bring the same or less amount of money than we brought to the country. But if the time period is more than one year, we must have a licence from the State Bank of Vietnam. How can we benefit over the long term?" David Ngo asked.Bui Viet Cuong, an overseas Vietnamese from Switzerland, said: "Regulations are very necessary to ensure State management in every aspect of life. The knowledge of over-seas Vietnamese in finance is great, and relevant authorities should issue proper poli-cies to encourage them to invest and promote the country's development."Nguyen Huu Nghiep, deputy head of the HCM City's Customs Department, said that authorities had tried to reform administrative procedures, especially online services, to reduce cumbersome procedures for overseas Vietnamese and investors, and have regularly organised forums to hear complaints."We will submit all proper and practical complaints to relevant ministries for adjust-ment in order to create the most favourable conditions for investors," he added.https://en.vietnamplus.vn/experts-tax-customs-reform-needed/121928.vnp

Government to target 'reasonable' wealth distribution


The government will accord priority to a 'reasonable' distribution of wealth as it tack-les the various socio-economic disparities in the country, prime minister Nguyen Xuan Phuc said on Saturday.Equality, growth quality and the handling of high-profile corruption cases were lead-ing concerns as he fielded questions in parliament on Saturday afternoon.He was the last government leader to take the floor at the National Assembly's three-day hearings of cabinet members.


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The 2.5 hour long Q&A session was the second time PM Phuc took questions. For the most part, his performance on major national issues was positively reviewed and re-ceived by deputies and voters, the Vietnam News Agency reported.Opening the session, PM Phuc reported on socio-economic achievements of 2017, es-pecially stressing the fulfillment of 13 targets set by the NA last year.Phuc asserted that the country's growth quality has improved visibly, with industry contributing more than agriculture. He said that this year's export turnover could reach $210 billion, up 21 per cent compared to last year (and threefold the set target of 7 per cent).The country has jumped five positions on the global competitiveness index and made progress on other human development indexes including life expectancy, which reached 73.7 years, the PM noted.On administrative reforms, Phuc said the government has introduced a total of 14 res-olutions and implemented several measures. Citing examples, he said the process of abolishing household registration books and issuing individual identification num-bers has begun, and online portals set up to receive feedback from people and busi-nesses."From 2015, the number of civil servants on government payroll has been reduced by 30,000," he said, adding that from now towards 2021, the aim is to shrink the number of government workers by 2.5 per cent each year.Disparities existResponding to questions over the wealth disparity, including social stratification be-tween rural and urban areas, and mountainous areas and flatlands, Phuc admitted that despite the government's efforts and recent achievements, there remained big devel-opment gaps between these areas, with rural income just half of that in urban areas, and even lower in mountainous areas."A reasonable distribution of wealth is an ongoing priority," and will be promoted in the near future via economic restructuring, improving labour productivity and prod-uct quality, creating more jobs for people in remote areas, redistribution of income by taxation, and better social security, he said.On promoting the private sector's role in the economy, PM Phuc said that the country can expect to have more than 115,000 new private companies this year and 93 per cent operating well.He also reiterated the government's commitment to improving the trade/business en-vironment, increasing transparency and equality in accessing resources, streamlining procedures, and preventing overlapping inspections.Phuc asked private sector companies to "say no to bribes and unofficial fees".Responding to concerns over the management of foreign direct investment (FDI) busi-nesses, PM Phuc said they are "a part of Vietnam's economy" that contributes 60 per cent of the country's export value and employs 3 million people.But there were issues with this sector, including the level of technology used, pricing, tax evasion and violations of environmental regulations violations. These will be dealt with strictly, the PM said, adding the government will be choosy about attracting in-vestment.Investment will be directed to areas where there was real need, "not in just any area, and by whatever means," he added.He said FDI and domestic firms should cooperate better for a win-win development.Anti-corruption fightThe prime minister strongly affirmed that "the Party and the State will not allow out-rageous high-profile corruption cases to fall flat," and that the judiciary and legislative branches will collaborate to deliver rightful results to the public.Some deputies expressed their appreciation for the government's recent strong anti-corruption push, but also voiced concerns over "new and more sophisticated and deep-lying forms of corruption" that can undermine the political system.PM said the government is collecting and integrating NA feedback on its amended Law on Anti-Corruption, in the spirit of "there must not and should not be corruption."


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He also asked the NA to consider raising wages for civil servants as a way to ensure their livelihood and reduce petty corruption."The application of information technology solutions can be helpful in preventing cor-ruption," he said, asking local governments to promote this process in the near future, together with implementation of e-government.'Worst fears'When asked, the government leader admitted he was not entirely satisfied with the achievements in governing the country. He also said his "worst fears" are backward-ness, corruption, peaceful evolution, and moral failings.Phuc also responded to other issues raised at the hearing, including functions of a fa-cilitating government, policies for ethnic minority people, equitisation of State-owned enterprises, measures to better protect forests, and civil servants' bureaucratic attitude.vietnamnews.vn/politics-laws/417809/govt-to-target-reasonable-wealth-distribu-tion.html#PQTGf8d1OI0QYt5s.97

PPP law to be drafted in 2018


Vietnam is expected to start building a law on public-private partnership (PPP) invest-ment in 2018 to pave the way for future foreign investment inflows.Vu Quynh Le, deputy head of the Ministry of Planning and Investment's Public Pro-curement Department, made this statement at November 16 workshop at Vietnam-World Economic Forum Infrastructure Development Cooperation.If everything goes smoothly, the draft law is expected to be submitted to the govern-ment and the National Assembly (NA) in late 2018.At present, PPP investment is regulated by Decree No.15/2015/ND-CP and Decree No.30/2015/ND-CP. Despite improvements, the risk-sharing mechanism, exchange rates, and revenue guarantees, which are considered the topmost concerns among for-eign investors, remain absent from the decrees.The lack of this regulatory mechanism has discouraged foreign investors from joining transport infrastructure projects in Vietnam. Thus, up till now, no PPP transport infra-structure projects have been successfully done by foreign investors in Vietnam, despite their great interest."The decrees cannot help solve these problems, only a law can deal with them. We are proposing the government to build a PPP law," a senior official from the Ministry of Transport (MoT) told VIR.Vietnam has been striving to attract private investment into infrastructure projects amid heavy budgetary constraints.According to the Ministry of Planning and Investment, Vietnam is estimated to need around $68 billion of foreign investment in the infrastructure sector in the next five years.http://english.vietnamnet.vn/fms/business/190572/ppp-law-to-be-drafted-in-2018.html

PM demands measures to tackle shortcomings of public-private partnerships


The government Office has released a conclusion by prime minister Nguyen Xuan Phuc after a regular cabinet meeting on shortcomings, mechanisms and policies of build-operate-transfer (BOT) and build-transfer (BT) projects, equitisation, and part-nerships.According to the government Office's Notice 535/TB-VPCP released yesterday, eco-nomic and social infrastructure is a pillar of the country, of which traffic and urban in-frastructure plays a crucial role in ensuring socio-economic growth, the government news website reports.To develop infrastructure facilities, private investment has been mobilised over the past years, mainly under BOT and BT formats, besides public investment allocated by the government from the State budget and official development assistance (ODA) loans.The government has created a slew of mechanisms and policies in order to lure private


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sector investments under the BOT and BT investment models. As a result, the quality of infrastructure works has been improved, creating a favourable environment for in-vestment, and regional and global economic integration.However, the implementation of infrastructure projects under public-private partner-ships (PPP), especially BOT and BT formats, has exposed shortcomings which should be solved to fulfill development goals, ensuring socio-economic effectiveness and en-hancing government management of this kind of investment.Specifically, State agencies and the public have lately expressed concerns over BOT and BT projects. Many road and bridge projects under the BOT format have incurred cost overruns while many BT projects have also entitled investors to valuable land at low prices.The State Audit Office of Vietnam has recently decried such investment formats, and has ordered many BOT road projects to have their toll collection durations shortened as their actual costs are lower than registered while toll collection revenues are higher than declared.Given such a situation, the PM asks the Ministry of Planning and Investment and rel-evant agencies to streamline and speed up the implementation of policies and regula-tions on the investment and use of traffic infrastructure under BOT projects.The government leader demands the transport ministry consider the State Audit Of-fice of Vietnam's proposals in order to adopt viable solutions for improving State man-agement in developing traffic infrastructure, especially BOT and BT projects.The transport ministry is required to finish strategies and master plans for developing traffic infrastructure, propose priority projects to be developed under the PPP format, and build tollgates in an appropriate manner.The transport ministry will have to cooperate with relevant agencies to map out the contract liquidation process and project assessment in line with prevailing regulations. Besides, the ministry takes toll collection time into account so as to ensure the interests of the State, investors and the public.http://english.thesaigontimes.vn/57100/PM-demands-measures-to-tackle-shortcom-ings-of-public-private-partnerships.html

WEF to propose policies for Vietnam to seize 4IR opportunities


The World Economic Forum (WEF) will build a report proposing policies for Vietnam to improve competitiveness and prepare all necessary conditions to optimise opportu-nities and benefits from the Fourth Industrial Revolution (4IR).He underlined the growing relations between Vietnam and the WEF over the past time and said the report will be built as part of the bilateral cooperation agreement on fu-ture-proofing economy in Vietnam signed in 2017.Justin Wood, head of the Asia Pacific region of WEF, said Vietnam has seen remarka-ble strides since 1980s from a low-income country to middle-income one.Vietnam is striving to become a high-income nation in the future, he added.Addressing the event, deputy prime minister Vuong Dinh Hue highlighted opportu-nities from the internet of things, which enable all individuals to start business and help promote inclusiveness.Vietnam has obtained significant achievements in the field of telecommunication in-frastructure, he said, adding that the country has over 130 million mobile phone sub-scribers and the 4G network has covered up to 99 percent of Vietnamese districts. Fifty-five percent of the population has been frequently connected with the internet, he not-ed.Besides opportunities, the 4IR also poses numerous challenges in increasing competi-tiveness and promoting inclusiveness in Vietnam such as changing business models and shifting labour forces which have been occurring in some taxi firms and manufac-turing and processing industries, Hue said.He affirmed that the government will hold regular dialogues with the business com-munity as well as domestic and foreign experts to remove barriers and tackle any aris-ing issues stemmed from the fourth industrial revolution.


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The government will also create a legal corridor and essential action programmes to support businesses as well as encourage the formation of start-up ecosystems based on science and technology and promote corporate social responsibility.english.vov.vn/economy/wef-to-propose-policies-for-vietnam-to-seize-4ir-opportuni-ties-362765.vov

Promoting VN innovation critical: PM


Le Van Chung could not hide his happiness when his seven-member team from Duy Tan University won first prize in the information technology (IT) category at the Viet-namese Talent Awards 2017 held on Thursday evening."No words could describe my feelings now. I can only say that this is the most unfor-gettable moment of my life," Chung said. "We, seven people, worked on our project for five years. We are happy to receive positive feedback."The team won its prize, presented by prime minister Nguyen Xuan Phuc, for its design of a 3D human body simulator that facilitates teaching, learning and research in health science.Phuc said at the awards ceremony that fostering talents was of great important to the prosperity of the country. He added that the Vietnamese Talent Awards, initiated by Vietnam Study Promotion Association, had created a campaign of continuous learning and innovation at all ages, over its 13-year history."It's time for self-taught talents and the youth to start up together with scientists to pro-mote innovation for the future of our country," Phuc stressed. "Our country will devel-op strongly if we can take the opportunity and promote the brainpower of Vietnamese."The industrial revolution 4.0 was bringing many opportunities and it was critical for the country to promote talent and innovation to avoid lagging behind, he said.Phuc said that Vietnam was determined to develop a transparent and constructive government to encourage every potential and promote innovation, adding that the government could also make use of innovative solutions.Phuc appealed to Vietnamese talents in every field to create a society of learning and innovation.The Vietnamese Talent Awards, first held in 2005 to honour inventions in IT and then expanded to other fieldsnamely science and technology, environment, health and tal-ent promotionis now a launching pad for young businesses and start-ups.Other products honoured this year include a multi-functional agricultural machine, an advanced technology application for reproductive health care and raising population quality, a kidney transplant operation, the app service connection Rada and spell checker DoIT.Promote real-life applicationChung said that his team still faced difficulties in applying the product in real-life sit-uations.The product has been implemented for one year at Duy Tan University and a clinic in Da Nang City and received positive feedback from students as compared to tradition-al learning methods."However, we meet with difficulty in bringing our product into real-life application due to a lack of hospital budgets for this and our lack of relations with universities," he said. "We hope that our product will be widely known and applied at universities and hospitals."vietnamnews.vn/economy/417785/promoting-vn-innovation-critical-pm.html#KcwJWV2tMeQB1x6k.97

Special economic zonesnew impetus for economic development

20/NOV/2017 INTELLASIA| NHAN DAN

Vietnam is promoting the establishment of three special economic zones (SEZs), in-cluding Van Don (Quang Ninh province), Bac Van Phong (Northern Van Phong, in Khanh Hoa), and Phu Quoc (Kien Giang).SEZ model is expected to create a new impetus for economic development and reform,


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because of its outstanding business environment, transparent institutions, and effec-tive administration.Creating momentum from emerging economic zones\Vietnam has 18 coastal economic zones (EZs) which are enjoying improved preferen-tial policies and a more favourable investment and business environment for investors than other EZs. However, according to economists, the country still has not truly had a SEZ yet, as incentive mechanisms in EZs, while being better than others, are still not attractive to investors.The establishment of three SEZsVan Don, Bac Van Phong, and Phu Quocis considered a boost to the Vietnamese economy in the future. In particular, Phu Quoc belongs to the group of EZs given top priority by the government until 2020, and draws robust investment. As of the beginning of 2017, Phu Quoc has attracted $16.7 billion of invest-ment, ranking fourth among localities receiving the most investment capital across Vi-etnam.Van Don EZ was established in 2007 with the aim of becoming a centre for eco-mari-time tourism, and an aviation and international trade hub to promote local economic development for the northern province of Quang Ninh, and create momentum for re-gional and national development. Bac Van Phong EZ has been selected by the govern-ment as the earliest development priority (since 2006), aiming to become the nucleus of economic growth and an urban, industry, service, and tourism centre of the South Central Coast.In fact, these three EZs have not yet been able to maximise their advantages, and the set objectives are proving difficult to achieve. The main reason is that the institutional and policy framework is inadequate, ineffective, and unattractive enough to draw large scale investment.In order to improve the efficiency of EZs, the Ministry of Planning and Investment (MPI) has studied international SEZ models, and selected these three EZs to turn them into true SEZs in Vietnam. According to Head of EZ Management Department under the MPI Tran Duy Dong, these are EZs with advantages that meet the necessary crite-ria to create a breakthrough in attracting investment.In order to set up SEZs, by the end of 2016, the government agreed to promote the con-struction of these three SEZs with the intention that each unit would develop their own strengths in order to maximise their potential and comparative advantages to create new development impetus, ensure regional allocation of resources, and produce a sp-illover effect on a national scale.According to the MPI forecast, the benefit from SEZ development is very high, as local people in these areas could earn from $12,000-13,000/person/year. Specifically, in Van Don, during the 2021-2030 period, it is estimated that the State could collect $1.9 billion from taxes and fees; while enterprises would generate about $9.7 billion in added val-ue. From 2017 to 2030, in Bac Van Phong, it is estimated that the State coffers would grow to $1.2 billion from taxes and fees, and enterprises could generate value added at $10 billion. For Phu Quoc, it is estimated that the State might collect $3.3 billion from taxes, fees and land use; while businesses would gain $19 billion in value added.Minister of Planning and Investment Nguyen Chi Dung said that when coming into operation, SEZs would create a huge attraction, a "booming" investment. SEZs would contribute greatly to bringing the Vietnamese economy to the level of developed coun-tries in the region. Developing SEZs in Vietnam with break-through administrative and economic mechanisms and policies, along with international competition, new de-velopment motivation and positive spillover effects, is necessary and urgent.Removing bottleneck to facilitate SEZ developmentIn order to perfect the mechanism and policies for the operation of SEZs, the MPI was assigned by the government to draft the Law on Special Administrative-Economic Zones. Tran Duy Dong said that drafting the bill was necessary in order to institution-alise the socio-economic development viewpoint, strategy, and plan for the construc-tion and development of SEZs approved at the 8th, 10th, 11th and 12th National Party Congresses.


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In particular, the Resolution of the 12th National Party Congress sets out "to build some SEZs to create growth points and pilot the breakthrough regional development mechanism." The completion of the draft law also provides an important legal frame-work for the establishment, development, and management of three special adminis-trative-economic units that have been approved by the competent authorities in the Notice No. 21-TB/TW dated March 22, 2017.Economists said that Vietnam's advantages in attracting investment are shrinking. The country is actively improving its business environment to create attractiveness for for-eign investors. If the business environment fails to distinguish itself, it will be difficult to attract investment. Vietnam is a developing country, so it needs to create more at-tractive and innovative opportunities to attract investors. If there is no true SEZ, it will be difficult to retain investors.To ensure SEZs are seen favourably by investors, the MPI has cooperated with relevant units to study and synthesize experience from 13 countries around the world with both successful and failed SEZ development models. Based on that, a model for SEZ development suitable for Vietnam's economic conditions will be formed in anticipa-tion of the development of the 4th Industrial Revolution that is progressing world-wide.Deputy minister of Planning and Investment Nguyen Van Trung affirmed that the Law on Special Administrative-Economic Zones is remarkable, not only domestically but also internationally, as it incorporates competitiveness and groundbreaking fea-tures.It is especially necessary to have a policy to consider exemption from liability for the heads of such special units, otherwise, leaders of SEZs would not dare to proceed be-cause of the restrictive legal regulations. This means that it is important to remove con-strictions for the development of SEZs. If the bill is approved, this will be a great opportunity for Vietnam to attract investment in three special administrative-econom-ic zones, namely Van Don, Bac Van Phong, and Phu Quoc.Opening special zones to welcome investment wavesAccording to Dr Vo Tri Thanh, former deputy Head of the Central Institute for Eco-nomic Management, developing mechanisms for SEZs need to develop a broader per-spective to compete in the international arena. Vietnam should accept the "new play" on payment and currency but at a manageable level. Policy development still receives too much focus, meanwhile, there is no clear identification yet on SEZ as a place to make money or to test institutions, thus influencing policy making and planning.The goal is to create a business investment environment that is particularly conducive to innovation, research, and development, as well as facilitating new and hi-tech sci-ences, and services and industries with development advantages which are named in the list of regional priorities for development.Minister Nguyen Chi Dung said that under the National Assembly's programme for building draft laws and ordinances, the draft Law on Special Administrative-Econom-ic Zones is scheduled to be submitted to the National Assembly for discussion at its ongoing 4th session, and to be approved at the next sitting. Once the draft bill receives approval, it is expected to attract a surge of investment in Vietnam.The policy has been formed, now the mission is to legalise it and create the outstanding institutions that are capable of competing within the region and international arena. While taking the initiative and building mechanisms to welcome waves of investment internationally and domestically, it is imperative to understand the needs of the na-tion, and investors, then move forward to develop the appropriate institutions.As a special administrative-economic unit, administrative or economic organisations must be special. With flexible and open issues, it is necessary to study the development models of other countries and current trends in the world, combined with the reality of the country during the past years, to build the best institutions with great competi-tiveness, while at the same time ensuring that core issues related to defence-security, national sovereignty, social consensus, and environmental protection are not neglect-ed.


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Standing member of the National Assembly's Economic Committee Do Van Sinh: "Making a breakthrough needs a break in thought first. A policy issued without break-through is no different from regular ones."Minister of Home Affairs Le Vinh Tan: "There are many models on the organisational structure of SEZs in the world, and here in Vietnam we have special administrative-economic zones, which have both administrative and economic features. Therefore, the specialty is that it must be different from current law, so this draft law on special administrative-economic zones should not be contrary to the Constitution. It is possi-ble that after passing this law, several other current bills in force should be adjusted to suit the development of special administrative-economic units."http://english.vietnamnet.vn/fms/business/190506/special-economic-zones---new-im-petus-for-economic-development.html

FDI pursuit should focus on US and EU: expert


Vietnam needs new strategies of foreign direct investment (FDI), which should focus on seeking investment from the US and European Union, according to experts.According to a preliminary draft for the FDI strategy for 2018-23, based upon current development in Vietnam, investment in the nation should focus on those sectors hav-ing advantages, as well as sectors that foreign companies could bring more benefits to, rather than domestic firms.The draft built by the Ministry of Planning and Investment (MPI) and the World Bank sets out priority sectors for attracting FDI, such as those that needs increased value and competitiveness, including manufacturing (high-grade metals/minerals/chemicals/plastics and high-tech/electronic components); service (logistics and maintenance, re-pair and overhaulMRO); agriculture (innovative agricultural products, high value such as rice, coffee, seafood); and travel (high-value tourism services).In the short term, priority is to be given to industries with narrow opportunities for competition, such as production (automotive and transport equipment OEMsOriginal Equipment Manufacturers and suppliers), and environmental technology (water con-servation equipment, solar, wind), reported the Nha dau tu (Investor) Magazine.In the medium term, priority should be given to sectors that create and develop skills, including manufacturing (pharmaceuticals and medical equipment), services (educa-tion and health services, financial services, financial technology (Fintech), information technology and intellectual services (accounting and design).The draft also proposed solutions to enhance efficiency in the operation of the Foreign Investment Agency (FIA) under the MPI.It recommended that Vietnam should remove entry-barriers and maximise the impact of incentives in attracting investments.Reforms are also needed to more effectively anchor existing investors and motivate them to expand their activities in Vietnam.The nation needs to maximise the absorption potential of local companies by strength-ening linkages with global value chains.Nguyen Mai, chair of the Vietnam Association of Foreign Invested Enterprises (VAFIE), said that this is one of the important contributions for the orientation of for-eign investment in the future.However, Mai said foreign investment can not be separated from the socio-economic development strategy being carried out throughout the country. At present, Vietnam is implementing the 10-year socio-economic development strategy from 2011-20. Therefore, the period of the FDI strategy should be adjusted to be appropriate for the 10-year socio economic development strategy, because the period of the FDI strategy for 2018-23 is too short.The FDI strategy also needs to address the issue of attracting more investors from the US and the EU, Mai said.What Vietnam needs to focus on is attracting investment from the US and the EU in the future, but not Japan, South Korea and China. If not resolved, investment in Viet-nam will remain based mainly on Asian countries, Mai said.


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The strategy should pay attention to promoting more foreign investment in difficult provinces. Although the government has offered many incentives, few investors have come to the northern mountainous and Central Highland provinces, he said.Meanwhile, Phan Huu Thang, former director of the FIA, said that the strategy on at-tracting a new generation of FDI should take into account policies relating to the three special economic zones of Phu Quoc, Van Don and Bac Van Phong, because the final development plan of three zones will be approved next year.Further, Nguyen Anh Tuan, vice chair of VAFIE and Editor-in-Chief of Investor Mag-azine, said the list of priority areas in the draft lacks infrastructure that needs huge in-vestments, while domestic investment can not meet the existing demand.Currently, there is no FDI project in the transportation sector. For instance, Long Thanh Airport and the North-South Highway need large amounts of capital. Vietnam should attract foreign investors to this sector, because it needs both capital and tech-nology, Tuan said.http://bizhub.vn/news/fdi-pursuit-should-focus-on-us-and-eu-expert_290188.html

Workforce growth turns modest

20/NOV/2017 INTELLASIA| SGT

The local workforce has annually grown by less than 1 percent over the past five years due to population aging, according to a report by the Institute of Labour, Science and Social Affairs.At a ceremony on the report "Trend of labour and social affairs in Vietnam in 2012-2017" held yesterday in Hanoi City, Dao Quang Vinh, director of the institute, said Vi-etnam has to face rapidly aging population while the social insurance system is not ef-fective enough.Therefore, the number of people continuing working after retirement tends to rise, from 44.89 percent in 2012 to 46.24 percent in the second quarter of this year.Population aging also affects the age-based employment structure, with the number of less-than-35-year-old workers falling. Besides, the number of female employees aged over 55 and men over 60 had increased, nearly equal to the number of young people aged 15 to 24.In addition, industrialisation and urbanisation have attracted more workers from rural areas to cities, leading to an average increase of 2.5 percent in workforce in cities and 0.36 percent in rural areas. However, the number of male workers migrating to urban areas has surged compared to women in recent years.The quality of Vietnamese labourers remains low as only 23 percent of them have qual-ifications and certificates. Especially, the employment structure based on professional ability is unsuitable to the socio-economic development in Vietnam.The report also shows that more than 50 percent of employees graduate from univer-sities and colleges, 5.42 percent from vocational schools and 5.6 percent from short-term training classes.Each year sees a high jobless rate among holders of bachelor's or master's degrees.http://english.vietnamnet.vn/fms/business/190587/workforce-growth-turns-mod-est.html

Recruiting & retaining 20/NOV/2017 INTELLASIA| VN ECONOMIC TIMES

It's never been more important for enterprises to adopt a comprehensive people strat-egy.Vietnam was ranked 86th out of 118 countries in the latest Global Talent Competitive-ness Index (GTCI), released in early 2017 by INSEAD, one of the world's leading busi-ness schools, the Human Capital Leadership Institute of Singapore (HCLI), and the Switzerland-based workforce solutions provider Adecco Group, which measures how countries grow, attract, and retain talent and provides a resource for decision-makers to develop strategies for boosting their talent competitiveness. According to the report, Vietnam scored relatively better in global knowledge skills but is struggling in terms of attracting talent and developing a pool of vocational and technical skills.The country still possesses a workforce of prime age at low cost, with a young popu-


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lation and a rapidly-rising middle class willing to spend. In the context of the trend to-wards automation, that there are still millions of low-skilled workers in the country's key export sectors is a concern for enterprises as well as the government. However, "most enterprises in Vietnam still have a huge need for talent, especially at senior lev-els," said Tieu Yen Trinh, CEO of Talentnet. A comprehensive people strategy is there-fore more important than ever, because young talent are now expecting fast career progression and there's a big gap between supply and demand at the top management level, the latest Mercer Total Remuneration Survey found.Automation threatThe Global Industry 4.0 Survey, the largest research of its kind and conducted last year by PwC on over 2,000 companies in nine major industrial sectors from 26 leading coun-tries, revealed that companies expect the fourth industrial revolution (Industry 4.0) to reduce operational costs by 3.6 per cent per year while increasing efficiency by 4.1 per cent. Major corporations in Vietnam have been looking at applying advanced technol-ogies and replacing their human workforce with machinery and robots in certain in-dustries, to raise productivity, reduce production time, and optimise labour costs.Similarly, Mercer's "Insights from Current Asian Labour Market Trends 2017" report found that global industries will start to be disrupted by 2020, in which around 4.9 mil-lion jobs will be added in business and financial operations and 4.2 million in manage-ment. More than 4.8 million jobs, however, will be lost in office and administration, along with 1.6 million in manufacturing and production.At the Vietnam HR Awards 2017 held in August, Hoang Nam Tien, Chair of FPT Soft-ware, agreed that robotics will replace the human workforce in the near future, so Vi-etnamese companies should be aware of the increasing effects of Industry 4.0 on their employment. When technology takes over to effectively support organisational oper-ations, it consequently begins replacing people positions. Thus, the importance of hu-man resources (HR) management, including people strategy and talent retention policies, should be the top priority in any business strategy.Not only does it help increase efficiency and simplify and automate processes, technol-ogy also helps in gathering the necessary data for assessments and analyses, from which better decisions can be drawn for better direction in business development. HR management is therefore considered vital for businesses and technology is a contrib-uting factor in talent management and leadership development. Furthermore, taking into consideration that HR management is the backbone of any enterprise, technology is having a major impact on many talent strategies.At the same time, the technological era is creating both opportunities and challenges for businesses in the process of enhancing and managing resources. "Technology im-provements require an increasing demand for a creative workforce with the strategic thinking and analytical acumen to meet needs in this challenging day and age," said Trinh. "Expectations of employers regarding the required skills that potential talent and leadership need are entirely different from those of previous years, together with the pressure of having a workforce management strategy to keep up with the global workforce."Limited changesFactors affecting employee retention and long-term commitment vary from company to company, but primarily include working environment and culture, relations with colleagues and especially leadership teams, career development opportunities, and, of course, compensation. Focusing on these not only helps to promote a company's image but also enhances employees' commitment to the organisation. Compensation, in par-ticular, though not the one and only driver of an employee retention strategy, is con-sidered the most common top-of-mind concern for employees when considering whether to remain at a company. Many local enterprises, however, aren't keen on stra-tegically investing in their total rewards policy.According to the 2017 Vietnam Salary report conducted by Mercer and Talentnet on 592 well-established multinational companies (MNCs) and leading domestic compa-nies from 16 industries and with remuneration data on 289,236 employees, the number


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of participating companies increased by 6 per cent while the among of employee data increased by 19 per cent in all industries. "The significant increase in the number of data points from leading companies joining this survey indicates the growing need of organisations for official and trustworthy market data to benchmark their current compensation and benefits with the market, maximise the use of their HR budget, and build an effective rewards system in order to attract and retain talent," said Hoa Nguy-en, Senior director of Mercer Salary Surveys and HR Consulting Services at Talentnet.A deeper look into the survey reveals increasing awareness among companies about the importance of people management and investment. Amid globalisation, one posi-tive sign is that there were more enterprises, both large and medium-sized, joining the survey in 2017, allowing HR experts and business leaders to have access to more in-sightful data on building their rewards strategies.MNCs overall pay higher salaries than local companies, by an average of 29 per cent; down slightly from last year's 31 per cent. The pay difference in annual base salaries is 30 per cent at the professional level and up to 41 per cent at the management level, as MNCs have been focusing on offering higher salaries for management positions to compensate such staff for their greater contributions and scope of work. Local compa-nies, meanwhile, are now willing to be more flexible in pay so they can compete with MNCs for key talent, leading to their variable bonuses accounting for a higher percent-age of base salary than at MNCs.Conversely, the average voluntary staff turnover rate at local companies is higher than at MNCs (10.5 per cent versus 7.4 per cent). For MNCs, the Top 3 industries with the highest turnover rates are retail (32.2 per cent), real estate (18.8 per cent), and consum-er goods (17.3 per cent), whereas chemicals and the oil and mining industry have low turnover rates, at 9.9 and 5.3 per cent, respectively.Pay difference by industrymncsThe average salary increase in 2017 at MNCs and local companies was 8.5 per cent and 8.9 per cent, respectively, compared to 8.6 per cent and 8.7 per cent last year. However, Vietnam remains among the Top 3 regional countries with the highest salary increases, following only Myanmar and India. High-tech and life sciences were the Top 2 in terms of highest salary increases, at around 10 per cent, thanks to their positive busi-ness performance. Though paying in the top range in Vietnam, the oil and mining in-dustry recorded the lowest salary increase, of 4.6 per cent, even lower than last year's 7.5 per cent, due to falling oil prices.Salary and benefits have always been considered the most important factors in attract-ing and retaining talent in Vietnam over the years, according to Nguyen Thi Hong Thuy, HR director at the Vietnam Fan JSC. In the context of global integration and In-dustry 4.0, Vietnamese talent will have better job options, so "local companies should pay much more attention to their total rewards strategy and optimise it wisely, to not only retain high performers but also enhance competitiveness in the regional market," she said.She added that, at the senior management level, salaries in Vietnam are quite high re-gionally due to the fact that the country lacks talent at this level, but if local companies don't proactively invest in their strategy they will find it difficult to secure good talent, especially when the labour market become fiercely competitive nationally and region-ally under global integration.http://vneconomictimes.com/article/business/recruiting-retaining

Rising global coal prices a threat to budget

20/NOV/2017 INTELLASIA| DTI NEWS

As a coal importer, Vietnam will pay substantially more for energy source in coming years, according to recent analysis.Vietnam may have to spend an additional $1.27 billion each year on the fuel to 2021, given the global price of coal has doubled since the beginning of 2016, new analysis re-veals.The current market price of thermal coal has risen to $100 per tonne, double the figure early last year, according to research from the Australia-based Institute for Energy


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Economics and Financial Analysis (IEEFA).Vietnam imported a net 12 million tonnes of coal last year, a staggering increase of 131 per cent against 2015, and the country's net coal imports will stand at 35 million tonnes per year by 2021, according to the International Energy Agency (IEA).At current market prices, that would cost Vietnam $3.5 billion per year. Compared with projections made last year, which said Vietnam would have to spend $2.8 billion at a predicted price of $80 per tonne, the country will end up spending an extra $1.27 billion every year on importing foreign coal by 2021, the IEEFA calculated.According to the institute, rising coal imports create commodity price and currency risks for Vietnamese electricity consumers that have a negative impact on the current account deficit."The doubling of the coal price from $50 in January 2016 to almost $100 today is largely as a result of a Chinese policy aimed at an orderly coal market transition by maintain-ing a degree of profitability for domestic Chinese coal miners, while the central gov-ernment forges ahead with an accelerating transition to clean energy," it said. "China is set to install 50 gigawatts of solar in 2017 alone; a global record for a single country in a single year.""The fluctuating market in 2017 illustrates the extent to which coal is a major threat to the health of Vietnam's budget," Tim Buckley, director of Energy Finance Studies at the IEEFA, was quoted as saying in a statement released this week by the IEEFA."For countries experiencing significant sustained economic growth, it also further val-idates the imperative to diversify Vietnam's electricity sector generation base to incor-porate more alternative sources of domestic supply, namely renewable energy infrastructure, which continues to see cost reductions of more than 10 per cent every year."In Vietnam, which has switched from a coal exporter to a coal importer over the years due to over-exploitation, the development of green-power projects has only just start-ed and investors are still struggling due to low purchase prices.The Ministry of Industry and Trade in September asked the government to raise the purchase price for wind power in an effort to help investors cover high input costs, suggesting the price be lifted to 8.7 cents per kilowatt-hour (kWh) for wind energy projects on land and 9.95 cents per kWh for offshore projects.http://dtinews.vn/en/news/018/53881/rising-global-coal-prices-a-threat-to-budg-et.html

MoIT's power tariff proposals will benefit hotels


The Ministry of Industry and Trade (MoIT) is drafting regulations on new retail prices for electricity, aiming to lower electricity prices for hotels in order to strengthen the tourism sector and hike prices for electricity-guzzling households in an effort to incen-tivise lower consumption.The draft states that electricity retail prices would be set for each customer category in-cluding producers, businesses, lodging facilities, administrative agencies, and house-holds. The average electricity price is currently VND1,662 per kWh.A new feature of the draft regulations is discounted electricity prices for lodging facil-ities as the government aims to help tourism become one of the country's key economic sectors. Accordingly, lodging facilities will enjoy a lower power tariff equal to power for producers.The retail price for households is still divided into six groups. Families who consume up to 50 kWh of electricity per month would pay 92 per cent of the average retail price. Those using from 51 to 110 kWh will pay 95 per cent of the price, 101-200 kWh 110 per cent, 201-300 kWh 138 per cent, 301-400 kWh 154 per cent, and over 401 kWh 159 per cent.The government will subsidise poor households with an amount equal to the retail price of 30 kWh per month.The pricing scheme means that the more electricity households consume, the more money they have to pay: households that consume over 401 kWh per month would


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have to pay a price 1.7 times higher than that of households that consume 50 kWh per month.The ministry said the move was intended to encourage household customers to save electricity.The power tariffs were drafted after the ministry considered the experiences of coun-tries such as Thailand, South Korea, Hong Kong, South Africa, Indonesia and Malay-sia. The establishment of six groups for electricity pricing over the past three years has been straightforward and effective at encouraging responsible power use, the ministry added.However, the dividision of power tariffs for households into six groups has not been responsive to societal changes, experts said.Nguyen Tien Tha, former director of the Price Management Department under the Ministry of Finance, told online newspaper vietnamnet.vn that currently, few poor households consume less than 50 kWh. People's lifestyles now include dramatically more electronics equipment.Tha proposed applying a common electricity price for households or reducing the cur-rent six groups to three or four.Statistics showed that around 65 per cent of households consume electricity of 150 kWh a month."We proposed households consuming less than 150 kWh a month pay 95.5 per cent of the average retail price instead of the current 110 per cent, to ensure most of people en-joying lower power tariff," he told the newspaper.Specialist Ngo Tri Long shared the opinion, saying that the people's quality of life has been improved as electricity use has increased. He said the government should not ap-ply a higher-than-average price to people consuming more than 100 kWh per month.In July, the government issued a new mechanism stipulated in the prime minister's De-cision 24/2017/QD-TTg allowing the Electricity of Vietnam (EVN) to hike the average power retail price when input cost for electricity production rises 3 per cent instead of 7 per cent as before.Depending on the input cost increase, EVN will decide to raise the price between 3 and 5 per cent before reporting to the ministries of industry and trade and finance.For increases between 5 and 10 per cent, EVN can raise prices after receiving approval from the MoIT.For hikes above 10 per cent, which could potentially impact the macro-economy, the two ministries will work together to look into the power price plan presented by EVN.The average power retail price has remained unchanged since March 2015.http://vietnamnews.vn/economy/417815/moits-power-tariff-proposals-will-benefit-hotels.html#KciZudTSwBMbvEA8.97

Ban on casino entry lifted


New circular lifts ban on Vietnamese nationals' entry into casinosFrom December 1 this year Vietnamese who can show a minimum income of VND10 million (US$440) a month can gamble in casinos.Circular No 102/2017, issued by the Ministry of Finance in early August to guide De-cree No 03/2017 on casino businesses, lifts the ban on Vietnamese entering casinos that is in place now. Only foreigners are currently allowed into the country's casinos.Once the ban is lifted, to enter people must also prove they are over 21 years old.As for the income, they have to show it is taxable at level 3 or higher or have certified copies of a lease agreement showing they receive rent of at least VND10 million a month or a bank statement showing interest income of that sum.Since 1992 the government has been acknowledging that casinos would help attract tourists and bring revenues.This resulted in the first casino appearing in 1994 in the beach resort of Do Sn in Hai Phong.Now there are eight casinos and more than 50 electronic gambling facilities nation-wide.


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The new circular is expected to encourage the opening of casinos around the country, especially in special administrative-economic zones like Van Don in Quang Ninh Province, Bc Van Phong in Khanh Hoa and Phu Quoc in Kien Giang.In Van Don, the province people's committee has licensed real estate developer Sun Group to build a $2 billion luxury resort-amusement complex with a casino on 2,500 hectares in the special economic zone.Both Quang Ninh and Kien Giang provinces want the government to choose casinos in their locality to trial entry for Vietnamese.Other provinces, including those without special economic zones, also want a piece of the action.The Thua Thien-Hue Province People's Committee has sought permission to increase the charter capital of the Lng Co Laguna Project from $874 million to $2 billion and open a casino.The new circular has attracted some public criticism, with people saying the regula-tions limiting entry based on income cannot be enforced since it is difficult to prove income.To gain entry, a person has to be paying income tax at level 3 or higher, but in Vietnam 70 per cent of payers are assessed at level 1.Others said the daily maximum gambling limit of VND1 million is too low to attract high income earners and help the government achieve its revenue target.Meanwhile, the existing casinos are operating at just a third of their capacity and claim to be losing money.The Hoang Gia International Construction Investment Joint Stock Company said its casino business made a gross loss of VND35.8 billion last year and a net loss of VND101 billion in the first nine months of this year.Analysts blame this on the rapidly growing competition, with more and more casinos fighting for fewer gamblers from overseas, most of them from China and Taiwan.Vietnamese gamblers usually cross the border into Cambodia, where many casinos target them.The government's decision to lift the ban is expected could not have come sooner for the casinos.Exporters fret as foreign currency loans set to dry upThe circular that allows the extension of foreign currency lending to enterprises in-volved in export activities will expire in a month.Economists are concerned this could affect borrowers.Last November the State Bank of Vietnam (SBV) issued a circular amending and sup-plementing some articles in an earlier circular guiding lending in foreign currencies.This allowed enterprises with short-term foreign currency requirements for their pro-duction and export activities to continue borrowing in foreign currencies until the end of 2017.Interest rates for foreign currency loans are only around half the on Dong loans.They are currently at 2.8-6 per cent.Interest rates for non-priority Dong lending stand at 6.8-9 per cent for short-term loans and 9.3-11 per cent for long- and medium-term loans.Exporters are understandably worried they would lose this big advantage from next month.Analysts fear there will be a double whammy for exporters. Firstly, their costs will shoot up, hitting their bottom line. Secondly, demand for Dong loans will go up sharp-ly, pushing up loan interest rates even higher, particularly at banks that have liquidity issues.The situation is predicted to become quite dire since growth in foreign currency lend-ing is on an upward trend.In the first nine months of this year credit growth was 12.9 per cent compared to 5.4 per cent a year earlier.Export enterprises pointed out that if they have to borrow in Dong to finance their op-eration costs would rise significantly, affecting the competitiveness of their goods.


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They wanted the central bank not to have a one-size-fits-all policy since export enter-prises' business strategies are very different from those of other businesses.But economists justified the SBV's policy saying the increasing demand for credit means dollarisation of the economy is a real threat and could undermine the govern-ment's anti-dollarisation efforts.To preclude this, it is necessary to switch completely from lending and borrowing the greenback to buying and selling it.Others said, however, that to do this there should be flexibility in exchange rates and businesses must be allowed to freely buy foreign exchange when they require.Moody's upgrades VN banking outlookMoody's Investors Service has upgraded the outlook for Vietnam's banking system to "positive" for the next 12-18 months from "stable".According to a statement from the credit rating agency, the Vietnamese banking sys-tem's positive outlook reflects strong economic prospects, with the banks' operating environment benefiting from robust economic growth, based on ongoing improve-ments to infrastructure, favourable demographics and the government's continued fo-cus on reform to support foreign direct investment.But it also warned Vietnam of rising asset risks as the nation boosts credit growth to drive the economy.Rapid credit growth will continue to erode capital buffers and capitalisation will dete-riorate as the banks struggle to replenish capital against rapid loan growth, it warned further.http://vietnamnews.vn/economy/417812/ban-on-casino-entry-lift-ed.html#sV0T7KjuBciEK9BK.97

Leather, footwear industries expand exports to EU


Vietnamese leather and footwear exporters must comply with the EU-Vietnam free trade agreement's rules of origin and be prepared to deal with EU barriers and anti-dumping measures, speakers said at a seminar held in HCM City on November 17.The meeting, organised by the Ministry of Industry and Trade and the European Trade Policy and Investment Support Project (EU-Mutrap), was held to help exporters take advantage of the EV-FTA when it takes effect in 2019.Phan Thi Thanh Xuan, vice chairwoman and general secretary of the Vietnam Leather, Footwear and Handbag Association (Lefaso), said the EV-FTA would increase exports because of lower tariffs and contribute to eliminating other trade barriers.However, Vietnamese leather and footwear manufacturers and exporters will confront challenges as well. To meet EU requirements, Vietnamese businesses will have to im-prove technologies and manufacturing processes to ensure high quality.Because most leather and footwear manufacturers in the country are foreign-invested, locally-owned enterprises will have to enhance competitiveness to increase market share.Vuong Duc Anh, deputy head of the origin of goods division under the Ministry of In-dustry and Trade's Export-Import Department, said that exporters should comply with EV-FTA's rules of origin in order to make the most of EV-FTA."Exporters will not be able to enjoy tariff cuts to zero percent unless they meet EV-FTA's rules of origin," Anh said.Professor Sanggeeta Khorana, an expert from EU-Mutrap, said Vietnamese businesses subjected to EU barriers and anti-dumping measures should be able to prove that they do not receive subsidies.An anti-dumping investigation can be initiated whenever the directorate general for Trade of the European Commission decides that information is sufficient to launch an official investigation.Vietnam earned $13.1 billion from leather and footwear exports in the first nine months of the year, an increase of 11.4 percent over the same period last year.Last year Vietnam ranked as the third-largest footwear manufacturer in the world, af-ter China and India, according to Lefaso.


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The EV-FTA will come into force in 2019, connecting Vietnamone of Asean's most dy-namic manufacturing hubs with the EU one of the world biggest markets with GDP of over $18 trillion, accounting for 22 percent of the world's total GDP and a population of over 500 million.Once the EV-FTA agreement goes into effect, the EU will eliminate import duties on 85.6 percent of its tariffs lines on Vietnamese products. After seven years, 99 percent of EU tariffs will be removed for Vietnamese products.Vietnamese textiles, footwear and seafood products (except for canned tuna and fish balls) will incur no import duties within seven years after the agreement takes effect.As of the end of last year, Vietnam's leather and footwear exports to the EU reached nearly $5 billion, making the EU the second-largest leather and footwear importer of Vietnam after the US.This comes two years after Vietnam enjoyed the EU's generalised system of preferenc-es (GSP) with tariffs reduced from 13-14 percent to 3-4 percent.In recent years, Vietnam has become one of the most active players in negotiating and implementing free trade agreements.The EU is Vietnam's second-biggest export market, while Vietnam is the EU's 11th big-gest source of imports.About 900 European enterprises have invested in Vietnam, which has the largest Eu-ropean business community in Southeast Asia.http://english.vov.vn/trade/leather-footwear-industries-expand-exports-to-eu-362818.vov

US exports to Vietnam resume with first shipments delivered

20/NOV/2017 INTELLASIA| HPJ

Shipping containers containing 7,850 metric tonnes of US distiller's dried grains with solubles arrived into the Port of HCM City, Vietnam, between October 25 and Novem-ber 10, 2017among the first orders filled following a September announcement by the Vietnamese government that it would lift its suspension of DDGS imports and ease fu-migation requirements for US corn and wheat imports.Manuel Sanchez, US Grains Council regional director for South and Southeast Asia, was on site as the containers of US DDGS arrived.The containers were among the first to arrive in Vietnam following the government lifting a suspension put in place in October 2016."We are glad to see the first shipment and arrival of US DDGS back into the Vietnam-ese market," said Manuel Sanchez, US Grains Council regional director for South and Southeast Asia. "The Council collaborated closely with our own government, the Viet-namese government and industries in both countries to resolve this trade disruption."The Council's marketing efforts and technical support on the ground in Vietnam have assisted the local feed industry in understanding how to use US DDGS and led to in-creasing inclusion rates for this feed product in the Vietnamese swine and poultry sec-tors. As a result, Vietnam rapidly ramped up consumption levels, becoming one of the largest markets for US DDGS.However, following the detection of quarantine pests, the Vietnamese Plant Protection Department issued a decision in October 2016 to temporarily suspend DDGS importa-tion. As a result, Vietnam purchased 50 percent less US DDGS in 2016/2017 at nearly 495,000 tonnes, compared to almost 986,000 tonnes the year prior.The Council responded with an intense effort to address concerns and lift the suspen-sion in coordination with the US Department of Agriculture's Animal and Plant Health Inspection Service and the Office of the US Trade Representative. The groups worked together to address the Vietnamese government's concerns and help return open ac-cess to one of the fastest growing feed markets in the world."Any disruption to the supply chain has a tremendous impact on market price," Sanchez said. "The arrival of US DDGS on Vietnamese shores signals a return to busi-ness as usual, benefitting both the Vietnamese feed sector and US farmers and agribus-iness."


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Trillion-dong street food market remains unexploited

20/NOV/2017 INTELLASIA| NGUOI LAO DONG

Vietnam has not had street food business although the market potential is very large. Without proper and professional investment, this trillion-dong market will sooner or later belong to foreign businesses.The aforementioned statement was given by Nguyen Phi Van, a retail and franchise specialist at a talk with young people who are dealing with street food chain on the morning of November 16."In only five years from 2011 to 2016, street food chain in Vietnam achieved an average growth of 24.1 percent/annum and a total increase of 194.3 percent; an average revenue growth of 32.1 percent and a total increase of 300 percent. This is just the statistics of Euromonitor on four chains selected in terms of scale, points of sale. Meanwhile, as of the end of 2016, Vietnam had a total of 149,000 street food outlets with a total value of 46.9 trillion dong and the annual growth rate of two percent", said Van.Young people were so surprised with each figure given by Van. They could not imag-ine that the market of snacks such as bread, sticky rice, coffee, cold drinks, etc. sold on trolleys, mobile motorbikes, etc. everywhere has such a large capacity and potential.This study has partly explained for the exciting of the street food market in 3-4 recent years. Many brands have come into being, and points of sales are opened very quickly and also disappear not long after.One point that is easy to see is that street food over time has mainly developed by movement and then "sunk" gradually even disappeared completely. Baked sweet po-tatoes, banana sticky rice, yellow sticky rice with fried onions, pure juice, milk tea, pudding sweet soup, lemon tea, cheese, etc. are examples.According to Euromitor's statistics, while CP (Thailand)'s Five Star Chicken brand has grown rapidly in market share since 2013, from 26.7 percent to more than 71 percent, Vietnamese brands including banh mi que (stick-shaped bread), 1 phut 30 giay (one minute 30 seconds) in HCM City and Goethe coffee in Hanoi could not have developed since 2013, even decreased sharply in market share.Not being included in the statistics but Ma Hai grilled chopped fish bread (which was a phenomenon of street food culinary several years ago, leading to the appearance of some chains that operated quite excitingly from 2014 to 2015), after developing four stores, 40 self-opened trolleys and franchising 30, decided not to expand the scale and focus on standardising human resources and management towards more professional work.Talking to us, owners of some street food brands said they really want to maintain and expand but due to changing consumer tastes and lack of expertise in investment in the chain development, it is difficult to "grow up". There have had cases that owners had to give up midway because of lacking capital and human resources to invest largely in the system.Sharing the failure story of Banh mi Viet brand, Tran Thi Bich Nga, CEO of this culi-nary chain said Banh mi Viet started its business in 2010, and developed very well till 2012 when it opened the second, the third stores, but when there were more than two stores, the operation, management and maintenance of quality, sales began to encoun-ter obstacles. As the business went down gradually, the Board of directors decided to close all stores to start from the beginning. "Now we have to rebuild the system with professional procedures. It is impossible to succeed with the old way of thinking that we have professions, we know how to make breads and then we can open a company".According to Nguyen Phi Van, street food is also a model so it needs professional op-eration though the investment can only be a mobile trolley worth five or ten million dong or more. If there is no system, no preparation in training, operation, human re-source, supply chain, financial model, technological appliance, etc., then the develop-ment will certainly fail.It is quite common now that those involving in street food business now are often sub-jective. They think that the investment is low, so it is not necessary to be professional. Therefore, they have not taken opportunities from the financial market to shape, build and develop a comprehensive chain. "It is a great opportunity if street food can be pro-


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fessionalised and developed into chains. The biggest challenge of this industry is that most of young people come from individual households, who often self-open stores then it will be very difficult to succeed. Food giants will sooner or later enter this mar-ket and gain market share. Five Star Chicken is a small example", said Van.According to retail experts, foreign "giants" are focusing on developing their brands in Vietnam so they have not "attacked" the street food segment. Once they have devel-oped stably, they will certainly shift to street food and accelerate the chain opening. The common trend in the world and also in Vietnam is consumer have "n in 1" de-mand. This trend is clearly reflected in the fact that convenience stores have competed by opening additional fresh food segment, bringing processed food (including street food) to serve customers.The fact that such large brands as 7-Evelen, Circle K, Ministop or Satra have supple-mented food items that are strictly controlled in terms of quality, food hygiene and ac-cepted by consumers has increased competitiveness in the street food market.According to market research companies, though Vietnam has 149,000 street food out-lets, only 0.59 percent of these are branded stores. This ratio is five percent in Hong-kong, 10 percent in Singapore, 21 percent in the Philippines, and 30 percent in Taiwan.Street food is now a very potential segment not only in the country but also in the world. The current trend is that countries are favoured of indigenous food, and con-sumers in the world are eager to approach traditional cuisine of countries. Therefore, if knowing how to do, Vietnamese street food can entirely be "exported".

Is e-commerce sector no longer available to Vietnamese businesses?

20/NOV/2017 INTELLASIA| NHIP CAU DAU TU

The end-of-the-year shopping season is the time when e-commerce companies com-pete to attract users and foreign group has taken advantage of this opportunity to show off its financial potential.As always, Lazada Vietnam was the first unit to activate the shopping season at year's end. With the target of raising revenue by five times compared to normal days, Lazada Vietnam brought about more than 150,000 promotional products at shocking price from November 9 to November 11, 2017. All orders below six kilogrammes were de-livered free-of-charge on these days.Besides, Lazada Vietnam also announced to have put four additional new order processing centres into operation to minimise the "congestion" of orders as in the pre-vious years. The special thing is that for the first time in this year, Lazada Vietnam of-fers a 50 percent discount to merchants on this platform. The programme also does not publish deadlines.Lazada Vietnam's delivery support and discount is aimed at coping with the growth of Shopee Vietnam. Although it has just entered the market for two years, Shopee Vi-etnam is having impressive growth with many support policies to buyers and sellers. For example, for buyers, this company supports free-delivery. Meanwhile, for sellers, apart from no fee collection, Shopee Vietnam also offers free skill training programmes on selling, customer service, etc."We have no plans to stop supporting sellers and buyers in the near future", said Tran Tuan Anh, Chief Finance and Operation Officer of Shopee Vietnam.Earlier, Shopee Vietnam is operated on C2C platform, and now it has opened addition-al Shopee Mall service to attract branded businesses. This year, Shopee Vietnam also participates in the promotional season at the end of the year with more than 100,000 products, hoping to increase the sales by five times compared to normal days.With the fact that Sea (the mother company of Shopee Vietnam) has just earned more than $800 million through IPO, the company is confident to continue its presence in Vietnam. Over the last two month, Shopee has invested strongly in advertising on me-dia. Shoppe Vietnam has now been considered as a formidable component of Lazada Vietnam.Under the pressure of foreign businesses, representatives of domestic businesses in-cluding Sendo.vn, Zalo.vn and Tiki.vn have had different moves. Sendo.vn and Za-lo.vn choose to keep silent but Tiki.vn does not. Tiki.vn prepared 3,000 incentives with


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a discount of 50 percent through flash sale, supporting free delivery for orders worth more than 111,000 dong and delivering within two hours for orders worth more than 599,000 dong. For sellers, Tiki.vn received no commission from November 9-12. The representative of Vietnam expected a three times growth at this time.Tiki.vn decided to choose Ngoc Trinh as Key Opinion Leader (KOL) for this campaign. Though Ngoc Trinh was quite successful with her advertising campaigns, it is impos-sible to conclude in the e-commerce sector because the success depends on many fac-tors such as sources of goods, support policies to buyers and sellers. This is the rule that Lazada Vietnam and Shopee Vietnam are establishing.In spite of being somewhat superior, it is difficult to blame Tiki.vn because Vietnam e-commerce market is being distorted by foreign businesses that have plenty of capital. After receiving nearly 400 billion dong investment from VNG in 2016, Tiki.vn invested a lot in infrastructure, warehouses and personnel. Some sources of news say this unit is negotiating with Amazon.com (the U.S) or JD.com (China), which is more likely JD.com. These are the two units that Tiki.vn's operating model is closest to.Except for Zalo.vn that is still VNG's strategic project, the existence of domestic group in the near future is also very uncertain due to the dominance of foreign group.The SWOT business model mentions a factor i.e. challenges or barriers to penetrate into the industry in which the race for market share of Lazada Vietnam and Shopee Vi-etnam is creating a huge barrier for the domestic group.Accordingly, if Lazada Vietnam is creating barriers by huge investment costs in adver-tising to attract users, Shopee Vietnam is very willing to spend on delivery support and collection fee. Of course, both of them never reveal the amount spent on advertis-ing and delivery in Vietnam.However, recent data have shown how "big" it is. According to the report that Sea sub-mitted to Nasdaq (the U.S), in the first three months of 2017, Shopee had 30,000 orders per day. For each order, Shopee Vietnam supported 50,000 dong delivery fee and 30,000 dong collection fee.Not all orders are eligible for support but if just 50 percent of the orders were qualified, Shopee's support fees amounted to tens of billions of dong. And with the current growth momentum, the amount of money that VNG poured into Tiki.vn at the begin-ning of 2016 is just enough for Shopee Vietnam to deliver goods within 6-12 months.In order to compete and survive, domestic business group needs the support from for-eign investors but the cost barriers that Shopee Vietnam and Lazada Vietnam have cre-ated caused many investors to step back.Similarly, niche markets such as agricultural products or specialties of sandacsan.com (Viettel) or badasan.com.vn (VNPost) are difficult to create a milestone in the market without breaking the aforementioned barriers. Is e-commerce sector no longer availa-ble to Vietnamese businesses?

Foreign brands up the ante in fashion market


The competitive pressure exerted on domestic fashion firms by the increasing presence of world renowned brands is unavoidable, but it could have positive impacts in the long run, experts say.They say that the Vietnamese consumer market is growing, and stiff competition could motivate domestic firms to change their production methods and business practices in order to stay in business.Since the early 2000s, a series of world famous fashion houses targeting the middle-in-come group has entered Vietnam, including Spain's Mango, UK's Oasis and US's GAP.Sweden's Hennes & Mauritz (H&M) and Spain's fashion giant Zara are among the lat-est entrants in the last few months.Going by anticipation and crowds that these brands have generated in their opening days, it is evident that they are meeting a demand, and domestic firms have no choice but to deal with strong competition.What has to changeDang Phuong Dung, vice Chairwoman, Secretary general at Vietnam Textile and Ap-


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parel Association (VITAS), told the Vietnam News Agency that the emergence of more international brands would compel domestic companies to diversify their products in all market segments.The foreign brands are meeting a real demand, according to Samir Dixit, Managing di-rector, Brand Finance Asia Pacific.He said in the company's 2016 Vietnam 50 Report that foreign brands' taking over the domestic market is simply inescapable because of the ever increasing gap between consumers' demand and producers' supply in terms of volume, quality and aesthetics.As the foreign brands enter Vietnam, local businesses must be more aware of their own product quality and appropriately change their investment orientations, Dixit said.Dung said most domestic garment producers have focused mainly on exports, chiefly taking on outsourced production. They have not been interested in the huge potential of the domestic market; therefore, despite being one of the top textile and garment ex-porters in the world, the country has yet to gain much added value, she added.Customer favouriteWith textile and garment firms tending to specialise in production but not in design, branding and distribution, they will have to adapt fast to be able to compete with the newcomers.The success of grand openings by H&M and Zara can be attributed to good marketing and advertising, but it is undeniable that "fast fashion" (where a new trend or design is quickly produced at relatively cheap prices) is now an established customer favour-ite in Vietnam.Its young population and rapid improvement in living standards has made Vietnam an attractive and fertile territory for international fashion brands.These firms produce wide ranges of clothing for different market segments and sell them at an average price due to diminishing production costs that result from mass production.In the fashion industry, foreign companies tower over their domestic counterparts in terms of capital, professionalism, marketing and customer service, and most impor-tantly, online selling.A spokesperson for H&M said the brand spent two years researching the Vietnamese market, identifying key growth factors like a fast-paced economy, an exponential number of fashion-conscious consumers with distinctive tastes, and a surging density of shopping malls.Domestic enterprises have begun placing more emphasis on designing and offering more diverse products of higher quality, and it is even said that Vietnamese enterpris-es may enjoy some home turf advantage, which enables a cultural understanding of customer habits.However, it is evident that domestic brands remain weaker than their international competitions, as Dinh Th M Loan, President of the Vietnam Retailers Association, said at a June 2017 conference on identifying retail policy risks.Loan said that more than 200 foreign fashion brands present in the country occupying more than 60 per cent of the market share.She noted that major fashion brands in the world are very interested in Vietnam be-cause of its high annual average market growth rate of between 15 to 20 per cent.There's confidenceDomestic brands that have made a mark in the market remain confident and hopeful that they will be able to ride the new waves of international competiton.D Viet Anh, director of Boo Fashion Trading Co. Ltd, told Vietnam News that the con-tinuous stream of foreign brands entering Vietnam's fashion markets will have some impact on the domestic fashion industry, but they are likely to be short-term impacts. In the long run, such competition is definitely a good dose of reality for the country's fashion market. It will help alter people's shopping habits towards branded products instead of non-branded ones, he added.The looming presence of these foreign brands will also help customers compare do-mestic and global fashion products, and understand that prestigious Vietnamese


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brands are not inferior, Anh said.Nguyen Tiep, NEM Fashion's Head of Marketing Department, also held the same view despite the two brands' different demographics.Tiep told Vietnam News that his company would carry out a business strategy to boost a line of customers' favourite products in order to increase its competitiveness.The company will also focus on strengthening its point of sale customer service and improving overall customer experience, Tiep said.http://vietnamnews.vn/economy/417797/foreign-brands-up-the-ante-in-fashion-mar-ket.html#AlBkYizivesR1IZd.97\

Property market stays strong


Strong economic growth since 2015 has created a thriving domestic property market that is likely to continue next year, said Construction minister Phm Hng Ha.Ha told the first annual Vietnam Real Estate Forum in Hanoi on Wednesday that the market's growth had made significant contributions to the country's socio-economic development."Upbeat signs have been seen in the market index. Property inventories have fallen sharply due to growing housing demand, while the flow of direct and indirect foreign investment into the sector has soared," he said.The property market's recovery has also bolstered the financial-securities market and other related industrial sectors, such as construction and building materials, the min-ister said, predicting that resort properties would also continue to develop.However, he said the market had displayed a lack of transparency. Further, parts of the real estate market had been manipulated by those with vested interests.Most investment in property projects had come from credit institutions, banks and by mobilising home buyers."The structure of property products has not been suitable or closely managed. The sup-ply of high-end estate segments has been higher than demand, while there has been a lack of commercial and social housing projects," the minister added.In addition, he said, State management agencies had not developed policies to respond to changes in the market. Also, he claimed the government had not had adequate pol-icies regarding taxes, credits and land, to regulate resources for market development, and had not encouraged social housing projects.Nguyen Trn Nam, chair of the Vietnam Real Estate Association (VNREA), agreed, say-ing that the estate market would be more stable next year.Statistics indicate that Hanoi has some 20,000 apartments for sale. In total, the capital and HCM City have 45,000 to 50,000 apartments that are offered for sale in the market, while consumption results in only 30,000 sales per year."Therefore, the market has enough apartments to meet current demand," Nam said, adding that there is no speculation in the market.Nguyen Trng Ninh, director of the ministry's Department of Housing Management and Real Estate Market, said the property market continued to see stable growth, in-cluding in resort properties at Da Nng, Nha TrangKhanh Hoa and Phu QucKien Giang, which were attracting investments from local and foreign investors.Credit in estate under controlOutstanding loans in the property sector are in line with the government's orientation and the market's real demand. By the end of July, outstanding loans in the sector rose 4 per cent from last year. Property loans account for 9 per cent of the country's total outstanding loans."The portion has been stable since 2013. The loans in the estate sector have focused on apartment projects, which are suitable for people's demand," said Nguyen Quc Hung, director of the Credit Department under the State Bank of Vietnam (SBV).In addition, the central bank has asked credit institutions to actively resolve bad debts, especially in the property sector. The bad debt rate in the sector was sharply reduced from 7.05 per cent in 2013 to 4.06 per cent in 2017.Hung said the SBV would continue to stabilise the monetary market, while closely su-


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pervising credit in the estate sector to ensure effective and sustainable credit growth.He proposed to continue renewing and improving planning, while shortening the time for approving social and commercial housing projects. Meanwhile, policies for these new types of properties, such as condotels and officetels, should be completed.He said the government was also on guard against speculation-driven growth in the market. Further, banks will not issue loans worth more than 70 per cent of a project to property developers, and investors must use the loans to invest only in the project for which they received the loan.Economist Le XuAn Ngha said he believed that financing for social housing projects has been challenging, as it mainly comes from bank loans instead of non-profit or gov-ernmental resources."Bank loans should not be a long-term solution, as they cause pressure on the banking sector. I think the Ministry of Construction should study experiences from other coun-tries in mobilising resources. This could include the establishment of a fund for social and inexpensive housing projects," he added.VNREA's vice chair Nguyen Mnh Ha said social housing projects have been mostly lo-cated in big cities, such as Hanoi and HCM City.The projects should be set in locations that are not too far from the city centres, and re-ceive support through tax breaks.Ha said establishing the fund could be difficult, as low and middle-income residents would likely be unable to contribute to the fund. Deep-pocketed donors would need to step up."The issue is that each locality should have their own solution to resolve the problem," he said.The forum, organised by VNREA in cooperation with the financial-economic channel VITV, is a large event that will assess the real estate market in a comprehensive man-ner, from commodities and segments to housing-related issues, such as land, finance, credit and tax.http://vietnamnews.vn/economy/417670/property-market-stays-strong.html#d0s3vZEYsCVzgVrw.97

Vietnam continues to see strong interest from developers


Vietnam continued to see strong interest from developers for large-scale mixed-use projects with a residential component in major cities in the third quarter of 2017, ac-cording to the Asia Pacific Investment Quarterly from Savills.The report noted that, in September, VinaLand Limited, the real estate investment fund of the Vietnam-based asset manager VinaCapital, sold its stake in VinaSquare, a mixed use 3.1-ha development site in a prime location in HCM City's District 5, which they acquired a decade ago, to Tri Duc Real Estate for a total consideration of $41.2 mil-lion.In addition, its 182-ha My Gia Project, one of the largest township projects in Nha Trang, also changed hands to a local developer for over $11 million.In August, Anpha Holdings, a Vietnamese real estate development company, acquired Novaland's 99.98 per cent stake in its subsidiary, Nova Galaxy.The Galaxy 9 project, located in District 4 of HCM City with over 500 apartments, is part of the recently acquired company.In Hanoi, Growing Sun Investment picked up the prime 4.2-ha Diamond Rice Flower complex project from Kinh Bac City Group, a well-known listed company. Similarly, FLC Group won the bid for the land use rights of the 6.4-ha DM1 land plot, located in Nam Tu Liem district, for nearly $38 million, to build townhouses, villas, and apart-ments.Vietnam's real estate market is trending upwards overall, across all sectors, with a par-ticularly positive outlook for the office market.Despite an 8 per cent increase year-on-year in new supply, HCM City continued its ro-bust trend with high average occupancy of approximately 95 per cent and with aver-age Grade A rents up 8 per cent year-on-year.


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Vietnam continues to see strong interest from developers, government news, Vietnam breaking news, politic news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, Vietnam net news, Vietnam latest news, vn newsHanoi has also started to catch up with significant improvements in net effective rents and occupancy rates for Grade A and B buildings. Total office stock in the capital was approximately 1.6 million sq m with occupancy rates of 93 per cent, an increase of 6 per cent year-on-year.Market rentals for both Grade A and Grade B have increased slightly quarter-on-quar-ter, by approximately 2 per cent and 9 per cent, respectively.With continued strong demand on the back of healthy foreign direct investment (FDI) and robust GDP growth, Savills expects to see an extremely low vacancy rate across all office grades and average rental growth of approximately 8.4 per cent per annum in the next three years.http://english.vietnamnet.vn/fms/business/190505/vietnam-continues-to-see-strong-interest-from-developers.html

$69.4m housing fraud discovered


The government Inspectorate has detected financial violations totalling VND91.56 tril-lion (US$69.4 million) in 38 housing projects developed in Hanoi between 2002 and 2014.The violations and the poor quality of planning of residential areas were discovered after inspectors checked 38 out of 204 projects.They found that housing plans were adjusted several times, leading to changes in the heights of buildings and land use. In particular, the arbitrary adjustment of plans af-fected the order, discipline and interests of the State, according to the inspectors."This situation has led to difficulties in developing urban planning for the city," Tran Huu Loi, head of the inspection delegation, told the Tien Phong (Vanguard) newspa-per.The violations benefited investors because they were not obliged to pay more land-use fees or land rents as the adjustment of plans were made in favour of the investors, causing losses to the State budget, the Inspectorate said.Further, housing project developers did not fulfill their financial obligations. For ex-ample, the investor of the CT2 land plot under the Kim Van-Kim Lu New Urban Area Project in Hoang Mai District did not pay a land-use fee equal to VND733 billion ($32.24 million), although it built houses for rent.In many projects, inspectors found investors had illegally altered land-use and con-struction plans, using more land but not paying fees for the extended area.At the time of inspection, many investors had not yet paid obligatory fees to the State budget.The Hanoi People's Committee also miscalculated land use fees and, in some cases, housing project investors did not fulfill all their financial obligations, resulting in a shortfall of VND6 trillion ($266.6 million) for the State budget.On the basis of the inspection results, the government Inspectorate has proposed prime minister Nguyen Xuan Phuc to direct the chair of the city People's Committee to take measures to rectify shortcomings and violations in management of construc-tion investment and land use.The committee needs to review and check project investors violating land use and con-struction plans to handle the violations, it said.Organisations and individuals must also review their management responsibility, the government Inspectorate added.http://bizhub.vn/property/694m-housing-fraud-discovered_290192.html

No foundation to prove $3 billion flow from Vietnam to US for house purchase


There was no foundation to say that Vietnamese people transferred $3 billion from Vi-etnam to the United States for house purchase, Le Minh Hung, Governor of the State Bank of Vietnam, said.


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SBV Governor Le Minh Hung made the remarks at a National Assembly (NA) Q&A session on November 17.The deputies mentioned to a report of the US National Association of Realtors (NAR), which showed between April 2016 and March 2017, Vietnamese buyers purchased ap-proximately 5,689 residential properties in the US, roughly double of the previous 12-months period.According to the NAR report, it is estimated that Vietnamese buyers spent up to $3 bil-lion on residential properties in the US in 2017. The amount of property purchases made by Vietnamese nationals has been on the rise since 2012-2013. The report also in-dicates that Vietnamese buyers tend to favour properties in California, Florida, and Texas.The amount of money Vietnamese spent to buy houses in the US accounted for 2 per-cent, or $3.06 billion. Vietnam is listed among 10 countries with the highest number of citizens buying houses in the US.According to Hung, the Vietnamese who bought houses in the US may include Viet-namese who live in Vietnam; Vietnamese who have lived for a long time in third coun-tries; Vietnamese who had been living in the US for less than two years until now; and Vietnamese who study, work and visit relatives in the US and have fixed-term visas of less than six months.Many Vietnamese have bought properties in the US, but this has not generated cash flow from Vietnam to the US, according to SBV.Hung affirmed that Vietnam has adequate regulations to control the transfer of money to foreign countries.According to SBV, under the Vietnam's Forex Ordinance and Decree No 70/2014, the purposes of one-way remittances abroad by Vietnamese do not include payments for property purchases.However, if individuals remit money for overseas settlement purposes, they may use the money to buy properties to serve the settlement.Credit institutions are allowed to provide remittance services to individuals who have one-way remittances, based on the checking of related documents.The institutions, for example, would refer to notices by foreign schools about tuition and subsistence for students to provide remittance services to make payment for ex-penses.Regarding remittances for health care services, commercial banks would refer to hos-pital fee invoices released by overseas hospitals to remit money.The reports from credit institutions showed that the total amount of foreign currencies Vietnamese remitted abroad for transactions in 2015 was $2.26 billion. This included $523.7 million remitted for inheritance and settlement purposes, $307.76 for gifts and $1.4 billion for studying, healthcare, tourism and visits.In 2016, the amount of money remitted for the same purposes totalled $858.8 million. In the first six months of 2017, individuals remitted $419 million.Under current laws, if institutions and individuals remit money abroad to make in-vestments overseas, including investment in real estate, they must comply with regu-lations stipulated in the Investment Law and related documents on outward investments.To date, MPI has licensed 16 outward investment projects in the real estate sector in the US, totalling $228.8 million, accounting for 26 percent of total outward investment capital in real estate and 32 percent of total investment in the US.http://dtinews.vn/en/news/018/53887/no-foundation-to-prove--3 billion-flow-from-vi-etnam-to-us-for-house-purchase.html

Part of the puzzle 20/NOV/2017 INTELLASIA| VN ECONOMIC TIMES

Vingroup's launch of its Made-in-Vietnam motor vehicle brand Vinfast again raises questions about the ability of local component suppliers to meet requirements.Since leading property developer Vingroup announced plans in September to step into in the country's automobile sector with its Vinfast motor vehicles, many have hoped


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the giant will finally realise the long-standing dream of Vietnam establishing an auto-mobile manufacturing industry. Vingroup targets becoming a leading motor car man-ufacturer in Southeast Asia, producing 500,000 vehicles a year with a localisation rate of 60 per cent by 2025. The birth of Vinfast is not only good news for the country's auto industry but also has a positive influence on support industries, which have been far too weak for far too long.Room for hopeAfter Vingroup announced its plans to make Vietnamese motor vehicles, a number of automobile accessory and component manufacturers expressed a desire to become partners of Vinfast. "We are willing to make large investments, just to have the oppor-tunity," Truong Hong Minh, CEO of the Nhat Minh Co., which specialises in manu-facturing plastics, said at a recent conference on developing automobile support industries.The opportunity Minh referred to may well be realised, because despite signing deals with many foreign partners in the design and supply of components, Vinfast must still acquire components produced in Vietnam in order to meet localisation rates. "We are in the process of designing the first motor car and also want to link with all auto com-ponent manufacturers inVietnam to achieve localisation goals in the future," said Vo Quang Hue, deputy CEO of Vinfast and former CEO of auto component maker Robert Bosch Vietnam. In the view of many analysts, the decision by Vingroup to appoint Hue, who was trained in automobile technology in Germany and worked for BMW and Bosch, shows its deter-mination to increase localisation rates.Vinfast will cooperate with German partners in product development and the man-agement of its new manufacturing complex. Its vehicles will be designed by Italian de-sign houses, while the main components, such as engines, will be brought in from US and Europe. It will, however, engage Vietnamese companies to manufacture most of the necessary components.Recognising the opportunities Vinfast will present, CEO of the Hanoi Plastics Compa-ny, Nguyen Thanh Nam, said the company will step up production line upgrades in the future to meet the standards needed to participate in the production chain. He ac-knowledged that plastics products supplied to the automobile industry have not de-veloped sufficiently in recent years, due to the influence of import tax policies declining under roadmaps to integrate automobiles and components into the global supply chain.In order to support auto component suppliers in seizing the opportunities, the HCM City centre for Support Industries has connected auto manufacturers with auto com-ponent suppliers, so they can identify demand and understand what difficulties they face. "The development opportunities for auto parts suppliers are huge," said Le Nguyen Duy Oanh, deputy director of the Centre. The average localisation rate stands at just 15 per cent, so the opportunities are many for domestic enterprises to increase the rate if production lines are improved in a timely manner. If a localisation rate of at least 40 per cent is achieved to qualify for tax incentives within Asean, or even 60 per cent, as announced by Vingroup, it would help develop the country's domestic sup-port industries.The Vinfast project kicked off at a time when the government's determination to de-velop the automobile industry is high. In a speech at the ceremony opening Vinfast's plant in the northern port city of Hai Phong in September, prime minister Nguyen Xuan Phuc said that with per capita income of nearly $3,000, Vietnam will have to uni-versalise motor cars in the near future. The determination of the government is dis-played by a host of new policies on automobile assembly, support for Vietnamese component manufacturing enterprises, and modifications to import and excise taxes."Vietnamese enterprises can currently only supply certain components to partners in Japan and Europe. This is a good time for the government to create favourable condi-tions for enterprises in support industries to expand their production scale." Le Nguy-en Duy Oanh, deputy director, HCM City centre for Support Industries


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Demand for automobiles, it's been predicted, may reach 600,000 units a year by 2025. If the local automobile industry meets this demand, especially for vehicles of less-than-nine-seats, by 2025, it will be able to reduce import turnover by $3-7 billion at that time and $5-12 billion by 2030, improving the trade balance and macroeconomic stability.Challenges aheadThere can be no denying the opportunities the Vinfast "dream" will bring to Vietnam's auto component suppliers, but the question is whether they can meet needs. The auto component manufacturing industry has been in a poor state for some time, as evi-denced by localisation rates reaching just 7-10 per cent, while the original strategy aimed at 60 per cent by 2010.Locally-manufactured products have low technological value and include tubes, plas-tics, tires, seats, mirrors, glass, wires, and batteries. In 2016, while Vietnam outlaid $2.3 billion on importing completely-built-unit (CBU) motor cars, the importation of com-ponents and accessories for assembly and repair totalled $3.54 billion, according to data from Vietnam's general Department of Customs.The country's auto industry remains small, which explains why global component suppliers are yet to establish a strong presence, the Automotive Working Group (AWG) told the 2017 Vietnam Business Forum held in Hanoi in June. According to the group, more than 90 per cent of existing component suppliers in Vietnam are foreign-invested companies, and the majority of components and materials for auto manufac-turing and components still need to be imported.Moreover, a report from the Japan External Trade Organisation (JETRO) showed that the localisation rate in industrial products in Vietnam was 34.2 per cent in 2016; far lower than China's 67.8 per cent, Thailand's 57.1 per cent, and Indonesia's 40.5 per cent. The Ministry of Industry and Trade (MoIT) also acknowledged that the domestic sup-port industry remains underdeveloped. A recent report from the ministry revealed that Vietnam aimed for a 40 per cent localisation rate for motor cars of less-than-nine-seats by 2005 and 60 per cent by 2010, but the current rate is a mere 7-10 per cent. The highest localisation rate, of 37 per cent, is for Toyota Vietnam's Innova.According to Oanh, the difficulty for domestic auto component manufacturers is low productivity, which disqualifies them from joining global supply chains. "These com-panies have many opportunities, but the gap between the requirements of auto man-ufacturers and their capacity is substantial, especially in terms of quality and price," she said.After more than 20 years in Vietnam, though much higher than at other foreign man-ufacturers, Toyota's localisation rate is only 19-37 per cent, depending on the model. While pledging to increase the rate to 30-40 per cent within ten years of arriving in the country, in 2007 it stood at just 2-12 per cent. With vehicles of less-than-nine-seats, it was only 18 per cent. Even its goals regarding technology transfer were not met. Phan Dang Tuat, deputy Chair of the Vietnam Supporting Enterprises Association, said that Vinfast's goal of a 60 per cent localisation will be a challenge. According to his calculations, a sedan usually has 24,000 components. Assuming that each enterprise makes six, it will require 4,000 enterprises to supply those components. But there are actually only 1,800 support enterprises in Vietnam. "The number may increase in the future, but the problem is whether they will have the capacity to meet requirements," he said.http://vneconomictimes.com/article/business/2w4yqkc6-part-of-the-puzzle

VN auto sales set to miss target


With a continuous year-on-year decline in sales this year, the domestic auto industry is unlikely to achieve the 10 per cent growth predicted by the Vietnam Automobile Manufacturers' Association (VAMA).The 21,870 autos sold in October marked a year-on-year drop of 22 per cent.In the January-October period, a total of 204,999 automobile units were sold, down nine per cent year-on-year, according to a VAMA report. The sales of passenger cars decreased by 10 per cent, commercial vehicles by six per cent and special-use vehicles


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(cranes, canal diggers, street-cleaning trucks, waste trucks, passenger bus at airports, lift trucks in warehouses and small cars serving golf courses) by 18 per cent during the period.Although auto businesses have engaged in aggressive marketing to boost end of the year sales, offering discounts and promotions from few dozens to hundreds of mil-lions of Dng on ordinary cars to luxury cars, they have not achieved expected results.The Truong Hai Automobile Joint Stock Co (Thaco) offered price reductions of VND5 million (US$219) to VND26 million in October for its Morning, Cerato and Sorento models.Meanwhile, Toyota Motor Vietnam supported buyers with registration fees reductions of VND30 million for Vios, VND15 million for Innova and VND50 million for Camry 2017.Mitsubishi Vietnam also launched a discount of VND214 million for the SUV Pajero, bringing its retail price down from VND2.12 billion to around VND1.9 billion.Apart from its poorly selling models, Huyndai Thanh Cong announced a special pro-motional programme offering a discount of VND230 million for its bestselling new-version model SantaFe, which brought the price down to VND898 million.In its luxury car segment, Mercedes-Benz Vietnam also offered a VND50 million reg-istration fee discount and three free maintenance passes for all cars that the company is producing and distributing in the Vietnamese market.Despite all the price reductions and promotions, many consumers were still waiting for a further reduction or until early 2018, hoping to buy cheaper vehicles once the im-port tax rate for completely built units drop from 30 per cent to zero per cent in the Southeast Asian (Asean) region.Hopes dashedHowever, such hopes were dashed last month when the government issued Decree 116/2017, effective from the day of signing, introducing several strict regulations for lo-cally-assembled automobile businesses as well as importers.These regulations will not only make it difficult for small businesses to import autos, but also for official distributors in Vietnam and local assemblers.VAMA has sent a petition to the prime minister expressing concern over some of the new regulations in the decree that relate to automobile manufacturing, assembly and importing enterprises.For example, the decree requires that when conducting inspections and tests, auto im-porters must provide quality management bodies with papers including copies of quality certificates issued by foreign authorised agencies or organisations for imported cars. VAMA has said that many countries do not have such certification, making it dif-ficult for importers to do business.However, the Ministry of Industry and Trade has said that the new decree will help domestic enterprises and foreign investment companies to compete more fairly, ensur-ing the interests of consumers.Another regulation in the decree requires domestic auto assemblers to have an auto testing track with a minimum length of 800m, including flat, rocky, rugged and rip-pled, as well as sloping, wet and curved surfaces.VAMA said it was difficult for its members to meet this requirement because there was not enough space to build or expand the testing track. Furthermore, the rent for such space would be very costly.Auto importers, meanwhile, are required to have authorised certification to recall products, but small and medium enterprises cannot meet this requirement because they always buy vehicles through middlemen. In addition, for batches of cars import-ed by small businesses or official distributor, management bodies will check each lot and model representing the type of cars in the batch, thus increasing expenses for the importers.Nguyen Tuan, the director of Thien Phuc An, an auto importer, said the test would be very expensive, costing some VND100 million for each batch, not to mention the two months or so it would take, which would lead to many other expenses, forcing busi-


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nesses to sell at higher prices.Tuan said the conditions stipulated in the decree made it very difficult for small and medium enterprises and non-authorised car dealers (who buy cars from the automak-ers in foreign countries and import them into Vietnam.) With this decree, the domestic car market will remain wholly controlled by joint ventures and some official distribu-tors in Vietnam, and there will not be much competition that would benefit end users, he added.http://vietnamnews.vn/economy/417770/vn-auto-sales-set-to-miss-tar-get.html#2AFlBSEoHSgMYd0e.97

Start-ups face recruiting difficulties due to poor finance


Weak finance is preventing start-up firms from hiring talented employees, said Nguy-en Duc Hai, co-founder and training director of VietFounder.Hai said a start-up company had to face numerous difficulties but to him, the two most challenging obstacles are finance and human resources."Companies have difficulties in searching for funds to maintain operations but the managing skills of many firms are still weak that's why many potential projects were halted. Due to weak finance and recruitment skills, it is hard for start-up companies to attract talent. Moreover, talented employees often prefer working in big companies than taking risks with start-ups," he said.He went on to say that newly-established firms need enthusiastic and ambitious em-ployees and graduates fit those requirements the most. But employees agree to work at start-up companies when there are other motives such as outstanding leaders, prod-ucts with great potential or they have the chance to own part of the firms.On the first days when the companies are set up, they often do not have detailed work-ing process and the working environment is messy and unprofessional. Some firms may feel less confident when recruiting or employees will leave after a while because they do not feel that they have chances to show their talent.However, despite organisational teething problems, start-up companies have advan-tages over the major firms. Leaders and employees will feel equal and the dynamic workplaces make young people more open and ready to help each other."In another company, it may be impossible or very slow to make some serious changes and so the opportunities are lost. Meanwhile, 80 percent of a project can be changed quickly in start-up companies. This is also an attractive factor for young talent," Hai said. Moreover, they also have more chances to earn promotions or learn from co-workers or their own CEOs. This is a great benefit especially to the graduates while other firms favour experienced employees.Hai admitted that wages at VietFounder are not huge, but in return, both of the found-ers are enthusiastic about training young employees. "During job interviews, I also em-phasize the benefits of the opportunities to learn and develop one's self in this environment to persuade talented employees to work for us," he said.On November 16, Navigos Group announced the results of the survey on recruiting at start-up companies at TechFest 2017. 54 percent of the surveyed firms have the de-mand for new recruitment in the next three months. 17 percent need new recruitment in the next three to six months and 11 percent need new recruitment in next six to 12 months.Experience is not the deciding factor as 35 percent said they would recruit graduates and 49 percent said salary was the most difficult factor. 64 percent admitted that they do not have anyone in charge of human resources.http://english.vietnamnet.vn/fms/business/190493/start-ups-face-recruiting-difficul-ties-due-to-poor-finance.html

Startups a 'promised land' for new graduates


Startups are a "promised land" for new graduates as they will present many employ-ment opportunities in the near future, according to the latest report from the Navigos Group.


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Its latest survey reveals considerable employment opportunities at startups in the near future. Fifty-four per cent of startups will have demand for recruitment in the next three months, 17 per cent within the next three to six months, and 11 per cent within the next six to 12 months. Some said they always have demand for recruitment.Work experience is not a prerequisite. Thirty-five per cent of startups said they only need fresh graduates while 12 per cent said they don't pay attention to candidates' pre-vious work experience.Limited salary budget is the biggest challenge in recruitment for Vietnamese startups, as answered by 49 per cent of those surveyed. A tight salary budget prevents them from attracting suitable candidates. Most candidates, meanwhile, focus on salary and bonuses rather than the learning and development opportunities at startups.Eighteen per cent of startups face difficulties in terms of experience and processes in recruiting, training, evaluating, and developing employees and 17 per cent think can-didates don't have long-term commitment, lack enthusiasm, don't meet professional requirements, and don't have the right culture to work at a startup.From the survey, Navigos recognised that Vietnamese startups haven't really focused on their human resources department. Sixty-four per cent of those surveyed don't have human resources staff, with their founders taking on the task. Only 15 per cent believe they need human resources staff.Regarding recruitment channels, although Vietnamese startups mostly use less costly channels such as introductions from acquaintances and Facebook or LinkedIn, the sur-vey revealed that 38 per cent use online recruitment websites and 11 per cent use head-hunting services.This demonstrates that they have begun to pay attention to professional recruitment services.The Navigos Group, one of leaders in Vietnam's recruitment industry, is comprised of www.vietnamworks.com, an online recruitment portal, and Navigos Search, an exec-utive search firm.http://english.vietnamnet.vn/fms/business/190558/startups-a--promised-land--for-new-graduates.html

Startup movement helps increase new enterprises


According to the Ministry of Planning and Investment, the number of newly registered businesses in the first 10 months of this year reached 100,000. Experts have acknowl-edged that besides efforts to improve business climate, timely support for the startup movement has also contributed to the positive outcome.Despite being newly established, this enterprise has achieved remarkable successes from its initial idea of designing home-made beansprouts equipment.Thanks to supporting policies for startups, enterprises like this have been helped to pursue their initiatives to make market debutStatistics on business registration in the first 10 months of this year showed the number of newly registered businesses reached more than 100,000, nearly equal to the total number of 2016.According to experts, the startup movement has spurred many business activities in VietnamAccording to Phan Duc Hieu, deputy director of Central Institute for Economic Man-agement, instead of striving for a seat at a public agency, there are more young people who want to affirm themselves by starting their own businesses.Besides, the business environment in Vietnam has been improved significantly by pol-icies introduced by the State, government, ministries, and sectors as well as brighter outlook from both domestic and international markets.Tran Thi Hong Minh, director of Agency of Business Registration said "The implemen-tation of the Law on investment and the law on businesses as well as efforts of minis-tries and sectors have helped to generate the figure.""Thriving in the world market has helped enterprises take the initiative in starting their own businesses", said Phan Duc Hieu, deputy director of Central Institute for Econom-


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ic Management.Recently, ministries and sectors have introduced reforms in business and investment conditions, including exempting several business conditions. The move is expected to create more favourable conditions for people and enterprises to start businesses, help-ing to boost the country's economy.https://en.vietnamplus.vn/startup-movement-helps-increase-new-enterprises/121982.vnp

Hotel occupancy rises in HCM City


Four- and five-star hotels in HCM City have seen a slight decline in room rates al-though the rising number of tourists has resulted in an increase in occupancy rates at high-end hotels.The average room rate of three- to five-star hotels was more than 1.914 million VND (84 USD) in the first six months of the year, a decrease of 11.3 percent compared to 2014, according to the city's Department of Tourism.The average occupancy rate for four- and five-star hotels rose to 85 percent from 70 percent of the same period last year.According to one five-star hotel, its current room rate is 112 USD compared to 130 USD of the same period last year.The hotel market remains a lucrative business but the competition is fierce due to ex-panding room inventory, a manager of a downtown five-star hotel said."An increase of 2 USD in room rates will result in a fall in the occupancy rate," the man-ager said.From 2013 to 2016, the supply of four- and five-star hotels increased 20 percent per year to meet international tourist demand for upscale resorts and luxury accommoda-tion, according to Savills Vietnam, the property consultant.HCM City has the largest hotel supply in Vietnam, with approximately 16,000 three- to five-star rooms.Over the next three years, the city expects to have 3,500 new rooms, a 22 percent in-crease.Besides an abundant supply of two- to three-star hotels, the growth of apartments and houses rented out to tourists has increased the competition in the hotel segment, ex-perts in the hospitality sector said.Lam Quang Huy, deputy general director of the Grand Hotel in HCM City's District 1, said the hotel's occupancy rate rose to 87-90 percent in the last few months."The hotel is offering additional services to attract customers and maintain the room rate," Huy said.Travel firms said that around 70 percent of tourists chose to stay at two- to three-star hotels as the difference of room rates between three-star and five-star hotels could reach 60-70 percent.Three- to four-star hotels usually sell at least 50-60 percent of their rooms in advance to travel firms and offer flexible and incentive policies on room rates for them, a rep-resentative of TransViet Travel said.As accommodation costs make up around 40-60 percent of tour prices, tour operators often choose three- to four-star hotels with reasonable prices instead of five-star hotels.In the first nine months of the year, the city welcomed 4.2 million foreign tourists, a year-on-year rise of 16.6 percent, according to the Department of Tourism.Tourism revenue was estimated at 84.57 trillion VND (3.72 billion USD), a year-on-year increase of 10 percent.http://dtinews.vn/en/news/018/53842/-hotel-occupancy-rises-in-hcm-city.html

Inland waterway holds small transport market share


Although Vietnam has a dense network of rivers and canals, the volume of cargo and passengers transported on inland waterways accounts for small proportions, 17-19 percent and 4-6 percent respectively.According to a report by the Vietnam Inland Waterway Administration, Vietnam with


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SVietnam finance & business 20 November

3,200 kilometers of coastline and 240 river mouths ranks fourth among countries with the densest waterway transport networks.As of last month, the country had 271 seaports including 258 ports handling cargo and 13 others serving passengers. Only Viet Tri and Ninh Phuc ports have been connected to railways but they have yet to be operated.Vietnam also has nearly 10,800 inland waterway stations with 8,000 of them for cargo handling and more than 2,500 serving passengers.Despite the lowest cost and capacity to transport a huge volume of freight and people, the sector has not made good use of its advantage. Weak infrastructure links among ports, small investments in inland waterways and low competitiveness of transport enterprises have been attributed to the small proportion of waterborne transport.The Ministry of Transport plans to upgrade 2,000 kilometers of waterways, mainly in-land and coastal ones, and enhance management to increase the market share of the sector to 18-21.5 percent by 2020. The ministry also expects to raise the volume of cargo transported on waterways to 20-22 million tonnes a year.At a meeting on how to increase the inland waterway transport market share on Tues-day, minister of Transport Nguyen Van The said preferential loans should be offered for private transport enterprises as they are considered a driving force of the sector.Minister The assigned agencies under the ministry to identify why the Mekong Delta's waterway system has not been operated effectively in spite of great potential.He also required periodic reports on the implementation of the inland waterway re-structuring project and other policies to help handle shortcomings and develop the sector, reducing pressure on road transport.http://english.thesaigontimes.vn/57101/Inland-waterway-holds-small-transport-mar-ket-share.html

BUSINESSIZ NEWS

Business Briefs 20 November, 2017

20/NOV/2017 INTELLASIA |

* generali Vietnam Life Insurance LLC has launched a new product called VITA-Song Tu Tin (VITALive Confidently) which provides customers and their families with comprehensive protection. It also offers investment returns thanks to annual and spe-cial bonuses up to 500 percent of annual premium.* Vietnam Debt and Asset Trading Corporation (DATC) will auction nearly 4.5 million shares, or a 93.5 percent stake, at Civil Engineering Construction Corporation o. 60 on December 15. The starting price is VND7,200 per share, which means DATC can raise around VND32 billion from the sale. DATC offered the shares via public bidding in July at the starting price of VND10,800 a share but found no buyers.* Masan Group Corporation (MS ) has spent nearlYVND5.9 trillion buying back over 100 million shares as treasury shares, taking to 109.9 million the total number ofits treasury shares.* An Phat Holdings Company has registered to buy 400,000 shares of An Phat-Yen Bai Mineral & Plastic Company (HII) to hold a 2.94 percent stake in the latter. Transaction is expected to takeplace between ovember 20 and December 18.* Dien Quang Company (DQC) has announced to buy back over 993,000 shares as treasury shares at no higher than VND45,000 each. DQC will conduct the transaction within 30 days after getting approval from the State Securities Commission.* Phu Tai Company (PTB), a car retailer, said its consolidated net profit rose 28.2 per-cent year-on-year to VND219.6 billion in the January-September period, and its con-solidated revenue increased 13 percent to VND2.9 trillion in the period.* Vietnam Construction and Import-Export Corporation (VCG) plans to divest from a series of subsidiaries, including a 30.36 percent stake in Vinaconex 11, a 29 percent stake in International Joint Venture Vinaconex-Taisei Co Ltd, a 35.39 percent stake in Vinaconex Glass Fiber Reinforced Polyester Pipe JSC, and a 51.4 percent stake in Vimeco JSC. The State Capital Investment Corporation, the government's investment arm, which now owns 51 percent of VCG, plans to sell 96.25 million shares in VCG, or


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21.79 percent, said Viet Capital Securities Corporation.* Military Bank has coordinated with Hanoi City's Department of Planning and Invest-ment to launch online payment service for local enterprises.

VN Index drops from 10-year high


Shares fell on the HCM Stock Exchange after rallying for 10 days to its 10-year high as the market was hit by strong investor selling.The benchmark VN Index dropped 0.24 per cent to end Friday at 890.69 points. It had made a 10-day rally of total 7.1 per cent.The southern market index advanced total 2.6 per cent on a weekly basis and 6.4 per cent since the start of November.More than 188.5 million shares were traded on the southern bourse, worth VND5.36 trillion (US$238.3 million).The trading figures posted a decline of 8.7 per cent in volume and 27 per cent in value compared to Thursday.Vietnam's major stock market was dominated by declining stocks, which outnum-bered gaining ones by 168 to 111.Large-cap stocks were hit by investors' profit-taking after the benchmark VN Index had rallied for 10 consecutive sessions.Twenty-four of the 30 largest companies by market capitalisation in the VN30 Index saw share prices drop while only four advanced, causing the large-cap index to fall nearly 0.3 per cent to 887.41 points.Among decliners were Binh Minh Plastic (BMP), DHG Pharmaceutical Co (DHG), Sa-combank (STB), logistics firm Gemadept (GMD) and food producer Kido (KDC).BMP lost 2.7 per cent to erase its entire growth made in the previous two days. It had grown total 23 per cent since the end of October.GMD dropped 2 per cent following its three-day increase of 8.6 per cent. Gemadept shares had gained more than 10.2 per cent in total so far this month.DHG and KDC also retreated after they had gained total 9.1 per cent and 6.2 per cent in the three previous sessions. The two stocks declined by 2.5 per cent and 2 per cent, respectively.Though the VN Index put an end to its 10-day rally on Friday, the benchmark index was able to stay above the 890-point level amid the increase of investor selling during the session, Bao Viet Securities Co (BVSC) analyst Tran Xuan Bach said in a note.Trading liquidity has remained stable around the average number of the last 21 ses-sions with spreading investment among local stocks, proving that investor sentiment was quite positive and reduced the dependence of the market on large-cap stocks, he said. However, the benchmark index will continue struggling in the range of 890-895 points and it could fall back to the area of 860-865 points, Bach warned.The HNX Index on the Hanoi Stock Exchange struggled in the entire session to finish at 108.31 points, slightly unchanged from Thursday's ending level of 108.29 points.Friday's gain also extended the northern market index's gain for an eighth session with total growth of 3.3 per cent.More than 58.9 million shares were traded on Hanoi 's market, worth nearly VND750 billion.http://vietnamnews.vn/economy/417789/vn-index-drops-from-10-year-high.html#2zJ6moLFZKtv0SQ4.97

Vietnamese stock market eyes development trends


Vietnam's stock market is becoming an important channel for mobilising capital. State-owned enterprises are being equitised to improve governance capacity and financial transparency.Do Trong Quynh, director general of the Vietnam Construction and Import-Export Corporation (Vinaconex), tells the story of when Vinaconex was on the verge of bank-ruptcy.In 2006, Vinaconex built the Cam Pha Cement Plant mostly with money from bank


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loans. In 2011, stronger foreign currencies and slow growth of the cement market led to losses for Vinaconex. The cement plant began losing almost $30 million a year, push-ing Vinaconex to the verge of collapse. Raising the corporation's charter capital saved Vinaconex from going bust and allowed it to stand firm and increase its capitalisation in the stock market to almost $400 million.Quynh said "The contribution of $66 million by its two biggest shareholders helped Vi-naconex recover and grow. Just $66 million saved a company with 30,000 workers from ruin, demonstrating how important capital sources are for a company going through a dangerous period."Vietnam's stock market is forecast to continue to grow thanks to the government's plans to expand equitisation and withdraw state capital from state-owned enterprises.During the first nine months of 2017, 34 SOEs were equitised on schedule. In 2018, 64 additional enterprises will be equitised, including major corporations like Vietnam Pa-per Corporation and telecommunications giant MobiFone.In 2019, only 18 are scheduled to be equitised, but most of those are blue-chip compa-nies like the Vietnam National Coffee Corporation, the Vietnam Post and Telecommu-nications Group, the Vietnam National Chemical Group, and the Vietnam National Coal and Mineral Industries Holding Corporation.Tran Van Dung, Chair of the State Securities Commission, said "The government has clarified the progress, direction, and rate of divestment of state capital from SOEs. The stock market is likely to heat up in the very near future."This year has witnessed a buying spree by foreign investors in both the securities and bond markets. Foreign indirect investment in the past 10 months surged 70 percent against last year. Vietnam's capital markets will enjoy more favourable conditions to attract investment in the future due to Vietnam's steady economic growth, controlled inflation, the private sector's greater role in the national economy, and the improved legal framework for capital markets.http://english.vov.vn/economy/vietnamese-stock-market-eyes-development-trends-361975.vov

Fund manager optimistic on VN stock market


After 10 long years, the VN Index has again gone past the 800-point mark. Vietnam News speaks with Steven Mantle, offshore fund raising director of Vietfund Manage-ment (VFM), about the market and VFM's funds.What is your reading of the Vietnamese economy now?In terms of Vietnam's economy, GDP growth is very healthy now, reaching 7.5 per cent in the last quarter, the highest Q3 growth in seven years, which is positive in terms of Q4 growth. There are some concerns over the loosening of monetary policy, lower in-terest rates, increase in credit growth allowance. This can be scary for foreign investors given previous events in Vietnam many years ago.Now, it is fair to say where the economy is with low inflation so far this year of 1.8 per cent, with the balance of trade now at $442 million, it seems that foreign investors are more confident about where the economy is and the government policy is, despite the shock over the monetary policy.Vietnam does not have pressure to devalue the currency to increase exports or boost manufacturing.The economy at the moment is very strong.The market has reached 800 points. What do you think of this remarkable milestone?In the region, Vietnam is the top performing market out of Thailand, the Philippines and Malaysia. Last year, it was the second best performer behind Thailand, but Thai-land is struggling this year. Vietnam has kept its momentum going. The Philippines is also having a good year, but this follows a bad 2016 when it was the only market in Southeast Asia to fall. Vietnam however has continued to grow very well following a 14.8 per cent growth last year.Vietnam is an emerging market. As we know Morgan Stanley Capital International (MSCI) did not include Vietnam in the emerging market watch list, but at the moment


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we have a lot of liquidity, far more than in the Philippines or Pakistan. In the Philip-pines, some of their biggest companies are family owned and they don't really have much trade. In terms of the depth of Vietnam's stock market, it is actually healthier than the Philippines, it has much more choices available.In terms of the impact of foreigners, net buying this year has been around $630 million, the second highest in Southeast Asia after Malaysia. At its peak, the net buying this year was worth nearly $670 million. We had some selling last month, a bit more this month.The last thing is that in June, Vietnam has not been put on the MSCI emerging markets watch list. There is a lot more to be done in terms of foreign investors, general trading, but one thing that Vietnam does excel is in the quality of stocks we now have: over 22 stocks with a market cap of more than a billion dollars, 15 of them in our VN30 ETF, and there are four that meet MSCI criteria for emerging markets while a further five only fall short due to MSCI's subjective free-float criteria.How is VFM's ETF doing this year?So as a company that has gone from managing around $75 million at the beginning of this year to about $115 million today, we have seen growth in all four funds in terms of performance and subscription.Often, the Korea and Vietnam story is compared to Japan and Thailand in the 90s, but essentially there is a large level of foreign direct investment coming into Vietnam from Korean companies. So we have a lot of interest from Korea this year.Korea is the biggest, but we are seeing interest from different areas. Hong Kong, Thai-land have been big investors in the capital market, and also Singapore and Taiwan. We are also seeing interest in Europe and US.The ETF was up 28 per cent at the end of September.How do you see the market and foreign capital flows from now through end of the year?We've already seen extremely high levels of foreign buying compared to previous years and currently we're on for our biggest year of net buying since 2007. This is thanks to good quality IPOs and overseas corporates investing strategically. Also, more overseas investors are warming up to Vietnam, perhaps helped by higher MSCI Frontier Index allocation but also importantly due to good earnings growth.The Vinamilk stake being divested by the SCIC last week should help bring in more foreign capital. Despite the market being at its highest levels for a decade, there are still many compelling buying opportunities out there for overseas investors not looking to take profit.In terms of predictions for the market itself, the Vietnam Index has continued to rise this year with very little correction so far. Although November is traditionally a down month for the VN Index, 2017 could perhaps become just the second time in 10 years this month has been positive.http://english.vietnamnet.vn/fms/business/190436/fund-manager-optimistic-on-vn-stock-market.html

SCIC to sell 21.79pct stake at Vinaconex


The State Capital Investment Corporation (SCIC) will sell 21.79 per cent stake at Viet-nam Construction and Import-Export Joint Stock Corporation (Vinaconex) on Decem-ber 8.This amounts to more than 96.25 million shares.At a roadshow held on Thursday at the Hanoi Stock Exchange, SCIC said that the min-imum bidding price would be announced one day before the auction, based on the closing price at the trading session.Shares of Vinaconex, listed on the northern bourse as VCG, rose 0.8 per cent to trade at VND25,800 (US$1.14) per share, on Friday morning.Nguyen Dc Chi, chair of SCIC, said if the auction was successful, SCIC's stake in Vina-conex would be reduced to 36 per cent, but it would still remain a major stakeholder, with the right of veto.


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Chi said SCIC would continue to divest from Vinaconex by 2020, as VCG's business lines were not sectors that the State would maintain controlling stakes under the prime minister's Decision 58. He added that the roadmap for divestments from VCG would be carefully considered to ensure benefits for both the sides.One of the business lines of Vinaconex was property, which had a cap for foreign in-vestors' holding, at 49 per cent.In the first nine months of this year, Vinaconex's revenue was estimated at nearly VND6.63 trillion, up 17.9 per cent over the same period last year and exceeding its full year's target by 61 per cent.The after-tax profit was VND623 billion, rising by 31.3 per cent year-on-year.VCG would focus on completing a 264.13ha urban complex, Splendora, in the West of Hanoi and estimated that the project would bring a net profit of hundreds of billions of Dong for the company.SCIC planned to divest from 85 enterprises in 2017. To date, SCIC completed divest-ments at 20, and the load of work in the remaining months of the year was huge.vietnamnews.vn/economy/417737/scic-to-sell-2179-stake-at-vinacon-ex.html#3pjdG8Jzo1XtQqdu.97

Sao Ta Foods becomes Ben Tre Aquaproduct affiliate


Ben Tre Aquaproduct Import and Export JSC (ABT) has completed the purchase of nearly 7.84 million shares, equal to 20.1 per cent of voting rights in Sao Ta Foods JSC (FMC), making the latter an affiliate company of Ben Tre Aquaproduct.The company made the announcement on the HCM Stock Exchange on Thursday.Ben Tre Aquaproduct is a subsidiary of PAN Group which holds 72.82 per cent of its capital.Earlier, Hung Vuong Corp (HVG) decided to offload its entire holding of 21.128 mil-lion shares equivalent to 54.28 per cent of Sao Ta Foods' capital to streamline its busi-ness in the context of declining performance and heavy interest burdens.SSI Asset Management Co Ltd on Monday also bought more than 7.72 million shares of Sao Ta Foods, lifting its ownership to 19.97 per cent of voting rights.Sao Ta Foods is one of the three biggest shrimp exporters in Vietnam. The shrimp ex-porter reported its best-ever result with estimated pre-tax profit of VND125 billion (US$5.5 million) in the fiscal year 2016-17, an increase of 25 per cent over the yearly tar-get and up 60 per cent year-on-year.The company's shares are trading at about VND22,000 per share on the HCM Stock Ex-change.http://bizhub.vn/markets/sao-ta-foods-becomes-ben-tre-aquaproduct-affiliate_290206.html

Petrolimex stocks fall with sinking performance


Vietnam National Petroleum Group (Petrolimex, coded PLX), has witnessed a sharp drop in share prices after a vast wave of investors started selling its stocks and setting up stock discounts, following the drop in profitability since April 2017.Prior to the falling business performance, the ticker stood at a record price of VND69,000 ($3.03) in September.The current price of Petrolimex plunged to VND56,200 ($2.47), a roughly 20 per cent drop from the September record.According to the group's consolidated income statement for the first three quarters, the consolidated before-tax profit was only VND3.5 trillion ($156.13 million), which was 87.3 per cent of the same period in 2016 and 75.7 per cent of the target.On the contrary, the consolidated revenue of the first three quarters was VND112.4 trillion ($4.95 billion), up 27.7 per cent against the same period in 2016.Despite the burgeoning revenue growth in the first nine months, the company's profit went on a steep downward slope.Speaking about losing profitability, Petrolimex's spokesperson clarified that the key el-ements negatively affecting the company's petroleum trade were incurred costs, such


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as social insurance expenses and outsourcing services, as well as Korean import tariffs (which is lower than the existing applicable 10 per cent value-added tax on all imports and domestically-manufactured goods).Besides, the petroleum business also encountered obstacles in other business lines, such as petroleum aviation and bitumen in road construction.Many economists asserted that Petrolimex might be undergoing significant pressure to improve business performance. One of the group's business enhancement strategies was to initiate the supply of the bio-fuel RON 92 E5 from the beginning of 2018.Nguyen Quang Dung, deputy director general of Petrolimex, noted that the petroleum group put great maximum effort into assuring that 100 per cent of the group's petrol stations would be capable of supplying E5 bio-fuel by January 1, 2018.Dung also added that most of the petroleum input would be acquired from domestic bio-fuel plants that meet the company's fuel quality requirements.In addition, regarding business administration, the petroleum provider also applied the enterprise resources planning (ERP) and enterprise gas (Egas) with the intent of en-hancing business performance in 2018.Petrolimex is a Hanoi-based company founded in 1956. The petroleum provider pri-marily operates in the businesses of petroleum, transportation, gas, and petrochemi-cals. It also provides design and engineering, commercial, as well as insurance and banking services.http://english.vietnamnet.vn/fms/business/190574/petrolimex-stocks-fall-with-sink-ing-performance.html

Real estate inventory value approximates $1.14bil

20/NOV/2017 INTELLASIA| SGGP

Real estate inventory value now approximates VND26 trillion (US$1.14 billion), reduc-ing 16 percent compared to December last year, reported the Ministry of Construction this morning.At the first real estate forum in Hanoi, the ministry said that most of the inventory are villa and townhouse projects in areas with asynchronously infrastructure.The event was attended by minister of Construction Tran Hong Ha and representa-tives from 1,000 property companies, agencies and localities.The Ministry of Construction estimated that the property market continues growing stably in both prices and transaction volume this year. Most of successful transactions are contracts buying houses directly from investors. Projects with high transaction vol-ume and price hike locate in centre areas and positions with synchronous infrastruc-ture. Nguyen Trong Ninh, head of Housing and Real Estate Market Management Agency, said that one of notable things in the real estate market this year was in HCM City.Housing land prices increased by 10-20 percent compared to 2016 in outskirt districts such as 2, 9, Binh Chanh, Hoc Mon, Cu Chi and Can Gio. The prices surged as high as 30-40 percent and even 70 percent in places.That was caused by strongly developing traffic infrastructure and many large invest-ment projects about to be invested. Speculators and brokers had taken advantage of these information to blow prices up.Afterwards the ministry required HCM City Construction Department to propose city authorities to publicise planning information about traffic, property and infrastructure projects and their progress, inspect real estate trading and rectify the illegal separation of large land pierces into smaller plots for sale.Therefore, land prices in these areas have reduced fever.The Ministry of Construction forecast no large fluctuations in the housing market in the upcoming time. Projects serving tourism will continue strongly developing.http://english.vietnamnet.vn/fms/business/190341/real-estate-inventory-value-ap-proximates--1-14bil.html

VN firms urged to trade with HK


As one of the leading trade and financial centres of the world, Hong Kong would be a


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gateway for Vietnamese enterprises to enter the Chinese mainland market and other regional and global markets, the deputy executive director of the Hong Kong Trade Development Council (HKTDC) said.Speaking at a press luncheon in HCM City on Friday held by HKTDC and the Vietnam Chamber of Commerce and Industry, Benjamin Chau said Vietnam was Hong Kong's third largest trading partner in Asean and its ninth largest trading partner worldwide, with bilateral trade reaching $13 billion in the first ninth months of the year, a year-on-year increase of 11.6 per cent."Vietnam was the most important export market for Hong Kong's merchandise in Asean," with its exports to Vietnam amounted to $7.4 billion, an increase of 11 per cent, he said.Meanwhile, import to Hong Kong from Vietnam reached $5.7 billion, up 12 per cent over the same period last year.Bilateral trade had been fruitful for many years, he said, adding that he hopes Viet-namese companies "make more use" of the Hong Kong platform to further promote their businesses in the local market as well as the international market.Chau also encouraged Vietnamese firms to participate in fairs organised by the council as exhibitors, which is a great chance for them to introduce their products and services to other countries.Last year, more than 38,000 exhibitors from 88 countries and regions as well as nearly 770,000 buyers from 200 countries and regions visited more than 30 of the Hong Kong council's trade fairs, he said.However, only 40 exhibitors from Vietnam joined fairs, while the figure was more than 500 from Thailand and over 1,000 from Japan, he said.Tina Phan, director of Indochina at HKTDC, said Vietnam was the producer and ex-porter of many fruits and vegetables, garments, handicrafts, and other products. Therefore, exhibitions on food, house-wares, or gifts are very suitable for Vietnamese firms to promote their products to international buyers.Many international buyers had increasingly sought goods from Vietnam through the council's fairs, she said."Leveraging on our advantages, Vietnamese companies can expand businesses into the Chinese mainland and the world," Chau said.Chau said HKTDC and the Vietnam Trade Promotion Agency on November 16 signed a memorandum of understanding for cooperation on trade promotion.Under the MoU, the two sides will cooperate in exchanging market information so that companies in Hong Kong and Vietnam can know the market situation better, organise trade missions and capacity training programmes, encourage Vietnamese companies to utilise digital channels such as its www.hktdc.com in business transaction, and to participate in HKTDC trade fairs to tap into the Hong Kong and world markets, he said.In addition, the Asean-Hong Kong Free Trade Agreement, which was signed on No-vember 12 and is expected to come into effect in January 2019, would further increase trade in goods, services, and investment between Asean countries and Hong Kong, as well as trade between Vietnam and Hong Kong in particular, he added.http://vietnamnews.vn/economy/417808/vn-firms-urged-to-trade-with-hk.html#T53lqCEWGELzDZx9.97

Mekong Agriculture Technology Challenge programme starts


The Mekong Agriculture Technology Challenge (MATch) was launched in HCM City on Thursday, aiming to support agricultural start-ups for the Mekong region's agricul-ture to be turned into a more competitive and sustainable industry.MATch is the latest in a series of innovation accelerators by the Mekong Business Ini-tiative (MBI) with funding and support from the Australian government and the Asian Development Bank.Phan Vinh Quang, deputy director of MBI, said agricultural technology start-ups and global agricultural solution providers, can join MATCh to help transform the Mekong


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region's agriculture industry into a leading global supplier of safe and nutritious food.The programme includes two challenges the MATch Startup Accelerator and the MATch Market Access Accelerator. The first is aimed at innovative early stage agritech start-ups and traditional agriculture businesses with new, scalable business models in Cambodia, Laos, Myanmar and Vietnam.The second challenge will help mature international agritech companies expand into the Mekong region. Participants will receive mentorship and assistance with their ex-pansion plans including product adaptation, and help forge relationships with part-ners and investors in the region.The competition offers awards and prizes worth $200,000 in total, provided via tech-nical support and service provision. Award winners will also be introduced to and re-ceive finance from strategic investors.The winners will also be invited to present their solutions at the Greater Mekong Sub-region Summit in Hanoi in 2018 and to participate in the Future Food Asia Award Competition held in Singapore.The programme accepts online applications at www.match.mekongbiz.org until the end of December.vietnamnews.vn/economy/417771/mekong-agriculture-technology-challenge-pro-gramme-starts.html#v3tvKBcZmO4BOYf9.97

Da Nang property surges after Apec


The prolonged international focus on Da Nang as the host of this year's Apec Summit has boosted the city's brand value, and the local real estate sector will benefit accord-ingly, experts say.In its survey of the central city, property consultancy firm Savills Vietnam said the al-ready strong tourism growth would get a further boost, and its warm climate, golden beaches and rich culture would draw more visitors to its resorts and hotels.The report said the city had seen a first half GDP growth of 8.1 per cent year-on-year,. Foreign direct investment increased year-on-year by a stunning 269.5 per cent with about $14.3 million disbursed. Credit growth in the first half reached a six-year high of 7.5 per cent. The hospitality boom continues as more international and domestic flights are added and major hospitality brands jostle to enter the market.Tourism is a driving force for the city economy. Visitors increased by 72.2 per cent to more than 1.2 million in the first six months this year, with total Vietnam visitor num-bers up by about 33.2 per cent to 3.2 million.The opening of infrastructure projects for the Apec summit, including airport expan-sion and the Dien Bien Phu-Nguyen Tri Phuong road tunnel. will service future growth. Rapid expansion of resort projects along the entire coast gives Da Nang world class capacity to service northern Asian markets, the report said.It added that, to the south, the recently completed Cua Dai bridge in Hoi An allowed further expansion and with the $4 billion casino, golf and entertainment complex at Hoiana well underway, the city's attraction was likely to increase. The golf coast con-tinues to grow in popularity. The existing four courses are already well patronised..Nguyen Thi Kim, owner of the Thien Kim Real Estate transaction centre in Da Nang, predicted a surge in the retail segment of the property market after the Apec meeting."There are busy transactions of small hotels and apartment projects in the city while big property developers are likely to flock to the city seeking investment chances in large resorts and apartments," she told Vietnam News.The sales are likely to increase as small investors speculate on a surge. More investors from Hanoi and HCM City are likely to go to Da Nang to test the market. If they do well, they are predicted to pour more money into big projects."There is a slight change in small and little projects. Investors are develeoping enter-tainment and resort projects in coastal areas in Dien Nam-Dien Ngc near Hoi An city, including Cocobay, Sheraton, Vinacapital.Kim said some investors still hesitated to pour money into big transaction as they wait-ed for official reports on the inflation rate and finance from state agencies


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The Savills report said the real estate market would continue to remain robust, despite the likely demise of the Trans-Pacific Partnershi, adding that the Regional Comprehen-sive Economic Partnership (RCEP), involving China, as well as membership of Asean and the Vietnam-EU Free Trade Agreement, would be important drivers for continued investment.The report said that there was considerable interest from foreign investors, given the nation's strong GDP growth, a relatively stable currency, young demographic, rapid urbanisation, as well as rapid growth in the domestic consumer market driven by one of the fastest growing middle classes anywhere in the world.This interest is fuelling investment across all real estate sectors from industrial to office and residential to retail. In addition, the rapid growth in tourism arrivals, both foreign and domestic, is creating a boom in the hospitality sector.While interest remains strong from Japan, Korea, Singapore and increasingly, China, foreign investors still find it challenging to identify quality real estate investments with clear ownership. The report said transactions involving operating assets would remain scarce and that most would involve development projects. Many foreign de-velopers sought to secure long term partnerships with local counterparts.According to Pham Thai Binh, head of the retail department at Savills HCM City office, said Da Nang and central Vietnam were yet to become a booming market because local spending habits were thrifty and young people hesitated to shop for luxury brands.Despite the introduction of luxury malls like Vincom and Parkson, they serve more as entertainment and cuisine centres rather than shopping centres, he said.Da Nang is yet to be identified as a key market in the development plans by luxurious fashion brands like Zara, H&M, Uniqlo, but in the next five years, the central city could be a favoured shopping centre, when the two major markets of Hanoi and HCM City are saturated, Binh said.He said Le Duan Street, a popular shopping hub, would continue tobe a major desti-nation for retail and shopping investors..According to Savills, Da Nang will become a magnet for a series of fast-food brands, including McDonalds, Phuc Long, Lotteria and Kentucky.http://english.vietnamnet.vn/fms/business/190550/da-nang-property-surges-after-apec.html

Strong industry, trade sectors account for 33pct of HCM City's GRDP


HCM City's industry and trade sectors were among the leading, the city's Department of Industry and Trade, said on Wednesday.Compared with 2016, the index of industrial production (IIP) this year is expected to increase by nearly 8.5 per cent; turnover from retail goods and consumer services by 10.9 per cent; and export turnover by 15.1 per cent.Industry and trade reached added value of around VND356 trillion (US$15.8 billion), accounting for 33.6 per cent of the city's GRDP."The breakthrough growth of four key industries food processing, chemistry-rubber engineering, electronics and information technology saw significant achievements with IIP 1.83 times higher than that of national industry," Pham Thanh Kien, director of the department, said."Infrastructure for modern trade included an additional 18 supermarkets, three shop-ping malls, and 218 convenience shops compared with 2016. There was remarkable growth of online trade, which contributed to commodity retail and consumer service turnover," he added.City authorities have launched many support policies for enterprises. Enterprises in the industry and supporting sectors can now borrow capital of up to VND200 billion ($8.9 million) per project, with preferential-loan interest periods lasting seven years.This year, the city organised 35 trade promotion campaigns by connecting internation-al retail groups with local producers and helping enterprises expand market share in neighbouring provinces and international markets.Rapid establishment of new enterprises, with nearly 330,000 this year, an increase of


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8.45 per cent, also contributed to growth.However, most of the new enterprises were micro and small-sized companies, which have difficulty accessing preferential capital from the government and banks.The supporting industry has gained initial achievements, but is not strong enough to meet material demand for local producers."In the coming time, the trade and industry department will promote trade focusing on key markets with trade surpluses with Vietnam of over $1 billion, like China, South Korea, Singapore, Taiwan and Thailand," Kien added."We will focus on policies to help supporting enterprises so they can take advantage of free trade agreements, and develop technical barriers to minimise any negative im-pact from such agreements," he added.Economists have said that HCM City must identify its export advantages and focus all resources to promote key export industries like electronics, computers, software and digital content and services.http://bizhub.vn/news/strong-industry-trade-sectors-account-for-33-of-hcmcs-grdp_290190.html

HCM City steps up cooperation with IFC


HCM City is committed to creating favourable conditions for the International Finance Corporation (IFC) to carry out joint projects based on current laws, stated Le Thanh Liem, vice Chair of the municipal People's Committee.Liem made the statement at a reception for Kyle F.Kelhofer, IFC Senior Country man-ager for Vietnam, Laos and Cambodia, in the southern city on November 17.While affirming that the IFC's financial assistance and investment mobilisation have contributed significantly to the city's development, Liem asked for further support from the IFC, particularly in attracting, managing and effectively using foreign invest-ments.For his part, Kelhofer said the IFC wants to assist HCM City in seeking and luring cap-ital from investors and international financial partners for the city's infrastructure de-velopment.He noted that cooperation programmes with the IFC could enable the southern eco-nomic hub to access diverse sources of funding with low interest rates.Kelhofer told his host that the IFC is willing to share experiences with the city on how to effectively attract, manage and use foreign capital, and provide technical support to help the city carry out public-private partnership (PPP) projects.At the working session, both sides agreed to boost relevant studies in a bid to soon turn their bilateral cooperation plans into practical and feasible projects.The IFC, a member of the World Bank Group, has operated in Vietnam since 1994. It has so far mobilised $5.6 billion to fund 123 projects in infrastructure development, ag-riculture, renewable energy and banking in the country.http://english.vov.vn/economy/hcm-city-steps-up-cooperation-with-ifc-362787.vov

Industry, trade sector see strong growth in HCM City


HCM City's industry and trade sectors were among the leading, the city's Department of Industry and Trade, said on November 15.Compared with 2016, the index of industrial production (IIP) this year is expected to increase by nearly 8.5 percent; turnover from retail goods and consumer services by 10.9 percent; and export turnover by 15.1 percent.Industry and trade reached added value of around VND356 trillion (US$15.8 billion), accounting for 33.6 percent of the city's GRDP."The breakthrough growth of four key industriesfood processing, chemistry-rubber engineering, electronics and information technologysaw significant achievements with IIP 1.83 times higher than that of national industry," Pham Thanh Kien, director of the department, said."Infrastructure for modern trade included an additional 18 supermarkets, three shop-ping malls, and 218 convenience shops compared with 2016. There was remarkable


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growth of online trade, which contributed to commodity retail and consumer service turnover," he added.City authorities have launched many support policies for enterprises. Enterprises in the industry and supporting sectors can now borrow capital of up to VND200 billion (US$8.9 million) per project, with preferential-loan interest periods lasting seven years.This year, the city organised 35 trade promotion campaigns by connecting internation-al retail groups with local producers and helping enterprises expand market share in neighbouring provinces and international markets.Rapid establishment of new enterprises, with nearly 330,000 this year, an increase of 8.45 percent, also contributed to growth.However, most of the new enterprises were micro and small-sized companies, which have difficulty accessing preferential capital from the government and banks.The supporting industry has gained initial achievements, but is not strong enough to meet material demand for local producers."In the coming time, the trade and industry department will promote trade focusing on key markets with trade surpluses with Vietnam of over $1 billion, like China, the Republic of Korea, Singapore, Taiwan (China) and Thailand," Kien added."We will focus on policies to help supporting enterprises so they can take advantage of free trade agreements, and develop technical barriers to minimise any negative im-pact from such agreements," he added.Economists have said that HCM City must identify its export advantages and focus all resources to promote key export industries like electronics, computers, software and digital content and services.http://english.vov.vn/economy/industry-trade-sector-see-strong-growth-in-hcm-city-362761.vov

Companies pledge VND40 billion for local tourism publicity


Eight major tourism companies have pledged VND40 billion (US$1.7 million) to carry out promotion and advertising campaigns for the tourism sector.Ngo Minh Duc, chair of HG Group, said the eight companies include HG Group, Thien Minh Group, Muong Thanh Corporation, Vingroup, Saigontourist Holding Company, Sun Group, Vietnam Airlines, and Hanoi Tourism.Each company agrees to contribute VND5 billion in a bid to improve Vietnamese tour-ism promotions at two large tourism fairs ITB Berlin in Germany and World Travel Market in the United Kingdom, and set up a tourism promotion website in English at http://vietnamtourism.vn/. The two activities will be implemented in three years until 2020."We will not carry out destination promotion activities on behalf of the government, but only offer support, as management agencies lack finances to carry out activities ef-fectively. Once the tourism sector has a larger fund to organise activities, our pro-gramme will come to an end," he said.HG Group, Thien Minh Group, Muong Thanh Corporation, and Vingroup have al-ready done their part. Other companies are encouraged to join to raise the total to VND70-80 billion, according to him.They are unanimous in choosing a company specialising in tourism consultancy to do publicity campaigns.In a related development, the Ministry of Culture, Sports and Tourism is gathering opinions for a draft on the organisational charter and operation of the Tourism Devel-opment Assistance Fund.This is a financial fund beyond the scope of the State budget which has functions to manage and coordinate financial resources for tourism promotion activities. It has chartered capital of VND300 billion (US$13.2 million).http://english.thesaigontimes.vn/57108/Companies-pledge-VND40 billion-for-local-tourism-publicity.html


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Japanese backs Da Nang tourism


The Mikazuki hotel Group from Japan will spend more than $100 million to build a water park and five-star hotel on the beach of Da Nang the biggest investment in tour-ism property from Japan iin the city.The project, which will cover 13ha, will include a 5ha water park, and a five-star hotel with 280 rooms on Da Nang Bay.It is the biggest foreign investment in tourism property in the city this year.Earlier, the Route Inn Group from Japan launched a four-star hotel project, the Grand-vrio Da Nang City. It is the first of a chain of 50 hotels in the country.Japan is the second largest investor in Da Nang with 134 projects worth $598 million.The city has hosted 5.1 million tourists, of which 1.76 million were foreigners, in the first nine months this year. The number of Japanese visitors has trebled in recent years..Japanese projects create 40,000 jobs for the city and neighbouring provinces.The city has also reserved a 134ha industrial park for medium and small-size business-es from Japan.Tourist real estate remains a favourite investment magnet in this central city, attracting 25 foreign direct investment (FDI) projects worth $1.8 billion or 54 per cent of total FDI capital in the city.The city has so far developed 16 tourist property projects consisting of 749 villas, of which 609 are for sale and 140 for lease.http://bizhub.vn/property/japanese-backs-da-nang-tourism_290199.html

Vietnam trade fair begins in Cambodia


The Vietnam Trade Fair 2017 opened in Phnom Penh, the capital city of Cambodia, on November 18, drawing more than 150 businesses of Vietnam and Cambodia.The event, the eighth edition, was co-organised by the Defence Ministry and Industry and trade ministry of Vietnam and the Defence Ministry and Commerce Ministry of Cambodia.It will run till November 22, with over 230 booths, covering an area of about 10,000 square metres. A forum to bolster VietnamCambodia trade and investment will take place at the event, along with daily cultural performances.Speaking at the opening ceremony, Vietnamese deputy Defence minister Tran Don said Vietnam has to date launched 190 investment projects in Cambodia with total reg-istered capital worth nearly $3 billion.Meanwhile, Cambodia's investment in Vietnam is also on the rise, with 18 projects cap-italising at over $58 million.Two-way trade hit $3 billion per year and the two countries are striving to raise the fig-ure to $5 billion in upcoming years.The fair is an important political event that fosters the friendship between the two na-tions. It also offers opportunities for Vietnamese firms to enhance cooperation with their Cambodian counterparts and explore new markets, thus boosting export to Asean member countries and Cambodia in particular, Don added.For his part, Cambodian Secretary of State for Commerce Ok Boung said the event aims to consolidate and develop the traditional and comprehensive partnership be-tween the two countries, celebrating the 50th founding anniversary of the diplomatic relations and the Vietnam Cambodia Friendship Year 2017.The Cambodian officials voiced his hope that the fair will enhance business connection of the two countries as various contracts will be inked. He affirmed that the two sides will continue working in creating optimal conditions for business links for mutual in-terests.http://english.vov.vn/economy/vietnam-trade-fair-begins-in-cambodia-362828.vov

Vietnam Expo 2017 promotes new products for 2018


The 15th Vietnam International Trade Fair (Vietnam Expo 2017) on December 6-9 in HCM City will see the introduction of new products that will hit the market in 2018.


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According to the Vietnam National Trade Fair & Advertising Company (Vinexad), participating companies want to introduce their new items for 2018 with the aim of seeking customers' feedback for evaluating the market's demand.The expo, held by the Vinexad, continues to be an important bridge to connect Viet-namese and foreign enterprises, allowing them to meet and exchange views on busi-ness cooperation.It is also a destination where policy makers can update latest waves of market and pro-ducer can popularise their trademarks as well as expand consumption market net-work.This year event will feature 800 booths displaying products in the fields of electronic devices and products, hardware products and hand tools, construction materials and household products-consumer goods.The organising board has received 860 registrations through website and fanpage so far, including those from the UK, the US, the United Arab Emirates, Turkey, Russia, Slovakia, Belarus and Asian countries.A line-up of talks and trade exchange conference will be held in the framework of the event.According to the organising board, some 320 enterprises attended the 2015 event while the number increased to 520 in 2016 and is expected at 750 in 2017.http://english.vov.vn/economy/vietnam-expo-2017-promotes-new-products-for-2018-362759.vov

Vietnam gets ready to celebrate 20 years of internet


The Vietnam Internet Forum 2017 (VIF17) will take place at the Hanoi Museum on No-vember 27-28.VIF17, themed 'Digital For Good', will discuss the contribution of the internet to a cre-ative, sustainable and open society through e-governance, open data, smart cities and social network development.Inspired by the Stockholm Internet Forum which took place in May, the event in Hanoi takes place at the time of the twentieth anniversary of the internet arriving in Vietnam (1997-2017).The event is hosted by the Embassy of Sweden in Hanoi and Vietnamese Ministry of Information and Communication, along with partners such as Lund University, Viet-nam Internet Association, United Nations Development Programme and United Na-tions Educational and Scientific and Cultural Organisation.In addition, the Vietnam Internet Association will also hold the Internet Day 2017 and anniversary ceremony marking 20 years of internet in Vietnam at JW Marriott Hanoi hotel on November 22.At the ceremony, individuals and enterprises, which have contributed to the develop-ment of the internet in Vietnam in the past 10 years will be announced.Also, the 'Chatbot 2017' contest will be launched, aiming to connect the start-up com-munity and young programmers.The event is expected to be a special occasion to look back on the internet's develop-ment in Vietnam, while giving suggestions to further promote the development of the internet in Vietnam to bring prosperity to the nation in the future.vietnamnews.vn/economy/417794/viet-nam-gets-ready-to-celebrate-20-years-of-in-ternet.html#2etehu7oA8IwMy0V.97

Management of product origin to be enhanced


The general Department of Customs has ordered the management of origin and labels of imported products to be enhanced.The move comes in the wake of a probe into Khaisilk's trade fraud of selling "Made-in-China" products under the Vietnamese brand, which caused a stir.Accordingly, customs departments across the country must enhance their manage-ment of product origin and labels following the government's Decree 19 on product or-igin, Decree 43 on labeling and Ministry of Finance's Circular 38 on customs


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management procedures.Special attention must be paid to Vietnamese companies' products that were produced abroad and then imported into the country.All violations must be reported to the general Department of Customs.According to current regulations, organisations and individuals placing goods in cir-culation must be in charge of labeling, and the labels must provide clear and accurate product information.The Khaisilk fraud was uncovered more than a week ago when a company which bought Khaisilk-branded scarves at a Khaisilk store on Hang Gai shop in Hanoi found one scarf with two tags one with "Khaisilk Made in Vietnam" and the other with "Made in China."Hoang Khai, chair of the group which is considered a top Vietnamese silk brand, later admitted that the scarves were actually imported from China.On November 4, deputy prime minister Truong Hoa Binh asked the Ministry of Indus-try and Trade in coordination with relevant ministries to clarify violations of Khaisilk and report the findings before December 15.Customs' statistics showed that imports of silk products from China were worth $1.2 million in the first nine months of this year, while the figures were $2.3 million in 2016 and $4 million in 2015. From 2015 to September 2017, Vietnam imported more than 8,800 silk scarves from China, worth some $35,800.In another development, the Hanoi Department of Taxation recently reported on the tax payments of Khaisilk's store on Hang Gai Street.Accordingly, the store, which is owned by Nguyen Thu Nga and began selling silk products from January 2004, earned revenue of VND14 billion in the January-Septem-ber period and paid tax of more than VND200 million for the period.The company earned VND15.6 billion in 2015 and VND16.11 billion in 2016 as reve-nue, and paid taxes worth VND234 million and VND241 million, respectively.The tax department said that the store was not in arrears of taxes.Earlier, the general Department of Taxation had asked the municipal tax department to report on the performance of tax payment of Khaisilk Group and its stores in Hanoi.http://english.vov.vn/economy/management-of-product-origin-to-be-enhanced-362786.vov

Sales & Marketing Camp 2017 officially opens in HCM City


Over 1,000 leaders, directors, senior managers as well as sales and marketing staff and students this morning participated in Vietnam Sales & Marketing Camp 2017 themed "Digital Transformation" in HCM City to study and improve their knowledge.Being the largest event in the sales and marketing sector co-organised by chair of the directors of Sales & Marketing Club Vietnam (CSMO Vietnam) and Le Bros, Vietnam Sales & Marketing Camp 2017 aims to help participants to update on new trends, while simultaneously expand their relationship network to develop their careers and ex-change experiences."The digital transformation and the 4.0 Industrial Revolution have brought about dy-namically changing operation trends, shifting the position of enterprises in the sales and marketing and communication sectors. We hope that the event will help partici-pants understand better the power of digital solutions and then apply them in reality and find new ways to develop their enterprises," said Bui Quy Phong, deputy chair of CSMO in the north.In the framework of the two-day event (November 17-18), 45 speakers from leading groups will hold presentations on 10 key topics and discussions to share knowledge and new trends, as well as the compulsory creativities in order to maintain their oper-ations in the sales and marketing sector.Notably, the programme organised today is for everyone interested in the communi-cations, sales, and marketing sector. CSMO Summit organised tomorrow is for senior managers with discussions of management and human resources and job opportuni-ties, as well as the agency-client relationship.


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Dung Quat EZ attracts more than $11 million investment


Six businesses from the Republic of Korea have been granted licences to invest in Dung Quat Economic Zone in the central province of Quang Ngai.Tran Ngoc Cang, chair of Quang Ngai Provincial People's Committee, and represent-atives of the managing board of Dung Quat Economic Zone handed over investment licences to the six businesses at the headquarters of Doosan Heavy Industries & Con-struction Co., Ltd in Busan during their recent working visit to the ROK.This was part of the trade and investment promotion activities of Quang Ngai prov-ince in the ROK, supported by Doosan Vina.Six businesses will pour more than $11 million into projects covering 65,022 sq m in Binh Thuan commune, Binh Son district, Quang Ngai province.Yoen In Jung, Doosan Vina CEO, said that since it established operations in Vietnam, Doosan Vina has always stood side by side with Quang Ngai province in investment attraction. It serves as a bridge to bring more Korean investors to the province.At a working session with Doosan, Cang said Doosan Vina was the first FDI project in Quang Ngai. After 11 years of operation, the company has contributed to changing the provincial GDP structure, increasing budget collection, and creating jobs for 2,500 direct workers and more than 1,000 indirect labourers.http://english.vov.vn/investment/dung-quat-ez-attracts-more-than-us11 million-in-vestment-362807.vov

Stripe International's ambition to redraw Vietnamese fashion map


Japan-based fashion apparel retailer Stripe International Inc. remains hungry after ac-quiring NEM Fashion and is now planning to seize other apparel brands in Vietnam to expand faster.NEM's confidenceNEM Fashion was established in 2002 and has since become one of ladies' favourite fashion brands, with trendy designs inspired by French fashion. NEM's popularity is due to the luxurious and convenient location of its retail outlets.NEM Fashion operates over 40 retail outlets with nearly half in Hanoi and HCM City, with factories covering the whole country. The company's revenue increases by 20 per-cent per year so far due to constant store openings, and is expected to hit $26 million this year.Based on these assets, NEM was not overly worried when Zara and H&M came to Vi-etnam last year. NEM's representative assessed that these brands are a good fit with Vietnamese consumers' taste and carry big foreign brand names, although their qual-ity may not be as good as domestic brands.The representative said that Vietnamese customers are not usually loyal to a single brand, they find and buy the products they like. "If they could catch their psychology, domestic fashion companies will keep up the trend and continuously provide new products," he said.Every month, NEM releases over 500 designs across the palette, from cocktail dresses to regular clothing. They are always highly appreciated for their trendy colours, style, and materials, becoming the centre of the Vietnam fashion market.Stripe International's ambitionDuring last week, the negotiations between NEM and Stripe International Inc., a Ja-pan-based fashion apparel retailer, over the acquisition went viral on almost every newspaper. Detailed information is still forthcoming, however.Stripe International set up Hanoi-based subsidiary Stripe Vietnam JSC in September 2017. The company is located at 545 Nguyen Van Cu (Long Bien district) and carries VND175 billion (US$7.7 billion) of chartered capital. Setting up the subsidiary was part of the plan to take over the apparel business assets of NEM Fashion.However, news on Stripe International's website show that NEM Fashion was already acquired Stripe Vietnam in October. After the acquisition, Yasuharu Ishikawa is both Stripe International's chair and Stripe Vietnam's CEO.Yasuharu Ishikawa said that acquiring NEM Fashion is the first step in Stripe Interna-


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tional's plan to break into the Vietnamese market. They confirmed expanding business operations in the mid- and long term alike, concentrating on the Asean market, where Vietnam is one of the most important markets due to its potential from the large pop-ulation and economic growth.With more than 20 years in the apparel sector and owning many fashion brands, Stripe International's ambition is to become a global multi-sector corporation. Ishikawa con-firmed intentions to continuously develop towards this goal.Business analysts said that Stripe International will not only acquire NEM Fashion, but also other apparel companies to expand its business.http://english.vov.vn/investment/stripe-internationals-ambition-to-redraw-vietnam-ese-fashion-map-362836.vov

Jardine Matheson firm builds up over $900 million stake in Vinamilk

20/NOV/2017 INTELLASIA| TUOITRE NEWS

A Jardine Matheson company has built up an 8 percent stake worth $911.5 million in Vinamilk, Vietnam's biggest-listed company, highlighting a strong interest from for-eign groups to expand in one of Asia's fastest-growing economies.Singapore-listed Jardine Cycle & Carriage Ltd (JC&C) on Thursday said one of its wholly-owned units had bought an additional 36 million shares in Vinamilk, just days after it paid $616.6 million for a 5.53 percent stake in the dairy firm.The sale comes amid Vietnam's broader effort to trim its stakes in state-owned firms, including the country's biggest brewer Sabeco, Vietnam Airlines and Habeco, many of which have low profitability.But progress has been slow, given the small sizes offered, sizeable state control and concerns about vested interests.A Vinamilk stake sale in 2016 drew in only one buyer, but last week's sale saw high demand from 19 investors in Vietnam and overseas after the state investor removed some of the restrictions applied to the earlier sale.JC&C's previous purchase of Vinamilk stock was made through the open market and an auction by the State Capital Investment Commission of Vietnam, the largest share-holder in the dairy firm. The latest purchases were made via on-market deals only.The unit is now Vinamilk's No.2 foreign shareholder, after the 16 percent stake control-led by Fraser & Neave Ltd, a group backed by Thai tycoon Charoen Sirivadhanabhak-di.JC&C is part of Hong-Kong based Jardine Matheson, one of Asia's biggest conglomer-ates which has interests in luxury hotels, motor vehicles, property, food retailing, transport financial services and agribusiness.Officials at the Ho Chi Minh stock exchange did not provide further details on the lat-est purchase.Vinamilk shares rose as much as 1.2 percent to 184,000 dong a share ($8.11 each) on Thursday. ($1 = 22,701 dong)https://tuoitrenews.vn/news/business/20171118/jardine-matheson-firm-builds-up-over-900 million-stake-in-vinamilk/42715.html

Finnish firm pours over $33 million into clean energy project in Hanoi


Kimmo Tuppurainen, sales director for Southeast Asia for Watrec, said his company has launched a clean energy project worth euro 30 million (more than $33 million) in Hanoi.The waste-to-energy project is designed to treat some 600 tonnes of waste per day, he said.It aims to collect, classify and convert urban solid waste into biogas and other materials to produce electricity, he added.Watrec is negotiating with partners to arrange capital for the project.Watrec is a leading biogas technology company in Finland, which treats 31,500 tonnes of organic waste each year.The waste-to-energy project in Hanoi is intended to manage mixed waste without clas-sification and treat urban solid waste, Tuppurainen noted.


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Saku Liuksia, Finpro's programme manager of waste-to-energy and bioenergy, said Vietnam has a lot of potential to develop clean energy projects from urban waste and agro-forestry waste products.FinPro has focused on converting waste into energy and bioenergy in Vietnam for about two years, so it understands the country's challenges and potential, he said.In fact, many Finnish businesses have invested in this sphere in Vietnam and made progress.The Doranova company is building a landfill treatment factory worth euro 6 million (US$7 million) on the outskirts of HCM City, aiming to convert 35,000 tonnes of waste into energy.A year ago, Doranova was one of the Finnish enterprises to carry out a waste-to-energy project in the southern province of Binh Duong.Matti Miinalainen, Valmet's director for Asia Pacific & China, said Vietnam is a prior-ity investment destination for Valmet.He suggested defining the feasibility of projects and introducing new technologies to customers.A representative from FinPro said Finnish businesses will work with Vietnamese com-panies and transfer technology to local firms.http://english.vov.vn/investment/finnish-firm-pours-over-us33 million-into-clean-en-ergy-project-in-hanoi-362750.vov

Company to build factory to increase chicken exports


The Koyu & Unitek Company, based in the southern province of Dong Nai, plans to develop a second chicken processing factory to meet the demand for chicken products of the Japanese market.The second factory, worth $20 million, is expected to produce some 550 tonnes of proc-essed chicken each month once operational in 2019. It will enable the company to ex-port about 1,000 tonnes of products to Japan.The company's first factory in the province's Long Binh Industrial Zone has a monthly capacity of 350 tonnes, but it is yet to declare the location of its second plant, where construction will begin in 2018.Koyu & Unitek, a joint venture between Australia and Japan, started exporting chicken products to Japan in September, after receiving approval from Japanese authorities in June. The firm has currently shipped four containers of products to Japan.James Hieu, general director of Koyu & Unitek, said that Vietnamese chicken products are favoured by many Japanese consumers."Our goal is to bring Vietnamese chicken products into supermarkets in Japan. How-ever, due to insufficient quantities, these products are only being distributed to restau-rants and hotels over there," he said.Apart from Japan, the company is exploring new export opportunities in other South-east Asian countries, Hieu added.Koyu & Unitek is a member of a supply chain that operates in the animal breeding and feed industry. Other three members of the chain are Bel Ga JSC, a joint venture of the Belgian Belgabroed Group and the Netherlands-based De Heus, as well as the Hung Nhon Group and De Heus.http://english.vov.vn/investment/company-to-build-factory-to-increase-chicken-ex-ports-362860.vov

Debt-ridden firm resumes mammoth theme park construction in southern Vietnam

20/NOV/2017 INTELLASIA| TUOITRE NEWS

The developer of the project has just paid VND1 billion (US$44,077) out of VND800 bil-lion ($35.1 million) stated in distraint documentsThe construction of several sections at a theme park whose developer is mired in debt has been reinitiated in southern Vietnam, despite a distraint order imposed on the project several months ago.The Happyland entertainment complex project, located in Ben Luc District, Long An Province, has continued again after a long hiatus, Phu An Investment, Construction,


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and Infrastructure Development JSC, under the management of Khang Thong Group, which is the developer of theme park, said in a press release on Saturday.The firm is set to go on with the construction of a five-star hotel, along with resort and entertainment components at the venue.Nguyen Anh Diep, communication director of Khang Thong Group, told Tuoi Tre (Youth) newspaper that these facilities are included in the original design of the park, which had been approved by local authorities.The primary partner for the construction is Vina Oscar Hotel group, Diep added.Vina Oscar Hotel signed a deal with Khang Thong in July to purchase 88 percent of a 305ha area within Happyland at $668 million."We will complete the payment stated in the distraint documents to focus on imple-menting the project," Diep said.The Long An People's Committee previously confirmed that a distraint order had been given to the Happyland entertainment complex in May, with total assets estimated at VND800 billion ($35.1 million).According to Nguyen Van Gau, head of the provincial Department of Civil Judgment Enforcement, Phu An JSC has only paid VND1 billion ($44,077) so far.As per regulations, the firm is not allowed to change the status quo of the project under distraint, Gau said.Officers from the department have been tasked with verifying the information regard-ing the resumption of construction at Happyland and checking whether the project's status quo has been altered, the official added.The construction of Happyland was first initiated in 2011, with Phu An Company an-nouncing that it would be Southeast Asia's largest entertainment complex upon com-pletion in 2014. The original investment was estimated at $2.2 billion.Covering a total of 350ha, the park stretches 3.7 kilometers along the Vam Co Tay Riv-er, expected to include a variety of features, namely a hot air balloon, a wine castle, Vi-etnamese-themed villages, studios, an ancient town, a toy city, and a five-star hotel.However, Happyland has yet to be opened to visitors at the moment, while many fa-cilities have not been completed.In February 2015, the HCM City office of the Vietnam International Arbitration centre ruled that Phu An had to pay over $5.125 million to a Russian company.The firm also owes more than VND674 billion ($26.6 million) to several other business-es.https://tuoitrenews.vn/news/business/20171119/debtridden-firm-resumes-mammoth-theme-park-construction-in-southern-vietnam/42730.html

Local firms may not be qualified as major suppliers of Walmart

20/NOV/2017 INTELLASIA| SGT

Vietnamese food enterprises may not be qualified as major suppliers of US multina-tional retailer Walmart because of their small scale, but they may be its smaller provid-ers, said Jocelyn Tran, senior director for Walmart Global Sourcing in Southeast Asia, at a conference on the local food industry.The conference on improvement of the food value chain was held in HCM City yester-day on the sidelines of Vietnam Foodexpo 2017.Tran cited the regulation of Walmart as saying that small suppliers should have annual revenue of $2.5 million, and revenue from supplies for Walmart should be less than $100,000 a year.She said if local companies want to cooperate with the retail giant, they must submit their audit reports to either Intertek, a UK-based total quality assurance provider, or third-party audits. Then, Walmart will assess their reports before giving its final say.She added these enterprises should also follow good customer service principles such as respecting their customers, complying with prevailing regulations, and ensuring transparency. Besides, they should obtain global food safety initiative (GFSI) certifica-tion.Also at the conference, some experts and corporate representatives called attention to the issue of branding among local companies. Some expressed their regret over the fact


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that more than 80 percent of Vietnam's goods for export do not have brands while the brand value is the prestige of each country.Leon Trujillo, a branding and marketing expert, said Vietnam has become a hub for food production, but many Vietnamese brands are not popular.He quoted a recent report of Brand Finance, a London-based brand valuation and strategy consultancy, as saying that Vietnamese brands are worth $203 billion, a stag-gering rise of 40 percent against 2016, but the figure is still modest compared to other regional countries.Nguyen Phong, director of Eatuhoney Co Ltd in the Central Highlands province of Dak Lak, told the conference that his company has shipped a large amount of honey to the US through an intermediary, so his products do not bear the brand "Eatuhoney.""Vietnam exports around 200,000 tonnes of honey a year, but the number of Vietnam-ese brands (in the sector) is insignificant. This is the pain of businesspeople," he said.Within the framework of the conference was a commercial transaction programme be-tween local enterprises and importers from China, Japan, France, Italy and the US. Prominent names there included Vietnam's Vinmart and Satra, South Korea's CJ and Lottle, Thailand's Central Group, and Walmart.As many as 300 local food processors are expected to cut deals with their potential partners on the spot, opening up opportunities to supply goods to major food distrib-utors at home and abroad, and expanding food and foodstuff supply chains.http://english.vietnamnet.vn/fms/business/190584/local-firms-may-not-be-qualified-as-major-suppliers-of-walmart.html

Sao Ta Foods becomes Ben Tre Aquaproduct affiliate


Ben Tre Aquaproduct Import and Export JSC (ABT) has completed the purchase of nearly 7.84 million shares, equal to 20.1 per cent of voting rights in Sao Ta Foods JSC (FMC), making the latter an affiliate company of Ben Tre Aquaproduct.The company made the announcement on the HCM Stock Exchange on Thursday.Ben Tre Aquaproduct is a subsidiary of PAN Group which holds 72.82 per cent of its capital.Earlier, Hung Vuong Corp (HVG) decided to offload its entire holding of 21.128 mil-lion shares equivalent to 54.28 per cent of Sao Ta Foods' capital to streamline its busi-ness in the context of declining performance and heavy interest burdens.SSI Asset Management Co Ltd on Monday also bought more than 7.72 million shares of Sao Ta Foods, lifting its ownership to 19.97 per cent of voting rights.Sao Ta Foods is one of the three biggest shrimp exporters in Vietnam. The shrimp ex-porter reported its best-ever result with estimated pre-tax profit of VN125 billion (US$5.5 million) in the fiscal year 2016-17, an increase of 25 per cent over the yearly tar-get and up 60 per cent year-on-year.The company's shares are trading at about VN22,000 per share on the HCM Stock Ex-change.vietnamnews.vn/economy/417782/sao-ta-foods-becomes-ben-tre-aquaproduct-affili-ate.html#kRtXPPhUBWLoFlLq.97

Mai Linh to join hi-tech motorbike taxi game


Mai Linh Group has announced that its motorbike taxi service aiming to compete with Grab and Uber, called M.Bike, will launch on November 20.The move is yet another development in the heated taxi wars between traditional taxi firms and ride-hailing companies such as Grab and Uber.Prior to M.Bike, other local tech-driven motorbike taxi services such as VivuMoto or Tim Xe have been launched, to limited success.Explaining the reason for launching M.Bike, VTC News quoted H Huy, the group's chair, as saying that traditional taxi businesses, including Mai Linh, are facing difficul-ties by having to compete with high-tech taxi companies.But that does not mean Mai Linh would "suffer losses", the group will try to develop stronger, he said.


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Huy added that the M.Bike application was built by Vietnamese engineers. "Despite still having to learn and continue to complete, the application has partly proved the breakthrough of Vietnamese technology in the 4.0 era".The application is available for both iOS and Android operating systems.With M.Bike, Mai Linh does not invest in buying motorbikes, the application will con-nect customers with drivers, who are partners with the company instead of employees.The company's motorbike taxi service will have its own brand identity. The company will equip its drivers with costumes and helmets.Individuals under the age of 50, with driving licenses, may join the network. However, the motorbikes used must not be produced before 2014.The price of the service is reported at VN11,000 (about 50 US cents) for the first two kilometres and VN3,800 for each subsequent kilometre. For M.Bike Premium, with more luxurious motorbikes, the rates will be VN20,000 for the first two kilometres and then VN7,000 per kilometre.The price is not much different from that of UberMoto and GrabBike. GrabBike charg-es customers VN11,000 and VN12,000 for the first 2km in Hanoi and HCM City, re-spectively. The charges can change depending on market demand, location and time period during the day. Meanwhile, UberMoto charges passengers at least VN10,000 at the start for each trip and VND3,700 for the next kilometre.To attract partners, Mai Linh said that its revenue sharing policy will be at 15-85, which means that Mai Linh will receive 15 per cent of revenue from the transportation.This figure is much lower than the revenue sharing of other companies in the market, which are between 20 and 25 per cent.Notably, drivers will be free to use the Mai Linh services for the first two months.The application was also piloted before being officially introduced. "As we're joining the game late, we are very careful and listen to our customers. The application was used by the group's staff in the past two months to learn from experience and complete our services," Huy added.The service will first be implemented in Hanoi, Da Nang and HCM City then will be expanded to other locations if successful.Bui Danh Lien, Chair of the Hanoi Transport Association, was quoted by sohuutrit-ue.net.vn, as saying that his association welcomes the move, as more the businesses that enter the market, increasing competition will push down service prices for cus-tomers.On the other hand, the participation of Mai Linh in the "motorbike taxi" game also proved the sensitivity of Vietnamese enterprises, he noted.However, Lien expressed concerns for M.Bike as GrabBike is taking over the market, with even UberMoto being dominated by GrabBike."Technological motorbike taxi services are not new, so to succeed, Mai Linh must have plans to impress the market to change the habits of consumers," he said.To change the habit of customers, Lien noted that Mai Linh must have better and more professional service, with price and promotion programme, which must be more at-tractive than those of GrabBike, UberMoto.Along with that, communication and marketing strategies must also be good so that its new service can be known by consumers, he added.vietnamnews.vn/economy/417788/mai-linh-to-join-hi-tech-motorbike-taxi-game.html#xVcv0tVS0qjlozCL.97

Vingroup launches 2 new Vincom centres


The real estate developer Vingroup on Friday officially launched Vincom Plaza Tuy Hoa in the southern province of Phu Yen and Vincom+ Uong Bi in the northern prov-ince of Quang Ninh, increasing the number of Vingroup's commercial centres to 44.Vincom Plaza Tuy Hoa and Vincom + Uong Bi are covered with full retail, food, and entertainment areas marking the first appearance of Vincom in Phu Yen and Uong Bi, bringing modern consumer culture to young cities.In Phu Yen Province, Vincom Plaza Tuy Hoa has a total area of over 12.000sq.m located


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in the centre of a crowded urban area. It brings local people the utilities that first ap-peared in the province such as a CGV cinema and modern electronic entertainment zone named c Nguyen Phat. Customers also witnessed the appearance of a series of top restaurants such as King BBQ, Hotto, Lotteria, Rainbow Yogurt and other prestige brands in Vietnam and internationally such as Korean style home appliances Mini-good, Vascara shoes and bags, Triumph, IVY Moda, TNG, Aristino, PNJ and Fahasa bookstore.In Quang Ninh Province, Vincom + Uong Bi, covering an area of 4,000sq.m, will be a new shopping destination for local people and tourists with well-known brands such as TNG Fashion, Esjaco, Chingu BBQ and Lotteria. The TomKiss entertainment area, with many modern entertainment activities for children to exercise and play, will be an ideal destination for young families at the weekend.These two new shopping centres will also see some of Vingroup's retail brands, such as VinMart supermarket and the VinPro technology and electronic supermarket.Of which, VinMart provides a variety of products, from fresh food such as VinEco products applying Israeli agricultural technology, cosmetics, household appliances and consumer goods. With reasonable prices, clear origin and quality guarantee, Vin-Mart will contribute to improving the quality of life and become the daily choice of every family.In addition, VinPro offers electronic products, refrigeration, household appliances, mobile phones, and laptops from world famous brands and attractive after-sales poli-cies.On the occasion their launch, Vincom Plaza Tuy Hoa, Phu Yen and Vincom + Uong Bi are offering a series of promotions for customers.http://bizhub.vn/property/vingroup-launches-2-new-vincom-centres_290200.html

VNPAY & Thang Long Transport sign MoU

20/NOV/2017 INTELLASIA| VN ECONOMICTIMES

Two to provide VNPAYQR scanning in mobile banking.Representatives from the Vietnam Payment Solutions Joint Stock Company (VNPAY) and the Thang Long Transport Corp. have signed a memorandum of understanding (MoU) on providing a new form of paymentVNPAYQR scanning on the mobile bank-ing application.The payment form is expected to bring benefits to both customers and Thang Long Transport.General director of VNPAY, Le Tanh, told the signing ceremony that VNPAY is one of the leading companies in the field and provides payment solutions to over 8,000 Vi-etnamese enterprises and has cooperation agreements with 31 banks in Vietnam.General director of Thang Long Transport, Nguyen Tien Long, emphasized that ap-plying new technology, especially QR codes, has become necessary in recent times be-cause it brings convenience to customers."We will apply mobile payments through QR codes in Hanoi first and will then ex-pand to other cities and provinces, especially Bac Ninh province," he said. "Most for-eign customers, such as those from Japan and South Korea, expected that we will adopt new payment solutions."Thang Long has become a multi-business corporation, in passenger transport, trans-portation construction, and commercial business.In passenger transport, the company has 700 taxis and 800 employees, operating in the capital Hanoi and northern Bac Ninh and Bac Giang provinces.VNPAY was officially established in March 2007 by a team of experienced leaders in the field of banking and finance, information technology, and telecommunications.With the goal of becoming a leading company in the field of electronic payments in Vi-etnam, over the last four years VNPAY has cooperated with 31 banks, seven telecom-munications companies, and more than 8,000 enterprises, providing payment solutions such as SMS Banking, the VnTopup phone recharge service, VnMart e-wal-let, multi-SIM, and the VNPAYQR payment gateway.http://vneconomictimes.com/article/business/vnpay-thang-long-transport-sign-mou


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Tran Anh reveals larger loss before MWG merger


On the verge of a merger with Mobile World Investment Corporation (MWG), Tran Anh Digital World JSC (Tran Anh Digital) revealed a net loss of VND11.8 billion ($519,672), exceeding the net loss stated in its self-reported financial statement by VND4.8 billion ($211,392).Apparently, there has been a notable discrepancy between Tran Anh Digital's 2017 first half financial statement and the previous self-reported financial statement that highlighted a larger net loss right before the merger with MWG.The board of directors (BoD) at Tran Anh Digital pointed out that the recently leaked information on the merger negatively influenced customer behaviour and shrunk the company's revenue.The company's BoD also attributed the post-audit discrepancy to the readjusted trade discounts given to providers until, which increased the cost of goods sold and de-creased accumulated profit, before-tax profit, and after-tax profit.Nguyen Duc Tai, co-founder cum chair and CEO of MWG, recently confirmed that ne-gotiations on the acquisition of Tran Anh Digital were basically finished. The negotia-tion stated that Tran Anh Digital's shareholders had approved of MWG purchasing over 25 per cent of the company's charter capital, with the caveat that the corporation will not submit a takeover bid, and to eliminate the listed stock on the Hanoi Stock Ex-change.On September 30, the company's total assets reached VND824 billion ($36.3 million), which was a 30.5 per cent drop since the beginning of 2017.The primary cause for this was the plunging inventory, and plummeting short-term assets and short-term accounts receivable.According to the official financial statement, the company earned a net revenue of VND1.825 trillion ($80.3 million), 7.2 per cent less than in the first half of 2016.The cost of goods sold reported a VND1.57 trillion ($69.1) rise, whilst accumulated profit reached VND225 billion ($9.9 million), 2.7 per cent down against the same cate-gory in the self-reported financial statement.Additionally, due to the surging costs of sales, financial costs, and corporate manage-ment, Tran Anh Digital's financial situation encountered a major setback.Tran Anh Digital is a Hanoi-based enterprise which trades in and provides mainte-nance services for computers, electronics, household appliances, and telecommunica-tions equipment in Vietnam.

iPhone X available in Vietnam from December 8


iPhone X Apple's latest iPhone product will officially be sold in Vietnam from Decem-ber 8.FPT Shop an Apple Authorised Reseller in Vietnam said buyers could pre-order the genuine iPhone X from December 1 to 7.It said the iPhone X would cost VND29.9 million (US$1,317) and VND34.7 million (US$1,528) for the 64GB and 256GB versions, respectively, for both the silver and grey colours.The price of the iPhone X at an Apple Authorised Reseller would be VND500,000 to VND1 million cheaper than a phone bought from private shops. Private shops trans-ported these phones to Vietnam in different ways.Earlier, most large mobile phone retailers in Vietnam expected that the iPhone X would be sold in the country by the end of this year or the beginning of next year.A genuine iPhone X is being sold at an Apple Authorised Reseller in Vietnam later than other countries such as Thailand, Malaysia and Cambodia.Private shops began taking orders several days ago. Vietnamese dealers fly to regional countries, especially Singapore, and buy the iPhone X from authorised resellers there, and then carry the phones to Vietnam to sell at a profit.Online newspaper Zing.vn estimates that in the US, some users spend money equal to one week's salary to own an iPhone, while some Vietnamese spend six months' salary.


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Russian markets in HCM City

20/NOV/2017 INTELLASIA| VOV5

VOV.VNRussian markets have boomed in the heart of HCM City in recent years. These markets sell wooden roly poly dolls, Russian souvenirs, and warm Russian clothes.The Russian market on Vo Van Kiet street in District 1 was built in 2009. It covers an area of 2,000 square meters. The 3-storey market has 200 booths selling clothes, foot-wear, bags, and household goods.The products are sold at reasonable prices and customers can be assured about their quality. The market attracts a lot of customers, many of whom are Russian.Luu Thi Nga, who has done business for more than 8 years at this market, says the market is always busy. Many Russian dealers shop here, and then resell the products in Russia."Warm clothes are the most sought after by Russians as winter lasts very long in Rus-sia," she said.Vu Anh Duong, who is on the Russian market's managing board, says traders at the market are mostly Vietnamese who have studied and worked in Russia.Besides Russians, the market also attracts customers from Malaysia, Japan, the Repub-lic of Korea, Britain, and the US. Vietnamese come here to find suitable clothes for a business or vacation trip abroad."There are sections selling food, souvenirs, and clothes imported from Russia. The market is a venue for cultural exchange between Vietnamese and Russian people," he said.The Russia Shop on Vo Van Tan street, District 3, is another venue for Russian prod-ucts in HCM City. Russian souvenirs, Matrioshka dolls, and food such as cheese, black bread, and tea are sold here.Le Thi Thu Huong, who runs the shop, says the shop is popular with Russian custom-ers and receives many orders by email or phone every day. "The food is popular here. People often buy our sauces, salad dressings, canned food, fish, and chocolate," he said. Russian products can be found at Russian markets and also at many other super-markets in HCM City.http://english.vov.vn/market/russian-markets-in-ho-chi-minh-city-362831.vov

Vietnam attends largest Asia-Pacific food fair in Singapore


More than 10 Vietnamese businesses are showcasing their products at the ongoing Asia-Pacific Food Expo (APFE) in Singapore on November 17-20.The Vietnamese exhibitors specialise in trading rice, coffee, seafood, vegetables and fruits, and food.APFE offers a good chance for Vietnam's firms to seek partners and expand partner-ships towards signing contracts to export their products to Singapore and other re-gional markets.Organised by the Singapore God Manufacturers' Association, this year's event draws the participation of 10 countries and territories such as China, India, Indonesia, the Re-public of Korea, Malaysia, Japan, Australia, Thailand, Vietnam and Taiwan (China).On display at nearly 200 booths covering an area of 12,500 sq.m are processed food, beverages, confectionery, frozen food, ice cream, milk products, food materials, tea, coffee, seafood, poultry products, vegetables and fruits, and spices.The expo is expected to attract 400,000 visitors.http://english.vov.vn/economy/vietnam-attends-largest-asiapacific-food-fair-in-sin-gapore-362871.vov

Jica workshop on construction projects


The Ministry of Construction and the Japan International Cooperation Agency (Jica) has organised a training workshop on management of construction projects in Viet-nam.The workshop was co-organised on November 17 as part of a Jica-funded project, launched in April 2015, for improving capacity in cost estimation, contract manage-


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ment, and quality and safety in construction investment projects in Vietnam.The workshop focused on quality management, safety and environmental manage-ment, and cost estimation.The event, which was attended by state agencies, project management units, contrac-tors and consultants, discussed the project's outputs and focal points related to Viet-nam's laws and regulations on construction.The project, implemented by the Ministry of Construction and Jica, aims to improve the capacity of staff in the ministry and related organisations to ensure that all con-struction projects in Vietnam are managed in accordance with international standards and regulations of public construction projects.Similar workshops will also be held in Da Nang, Can Tho and HCM City.Vietnam has maintained sustainable economic growth in recent years and implement-ed a large number of major infrastructure development projects.However, due to inadequate project management and quality and safety management of construction works, many construction accidents have been recorded.In addition, construction contracts that have been poorly managed have led to numer-ous disputes, obstructing the smooth implementation of construction projects.http://english.vov.vn/economy/jica-workshop-on-construction-projects-362853.vov

Office rental price to increase at an average of 8.4pct/year within the next 3 years

20/NOV/2017 INTELLASIA| DTCK

According to information from Savills, in Q3/2017, Vietnam real estate market grew in all segments, in which office segment was particularly promising.The new office supply in HCM City increased eight percent by year. However, the market still continues its strongly growing trend with the average occupancy rate of approximately 95 percent and the average Grade A rents to swell eight percent by year.Hanoi is also catching up with significant improvements in rents and occupancy rate of Grade A and Grade B office buildings.The total supply in Hanoi reached approximately 1.6 million square meters, the occu-pancy rate touched 93 percent, up six percent by year. Rents for Grade A offices slight-ly increased and those for Grade B offices swelled nine percent by quarter.According to Savills, within the next three years, the occupancy ratio of the office mar-ket will still maintain a high level in all grades and rents will increase at an average of 8.4 percent per annum.

Vietnam Airlines expects to open direct flights to the U.S by 2020

20/NOV/2017 INTELLASIA| NHIP CAU DAU TU

Vietnam Airlines Corporation has ended the Apec 2017 with a $1.5 billion deal to pur-chase and maintain 44 aircraft engines from Pratte & Whitney (the U.S), but that is not all."We are completing procedures to sell 57.8 million shares, scheduled to take place in December this year or Q1/2018. Then, Vietnam Airlines will list on HCM City Stock Ex-change (STC) and complete the IPO process", said Duong Tri Thanh, CEO of Vietnam Airlines.At the beginning of the year, Vietnam Airlines' VNA-coded shares were listed on Up-com in Hanoi Stock Exchange. Currently, the State is still holding 86.2 percent of the shares here.Vietnam Airlines' leaders are also quite determined about the capital divestment road-map in the long term. "We are very well directed with the goal of reducing state own-ership in the corporation to 51 percent by 2020", said Thanh. He added the State has a policy to create much development space for Vietnam Airlines to focus more on infra-structure development and general management.Earlier, Vietnam Airlines was one of the few large-scale state-owned corporations that successfully found strategic investor. In the middle of 2016, Vietnam Airline sold 8.771 percent of the chartered capital to ANZ Holdings Inc. (ANA), Japan Aviation Corpo-ration.This deal was considered as a typical equitisation case. Research report on strategic


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shareholders of the American Chamber of Commerce (AmCham) in Vietnam showed that the negotiation process between VNA and ANA had to overcome many obstacles, which lasted more than three years. The report also indicated that just a few state busi-nesses conducted detailed appraisal through hiring foreign consultants and experts, for example Vietcombank, Vietnam Airlines, and Petrolimex.According to representative of VNA, the experience in the equitisation of state compa-nies is to determine corporate value under international standard right from the begin-ning to have grounds for persuasion and negotiation with investors. "Thanks to this evaluation method, Vietnam Airlines can sell shares at higher price than the expecta-tion. The final selling price of shares to ANA is 21,000 dong per share, higher than ANA's offering price at 18,000 dong per share", said VNA's representative.The next question is whether ANA shareholders will continue buying shares when VNA continues to equitise? "Under Japanese law, ANA is not allowed to own more than 10 percent so I think they will maintain the current level", said Thanh. However, the ownership of ANA is available, through subsidiaries of Vietnam Airlines. "It is likely that they will seek for investment opportunities in our subsidiary companies or others", said Thanh.With ANA shareholder, Vietnam Airlines' recent business results continue to consoli-date the opinion on enhancement of ownership rate in the future. In the first 10 months of 2017, Vietnam Airlines recorded the consolidated profit of more than 2.9 trillion dong, surpassing 52 percent of the whole year plan.Good financial results are partly due to the significant growth of the aviation market in general. Last year, the growth of Vietnam Airlines' passenger transport amounted to 19 percent.The Centre for Aviation (CAPA) assessed Vietnam Airlines as the fastest growing na-tional flag in South East Asia and one of the fastest growing traditional airlines in the world in 2016. Last year, Vietnam Airlines was one of the four only airlines in South East Asia to transport more than 20 million passengers.This was also the first time that Vietnam had a representative to receive the annual award of "Airline of the Year in Asia-Pacific region". This title was ranked since 2003, and earlier were familiar names such as All Nippon Airways, Japan Airlines, Cathay Pacific, Air Asia, etc.According to representative of CAPA, the successful equitisation process, high profit, diversified international cooperation and doubled brand strategy with Jestar Pacific helped Vietnam Airlines be recognised.Peter Harbison, Chair of CAPA said "Vietnam Airlines emerged as a traditional airline with a lot of success and rapid growth, despite the increasing competition from the do-mestic market".Vietnam Airlines' representative estimates that the carrier transports 22 million pas-sengers in this year and the growth in 2018 will be about 10 percent. To achieve this, strategy will still be dual brand, including traditional brand and low-cost branding, with the principle of expanding both domestic air and international routes.Plans to sell shares in the near future will help the company have more new growth resources in the future. Meanwhile, the airline will still strengthen the route expansion.One of the expectations of Vietnam Airlines in the short term is the opening of direct flights to the United States. "This is a long-waited destination. Vietnam has a rather large Vietnamese community in the U.S with about three million people. We have planned for this route for about 10 years now, and are on the final stage of deciding when to start exploiting, which is expected to be at the end of 2019 or beginning of 2020", said Thanh. End


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