Stock market

Shares advance on strong cash flows

13/Feb/2017 Intellasia | VNA

Shares advanced on February 10 on the two stock exchanges when investors sought opportunities in medium-cap and penny stocks.

On the HCM Stock Exchange, the VN Index rose 0.5 percent to close at 703.8 points. The southern market index decreased 0.2 percent on February 9.

On the Hanoi Stock Exchange, the HNX-Index also gained 0.5 percent to end at 86.04 points, extending its two-day rally to 0.9 percent.

Liquidity remained positive, with a total of 186.3 million shares worth a combined 3.5 trillion VND (almost 155 million USD) traded in the two markets.

Sharp increase in the global natural rubber price lifted local rubber companies. Hoang Anh Gia Lai Group (HAG) and its agricultural arm Hoang Anh Gia Lai Agricultural (HNG),

along with Dong Phu Rubber (DPR), Phuoc Hoa Rubber (PHR), Hoa Binh Rubber (HRC), Hoang Anh Gia Lai Group (HAG) advanced between 2 percent and 5 percent.

Oil and gas stocks also recovered from a two-day slump, as most of the biggest companies-including PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD), PetroVietnam Technical Services (PVS) and Petroleum Equipment Assembly & Metal Structure (PXS)-increased 1.7-2.8 percent.

Low-priced stocks like Truong Thanh Furniture (TTF), Agribank Securities Co (AGR), FLC Group (FLC) and Urban Development & Construction (UDC) soared to the maximum daily rise limit following heavy investments.

"Market indices were not governed from a few large stocks which play the leading role. The positive performance was contributed from the consensus of the large cap stocks as well as the major part of the market," analysts at BIDV Securities Co wrote in a market report.

Liquidity maintained healthy levels as cash flows shifted to other sectors that focused on not only a few big stocks like in the previous rallies, the report said.

According to Vietnam Investment Securities Co, the market is accumulating values and in some sessions, even the stocks which are expected to rise in the long term - like Hoa Phat Group (HPG), FPT Corp (FPT) and Kinh Bac City Development (KBC) - can experience downward correction.

"Such correction is not too bad, as it sometimes is a good opportunity for other investors to make a spillover impact to the whole market," it said in a report.

Foreign investors continued to collect local shares, picking up total net value of nearly 24 billion VND. They bought a total net value of 56 billion VND on February 9.

http://en.vietnamplus.vn/shares-advance-on-strong-cash-flows/107071.vnp

VN30-Index alone in falling 13/Feb/2017 Intellasia | Vn Economic Times

VN Index remained stable at around the 700-point mark on February 10. The VN30-Index was the only main index to close lower on February 10. On HSX the VN Index increased 3.12 points (0.45 per cent) while the VN30-Index lost 0.05 points (0.01

per cent). The VNMid-Index rose 5.68 points (0.68 per cent) and the VNSml-Index 2.16 points (0.28 per cent).

On HNX, the HNX-Index increased 0.39 points (0.46 per cent) and the HNX30-Index 0.82 points (0.54 per cent), while the UPCoM-Index lost 0.03 points (0.06 per cent) and the VNALL-Index gained 1.97 points (0.2 per cent).

HSX saw a 141 point increase followed by a 104 point decrease while HNX saw a 139 point increase followed by a 117 point decrease.

Liquidity on HSX reached VND2.7 trillion ($119.23 million), 3.5 per cent lower than yesterday, and on HNX was VND385 billion ($17 million), 23 per cent higher.

The VN Index opened at 700.65 points and quickly increased to 702.7 points early on before falling to its bottom of the day of 701.3 points then recovering to close the morning session at 703.1 points. In the afternoon, it reached its peak of the day of 704 points early on before falling and closing at 703.8 points.

Among food and beverage stocks, MSN lost 1.2 per cent and VNM 0.2 per cent while BHN increased 2.9 per cent, KDC 1.3 per cent and SAB 1.1 per cent. SBT was the only share to close at its opening price.

VNM's liquidity was different from previous days, with VND280 billion ($12.36 million) changing hands, ranking it second-highest on HSX after ROS, which had VND372 billion ($16.42 million) and increased 0.7 per cent in price.

In banking, CTG rose 2.8 per cent and BID 1.5 per cent while VCB shed 1 per cent, EIB 0.9 per cent and MBB 0.7 per cent.

In energy, GAS was up 1.7 per cent and CNG 0.8 per cent while PGD closed at its opening price. Among other large caps on HSX, VIC and HPG closed at their opening price and BVH and MWG

increased 1 per cent and 0.8 per cent, respectively. On HNX, VCS rose 3.1 per cent, PVS 2.8 per cent, VCG 2 per cent, PHP 1.2 per cent and ACB 0.8 per

cent. SHB lost 2 per cent, DBC 0.9 per cent, PVI 0.4 per cent and NTP 0.1 per cent. Foreign investors net bought on HSX by VND11 billion ($485,760) and by VND12 billion ($529,920) on

HNX. The trading week saw the major indices head in opposite directions. While the VN Index fluctuated

above the 700-point threshold due to large cap division, the HNX-Index saw positive performance, rising on all five days. Liquidity was high and money rotated among major groups, including finance, construction, construction materials, and rubber, before flowing into new areas such as fertilisers, pharmaceuticals and textiles. Foreigners traded actively and concentrated on large caps, especially VNM, which supported the market. We are optimistic about an uptrend, though the VN Index will have to accumulate for a while before testing the resistance range of 710-715 points.

KIS Vietnam Securities Corporation http://vneconomictimes.com/article/banking-finance/vn30-index-alone-in-falling

Shares to uphold short-term upturn 13/Feb/2017 Intellasia | VNA

Shares are moving into positive territory, driven by strong investment inflows on an optimistic market outlook expected this week.

According to analysts at Viet Dragon Securities Co, both stock indices closing higher with liquidity rising robustly in the two markets last week endorsed the expected upturn in the short term.

The benchmark VN Index on the HCM Stock Exchange moved sideways around 700 points in the last five sessions and ended the week at 703.8, 0.5 percent higher than the end of the previous week.

Liquidity improved with the daily market value reaching 3 trillion VND (132.7 million USD) last week, up 50 percent over the previous week's value. Trading volume increased 32.2 percent, averaging 145.5 million shares.

On the smaller exchange in Hanoi, the HNX-Index increased 1.2 percent for the week, closing at 86.04 points on February 10. Trading volume was more modest with just 40 million shares worth 373 billion VND exchanged each session, up 81.3 percent week-on-week.

While large-cap stocks saw divergence, a big proportion of investments ran into mid-cap and small-cap stocks in the weekend sessions.

Encouraging 2016 earnings reports were gaining momentum for strong gains of rubber, steel and real estate companies, such as Dong Phu Rubber (DPR), Phuoc Hoa Rubber (PHR), Pomina Steel (POM), Nam Kim Steel (NKG), Consultancy Design & Urban Development (CDO), Urban Development & Construction (UDC), Sai Gon Telecommunication & Technologies (SGT) and Hoa Binh Construction & Real Etate Corp (HBC).

Among these, POM, SGT, UDC and CDO were the biggest gainers, each seeing share prices climbing 38-40 percent last week.

"The annual general meetings and business plans of listed companies in 2017 could motivate the VN Index," Tran Hai Yen, a stock analyst at Bao Viet Securities Co wrote in a market report.

Foreign investors concluded last week as net buyers for a modest net value of just 45 billion VND. Shares of dairy giant Vinamilk (VNM) topped their net buys with total value of 156.3 billion VND. Their net buys on this share extended to 23 consecutive sessions, with a total value of 936 billion VND.

Global stock markets remained positive, especially the Dow Jones surpassing and remaining above 20,000 points after the US Federal Reserve did not hike rates in its last policy meeting.

However, the growth of the developed market, typically the US market, could cause difficulty in maintaining investment capital, running into frontier and emerging markets, including Vietnam, according to the Bao Viet Securities Co.

"Basically, we believe that foreign indirect investment flows in Vietnam's stock market in 2017 will be significant compared to previous years," Yen said.

http://en.vietnamplus.vn/shares-to-uphold-shortterm-upturn/107122.vnp

Vietjet set to list on HoSE 13/Feb/2017 Intellasia | Vn Economic Times

Budget carrier secures approval to list 300 million shares on HCM City Stock Exchange. Vietjet Air has gained approval to list on the HCM City Stock Exchange (HoSE), with stock code VJC. The budget carrier registered to list 300 million shares, equivalent to VND3 trillion ($167 million). The

offering price has not been announced. It deposited the shares at the Vietnam Securities Depository on January 25.

Vietjet's attracted a lot of investor attention when it announced its listing on the stock market. A total of 23 overseas investors bought 66.5 million shares, equivalent to about 14 per cent of Vietjet, during a pre-listing stake sale in December 2016, billionaire founder Nguyen Thi Phuong Thao told Bloomberg.

The budget carrier is valued at $1.2 billion by its advisers, and it's also considering a foreign listing and overseas bonds issuance, she said.

Vietnam Enterprise Investments Limited (VEIL), an investment fund under Dragon Capital, owned Vietjet shares as at January 1 valued at $43 million. HCM City Securities Corp (HSC) also spent VND134.5 billion to purchase 1.6 million of the carrier's shares.

Shareholders have also approved the company's proposal to issue more than 22.3 million shares to the Huong Duong Sunny Investment Co Ltd during 2017 at a price of VND84,600 ($3.76) per share.

Vietjet forecasts 2017 profit to rise 30 per cent from $101.8 million in 2016, Thao was quoted as saying. Vietjet surpassed Vietnam Airlines as the leader in domestic passenger transport during the Tet holidays,

according to the Civil Aviation Authority of Vietnam. Over the six-day holiday, Vietnam Airlines transported 175,146 passengers while Vietjet transported

209,179, for shares of 35 per cent and 42 per cent. Jetstar Pacific held 20.7 per cent and Vasco 2.3 per cent. The carrier will continue to expand its domestic network this year and strengthen its international

operations while improving service quality, especially its SkyBoss and in-flight services. It also aims to achieve a passenger satisfaction rate of 99 per cent and a return-customer rate of 95 per cent.

Vietjet Air currently boasts a fleet of 40 aircraft, including A320s and A321s, and operates 350 flights each day. It has opened 53 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, South Korea, Taiwan, Malaysia, China and Myanmar and has carried nearly 30 million passengers to date.

http://vneconomictimes.com/article/business/vietjet-set-to-list-on-hose

Vietjet to list 300m shares on HOSE 13/Feb/2017 Intellasia | VNA

Shares of the VietJet Aviation Joint Stock Company (VietJet Air) will be officially listed on the Ho Chi Minh Stock Exchange (HOSE) on February 28.

According to the carrier's representative, the firm's listing registration was approved on February 6, and it plans to list its 300 million shares worth 3 trillion VND on the HOSE.

Previously, Vietjet Air completed an auction of 44.8 million shares at its initial public offering (IPO). Vietjet Air CEO Nguyen Thi Phuong Thao said the firm's shares have been welcomed in a number of

largest markets like Hong Kong (China), London (the UK), Singapore and the US, with the involvement of international financial institutions.

As of January 12, Vietjet had a total charter capital of 3 trillion VND (132.4 million USD), with 664 shareholders, including three main shareholders owning over 5 percent of the charter capital: the Huong Duong Sunny Investment Ltd (23.24 percent), CEO Nguyen Thi Phuong Thao (9.42 percent) and the GIC Investment Fund of the Singaporean government (5.48 percent).

After the five years of operation, Vietjet is the airline having the second largest domestic market share in Vietnam after the national flag carrier Vietnam Airlines. In 2016, it reported a record growth of over 27.2 trillion VND in net revenue and 2.29 trillion VND in post-tax profit, up 38.7 percent and 95.8 percent year-on-year, respectively.

The airline sets to achieve respective revenue and profit expansions of 49 percent and 64 percent in 2017. Its dividend in the 2017-2019 period is hoped to be maintained at 50 percent, with at least 30 percent of this being cash.-

http://en.vietnamplus.vn/vietjet-to-list-300 million-shares-on-hose/107043.vnp

Shares to uphold short-term upturn 13/Feb/2017 Intellasia | Bizhub

Shares are moving into positive territory, driven by strong investment inflows on an optimistic market outlook expected this week.

According to analysts at Viet Dragon Securities Co, both stock indices closing higher with liquidity rising robustly in the two markets last week endorsed the expected upturn in the short term.

The benchmark VN Index on the HCM Stock Exchange moved sideways around 700 points in the last five sessions and ended the week at 703.8, 0.5 per cent higher than the end of the previous week.

Liquidity improved with the daily market value reaching VND3 trillion (US$132.7 million) last week, up 50 per cent over the previous week's value. Trading volume increased 32.2 per cent, averaging 145.5 million shares.

On the smaller exchange in Hanoi, the HNX-Index increased 1.2 per cent for the week, closing Friday at 86.04 points. Trading volume was more modest with just 40 million shares worth VND373 billion exchanged each session, up 81.3 per cent week-on-week.

While large-cap stocks saw divergence, a big proportion of investments ran into mid-cap and small-cap stocks in the weekend sessions.

Encouraging 2016 earnings reports were gaining momentum for strong gains of rubber, steel and real estate companies, such as Dong Phu Rubber (DPR), Phuoc Hoa Rubber (PHR), Pomina Steel (POM), Nam Kim Steel (NKG), Consultancy Design & Urban Development (CDO), Urban Development & Construction (UDC), Sai Gon Telecommunication & Technologies (SGT) and Hoa Binh Construction & Real Etate Corp (HBC).

Among these, POM, SGT, UDC and CDO were the biggest gainers, each seeing share prices climbing 38-40 per cent last week.

"The annual general meetings and business plans of listed companies in 2017 could motivate the VN Index," Tran Hai Yen, a stock analyst at Bao Viet Securities Co wrote in a market report.

Foreign investors concluded last week as net buyers for a modest net value of just VND45 billion. Shares of dairy giant Vinamilk (VNM) topped their net buys with total value of VND156.3 billion. Their net buys on this share extended to 23 consecutive sessions, with a total value of VND936 billion.

Global stock markets remained positive, especially the Dow Jones surpassing and remaining above 20,000 points after the US Federal Reserve did not hike rates in its last policy meeting.

However, the growth of the developed market, typically the US market, could cause difficulty in maintaining investment capital, running into frontier and emerging markets, including Vietnam, according to the Bao Viet Securities Co.

"Basically, we believe that foreign indirect investment flows in Vietnam's stock market in 2017 will be significant compared to previous years," Yen said.

http://bizhub.vn/markets/shares-to-uphold-short-term-upturn_284085.html

MSCI adds ROS, SAB to iFrontier Markets Index 13/Feb/2017 Intellasia | Bizhub

US-based MSCI Inc. has added two Vietnamese stickers - ROS (FLC Faros Construction JSC) and SAB (Saigon Beer Alcohol Beverage Corp) - to its basket for calculation of the MSCI Frontier Markets Index

This was reported by Reuters on Friday. No stocks were deleted. MSCI Frontier Markets Index is the underlying index for the MSCI Frontier Markets Index ETF, which

invests in securities in emerging markets. Therefore, following the first quarterly review in 2017, the number of constituents of the MSCI Frontier

Markets Index will increase to 126. Among them are 11 Vietnamese securities - VIC, MSN, VCB and HPG, as well as STB, GAS, BVH and BID, along with VNM and two newcomers ROS and SAB.

Meanwhile, no changes were made to the MSCI Frontier Markets Smallcap Index in the latest review. In the previous review, three Vietnamese stocks - NTP, VSC and VHC - were added to the index.

All the changes will take effect as of the close of February 28, 2017, MSCI said in a statement.

ROS' stock increased 0.80 per cent to close at VND135,400 (US$5.96) per share on February 9. The stock went up 0.51 per cent during the break in February to VND136,100 đồng per share.

http://bizhub.vn/markets/msci-adds-ros-sab-to-ifrontier-markets-index_284075.html

41 new firms list on HNX in January 13/Feb/2017 Intellasia | Bizhub

The Hanoi Stock Exchange welcomed the listing of three new companies on the official exchange and 38 new enterprises on the unlisted public company market (UPCoM) in January.

The three new firms to be listed are PC3 - Investment Joint Stock Company (PIC), Hiep Khanh Tea JSC (HKT) and Vinacomin - Northern Coal Trading JSC (TMB).

As of the end of January, the total number of stock codes listed on the HNX reached 379 codes, with total volume of 11.1 billion shares, corresponding to a total listed value of some VND111.5 trillion (US$4.9 billion).

On the Hanoi Stock Exchange, market trading liquidity remained lower than the previous month and average trading volume reached 25.44 million shares per session, equivalent to a transaction value of VND264.9 billion per session, down 38.6 per cent in volume and 36.9 per cent in value month-on-month.

Transaction volume of the 10 largest stocks by market capitalisation reached 105.79 million shares, accounting for 24.45 per cent of total market transactions.

The HNX Index gained 5.42 per cent to end at 84.46 points in the final minutes of the trading session on January 25.

In January, trading transactions by foreign investors decreased from the previous month, with a total of 23.94 million shares traded, equivalent to a transaction value of VND369.6 trillion. Of the total transactrions, 17.33 million shares were purchased and 6.6 million shares were sold.

As of January 25, there were 454 firms registered for trading on the UPCoM. The UPCoM index rose 1.6 per cent to end at 54.68 points in the closing minutes of the last trading session in January.

The market saw some 119.7 million shares traded with transaction value of VND2.2 trillion last month. The average trading volume reached 7.04 million shares per session, equivalent to a transaction value of VND132.6 billion per session, down 36.42 per cent in volume and 32.8 per cent in value month-on-month.

The HNX30 went up 5.5 per cent to conclude at 151.4 points at the end of the January 25 trading session. Trading volume averaged 11.6 million shares with an average trading value of VND134.9 billion, accounting for 45.7 per cent of the whole market's average transaction volume and 52.9 per cent of its average transaction value.

At the closing of the trading session on January 25, capitalisation value of HNX30 accounted for 50.9 per cent of the total market capitalisation.

Regarding autions, in January, HNX held an auction for the divestment plan of the Vietnam Debt and Asset Trading Corporation and two IPO auctions offering shares of 185 Co. Ltd and Haprosimex Co Ltd

The total volume of shares offered during these three auctions reached over 8.9 million shares. Investors bought a total of more than four million shares, equal to 45 per cent of the shares offered. Over VND40 billion was contributed to the State budget.

http://bizhub.vn/markets/41-new-firms-list-on-hnx-in-january_284067.html

Tuong An Vegetable Oil issues shares 13/Feb/2017 Intellasia | Vn Economic Times

Company to increase charter capital for first time since being listed in 2006. The Tuong An Vegetable Oil Company (TAC), the largest subsidiary of the Vietnam Vegetable Oils

Industry Corporation (Vocarimex), has approved a plan to issue shares in order to increase its charter capital.

The company held an extra-ordinary shareholders' meeting on February 10 to announce the plan, under which it is expected to issue shares at a ratio of 10:7.

The number of TAC shares will increase to 32,226 million and its charter capital from VND190 billion ($8.36 million) to VND322.7 billion ($14.2 million).

This is the first time TAC has increased its charter capital since being listed in 2006 and after the Kido Group Corporation (KIDO) purchased a 65 per cent stake.

TAC is the second-largest cooking oil company in the country, with a 22 per cent market share. In 2016 its net revenue reached nearly VND4 trillion ($176 million), up 10.7 per cent against 2015. After-tax profit

stood at VND67 billion ($2.9 million), down 4 per cent year-on-year and 3 per cent less than the target set for the year.

KIDO was granted a license last October by State Audit of Vietnam (SAV) to bid to purchase a 65 per cent stake in TAC, representing 12,337,130 shares.

The move "is considered a long-term commitment by KIDO with TAC to strengthen the development of TAC's core businesses activities," according to a TAC statement.

TAC's shareholding structure changed significantly in July, with nearly 65 per cent changing hands. The Viet Long Securities Investment Fund Management Corporation (VLFM) purchased 4.55 million shares, or 24 per cent, from Vocarimex.

In January, KIDO was given permission to hold more than 51 per cent in Vocarimex without needing to conduct a takeover bid.

The green light was necessary for KIDO to acquire a controlling stake and become Vocarimex's parent company. KIDO currently holds 24 per cent and is expected to increase its ownership to 51 per cent during the first quarter of this year.

KIDO's net revenue reached over VND2.2 trillion ($96.8 million) last year, down 28.7 per cent against 2015. Gross profit was VND880 billion ($38.72 million), thanks to consolidating TAC's profit.

http://vneconomictimes.com/article/business/tuong-an-vegetable-oil-issues-shares

Energy stocks keep Vietnamese markets up 14/Feb/2017 Intellasia | VNA

Shares advanced further on the two local exchanges on February 13, driven by energy stocks' continuing rise by three consecutive sessions of positive crude trading.

The benchmark VN Index on the HCM Stock Exchange gained 0.3 percent to close at 705.9 points. The southern market index has risen a total of 0.7 percent in the last two days.

The HNX Index on the Hanoi Stock Exchange was up 0.5 percent to end at 86.43 points. The northern market index has rallied total 1.7 percent after five trading days.

More than 205 million shares were exchanged on February 13, worth 3.21 trillion VND, showing an increase of trading volume and a fall of trading value compared to last week's daily averages.

The stock market was strongly supported by high investor confidence in energy shares, as oil prices had a three-day rally last week after a report said that members of the Organisation of Petroleum Exporting Countries (OPEC) had strictly committed to its output cut deal.

Oil trading was bolstered after OPEC members reduced 92 percent of their production in January, followed by a 50 percent reduction by non-OPEC exporters.

Among local energy shares, PetroVietnam Coating Corp (PVB) hit the daily trading limit of 9.8 percent, while PetroVietnam Technical Services Corp (PVS), PetroVietnam Mud Drilling Corp (PVC) and PetroVietnam Drilling and Well Services Corp (PVD) ranged between 5.4 percent and 6.6 percent.

Mid-cap and penny stocks remained attractive to investors on expectations for better performances in 2017.

Among those shares, property developer FLC Group (FLC) hit the daily trading limit of 7 percent after FLC's CEO Huong Tran Kieu Dung told local media that the group targets a doubled revenue in 2017 with an earnings of 13 trillion VND from real estate segment.

Expectations for a positive year also helped agricultural group Hoang Anh Gia Lai JSC (HAG) jump 3 percent after it reported a lower loss of 302.8 billion VND in the fourth quarter of 2016, which was an improvement compared to 2015's number.

FLC and HAG were also the two most active stocks in the market, with more than 21 million shares of FLC and 9.85 million shares of HAG being exchanged.

http://en.vietnamplus.vn/energy-stocks-keep-vietnamese-markets-up/107185.vnp

All indexes close higher 14/Feb/2017 Intellasia | Vneconomic Times

All main indexes on VIetnam's stock markets finished higher on February 13. On HSX the VN Index increased 2.12 points (0.3 per cent) and the VN30-Index gained 3.9 points (0.59

per cent). The VNMid-Index rose 9.48 points (1.13 per cent) and the VNSml-Index 6.57 points (0.85 per cent).

On HNX, the HNX-Index increased 0.39 points (0.45 per cent) and the HNX30-Index 2.46 points (1.59 per cent).

The UPCoM-Index gained 0.02 points (0.04 per cent) and the VNALL-Index gained 6.77 points (0.68 per cent).

HSX saw a 160 point increase followed by a 93 point decrease while HNX saw a 144 point increase follo wed by a 106 point decrease.

Liquidity on HSX reached VND2.6 trillion ($114.6 million), about 4 per cent lower than last Friday, and on HNX was VND431 billion ($19 million), 12 per cent higher.

The VN Index opened at 703.8 points, it up after pre-opening session but quickly tumbled to bottom of the day at 703.6 points in early session. It then recover to 705.3 points and traded fluctuate around the points to close morning session at 705 points. The afternoon session saw the index increase gradually to top of the day at 706.4 points in middle of session before fell a bit to close day's trading at 705.9 points.

Among food and beverage stocks, VNM close at its opening price, BHN and MSN down 1.5 per cent and 0.5 per cent respectively. KDC up 0.5 per cent, SBT 0.4 per cent and SAB 0.1 per cent.

In banking, STB down 2 per cent, BID 0.5 per cent, VCB 1.2 per cent and CTG 0.3 pere cent. MBB and EIB up 1.8 per cent and 1.4 per cent respectively.

In energy, CNG up 1 per cent, PGD 0.4 per cent and GAS 0.2 per cent. Among other large caps on HSX, VIC close at its opening price. MWG up 2.9 per cent, BVH 1.7 per

cent, HPG 0.9 per cent and NVL 0.7 per cent. ROS remain as highest liquidity on market as it saw VND325 billion ($14.33 million), price increased

0.7 per cent. Follow by FLC with VND123 billion ($5.42 million) and price up 7 per cent. VNM saw little trading liquidity of VND93 billion ($4.1 million), ranked 5th on the HSX.

On HNX, PHP and ACB down 2.4 per cent and 1.7 per cent respectively. NTP close at its opening price, while PVS up 5.4 per cent, VCG 3.9 per cent, SHB 2 per cent, VCS 1.4 per cent and PVI 0.4 per cent.

Foreign investors net bought on HSX by VND21 billion ($926,100) and net sold by VND7 billion ($308,700) on HNX.

http://vneconomictimes.com/article/banking-finance/r3q4zwm2-all-indexes-close-higher

Brokerages: Strong corporate earnings back equity market 14/Feb/2017 Intellasia | The Saigon Times

A number of brokerages said many listed firms have announced positive 2016 financial reports, which will buoy the equity market this week.

Nguyen The Minh, head of the capital market analysis division at Saigon Securities Inc, said in Dau tu Chung khoan newspaper that corporate earnings improved significantly and various enterprises saw their revenue and profit rocketing to new highs last year, which could underpin the stock market.

Nguyen Huu Binh, head of the analysis department at Vietnam Investment Securities Company, said the VN Index has hovered around the 700-point level over the past seven sessions, and ended at an intraday high last Friday amid hectic trading.

If a certain sector or a group of large caps makes nice gains this week, the VN Index will climb to a new high, he said.

Last week saw the VN Index rising 0.49 percent against the previous week at 703.78 points and the HNX-Index leaping 1.19 percent at 86.04 points.

Liquidity improved on both exchanges as the average matched volume climbed 32 percent to 133.1 million shares per session on the HCM City bourse, and went up a staggering 81 percent to 38.1 million shares per session on the Hanoi market.

According to vietstock.vn, profit taking pressure weighed on the HCM City exchange last week but strong cash flows helped the market avoid a decline.

The VN Index closed down last Monday due to poor performance of certain heavyweights, but nudged up in the next two sessions, backed by petroleum stocks. A selloff hit many large caps last Thursday and led the index to snap a two-day rising run.

Viet Capital Securities Company wrote in a report that the index enjoyed its biggest gain of the week last Friday, advancing half a percent to a nine-year high at 703.78 points. Brewery SAB (up 1 percent) and real estate developer ROS (up 0.7 percent) advanced after MSCI announced it had added the two firms to its Frontier Markets Index.

GAS and PVD of the petroleum sector moved higher as Brent crude oil prices extended an overnight rally in Asian trade last Friday.

Regarding foreigners' trade, the HCM City exchange saw such investors' net purchases reaching VND37.9 billion. They picked VNM with VND156.3 billion, NVL with VND57.68 billion, VCB with VND 41.47 billion and SSI with VND30.9 billion.

They offloaded VND58 billion of HSG, VND40.3 billion of RAL and VND30.5 billion of PAC. Foreign investors also stayed on the buying side on the Hanoi market and net bought VND6.6 billion of

shares. They acquired SHB with VND6 billion, PLC with VND2.8 billion and VGC with VND2.6 billion, while they sold PGS and VND shares worth VND6.1 billion and VND5.5 billion, respectively.

http://english.thesaigontimes.vn/52279/Brokerages-Strong-corporate-earnings-back-equity-market.html

VietJet Air to list at end of February 14/Feb/2017 Intellasia | Nikkei

Vietnam's first private low-cost carrier also planning overseas debut Vietnamese low-cost carrier VietJet Air is planning to list 300 million shares on HCM City Stock

Exchange (HOSE) on February 28, with an offer price of 90,000 dong ($3.97) per share. Last December, the first Vietnamese private carrier reportedly sold more than 110 million shares to a

number of institutional and private investors during a pre-listing stake sale, priced at 84,600 ($3.73) dong apiece, valuing the carrier at $1.2 billion.

VietJet, which became known for a promotional video featuring bikini-clad flight attendants, has also reinstated its plan to list on either the Singapore, Hong Kong or Tokyo bourses, after floating its shares in Vietnam. It postponed the overseas float plan last year.

VietJet reported net profit of 2.29 trillion dong ($100 million) on revenue of 27.53 trillion dong in 2016, year-on-year increases of 95.6 percent and 38.7 percent respectively.

It aims for a 30 percent growth in pre-tax profit this year. Currently, VietJet has been benefitting from tax incentives in Vietnam, enjoying paying no corporate

income tax in 2014 and 2015, and set to pay 50 percent of it for the years 2016, 2017 and 2018. Established in 2007, the Hanoi-based budget carrier launched its first commercial flight in December

2011. It has grown to be the second largest airline in Vietnam accounting for 41 percent of the market, just behind national flag carrier Vietnam Airlines, which has 42 percent.

VietJet operates more than 60 domestic and international routes. To meet the fast-growing demand for travel from the region's large population of young people, the

airline has signed multi billion dollar orders with aircraft manufacturers Boeing and Airbus to expand its fleet.

The company plans to issue bonds in overseas markets and is in talks with the regional carriers and banks for a strategic investment to raise more funds for their expansion.

Nguyen Thi Phuong Thao, founder and chief executive of VietJet, will retain a 32.66 percent stake, through direct and indirect holdings. Of this, 23.24 percent is held by VietJet's largest institutional shareholder, Huong Duong Sunny Investment Company, which is wholly owned by Thao.

Singaporean sovereign wealth fund GIC is the largest overseas stakeholder, holding 5.48 percent of the company.

As of mid-January 2017, foreign investors including Morgan Stanley, Mirae Asset, Wareham Group, Dragon Capital Markets, DC Developing Markets Strategies and VinaCapital owned a combined 24.39 percent stake of VietJet, according to documents filed with HOSE. The foreign ownership limit is currently capped at 30 percent, in accordance with Vietnamese regulations for the aviation industry.

Other noticeable institutional investors in VietJet related to Thao include Sovico Holdings (4.9 percent) where she is the founder and chairwoman, and HD Bank (4.5 percent) where she is the vice chairwoman.

http://asia.nikkei.com/Markets/Equities/VietJet-Air-to-list-at-end-of-February

Finance

Interest rates to remain stable in 2017: SBV

13/Feb/2017 Intellasia | Bizhub

A report to announce the operation of the banking system in January 2017 and its orientation for the entire year stated that some commercial banks inched up deposit interest rates by 0.1 per cent to 0.3 per

cent per year. However, it said, the rise was only in some small-sized banks and did not reflect the common trend of the entire banking system.

Besides increasing the interest rates right after the Lunar New Year holiday to accelerate deposits, some commercial banks also offered promotional programmes to attract depositors.

At the Vietnam Construction Bank (VNCB) for example, besides an interest rate of 8 per cent per annum for the first nine working days after the Lunar New Year for new customers or customers renewing deposits from VND100 million (US$4,400) for six-month terms or more, customers depositing money from VND10 million onwards also had the opportunity to receive thousands of gifts.

The Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) also applied a programme to customers depositing money on terms from two months onwards at the bank's transaction points with a total gift value of nearly VND1 billion in cash.

According to the central bank, the liquidity of the banking system in the past weeks was secure, helping the monetary market and interest rates to stabilise, thanks to the flexible management policies, especially through the open market operation.

Currently, deposit interest rates average at 0.8 per cent to 1 per cent per year for below one-month terms, 4.5 per cent to 5.4 per cent per year for one-month term to six-month terms, 5.4 per cent to 6.5 per cent per year for six-month terms to 12-month terms and 6.4 per cent to 7.2 per cent per year for terms exceeding 12 months.

Lending interest rates average 6 per cent to 7 per cent per year for prioritised industries of agriculture, exports, spare parts industries, small- and medium-sized enterprises, and hi-tech firms. Some reliable borrowers with healthy financial status can even receive a lower rate of 4 per cent to 5 per cent per year.

Common lending rates for other sectors are 6.8 per cent to 9 per cent per year for short-term loans and 9.3 per cent to 11 per cent for medium- and long-term loans.

General director of Asia Commercial Bank Do Minh Toan said that since banks could hardly increase lending rates, the deposit rates were unlikely to rise much.

Though the central bank has not released the credit growth in January yet, it revealed that it would control lending scales to meet the 16 per cent to 18 per cent credit growth target this year, besides taking measures to control it to ensure that lending is safe and effective.

"Lending next year will continuously focus on production, business and the government's five prioritised sectors of agriculture, exports, spare parts industries, small- and medium-sized enterprises, and hi-tech firms, while limiting the capital to risky industries such as real estate, BOT and BT projects," the SBV stated.

As for bad debts, the central bank said handling of bad debt would be accompanied by preventive measures in order to minimise new bad debts and keep the bad debt ratio under 3 per cent in 2017.

SBV announced that it was finalising a project on restructuring credit organisations and handling bad debt between 2016 and 2020, which would be submitted to the Politburo.

After the project receives approval, the SBV would develop plans to carry out measures set out in the project.

In 2017, the asset management company (VAMC) would also play a greater role in handling bad debts to maintain the rate of bad debt at the safe level of below 3 per cent of the total outstanding loans, the SBV said.

http://bizhub.vn/banking/interest-rates-to-remain-stable-in-2017-sbv_284077.html

Many hot issues in banks' shareholder meeting season in 2017 13/Feb/2017 Intellasia | Dau Tu Chung Khoan

One of the highlights of this year's shareholder meeting season continues to be the payment of dividends. However, bank leaders believed that dividends can hardly be improved in a short time as it takes time for banks to settle bad debts, until the achieved profit is not be much eroded by the risk provisioning.

Shareholder of a joint stock bank Nguyen Thanh Hung said that in the recent years, shareholders of banks have always been concerned about the difficulties caused by the rising bad debts and slow process of bad debt settlement which led to limited profit and low dividend payment, sometimes even no dividend was paid. This year, Hung expected that his bank will pay better dividends compared to the three percent in 2015.

Chair of the Board of directors of a bank in Hochiminh city with charter capital of five trillion dong said that his bank in 2016 has exceeded the profit target by 10 percent, reaching 484 billion dong pre-tax profit. However, he said that the bank can only distribute dividends of the year 2016 at about five percent in share

or cash, equivalent to the dividend payment in 2015. This leader explained that the difficult context of the market has been affecting the bank's operation, and the bank also has to prepare for the application of the Basel II standards. Thus, the most important thing at the percent time for his bank is to fully provision for risks.

Concerning the Basel II standards, the State Bank of Vietnam (SBV) has recently issued Directive 01 on implementing monetary policy and ensuring safe and efficient banking operation in 2017. Accordingly, one of the central tasks this year is to carry out the Scheme on restructuring the system of credit institutions (CIs) in association with the bad debt settlement in 2016-2020, further do research to apply Basel II standards, and enhance transparency in line with international rules and practices of CIs in Vietnam.

There are about 200 trillion dong of unsettled bad debts currently located at the Vietnam Asset Management Company (VAMC). The handling of bad debts, according to banking experts, definitely needs the participation of private sector. According to Dr Vu Thanh Tu Anh from the Fulbright Economic Teaching Programme, it is impossible to tackle bad debts without spending any amount of capital. However, it is also unrealistic if using a huge amount of the State budget to settle bad debts as suggested by some experts.

Hence, to solve the bad debt issue, banks must retain their profit to fully provision for risks. SBV's Governor Le Minh Hung said that in the current difficult context, the bad debt handling is unlikely to receive direct support of the State budget, and the importance is the effort of banks. Banks should promote the risk provisioning by using their profit, at the same time accelerating the removal of difficulties in the process of settling the secured assets of the bad debts.

In fact, increasing provision for risks is one of the reasons causing sharp profit reduction to many banks in the recent years. The Export Import Commercial Joint Stock Bank (Eximbank) is a typical example. The bank has set aside trillions dong of provision each year. general director of the bank Le Van Quyet said that closing year 2016, the pre-tax profit and profit before risk provisioning of Eximbank was estimated at about 1.2 trillion dong. However, due to the provision for risks in the year reached up to around a trillion dong in order to pull the bad debt ratio down to below three percent, the remaining profit after risk provisioning of Eximbank was only about 300 billion dong before tax.

Quyet shared that the view of Eximbank's Board of directors and Board of managers is to fully provision for risks to ensure operational safety and thus profit can hardly be high in the near future. Eximbank is planning the profit target to submit to the Shareholders Committee in the coming annual shareholders meeting, with cautious consideration.

For Eximbank, the bad debt and profit issues have always been the hot topics of its annual and extraordinary shareholders meetings in the recent years. Many shareholders of the bank have been unsatisfied for not receiving dividends, due to the significant rise of bad debts. Nevertheless, the most interested topic in the annual shareholders meeting of Eximbank is senior personnel, which is seen as the crux of all issues. The expected to hold the 2017 annual shareholders meeting on April 21st 2017 in Hochiminh city. At the meeting, three additional members of the Board of directors will be elected. According to the Resolution of Eximbank's Board of directors, the bank will receive nomination from shareholders and groups of shareholders for the election from February 21st to March 6th 2017. The nomination documents will be examined from March 7th to March 17th 2017. By March 20th 2017, Eximbank planned to submit the expected list of candidates for the additional election of the Board of directors to SBV for approval before the vote at the annual shareholders meeting.

In 2016, Eximbank was two times unsuccessful in holding the shareholders meeting due to the conflicts between the major shareholders and the disagreement on the number of members in the Board of directors in the new term. Before the extraordinary shareholders meeting which was scheduled on August 2016, Eximbank had to make cancelation announcement as the SBV requested the bank to review and inspect some information related to the right to stand for election and nomination of the groups of shareholders and report to SBV before the agency approves the list of candidates. However, in 2016, Eximbank could not be able to conduct the shareholders meeting. Hence, investors are particularly paying attention to the shareholders meeting of Eximbank in 2017.

The fact shows that the top management of banks is always the outstanding issues of the shareholders meetings, especially when the banking sector has been accelerating the restructuring process.

According to SBV's Governor, the Scheme on restructuring the banking sector phase II (2016-2020) will be completed and submitted to the government and Politburo with specific steps. The scheme to restructuring five banks, including the three "zero dong" banks (OceanBank, CBBank, and GPBank) and two other banks including Dong A Commercial Joint Stock Bank (DongA Bank) and post-merger Saigon

Thuong Tin Commercial Joint Stock Bank (Sacombank) has been approved by the Politburo and SBV has made a detailed scheme to be implemented in the near future.

Savings interest rates hit the peak after the Lunar New Year

13/Feb/2017 Intellasia | VTC News

Banks are racing to offer record high mobilisation interest rates after the Lunar New Year holiday. From January 12th 2017, the National Citizen Joint Stock Commercial Bank (NCB) has applied ceiling interest rate of eight percent per annum. In addition, the bank is also listing high interest rates on some particular terms, such as 7.8 percent per annum on 18-month term, 7.5 percent per annum on five terms of 13-month, 15-month, 30-month, 36-month, and 60 months.

Meanwhile, the highest deposit rate offered at Construction Bank (CB) is also eight percent per annum. This rate has been applied at the bank for the last several months. Despite not launching this rate of eight percent per annum for a long time, the Vietnam Prosperity Commercial Joint Stock Bank (VPBank) after the Lunar New Year holiday, has again applied this rate at some of its transaction offices.

In addition, many other banks are listing deposit rates close to the ceiling level such as Vietnam Public Commercial Joint Stock Bank (PVcomBank - 7.9 percent per annum), Viet Capital Commercial Joint Stock Bank (VietCapital Bank - 7.9 percent per annum), Bac A Commercial Joint Stock Bank (BacA Bank - 7.65 percent per annum), Tien Phong Commercial Joint Stock Bank (TPBank - 7.6 percent per annum), and Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank - 7.55 percent per annum), etc.

Although mobilisation interest rates are surging, the State Bank of Vietnam (SBV) has still directed banks to lower lending rates. In the report on the operational results of the banking sector in January 2017 and orientation in 2017, SBV admitted that some banks slightly increase mobilisation interest rates in the early days of January 2017 by about 0.1 to 0.3 percent per annum. However, the agency confirmed that this adjustment only occurred in some small joint stock banks and it is the overall trend of the market.

According to the SBV, thanks to the synchronous and flexible management of the tools of monetary policy, especially the Open Market Operations (OMO) in order to ensure liquidity for the system in the end of the year, the currency market was kept stable, while the stability of savings interest rates and lending rates was maintained.

Currently, the mobilisation interest rates are ranging from 0.8 to one percent per annum for non-term deposits and deposits with terms of less than one month, 4.5-5.4 percent per annum for deposits with terms from one month to less than six months, 5.4-6.5 percent per annum for deposits with terms from six months to less than 12 months, and 6.4-7.2 percent per annum for deposits with terms of more than 12 months.

The lending rates are popular at six to seven percent per annum for priority areas, and 6.8-nine percent per annum (short terms) and 9.3-11 percent per annum (long terms) for common production and business areas. Customers with healthy and transparent financial capacity may apply short-term loans at four to five percent per annum.

In the coming time, SBV will continue to synchronously operate the monetary policy tools to reasonably regulate liquidity and control interest rates in line with the macroeconomic developments, striving to stabilise the interest rate level.

According to SBV, the agency will instruct CIs to balance the capital sources and maintain the stability of the deposit rates, cut operational costs, and enhance business efficiency in order to have the opportunity to reduce lending rates to share difficulties with borrowers, while ensuring the financial safety in operation.

The Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) continues to be the pioneer bank in lowering lending rates in this period. According to information of VnEconomy, deputy general director of Vietcombank Pham Thanh Ha shared that since the bank has controlled and settled the bad debts and taken measures such as reducing management costs, it is capable of maintaining the current lending rate level and can even slightly reduce it, especially the short-term lending rates applicable to the five priority areas and to start-up businesses. Ha confirmed that Vietcombank is willing to share with the people and enterprises and will always apply lower lending rates than the overall level of the market. He added that based on bank's reputation, creditability and service quality, Vietcombank is paying attention to attracting cheap capital, being flexible in balancing capital and using capital, improving operational efficiency, and cutting management expenses, etc., thereby minimising the mobilisation costs and creating conditions to lower lending rates.

Financial picture of 10 biggest banks

13/Feb/2017 Intellasia | DTCK

Under the roadmap on pilot application of Basel II standard, by 2018, 10 banks (including BIDV, VietinBank, Vietcombank, Techcombank, ACB, VPBank, MB, Maritime Bank, Sacombank and VIB) will complete the pilot. The analysis of financial indicators will help investors better understand the financial situation of banks, especially before the listing of VPBank and Techcombank.

*Income from interest still accounts for high proportion As per the most updated financial statements (Q3 and Q4/2016) of nine banks in Basel II pilot group

(except for Maritime Bank who has just published 2015 financial statement), the income of banks mostly comes from credit operation. The proportion of net interest income out of the total average revenue of the group still reaches more than 80 percent.

Notably, VPBank had the net interest income in January-September at more than 10 trillion dong, far exceeding the full-year figure reported by some banks. This success can be attributable to VPBank's ownership of a consumer finance company with the leading market share.

However, at some banks, the proportion of income from other operational segments is increasing. In Q4/2016, Vietcombank was recognised as the bank that had the lowest proportion of interest income on total income in Q4/2016 with 74.6 percent because in the period, the bank had the net profit from service operation at more than 2.1 trillion dong. Along with that, Vietcombank had 1.850 trillion dong net interest from forex trading and 1.939 trillion dong other income from the recovery of loans put for provision in previous years.

Sacombank and Techcombank were bright spots in the group of joint stock banks when their income from service reached a high level and this made their income proportion from interest to be lowest in the group. Specifically, Sacombank had the income from forex trading at more than 500 billion dong in the first nine months of the year, equal to the two state-owned giants of VietinBank and BIDV and was the dream of the remaining joint stock banks.

Meanwhile, Techcombank had more than one trillion dong income from other operation including 193 billion dong from the recovery of settled debts and 193 billion dong from insurance distribution.

Screening the most updated financial statements of the group of 10 banks, we can see that, VPBank was the bank that had the biggest difference in interest rates between lending and deposits, with an average of eight percent.

This figure had major contribution from the consumer finance segment, a strategy of VPBank to make a difference with other banks. This can be the motivation for other banks who want to engage in the consumer finance market where VPBank is dominating. Typically is the joint venture between MB and the Japanese partner, state-owned joint stock commercial banks.

Sacombank was a quite "strange" case in the difference between deposit and lending rates when its average reached 1.95 percent only. This is very difficult to ensure the safety of banking activity if credit is the main activity. However, due to large net income from service and forex trading, the bank is still profitable.

VIB, Techcombank and MB were joint stock banks whose net interest proportion on the average outstanding loan was rather high, ranging from 4.5 percent to 4.9 percent. Meanwhile, state-owned banks had the net interest on total outstanding loans at 3.3 percent. This causes borrowers the psychology that the cost to borrow from state-owned banks may be lower than from joint stock ones.

However, this also depends on the lending structure of state-owned banks as the proportion of the foreign currency loans as well as the key projects of the State will often have lower interest rates. Besides, many businesses with better business results will enjoy better lending rates.

*Provision, bad debts and unpublicised figures Among nine listed banks, only Vietcombank, Techcombank, VPBank and VIB announced outstanding

loans after provisioning related to Vietnam Asset Management Company (VAMC). Accordingly, Vietcombank is the cleanest bank until the present time when they bought back the entire bad debt sold to VAMC in the previous years. As such, in the near future, Vietcombank will no longer have to think about the provision for bad debts sold to VAMC.

For other banks, the burden of trillions dong of provision is still heavy. If earnings are not enough to offset the provision for bad debt, the financial statistics in the following years will be undoubtedly seriously affected.

Among state-owned joint stock commercial banks, BIDV is probably the most aggressive bank in putting provision for bad debt by using more than nine trillion dong profits to reserve for their losses. In terms of absolute number, BIDV's bad debt is also the highest in the group.

Currently, VPBank is currently the joint stock bank with the largest provision in the group of joint stock banks, according to financial statements in the first nine months of the year. The bank's bad debt as of the end of Q3/2016 was three percent, arising mainly from loans related to consumer finance which brings about high profit along with high risks. However, with the interest rate difference at eight percent, the bank's business performance remains good.

In terms of correlation between outstanding loans in groups 3-5 and the provision level, it seems that Sacombank has quite low ratio in the group. Notably, Sacombank merged with SouthernBank and so far, the bank's 2015 audited financial statement has not been released yet. It is very likely that when the audited report is released, this figure will be significantly different.

One worth noting detail is most of the banks in the group of 10 Basel II pilot banks announced that financial statements comply with standards on development and presentation of international financial reporting (IFRS), except for VPBank. If the financial statements of banks apply IFRS with more rigorous international accounting standards, the off-balance sheet loans that were disposed will be recalculated, the NPL ratio of banks may change.

*Challenges for searching for growth As per the data from financial statements of nine banks in the group, Techcombank was the leader with

the profit of 3.86 dong out of one dong cost paid to employees, followed by VPBank, Vietcombank and MB with 2.83 dong, 2.78 dong and 2.74 dong respectively.

The lowest in this group is Sacombank with 0.53 dong only. This stems from the fact that Sacombank is the unit that has the lowest interest rate difference in the group of nine banks.

Regarding the proportion of staff cost out of total operating costs, most banks range at 50-55 percent. The staff cost reduction is hardly feasible for banks at the current time. Many banks have been gradually upgrading the information technology system in order to minimise personnel costs and improve the productivity of employees. However, it is too early to assess the impact at this point.

Vietnam banking sector seems to be stuck in finding their own growth trajectory. The interest rate difference can hardly be raised because the current level at more than 3.3 percent/annum for state-owned joint stock banks and 4.5 percent for joint stock banks has already been quite high. Therefore, boosting lending will still be an important objective of banks in 2017.

The shift to consumer finance following the path that VPBank is doing to improve net interest income is one of the measures that many banks take into account. However, this is an area with high potential risks that requires a good risk management system to control bad debt.

The development of income from service and other operations in banks still has not found the way out when the proportion on total income is still not satisfactory compared to the previous time. Domestic banks will need to have specific strategies to increase the proportion of these revenues in the context that the market is competing more and more strongly. Techcombank is the bank that is doing well the raising of revenue proportion from service and non-credit operations.

Credit quality control must continue to be strengthened by banks in 2017. With the NPL ratio brought to low level, especially for state-owned banks, the maintenance of this target is not easy and the target of further reduction is hardly feasible.

Good customers can borrow short-term loans at four to fivepct per annum

13/Feb/2017 Intellasia | DTTCO

The State Bank of Vietnam (SBV) has announced that the interest rates will remain stable in 2017. Regarding the management of interest rates, the agency assessed that although some banks slightly raised deposit rates on the early days of January 2017 by 0.1-0.3 percent per annum, that was not the overall trend of the market. With synchronous and flexible operation of the monetary policy tools especially the Open Market Operations (OMO) channel in order to ensure the liquidity of the system in the end of the year, the currency market was kept stable, and the deposit rate and lending rate levels of the system continued to be stabilised.

Currently, the mobilisation interest rates are ranging from 0.8 to one percent per annum for non-term deposits and deposits with terms of less than one month, 4.5-5.4 percent per annum for deposits with terms from one month to less than six months, 5.4-6.5 percent per annum for deposits with terms from six months to less than 12 months, and 6.4-7.2 percent per annum for deposits with terms of more than 12 months.

The lending rates are popular at six to seven percent per annum for priority areas, and 6.8-nine percent per annum (on short terms) and 9.3-11 percent per annum (on long terms) for common production and

business areas. According to SBV, customers with healthy and transparent financial capacity may apply short-term loans at four to five percent per annum.

Regarding the exchange rate issue, SBV said that in the context when the international financial market in 2017 is expected to see complicated fluctuations such as the changes in economic policies of the US and the continuous interest rate increase of the US Federal Reserve, etc., SBV will closely follow domestic and international market developments and macroeconomic balances in order to stabilise the exchange rate and foreign currency market, and continue to flexibly operate the reference exchange rate and make intervention in the market when necessary.

According to statistics, the bad debt ratio continues to be controlled below three percent. In the coming time, SBV will carry out measures to prevent and minimise bad debt incurrence by requiring CIs to enhance credit quality. In 2017, the Vietnam Asset Management Company (VAMC) will promote higher efficiency in settling bad debts in order to maintain the bad debt ratio at a safe and sustainable level.

SBV is currently completing the Scheme on restructuring the system of CIs in association with bad debt settlement in 2016-2020 period under the direction of the government and it will be submitted to the Politburo. In 2017, SBV is building plans as well as concentrating resources to drastically and comprehensively carry out the solutions included in the Scheme.

Furthermore, the comprehensive restructuring in terms of finance, operation and governance of CIs will continue to be promoted in 2017 under particular forms, methods and roadmaps which are appropriate with the characteristics of each CI and with the market mechanism based on the precautionary principle, in order to ensure the interests of depositors and maintain the stability and safety of the system.

Over 13 trillion dong of government bonds mobilised in the first month of 2017

13/Feb/2017 Intellasia | Doanh Nghiep Vietnam

Information of the Hanoi Stock Exchange (HNX) mentioned that in January 2017, HNX mobilised more than 13.182 trillion dong of government bonds, up by 233 percent compared to December 2016. In particular, the State Treasury raised 10.032 trillion dong, while the Bank for Social Policies and the Vietnam Development Bank (VDB) respectively mobilised 800 billion dong and 2.350 trillion dong.

The winning bond yields are ranging from about 5.25 to 5.5 percent per annum on five-year tenor, 5.5-5.55 percent per annum on seven-year tenor, 6.8 percent per annum on 10-year tenor, 7.2-7.7 percent per annum on 15-year tenor, 7.69-7.7 percent per annum on 20-year tenor, and 7.98 percent per annum on 30-year tenor.

Compared to late 2016, the winning bond yield of the State Treasury bonds fell by about 0.03 percent per annum on five-year tenor, 0.05 percent on seven-year tenor, 0.05 percent per annum on 15-year tenor, 0.02 percent per annum on 20-year tenor while that of the 30-year tenor remained unchanged.

On the secondary government bond market, the total outright trading volume of government bonds in January 2017 reached more than 629 million units, equivalent to trading value of more than 67.4 trillion dong, down by 30 percent in value compared to December 2016.

The total repo trading volume of government bonds in the period reached more than 251 million units, equivalent to trading value of more than 24.6 trillion dong, down by 63.2 percent in value compared to December 2016.

The outright buying value of foreign investors in January 2017 was more than 5.7 trillion dong, while the outright selling value of foreign investors was more than 3.4 trillion dong.

What is the largest lender in interbank market?

13/Feb/2017 Intellasia | Tri Thuc Tre

Which bank is depositing and lending other credit organisations the most is the question that many people care about.

Data from consolidated financial statements that we synthesized show that the change in the balance of deposits, interbank loans of banks in 2016 had a clear differentiation. Some increased one and a half, even 11 times while some other banks recorded assets on the interbank market to decrease trillions of dong.

In terms of absolute number, Vietinbank achieved the highest growth with more than 28 trillion dong total assets on the interbank market. Meanwhile, in terms of the difference, VIB's growth was outstanding in terms of deposits and loans to other credit organisations.

In 2016, VIB was one of the banks having the strong growth in the total asset scale with 23.8 percent. Of which, the noticeable thing was the record growth of assets in the interbank market from 761 billion dong in 2015 to 9.152 trillion dong in 2016; 11 times higher than the same period and the growth was mainly in

the amount of gold and money deposited in other credit organisations with the balance amounting to more than eight trillion dong.

In terms of scale, the group of three giants still took the leading position in deposits and loans in interbank market. Specifically, Vietcombank was the top depositor and lender last year with 151 trillion dong, outstripping VietinBank and BIDV with 94 trillion dong and 62 trillion dong respectively.

In this group, BIDV was the only bank whose deposits and loans in the interbank market decreased six percent. Meanwhile, VietinBank and Vietcombank increased deposits and loans to other credit organisations by 43 percent and 15 percent respectively.

Big banks pay high volume of deposit interest in 2016

13/Feb/2017 Intellasia | VNN

More than VND100 trillion was paid by the eight biggest commercial banks to depositors in 2016. How big is VND100 trillion? Since mobilising capital and providing credit are the major sources of income for commercial banks,

their business performance heavily depends on profits from lending and from the interest they pay to depositors.

For most banks, the margin between the lending interest rate and the deposit interest rate makes up 80 percent of banks' profit annually.

In 2016, the total sum of money deposited by people and businesses at eight listed companies, including BIDV, Vietcombank, VietinBank, ACB, MBBank, Eximbank, VIB and NCB, was VND2,570 trillion.

The amount of money is equal to 1.5 times of the total capitalisation value of the Vietnamese stock market (VND1,700 trillion).

For the huge amount of deposits, the eight banks had to pay VND101.616 trillion in interest in the year. As such, the average interest rate depositors could enjoy was 4 percent per annum.

At present, the most expensive car in the world is valued at $3.9 million, or VND85 billion. This means that the huge amount of money banks paid for deposit interest in 2016 was high enough to buy 1,130 cars of this kind. Meanwhile, there are less than 150 cars of this kind all over the world.

The most expensive land in the world is reported as priced at $135,000 per square metre, or VND3 billion, on Princesse Grace Boulevard in Monaco. This means that the huge amount of money banks paid for deposit interest in 2016 was high enough to buy 33,000 square meters of land there, and the land area is large enough for four My Dinh Stadiums.

With the amount of money, one can even buy stock capitalisation of the banks, such as VietinBank (VND68.697 trillion) and BIDV (VND58.802 trillion).

If noting that the size of a 500,000 dong banknote is 152 x 65 mm, then VND100 trillion would be able to cover the area of 12 Noi Bai International Airports.

Who was the biggest payer? While the gap between the deposits at BIDV and Vietcombank was inconsiderable, the interest BIDV

had to pay to depositors was 1.8 times higher than Vietcombank. By the end of 2016, the total deposits at BIDV had reached VND726.185 trillion, while the figure had

been VND590.398 trillion. This means that deposits at BIDV were 1.2 times higher than at Vietcombank. Meanwhile, BIDV had to pay VND32.248 trillion to depositors, while Vietcombank paid VND17.949

trillion. The interest rates offered by BIDV are higher than Vietcombank for all terms of deposits. http://english.vov.vn/economy/big-banks-pay-high-volume-of-deposit-interest-in-2016-343297.vov

Outstanding consumer loans capped at 100m dong per person 13/Feb/2017 Intellasia | Bizhub

A consumer can have a maximum outstanding loan of VND100 million (US$4,400) at financial firms, as per the State Bank of Vietnam's Decree No 43/2016.

This cap, however, will not apply to car loans, wherein the car is a mortgaged asset. Experts said the cap will encourage financial firms to focus on lending small loans to promote

consumption. The decree, which comes into effect on March 15, has created the legal framework for growth in

consumer lending, which is expected to see a boom in the next several years, driven by economic growth and a young population with high consumer needs.

Regarding interest rates, which remain a matter of concern in consumer lending, the decree said that financial firms will have to draw up regulations on interest rates, such as the highest and lowest rates for each product.

Consumer lending interest rates have always been higher than banking rates as the risks are higher. Experts said the decree would improve market transparency, and sub-standard customers could get access

to credit. Consumer lending currently accounts for around 10 per cent of the total outstanding loans in Vietnam, as

compared to 25 to 30 per cent in the region. http://bizhub.vn/banking/outstanding-consumer-loans-capped-at-vnd100m-per-person_284061.html

Vietnam banks to slam doors on home-based business owners 13/Feb/2017 Intellasia | VnExpress

The central bank has tightened lending criteria for household and other unregistered businesses, meaning they will not be eligible for bank loans.

With the change coming into effect from March 15, a housewife who wants to earn some extra money by selling handmade soap will have to apply for a consumer loan rather than a commercial loan from the bank.

A consumer loan is more expensive than a business loan, which will later reflect in the costs of operating her business, limiting revenue growth and profitability.

Vietnam currently has 5 million unregistered home-based businesses, said Vu Tien Loc, chair of the Vietnam Chamber of Commerce and Industry (VCCI). However, the country plans to relax the business environment so that by 2020 it will have one million private businesses, most of which will be home-based businesses that have converted to legal entities.

Loc said because some regulatory requirements, mostly involving administrative procedures and tax policies, are expensive and time-consuming, the vast majority of local businesses choose to remain as home-based micro businesses.

Also according to the VCCI, about 70 percent of small business owners, including home-based ones, that apply for a bank loan get rejected, even though they are critical to job creation in Vietnam, employing 52 percent of the private sector workforce.

http://english.vov.vn/economy/vietnam-banks-to-slam-doors-on-homebased-business-owners-343225.vov

Analysis: Basel II bank performances

13/Feb/2017 Intellasia | VIR

Updated financial reports coming from nine out of 10 banks, consisting of Vietcombank, Vietinbank, BIDV, VIB, ACB, Techcombank, VPBank, MB, and Sacombank (leaving Maritime Bank out of the list as its latest reports were dated 2015) that are to carry out Basel II requirements by 2018, showed that the percentage of income generated by banks arose chiefly from credit activities.

Average net interest income over average total income of the group was thus reported at over 80 per cent. VPBank, for instance, revealed its net interest income as of the end of September at over VND1 trillion

($45.45 million), surpassing numerous other banks. Such results were said to be attributable to a number of finance companies owned by the lender, who somehow managed to secure leading market positions in the consumer finance field.

Other banks, meanwhile, had their share of income increasing from other activities. Vietcombank, in its third quarter report, claimed a VND1.85 trillion ($84.09 million) and VND1.939 trillion ($88.13 million) in interest income from its FX services and recovering debts, which were once made provisions for earlier on. The lender's ratio of net interest income over total income was calculated at 74.6 per cent, the lowest ratio in the third quarter of 2016 within the group.

Sacombank and Techcombank were the two highlights of the commercial bank group as both had the lowest net interest income over total income ratio. These two lenders recorded swelling incomes from services rather than interest.

For instance, Sacombank's income of VND500 billion ($22.72 million) as of the end of September came out of its FX services. Techcombank, meanwhile, secured over VND1 trillion ($45.45 million) from its non-credit line activities, of which VND193 billion ($8.77 million) was collected debts recovery and the same amount from insurance activities.

At a closer inspection of the financial results of the 10 lenders, VPBank holds the highest interest margin of 8 per cent on average. This figure came straight from its consumer finance line, which was said to be a distinguishing strategy within the group.

Taking VPBank's success, other lenders like MB and its Japanese partner are finding ways to penetrate the consumer finance market.

VIB, Techcombank, and MB were the commercial banks whose net interest income over outstanding debts was rather high at 4.5-4.9 per cent. State-owned commercial banks, on the other hand, had the same ratio recorded at approximately 3.3 per cent.

Borrowers, based on such ratios, often think that interest rates at state-owned commercial banks are lower than at commercial ones. In fact, this depends on the lending structure of state-owned commercial banks that factors in the percentage of dollar-denominated loans, prioritised projects or good credit history of borrowers, which can often enjoy a better interest rate.

Sacombank's net interest income over outstanding debts, however, posted at an average of 1.95 per cent, a rather risky number that can ensure the lender's safety should its credit activities are core. Sacombank's incomes, in reality, which arrive from its FX trading and activities, were able to ensure a return for the lender.

Provisions, bad debts and unpublished figures Out of the nine banks mentioned, only Vietcombank, Techcombank, VPBank, and VIB published their

outstanding debts after making provisions for bad debts. Others, however, were related to Vietnam Asset Management Company (VAMC).

Vietcombank, accordingly, was rather clean, as it managed to buy out all of its non-performing loans sold to VAMC earlier on. The lender, as such, would not have to think about making provisions for its debts sold to the asset management company.

For the others, having to allocate billions of dongs worth of provisions will continue being a burden. Should their income be sufficient to make up for these provisions, financial indicators for the following years would surely be affected.

State-owned commercial BIDV had possibly the biggest bad debt provision of VND9 trillion ($409.09 million). The lender also experienced the highest bad debts ratio of 1.96 per cent, compared to its peers in the state-owned bank group.

VPBank, meanwhile, was the lender that made the largest provision for bad debts among commercial lenders, according to their 9-month financial report. At the end of September 2016, VPBank's bad debts ratio was 3 per cent, arising chiefly from its consumer finance loans. The lender's 8 per cent interest margin, nevertheless, was able to bring profit.

It is worthwhile to note that most of the 10 banks implementing Basel II had their financial reporting in line with the IFRS requirements, with the exception of VPBank. Should they apply these requirements in a more stringent manner, debts that have been left out of their financial statements (sold to VAMC) would likely be recalculated and their bad debts ratio would possibly change.

Challenges for growth According to data collected from the nine banks' financial report, Techcombank seemed to lead the pack,

making VND3.86 for every VND1 paid to employees. VPBank, Vietcombank, and MB followed with VND2.83, VND2.74, and VND2.74, respectively.

Sacombank arrived at the bottom with merely VND0.53 in profit for every VND1 paid to its employees. This could be explained by it having the smallest interest margin recorded within the group.

Employee expenses at these lenders in the first nine months of 2016 accounted for 50-55 per cent of the total expenses. Cutting employee costs seemed to be the hardest quest for all banks at this stage. Some have managed to improve their information technology system to reduce human resources costs and enhance labour capacity. Yet it is still too early to assess the efficiency of the IT system over human resources.

The Vietnamese banking sector may well be stuck at finding the right path for its growth. Interest rate margins may not be broadened over time as the current 3.3 per cent a year at state-owned commercial banks and 4.5 per cent a year at commercial banks are relatively high. Promoting lending will thus be the target for 2017.

Shifting to consumer finance as VPBank has been pursuing to improve its net interest margin could be a probable approach that many banks have taken into account. Nevertheless, such a segment comes with high risk, thus requiring a better risk management tool to control bad debts.

Maximising returns through services and other activities has not proven effective, as the percentage of returns from these segments over total income has not improved over the years. Local banks must,

therefore, come up with specific strategies to boost income from these segments on the back of the ever-growing competition in the banking industry.

Controlling credit quality is also another aspect that banks ought to pay extra attention to in 2017. As bad debts ratio has been brought low, maintaining it would not be easy nor would cutting it down any lower.

http://www.vir.com.vn/analysis-basel-ii-bank-performances.html

IFC plans additional $57mn investment in VPBank 13/Feb/2017 Intellasia | Vn Economic Times

Private equity fund considering another loan facility for commercial bank. The International Finance Corporation (IFC), the private equity arm of the World Bank Group, is

contemplating a $57 million quasi-equity investment in the Vietnam Prosperity Joint Stock Commercial Bank (VPBank).

"The two sides are still in negotiations," a representative from VPBank told VET. The purpose of the loan facility is yet to be revealed.

This latest move comes after the IFC arranged a $125 million syndicated loan to the bank several months ago.

The new financing will assist VPBank in "raising long-term funds for its lending programme to micro, small and medium enterprises," the IFC told DealStreetAsia.

It will potentially use the IFC Financial Institutions Growth Fund and the IFC Emerging Asia Fund, both managed by IFC Assets Management Company, to finance the deal.

The facility last year was set to expand the fund's support for small and medium-sized enterprises (SMEs), especially female-led companies.

The $50 million loan was the first phase in a $125 million financing package from IFC to help the bank extend lending to local enterprises and help boost international trade opportunities, the IFC said in a statement.

The loan comprises $25 million from the IFC's own account and another $25 million from Cathay United Bank.

Twenty-five per cent of the funding will be exclusively set aside for women-owned SMEs. VPBank's CEO Nguyen Duc Vinh said that small businesses have been the focal point of its strategy, and

the IFC financial package will help accelerate its realisation. Previously known as the Vietnam Joint Stock Commercial Bank for Private Enterprises, VPBank was

founded in 1993 as a dedicated bank for the retail and SME segments. It was the sixth-largest lender in terms of total assets among private banks in Vietnam in 2015 and saw a 35 per cent increase in after-tax profit, to more than $114 million, in the first nine months of 2016, according to its latest financial statement.

The record high profit helped it become the fourth strongest in terms of profit making during the period, following three major State-owned banks - Vietinbank, Vietcombank and BIDV.

"The project will facilitate increased access to finance in Vietnam, which remains one the most common constraints to business expansion, according to the 2015 World Bank Enterprise Survey," the IFC said.

The project reiterates IFC's aim to support SMEs in Vietnam, following its earlier syndicated loan to VPBank in September 2016 and an $18.4 million investment in TPBank in August last year.

In addition to providing long-term funding to VPBank, IFC will also help the bank diversify its funding structure and assist it in building institutional capacities close to international standards.

The IFC has been investing in and working with TPBank, ABBank and fund management firm Dragon Capital to deepen the funding routes for private companies in Vietnam.

Since the launch of its Global Trade Finance Programme in the country in 2007, more than 950 guarantees have been issued by participating banks to support $4.2 billion worth of trade finance, making Vietnam one of IFC's top trade-finance markets.

http://vneconomictimes.com/article/banking-finance/ifc-plans-additional-57mn-investment-in-vpbank

Dong A bank recoups $185m of bad debts 13/Feb/2017 Intellasia | Bizhub

Dong A Bank has delivered a steady performance under the State Bank of ViEt Nam's special supervision, since August, recovering nearly VND4.2 trillion (US$185 million) of its non-performing loans.

A report on the bank's business performance released this week stated it had ensured liquidity, with capital mobilisation rising by VND940 billion by the end of 2016 against January 2016. Its lending reached VND1.78 trillion between August 2016 and December 2016.

The number of new customers last year also increased by more than 430,000 individual customers and over 2,000 institutional customers.

In addition, service activities earned the bank VND492 billion and revenue from remittances was nearly $1.43 billion.

http://bizhub.vn/banking/dong-a-bank-recoups-185m-of-bad-debts_284053.html

Reference exchange rate revised up 10 dong 13/Feb/2017 Intellasia | VNA

The State Bank of Vietnam revised the reference VND/USD exchange rate up 10 VND from the end of last week to 22,234 VND per USD on February 13.

With the current +/- 3 percent VND/USD trading band, the ceiling exchange rate is 22,900 VND per USD and the floor rate is 21,567 VND per USD.

In the opening hours, major commercial banks made no change to their rates. Vietcombank offered the buying rate at 22,600 VND and the selling rate at 22,670 VND, for one USD,

unchanged from the end of last week. BIDV listed the buying rate at 22,610 VND per USD, and the selling rate at 22,680 VND per USD, while

Techcombank set the buying rate at 22,600 VND per USD, and the selling rate at 22,700 VND per USD. http://en.vietnamplus.vn/reference-exchange-rate-revised-up-10-vnd/107120.vnp

Life insurance firms bought most long-term government bonds 13/Feb/2017 Intellasia | VNS

Life insurance companies were the major investors in government bonds in 2016. Statistics from the Insurance Supervisory Authority Department under the Ministry of Finance showed

that life insurance firms poured more than VND29 trillion (US$1.28 billion) in long-term government bonds of 15-year, 20-year and 30-year maturity terms.

Life insurance firms bought nearly 90 per cent of the 30-year government bonds, worth more than VND21 trillion. They were also the buyers of more than 41 per cent of the 20-year bonds and 19 per cent of the 15-year bonds.

The State Treasury has raised VND16.8 trillion by auctioning government bonds this year, while raising more than VND6.8 trillion on Wednesday alone.

The finance ministry has planned to raise a total of VND250 trillion for the State budget in 2017 by auctioning government bonds.

In 2016, a record VND281.75 trillion was collected through bonds. http://www.vir.com.vn/life-insurance-firms-bought-most-long-term-government-bonds.html

20pct insurance growth target set 13/Feb/2017 Intellasia | Bizhub

Vietnam's insurance sector is predicted to grow 20 per cent this year thanks to a change in government policies, experts said.

According to Phung Ngoc Khanh, head of the Insurance Supervisory Authority Department under the Ministry of Industry and Trade, the ministry this year will carry out some solutions to improve the market.

For instance, he told Thoi Bao Tai Chinh Vietnam (Vietnam Financial Times) that the Goverment is studying an amendment to the Insurance Business Law No24/2000/QH10 and law No61/2010/QH12.

Some policies on agriculture, aquaculture and pension insurance will be applied and this segments will issue new kinds of insurance products, he said.

Khanh also affirmed that the ministry will supervise the companies'operations in order to give them timely support. He added that the ministry will make all efforts to carry out international commitments and cooperation.

This year, Khanh expected the sector will attract more prestigious investors and the market will reach growth of over 20 per cent.

Talking about the market this year, the chair of the Insurance Association of Vietnam, Pham Kim Bang, predicted that the growth for life insurance will be 25 per cent and 14 per cent for the non-life insurance sector.

He told baodautu.vn that the awareness of people and companies about the role of insurance has changed, and they using more insurance products.

Furthermore, the country's growth, which is predicted to be 6.7 per cent in 2017, will be an advantage for the market to develop.

In addition, new government policies, such as public property and natural disaster insurance, will be a positive signal boosting the market, he said.

By the end of 2016, there were 62 insurance companies operating in the country. Of this total, 29 were non-life insurance companies, 18 were life insurance companies, two were re-insurance companies, 13 were insurance intermediary companies and one was a branch of a foreign insurance company.

Last year, the sector enjoyed good results. The Insurance Supervisory Authority Department reported that the total revenue of the sector last year

stood at nearly VND102 trillion (US$4.45 billion). Of the total, VND86 trillion was from the insurance business, up 23 per cent over the previous year and VND15 trillion was from investment.

Total claims were VND25.9 trillion. About VND12.6 trillion was from non-life insurance and VND13.3 trillion was from life insurance.

Despite good results, some shortcomings still existed, such as there were many insurance products but they did not meet the demand of all segments.

The management skill of some non-life insurance companies was not good so they lacked competitiveness.

http://bizhub.vn/news/20-insurance-growth-target-set_284091.html

SBV points out series of barriers of the bad debt settlement 14/Feb/2017 Intellasia | VietnamFinance

According to a recent draft report of the State Bank of Vietnam (SBV), as of the end of 2015, the bad debt ratio on the balance sheet of the entire banking system was 2.55 percent of the total outstanding loans. However, if including the unsettled bad debts located at the Vietnam Asset Management Company (VAMC), the total bad debts would account for 5.94 percent of the total outstanding credit.

As of November 2016, the bad debt ratio on balance sheet of banks was 2.46 percent. SBV assessed that the bad debt ratio did not reduce much compared to late 2015 as new bad debts have arisen in the context when the macroeconomic context has not seen much improvement, and the production and business activities of enterprises are still facing various difficulties. In addition, customers have been unable to make repayment for the due restructured debts of which the restructuring period expired.

SBV also mentioned that as of December 31st 2016, the debts located at VAMC remained about 190 trillion dong, and the debts at the stage of judgment as of September 30th 2016 were about 58.998 trillion dong (according to report 3542/BC-TCTHADS dated October 25th 2016 of the general Department of Civil Judgment Execution - Ministry of Justice).

According to SBV, although the settlement of bad debts has achieved positive results, the current value of bad debts and potential bad debts still poses risks to the safety and efficiency of banks' operation. Meanwhile, in the system of credit institutions (CIs), some CI still have high bad debt ratio, mainly including the CIs which are under special control, and some weak finance companies and financial leasing companies. Thus, it requires drastic measures in the near future in order to avoid bad impact on the system safety and to ensure the feasibility of the handling of weak CIs.

The draft report of SBV also pointed out that the settlement of bad debts is still facing numerous problems, mainly involving the handling of secured assets. There are many obstacles leading to these problems. The first obstacle is the slow recovery of the real estate market, while many secured assets are stuck in trading terms and the valuation of assets is not in line with market practice, leading to prolonged handling of assets. In addition, the secured assets of the third party are difficult to be handled, and the litigation procedures and implementation of judgment is complicated and time consuming.

The second obstacle is the lack of incentives to attract investors which are capable to acquire the unfinished large-scaled real estate projects, such as the creation of clear mechanisms, and the simplification of administrative procedures involving the sale of transfer of secured assets which are real estate, and uncompleted projects, etc.

The third obstacle is that many customers have postponed the repayment of debts and not cooperated in the liquidation of assets, affecting the completion of the legal procedures of the secured assets. For the loans which are secured by machinery and equipment, the value significantly dropped and it is very

difficult to find partners to liquidate. In addition, the recovered value of the secured assets is insufficient to pay for the incurred liabilities of customers, etc.

SBV said that the cause related to the legal problem is the main reason leading to the low efficiency of the bad debt handling. Accordingly, the regulations of the law regarding the handling of secured assets to recover debts contain many shortcomings which have slowed down the progress and effectiveness of the settlement of bad debts of the banking sector. In particular, banks and VAMC are not having full power to tackle the secured assets when borrowers are unable to repay debts.

Since the bad debts are concentrating at weak CIs, and most of the bad debts are related to the serious cases which are in the process of investigation and disputation, the settlement of bad debt takes long time. Thus, these banks need time to tackle bad debts while the restructuring of these banks need to be promoted.

Furthermore, the mechanisms and supporting policies of the State and government remain incomplete, lack of resources and specific mechanism for VAMC to operate.

SBV added that in the recent time, SBV has reported to the prime minister about the difficulties and the progress to remove these difficulties of relevant ministries. The prime minister has directed to accelerate the implementation. Nevertheless, all of the recommendations are all related to legal documents - which need time to do research and adjust. Since some recommendations are related to the provisions of the laws, the jurisdiction is of the National Assembly.

Credit may level off in Q1

14/Feb/2017 Intellasia | Bao Dau Tu

Despite the competition in stimulating credit demand at the beginning of the year, bank leaders admit, as a rule, in Q1 each year, outstanding credit generally levels off and high growth is hard to be expected.

Though in the first quarter of two recent years, credit tended to have positive changes and got out of negative situation as in 2011-2014 period, as per bank leaders, it is impossible to expect an outstanding credit growth in Q1/2017. The reason is the capital demand of corporates and individual customers often decrease in the first quarter of the year.

Tu Tien Phat, deputy CEO of Asia Commercial Bank (ACB) said, on the one hand, this is the time after the Lunar New Year, the manufacturing and business operations of companies have not been strengthened. On the other hand, many customers suppose that January is the month of holidays so they have not thought of borrowing from banks to expand their businesses. The demand for purchasing and building houses of individual customers often started after the lunar January. Therefore, it is likely that deposit rates will also be even out in this Q1 as credit demand does not increase.

Tran Xuan Hoang, deputy CEO of the Bank of Investment and Development of Vietnam (BIDV) said the credit growth target set by BIDV for this year is equal to last year, at 17-18 percent or possibly higher if the market has positive growth and the target is approved by the State Bank. Hoang said this year's credit is likely to continue improving positively but we cannot expect a breakthrough right from the first quarter of the year.

The reality in the past two years shows that credit of the entire banking sector achieved the growth target set at 18-20 percent but in the first quarter of the year and even the first half of the year, the growth rate did not fulfil 2/3 of the plan set for the whole year. But, outstanding credit had a breakthrough in the two remaining quarters of the year, especially in Q4 every year. Specifically, as of November 28, 2016 credit of the whole sector increased 14.57 percent but as of the end of December 29, 2016, outstanding loan of the entire banking sector grew 18.71 percent from the beginning of 2015 as Q4 was the peak season of businesses so the capital demand was high.

Banks expect that credit will continue improving positively and growing well in this year. Especially when the real estate market is recovering including the affordable housing segment.

This has compelled banks to develop loan growth plan at ceiling level in 2017 at 18 percent. Even, some small banks proposed the outstanding loan growth at 25-30 percent. For example, at Orient Commercial Bank, the growth of the total outstanding loan in 2016 was 35 percent, reaching 39.607 trillion dong. OCB said results attained in 2016 will set the stage for 2017's business plan.

The proportion of loans to customers in the past year of An Binh Bank (ABBank) also touched 40.141 trillion dong, up nearly 30 percent from the end of 2015 while the capital mobilisation only achieved the growth of more than nine percent.

Leaders of some large banks such as Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank), Vietnam Export Import Joint Stock Commercial Bank (Eximbank), Vietnam Technological and Commercial Joint Sock Bank (Techcombank) or ACB, BIDV, etc. also said the credit growth target set for

this year will be equal to or higher than last year but in line with the general growth rate of the entire sector Therefore, right from the first days of the year, banks had tactics to attract deposits through promotional programmes, interest rate increase, gifts in order to consolidate the best liquidity to meet the capital demand of customers.

However, as per the assessment of financial expert Huynh Trung Minh, credit in 2017 cannot have sudden improvement but only expects to swell as in the past year. Increased input cost is the barrier for banks in reducing output interest rates to stimulate credit demand especially for corporate customers.

The credit growth target that the banking sector sets for this year is 18 percent and focuses on strengthening credit for manufacturing and business sector as well as restructuring short-term capital for medium and long-term loan under Circular No.06/2016/TT-NHNN. Therefore, economist and financial expert Tran Du Lich said the credit growth set by the banking sector is reasonable in the context that the bad debt settlement progress cannot be accelerated yet and real estate sector also needs caution. This is the reason why until now the State Bank cannot remove the control of credit "room" ceiling.

Consumer credit has another bumper year

14/Feb/2017 Intellasia | DTCK

Consumer loan profit margin is being considered as the best compared to other segments. The demand for consumer capital is increasing, but not all customers can meet the credit conditions that

banks set to access capital. Therefore, many people have come to finance companies to be supported with consumer loans despite high interest rates.

Therefore, the operating results of consumer credit segment for individual customers of banks as well as business result of many consumer finance companies in recent years have had strong growth.

For example, FE Credit's revenue and profit greatly contributed to the total profit of the mother bank i.e. VPBank with an estimated 30 trillion dong outstanding loans and two trillion dong pre-tax profits as of the end of 2016.

Talking to Dau Tu Chung Khoan (or Securities Investment), Kalidas Ghose, CEO of FE Credit said, so far, the company has had an additional 2.7 million new accounts along with an active customer base hitting 3.3 million, bringing to FE Credit a huge competitive advantage in the market. The company's market share is estimated at nearly 70 percent at the end of 2016.

"The result of these efforts is the remarkable increase in our sales, total outstanding loans and revenue while still ensuring that credit operation is well controlled", said Kalidas Ghose and added that, the utilisation of the network of more than 7,900 POS brought about a record number of loans i.e. telephones, electrical appliances and motor loans, laying the future foundation for the company's cross-selling products.

The operating result of many other domestic and foreign finance companies in Vietnam's consumer loan market in recent years shows that the growth rate in the number of customers and disbursed loans increased significantly such as Home Credit, HD Saison.

Home Credit leader said the company had 1.9 million new customers in 2016, up 90 percent from 2015 and the accumulated number as of the end of 2016 was 4.9 million people. The company's loan sales growth in 2016 was 94 percent. After more than seven years operating in Vietnam, Home Credit set up a network of 5,700 service points in 63 provinces and cities.

The profit achieved by FE Credit is desirable by banks as the difference between input and output interest rates in lending corporate customers decreased while the pressure on provision increased. Therefore, in recent time, many banks have raced to acquire finance companies to restructure and switch to consumer a loan - which has always been considered as a "pot of gold".

Specifically, Maritime Bank acquired Textile and Garment Finance Joint Stock Company (TFC) under Vietnam Textile and Garment Corporation and renamed it into Maritime Bank Finance Joint Stock Company. SHB acquired Vinaconex Viettel Finance Joint Stock Company and then SHB asked to set up SHB Finance with the chartered capital of one trillion dong. After completion, the bank will transfer the loan portfolio to individual customers with less than 200 million dong income/year to this company.

ACB's 2016 management report shows that, the company's management board met to discuss the plan on acquisition of Post Finance Company Limited (PTFinance).

The reality shows that a general point of banks' acquisition of finance companies is after the deal is completed, banks make plan to find foreign strategic partners in order to transfer 49 percent capital of this company to establish a joint venture company. Finance companies often focus on lending affordable customers who purchase telephones, motorcycles, computers in instalments with drawdowns at less than 40 million dong.

Vietnam market is assessed to continue attracting developers of consumer credit with the population ranking 13th in the world. As per many forecasts, Vietnam now has about 18 million adults living in urban area (accounting for nearly 20 percent of the total population) which is the potential source of customers using financial services provided by financial organisations. This figure is expected to continue increasing following urbanisation scale in Vietnam.

As of the end of October 2016, the outstanding consumer loan of HCM City was 201 trillion dong, accounting for 14.7 percent of the city's total outstanding loan, i.e. the consumer lending market share doubled compared to two years ago.

Reducing interest rates not necessarily impossible

14/Feb/2017 Intellasia | Bao Dau Tu

Earlier in the year, the State Bank of Vietnam (SBV) has "reminded" and warned banks about interest rates and credit expansion.

The central bank said at the beginning of January 2017, market interest rates basically remained stable. However, as per the survey of Bao Dau Tu (or Investment Newspaper), on the days before the Traditional Lunar New Year, many banks had quietly raised interest rates by 0.1-0.3 percent/year, applicable to some terms. The interest rates have been applied ever since.

Besides, since starting transactions after the Traditional Lunar New Year, many banks have launched attractive promotional programmes with the value of several billions of dong to nearly ten billion dong. Not to mention, individual promotional programmes for VIP customers are still maintained with interest rates to be 0.2-0.5 percent/year higher than normal rates.

Deputy CEO in charge of capital source at a Joint Stock Commercial Bank said that some banks strengthened promotions or slightly increased interest rates does not reflect the general trend of interest rates. Currently, the system's liquidity is rather abundant and the beginning of the year is also not the time that credit demand rises strongly. Therefore, that banks increased promotions to attract deposits is just a competition move for market share to mobilise idle source of capital, preparing for this year's credit growth and is likely to increase more than in 2016.

However, that deposit rates continued to anchor at high level leads to the concern that lending rates hardly fall as desired and directed by the government.

Dr Le Xuan Nghia, economic expert admitted that the pressure to increase interest rates in 2017 is available because of some factors such as inflation, Fed's interest rate increase resulting in the appreciation of the US dollar, rising trend of interbank interest rates and government bond yields. However, the possibility of lowering interest rates is not necessarily unavailable.

"If the State Bank can control credit growth rate and bad debt settlement mechanisms come into life, lending rates still have chance to fall further", said Nghia.

Nguyen Thi Hong, deputy CEO of the State Bank said the interest rate operation in 2017 will be extremely difficult. Hong hopes that in 2017, a series of new solutions in settling bad debts will be introduced. When bad debts are settled more thoroughly and efficiently, banks will have conditions to stabilise and reduce lending rates if conditions allow.

Vietcombank Chair Nghiem Xuan Thanh said the clearing of debts at Vietnam Asset Management Company (VAMC) will help the bank have more room to reduce interest rates, especially when this amount of bad debts is successfully recovered by the bank. Currently, Vietcombank is the first bank that successfully handled the entire bad debts at VAMC and Vietinbank is the second bank that set this target and is expected to complete in 2017.

Regarding the bad debt settlement, the State Bank Governor required departments and bureaus to actively complete documents to advise the government and submit to the National Assembly to complete the legal framework supporting the restructuring and disposal of bad debt. At the same time, this year, the State Bank is also expected to carry out solutions to buy and sell bad debts following market mechanism while gradually establishing the debt trading market on the basis of transparency, clarification of mechanism for the participation of investors especially foreign ones.

The state bank's determination to handle bad debts is the basis for the further decrease in interest rates. Besides, strictly set market discipline also reinforces this hope. Right in the first directive issued at the beginning of 2017 (Directive 01/CT-NHNN), the State Bank also warns banks about interest rates. Accordingly, the state bank requires banks to strictly carry out regulations and guidelines of the State Bank on interest rates and actively balance between capital and use of capital to ensure liquidity and stabilise deposit rates, thereby cutting lending rates.

"Credit organisations must regularly monitor and detect violations in deposit and lending rates. Credit organisations violating regulations in interest rates are handled following the law's regulations", specified the Directive.

Borrowing activities soon get excited right after the Lunar New Year holiday

14/Feb/2017 Intellasia | Dau Tu Chung Khoan

The business activities of banks and enterprises have soon returned to normal on the first working days after the Lunar New Year. Talking to Dau Tu Chung Khoan newspaper, chief currency of a bank said that the overnight interbank interest rate in dong was 1.5 percent per annum on February 9th 2017, very low compared to the period before the Lunar New Year when it sometimes hit 5.3 percent per annum. The capital abundance has been seen even at banks' transaction desks.

A staff at a transaction office of Tien Phong Commercial Joint Stock Bank (TPBank) Trung Hoa branch said that from the first working day after the Lunar New Year, there were almost no customers withdrawing but mainly depositing money. This has led to a very generous source of capital.

In fact, not only TPBank but most of the banks in the system are also having abundant liquidity. According to a senior leader of the Monetary Policy Department of the State Bank of Vietnam (SBV), if some banks had to slightly raise mobilisation rates by about 0.1-0.3 percent per annum in the early days of January 2017, so far, the deposit rate level has cooled down, being popular at 0.8-one percent per annum for non-term deposits and deposits of less than one-month term, 4.5-5.4 percent per annum for deposits with terms from one month to less than six months, 5.4-6.5 percent per annum for deposits with terms from six to 12 months.

The excessive source of capital has actively supported the issuance of government bonds to be exciting again. In particular, the Development Bank on February 7th 2017 successfully mobilised four trillion dong of bonds on three tenors of five years, 10 years, and 15 years. The winning bond yield for these tenors are respectively 5.45 percent, 6.7 percent and 7.65 percent per annum, simultaneously down by 0.04 - 0.1 percentage point. The biding volume was three times higher than offering volume.

The Hanoi Stock Exchange (HNX) said that on February 8th 2017, the agency held a release of government bonds issued by the State Treasury with total offering volume of six trillion dong on three tenors of five years (three trillion dong), seven years (two trillion dong), and 30 years (one trillion dong). About 6.815 trillion dong were raised. Specifically, the winning bond yield of the five-year bonds is 5.02 percent per annum, 0.23 percent less than the winning yield in the previous release (on January 25th 2017). The winning yield of seven-year bonds is 5.44 percent, 0.11 percent less than the winning bond yield of the previous release (January 18th 2017), while the winning bond yield of the 30-year bonds is 7.97 percent per annum, 0.01 percent per annum less than the winning rate of the previous release (on January 11th 2017).

In addition, the sub-issuance of five-year and seven-year bonds also successfully mobilised 500 billion dong of each type of bond.

Observation of the market shows that banks have promoted the lending activities right on the first working week after the Lunar New Year. For example, the Orient Commercial Joint Stock Bank (OCB) has launched a preferential lending package with total limit of three trillion dong in order to supply cheap capital to the market at interest rates from only 5.99 percent per annum. Leader of a joint stock bank at the first meeting with his family (all the descendants of a common ancestor) in Da Nang has announced the preferential lending rates of five percent per annum, applicable to the members of his family wishing to borrow loans for business and production purposes.

Sharing with Dau Tu Chung Khoan, Phan Thanh Tinh, director of Phan Cong Plastic Packaging Limited Company in Dong Nai province said that his company has returned to normal operation since February 6th 2017. Talking with leaders of enterprises located in Dong Nai province, it can be seen that enterprises which have plans to invest or expand business and operation activities have actively worked with banks soon after the Lunar New Year holiday regardless of the traditional taboo for not borrowing on the early days of the New Year.

The above mentioned staff of TPBank also admitted that although his branch has not granted much credit in the beginning of the year, customers have come to the bank and applied loans. With the borrowing applications which were submitted prior to the Lunar New Year holiday and are about to be disbursed, customers have still come to the bank and normally performed the procedures.

The Economic Research Group of HSBC Vietnam has published the Vietnam Economic Outlook report in February 2017 with the main theme being "manufacturing in the lead for Vietnam's economy". According to HSBC, in December 2016, the industrial production increased by 7.8 percent compared to the

same period of last year, from 7.4 percent in November 2016. In particular, manufacturing sector recorded a two-digit number growth and accounted for 75 percent of the total industrial production. That helped offset the sharp fall of the mining and quarrying output result. The survey results on the Purchasing managers' Index (PMI) of the manufacturing sector is also very promising. The PMI in December 2016 reached 52.4 points, reflecting the sustainable improvement in operating conditions of the industry. The number of new orders went up, including new export orders, facilitating the production activities develop.

Economic expert of HSBC said that the confidence in the manufacturing sector continues to be strengthened thanks to the decision to recruit more staff and increase inventory (both the materials for production and finished products) of enterprises. All of these signals showed the expectation of higher demand and stronger economic growth in the coming quarters.

Banks urgently clear off bad debts

14/Feb/2017 Intellasia | Bao Dau Tu

According to regulations of the State Bank of Vietnam (SBV), the 10 billion US dollars of bad debts sold by banks to the Vietnam Asset Management Company (VAMC) are considered off-balance sheet debts. Therefore, except for the Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) which has cleared off all the debts at VAMC, the current data on bad debts of banks are mostly unrealistic. However, the statistics on bad debts of banks in the near future may be changed.

Information of Bao Dau Tu showed that banks in the near future will have to report the real bad debt data (including the off-balance sheet debts which were sold to VAMC). Thus, the bad debt ratio of banks is at the risk of being doubled. In the new Directive issued in the early year, SBV has also given warning about decisively handling the credit institutions (CIs) having large amount of bad debts and not being actively settling them.

This is also the reason why many banks have ultimately promoted the settlement of bad debts in the recent time, especially the debts sold to VAMC. Reportedly, banks mainly sold debts to VAMC in the period of 2014-2015. In 2016, the amount of debts sold to VAMC was insignificant (over 22 trillion dong). Some banks even planned to repurchase the debts they sold to VAMC.

Chair of the Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) Nguyen Van Thang said that in 2016, VietinBank solved nearly 10 trillion dong of bad debts, and in 2017, the bank will focus on handling bad debts and repurchasing the debts sold to VAMC by its own resources.

SBV's Governor confirmed that the key task of the sector in 2017 is to restructure and to tackle bad loans. As requested by the head of the sector, in 2017, banks must make plans to handle bad debts and the potential bad debts (bad debts on the balance sheet, debts sold to VAMC which remain unsettled, restructured debts, irrecoverable debts, etc.) The plan must be made for each quarter and regularly reported to SBV.

For VAMC, the task in 2017 is to review, reclassify and reassess borrowers, secured assets and the acquired debts in order to determine the recoverability and take appropriate measures. In addition, VAMC should strongly and synchronously carry out the solutions on buying, selling, and settling bad debts under market mechanism; apply measures to minimise the risks in trading debts under market mechanism, while creating favourable conditions for foreign and domestic investors to participate in the trading of bad debts, and secured assets.

The biggest expectation of banks in terms of bad debt settlement is that the government will submit a new law to support the restructuring and bad debt settlement in May 2017 to the National Assembly.

According to SBV's Governor Hung, the new law consists of three main contents. Firstly, there will be specific legal framework which support the restructuring process. Secondly, the law will solve the current problems in bad debt settlement, especially the obstacles related to seizing and handling secured assets in order to protect the interests of the lenders. SBV has also sent documents to the Chief Justice of the Supreme People's Court and the Procurator-General of the Supreme People's Procuratorate regarding the existing problems in bad debt settlement in order to have coordination and unified settlement.

Thirdly, the law will offer stricter regulations concerning share and securities ownership in order to limit the excessive ownership of bank shares, avoiding the use of banks to serve personal interests. The regulations on safety will be enhanced and included in the law.

In addition to building law, SBV has proposed the government the establishment of the Steering Committee for restructuring the banking system associated with bad debts, which is chaired by the prime minister.

Chair of VietinBank believed that these moves will help the bad debt settlement of banks in 2017 become more favourable. Meanwhile, lawyer Truong Thanh Duc, Chair of the Board Members of BASICO Law firm recommended that a separate law on bad debt handling should be quickly issued, otherwise bad debt issue may last for decades.

VPBank acquires more than 400b dong bonds of HAGL Agrico

14/Feb/2017 Intellasia | BizLIVE

The consolidated financial statement in 2016 of Hoang Anh Gia Lai Agricultural Joint Stock Company (HAGL Agrico - code HNG) showed that on December 27th 2016 and December 29th 2016, the Vietnam Prosperity Commercial Joint Stock Bank (VPBank) respectively registered to acquire 290 bonds and 141 bonds issued by the company. The par value of each bond is one billion dong. The total value of bonds acquired by VPBank is 431 billion dong. The bond' interest is paid quarterly, starting on March 27th 2018. In the first three interest periods, the bond yield is 10.5 percent per annum. According to information, the purpose of the issuance of HNG is to restructure the interest debts of HNG's bonds.

The above mentioned bonds are secured by 234,484,450 shares of HNG held by the parent company Hoang Anh Gia Lai (HAG); the entire lease rights, land use rights and assets attached to land of the 7,376 hectares of land in Lumphat district, Rattanakiri province owned by Daun Penh Agrico Company Limited; and the 4.7 million shares owned by Doan Nguyen Duc.

Regarding the long-term financial loans, in addition to the bank loans which increased from 4.690 trillion dong to 5.986 trillion dong, the domestic bond loans of the HNG rose from two trillion dong to 2.114 trillion dong. HNG has a loan offered by related party which soared to 10.164 trillion dong but was not specifically noted.

In addition to the above volume of bonds, VPBank is also the owner of 1.4 trillion dong bonds of HNG. The National Citizen Commercial Joint Stock Bank (NCB) was holding more than 300 billion bonds of HNG as of late 2016. This total volume of bonds was issued on November 17th 2015 to restructure a part of the principal debt of bonds issued in 2012 and supplement capital for the projects in Laos and Cambodia. These bonds are secured by 181,717,250 shares of HNG which is held by HAG.

According to the financial statement of HAG, VPBank is holding large volume of bonds of the firm, including a volume of bonds worth 1.614 trillion dong issued on November 28th 2014. VPBank and FPTS are also holding a volume of HAG bonds valued 600 billion dong issued on August 27th 2015.

How is the business performance of Vietnam's leading bank brand over the past 8 years?

14/Feb/2017 Intellasia | Tri Thuc Tre

At the beginning of February, good news came to the Bank for Investment and Development of Vietnam (BIDV) when the world's leading company in strategic consultation and brand valuation Brand Finance published the validation result of global banks in 2017.

Three Vietnamese commercial banks were included in this list i.e. BIDV, Vietcombank and Vietinbank. Of which, BIDV was valuated as the leading bank brand in Vietnam, surpassing Vietcombank and Vietinbank and ranking 26th among Asean banks, ranking No.401, up 12 grades from 2016.

VietinBank ranked No.408 with the brand value of $252 million (ranking No.379 in 2016) while Vietcombank's brand graded No.461 with $201 million (ranking No. 450 in 2016).

The brand valuation methodology of Brand Finance is the only method accepted by tax agencies and authorities with international scale and prestige including IRS, HMRC and ATO. The brand is also one of the few companies certified to provide brand valuation in line with ISO 10.668 - global standards on brand valuation.

So how is BIDV's business operation in recent time? As per financial report, at the end of 2016, the bank's loans to customers reached 723 trillion dong,

customers' deposits touched 726 trillion dong, an increase of 4.5 times compared to 2008. BIDV's indicators ranked the first in the banking system.

BIDV's net interest income in 2016 was 23.7 trillion dong, up nearly four times compared to eight years ago. The bank's after-tax profit in the past year also touched 7.7 trillion dong, up 3.2 times compared to 2008.

The after-tax profit in 2016 decreased compared to 2015 due to the sharp year-on-year increase in the provisioning rate at 63 percent after the acquisition with MHB.

In 2012, BIDV's profit was lower than the previous year. This stage went along with the transformation of operations under the model of a joint stock commercial bank in which BIDV developed and implemented the restructuring plan in 2012-2013 period with orientation till 2015, in association with the government's objectives and requirements on restructuring of credit organisations.

After the restructuring period, BIDV's business operations had had breakthroughs in operational efficiency, profits and has been highly appreciated by foreign organisations.

Deutsche Bank remains steadfast in Vietnam?

14/Feb/2017 Intellasia | VIR

Jens Ruebbert, chief country officer at the HCM City Branch of Deutsche Bank AG, shared with VIR's Nam Phuong the branch's commitment to the country despite recent incidents that plagued the bank's overseas activities and his thoughts on the mergers and acquisitions wave in Vietnam.

Deutsche Bank has participated in a number of mergers and acquisitions (M&A) deals in Vietnam last year. Can you share some of your predictions on the future of M&A in the country, especially in deals where foreign partners are involved?

Last year, Deutsche Bank Group has led a number of landmark transactions in Vietnam, including the initial public offering for budget airline VietJet Air, the acquisition of retailer Big C Vietnam by Thai Central Group, and investment in Masan Consumer by Singha Asia, also from Thailand.

Our regional Corporate Finance team participated in these transactions, and I think that the Vietnamese market could see a new wave of M&A in the near future. One major reason is that the government is committed to equitising and reforming state-owned enterprises as part of the national strategy to improve business productivity.

If the Vietnamese government continues to open up these state-owned firms to foreigners, we believe that a lot of overseas investors will be interested. Of course, global investment banks like us will be happy to assist domestic firms in finding the most suitable foreign investors.

Many banks in Vietnam are shifting towards retail customers, but it seems that Deutsche Bank still stands its ground on corporate and investment banking. Will you change this strategy in the coming years?

We will continue to focus on corporate and investment banking in Vietnam. We do provide/offer retail banking for some select markets in Europe, most importantly in our home market Germany, but there are no plans to launch such services in Vietnam in the future.

The main reason is that we would like to concentrate on what we are good at in Vietnam, which is corporate and investment banking. Another factor is the increasing competition in the local retail banking sector. As you mentioned, many banks in Vietnam are offering retail services and domestic lenders are doing well in their shift towards retail customers, making the sector highly competitive.

Looking into the future, we can see that transactions in Vietnam will involve more automation and technology. In particular, financial technology services (fintech) will play a more prominent role, as it does in retail banking.

Moreover, new players are likely to enter the corporate and investment banking markets, as there are many opportunities in the expanding Vietnamese economy. Our economists expect that Vietnam will grow by 6.4 per cent this year, supported by a sustained recovery in agriculture and export.

Deutsche Bank has recently been having legal troubles in its US and European markets. Does this affect your operations in Vietnam, and what plans do you have here for 2017? Do you intend to invest in a Vietnamese lender, as the foreign ownership cap on banks may soon be removed?

This year, Deutsche Bank is proud to celebrate its 25th anniversary in Vietnam and we remain committed to delivering innovative financial solutions to our clients, from corporate advisory, to trade finance, treasury solutions, and custodian services. Despite recent incidents that Deutsche Bank Group experienced in the global markets, our commitment to Vietnam remains unchanged.

After a year of advising large M&A deals, Deutsche Bank Group will continue to look for new investment banking transactions in Vietnam, and we hope that opportunities will arise as the Vietnamese economy develops.

Regarding the government's recent discussion over lifting the foreign ownership limit in Vietnamese banks, we think that it reflects strong will to reform the banking sector and is a positive step to attract fresh capital into restructuring banks.

Unfortunately, I cannot comment on whether Deutsche Bank will participate in this activity, as such strategic decisions are made by our group's Management Board.

http://www.vir.com.vn/deutsche-bank-remains-steadfast-in-vietnam.html

Lending cap set for finance firms

14/Feb/2017 Intellasia | The Saigon Times

Finance companies will be allowed to lend a maximum of VND100 million (some $4,405) to an individual customer from March 15 this year as required by the State Bank of Vietnam (SBV) in Circular 43/2016/TT-NHNN.

The circular, which was signed by the SBV's governor, aims to better control lending activities at finance firms and protect the legitimate rights of borrowers. An individual can borrow a maximum of VND100 million at a finance firm to pay for goods and services including cars, home appliances, school tuition, medical treatment and tourism, and home repair.

The lending cap will not apply to the consumer credit used to buy an auto that is placed as collateral for the loan.

Finance firms are required to submit the lowest and highest interest rates for their consumer credit to the SBV for approval. The circular allows them to introduce their credit products at consumer goods stores and collect information about the borrowing demand of customers.

Finance firms have to issue internal principles on collection, update, inspection and management of client data, as well as application of effective measures to detect and prevent false information and fraud, control debts and ensure compliance.

The circular also states finance companies must clarify the deadlines for principal and interest payments, interest change, ways to collect debts and coping measures for overdue loans in lending contracts with customers. They should make clear points in the contracts when requested as well as publicise sample contracts and transaction conditions for consumer credit at their head offices and on websites.

http://english.thesaigontimes.vn/52270/Lending-cap-set-for-finance-firms.html

Domestic accounting market approaching vast opportunities 14/Feb/2017 Intellasia | VIR

Trinh Duc Vinh, deputy head of the Department of Accounting and Auditing Regulations under the Ministry of Finance, elaborates on the Law on Accounting 2015 which is expected to propel the development of domestic accounting services.

Accounting is one of eight fields enjoying total freedom in the Asean after the Asean Economic Community (AEC) was established at the end of 2015. Could the Law on Accounting be in a position to protect accounting firms as well as the domestic accounting services market?

Compared to accounting firms in other regional countries, local firms prove to be weaker in terms of financial capacity, human resources quality, and track record. Therefore, on one side, Vietnam will open up the market for accounting services to match its undertakings under the AEC, while on the other side, it will limit foreign firms to only provide accounting services in the form of capital contribution with local firms on an equal footing or establish branch offices in Vietnam, but they will not be allowed to open wholly foreign-owned units.

In addition, we have erected technical barriers to shield the domestic market. Accordingly, anyone, including foreigners, providing accounting services in Vietnam need to acquire

accountants' or auditors' certifications. To get the certificate, they must undergo an exam in Vietnamese held by the Ministry of Finance (MoF). Even those already holding certifications granted by foreign organisations, including international accounting organisations which were accepted by the MoF, must take an exam on Vietnam's economic, financial, and accounting regulatory systems - in Vietnamese language. Not only Vietnam, other regional countries have also applied similar measures to safeguard their domestic service trading markets.

Why only certain types of companies are allowed to provide accounting services in Vietnam? Like several other kinds of services, such as auditing or notary services, accounting firms hold high

responsibilities, so that risks are high if even joint stock firms, cooperatives or joint ventures were allowed to provide these services.

For example, when joint stock firms are authorised to provide accounting services, they could also be the shareholder of the companies leasing their accounting services. In that case, it would be difficult to ensure transparency and objectivity. Therefore, as per global practices. only limited liability companies consisting of at least two members, consortiums, and private firms are eligible to provide these services.

Do you think that imposing a cap on capital contribution to accounting firms will prevent certified accountants from opening businesses?

Accounting services do not require much capital, but are very reliant on the quality of human resources (accounting team). Therefore, controlling capital contribution does not discourage certified accountants from establishing their own businesses.

Therefore, governmental Decree 174/2016/ND-CP regulates that corporate members of limited liability companies must contribute at most 35 per cent of the chartered capital. In case many entities jointly contribute capital, the total contribution of these entities must not surpass 35 per cent.

Besides, at least two capital polling members must be certified accountants and the share of certified accountants must exceed 50 per cent of the chartered capital.

These requirements are to help ensure the independence of accountants' activities as well as their responsibility.

How will the accounting services market fare in the upcoming time? Each year, 100,000 new companies will join the market, opening up enormous opportunities for

accounting services. Besides, from this year, businesses and administrative organisations are allowed to hire accounting firms and are not required to open their separate accounting departments.

Thus, I believe the accounting services market will enjoy great opportunities in the upcoming time. http://www.vir.com.vn/domestic-accounting-market-approaching-vast-opportunities.html

Reference exchange rate goes up 1 dong 14/Feb/2017 Intellasia | VNA

The reference exchange rate for VND/USD was raised by 1 VND to 22,235 VND per USD on February 14.

With the current trading band of/-3 percent, the ceiling rate applied to commercial banks on the day is 22,902 VND and the floor rate, 21,568 VND per USD.

The opening hour rates at most commercial banks also went up, with Vietcombank increased both buying and selling rates by 60 VND, to 22,660 VND and 22,730 VND, respectively.

BIDV listed its buying rate at 22,665 VND and selling rate at 22,735 VND per USD, both up 55 VND compared to February 13.

The buying rate listed by Techcombank went up 30 VND to 22,630 VND and the selling rate was increased by 40 VND to 22,740 VND per USD

http://en.vietnamplus.vn/reference-exchange-rate-goes-up-1-vnd/107182.vnp

KB Kookmin Bank welcomed to join banking restructuring 14/Feb/2017 Intellasia | VGP

PM Nguyen Xuan Phuc called on KB Kookmin Bank to expand financial operations in Vietnam while receiving Chief Executive Officer Yoon Jong-kyoo in Hanoi on January 11.

The government chief praised the Korean financial group for sharing experience in social housing development and for supporting startup movement in Vietnam.

He also welcomed the financial group to join the government's efforts in restructuring commercial banks, including purchasing them.

COE Yoon expressed his wish to further expand investment in Vietnam, especially in such fields like banking, securities, insurance, and social housing development.

Yoon said the group expects to cooperate with competent agencies of Vietnam to organise a seminar to seek ways for social housing development for low incomers.

http://news.chinhphu.vn/Home/KB-Kookmin-Bank-welcomed-to-join-banking-restructuring/20172/29788.vgp

Corporate

Draft decree on State monopoly in trade submitted to government

13/Feb/2017 Intellasia | Bizhub

The Ministry of Industry and Trade has submitted to the government a draft decree declaring a State trade monopoly in 16 goods and services.

On Saturday, the government website published the draft submitted by the Ministry of Industry and Trade, which mentioned the State would hold a monopoly in trading 20 goods and services, such as goods

and services for the purpose of national defense; production, sale, import and export of industrial explosives; gold bar production; export and import of gold materials to produce gold bars; issuing lottery.

In addition, the State's monopoly would also extend to the fields of tobacco imports; lottery ticket issuance; activity of the national reserve; money printing and minting; issuing Vietnam's postage stamps; and production, sale, import-export, transport, storage of fireworks and related services; besides operation of lighthouses and public navigable systems.

According to the ministry, the draft decree is aimed at implementing the 2005 Commercial Law which permits State monopolies with no timelines on commercial operations for a number of goods and services, especially in areas of national interests. The government will specify the categories of goods and services, and the geographical areas of the State monopoly.

The draft mentioned that the State monopoly in trade implied commercial activities in which only State agencies or State-owned firms would be authorised to trade.

The draft also stated: "The State monopoly in trade is only in essential goods and services, such as the defence and security to which the State would have exclusive rights."

The enacted decree will contribute to improving the transparency, consistency and accuracy of the legal system on the State monopoly in commercial activities, the ministry said.

The ministry said it would promote a healthy competitive environment, while classifying the scope of the State monopoly, as well as the rights and obligations of related businesses, thereby instilling confidence and trust in the public, besides allowing other economic sectors to monitor State intervention through legislation.

The firms that carry out the State monopoly will have to be under strict inspection and supervision, according to the laws on enterprises, competition, pricing and management and use of State funds, the ministry said.

http://bizhub.vn/news/draft-decree-on-state-monopoly-in-trade-submitted-to-govt_284089.html

Grade A offices in downtown area forecasted to be in shortage 13/Feb/2017 Intellasia | Dau Tu Bat Dong San

Price of office-for-rent market has generally been rather stable within three recent years (from 2014 till now) and is forecasted to maintain this level in 2017 when the new supply continues to increase. However, Grade A offices are assessed to have more positive developments as demand increases and supplies are limited.

*Foreign visitors account for 76 percent of Grade A office space According to data from Savills, in Q4/2016, office rents in all three Grades A, B, C were stable, standing

at about $28, $16 and $13 per square metre per month respectively. The market capacity was 87 percent in Q4, up four percent year-on-year. On average, the average rent is reaching $19/square metre/month, stabilising in Q4/2016 and increasing 1.4 percent year-on-year.

Sharing with Dau Tu Chung Khoan (or Securities Investment), Do Thi Thu Hang, director of Research Division at Savills Hanoi said "Last year, two projects including Vincom Pham Ngoc Thach (27,000 square meters) and Vincom Pham Hung (about 20,000 square meters) increased the total supply of office market in Hanoi to 1.2 million square meters. The office-for-rent market does not have many new supplies, except for some buildings in the west.

In 2016, no Grade A project went into operation but Grade B and Grade C only. The total supply rose four percent year-on-year. In 2017, there will have about 164,000 square meters from six projects including two Grade A and in 2017, there will have about 250,000 square meters from 13 projects.

Also according to Hang, office rents are being adjusted towards the level that both customers and renters find the motivation for development. In fact, office rents continued to hit the bottom in four recent years. Therefore, though some commercial centres in Hanoi are being renovated and a series of new commercial centres such as Aeon Mall Long Bien, Mipec Riverside, Vincom Pham Ngoc Thach, etc. have been put into operation, most of these projects reached rather high capacity. Besides, the area for lease often has positive growth in all categories.

In Grade A office segment, according to Savills' survey, if in 2014, 50 percent of the finance and banking sector rented at Grade A buildings, then in 2015, this proportion fell to 32-35 percent. Meanwhile, telecommunication and manufacturing are the two sectors that tend to increase the rent of Grade A office space.

"Not to mention, in Grade A office-for-rent now, as much as 76 percent are foreigners. Of which, Korea, Japan, the U.S, the UK and China are leading countries in leased areas", added Hang.

Regarding the prospect of offices-for-rent of different kinds in 2017, as per Savills' assessment, the downtown area will have higher occupancy rate, especially Grade A office buildings. Customers wishing to rent more than 900 square meters of Grade A offices in the near future in Hanoi's downtown area will face difficulties because available space in the same area now remains at less than 900 square meters only. Besides, a large area in suburban offices-for-rent has also been filled.

Over the last period, the urban area witnessed the active operations of office-leasing segment, especially the spike in occupancy of Grade A office buildings. This is partly because rental policy of some investors is attractive to tenants. Not to mention, this area is having many choices for tenants and the future supply is rather abundant.

In the western area of Hanoi, Grade A office market runs very well, surpassing Grade B. Currently, the empty area of Grade A buildings in this area remained at six percent only. Within the past one year, Grade A office rents increased five percent and mostly to serve the office expansion, not the new establishment.

Hang analysed "In the current context, we realise that some investors may raise the price in the near future. Besides, we also find that, within the next two years, the downtown area will have no Grade A office- for-rent. This can be understood that the size, capacity of Grade A offices in the downtown area will reach a very high level in the near future".

On the other hand, in the judgement of some experts, in the upcoming years, office rents of both Grade A and Grade B in Hanoi will still be stable. There is little possibility to increase in price when the new supply continues to enter the market. However, the downtown area is expected to have higher level of price increase as demand overwhelms supply.

VN realty market attracts robust foreign investment

13/Feb/2017 Intellasia | Bizhub

Foreign Investment Agency statistics show that nearly $300 million worth of foreign direct investment (FDI) was poured into the property market in January, accounting for roughly 20 per cent of the total FDI attraction.

Nguyen Mai, chair of the Vietnam Association of Foreign Investment Enterprises, said that the Vietnam real estate market appeals to foreign investors due to two factors:

The first one is the growing middle class, which is expected to reach 33 million by 2020 from 12 million in 2012. A series of policies targeted to improve the investment climate and allowing foreigners to own real estate assets in Vietnam also consolidated confidence, Mai said, adding that investments in property assets promises higher returns in Vietnam than in many other countries.

Mai said that the low- and middle- income housing market is catching the eyes of foreign investors due to land use incentives and credit. "This is a good sign," he said.

According to Phan Huu Thang, former director the Foreign Investment Agency, many foreign investors and investment funds are eyeing opportunities in the realty market of the country of 90 million population.

"Opening-up policies together with rapid ubanisation are turning Vietnam's realty market into a destination," Thang said.

However, Thang noted that attention must be paid to attracting investors of adequate capacity to carry out projects, calling this essential to prevent stagnation, which has caused significant losses.

In 2016, foreign investors poured a total of $1.3 billion into the realty market. http://bizhub.vn/property/vn-realty-market-attracts-robust-foreign-investment_284079.html

Big conglomerates emerge after 10 years of hiding 13/Feb/2017 Intellasia | VNN

Soon after listing their shares on the bourse after many years of hiding, a number of multi billion dollar conglomerates quickly became 'pillars' in the stock market.

Just within a short time from the end of 2016 to early 2017, a series of large conglomerates turned up in the stock market.

FOX shares of FPT Telecom, after many years of stirring up the OTC market, made their debut on UpCom market in early 2017 and saw the prices increasing several times within days.

Prior to that, SAB and BHN of Sabeco and Habeco, the two largest brewers, also witnessed share prices soaring from tens of thousands of dong to VND200,000 per share.

With the market price of VND220,000, Sabeco has become the enterprise with the second largest capitalisation value in the stock market ($6.3 billion), just after Vinamilk ($8 billion).

SAB is being hunted by investors, including foreigners, who now hold 9 percent, while the Ministry of Industry and Trade still holds the controlling stake of 89 percent.

With the appearance of multi billion dollar conglomerates, the Vietnamese stock market scale has grown rapidly.

Ten years ago, Vietnam only had two to three enterprises with capitalisation value of billions of dollars, while there are now tens of such enterprises.

HVN shares of Vietnam Airlines, the national flag air carrier, soared so sharply on the first days of 2017 that many investors regretted their decision to not buy HVN when the carrier made IPO in 2014.

The price of more than 1.3 billion HVN soared by 40 percent on the first day of turning up, raising the air carrier's value to over $2 billion.

The impressive debut and the expected bright prospects of the aviation market promise huge profits for investors, including Vietcombank and Techcombank, the two institutional investors who bought 99 percent of the amount of HVN offered at the IPO.

Sabeco's share price, which was VND80,000 in the OTC market, has increased by three times within a short time.

A series of foreign investors, including SABMiller, Thai Beverage, Shingha, Heineken, Ab-Inbev and Asahi, are queuing up to buy the shares after one decade of waiting, since the day the enterprise began equitisation in 2008.

ACV shares of the Airports Corporation of Vietnam (ACV) have also been hunted by investors. The enterprise has listed its name among multi billion dollar corporations soon after listing shares on the bourse with the total capitalisation value of approximately $5 billion.

At the IPO in 2015, more than 80 percent of ACV shares put into auction were bought by foreign investors. The investors who acquired ACV shares at the IPO now can make a 400 percent profit just after one year.

http://english.vietnamnet.vn/fms/business/172291/big-conglomerates-emerge-after-10-years-of-hiding.html

Ministries split over proposed environmental tax hike for fuels

13/Feb/2017 Intellasia | The Saigon Times

The Ministry of Finance still sticks with its proposal to impose a higher environmental tax on fuels though other ministries have expressed concern over the impact of the hike on the country's socio-economic growth.

The Ministry of Finance sought an environmental tax of VND4,000-8,000 per litre of gasoline compared to the current VND1,000-4,000, VND3,000-6,000 per litre of jet fuel, VND1,500-4,000 per litre of diesel oil, VND300-2,000 per litre of kerosene, VND900-4,000 per kilogram of heavy fuel oil, and VND900-4,000 per kilogram of lubricant.

In a report on the impact of draft amendments and supplements to the environmental protection law, the Ministry of Finance said the proposed environmental tax spike would leave no negative impact. However, the ministry has not mentioned its quantitative assessment which is required for such a report.

The ministry said there are grounds for the proposal as the environmental tax hike would help raise public awareness of environmental protection, limit consumption of pollution-causing goods, and match a roadmap to offset reductions of import tariffs in line with the country's commitments to international trade deals.

The ministry said Vietnam cut the import tax on fuels to 0 percent last year and will lower that on gasoline to 8 percent in 2021, 5 percent in 2023 and 0 percent in 2024 as required by the trade pact among the Asean countries.

Under a free trade agreement between Asean and China, Vietnam lowered tariffs on oil imports to 5-8 percent last year. The import taxes on oil and gasoline will be brought down to 0 percent and 10 percent respectively in 2018 in accordance with the Asean-South Korea FTA.

An environmental tax increase reflects a trend in regional countries and will help prevent fuel smuggling. Therefore, the draft revision of the environmental protection law is necessary, the ministry said.

In their comments on draft amendments and supplements to the environmental protection law, a number of ministries have expressed concern over the negative impact of the environmental tax increase on the country's socio-economic growth.

The Ministry of Foreign Affairs called for the ministry to weigh the viability of the environmental tax hike and devise an appropriate road map for it as many enterprises are still grappling with a host of difficulties and fuels now bear multiple taxes and fees.

The Ministry of Finance was urged to assess the impact of the environmental tax spike on the country's growth.

Meanwhile, the Ministry of Justice said the draft amendments and supplements have many overlapping contents. It asked the Ministry of Finance to evaluate the effect of the draft revised environmental protection law, particularly the spike of the environmental tax on groups of goods, fuels and lubricant products.

http://english.thesaigontimes.vn/52243/Ministries-split-over-proposed-environmental-tax-hike-for-fuels.html

Vietnam aims to link SE Asia to Indian Ocean

13/Feb/2017 Intellasia | VNA

Vietnam plans to invest in its transport infrastructure comprehensively while linking development strategies among sectors in order to develop a multi-modal transport environment, making the country the gateway connecting Southeast Asia to the Indian Ocean.

This was the target of a master plan on developing infrastructure and linking national infrastructure with other regional networks from now until 2020. The master plan was approved by prime minister Nguyen Xuan Phuc on February 7.

According to the plan, Vietnam will give priority to construction work which ensures the connection between national modes of transport, major economic centres, key transport hubs and traffic infrastructure networks in the region.

Specifically, the country will focus on building expressways, including the Ho Chi Minh Expressway, and upgrading and connecting national highways of the northern and southwest belt roads and sea routes linking Vietnamese ports with neighbouring countries such as Lao, Thailand and Cambodia. Around 2,000 kilometres of highways will be completed and put into use by 2020.

The country aims to complete construction projects to connect the route from northern Cao Bang province's Pac Bo district to southernmost Ca Mau province's Dat Mui district with a two-lane road.

In terms of its sea route network, Vietnam will focus on construction work that connects seaports with national transportation networks and logistics hubs in the region. Dry ports and other infrastructure that supports the development of logistics services will also be given priority.

Development of waterway systems is also important. Vietnam has set a goal to complete the national technical regulations on domestic waterways. Water routes connecting the Mekong Delta region with HCM City and other routes of Tien, Hau, Hong and Thai Binh rivers will be upgraded.

The country will continue upgrading and modernising three international airports, including HCM City's Tan Son Nhat Airport, Hanoi's Noi Bai Airport, and Da Nang Airport. Other facilities will also be built at other airports to help achieve total designed capacity of airports of between 110-120 millions of passengers and 1.5-2.5 millions of cargo by 2020.

http://en.vietnamplus.vn/vietnam-aims-to-link-se-asia-to-indian-ocean/107025.vnp

Hanoi office and retail competition heating up 13/Feb/2017 Intellasia | VNA

The market segment for offices and retail space for lease in Hanoi is expected to become fiercely competitive as supply increases.

It is estimated that by the end of this year, the market will have additional 200,000sq.m of offices for lease from seven projects. However, there is no new project in the capital's centre.

CBRE said last year, the total supply of office for rent was up to around 1.2 million sq.m including 65 percent of B-class offices. The rental price of the B-class offices was 17.8 USD per sq.m a month, posting a 0.6 percent year-on-year increase. That of A-class offices was 28.5 USD per sq.m a month, representing a 3 percent decrease from the previous year.

The rental price and occupancy rate of offices in the city's centre has been at high level due to favourable locations and limited land funds.

Companies with strong financial situations were ready to pay 30-40 USD per sq.m a month for A-class offices and 20-30 USD per sq.m a month for B-class offices excluding taxes and service fees.

However, big areas in the centre area's were hard to find.

Nguyen Hoai An, CBER's deputy director, said that rental in the city's centre was expected to increase due to limited supply, while the western area rents might sink due to abundant supply.

Vietnam in general and the real estate market in particular are expected to attract foreign direct investment in the upcoming time thank to the advantages of stable politics, geographical location and human resources.

The positive signs of the economy could draw attention from foreign investors to the country and the capital markets, thus making demand of office for lease higher.

Cushman & Wakefield said the competition in the market would be increased due to not only new projects but also to the increase of new types of offices such as co-working spaces and office-tel.

In term of retail space for lease, Hanoi has around 1.2 million sq.m, posting 10 percent increase from last year with the launch of two new commercial centres including Vincom Pham Ngoc Thach and Vincom Plaza Bac Tu Liem with a total of 45,900 sq.m.

The average rental price of the city's commercial centres in the first quarter of the year was reduced by 7.6 percent from the previous quarter.

According to Savills Vietnam, 12 new commercial centres with a total area of 158,000 sq.m are expected to be completed this year. All of the centres are located in the city's outside centre area in Cau Giay, Thanh Xuan and Ha Dong district. Most of the projects have been integrated into residential complex.

The country opened its retail market under WTO's commitments and has attracted foreign retailers, causing the fierce competition. Japanese, Thailand and Chinese retailers have expressed increasing attention to investments in Vietnam, showing strong development potential in the market despite competition. http://en.vietnamplus.vn/hanoi-office-and-retail-competition-heating-up/107096.vnp

Casinos open, but Vietnamese find it difficult to gain admission

13/Feb/2017 Intellasia | VNN

The government has finally allowed Vietnamese to gamble at casinos. However, because of strict requirements set by the watchdog agency, it will be not easy for locals to enter casinos.

From March 15, 2017, Vietnamese citizens will have the right to play at casinos licensed by the government. However, they must be 21 years old or above with "full capacity for civil acts of individuals" according to Vietnamese law, have proof of regular monthly income of VND10 million (US$450), and be subjected to third-degree taxation according to the law on individual income tax.

The admission ticket is VND1 million (US$45) for 24 hour entry, or VND25 million (US$1,126) per person monthly.

Nguyen Hoang Hai, deputy chair of the Vietnam Association of Financial Investors (VAFI), warned that players would find it troublesome to follow procedures to prove their income.

"There would be no problem for employees to prove their income, but it would be difficult for businesspeople and freelancers to do this," Hai said, adding that it is unclear what documents people have to show.

According to the Ministry of Finance, about 70 percent of taxpayers are subject to first- degree taxation. The people subject to third-degree taxation are those with net monthly income of VND10-VND18 million.

Hai said that strict requirements would not attract players. Meanwhile, in Singapore, the requirements on players at Marina Bay Sands are not too complicated: people just need to pay the daily fee of SGD100 (VND1.6 million), or SGD2,000 a year (VND32 million).

Meanwhile, the gambling limit of VND1 million for 24 hours is described as 'too low' which cannot satisfy players. Ngo Thanh P, a young businessperson in Hanoi, said the low limit would not attract real high-income earners. If so, the goal of increasing revenue from tax collection would be unattainable.

The owner of a privately run business in Hanoi also said that the low gambling limit would keep successful businesspeople and rich people away.

"VND25 million a month won't be able to satisfy them. They would rather go gambling abroad than go to domestic casinos," he said.

However, opinions about the issue vary. Ha Ton Vinh, an expert on casinos, while agreeing that it is a right decision to open casinos to Vietnamese, stressed that it is necessary to control them strictly.

In the Republic of Korea, there are 17 licensed casinos, but only Kangwon Land is opened to domestic players. The casino is located in a remote area, hundreds of kilometers from Seoul. In Nepal and Cambodia, casinos are open only to foreigners.

http://english.vov.vn/economy/casinos-open-but-vietnamese-find-it-difficult-to-gain-admission-343260.vov

Business Briefs February 13, 2017

13/Feb/2017 Intellasia

* Ca Mau Frozen Seafood Processing Import Export Corporation (CMX) reported revenue of VND842.1 billion last year, a 4 percent rise year-on-year, but it racked up losses of VND50.6 billion compared to a net profit of VND24.6 billion in 2015. Its total assets stood at VND318.2 billion by the end of 2016.

* Sao Ta Foods Company (FMC) said it would pay a 2017 first round dividend in cash for shareholders at 30 percent on the record date of February 28. Payments are slated for March 24.

* Construction Company 47 (C47) has issued 5.02 million shares to pay a dividend and increase its equity, raising its total outstanding volume to 17.02 million shares. The new shares have been tradable since February 8 but 4.58 million shares are not transferable until February 12 and 439,055 shares until December 21.

* The HCM City exchange has issued a warning against seafood exporter Hung Vuong Corporation (HVG), effective from February 15, as the enterprise racked up losses of VND49.3 billion in 2016.

* Tasco Company (HUT), which is active in the construction and engineering sectors, said in a financial report its net revenue rose 24 percent year-on-year to VND2.78 trillion in 2016 and its net profit went up 2.5- fold to VND404 billion. The full-year earnings per share were VND2,784. HUT's inventory declined 26 percent from end-2015 to VND41.5 billion by the end of last year.

* Doan Dac Hoc, director of Petroleum Mechanical Company (PMS), has registered to acquire one million PMS shares "to increase his ownership to 1.61 million shares (13.9 percent) in one month starting from February 10.

* Vietnam Construction and Import-Export Corporation (VCG) attained revenue of VND8.6 trillion in 2016, an 8 percent pickup year-on-year, and net profit of VND671.3 billion, a 28 percent rise. The full-year earnings per share were VNDl,078. YCG's total assets leapt 49 percent from end-201S to VND4.13 trillion by the end of last year, Viet Capital Securities Company reports.

* Dinh Van Tong, vice chair of Northern Textiles & Garments Company (TET), has registered to sell his entire stake totalling 251,433 TET shares (4.41 percent) from February 10 to March 10.

* Saigon Railway Transport Joint Stock Company said yesterday that train fares have been lowered by 10-20 percent for north-south trips until February 18 and 8-30 percent afterwards. It has offered more discounts for individuals and groups of passengers who make bookings long before departures. The company said groups of passengers could enjoy a 25 percent discount on fares for trips between HCM City and the central city of Hue and those between Danang and Hanoi until December 27 this year, except for holidays. It has knocked off 40 percent for group bookings for journeys between HCM City and the central railway station of Dieu Tri and those between Dong Ha station and Hanoi.

Business leaders in their 60s at the top of their game

13/Feb/2017 Intellasia | VNN

They are successful businesspeople who created strong brands with fame extending beyond national borders. Though they are of retirement age, they remain at the top of the business leadership and are considered irreplaceable.

At a gala evening held on the occasion of the birthday of FPT last September, the largest Vietnamese IT conglomerate, FPT's staff sang a funny song with words urging Truong Gia Binh, FPT's president, who has turned 60, to retire.

Binh and his co-workers set up FPT in 1988 with just 13 workers. Today, FPT employs 27,000 workers, operating in four major business fields, including technology, telecommunication, distribution & retail, and education. The conglomerate reported revenue of VND40 trillion in 2015.

Though the story about 'power transfer' at FPT has been mentioned in the last 10 years, as a technology firm, it is believed to need young leaders with daring innovations, but Binh is still the 'soul' and 'captain' of the conglomerate.

At the age of 63, Mai Kieu Lien is still in the post of general director of Vinamilk, the nation's dairy producer. Prior to that, Lien was both chair of the board of management and general director of the enterprise in 2003-2015. She is the only Vietnamese among 50 most influential businesswomen recognised by Forbes.

After 10 years of listing shares, Vinamilk's revenue has increased by eight times from VND5.659 trillion in 2005 to VND40.223 trillion in 2015, while net profit has increased by 12 times from VND605 billion to VND7.77 trillion.

According to Nielsen, Vinamilk is leading the domestic liquid milk market with 50 percent of market share. Lien said Vinamilk is nurturing the hope to become one of the world's 50 largest dairy production conglomerates by 2017.

Vu Thi Thuan, 60, became vice president and managing director of Traphaco in 2003, general director of Traphaco in 2011 and president of Traphaco in 2013.

The chairmanship has been eyed by SCIC, a big shareholder in Traphaco, for a long time. However, in Traphaco, Thuan is still considered the 'soul' of the company despite the presence of foreign shareholders and SCIC.

At the 2016 shareholders' meeting, Thuan was once again reelected as the chair of Traphaco with 98.65 percent votes from shareholders. This showed shareholders' confidence in Thuan who has been playing an important role in the development of the company.

Tran Thi Tu Huong is very well known in Vietnam as she still is doing business at the age of 80. Two deals made Huong famous among the business circle. In early 1990s, She developed a brewery in

Khanh Hoa province and later sold to San Miguel for $24 million. The deal brought profit of $5 million. She also transferred a factory in HCM City to Coca-Cola at $15 million.

http://english.vietnamnet.vn/fms/business/172325/business-leaders-in-their-60s-at-the-top-of-their-game.html

Carlsberg may not be Habeco's only option

13/Feb/2017 Intellasia | Vn Economic Times

Drawn-out negotiations raise possibility that Danish brewer may not have the clear path to strategic ownership it previously thought.

Carlsberg will bid for the State-controlled Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco) in March or April, but the Vietnamese government may have more than one option to choose from when it comes to buyers.

The government is seeking to equitise Habeco, the country's second-largest brewer, by selling its 82 per cent stake. Carlsberg, which already owns 17 per cent of the company, holds priority purchase rights for a 60 per cent stake.

In October, the government said it would announce the results of negotiations on its priority purchase rights with Carlsberg by the end of that month. It is not clear why the process has been drawn out.

"We have not been able to make a bid," the Danish brewer's CEO, Cees 't Hart, told Reuters, adding that he expects to submit a bid in March or April. There was also uncertainty over whether the Vietnamese government will abide by Carlsberg's first right of refusal, he said.

So what might have actually gone wrong in the negotiation between Carlsberg and the Ministry of Industry and Trade over additional Habeco's shares?

A price disagreement almost certainly exists. The government announced in August it wants to sell its 82 per cent stake for $404 million, or about VND48,000 ($2.11) a share, which according to CEO of Carlsberg Vietnam, Tayfun Uner, is a reasonable valuation, or VND50,000 ($2.2) per share; the same price it paid in the 2008 IPO.

The government is now keen to take the market price as a reference for the deal. After switching from the Unlisted Public Company Market (UPCoM) to the Ho Chi Minh Stock Exchange (HoSE) on January 19, shares in Habeco rose 15 per cent in their first day of trading to VND147,000 ($6.51) from a starting price of VND127,600 ($5.63), valuing the Vietnamese brewer at $1.5 billion.

But a 21.1 per cent year-on-year decline in Habeco 2016 net profit to VND740.1 billion ($32.7 million) saw its share price head down. After the February 9 trading session, its shares closed at VND114,000 ($5.03). While price is driven by market demand and supply, the surge in the company's share price did not accurately reflect the underlying value of the business and is mainly due to speculative buying on very thin volumes, Uner said.

Another reason why negotiations could fall apart is that the Vietnamese government may have more than just one potential buyer. "We have first right of refusal, but if they neglect that for any reason, and we do not have any signal that they will, then we may not be able to buy it," Hart said.

While the partnership agreement signed in 2008 is still legally binding, some of the terms are no longer appropriate under current law. According to a lawyer with knowledge of the agreement, the selection of a single foreign strategic investor for the majority of the stake may be in conflict with regulations in the Competition Law and the Trade Law or the criteria for State divestment from joint stock companies.

Still, the government has no choice but to sell Habeco as soon as possible. "Letting incapable people continue on the brewer's management board will eventually destroy the brand and the company, while a fast sale does not necessarily mean Habeco will be let go at a cheap price," Nguyen Hoang Hai, vice Chair of the Vietnam Association of Financial Investors (VAFI), told VET by phone on February 9.

With a young, beer-loving population, Vietnam is among Asia's largest consumer of beer, putting it on the radar of international brewers. The country's beer market grew at an average compound annual rate of 7 per cent from 1999 to 2015 and touched 4 billion litres in 2016. Growth is anticipated at around 4 per cent to 2021, data from researchers Canadean, quoted by investment bank Liberum, showed.

Kirin Holdings, Asahi Group Holdings, Thai Beverage, Heineken, and Anheuser Busch Inbev SA are among some 20 investors that have expressed interest in the sale.

Habeco's share price soared when a limited number of shares were listed in October, as investors raced to snap them up before the planned sale. The brewer has a market share of about 20 per cent in Vietnam.

http://vneconomictimes.com/article/business/carlsberg-may-not-be-habeco-s-only-option

Vietnam's dragon fruits introduced at Berlin international fair 13/Feb/2017 Intellasia | VNA

Vietnam's dragon fruits were introduced at the international fresh produce trade show - Fruit Logistica 2017 - held in Berlin, Germany, from February 8-10.

Dragon fruits were the only product displayed at the Vietnamese stall, but it was still a big draw to visitors. The fruits are grown under an EU support programme, which helps ensure the cultivation process and the final products to meet GlobalGAP standards.

During the show, Vietnamese exporters signed cooperation pacts with Germany's leading fruit and vegetable distributor Landgard, paving the way for dragon fruits and other fruits of Vietnam to penetrate this demanding market.

Fruit Logistica is one of the world's largest events in the field. Last year, the event attracted 2,884 exhibitors from 70 countries worldwide and over 70,000 visitors.

According to figures from Vietnam's Ministry of Agriculture and Rural Development (MARD), dragon fruits are grown on 37,000ha across the country, with annual output reaching some 630,000 tonnes.

The fruits have been exported to the European Union, the United States, Japan, and the Republic of Korea.-

http://en.vietnamplus.vn/vietnams-dragon-fruits-introduced-at-berlin-international-fair/107077.vnp

Trade ministry urges Australia to lift ban on shrimp imports 13/Feb/2017 Intellasia | VNA

Minister of Industry and Trade Tran Tuan Anh has just called on the Australian government to soon lift its ban on prawn and uncooked shelled shrimp imports, saying that it poses negative impacts on Vietnam's shrimp breeding and processing sector.

The Vietnamese minister made the call in his recent letter to the minister of Commerce and minister of Agriculture and Natural Resources of Australia.

On January 7, the Australian Department of Agriculture and Natural Resources announced the suspension of prawn and uncooked shelled shrimp imports from Asian nations in fear of white spot disease outbreaks in Australia. The ban took effect on January 9, 2017 and will last for six months.

Shrimp shipments which departed the exporting country on or after January 9, 2017 will be re-exported or destroyed when arriving in Australia. Other shipments en route to Australia will face strict examinations.

Right after the announcement, the Ministry of Industry and Trade instructed related bodies and the Vietnam Trade Office in Australia to update relevant associations and enterprises on the information while working with the Ministry of Agriculture and Rural Development to look for suitable solutions.

The Office worked with the Seafood Importers Association of Australia to have common voices in raising concern over the ban's negative impacts on Australian shrimp importers and consumers as well as Vietnamese shrimp farmers and exporters.

The agency also met with representatives from several shrimp exporters to voice their common concern to the Australian government.

Meanwhile, during his working session with Australian Ambassador to Vietnam Craig Chittick in Hanoi on February 10, MoIT deputy minister Tran Quoc Khanh briefed on huge losses caused by the ban to Vietnamese shrimp farmers and exporters, calling the Australian government to consider, devise alternative measures and soon lift the ban in order not to impact growing trade relations between the two nations.

MoIT will continue working with relevant bodies from the two nations to ask the Australian government to remove the ban as soon as possible.-

http://en.vietnamplus.vn/trade-ministry-urges-australia-to-lift-ban-on-shrimp-imports/107079.vnp

VietJet to launch Da Nang-Seoul route 13/Feb/2017 Intellasia | Press Release

Vietjet Aviation Joint Stock Company ("Vietjet") is set to open its latest international route from Da Nang to Seoul, South Korea on 31 May, 2017.

The route will operate on a daily basis and is set to depart from Da Nang at 11.45pm (local time) and arrive in Seoul at 6.00am (local time). The return leg will depart at 7.00am (local time) and land in Da Nang at 9.40am (local time). The flight time per sector is approximately four hours and 30 minutes.

Tickets for the new route are now available to purchase at www.vietjetair.com, with flights costing as little as cents 30 within Vietjet's promotional hours (1-3pm GMT+8).

Vietjet currently operates four routes connecting Vietnam and South Korea between HCM City, Hanoi, Hai Phong and Seoul and Hanoi and Busan

About VietJet: Vietjet is the first airline in Vietnam to operate as a new-age airline with low-cost and diversified services

to meet customers' needs. Currently the airline boasts a fleet of 44 aircraft, including Airbus A320s and A321s, operating 350 flights per day over 60 routes. In Vietnam, Vietjet has successfully connected key regions operating routes in Vietnam and across the region to international destinations such as Thailand, Singapore, South Korea, Taiwan, Malaysia, China and Myanmar. Today, Vietjet is one of the fastest growing airlines in Asia, transporting over 35 million passengers, and is quickly expanding international routes throughout the Asia Pacific region and beyond.

Vietjet to launch Da Nang-Seoul route

13/Feb/2017 Intellasia | Bizhub

Vietjet will launch daily flights from the central city of Da Nang to Seoul (South Korea) on May 31 in a bid to meet the increasing travel demand of tourists and business people.

Flight time between the two destinations will be four and a-half hours.The flight from Da Nang will depart at 23.45pm and arrive in Seoul at 6am (local time). The return flight will take off at 7am (local time) and land at 9.40am in Da Nang.

In celebration of the new route and on the occasion of Valentine's Day, the airline will run a three-day promotional offering of 500,000 air tickets priced from only VND5,000 (15 US cents) starting tomorrow till Thursday.

The promotion applies to all international routes from HCM City, Hanoi, Hai Phong and Da Nang to Seoul, Busan (Korea), Hong Kong, Kaohsiung, Taipei, Taichung, Tainan (Taiwan), Singapore, Bangkok (Thailand), Kuala Lumpur (Malaysia), Yangon (Myanmar) and Siem Reap (Cambodia) from March 1 to December 12.

As for the Da Nang-Seoul route, the promotion is available for use from May 31 to December 31. Da Nang is the fourth Vietnamese city to be linked by air with Seoul, after HCM City, Hanoi and Hai

Phong. Vietjet plans to expand its international network in 2017, looking to boost regional trade and integration. http://bizhub.vn/corporate-news/vietjet-to-launch-da-nang-seoul-route_284093.html

Vietnam Airlines to run direct Hanoi-Sydney flights 13/Feb/2017 Intellasia | Tuoi Tre News

The national flag carrier Vietnam Airlines has announced plans to launch a direct route between Hanoi and Sydney, Australia in March.

The airline will be operating three weekly flights between the capital city and Sydney on Tuesdays, Fridays and Sundays, departing from Hanoi at 11:55 pm and returning from Sydney at 3:15 pm during the summer.

In winters, planes will depart Sydney at 2:15 pm. The routes will be flown by state-of-the-art Boeing 787-9 Dreamliners, and estimated flight times are

nine hours and 35 minutes in normal conditions. Vietnam Airlines already had daily flights between HCM City and the Australian cities of Sydney and

Melbourne, but this will be its first direct route between Hanoi and Australia.

The first Hanoi-Sydney flight is slated for takeoff on March 28. Passengers who fly on the route in the first month following its launch will be able to purchase roundtrip

tickets starting at $500, while those who depart after March 28 and return no later than June 20 will be able to purchase tickets for as low as $650.

Australia is among Vietnam's biggest tourism markets, with over 320,000 Australian tourists having visited the Southeast Asian country in 2016, up 5.6 percent from the previous year.

http://tuoitrenews.vn/business/39481/vietnam-airlines-to-run-direct-hanoisydney-flights

HCM City seeks Finland's support to build startup ecosystem 13/Feb/2017 Intellasia | The Saigon Times

HCM City is seeking cooperation with and experience from Finland to develop a startup ecosystem in the city.

Speaking at a meeting on February 8 with Ilkka-Pekka Simila, ambassador of Finland to Vietnam, Nguyen Thanh Phong, chair of the HCM City People's Committee, said the city is supporting creative startups in mechanical engineering, electronics-information technology, chemicals-plastics-rubber, food and foodstuff processing, supporting industries, and nine service sectors.

Phong said the city needed Finland's experts to come here to share experience in building a digital startup ecosystem, startup training programmes at universities and an electronic government mechanism for the city.

The Finnish ambassador said Finland could also cooperate with the city in other fields such as education and information technology.

Finland has invested in seven projects in HCM City with total investment capital of $2.16 million. http://english.thesaigontimes.vn/52250/HCM City-seeks-Finland percente2 percent80 percent99s-

support-to-build-startup-ecosystem.html

Rice export gloomy, domestic demand strong 13/Feb/2017 Intellasia | The Saigon Times

The rice export prospect for this year is bleak but domestic consumption has shown positive signs, evident in a recent price rise.

Vietnam exported an estimated 325,000 tonnes of rice worth $136 million last month, up 32 percent in volume and 35.1 percent in value year-on-year, according to the Ministry of Agriculture and Rural Development. The Vietnam Food Association (VFA) has forecast there are a lot of adverse factors affecting the country's rice export performance this year.

In particular, the volume of rice in the export contracts carried forward from 2015 to 2016 totalled around 1.3 million tonnes while inventories were some 700,000 tonnes. The volume of the export deals carried forward from last year to 2017 was only 547,000 tonnes but inventories amounted to 990,000 tonnes.

This has put enormous pressure on the country's rice shipments in the early months of this year. If the situation does not improve, it would have an adverse effect on the full-year target.

The market for rice in the Mekong Delta has been booming, especially the fragrant type, since the end of Tet.

Ngo Ngoc Yen, director of HCM City-based rice firm Yen Ngoc, said prices of unprocessed OM 4900 and jasmine rice are around VND5,200-5,450 a kilo, a rise of VND200-300. A kilo of fresh IR 50404 rice costs VND4,600-4,700, up 200-250 against the pre-Tet period. Pham Thai Binh, director of Trung An Co Ltd in Can Tho, said his firm is purchasing jasmine rice at VND5,250 a kilo, up from VND4,800 in the same period last year.

Yen said rice products at Ba Dac wholesale food market of Tien Giang Province have marked up by VND200-500 a kilo against the pre-Tet period, with jasmine rice quoted at VND10,000-11,000, ST 21 at VND10,800-11,000 and OM 4900 at VND10,000.

Farmers in some Mekong Delta provinces are focusing on sticky rice production, leading to a shrinkage of jasmine rice acreage. There has been a surge in local demand for jasmine rice while the product has been in short supply, causing its price to edge up, she explained.

She added the situation is also attributable to a huge reduction in rice output in recent crops. Binh said rice export prices are higher than in end-2016 given a steep rise in domestic consumption. http://english.thesaigontimes.vn/52246/Rice-export-gloomy-domestic-demand-strong.html

Vietnam spends $5m daily on chemical imports 13/Feb/2017 Intellasia | VNN

If Vietnam continues importing chemicals from China, it will have to rely on Chinese imports and accept low-quality products, experts have warned.

A GDC report showed that in 2016 alone, Vietnam imported $1.8 billion worth of chemicals, including $1.02 billion worth of products to make other compounds. This means that Vietnam spent VND112 billion daily to import chemicals.

The imports were mostly from China, while imports from countries with developed chemical industries such as India, the US, Canada, Israel, Japan and South Korea were modest.

According to Ngo Tri Long, there are three reasons for Vietnam to import chemicals from China. First, Vietnam has high demand for chemicals, but it still cannot produce chemicals domestically. Second, Vietnamese enterprises prefer importing chemicals from China to other countries because Chinese products are cheaper. Third, Vietnam, like other countries neighbouring China, want to import chemicals across the border gates instead of through official channels in order to avoid tax.

Le Cao Doan from the Central Economics Institute has also expressed concern about imports from China, especially in the context of Vietnam's high trade deficit and the risks of relying on Chinese imports.

The high imports from China are problems to many countries including Vietnam, which imports low-quality and dirty products.

"If Vietnam continues importing chemicals from China, it will become the place containing low-quality products and relying on Chinese imports," he said.

Doan said that Vietnam is facing two big problems. If continuing to rely on China, the Vietnam economy would lag behind, because the economy would be

based on industrial production, similar to what China once experienced in the past. In addition, Vietnam would see the damage to the environment and the platform for development.

What does Vinachem do? Vinachem, or the Vietnam Chemicals Group, is known as the largest domestic chemicals producer which

regulates big fertiliser and chemical factories in Vietnam. However, the big factories put under Vinachem's management are incurring huge losses of trillions of

dong. Meanwhile, Vu Dinh Duy, a member of Vinachem's board of directors, has left Vietnam for medical

services and has been unreachable for many months. In the latest news, Vinachem has set up a steering committee to solve existing problems at fertiliser

plants which are incurring big losses. Besides the chemicals companies in which the state holds the controlling stakes, Vietnam also has many

privately run companies in the field. However, an analyst said domestic chemical output remains modest and Vietnam still has to rely on

imports. http://english.vietnamnet.vn/fms/business/172290/vietnam-spends-5 million-daily-on-chemical-

imports.html

Pork prices soar in Vietnam and China 13/Feb/2017 Intellasia | The Saigon Times

The pork price in China has begun showing signs of picking up after a sharp plunge in November last year. Meanwhile, the price in Vietnam has also eased off a record low seen last December.

Nguyen Tri Cong, chair of Dong Nai Province's Husbandry Association, said local pork demand in the pre-Tet period was rising but the price of the meat was falling, forcing farmers to sell pigs at prices below production costs to have money for Tet celebration.

However, after the Lunar New Year holiday (Tet), supply has been dipping, driving up the pig price. The live-pig price in Dong Nai, the biggest pig farming province in Vietnam, has been hovering around VND37,000 per kilo, up VND3,000-4,000 over three previous weeks.

The higher price, however, has yet to help farmers offset their losses. Meanwhile, the China pig price has grown steadily, with pigs selling at around VND57,000 per kilo and

pork at VND60,000 per kilo on average. Pork rose to a record high of VND70,000 per kilo in May and June last year.

The pork price in Vietnam had sharply increased since March last year. It hit VND55,000 per kilo in May due to strong demand in China.

Many farmers scaled up their pig farming as they believed pork consumption in the northern neighbour would remain strong and that domestic demand would grow during the Tet shopping spree.

However, the pork price in China steadily dropped after the surge of demand. By November, it stood at around VND53,000 per kilo, the lowest last year, affecting Vietnam's pig exports to the northern country.

Farmers had no choice but to sell their pigs on the domestic market, resulting in an oversupply. The association said the province had 1.8 million pigs before Tet compared to 1.5 million or fewer in

previous years. The Ministry of Agriculture and Rural Development requested provinces and cities nationwide to review

their pig farming plans. Local authorities were told to improve market forecasts and encourage farmers to embrace both small and large-scale farming methods to avoid risks.

http://english.thesaigontimes.vn/52249/Pork-prices-soar-in-Vietnam-and-China.html

Vietnam's fuel subsidy fund shrinks by 40pct in 2016 13/Feb/2017 Intellasia | VnExpress

New data from the finance ministry showed that nine out of 27 trading firms had overdrawn last year to keep prices stable.

The Ministry of Finance said the country's fuel price stabilisation fund had shrunk by 40 percent over the course of last year, to around VND 2.4 trillion ($110 million) in late December.

Compared to the end of September, that was up 9 percent. The fund, established and managed by the ministry since 2009, extracts VND300 from every litre of fuel

sold. Fuel companies are allowed to tap the fund when the government wants to keep prices stable and minimise the impacts of global increases.

The ministry's data showed that nine out of 27 trading firms had overdrawn last year. Most of these are small companies.

Meanwhile, state-owned fuel giant Petrolimex and Military Petroleum Corporation had $800 million and $12 million left at the end of last year.

Vietnam went through 25 fuel price adjustments in 2016, with more hikes than cuts. The latest increase was in late December when the popular gasoline grade RON92 hit VND17,594 per litre.

Fuel companies are currently given a subsidy of VND569 per litre from the price stabilisation fund. http://e.vnexpress.net/news/business/vietnam-s-fuel-subsidy-fund-shrinks-by-40-percent-in-2016-

3539833.html

Gas trading rule to be relaxed 13/Feb/2017 Intellasia | The Saigon Times

Minister of Industry and Trade Tran Tuan Anh has signed a decision setting up a drafting committee and an editing team responsible for modifying government Decree 19 on gas trading in a way that facilitates this business, Nguoi Lao Dong newspaper reports. The drafting committee has 17 members, led by deputy minister Ho Thi Kim Khoa. Meanwhile, the 16-member editing team is headed by the trade ministry's legal department and represented by relevant agencies and ministries.

Decree 19 was issued on March 22 last year to replace Decree 107, and took effect in mid-May the same year. Some business conditions provided in the decree have been making life hard for traders.

Experts said the decree imposes stringent requirements on facilities such as a host of gas tanks and large warehouses, thus effectively pushing small businesses out of the market and giving monopolistic power to large enterprises.

Last October, enterprises representing over 700 gas trading companies in the north proposed removing these trading conditions.

http://english.thesaigontimes.vn/52248/Gas-trading-rule-to-be-relaxed.html

Vietnam demand supports gasoil differentials 13/Feb/2017 Intellasia | Tuoi Tre News

Spot demand from Vietnam lent support to gasoil differentials despite ample supply of the fuel, trade sources said.

Vietnam's top fuel importer Petrolimex bought three cargoes of 35,000 tonnes each of 500ppm sulphur gasoil for loading from Singapore, Malaysia or Thailand at a premium of about 55 to 60 cents a barrel to Singapore quotes, traders said.

Vietnam's PV Oil followed with a tender requirement for March and April seeking a total of 80,000 cubic metres of gasoil, they added.

Sri Lanka's Ceylon Petroleum Corp is seeking 200,000 barrels of jet fuel for delivery in February, traders said.

Refinery maintenance in Asia, which is expected to be heavier than in previous years, will likely further boost gasoil and jet fuel differentials, traders said.

Japanese oil refiner Cosmo Oil Co said on Friday it planned to shut two crude distillation units (CDU) this year for scheduled maintenance.

The two CDUs at Chiba and Sakai refineries are likely to be shut for about 1-1/2-months each, a company spokesman said.

Arbitrage economics to ship diesel to Europe also remain unviable with oil product inventory in Europe remaining high, traders said.

The region's stocks of crude oil and all oil products apart from fuel oil edged higher despite the lower run rates, reaching a total of 1.150 billion barrels in January, data from industry monitor Euroilstock showed.

TENDERS: - Pertamina is seeking 200,000 barrels of jet fuel for delivery into Jakarta over March 23 to 25. The

tender closes on February 14 and is valid until February 17. - Ceylon Petroleum Corp is seeking 200,000 barrels of jet fuel for delivery into Colombo over February

21 to 22. The tender closes on February 14 and is valid for up to 72 hours. - PV Oil is seeking 80,000 cubic metres of 500ppm sulphur gasoil for delivery into Nha Be and Mien

Dong over March to April. The tender closes on February 10. http://tuoitrenews.vn/business/39500/vietnam-demand-supports-gasoil-differentials

Uber passenger transport scheme rejected 13/Feb/2017 Intellasia | The Saigon Times

The Ministry of Transport has turned down a proposal of Uber Vietnam to join the passenger transport market through a mobile app on a pilot basis.

Since Uber Vietnam submitted its proposal on November 22, 2016, the ministry had reviewed current relevant regulations and consulted other ministries and agencies.

According to the ministry, it is inappropriate that Uber BV based in the Netherlands authorises Uber Vietnam to carry out the pilot project and fulfill obligations stipulated in Decision 24 of the transport ministry because Uber Vietnam does not guarantee Uber BV's responsibility for the scheme.

Furthermore, the business registration certificate which local authorities granted Uber Vietnam makes clear that Uber Vietnam specialises in management consultancy and market research. If Uber Vietnam wants to enter the passenger transport market, it must register this business field with local authorities.

According to the proposal, digital data would be used as proof of contract terms, instead of paper-based contracts but the company does not give a detailed description and analysis of the process of a passenger transport contract being constituted via the Uber app.

Digital contract content must meet the requirements provided in Decree 86/2014/ND-CP on business conditions for road transport and Circular 63/2014/TT-BGTVT on organisation and management of road transport and supporting services.

The Uber proposal neither clarifies the rights and responsibilities of technological application providers and transporters towards passengers, nor provides guidelines for handling passenger complaints, says the transport ministry.

The fact that Uber BV authorises Uber Vietnam to exercise the rights and obligations in Vietnam would make it hard to force the Dutch company to solve disputes and complaints.

The Ministry of Transport requests Uber Vietnam to not partner with local vehicle owners and transporters to do passenger transport business for now as this is against the current rules.

http://english.thesaigontimes.vn/52247/Uber-passenger-transport-scheme-rejected.html

India's TATA to build $50m coffee plant in southern Vietnam 13/Feb/2017 Intellasia | Tuoi Tre News

A multinational conglomerate from India has plans to build a $50 million coffee plant in Binh Duong, Indian Ambassador to Vietnam Parvathaneni Harish announced during his visit to the southern province on Friday.

As part of the visit, Ambassador Harish and Consul general Smita Pant met with Secretary of Binh Duong Party Committee Tran Van Nam and the provincial chair Tran Thanh Liem, discussing cooperation in the fields of information technology, renewable energy and capacity building.

With Indronil Sengupta, a representative of Indian conglomerate TATA among the attendees, the Indian ambassador informed Binh Duong authorities of the group's proposal to invest $50 million on setting up a freeze dried instant coffee plant in the province.

The plant is expected to be located at the VSIP-II Industrial Park, with a capacity of 5,000 tonnes per annum, the Consulate general of India said in a press release on Friday.

The Indian ambassador also invited the provincial leaders to participate at the forthcoming Cambodia-Laos-Vietnam-Myanmar Business Conclave in Jaipur, India later this month.

Following meeting with local officials, Ambassador Harish also paid a visit to the VSIP-I Industrial Park, touring the manufacturing facility of Godrej Vietnam.

Specialising in steel furniture items, Godrej Vietnam is the first Indian investment in Binh Duong, initiated two decades ago in the province.

http://tuoitrenews.vn/business/39507/indias-tata-to-build-50mn-coffee-plant-in-southern-vietnam

Vietnam Airlines to sell, lease back four aircraft 13/Feb/2017 Intellasia | VNA

Vietnam Airlines said that it plans to sell or lease back four new aircraft which the corporation will receive in 2017 to ease the pressure on the due-debt-over-ownership-capital ratio and boost liquidity.

Aircraft to be sold or leased back include one Boeing B787-9 and three Airbus A350. According to Chair of the Board of directors Pham Ngoc Minh, the plan still ensures Vietnam Airlines'

intention of developing its fleet while reducing its dependence on loans, particularly government -sponsored loans.

The sale and leaseback of the four planes would help Vietnam Airlines cut its original capital need for buying aircraft by 544 million USD and reduce the debt-over-ownership-capital ratio from four times on December 31, 2016, to 3.2 times on December 31, 2017 and three times by the end of 2018, said Minh.

As of December 31, 2016, Vietnam Airlines owned a fleet of 86 aircraft with average age of 5.7 years. Vietnam Airlines will continue upgrading its fleet by getting rid of Fokker and ATR72 planes and

replacing its 18 body-wide Boeing 777 planes and Airbus A330 with 33 new-generation Boeing 787-9 and Airbus A350 planes by 2019.

http://en.vietnamplus.vn/vietnam-airlines-to-sell-lease-back-four-aircraft/107061.vnp

Da Nang approves logistics project 13/Feb/2017 Intellasia | VNA

The first logistics project in the high technology park of the central city of Da Nang has been approved with total registered capital of 316 billion VND (14 million USD).

The U&I Logistics Centre - Da Nang, funded by the CP Logistic U&I company in southern Binh Duong province, will cover more than 5ha in the Da Nang Hi-tech Park.

The first phase of the project will be implemented in the third quarter of 2017 and the second phase will start in Q1 of 2021.

Once completed, the project will provide logistics services such as delivery of import-export products, customs procedures and transport of goods by road and inland waterways for businesses in Da Nang Hi-tech Park.

It is hoped to aid transport and trading activities in the park and Da Nang's plan to turn Lien Chieu Port into the city's logistics centre.

http://en.vietnamplus.vn/da-nang-approves-logistics-project/107131.vnp

Transport Ministry rejects Uber Vietnam proposal 13/Feb/2017 Intellasia | VNA

The transport ministry has declined to approve a Uber Vietnam request to pilot an IT upgrade for its services, citing, among other things, a lack of authorisation and validation from its parent firm.

In an indication of regulatory obstacles that stand in the way of companies using ridesharing apps that people can use to hire transportation in major cities around the world, the ministry said Uber Vietnam had not met several conditions for regularising its operations in the country.

A similar application by Uber's rival, GrabCar, has been approved.

An official document sent to the company by the ministry said the authorisation given to Uber Vietnam by Holland-based Uber International Holding BV (Uber BV), which provides the smartphone application for Uber services, was insufficient.

It said Uber Vietnam was presenting itself as the developer and applicant of the test launch with Uber BV having no legally binding responsibility in project implementation.

Furthermore, the registered fields of operation in Uber Vietnam's initial business certification are "managerial activities" and "market research", that has no relation to any action authorised by Uber BV.

If Uber Vietnam is developer of the IT component and wants to apply it, it has to add this activity to its list of registered operations, according to the Ministry.

Also, as the party directly responsible for signing and implementing the project, Uber Vietnam should work with other commercial transportation units and provide these and their direct clients (drivers) with the necessary contracts.

The ministry also said that under the nation's e-commerce laws, the Uber mobile application has the same function as an electronic exchange. Therefore, the company needs to register its services with the Ministry of Industry and Trade.

Regarding Uber Vietnam's use of electronic contracts and data instead of traditional paper contracts, the ministry demanded more details and analysis on the content and process before approving the project.

In particular, the pilot project must clarify Uber's rights and responsibilities as a supplier of technological applications and transportation services. This includes the authorisation given by Uber BV to Uber Vietnam, as also the resolution of any legal issues that arise during the latter's operations.

The ministry's communique said it could not approve Uber Vietnam's request before the company satisfies all the conditions mentioned therein. It said this was required so that the company would not continue working with vehicle owners and other transportation units in contravention of regulations.

The project under which Uber has sought approval is officially titled "Application of information technology in supporting the management and connection of commercial passenger transportation by contract."

The project's stated aim is to enhance State management of information technology-based passenger transportation, and create preconditions for future science and technology application projects in the transportation sector.

Uber entered Vietnam in June 2014 as a foreign company operating in the country without resident offices. The company has undergone previous scrutiny by the government on matters of tax avoidance and its legality in the country.

http://en.vietnamplus.vn/transport-ministry-rejects-uber-vietnam-proposal/107088.vnp

HCM City in dire need of affordable houses 13/Feb/2017 Intellasia | Dtinews

Around 81,000 people in HCM City need accommodation each year in the 2016-2020 period as the city continues to attract people from the countryside, according to the HCM City Real Estate Association (HoREA).

HoREA said that the southern metropolis' current population stands at 13 million, including 500,000 who live in rented apartments. Around 3 million people that have moved to the city for work also need accommodation. However, the supply of apartments of one or two bedrooms priced at around VND1 billion (USD45,000) remains limited.

Le Hoang Chau, HoREA Chair said that low-cost housing projects still face many difficulties in implementation related to site clearance and loans, leading to the modest supply.

Under current regulations, commercial housing projects of 10ha or more are required to allocate 20 percent of the land to social housing, which Chau claimed may not be suited to specific projects. He suggested an option that investors can exchange land lots or apartments of equal value at other locations, or pay the required 20 percent land allocation in cash to localities so that they can use the money so that their upmarket developments would not be affected by low income earners.

The State Bank of Vietnam's Circular 36 issued early 2016 restricts credit in the property market, so lending interest rate for this sector has grown.

Chau also noted that it takes investors up to two years to complete procedures for building affordable housing projects, which should be shortened.

Besides cheap apartments, investors should also focus on building houses for low-income earners to lease, he said.

http://www.dtinews.vn/en/news/018/49447/hcm-city-in-dire-need-of-affordable-houses.html

HCM City aims for sustainable realty market 13/Feb/2017 Intellasia | VNA

Vice Chair of the HCM City People's Committee Le Van Khoa asked relevant departments to improve management and take measures to tackle factors that could create the conditions for a property market bubble.

Khoa pointed out during a working session with the municipal Department of Construction this week that there is a shortage of low and mid-end apartments, while high-end properties are abundant. "The imbalance in supply and demand must be tackled," Khoa said.

Khoa said that the city needed a sound plan for urban development and policies to attract capable developers, especially in renovating degrading apartment buildings.

Tran Trong Tuan, director of the construction department, said that his team would focus on improving the urban landscape and hastening the development of key and unfinished projects.

He said a research project on the city's realty market neared completion and would be proposed to the People's Committee within the first quarter of this year.

Tuấn said that the city would also focus on developing homes for low-income earners and workers at prices ranging from 300 million VND (13,200 USD) to below 1 billion VND per unit.

The city plans to complete 30,000 apartment units for low-income earners by 2020. The HCM City Real Estate Association also recently raised ten proposals to promote the development of

the realty market toward transparency and sustainability. The proposals included amendment to the laws on land, real estate business together with administrative

reforms, credit policies and house ownership policies. However, traffic chaos could put brakes on realty market. HCM City's traffic woes, with jams regularly occurring in most places, are affecting the real estate

market, especially with a myriad of new housing projects set to be completed soon. But many have seen it coming for a long time, and developers have avoided some of the bad areas or are

unable to sell after building in places with inadequate traffic infrastructure. For instance, although facilities inside are well developed, a villa project each in District 9 and Thanh My

Loi in District 2 had failed to attract buyers. Also in District 9, Do Xuan Hop, a narrow street with a fair amount of traffic, has four apartment projects

with nearly 4,000 flats. Nguyen Xi Road, very close to Mien Dong (East) Bus Station in Binh Thạnh District and just five metres

wide, has three apartment buildings - Thuy Loi, Saigonres Plaza and Richmond City. In the area near Tan Son Nhat Airport, traffic jams are an everyday occurrence but housing projects are

mushrooming. On Hong Ha Street alone there are five apartment projects. Roads in the north-west of the city like Cong Hoa and Truong Chinh have a chronic traffic problem. But

here the real estate market has not developed much. Not many apartments have been built in this area though there are many vacant plots of land.

Tran Duc Vinh of Tran Anh Long An Real Estate Joint Stock Company was quoted as saying by Dau Tu (Vietnam Investment Review) newspaper that a nightmare for developers is building a project in an area where traffic infrastructure is not adequately developed.

He cited the example of his own company's Bella Villa project, saying traffic jams are a constant occurrence in the area because of poor infrastructure, and as a result, his company could not begin sales on schedule.

The same situation is also witnessed in Districts 7 and Nha Be since there are only a few bridges connecting them with the city centre while innumerable housing projects have been developing there.

River City project on Dao Tri Street is unable to attract buyers due to the traffic situation. Nguyen Huy Vu, general director of Ban Viet Real Estate Service and Building Company, predicted

2017 to be a hard year for developers trying to sell their products because of the traffic problems. The problem has been brewing for a long time but not been fixed, and this year developers would suffer,

he added. A CBRE executive, talking about the prospects for the city real estate market, warned that transportation

would be a thorny issue. She told Vietnam News that traffic jams were a serious issue affecting the development of the market.

Le Hoang Chau, the chair of the HCM City Real Estate Association, said the development of the property market and infrastructure should occur simultaneously.

"The city's infrastructure is designed for a population of three million, which has now risen to 10 million," he said.

To resolve the problem, he said developers should play a part in developing infrastructure when they plan a new project.

Vu agreed with him, saying city authorities should insist that companies develop surrounding infrastructure when building a new project.

http://en.vietnamplus.vn/hcm-city-aims-for-sustainable-realty-market/107087.vnp

Thai rice worries VN exporters 13/Feb/2017 Intellasia | Bizhub

Thailand's plan to sell all its rice reserves of about eight million tonnes this year has sparked concerns that this move will undermine Vietnam's rice exports.

Nguyen Van Don, director of Tien Giang-based Viet Hung Co Ltd, said rice exports were positive last month, with many contracts signed.

But starting early last week, trading tended to slow, he said, adding that his company has not had any new export contracts. He attributed this to the higher prices of Vietnamese rice compared to last month, and to Thailand's plan to sell all of its rice stockpiles.

Dang Thi Lien, director of Long An Foodstuff Co Ltd, said the price of Vietnamese five per cent and 15 per cent broken rice was $5-10 a tonne higher than the same kinds of Thai rice.

To compete with Thai rice, Vietnamese traders should lower their export price, but domestic rice prices are on the rise, even higher than export prices, making it hard for traders to compete abroad, she said.

Huynh The Nang, chair of Vietnam Food Association, said "It will be hard to compete with Thailand in exporting white rice due to our less competitive prices."

Vietnamese firms previously exported a lot of white rice to Africa, but now firms are only exporting fragrant rice to the market, he said.

"Thailand's determination to sell all of the rice in stockpiles in the first half of the year will continue to adversely affect Vietnam's rice exports. Vietnam's export rice prices are predicted to drop further this year. Only when Thailand's rice stockpiles are sold out can the rice export market recover," he said.

Domestic market Vietnam produces about 44-45 million tonnes of paddy a year, equivalent to 22-22.5 million tonnes of

rice. Domestic consumption accounts for about 15-16 million tonnes a year, and the rest is for export. Despite being one of the world's largest rice exporters, Vietnam's high-grade rice segment is dominated

by foreign brands. Nang, who is also general director of the Vietnam Southern Food Corporation (Vinafood 2), said many

domestic rice enterprises have implemented strategies to promote their rice brands as well as boost consumption of their products in the home market.

Enterprises have established their own farm and production facilities and are focusing on improving the quality of their rice to international standards as well as building brands for their products.

Last December, Tien Giang Food Company introduced to the market four to five new rice brands, which are produced following hygiene and food safety standards and are able to enter the US market.

In the case of Song Hau Food Company, a member of Vinafood 2, thanks to actively promoting its rice brands and expanding its distribution system, the company last year doubled its domestic sales revenue from 2015, he said.

Other companies, such as Dong Thap Food Company and HCM City Food Joint Stock Company, have actively improved their distribution systems, he said.

Consumption volume of Vietnamese rice in the domestic market is expected to increase significantly in the near future, especially as more and more rice is produced following hygiene and food safety standards.

In addition, programmes to enable consumers to trace the origin of rice will be sped up this year, he said. Pham Minh Thien, director of Dong Thap-based Co May Private Enterprise, said: "We have a market of

more than 90 million people. This is a very good foundation for us to deal with the supply and demand dynamic of the rice market."

http://bizhub.vn/news/thai-rice-worries-vn-exporters_284086.html

CMC Telecom starts cable construction 13/Feb/2017 Intellasia | Bizhub

CMC Telecom has begun construction of its 2,000km cable express system through Vietnam. The VND200 billion (US$8.81 million) cable system, which includes the latest technology, is expected

to assist CMC Telecom in improving its infrastructure and expanding its network scale, to meet the increasing demand of both domestic and foreign businesses.

The system will be routed through 20 cities and provinces nationwide, including Hai Phong, Thanh Hoa, Vinh, Hue, Quy Nhon and Nha Trang.

It is expected to become operational in mid-2017. In December, the corporation brought online its Asia Pacific Gate (APG) submarine cable system. With a

length of some 10,400km, the APG system provides broadband of 54Tb per second, resulting in internet speeds that are 20 times faster than the Asia-America Gateway (AAG) Cable System.

In addition to CMC Telecom, large telecom providers in Asia, such as Japanese Docomo, China Telecom and South Korean KT, are co-owners of the APG cable system.

http://bizhub.vn/tech/cmc-telecom-starts-cable-construction_284094.html

Enterprises see opportunities in 2017 14/Feb/2017 Intellasia | VNS

Tran Van My, general director of Phong Dien Scavi Company, said that his company is building an industrial centre specialising in textile and garment at the Phong Dien Industrial Park Hue City.

The first hub of its kind in Viêt Nam was in fact run on a trial basis in 2015 and 2016. My said the facility is due to be put into operation in the second quarter of this year, bringing together

various segments involved in textile production such as feedstock, fabric accessories, design, fashion illustration and finally production of large volumes of finished products for exports.

This closed production chain is expected to help not only strengthen the brand appeal and prestige of Vietnamese garment and textile products in the global market, increasing exports, but also address the current scale in the sector.

It is also expected to attract foreign investment since many foreign apparel manufacturers are keen to invest in the Vietnamese textile industry where there are specialised models.

Elsewhere, the CEO of Vietnam VP9 Company, said his company has set itself a sales target of $300 million from technological products, particularly internet-based television cameras.

Explaining the company's ambitious target, he told Tai Chinh & Chung Khoan that Vietnam is the first country in the world to successfully develop smart cameras that run Android and instal millions of Android applications, ushering in a new era of the internet of things.

Those smart products are now in demand around the world, and so are expected to be shipped to major markets such as the US, Europe and Japan, he said.

Besides focusing on exports, many companies including State and private ones have also drawn up ambitious strategies to expand their shares in the domestic market this year by enlarging distribution networks and consolidating their brand strengths.

They include Viet Tien Garment Company, Sai Gon Co.op, Thegioididong, FPT, Vingroup and Vinamilk. They plan to increase their investments by 50 per cent to expand their distribution systems.

It is not only such big companies but also many small ones, including start-ups, who plan to step up investment in production and business and their distribution networks this year.

Analysts said many companies hope to increase exports this year thanks to possible advantages created by positive changes expected in both the domestic and global economies, including free trade agreements, many of which effect this year.

The International Monetary Fund (IMF) has predicted the global economy to grow by 3.5 per cent this year, while the World Bank believes 3.1 per cent growth is likely.

The Vietnamese economy is expected to be steady with inflation remaining under control. In addition, the government will continue to carry out measures to improve the business and investment environment and support businesses.

According to the Ministry of Trade and Industry, in 2017 Vietnam's economic integration will be further momentum.

It will have to carry out all commitments under the Asean Free Trade Agreement with China and with other Asean member countries, the Asean Economic Community (AEC), World Trade Organisation (WTO), and new generation free trade agreements.

This is expected to create highly favourable conditions for the country's economic development. But analysts also warn about the many challenges in both the domestic and overseas markets that

Vietnamese enterprises might face and have to overcome if they want to seize the opportunities, particularly for exports.

They said the growth quality as well as competitiveness of the Vietnamese economy remains low. Besides there is macroeconomic instability and infrastructure lack of adequate to meet the development needs.

Recent global developments such as US President Donald Trump's protectionist rhetoric and Britain's vote to quit the EU show that some major economies are tending to protectionism and reduced trade liberalisation.

This will change the structure of global commodity supply and demand, significantly affecting the global market and of course exports by Vietnamese businesses.

The analysts said Vietnamese businesses should focus on exploiting their domestic market, adding it would be an important factor in survival and development.

Analysts think banks can cut rates After Lunar New Year-Tet, liquidity at most banks is rather plentiful as people have again started putting

their savings into them. Yet many of them have quietly raised their deposit interest rates by 0.1-0.3 percentage points. For instance, Eximbank raised the rate on three-month term deposits by 0.2 percentage points to 5.5 per

cent. Small banks have had to increase interest rates on long-term deposits to 8 per cent. They also had to give

"lucky money" to those who made short-term deposits. The chief of a bank with a chartered capital of VND5 trillion said though liquidity is good bank had to

increase deposit interest rates in order not to lose market share to smaller banks. One of the reasons lenders are vying with each other to hike their deposit interest rates is that they have

to have enough money since there is a possibility of strong credit growth of 18 per cent to even 30 per cent this year.

But this rate hike in the new year has gone against the State Bank of Vietnam's desire to lower interest rates to support the economy.

Some banking insiders also mentioned some other factors that are expected to impact the rates this year. The first is the imminent strengthening of the dollar after the US Federal Reserve increases interest rates

an expected three times this year as economic growth and inflation pick up. They pointed out that dong interest rates always have a close correlation with the value of the greenback. The second reason is that Circular No.06, which caps the ratio of short-term funds that can be used for

medium- and long-term loans, will reduce it from 60 per cent to 50 per cent this year. This has forced banks to restructure their finances and increase interest rates on medium- and long-term

deposits. The hike in wages this year is likely to bring inflationary pressure on the economy. However, some analysts said there remains a possibility of deposit interest rates falling this year in spite

of many factors that seem like preventing such a likelihood. But this requires the central bank to effectively control credit growth, and mechanisms and policies for

bad debt settlement to prove their efficacy. Nguyen Thi Hong, deputy governor of the SBV, said a series of new policies for settling bad debts would

be announced this year. This might enable banks to steady and reduce first the deposit interest rates and then the lending interest rates.

The SBV governor has also expressed determination to address the bad debts problem this year. The central bank will carry out many debt buying and selling market measures and set up a transparent debt trading market that will attract domestic and foreign investors.

The central bank instructed credit institutions to seriously carry out regulations and guidelines related on interest rates under its Directive No.01/CT-NHNN issued this year.

Vietcombank chair Nghiem Xuan Thanh said if bad debts are recovered by the Vietnam Asset Management Company (VAMC) it would help banks have "more room" to lower interest rates.

Lowering the interest rates will become even more feasible if banks can recover their bad debts by themselves.

This year Vietcombank plans to buy all VND4.3 trillion of NPLs that it sold to the VAMC, three years earlier than planned.

It will then settle the bad debts using its provisioning, hoping that as and when the debts are actually recovered the bank's financial capacity will improve.

A Vietinbank official said this year the lender would focus on settling bad debts, and buy back all the bad debts it had sold to the VAMC.

Amid the fierce competition between banks, Vietinbank plans to completely settle the bad debts year instead of in 2018 as it had planned earlier.

http://vietnamnews.vn/economy/351037/enterprises-see-opportunities-in-2017.html

State monopoly proposed for 20 areas 14/Feb/2017 Intellasia | The Saigon Times

The Ministry of Industry and Trade has unveiled a draft decree on State monopoly over production and supply of goods and services in 20 areas in the country.

The ministry was tasked with drafting the government decree to clarify the 20 areas with production and supply off limits to the private sector and to deal with the legal loopholes of relevant documents.

The proposed areas include defense, security, publishing, agricultural irrigation, traffic safety, lottery, and operation of infrastructure including first-grade airports and seaports.

The ministry said State monopoly was planned for such areas in line with the government's policies that regulate State-owned enterprises to supply and ensure essential goods, public services, social welfare, security and defense, power transmission, construction and operation of large-scale and multi-purpose hydropower stations and nuclear power facilities, money printing and lottery.

The ministry said the 20 areas were picked based on input from ministries and agencies. However, a number of ministries are still split over the content of the draft decree.

The Ministry of Justice argued that the ministry wanted the areas with State monopoly to be solely implemented by State agencies or enterprises. But reality showed that non-State firms could be assigned by State entities to carry out commercial activities subject to State monopoly, and this point is clarified in Article 17 in the general Agreement on Tariffs and Trade (GATT) of the World Trade Organisation (WTO) in which Vietnam is a member.

The Ministry of Justice requested the industry ministry to prepare procedures for eliminating and supplementing the areas with State monopoly because it did not mention this task as required by the draft decree.

The Ministry of Justice said if the industry ministry proposed multi-purpose hydropower stations be added to the list of 20 areas for security and defense purposes, many other areas can be supplemented with the same reasons. The industry ministry was asked to weigh listing publishing as the area monopolised by the State.

The industry ministry explained multi-purpose hydropower stations and publishing required State monopoly based on the power and publishing laws. The Ministry of Information and Communications threw its weight behind a policy to make publishing a State monopoly when asked to comment on this.

Meanwhile, the Ministry of Culture, Sports and Tourism proposed adding production of scientific documentaries and national data films to the list. Accordingly, the ministry wanted to retain full State ownership and a special financial mechanism for Central Scientific and Documentary Film Studio Co Ltd

However, the industry ministry said the proposal was not in line with the cinematography law, which allows businesses of different economic sectors to produce documentaries for national achieves.

The list covers the import and export of gold material used to produce gold bars after the State Bank of Vietnam insisted the State monopolises this area, the industry ministry said. However, experts said this was inappropriate as the material was needed by the market to support other activities than just production of gold bars.

Nguyen Dinh Cung, president of the Central Institute for Economic Management (CIEM), said the issuance of a decree guiding State monopoly in business areas would deter competition and run counter to reform efforts. Outdated regulations in the trade law should be eliminated and changed.

In mid-2015, the Ministry of Industry and Trade announced a draft decree on production and supply of goods and services with State monopoly in 16 areas.

List of 20 areas proposed for State monopoly 1. Goods and services used for defense and security purposes (to be detailed by the ministries of defense

and public security) 2. Production, distribution and import-export of industrial explosives 3. Production of gold bars

4. Export-import of gold material used to make gold bars 5. Lottery 6. Import of cigarettes and cigars except for duty-free products 7. National reserves activities 8. Money printing and minting 9. Printing of Vietnam's postal stamps 10. Production, distribution, export-import, transport and storage of fireworks and supply of relevant

services 11. Power transmission, construction and operation of multi-purpose hydropower plants and nuclear

power facilities 12. Operation of lighthouses and public navigational passages 13. Management, operation and exploitation of coastal information facilities 14. Services related to fl ight control, aviation information and rescue 15. Management and exploitation of national and urban railway systems invested by the State 16. Management and exploitation of irrigation works and interprovincial water supply for agriculture, and

sea embankments 17. Supply of forestry services in special-use forests except for forests the States authorises economic

organisations to manage 18. Publishing, exclusive of printing and distribution activities 19. Maintenance, management and exploitation of public postal services 20. Supply of public services for newspaper publishing http://english.thesaigontimes.vn/52272/State-monopoly-proposed-for-20-areas.html

2017 expected to be better for investment funds 14/Feb/2017 Intellasia | Bizhub

Investment funds are expected to perform better this year, following the successful 2016, on expectations that more individual investors will purchase their own investments, reported Dau tu Chung khoan (Securities Investment) newspaper.

Two factors that will make investment funds attractive to individual investors this year include the trading of some 1,500 companies in the securities market, which will bring investment opportunities to individual investors.

However, that also means individual investors will face risks if they decide to purchase investments on their own, as there are so many options, and investors may not choose correctly.

Another factor is the profit that an investor can make from entrusting investment funds with their money. Individuals are allowed to invest at least VND1 million (US$44.4) in an open-end fund and could have

the opportunity to obtain profits that are higher than the market's average, as their money will be managed by a professional asset management firm and used to invest in local assets.

Entrusting a professional asset management company will make it easier for individual investors to make money from the securities market, rather than dealing with a group of products and services by themselves.

According to Bao Viet Fund Management Company (BVF), investment funds saw strong increases in recent years by proving that their investment portfolios were efficient. This has made investment funds more popular and favoured by investors.

BVF reported that there are now 18 open-end funds, including five bond investment funds and 10 stock investment funds. The total value of the open-end funds reached more than VND3 trillion in 2016, a yearly increase of 41 per cent.

At VietFund Management (VFM), as of the end of 2016, two open-end funds, VF1 and VF4, saw annual growth rates of 19.3 per cent and 16.4 per cent, and average growth rates of 17.3 per cent and 18.3 per cent for the last five years, respectively.

At MB Capital, an investment arm of Military Joint Stock Commercial Bank, investment funds and investment portfolios managed by the company had an average growth of nearly 15 per cent in 2016.

At SSI Asset Management Company, open-end fund SSI-SCA has reached a growth rate of 43.4 per cent since its founding in September 2014, higher than the growth rate of 9.9 per cent for the benchmark VN Index on the HCM Stock Exchange during the same period. In 2016, SSI-SCA fund rose 24.1 per cent, compared to the market's growth of 14.8 per cent.

More participation from institutional investors, such as investment and asset management funds, will help reduce the number of individual investors in the securities market and cause the market to operate in a more sustainable manner, according to the Chair of the HCM Stock Exchange Tran Van Dung.

The ratio of the number of individual investors in the securities market now is 99 per cent, and it will be difficult to reduce that ratio in the next three to five years, Dung said.

He noted that there are some solutions that need to be put in place to reduce that ratio. Firstly, the market must be transparent. Transparency will bring fair investment opportunities to all

investors. Then, individual investors who are not skillful and professional will entrust professional asset management firms with their money.

Secondly, market regulators need to have comprehensive policies that encourage more foreign investors to enter Vietnam's securities market. Those policies include the lifting of the local market from frontier levels to emerging levels.

Thirdly, the market should develop a system of pension funds and improve the network of participating insurance-finance companies.

"When those three solutions are implemented, the ratio of institutional investors in the securities market will increase and the market will operate more sustainably," Dung said.

http://bizhub.vn/markets/2017-expected-to-be-better-for-investment-funds_284121.html

No need to wait for ODA, Da Nang firm says 14/Feb/2017 Intellasia | VNS

The main water supply company in Da Nang City, Dawaco, has proposed that it raises funds on its own to build the Hoa Lien Water Plant rather instead of using non-refundable Official Development Assistance (ODA) funds from Japan.

The proposal was made by the company's general director, Ho Huong, in a meeting with the city's leadership this month.

Huong said the company's water plants with a total capacity of 210,000 cubic metres each day have been overworked in summer when it exceeded designed capacity to supply 260,000 cubic metres a day.

He said the company will have to supply 660,000 cubic metres each day in 2025, and needs an early start to be able to do that.

Using ODA funds would mean that the Hoa Lien Water Supply Plant can only begin operations by 2022, given the complicated procedures, management and operations associated with such funding.

"We can raise funds ourselves fund for the first stage of the Hoa Lien water plant in the fourth quarter of 2017 and begin operations in late 2019, providing an additional 120,000 cubic metres of clean water each day," Huong said.

"The Hoa Lien Water plant would use VND4.8 trillion (US$212.3 million) for a 20-year construction and operation period, but we can reduce investment capital by using our funds with build the plant faster," he said.

While the ODA funding would be for a PPP (public-private partnership) project, Dawaco can raise funds from shareholders because it is a joint-stock company.

Huynh Duc Tho, Chair of the Da Nang People's Committee, said the city will review Dawaco's proposal soon.

Tho asked the company to prepare a fundraising plan with a strict construction schedule. The city will decide the best way of investing later, he said.

This is the second project in Da Nang that the investor has spurned ODA funds. The Da Nang Port Company raised funds from shareholders instead of using ODA from Japan.

Da Nang authorities have said the city is set to face a water crisis in the coming years as water exploitation has equaled existing designed capacity with 200,000 cubic metres taken from the Vu Gia River.

Meanwhile, the Cau Do water station, the city's major supplier, is struggling often with highly saline water due to a lack of supply from the upstream rivers during the dry season.

The city had called for Public-Private-Parnership (PPP) investment projects in waste water treatment and clean water supply and it seeks to become a 'green' city.

It has estimated project costs at VND6 trillion (US$267 million), of which $218 million would be used for urban infrastructure, to reach the 'green' target (an environmentally friendly city) by 2025.

In 2015, the city had listed 19 projects calling for investments of VND16.5 trillion (US$768 million) under the Public-Private-Partnership (PPP) model.

The same year, it presented a $115 million budget proposal for upgrading waste water treatment stations, waste water drainage systems and drainage channels in the city. The World Bank had agreed to loan $100 million for this project.

http://bizhub.vn/news/no-need-to-wait-for-oda-da-nang-firm-says_284101.html

HCM City seeks investors for prime real estate spot downtown 14/Feb/2017 Intellasia | VNS

The People's Committee of HCM City is calling for investment in a mixed-use property project to be located on prime real estate downtown.

The land plot of 1.31 hectares is enclosed by Nguyen Hue, Ho Tung Mau, Huynh Thuc Khang and Ngo Duc Ke streets in District 1.

The People's Committee has asked the Department of Planning and Investment to invite and select investors in the first quarter.

Construction is expected to cost more than VND2.8 trillion (US$127 million), while land clearance compensation will cost VND4.68 trillion ($210 million).

The city will grant a land-lease license for 50 years, including 72 months to complete construction. Last August, the city's People's Council adopted a resolution on the restoration of eight land plots that

had been withdrawn from cancelled projects or used for other purposes. The so-called golden land plot in District 1 was one of them.

Last June, the Van Thinh Phat Group Corporation sought approval from the People's Committee to invest in the plot. The company plans to build a complex with a height of no more than 40 stories.

http://bizhub.vn/property/hcm-city-seeks-investors-for-prime-real-estate-spot-downtown_284095.html

Major realty projects drive early FDI 14/Feb/2017 Intellasia | VIR

Supported by strong liquidity in 2016, a range of foreign invested real estate projects in major Vietnamese cities is expected to launch for sale in 2017.

This expected expansion is a result of stable economic growth and increased demand from both domestic and international buyers following the government's decision to ease regulations allowing foreigners to own properties in Vietnam.

Developers from Japan, South Korea, and Singapore are the most aggressive. Singapore's leading real estate developer, CapitaLand, is preparing necessary procedures to launch its latest project within this year, a residential tower in the heart of HCM City.

Due to be completed in the first quarter of 2018, the Somerset Dimension HCM City will be the first for-sale residential development in Vietnam to offer property management and concierge services by Ascott, the world's largest international serviced residence owner-operator, an arm of CapitaLand.

Four projects developed by a newly-formed joint venture between Indochina Capital and Japan's Kajima Corporation will also commence soon. The joint venture inked a contract last year to build a dozen projects in the next decade, ranging from residential to hospitality, in Vietnam's major cities.

The first four projects have total investment capital of $100 million, and will be located in Hanoi, HCM City, and Danang.

Besides, in HCM City's Thu Thiem New Urban Area, Gaw Capital Partners' $1.2 billion Empire City has just completed its model house, which is open for public viewing. The development will have a deluxe shopping mall, a five-star hotel, an office building, modern condominiums, and an 86-storey multifunctional tower, which will be the tallest building in Vietnam once completed. Preparations are being made to launch initial sales efforts to prospective buyers.

Also in Thu Thiem New Urban Area, the South Korean Lotte Group teamed up with three Japanese enterprises, Mitsubishi Corporation, Mitsubishi Estate, and Toshiba Corporation, and they are waiting for official approval from local authorities to start their $2.2 billion eco-smart city project.

Representatives of Lotte confirmed that the initial planning is done, and the developer is ready to start the project this year. Covering an area of 16.71 hectares, the complex plans to feature an international shopping-financial-banking centre, hotels, serviced apartments, offices, multifunctional condos, and a 50-storey building.

The list of upcoming foreign property projects also include Japan's Meade Group actively preparing to launch its $30 million high-end project called Wateria Suites in HCM City's District 2.

Meanwhile, another team of Japanese developers, including Daiwa House Industry, Nomura Real Estate Development, and Sumitomo Forestry, is launching a $220 million condominium project called Midtown in HCM City's District 7. With construction starting in early 2017 and a finish date in 2019, this project will add around 1,100 units in five buildings to the market.

The real estate market has also been enhanced by a range of merger-and-acquisition deals and new investment funds.

A group of Japanese corporations are exploring the possibility of injecting up to $2 billion in large, mixed-use complexes in major Vietnamese cities. The corporations involved include Mitsubishi, Sumitomo, Taisei, Nomura, Haseko, Sanyo Homes, Daiwa House, Aeon, and Toshin.

http://www.vir.com.vn/major-realty-projects-drive-early-fdi.html

Casino gold rush after new gambling rules 14/Feb/2017 Intellasia | VIR

Vietnam is finally allowing local residents to gamble at selected casinos, a scheme aimed at opening up the lucrative industry, although analysts say that more regulation is expected for clearer gambling rules.

One of the first prerequisites of the regulation is that all gamblers would have to be at least 21 years of age and have a clean criminal record to be granted entry in the casino. They would also have to provide proof of a stable monthly income of at least VND10 million ($443) - a limit that would clearly ward off the average earner.

Vietnam plans to impose a Singapore-style casino entry fee for local residents, who will have to ante up VND1 million ($45.45) per day or VND25 million ($1,100) for a monthly pass. The charge is less than the daily S$100 ($70) levy Singapore imposes on its locals but will still represent a significant barrier to most Vietnamese.

However, under the new regulation, local Vietnamese will be allowed to gamble at specific casinos approved by competent authorities on a three year trial basis. After three years, the government will decide whether to continue to allow the Vietnamese to have access to casinos.

Prof Augustine Ha Ton Vinh, investment consultant for Special Economic Zone and Casino Complex in the northern province of Quang Ninh's Van Don told VIR through e-mail that "this is the first time the government has issued a full decree about casino gambling on par with international practices. It has contributed to this sector in Vietnam."

He added that "Hopefully, there will be further new terms added to more adequately address casino tax revenue and the personal income tax of the player."

Now, Vietnam, one of Asia's most sought after but seemingly out of reach markets, plans to open its doors for local players on an experimental basis. Billionaire Lim Kok Thay's Genting Group, Sheldon Adelson's Las Vegas Sands, and former Adelson lieutenant William Weidner have all shown interest in Vietnam, and a successful experiment with so-called open casinos could lead to major investment by international players.

Vietnam currently has seven casinos operating in some of its most popular tourists destinations. They are The Grand Ho Tram Strip in the southern province of Ba Ria-Vung Tau, Aristo International Hotel in the northern province of Lao Cai, Phoenix International Club operated by Silver Heritage Group in the northern province of Bac Ninh, Royal International Hotel Halong in Quang Ninh, Do Son Resort Hotel in the northern port city of Hai Phong, Hai Ninh Loi Lai Casino in Quang Ninh's Mong Cai, and Hong Van Casino in Quang Ninh.

Among those, Royal International Hotel Halong reported in 2014 that its net losses had reached VND153 billion ($6.7 million). Meanwhile, Donaco International, the investor of Aristo International Hotel also reported the lower profit from its Vietnam casino than in others in the region.

It was expected that the situation, however, could change for the better once locals are allowed to enter casinos.

http://www.vir.com.vn/casino-gold-rush-after-new-gambling-rules.html

Business Briefs February 14, 2017 14/Feb/2017 Intellasia

* Cu Chi Commercial & Industrial Developing Investment Company (CCI) has announced February 21 as the ex-dividend date to pay a 2016 second round dividend in cash for shareholders at 7 percent. Payments are due on April 14.

* Tan Tao Investment-Industry Corporation (ITA) said in a financial report its revenue contracted 68 percent year-on-year to VND228.3 billion in 2016 and its net profit declined 70 percent to VND54.4 billion. The full-year earnings per share were a mere VND57. ITA's total assets inched up 1 percent from end-2015 to VND12.8 trillion by the end of last year.

* Ton Chuong Duong, a board member of Do Thanh Technology Corporation (DIT), has registered to buy 348, 130 DIT shares to increase his ownership to 400,000 shares (4.9 percent) in one month starting from February 15.

* Seafood Company No.4 (TS4) said it would pay a provisional dividend in cash at 5 percent for shareholders on the record date of March 20. Payments will be made on September 29.

* Realty developer Quoc Cuong Gia Lai Group (QCG) said its revenue surged 4-fold year-on-year to VND1.58 trillion in 2016 and its net profit up 3.2-fold to VND69.4 billion. The company's total assets increased 10 percent from end- 2015 to VND5.9 trillion by the end of last year.

* Individual investor Phan Thanh Liem has registered to acquire 280,000 shares (0.52 percent) of Superdong Fast Ferry Kien Giang Company (SKG) from February 16 to March 17. He currently holds no SKG shares.

* Visaco Mineral and Investment Company (VMI) has issued 2.35 million shares under an employee share ownership plan, raising its total outstanding volume to 10.9 million shares. The new shares will be tradable on February 16 but two million shares are not transferable until April 11.

* Binh Thuan Book and Equipment Company (BST) will pay a 2016 second round dividend in cash for shareholders at 6 percent on the record date of February 21. Payments are due on March 8.

* Dinh Van Nhan, chair of Song Da Investment and Construction Company (SDD), has registered to buy 200,000 SDD shares to revise up his ownership from 0.25 percent to 1.2 percent over one month starting from February 13.

* Vietnam Airlines may either sell or lease back four new aircraft which it is slated to receive this year to ease the pressure on the due-debt-over-ownership-capital ratio, the national flag carrier said Friday.

* Vietjet will start flying between the central Vietnamese city of Danang and Seoul (South Korea) on May 31, 2017 in a bid to meet the increasing travel demand of tourists, businesspeople and individuals between the two tourism-attraction cities, the low-cost carrier said Friday.

* Vietnam is expected to produce 19.6 million metric tonnes of steel in 2017, up two million metric tonnes compared to the previous year, said Nguyen Van Sua, vice-president of the Vietnam Steel Association.

* Fruit-exporting Vietnam spent more than $110 million importing fruits and vegetables in January 2017 alone, a 55 percent year-on-year rise, with consumers rushing to buy even fruits which are abundant in the local market at exorbitant prices.

SCG records rise in profit in 2016

14/Feb/2017 Intellasia | VNS

Thailand's SCG Group announced a year-on-year profit increase of 24 per cent to VND36.18 trillion (US$1.63 billion) in 2016, thanks to the performance of its chemical business and energy costs.

During the period, its revenue from sales dropped 4 per cent year-on-year to approximately VND273.2 trillion ($12.36 billion), while export revenue, which accounted for 27 per cent of the group's total revenue from sales, was VND72.6 trillion ($3.28 billion).

On December 31, 2016, SCG's total assets amounted to more than $15 billion, of which its assets in the Asean region, excluding Thailand, stood at $3.51 billion, or 23 percent of its total assets.

"In Asean, we continue to carry out strategies and are solidifying the SCG brand. SCG believes that this market holds high prospects, with dynamic growth from the government's investment policies as well as domestic consumption and trade among Asean countries," Roongrote Rangsiyopash, president and CEO of SCG, said.

SCG's Asean investments include a cement plant in Myanmar, which has an annual production capacity of 1.8 million tonnes, and Vietnam's second kraft paper plant, whose capacity is 243,000 tonnes a year. Both plants began commercial production in 2017.

SCG, one of the leading conglomerates in the Asean region, began business operations in Vietnam in 1992 with a trading business and gradually diversified into cement-building materials, chemicals and packaging sectors.

Today, it has 22 companies across Vietnam that employ around 6,900 people. http://bizhub.vn/corporate-news/scg-records-rise-in-profit-in-2016_284100.html

Big sell-off in VinaCapital's recent real estate strategy

14/Feb/2017 Intellasia | VIR

VinaCapital-owned funds have divested from a number of real estate assets in Vietnam, supposedly including the long-held Sofitel Legend Metropole Hanoi Hotel, as the investment firm restructured its strategy.

By late 2016, the Vietnam Opportunity Fund (VOF), an $864 million fund operated by VinaCapital, has withdrawn from an asset which was widely rumoured to be the 50 per cent stake it held in the Sofitel Legend Metropole Hanoi Hotel. Following the sale, the percentage of operating assets in VOF's portfolio, as of December 2016, dropped from 8.8 to 1.4 per cent.

According to announcements posted by the fund, VOF will receive $100 million in proceeds, in two annual instalments. The Metropole stakes, which accounted for 7.4 per cent of VOF's net asset value, were on sale for five years before the alleged deal was completed.

There are speculations on the market that a new real estate venture, co-founded by VinaCapital and American private equity firm Warburg Pincus, was the buyer in this deal. The $300 million joint venture, set up in November 2016, aims at developing and acquiring hospitality assets across Southeast Asia.

VinaCapital has yet to respond to VIR's requests for clarification. Meanwhile, VinaCapital's real estate fund VinaLand also divested from a number of projects. Last

month, the fund earned $10.9 million by selling its stake in Project BD, a 94.7-hectare parcel of land in the southern province of Binh Duong.

"This disposal is in accordance with both the pre-and post-2016 extraordinary general meeting stated policy to divest projects in a controlled and orderly manner. The proceeds received from this exit, in conjunction with those collected from past and future disposals, will be used to cover VinaLand's commitments, including operating costs and distributions to shareholders," said managing director David Blackhall in a statement.

Three months earlier, VinaLand also disposed of its share in the 7.3ha Project Ceana, located in central Vietnam. The transaction resulted in $7.6 million in proceeds for the fund.

As of December 2016, nine VinaLand projects were revalued by international consultants, as part of an ongoing appraisal programme. The fund noted that overall results were trending upwards, demonstrating continued improvements in the market and overall confidence that has flowed through to real estate land valuations.

During VinaCapital's 2016 investor meeting, founder Don Lam revealed that VinaLand was restructuring its strategy to better suit the taste of foreign investors. Specifically, overseas investors prefer projects with an investment span of less than five years. This new strategy reduces risks, yet poses the challenge of finding fresh land plots ready for immediate development.

Lam is also overseeing the $4 billion South Hoi An integrated tourism project, which was renamed the Hoiana in December.

http://www.vir.com.vn/big-sell-off-in-vinacapitals-recent-real-estate-strategy.html

State to divest from successful businesses in Hanoi 14/Feb/2017 Intellasia | VNN

The government has released a list of 19 enterprises in Hanoi and the proportion of the state's ownership stake in them.

Hanoi ranks second in Vietnam, just after HCM City, in terms of the number of enterprises restructured by the State from now to 2020.

The State will keep its ownership ratios unchanged in four enterprises, namely Hanoi Housing Management and Development; the Capital Lottery Company, the Hanoi Railway Corporation and the Hanoi Publishing House Company.

The remaining 15 companies will undergo equitisation, under which shares will be sold to investors. The State will still hold the controlling stakes (from 50 percent to less than 65 percent) in three companies - the Hanoi Park Greenery Company, Thong Nhat Park and Hanoi Zoo.

In other 12 companies, the state's ownership ratio will reduce to below 50 percent. These include a lot of 'shining' names such as Hanoi Transerco (transport), Hanoi Tourist (travel firms), UDIC (infrastructure developer) and Hawacom (water supply).

Being a big player in the tourism sector, Hanoitourist shares would be a valuable investment.

Hanoitourist now has a series of 4- and 5-star hotels, the best known in Hanoi, including Sofitel Metropole, Hilton, Pullman, InterContinental, Hotel de l'Opera Hanoi, Hilton Gardent Inn Hanoi, Hanoi Hotel and Thang Long Opera. The ideal destination point in summer - the Ho Tay Water Park - is also partially owned by Hanoitourist.

After 50 years of operation, the company's charter capital has increased from VND600 billion to VND2.850 trillion, while its business performance is usually good with a two-digit growth rate.

Hanoi Transerco runs a large network of buses and stations in Hanoi. The company has recently launched new services, including high-quality buses that carry passengers to Noi Bai Airport and BRT (bus rapid transit).

Hanoi Transerco also owns Toyota Hoan Kiem and Ford Hanoi, specialising in car trade and providing related services.

The company reported revenue of VND3.3 trillion in 2016 and profit of VND57.8 billion. Handico is the main unit in Hanoi in developing the social housing fund - accommodations for students,

houses for workers in industrial zones, apartments for low income earners and houses for resettlement. Handico has teamed up with Japanese Stanley to manufacture the parts and accessories for motor

vehicles. Hapro, the Hanoi Trade Corporation, is well known not only for its Hapro Mart chain, but also for its

import/export activities and trade infrastructure development. Hapro has charter capital of VND1.735 trillion. It reported revenue of VND2.2 trillion in the first six

months of 2016. UIDC is the contractor of a series of apartment blocks and new urban areas in Hanoi. The infrastructure

developer reported turnover of VND8.8 trillion in 2016, an increase of 23.5 percent over 2015. http://english.vietnamnet.vn/fms/business/172412/state-to-divest-from-successful-businesses-in-

hanoi.html

Qantas, Jetstar Asia expand codeshare services 14/Feb/2017 Intellasia | The Saigon Times

Qantas and Jetstar Asia are expanding their codeshare arrangements in a move to offer passengers including those travelling to and from Vietnam, more flights across the Qantas Group network in Asia.

Qantas said its code has been available on an additional 142 services operated by Jetstar Asia, bringing the number of weekly codeshare flights between the two airlines to 349. Customers will be provided with more opportunities to access Frequent Flyer benefits and services across the joint network to some of Asia's most popular destinations.

Besides Qantas' 44 weekly flights from Australia to Singapore and extensive own and partner network between Australia and Asia, the expanded arrangement between the two carriers also gives customers more options to book itineraries that combine different Asian airports.

Benefits of booking the Qantas codeshare flights on Jetstar Asia include through-check to and from Qantas international flights, earning of Qantas Frequent Flyer points, access to Qantas Club Lounge in Singapore for eligible passengers and Qantas International baggage allowance. Qantas codeshare passengers also enjoy a hot meal on flights over 90 minutes and a muffin for shorter flights plus water, tea or coffee.

http://english.thesaigontimes.vn/52290/Qantas-Jetstar-Asia-expand-codeshare-services.html

Jetstar Airways launches Vietnam - Australia direct flights 14/Feb/2017 Intellasia | VNA

Low-cost carrier Jetstar Airways in Australia, a member of Jetstar Group, has just announced the launch of two direct flights between Vietnam and Australia, according to Jetstar Pacific in Vietnam.

Accordingly, Jetstar Airways will use Boeing 787 Dreamliner to operate three flights per week, starting from May 10 between HCM City and Melbourne, and four flights per week from May 11 between HCM City and Sydney.

Director general of Jetstar Airways Jayne Hrdlicka highlighted Vietnam's tourism potential, saying that the country is one of the fastest growing travel destinations in the Southeast Asian region thanks to its cultural diversity, beautiful beaches and food.

The launch of the air route is expected to promote tourism exchange between the two nations, she added. On the launching occasion, the carrier offers a promotional campaign, under which travellers can buy one

way tickets for the routes at 3,430,000 VND (150.92 USD) and get free return tickets.

Promotional tickets are available at the website www.jetstar.com from 18:00 February 12 to the end of February 16.

Jetstar Group is one of the largest low-budget airlines in Asia-Pacific, operating over 4,000 flights per week to 80 destinations in 17 countries and territories in the region.-

http://en.vietnamplus.vn/jetstar-airways-launches-vietnam-australia-direct-flights/107154.vnp

Jetstar discounts HCM City-Australia flights 14/Feb/2017 Intellasia | Bizhub

Jetstar Airways, a member of the Jetstar Group, is offering a promotional programme with return tickets priced at VND3.43 million (US$152) from HCM City to Australia for bookings on February 13 to 16.

The airline said the promotion marked the launching of two direct air routes - from HCM City to Sydney with four flights a week, and from HCM City to Melbourne with three flights a week.

The budget airline plans the first flights from HCM City to Melbourne on May 10, and HCM City to Sydney on May 11.

The airline said it would become the only low cost carrier to fly directly to the popular Southeast Asian destination on the Boeing 787 Dreamliner, offering 21 business and 314 economy seats on each flight from HCM City to Sydney and Melbourne.

Passengers from Australia will be able to connect from HCM City with domestic Jetstar flights to 15 destinations in Vietnam.

Jetstar Pacific, another member of the Jetstar Group, said the budget airline was planning to launch a direct route between Dong Hoi City in central Quang Binh Province and Chiang Mai, Thailand, in order to boost tourism.

The Vietnam-based Jetstar Pacific will also operate a direct route from Da Nang to Osaka, Japan, later this year with four flights per week.

http://bizhub.vn/corporate-news/jetstar-discounts-hcm-city-australia-flights_284126.html

Vietnam Airlines to sell aircraft to cut debts 14/Feb/2017 Intellasia | Vneconomic Times

Vietnam Airlines intends to sell one aircraft and lease three in order to reduce its debts, according to documents prepared for an extra-ordinary shareholders meeting expected for February 20.

The national flag carrier intends to sell one of its B787-9 aircraft and lease three A350s this year, in a plan said to keep its debt-to-equity ratio at safe levels.

According to the airline, the plan is a part of restructuring efforts approved by the government in 2013. Documents from related ministries also require the carrier carry out measures to reduce its debt-to-equity ratio.

"With this plan, the corporation ensures its expansion plans for aircraft teams and cuts its dependence on loans, especially government-guaranteed loans," the document stated.

The airline also said the plan to sell and lease aircraft would reduce its investment capital by about $544 million compared to the original investment plan.

It also plans a hold a vote on two more members to the Board of Management at the extra-ordinary shareholders meeting.

Japan's largest airline, ANA Holdings, last year officially became Vietnam Airlines' main strategic partner in a $109 million deal.

Vietnam Airlines and its subsidiaries earned combined revenue last year of more than VND76 trillion ($3.34 billion), an increase of over 10 per cent against 2015.

Pre-tax profit stood at almost VND2.5 trillion ($110 million), up 140 per cent and 7 per cent higher than the annual plan.

A source from the carrier said the airline alone earned nearly VND59.1 trillion ($2.6 billion) in revenue and VND1.6 trillion ($70.4 million) in pre-tax profit. The company also contributed approximately VND4.9 trillion ($215.6 million) to the State budget, an increase of about 11 per cent compared to 2015.

It put ten Boeing 787-9 Dreamliners and six Airbus A350-900 XWBs into operation last year and carried 20.6 million passengers and 264,000 tonnes of cargo on more than 133,000 flights, both domestic and international.

The carrier was also certified as a four-star airline by the UK-based airline and airport rating organisation SkyTrax, which also ranked it third on its list of most improved airlines in the world during 2016.

http://vneconomictimes.com/article/business/vietnam-airlines-to-sell-aircraft-to-cut-debts

Doors open for EU agri-food firms with lower tariffs

14/Feb/2017 Intellasia | VIR

European enterprises are expected to intensify their agri-food presence in Vietnam thanks to slashed tariffs for EU-sourced agri-food items under the EU-Vietnam Free Trade Agreement.

According to Miriam Garcia Ferrer, head of section from the EU Delegation to Vietnam, many EU firms stand ready to invest in Vietnam's agri-food sector once the EU-Vietnam Free Trade Agreement (EVFTA) takes effect in 2018.

EVFTA is expected to help Vietnam attract more EU agri-food investment and products thanks to the reduction and elimination of tariffs by Vietnam for EU agri-food products, Ferrer said at a recent Hanoi-based meeting between EuroCham and Vietnamese government representatives.

Agricultural items' average tariffs will drop from the existing 67.7 per cent to 31.3 per cent in the third year of EVFTA's entry into force, then to 17.9 per cent in the fifth year, 4.7 per cent in the seventh year, and finally to 4.6-2.6 per cent in the 10th year.

Meanwhile, fishery items' average tariffs will drop from the current 86.7 per cent to 0.4 per cent in the third year, and 0 per cent in the 10th year.

Forty-two EU agri-food firms came to Vietnam recently, in search of investment and business opportunities. It is expected that another wave of EU agri-food firms will come to the country in 2017, according to Phil Hogan, EU Commissioner for Agriculture and Rural Development.

These 42 firms have total revenue of 170 billion euro ($188.8 billion) per year, and seek to ink multi million dollar deals to either establish joint ventures or distribution channels with Vietnamese enterprises.

Last year, firms in Vietnam spent $11.1 billion importing goods from the EU, of which only around $1 billion was for buying agri-food items, while the rest was for importing machinery, equipment, services, and other industrial products. However, Hogan said under EU agri-food firms' general business strategies, they will use Vietnam as their main consumer base, and from there they can boost exports to other Asean markets.

Graeme Dear, president of European Live Poultry and Poultry Hatching Egg Association (ELPHA), said that ELPHA wants to cooperate with Vietnamese firms in producing and exporting poultry products to the EU.

In addition, the UK's Aviagen Ltd, a firm that Dear is the general manager of, is also seeking to cooperate with Vietnamese partners in providing poultry breeding services. In Europe, Aviagen has an average annual revenue of 500 million euro ($532 million). Many other agri-food associations (such as Freshfel Europe, Spirits Europe, AVEC, EUCOFEL, and EDA), and firms (such as Belgian Fruit Valley, Sortovi Semena, Polar Oats, Valio, and Fairefield Foods) have and will come to Vietnam in search of opportunities.

http://www.vir.com.vn/doors-open-for-eu-agri-food-firms-with-lower-tariffs.html

Vegetable exports rise 14pct in January 14/Feb/2017 Intellasia | VNA

Vegetable exports in January rose 14 percent year-on-year to reach $230 million, reported the General Statistical Office.

According to the Vietnam Fruit and Vegetables Association, 2016 was a successful year for the sector as it earned about $2.5 billion in exports, growth of 30 percent from 2015, surpassing that of strong agricultural products such as rice, peppercorn and rubber.

The sector expects an export turnover of 3 billion USD this year. Good news also came for dragon fruit as it was officially accepted into the Australian market. Experts predict that exports of fruit and vegetables, especially fruit, will surge by three or four times in

the near future. However, they also pointed to weaknesses in the sector, including market exploitation, as the volume of

fruit and vegetables shipped to demanding markets such as Australia, France and the US remains low. In the first two years of exporting to France, only several tens of tonnes of Vietnamese lychee was sold,

while a small amount of mango was shipped to Australia. Meanwhile, Vietnamese fruit and vegetable exports largely depended on China, as about 70 percent of

products were shipped to China in 2016, compared to 65 percent in 2015 and 30 percent in 2014. Duong Phuong Thao, deputy head of the Department of Import and Export under the Ministry of Industry

and Trade, said that China pledged to create optimal conditions for Vietnamese products in the market.

However, China will tighten import activities and strengthen the fight against smuggling and the supervision of product quality, she said.

Thao stressed that to achieve sustainable growth in the sector, quality must be improved, with increasing investment in post-harvest storage and processing and building trademarks to attract more consumers.

http://english.vov.vn/trade/vegetable-exports-rise-14-in-january-343385.vov

Foreign brewers tap into robust domestic market 14/Feb/2017 Intellasia | VIR

Foreign breweries' thirst for the Vietnamese beer market has by no means been quenched. Heineken Vietnam Brewery Vung Tau JSC (Heineken Vietnam) last week received the investment

certificate for the 12-fold expansion of its factory in My Xuan A Industrial Zone after it bought the Vung Tau brewery in southern Vietnam from Carlsberg last year. Under said agreement, Heineken Vietnam will spend VND4.7 trillion ($185 million) to expand the factory and increase its capacity to over 610 million litres of beer per year. In July 2016, Heineken Vietnam took over the brewery in question from Carlsberg. At that point, the factory had a capacity of 50 million litres per year. This movement was in line with Heineken's strategy, as it currently holds roughly a fifth of the Vietnamese market after 25 years in the country. Heineken is eyeing a push into the north to expand its footprint.

Frans Eusman, head of Heineken's operations in Asia, said 2016 was "spectacular" and Vietnamese growth is sure to continue. He added that Heineken has a clear plan to grow sustainably, and that growth could come from further acquisitions or the expansion of existing operations.

Heineken's move is the latest and most dramatic of all the foreign brewers in Vietnam. In January 2016, Carlsberg invested in a fourth canning line in its Hue beer factory. This facility has the

largest capacity of all the Carlsberg factories in Vietnam. The investment raised Carlsberg's capacity in central Vietnam to 370 million litres a year.

At the end of 2015, Thai companies Singha and Masan Consumer Holdings officially started production at their joint, VND1.6 trillion ($70 million), 100 million-litre-a-year factory in the Mekong Delta province of Hau Giang. The company said the facility could be expanded to produce 150 million litres a year.

In May 2015, Anheuser-Busch InBev (AB InBev) took the first step into Vietnam with the opening of its VND 660 billion ($30 million), 100 million-litre-a-year factory in the southern province of Binh Duong.

Late last year, Nguyen Thai Ha, supply chain director at Carlsberg Vietnam, told VIR, "We will continue to invest more to expand our plant in Hanoi, which now has an annual capacity of 100 million litres. We will seek a new location for the Hanoi plant, as our land leasing contract with local authorities terminates in the next eight years."

Besides expanding capacity, foreign brewers are also closely watching the equitisation of Saigon Alcohol Beer and Beverage Corporation (Sabeco) and Hanoi Alcohol Beer and Beverage JSC (Habeco). Potential investors in Sabeco include Japan's Kirin Holdings, Thai Beverage Public Company Limited (ThaiBev), and Dutch beverage giant Heineken.

Heineken is also eying Habeco, as is the Japanese beverage company Suntory, Carlsberg, and Chaleo Yoovidhya - the Thai billionaire and co-creator of the Red Bull brand of energy drinks.

NASDAQ on February 8 reported that Carlsberg is very interested in the potential procurement of Habeco shares. Carlsberg expects to submit a bid in March or April this year.

"The equitisation of Sabeco and Habeco will potentially lead to changes and opportunities within the Vietnamese beer market, and we are following these developments closely," said Eusman.

The reason for the interest is that there is a lot of potential in the two companies. Not only do the two dominate the domestic market - Sabeco holds the biggest domestic market share and Habeco holds the third biggest - but according to Viet Capital Securities (VCSC), because the two companies are not operating at full efficiency, the potential for investors could be even higher.

"For Sabeco and Habeco, a transition in ownership and management may be a real catalyst to materialising their high earnings potential," said VCSC in a report released in November 2016.

"Although we understand that a focus on the premium segment supports its margins, the fact that Heineken Vietnam generates a much higher operating profit margin (greater than 30 per cent in 2015) compared to Sabeco (14 per cent) and Habeco (11 per cent) implies that there is plenty of headroom for improvement in the latter two," VCSC explained. "Tightening up the supply chain, consolidating ownership at manufacturing and trading subsidiaries,

propping up staff productivity, maintaining more control of the distribution system, and marketing more effectively are discernible areas for improvement."

In 2016, domestic production was slightly over three-and-a-half billion litres of beer. The Vietnam Beer-Alcohol-Beverage Association (VBA) expects the figure at about four billion litres of beer in 2017, up 10 per cent on-year.

Beer accounts for 94 per cent of the alcoholic beverage consumption in Vietnam. According to Canadean, a research company focusing on international soft drink and alcoholic beverage industries, the Vietnamese alcoholic beverage market has experienced a rapid growth of 6.4 per cent per year for the past 10 years.

VCSC expects solid growth in the beer market thanks to a young population and rising income. "Forecasts point to 4-5 per cent volume growth per annum in the next five years for Vietnam's beer

industry, and value growth should be higher than that given the ongoing trend toward premium products. With a median age of 30 and high economic growth, Vietnam has a young, vibrant consumer class. The country is estimated to have an additional one million people reaching the legal drinking age of 18 every year," it said.

http://www.vir.com.vn/foreign-brewers-tap-into-robust-domestic-market.html

Dat Xanh releases 2016 financials 14/Feb/2017 Intellasia | Vneconomic Times

Strong fourth quarter sees after-tax profit up handsomely. The Dat Xanh Group (DXG) has released its financial report for the fourth quarter of 2016 and the year

as a whole. After-tax-profit during the quarter reached VND393 billion ($17.3 million), an increase of 337 per cent

year-on-year and higher than the accumulated profit in the first three quarters of the year. Annual after-tax-profit came in at VND664 billion ($29.29 million), in which the after-tax profit of

shareholders of the parent company was VND537 billion ($23.69 million), or 60 per cent higher than in 2015. The figure also exceeded the targeted VND506 billion ($22.3 million). Earnings per share stood at VND3,964 ($0.17).

DXG achieved a range of success in 2016. The year marked a significant change in the group's real estate investments and it also acquired a number of projects of large scale in key locations, such as Gem Riverside in HCM City's District 2 (6.7 ha), Petroland in District 9 (6.3 ha), Saigonres in Thu Duc district (6.7 ha), and Vidoland in District 7 (1.1 ha).

Its total land for the apartment segment is now 80 ha, which is sufficient to carry out sales and ensure profitability over the next three to five years.

DXG was one of the ten largest real estate development companies in Vietnam in 2016, according to Vietnam Report, and it has developed rapidly in recent times. "This is recognition from the market as well as experts regarding the ongoing efforts of DXG," said Vu Quoc Vietnam from Dat Xanh.

The company has set a target of becoming one of the ten largest real estate development companies in Southeast Asia in the near future.

http://vneconomictimes.com/article/business/dat-xanh-releases-2016-financials

Trade is a two-way street: Vietnam has imported more from the US 14/Feb/2017 Intellasia | VnExpress

In fact, a lot more. Over the past decade shipments to Vietnam have quadrupled, with machinery and equipment topping the list.

Last year Vietnam surpassed the Philippines to become the fourth biggest Southeast Asian market for American goods, according to latest data from the US Department of Commerce.

Shipments from the US to Vietnam hit $10.2 billion, up more than four times compared to 2007, approaching the number recorded by Thailand. Singapore and Malaysia remained at the top.

Vietnam mostly imported machinery and crude materials for manufacturing last year. Besides, American agricultural products, especially soybean, also made major inroads.

Vietnam has been one of the top suppliers of a wide range of goods for the US While trade relations between the two countries have mostly been discussed with a focus on exports from Vietnam, it should be noted that a large number of American businesses also view Vietnam as an increasingly important market.

Bilateral trade has been expected to benefit from the Trans-Pacific Partnership (TPP), an ambitious trade pact connecting Vietnam, the US and other 10 countries.

But what is going to happen now that the Trump administration has officially pulled the US out of the deal? Experts say the demise of the pact could hurt businesses in both Vietnam and the US

"The TPP would have lowered 18,000 tariffs for US companies to export their goods to those 11 markets," said Karen Gerwitz, president of World Trade centre Denver, Colorado.

Experts say without joining the TPP, the US will have to negotiate on new bilateral trade deals with Vietnam and some other Southeast Asian countries, a process that will require a lot of time and effort.

As China and the European Union have been trying establish footholds in this fast-growing region, the clock is now ticking for the US

http://e.vnexpress.net/news/business/data-speaks/trade-is-a-two-way-street-vietnam-has-imported-more-from-the-us-3540767.html

Garment exports to US, Japan hit $15b in 2016

14/Feb/2017 Intellasia | VNA

The US and Japan imported 15 billion USD worth of garment and textile products from Vietnam in 2016, according to the Vietnam Textile and Apparel Association (Vitas).

The figure accounted for 53.5 percent of the garment and textile sector's export turnover of 28.3 billion USD last year.

The association said that to fulfill the target of earning 30 billion USD from exports this year, the sector will continue boosting shipments to the US and Japan, with a view to maintaining an export growth of 6 percent in these markets.

In 2016, Vietnam's apparel saw lower than expected results, with 28.3 billion USD in exports, meeting about 90 percent of the set target and up 5.7 percent year-on-year.

Vitas attributed the low export turnover to a lack of export orders due to fierce competition from foreign textile and garment producers, while global demands declined.

http://en.vietnamplus.vn/garment-exports-to-us-japan-hit-15 billion-usd-in-2016/107183.vnp

US turbulence should steer clear of Vietnam trade 14/Feb/2017 Intellasia | Vietnamnet

Bilateral trade and investment from the US into Vietnam are expected not to see drastic changes under US President Donald Trump.

Michael Sieburg, associate partner at Asia-Pacific marketing strategy consulting firm Solidiance, talked to VIR's Hong Anh about the impact of the American withdrawal from the Trans-Pacific Partnership and other economic policies of the new administration on Vietnam.

US President Trump has been talking about bringing jobs back to the US. To what extent will this affect US companies' expansion plans in Vietnam, where a lot of local workers are employed?

While Trans-Pacific Partnership (TPP) related foreign direct investment (FDI) might be negatively impacted by Trump's actions, I do not believe his pledge to "bring jobs back to the US" will itself lead to investors switching their FDI plans from Vietnam to the US.

Rather, I anticipate that a number of companies will announce that they are considering investments in the US but will be non-committal on the specifics.

The aim will be to appease the current administration and to cool tensions in this unpredictable political environment. I would bet many such 'considered investments' are never realised and those that are realised are predominantly linked to longer-term plans anyways.

Even if Trump imposes tariffs or other barriers, the long-term trend in the US will remain favourable towards globalisation, assuming the downsides of trade on specific communities are sufficiently addressed.

But let's not forget that Democratic presidential candidates Hillary Clinton and Bernie Sanders also - at least verbally - opposed TPP, so the short-term trend will be less favourable to such agreements.

While withdrawing from TPP was done with the simple stroke of a pen, I do not think Trump will be so quick to start imposing tariffs on US trade partners - though if we were in China or Mexico, I would be more concerned that he would place tariffs or other barriers to trade and investment.

Especially on Chinese investment in the US, President Trump has been true to his word across multiple campaign promises and his rhetoric on China and Mexico might well have consequences as he will not want to lose face by appearing to back down to these countries.

But for Vietnam, the tools Trump uses will be milder. Perhaps the use of non-tariff trade barriers will increase.

Vietnam is accustomed to such actions - as was the case in the past with the US, considering previous battles over shrimp and catfish.

But there are international legal arenas to deal with these issues and the US is not about to withdraw from the World Trade Organisation, or so one assumes.

If Trump actively listens to his advisors, Vietnam fortunes might be well-served by both US Secretary of State Tillerson and US Secretary of Commerce Ross, who have each had previous experience driving investments in Vietnam.

Their familiarity with the country and direct experience here might well position Vietnam favourably - or at least not unfavourably - in a Trump administration.

Solidiance predicted a strengthening of bilateral ties between the US and Vietnam thanks to the appointments of Tillerson and Ross. During 2017, in which sectors can we expect growth in trade between Vietnam and the US, and in investment from the US into Vietnam?

I would not suggest that Tillerson and Ross will have any industry-specific benefits, though given their past direct involvement in energy and textiles, I suppose those industries could see at least increased attention from US businesses.

Rather, the appointment of two Cabinet secretaries with direct Vietnam business experience at least gives Trump a voice from those who have done business here.

That's better than nothing and about as much as one can hope for in such a turbulent US political environment.

Does Trump's position on China have benefits to Vietnam in terms of FDI? It remains to be seen how Trump will act on economic and trade issues related to China, but he will not

want to be seen backing down from his heated campaign rhetoric, so it would not be a surprise to see some sort of actions taken targeting China.

In my discussions with foreign investors, there are already palpable concerns about what a Trump presidency means for their China-based business.

And Vietnam is a natural alternative destination for such investors and they are exploring expansion here. TPP no longer has the involvement of the US. If the remaining members ratify it, how different would

the impact on Vietnam be compared to a US-involved version? Given the size of the US economy, any deal without the US is clearly less impactful - but if Vietnam can

get increased access to a market like Japan for its agricultural products, there is a positive impact there, even without US involvement.

I am doubtful how seriously countries will pursue TPP without the US. Rather, I see Vietnam turning their attention towards other bilateral and regional trade deals, at least until a change of administration in the US.

http://english.vietnamnet.vn/fms/business/172508/us-turbulence-should-steer-clear-of-vietnam-trade.html

Uzbek deputy PM visits Vietnam rice industry 14/Feb/2017 Intellasia | VOV

Uzbek deputy prime minister Mirzaev Zoyir on February 11 headed up a contingent of delegates for a visit with rice industry representatives and a seed Company in northern Thai Binh Province.

With a ripening potential for increased agriculture trade, Uzbek ag businesses are increasingly becoming interested in boosting rice trade with Vietnam.

One of the tour stops was at the Thai Binh Seed Company where they found an immaculate operation and an astute operator. They're looking for clean, high-quality food; food that's been monitored from seed to the shelf and everywhere in between, said company reps.

Uzbek imports a lot of rice and they are looking for a higher grade of it. If Uzbek would import more rice from Vietnam, that would be good for the entire rice industry.

The reps said the contingent will probably go back to Uzbek, digest it, write it up and meet with Vietnam again. Hopefully, it won't be long before the protocols are in place. Once we do that trade more rice trade can begin.4

http://english.vov.vn/economy/uzbek-deputy-pm-visits-vietnam-rice-industry-343331.vov

Vietnam vows to develop national rice brand 14/Feb/2017 Intellasia | AFP

The government has approved a plan to develop a national rice brand by 2020, aiming to improve marketing capability and competitiveness.

Vietnam is a big rice exporter, but the world only knows Its white rice products with different broken grain proportions.

Vietnam's rice exports do not bear a Vietnam brand, but they are put in bags with import countries' labels. In the domestic market, Vietnam's rice is less favoured than imports from Thailand, Cambodia, Taiwan and Japan.

Vietnam exports rice to 80 countries and territories, but it has to compete fiercely with Thailand, India and Pakistan in the markets, and with Myanmar and Cambodia in the future.

A report of the General Statistical Office (GSO) shows that Vietnam's key export market is China, but the market is always unstable and unpredictable.

While Vietnam mostly exports rice to China across the border gate, Thailand, Myanmar and Cambodia have signed G2G (government to government) export contracts with the country.

Meanwhile, Asian markets (the Philippines, Indonesia and Malaysia) have had big changes recently as the governments have set up a programme to develop rice production in the countries to restrict imports.

In African markets, the biggest rice importers, Vietnam has to compete fiercely with India and Pakistan to sell 25 percent broken rice, and with China to sell 5 percent broken rice.

In April 2014, Vietnam's 15 percent broken rice was $436.5 per tonne, which was far below the price levels offered by three other contractors from France, Hong Kong and Thailand.

And these are reasons why the national programme on developing Vietnam's rice brand by 2020 has been launched. Vietnam wants to build up a national rice brand in order to help Vietnam's rice sell at higher prices and cement Vietnam's firm position in the world's rice market.

Analysts pointed out that the programme on developing rice brand has just been approved, the coordination mechanism remains unclear. Also, Vietnam still doesn't have high-quality rice varieties in large scale and sustainable production environment.

There is no close cooperation among businesses, farmers and researchers, and farmers and exporters lack information about key markets.

In addition, Vietnam lacks attractive brandnames to advertise in domestic and foreign markets. Dan Viet quoted some experts as reporting that Vietnam's rice has low and unstable quality because

many rice varieties are used in production, while there is no material growing area large enough. In Mekong Delta alone, there are 100 rice varieties in use.

"It is impossible to control rice brand with too many varieties," an expert said, adding that Thai national brand is applied only to two varieties KDML 105 and RD 15.

related news http://english.vietnamnet.vn/fms/business/172334/vietnam-vows-to-develop-national-rice-brand.html

Vietnam going big on shrimp farming 14/Feb/2017 Intellasia | VOV

The Vietnam government has announced plans to invest heavily in perfecting the country's intensive shrimp farming operations and expand production significantly over the next few years.

Earlier this month, the government announced plans to expand farm raised shrimp exports more than three-fold from the current harvest estimated at $3 billion in 2016 to $10 billion over the next few years.

To accomplish the goal, the country will dig new ponds and expand the hectarage devoted to shrimp production that it already operates by reducing its rice harvest, principally in the Mekong Delta, said minister of Agriculture and Rural Development Nguyen Xuan Cuong.

The government made the decision to place all future bets on shrimp farming following a rice harvest in 2016 that was devastated by the rising salinity of the Mekong River in 2016.

In the lower reaches of the Mekong Delta, saltwater has penetrated inland as far as 60 kilometres, according to meteorologists, killing crops and shuttering family farms, eliminating thousands of rural jobs.

Longer-term, the government is convinced that the shrimp farming business can compete on more equitable terms with the country's other more profitable agriculture production.

The increasing salinity may be bad for rice farmers but it is great for those in the shrimp business. Minister Cuong noted the gross revenue of the country's shrimp farmers from exports last year surpassed

that of rice, making it the second-largest agricultural export for 2016, after coffee. Government officials in the Mekong Delta and other coastal areas have been working to assist rice

farmers make the transition to cultivating shrimp that will affect tens of millions in the Mekong Delta alone.

Minister Cuong noted the global market for shrimp has been steadily increasing over the past few years and that the market demand is such that country would be able to safely expand shrimp farming to encompass some one million hectares from the 700,000 hectares now under cultivation.

In addition, he said government officials will work on introducing better-quality strains of shrimp and improving farming techniques. His target is to expand shrimp production to an average of eight metric tonnes per hectare.

Intensive shrimp farms can hold a density of up to 220 shrimp per square metre, compared with only 180 for semi-intensive farms, resulting in an annual yield of 10 tonnes, versus 5 tonnes per hectare using the semi-intensive method.

If one were to run the math, annual gross revenues of $10 billion from shrimp exports is very doable, said minister Cuong.

The weather in the Mekong Delta is most suitable for shrimp and is the motivating factor in making the decision to transition away from rice. The current weather oscillations are just too much for rice.

http://english.vov.vn/economy/vietnam-going-big-on-shrimp-farming-343227.vov

Tra fish sector should target Asian market: experts 14/Feb/2017 Intellasia | VNA

Experts have advised tra fish businesses to focus on the Asian market, particularly China and countries from the Association of Southeast Asian Nations (Asean) in 2017 in anticipation of difficulties from the current main markets of the US and EU.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), this year, tra fish exports to the US and EU will continue facing challenges, including fierce competition from other countries.

At present, the US is the biggest consumer of Vietnamese tra fish, followed by China. However, Vietnamese businesses will soon struggle to sell tra fish to the US due to anti-dumping taxes

imposed by the US Department of Commerce. Besides, under the US inspection programme of catfish, from September 2017, countries, which could

not submit a list of export companies to the US and documents proving food safety and hygiene according to the US Department of Agriculture's Food Safety and Inspection Service's regulations, will not be allowed to export to the market.

Given these difficulties, experts suggested businesses pay more attention to the Asian market. The VASEP said tra fish exports to China in 2017 will still account for about 20 percent of the sector's

exports. Businesses should focus on the high-quality segment instead of output, change their business methods

and create clean products with reasonable prices. Chair of the Board and general director of the Hung Vuong Corporation Duong Ngoc Minh said China's

Hong Kong is expected to be one of the leading importers of Vietnamese tra fish in 2017 with growth of 30 percent. However, Vietnamese enterprises still need to control the quality of products and carefully review contracts with Chinese partners, he said.

He also advised businesses to make use of the domestic market through selling products at supermarkets or online.

Nearly 400,000 tonnes of aquatic products worth VND15 trillion are sold in Vietnam each year, he said. Secretary general of the VASEP Truong Dinh Hoe said the most worrying issue at present is fish

material, noting that in the fourth quarter of 2016, tra fish processing plants saw their output fall 30 percent against previous months, while demand increased by 40 percent.

According to the Ministry of Agriculture and Rural Development, Vietnam has over 100 tra fish manufacturing and export facilities.

In 2016, the tra fish sector earned $1.67 billion from exports, a year-on-year increase of 6.6 percent. The fish was sold in 137 markets worldwide, with the US making up the largest proportion of 23 percent, followed by China (17 percent) and the EU (16 percent).

The sector aims to fetch more than $1.7 billion from exports in 2017. http://english.vov.vn/economy/tra-fish-sector-should-target-asian-market-experts-343335.vov

Vietnam tuna catches face penalties in Japan 14/Feb/2017 Intellasia | VOV

The Japan Fisheries Agency plans to control catches of Pacific Bluefin tuna, a fish species under threat of extinction, by applying the total allowable catch (TAC) system with a legal clause that would impose penalties on violators, sources close to the issue said.

Under the TAC system, the agency will decide in advance on volumes of Pacific Bluefin tuna that fishermen will be allowed to catch to control the marine resource.

The total allowable catch system sets limits on annual catch volumes in advance to control marine resources. Japan introduced the system in 1997. Currently, seven species - saury, Alaska pollack, horse mackerel, sardines, chub and spotted mackerel, Japanese common squid and snow crab - are subject to the system.

The selection of species for the list has been decided based on such factors as importance to the daily life of the Japanese public and whether catch volumes are large or inconsequential.

Member countries of the Western and Central Pacific Fisheries Commission (WCPFC), for which Vietnam is a cooperating non-member, had reached an agreement to halve catch volumes of immature Pacific Bluefin tuna from 2015 onward.

WCPFC is an international organisation that manages Pacific Bluefin tuna as a resource. However, dishonest practices such as falsely reporting catch volumes have been rampant in the industry

worldwide. Thus, the Japanese agency decided to introduce stricter controls on both domestic catches and imports.

The agency also hopes to demonstrate to the international community that Japan is taking a rigorous approach to managing marine resources by adding Bluefin tuna to the TAC system list.

http://english.vov.vn/market/vietnam-tuna-catches-face-penalties-in-japan-343319.vov

Cuttlefish, octopus export to grow 14/Feb/2017 Intellasia | Bizhub

Cuttlefish and octopus exports this year are expected to increase by four per cent from last year to reach $470 million, according to the Vietnam Association of Seafood Producers and Exporters (VASEP).

VASEP general secretary Truong Dinh Hoe said that Vietnam earned $440 million from cuttlefish and octopus exports last year, a year-on-year increase of three per cent, with South Korea, Japan and the EU the largest import markets.

Exports of frozen cuttlefish and octopus contributed 34 per cent and 32 per cent of the total exports, respectively, and dried and processed products the rest.

Demand from Japan, the EU and other markets recovered significantly in the last few months of the year, but exports to the largest import market of South Korea, which accounted for 38 per cent of total cuttlefish and octopus exports, fell strongly.

In the last few years, a scarcity of raw materials was a hurdle for mollusc exporters, who had to depend on imported sources.

The situation is expected to continue this year, with imports of raw materials forecast to increase strongly in the first quarter of the year.

Global demand for this kind of mollusc will not be high, but there is drastic competition among export countries, he said.

VASEP forecast cuttlefish and octopus exports just slightly higher than four per cent this year, Hoe said, adding that exports in the first quarter were estimated to reach $80 million, a year-on-year decrease of 1.93 per cent.

While exports to South Korea and Japan could fall slightly in the first quarter, exports to EU will rise but not by much.

http://bizhub.vn/news/cuttlefish-octopus-export-to-grow_284123.html

Japan now open to Vietnam banana growers 14/Feb/2017 Intellasia | VOV

After six months of negotiations, bananas from Vietnam can now be exported to Japan, making it one of the first fresh fruit to gain access to that market, a leading fruit exporter has reported.

Vo Quang Thuan of the Huy Long An Ltd, one of the country's largest fruit exporters, said that in addition to Japan, bananas have recently gained market entry into the Republic of Korea and Dubai.

The market openings are great news for Vietnamese banana producers and agricultural exports, said Thuan. Hitherto, China was the only foreign market for bananas, but now prospects for future exports are much improved.

The Japan market is a promising market for bananas, said Le Si Cong, director of La Ba Da Lat Company, another large fruit exporter. During the first month of the year demand was much higher than we anticipated, he noted.

Over the past few years, Vietnam and Japan industries have worked together to develop the scientific research needed to support the phytosanitary negotiations between the two countries.

These efforts, along with strong industry market development, have nurtured and paved the way for exports to this market. In the early going, bananas have sold in Japan at a competitive price, added Cong.

http://english.vov.vn/market/japan-now-open-to-vietnam-banana-growers-343316.vov

Tariff cut leads to lower prices of imported CBU autos 14/Feb/2017 Intellasia | The Saigon Times

Several auto firms have adjusted down prices of completely-built-up (CBU) autos imported from regional markets following an import tax reduction this year in line with a roadmap of the Asean Trade in Goods Agreement (ATIGA).

Toyota Vietnam has lowered the selling price of Yaris G cars by VND47 million to VND642 million per unit and Yaris E by VND44 million to VND592 million. Both models are imported from Thailand.

Honda Vietnam now retails an Accord auto made in Thailand for VND1.39 billion, down VND80 million from last year.

Car importers credited the lower prices of cars imported from regional markets to the duty on CBU autos being slashed to 30 percent this year from 40 percent in 2016 under the ATIGA. They said cars assembled in Thailand and Indonesia make a majority of autos imported into Vietnam from the Asean region.

An auto trading firm calculated a reduction of 10 percentage points will lead to a decline of 6-7 percent in the retail price of an imported car if new taxes and fees are not slapped on it.

Other auto firms have not announced their new selling prices but market watchers said they would have to follow suit soon if they wanted to retain their market shares and keep their sales stable.

Experts noted not many types of imported cars would be sold at lower prices this year since auto joint ventures would not bring in autos that can compete with the models they manufacture in this market. Favoured car models of Toyota, Ford, Honda and Isuzu are assembled in Vietnam as components are subject to import tariffs of 15-25 percent, lower than those on CBU autos.

Currently, most CBU autos imported from Asean markets are pick-up products including Toyota Hilux, Ford Ranger, Nissan Navara, Chevrolet Colorado, Isuzu D-Max, and Mitsubishi Triton. These imports are entitled to a duty of 5 percent so a further tax cut will not result in a significant fall in their selling prices on the domestic market.

Experts said if the duty on CBU auto imports from regional countries is slashed from 30 percent to 0 percent in January 1 next year, Yaris cars will retail for less than VND500 million a unit, down VND130-140 billion compared to the current price.

From 2018, the special consumption tax for autos with engine capacity of 1.5 litres or smaller will slide to 35 percent from the current 40 percent, leading prices of such imported CBU autos to be lower than those of locally-assembled autos. Therefore, it is difficult for domestic cars to compete with imported ones if their prices are not adjusted down.

The tariffs on autos imported from other markets outside Asean have fallen as Vietnam committed when joining the World Trade Organisation (WTO). Accordingly, the duties on 4-wheel-drive cars, sport utility vehicles (SUV) and autos with engines of more than 3.0 litres have been cut to 58 percent from 70 percent, to 47 percent from 51 percent, and to 58 percent from 61 percent since January 1 this year.

This is the reason why Toyota Vietnam has revised down the price of Lexus LX570 imported from Japan by VND210 million to VND7.81 billion, Lexus LS460L and Lexus GX460 by VND140 million to VND7.54 billion and VND5.06 billion respectively.

Currently, Lexus RX350 AWD, Lexus GS350 and Lexus ES350 retail for VND3.81 billion, VND4.39 billion and VND3.21 billion, representing respective decreases of VND100 million, VND80 million and VND50 million.

Toyota Vietnam sells Land Prado TXL and Toyota Land Cruiser VX imported from Japan at prices that are VND164 million and VND70 million lower than last year.

However, other auto firms have not reduced prices despite lower import duties in accordance with the country's commitments to the WTO.

http://english.thesaigontimes.vn/52268/Tariff-cut-leads-to-lower-prices-of-imported-CBU-autos.html

Ford sells 2,544 units in January 14/Feb/2017 Intellasia | VNS

Ford Vietnam reported January sales of 2,544 units with its EcoSport, Ranger and Transit models continuing to retain segment leadership.

The Ranger led with sales rising 3 per cent year-over-year to 1,342 vehicles and accounting for almost half the pickup trucks sold in the country.

The EcoSport SUV remained the leader of the compact SUV segment, selling 449 vehicles. The Transit maintained its leadership of the commercial bus and van segment with sales of 289 vehicles. The Everest SUV delivered sales of 116 vehicles while the Explorer premium SUV sold 137 units. Ford

Vietnam recently began importing the latter from the US with a 2.3L EcoBoost engine. Focus saw sales of 110 units, while the sporty Fiesta saw sales rise 12 percent from a year ago to 94

units. bizhub.vn/wheels/ford-sells-2544-units-in-january_284090.html

Vietnamese auto-manufacturer loses $11 million in fire 14/Feb/2017 Intellasia | VIR

An earlier fire this month at Truong Hai Auto Corporation (Thaco)'s factory in the central province of Quang Nam caused VND250 billion ($11 million) in damages to the company.

According to information released at the February 12 press conference held by Thaco and the Quang Nam People's Committee, the fire at Thaco's bus factory in the Chu Lai-Truong Hai complex in Nui Thanh district on February 2 was caused by electric malfunction.

The company said that before the fire, the company had taken out an insurance for the factory in which the value of the facility was set at VND600 billion ($26.43 million)

The company's initial calculations showed that the fire caused about VND250 billion ($11 million) in damages. Thaco chair Tran Ba Duong said that the factory resumed operations five days afterwards.

"It was fortunate that our workers detected the fire early on and moved our assets to safety," he said. "Otherwise the damage would have been even higher."

Duong said that this year Thaco targeted a revenue of VND71 trillion ($3.12 billion). "This equals to VND250 billion ($11 million) of revenue each day, and we expect to submit to the budget of Quang Nam province VND50 billion ($2.2 million)," he said.

http://www.vir.com.vn/vietnamese-auto-manufacturer-loses-11 million-in-fire.html

Hanoi plans to impose taxi badges on Uber and Grab cars 14/Feb/2017 Intellasia | DTI News

Hanoi authorities propose to issue badges for Uber and Grab taxis as they currently do with traditional taxi companies.

The competition between traditional taxis and app-based taxis like Uber and Grab has continued unabated. Conventional taxi companies have said they had to meet numerous requirements and pay various taxes and fees which Uber and Grab taxis aren't required to and that this was unfair.

In Document 399, the Hanoi's Department of Transportation said they had gathered opinions from the public and related agencies about the regulations over the operation of vehicles in the city. They proposed that all cars for hire with less than nine seats, including Uber and Grab taxi, must have the required badges and follow all regulations that are currently applied to taxis.

The department said they hoped to get more views before stopping to receive opinions from February 20 to report to the city people's committee.

The Ministry of Transport has declined to approve a proposal from Uber Vietnam Company to pilot an IT upgrade for its services because of a lack of authorisation and validation from its parent firm.

The ministry said it had inspected and dealt with various cars using the Uber app. According to the ministry, Uber is registered as the developer so it is not authorised to work as a taxi company. The ministry has asked Uber Vietnam to stop working with car owners and the 'illegal' operation in Vietnam until it completes all required procedures.

http://www.dtinews.vn/en/news/018/49483/hanoi-plans-to-impose-taxi-badges-on-uber-and-grab-cars.html

Made-in-China truck sales lose ground in Vietnam 14/Feb/2017 Intellasia | DTI News

Made-in-China trucks which had once dominated the Vietnamese market are facing the slow sales since early 2016.

According to the general Department of Customs, import of made-in-China trucks into Vietnam reached a record high of 26,700 units in 2015 worth a total USD1 billion compared to 13,700 units worth USD530 million in 2014.

However, since early 2016, the sales of Chinese trucks have considerably fallen in Vietnam. The general Department of Customs reported that only 10,900 Chinese trucks had been imported into Vietnam in 2016 and this figure reached just 94 units in January of 2017 compared to 1,700 units in January 2015.

Explaining about the surge in Chinese trucks imported during the 2014-2015 period, owner of an auto-agent in Hung Yen Province, said that it was low prices which attracted customers. Meanwhile, Vietnamese auto agents could owe payments for buying Chinese trucks for between 6 months and one year.

In early 2014, the Ministry of Transport issued a regulation to tighten control over overloaded vehicles also helped to fuelled the import of large-sized Chinese trucks.

Earlier, trucks were allowed to transport larger quantities, 2-3 times over their load capacity. But they will be fined heavily if they carried that much now with the new policy. So as to carry the same amount of goods as before, local transport firms had to increase the number of trucks.

The slow sales of Chinese trucks in Vietnam are also attributed to the stronger competition from rivals. More trucks produced by South Korea's Hyundai, Japan's Hino, Russia's Kamaz and German's Shacman are all being sold in Vietnam with more affordable prices.

Many showrooms of made-in-China trucks have been set up along National Highway 5A, however, over the past year, they have sold only a few units.

Representatives of a showroom in Hai Duong Province said despite low prices, the company sales of Chinese trucks have been on the sharp fall, which is partially due to quality which is not good as those made by South Korean, Japanese or European firms.

After being imported into Vietnam, many Chinese trucks have their bodies extended for the higher loading capacity, which is aimed to meet the Ministry of Transport's regulations and this also seriously affects the trucks' life-span.

http://www.dtinews.vn/en/news/018/49473/made-in-china-truck-sales-lose-ground-in-vietnam.html

Nghi Son Refinery may not be eligible for preferential selling price 14/Feb/2017 Intellasia | VIR

PetroVietnam may not have to purchase the products of Nghi Son Refinery and Petrochemical Complex (NSRP), a joint venture between PetroVietnam, Kuwait Petroleum International, Idemitsu Kosan, and Mitsui Chemical International, at the preferential price earlier agreed upon.

The reason is that Nghi Son's products do not meet the euro 4 standards imposed recently by a government meeting.

According to the conclusions oft the November 7 government meeting on the roadmap to apply the standards on emission set out in Decision 49/2011/QD-TTg, in 2017-2022 gasoline and fuel products in Vietnam will have to meet the euro 2 standards if they are produced by Dung Quat Refinery, and euro 4 standard if they are from other refineries and factories that came into operation after Decision 49/2011/QD-TTg became effective.

As per this conclusion, NSRP's products will have to meet euro 4 standards, which they do not. The Ministry of Industry and Trade said that last year NSRP submitted a document to the government,

saying that its products do not meet the euro 4 and 5 standards and proposed the government to loosen the standards.

According to the agreement signed between the investors of the complex and the Vietnamese government, for 10 years state-owned national oil and gas group PetroVietnam has to buy any amount of products that the company running the refinery complex, Nghi Son Refinery and Petrochemicals LLC (NSRP), wants to sell, at the price of imported products plus 7 per cent for refinery products, 5 per cent for LPG, and 3 per cent for petrochemical products.

The MoIT said that according to this agreement, NSRP's products have to meet the standards of Vietnam at the moment of buying.

Product standards are only one of the problems making NSRP future uncertain. Another issue is with the supply of clean water. The government guaranteed ample clean water, according to the government Guarantee and Undertaking (GGU), but the water is neither clean nor enough.

PVN's recent report shows that Binh Minh Construction and Building Material Co., Ltd, only supplies the equivalent of 22,000 cubic metres of clean water a day, 8,000 cubic metres less than the government's undertaking.

The quality of the water also fails to meet the criteria specified in the GGU, namely the QCVN 01:2009/BYT.

In order to prepare for the purchase of the products by PVN starting from the third quarter of 2017, PVN and NSRP are negotiating points regarding distribution infrastructure among others. PVN plans to establish a subsidiary to distribute NSRP's products. The two foreign partners, KPI and IKC, set up Idemitsu Q8 Ltd, licensed in April 2016. They wanted to have a joint venture with PVN, but the parties have not achieved an agreement.

As of the end of 2016, $6.7 of the 9 billion has been disbursed in NSRP. The project was 94.4 per cent complete, behind schedule, because the contractor had not achieved the deadline as specified in the EPC contract. 52 new expenditures arose, with a total cost of $81 million. At the moment, the parties are working with the contractor to explain these new expenditures.

In August 2016, the Ministry of Natural Resources and Environment asked NSRP to install a lake, cameras, and automatic supervision for the wastewater treatment system.

The installing of these new components could lengthen the construction process and may violate the stability clause in the GGU, because these requirements were added after the project's environmental impact evaluation had been approved by authorised agencies.

Licensed in 2008, the Nghi Son complex in the central province of Thanh Hoa's Nghi Son Economic Zone, has a total investment capital of $9 billion. Of this PetroVietnam has a 25.1 per cent stake, Kuwait Petroleum International 35.1 per cent, Idemitsu Kosan 35.1 per cent, and Mitsui Chemical International 4.7 per cent. The complex is expected to have a capacity of 10 million tonnes of crude input a year.

http://www.vir.com.vn/nghi-son-refinery-may-not-be-eligible-for-preferential-selling-price.html

Korea to invest in many sectors in Can Tho 14/Feb/2017 Intellasia | The Saigon Times

South Korean enterprises are seeking more chances to invest in traffic infrastructure, education, health, information technology, high-tech agriculture, and smart city projects in Can Tho City.

Professor Lee Beom Jae from Ajou University, head of a Korean business delegation to Can Tho City last week, said at a meeting with leaders of the city on Friday that Korean businesses are keen to sound out opportunities in these sectors in the city.

He hoped to connect many projects in Can Tho with Korean enterprises and the two sides would have specific projects by the end of this month.

He suggested that Can Tho should open direct flights from the city to Korea as it currently takes Korean enterprises nearly four hours to travel from HCM City to Can Tho.

Vo Thanh Thong, chair of the city, said Can Tho is seeking to open air services to Singapore and Korea after launching air links with Taiwan and Thailand. Besides, if Trung Luong-Can Tho Expressway is completed in 2019, it will help halve the travelling time between HCM City and Can Tho to two hours.

Korea-Vietnam Incubator Park (KVIP), which has got funding partly by the Korean government and has been put into operation in the city since last year, and a 200-hectare high-tech industrial park underway near KVIP will help incubate startup ideas to bolster economic cooperation between Can Tho and Korea.

By the end of 2016, Korea had nine investment projects with total registered capital of $247 million in Can Tho. The Korean Rice and Food Association has opened a branch in Vietnam with its office located in KVIP.

Lee Kwang In, vice chair of Donghae Engineering & Consultants, said at the meeting that his company would cooperate with the city in land planning, transport, and logistics related to the smart city project.

Nguyen Khanh Tung, director of Can Tho Trade and Investment Promotion Centre, also introduced projects in transport infrastructure, education, health, information technology, high-tech agriculture needing a combined $618 million to Korean enterprises at the meeting.

http://english.thesaigontimes.vn/52278/South-Korea-to-invest-in-many-sectors-in-Can-Tho.html

Nearly 500 foreigners register for e-visas 14/Feb/2017 Intellasia | Vneconomic Times

First week of trial e-visa issuance sees 490 applications, with 210 approved. Some 490 foreigners registered for e-visas from Vietnam, with 210 approved by the Ministry of Public

Security's Department of Immigration, according to the department. Major general Le Xuan Vien, Head of the department, announced the figures after the first week of an e-

visa pilot scheme conducted under Decree No. 07, which took effect on February 1 and permits tourists from 40 countries to apply and receive Vietnamese visas online.

The first foreigner to receive an e-visa was Richard Wilson, a British national. The UK is also subject to visa exemptions for stays of less than 15 days.

Foreigners can apply for visas and pay fees at https://evisa.xuatnhapcanh.gov.vn. Applications are processed within three working days. Each applicant is provided with a digital code, with which they can check the application's progress and print their e-visas once they have been issued. They can also present the codes at border gates and airports for scanning.

The e-visas are valid for 30 days. Each applicant must pay a non-refundable application fee of $25 visa bank transfer.

The 40 selected countries are Azerbaijan, Argentina, Armenia, Ireland, Poland, Belarus, Bulgaria, Brunei, South Korea, Germany, Chile, Colombia, the Czech Republic, Cuba, Denmark, Timor Leste, the US, Hungary, Greece, Italy, Kazakhstan, Russia, the UK, Luxembourg, Myanmar, Mongolia, Japan, Panama, Peru, Finland, France, the Philippines, Romania, Spain, Sweden, China (not applicable for Chinese e-passport holders), Uruguay, Venezuela, Norway, and Slovakia.

The e-visas are accepted at most international airports and the 28 border gates in Vietnam, according to Major general Vien. Tourists can also conduct temporary residence declarations online when travelling with e-visas. The pilot scheme will be evaluated by the government and results reported to the National Assembly once completed in 2019.

Thirty countries around the world now provide e-visas. http://vneconomictimes.com/article/biz-traveler/nearly-500-foreigners-register-for-e-visas

Can Tho targets 5.6 million tourists in 2017 14/Feb/2017 Intellasia | The Saigon Times

Can Tho City, the social and economic centre of the Mekong Delta, aims for 5.6 million visitors this year, with 600,000 of them foreigners, according to the Department of Culture, Sports and Tourism.

Le Minh Son, deputy director of the department, said at a tourism conference in the city last week that Can Tho received 5.34 million visitors last year, a year-on-year rise of 14 percent, and obtained total tourism revenue of VND1.82 trillion (US$80.5 million), up 5 percent.

There were around 258,400 international travellers staying overnight in the city, up 25 percent, he noted. The city tourism sector expects over 270,000 foreign visitors would stay overnight, and tourism revenues would reach VND2 trillion, he said.

The city plans to organise a range of events such as the Southern Traditional Cake Festival and the Asian Beach Volleyball Championship to make it more attractive to tourists.

Ninh Kieu, the city's central district, is working on plans to upgrade transport services to promote MICE (meeting, incentive, convention and exhibition) tours, beautify Ninh Kieu pedestrian bridge, launch a food street, and arranging riverside and walking tours linking Ninh Kieu, Cai Rang and Phong Dien districts.

Cai Rang has already finished a project on conservation and development of Cai Rang floating market to make the market a unique tourism product of the Mekong Delta.

Le Van Tam, deputy chair of Can Tho City, told the Daily that the city is also working towards establishing a tourism department by separating the Tourism Development centre from the Department of Culture, Sports and Tourism.

http://english.thesaigontimes.vn/52275/Can-Tho-targets-56 million-tourists-in-2017.html

Binh Dinh to attract 47 investment projects in 2017 14/Feb/2017 Intellasia | VNS

The central province of Binh Dinh aims to attract 40 domestic projects and seven foreign projects with a total investment capital of $510 million in 2017, according to the provincal Department of Planning and Investment.

To create the most favourable conditions for investors right from the beginning of 2017, the central province's People's Commitee has requested relevant agencies to urgently accelerate the construction of technical infrastructure projects at Nhon Hoi Economic Zone and at other industrial parks in the province, said Huynh Thi Thanh Thuy, deputy general director of the provincial Department of Planning and Investment.

The province's authority also asked the Department of Planning and Investment and the Economic Zone Management Board to regularly update the guidelines and policies related to domestic and foreign investment promotion, resolve problems for investors and prioritise investors applying high-tech, modern and environmentally friendly technologies.

In order to attract more domestic and foreign investors, Binh Dinh must facilitate and prioritise strong and capable strategic investors and contact potential and reputable investors to promote trade and investment in the province, said Chair of Binh Dinh's People's Commitee Ho Quoc Dung.

Binh dinh granted investment certificates to 40 projects with a total registered capital of VND9.7 trillion ($427.6 million) in 2016, up VND857 billion compared to 2015. So far, the province has attracted a total of 63 foreign direct investment (FDI) projects with a total registered capital of $738 million.

http://bizhub.vn/news/binh-dinh-to-attract-47-investment-projects-in-2017_284096.html

PM: Bac Ninh can become Asia's electronics capital 14/Feb/2017 Intellasia | DTI News

Bac Ninh should strive to become Asia's capital of electronics manufacturing and a symbol of Vietnam's rise in field of electronics, prime minister Nguyen Xuan Phuc said at the province's 185th anniversary celebrations on February 12.

He emphasized that Bac Ninh should make great efforts to not only be among the provinces with the highest GDP but also present its strengths in electronics in particular and the creative economy in general.

After 20 years of re-establishment, from an agricultural province Bac Ninh is now a modern industrial province with the country's highest economic growth.

Its gross regional domestic product (GRDP) ranks sixth in the country and its industrial production value second, while its budget contributions of VND17.8 trillion ($783.2 million) are the tenth-highest in the country.

The province also ranked fifth in attracting FDI, with 935 project and capital of $12.3 billion, and its Provincial Competitiveness Index (PCI) has been in the Top 10 for many years.

Effective index management and public administration (PAPI) ranked second. With such results, the province targets becoming a city under the central government by 2020.

The PM also paid a visit to the Samsung complex at the Yen Phong Industrial Park, where he expressed his desire that Samsung allow more domestic companies to join its production chain. Local input at Samsung currently stands at about 50 per cent.

Vietnam in general and Bac Ninh province in particular will create a favourable environment for Samsung to expand its business in the country, including ensuring political stability and sufficient labour resources, he said.

PM Phuc also visited the premises of local food group Dababo, where he praised the group's robust growth and the advanced technology used in its farming, husbandry, and outlets.

He called for more connectivity with farmers and local collectives to expand business for mutual benefit and to bolster State budget contributions.

Earlier, he met with Yoon Jong-kyoo, President of the Korean KB Kookmin Financial Group, in Hanoi on February 11. Vietnam, he said, will continue to maintain macro-economic stability and a favourable business environment for foreign investors.

In the first month of this year, Bac Ninh province attached eight newly-registered projects while three existing projects added capital, totalling $19.3 million.

Samsung Display Vietnam (SDV) has approved a plan to pour an additional $2.5 billion into its AMOLED module plant in the province.

The provincial government earlier asked for government permission to offer tax incentives to attract the additional investment, which would enable the project to be classified as large-scale. The expansion plan is likely to be finalised as soon as the first quarter of this year, according to local media.

http://www.dtinews.vn/en/news/018/49480/pm-bac-ninh-can-become-asia-s-electronics-capital-.html

Work begins on new Mien Dong coach station 14/Feb/2017 Intellasia | The Saigon Times

Saigon Transportation Mechanical Corporation (Samco) last week broke ground for package No.1 of the new Mien Dong coach station in District 9, HCM City.

Currently, a piling test is being done so that construction of technical works and a terminal could start early in the second quarter for completion late this year to replace the existing Mien Dong Coach Station in Binh Thanh District to reduce traffic congestion in the inner-city area, a representative of Samco as the project owner said.

After the station is moved to District 9, its existing premises in Binh Thanh District will be used to build public transport facilities such as a parking building, not for commercial development, said HCM City Party chief Dinh La Thang at a visit to the station in January.

The city will not build any shopping mall in the area, Thang added. The new Mien Dong station is envisaged having four sections. Section A covering 122,000 square meters

will house parking sites for vehicles, and other public and auxiliary works including a 26-storey building. Section B will comprise a two-storey building with bus stops, Section C will have a 5-storey building for

goods storage while a 15-storey service-trade building will go up in Section D. The new station which will be located between the city's District 9 and Binh Duong Province's Di An

Town in an area of over 16 hectares would require total investment of around VND4 trillion (US$176 million).

Upon completion, the new station will be connected with bus routes, especially the city's first metro line connecting Ben Thanh Market and Suoi Tien Park. Therefore, passengers can travel by either bus or metro to enter the city's centre or travel to outlying districts.

http://english.thesaigontimes.vn/52271/Work-begins-on-new-Mien-Dong-coach-station.html

EVN ensures electricity supply for IPs 14/Feb/2017 Intellasia | VNA

The Electricity of Vietnam's Northern Power Corporation (EVNNPC) has devised measures to ensure a stable electricity supply for industrial parks (IPs), according to EVNNPC Chair Thieu Kim Quynh.

The corporation is responsible for ensuring electricity supply for all IPs in 27 northern provinces, including the dozens of IPs in the northern province of Bac Ninh.

Quynh said the NPC held a working session with Samsung Vietnam group recently on electricity supply for its two affiliations - Samsung Electronics Vietnam (SEV) and Samsung Display Vietnam (SDV), which are under construction in Bac Ninh's Yen Phong IP.

The two Samsung facilities have strict requirements on non-stop power supply to ensure their operation, so the NPC is working on upgrading transformer stations and grids to meet the requirements.

In January, the EVNNPC sent working teams to review the implementation of several power supply projects in Nam Dinh and Bac Ninh provinces.

In Bac Ninh, the team reviewed the construction of the 110kV Yen Phong 5 transformer station and extension lines, and the project to enhance the transmission capability of the Bac Ninh - Dong Anh line.

These projects were carried out in 2016 and are set to be completed in 2017 to meet the power demand of local IPs.

According to the EVNNPC, the Yen Phong 5 transformer station will be put into operation on February 28.

The facility is expected to provide stable power for Samsung Display, Samsung Electronics and other investors in the industrial park, while easing the load on other transformer stations in summer. 4

http://english.vov.vn/economy/evn-ensures-electricity-supply-for-ips-343299.vov

Nod for logistics centre at Da Nang Hi-tech Park 14/Feb/2017 Intellasia | VNS

Da Nang High-tech Park's management board has granted an investment certificate to the first logistics project in the central city with total registered capital of VND316 billion (US$14 million).

The U&I Logistics Centre, funded by the U&I Logistics JSC in southern Binh Duong province, will cover more than 5ha in the Da Nang Hi-tech Park.

The first phase of the project will be implemented in the third quarter of 2017 and the second phase will start in Q1 of 2021.

Once completed, the project will provide logistics services such as delivery of import-export products, customs procedures and transport of goods by road and inland waterways for businesses in Da Nang Hi-tech Park.

The project is expected to meet the demand for logistics services of enterprises operating in Da Nang High-tech Park. It is expected to facilitate and improve transport and trading activities in the park and help Da Nang turn Lien Chieu Port into the city's logistics centre.

http://bizhub.vn/news/nod-for-logistics-centre-at-da-nang-hi-tech-park_284099.html

Hanoi hospitals seek external funding 14/Feb/2017 Intellasia | VIR

In a bid to raise capital and improve medical treatment services, Hanoi is seeking both local and foreign investors to buy stakes in public hospitals it owns.

Chair of the Hanoi People's Committee Nguyen Duc Chung said that Hanoi "stands ready to sell stakes of the city's public hospitals under the government's policy to equitise state-owned enterprises."

The money collected from the equitisation will be used for raising the quality of treatment services and upgrading hospitals.

Chung added that all information regarding investment and equitisation will be made transparent and public.

"Some Singaporean investors are expressing interest in buying stakes in some hospitals. They are also exploring investment opportunities in areas such as cardiovascular and gastrointestinal treatment, as well as radiation oncology and a number of modern technologies," Chung said at a recent "Meet Canada" seminar in Hanoi, which aimed to attract investment capital from Canadian investors to Hanoi.

At present, Hanoi has 15 public hospitals (see box) - none of which have been hitherto equitised. "When receiving any queries from local and foreign investors, myself, the municipal Party Committee

chief, and leaders of relevant departments such as Planning and Investment or Industry and Trade will directly help solve any issues that arise. We even work with them outside working hours," Chung said.

In Vietnam, only one public hospital, the Central Transport Hospital in Hanoi's Dong Da district, has been equitised. Some 51.43 per cent of the hospital's stock was acquired by locally-owned T&T Group JSC. About 30 per cent of the hospital's stakes are held by the state and the remaining stakes belong to hospital employees.

Hanoi is also seeking investments in new hospitals and upgrades to its existing ones. In late 2016, in a process taking only 26 days, Hanoi's authorities approved and licensed a Japanese-backed project to build a hospital in the city's Tay Ho district. This hospital, to be specialised in treating cancers and digestive diseases, commenced construction in December 2016 and is scheduled to officially commence operation in the first quarter of 2018.

Hanoi has also established a public bidding centre for medical equipment. The centre, the first of its kind in Vietnam, began operating in October 2016.

Chung added that Hanoi is cooperating with France, Japan, and other nations to improve its healthcare sector. The city is working with Japan to establish an automatic medicine distribution centre, which is expected to become operational in June 2018. The centre will provide medicine to all city-based healthcare establishments and pharmacies.

"We want to create a breakthrough in Hanoi's healthcare sector so that by 2020, the city will become the country's healthcare hub," he said.

http://www.vir.com.vn/hanoi-hospitals-seek-external-funding.html

Online hotel booking sites must pay taxes 14/Feb/2017 Intellasia | VIR

The Ministry of Finance has confirmed the tax obligation of overseas-based online hotel booking service providers with Vietnam-sourced income.

Deputy minister of Finance Vu Thi Mai said that under Vietnam's Value Added Tax and Corporate Income Tax laws, foreign companies abroad that derive income from Vietnam will be subject to value-added tax (VAT) and corporate income tax (CIT).

Mai's confirmation came in response to VIR's enquiry over a petition accusing overseas online hotel booking service providers of committing tax fraud on Vietnam-sourced income.

Vietnamese online hotel booking service provider Vntrip.vn, for instance, recently sent a petition to the government Office, claiming that overseas-based firm Agoda is showing "signals of tax fraud in Vietnam".

Under the petition, Vntrip.vn's director Le Dac Lam claimed that when a Vietnamese customer pays $100 through Agoda, the firm will collect $20 in fees while passing on $80 to the Vietnamese hotel. "Therefore, that $20 lies outside Vietnam and the country fails to collect any tax on this $20 kept by Agoda."

Mai said if Vietnam-based hotel service providers have contract-based transactions with foreign entities, they are required to deduct VAT and CIT, and they must, on behalf of these overseas partners, pay these charges to local tax agencies.

Mai's statement means that firms like Agoda have tax obligations for their Vietnam-sourced income, and Vietnamese entities have an obligation to withhold tax upon their payment to these firms. And these Vietnamese entities will be the ones to be punished under Vietnam's Law on Tax Administration if they fail to fulfil their tax-withholding obligations.

Following Vntrip.vn's petition, on January 18, 2017, the Ministry of Finance issued Document 848 detailing the country's tax policies and tax management regarding overseas online hotel booking service providers with Vietnam-sourced income.

"This document is a management measure. It requires tax agencies to review online hotel booking services and take a closer watch [for firms' tax obligations]," Mai told VIR.

Under the Law on Tax Administration's Article 108 on penalties applicable to acts of tax evasion or tax fraud, taxpayers committing any of the following offenses shall pay in full the amount of tax payable pursuant to the regulations and shall be fined an amount of up to three times the amount evaded:

1. Failing to submit a tax registration file; failing to submit a tax declaration file; failing to submit a tax declaration file within 90 days of the deadline for submission stipulated in Clauses 1, 2, 3, and 5 of Article 32 of the law, or from the expiry date of the extended time-limit for submission stipulated in Article 33 of the law

2. Failing to record revenue relating to determination of an amount of tax payable in accounting books 3. Failing to issue an invoice upon selling goods or services, or recording a value lower than the actually

paid value of goods or services sold on a sale invoice 4. Using unlawful invoices or source documents for cost accounting of input raw materials or goods in

activities giving rise to tax obligations, resulting in a reduction of the amount of tax payable or an increase in the amount of tax creditable or refundable

5. Using unlawful source documents or other documents to determine falsely an amount of tax payable or refundable.

http://english.vietnamnet.vn/fms/business/172611/online-hotel-booking-sites-must-pay-taxes.html

Samsung Display to further break billion-dollar threshold 14/Feb/2017 Intellasia | VIR

Besides Samsung Electronics, Samsung Display, another Samsung Group member is ambitiously ramping up investment in Vietnam, promising to hit $6.5 billion in early 2017.

Minister and government Office Chair Mai Tien Dung has just confirmed with the local press that the government has approved a proposal lodged by the Bac Ninh Province People's Committee, granting the same privileges to Samsung Display's $2.5 billion expansion project that are applied to other large-scale high-tech projects.

The next step for Bac Ninh province is to seek comments from authorised government agencies and submit the project's investment plan to the government.

"We are currently in the legal setup stage, hoping to secure the investment certificate by the upcoming 20th anniversary celebrating Bac Ninh's re-establishment," said a provincial source knowledgeable in the matter.

If things go smoothly, Samsung Display will become the first foreign firm to invest over a billion dollars in Vietnam in the Year of the Rooster.

With this new project, Samsung Display's total investment in Vietnam will touch $6.5 billion, after the initial $1 billion project in 2014 ballooned to $4 billion in 2015.

Samsung Display's global successes dominated media headlines throughout 2016, fuelling the corporation's demand for expansion.

Last April, Wall Street Journal reported that Samsung had signed to supply OLED screens to US tech giant Apple.

The screen volume was not disclosed, but it was estimated to be in the range of 100 million units. Shortly after, Japanese Nikkei broke the news that Samsung is planning a $6.82 billion investment to

upgrade and expand its OLED screen production lines for the Apple deal.

In late 2016, DigiTimes, Taiwan's leading high-tech media outlet, disclosed that Samsung Display will supply AMOLED screens a kind of OLED screen for Apple's new iPhone line in 2017.

Samsung Display's Bac Ninh plant is reported to have reserved individual production lines to meet Apple's demands.

When making their foray into Vietnam, Samsung Display confirmed plans to turn Vietnam into their global manufacturing base.

Screens are valuable components in smartphone manufacturing. As soon as these components are made in Vietnam, the localisation rate of Samsung plants in Vietnam will be significantly increased.

If Samsung Display's investments in Vietnam touch $6.5 billion, it will create more jobs, increase tax contributions, and bring about a raft of other positive socioeconomic gains.

Accordingly, irrespective of Samsung Display's ambitions and high-profile business dealings, its big investment plan is undeniably beneficial to Vietnam.

http://english.vietnamnet.vn/fms/business/172552/samsung-display-to-further-break billion-dollar-threshold.html

Economy

HCM City targets 8.7 per cent growth in 2017

13/Feb/2017 Intellasia | Bizhub

Su Ngoc Anh, director of the department, said the city had set ambitious targets this year, including establishing 50,000 new firms and having investment represent 35 per cent of GRDP.

The city also plans to shift 25,000 family-run businesses into registered enterprises, speed up equitisation of State-own companies, and improve cooperation with surrounding localities to expand the market.

Anh recommended that the city work with agencies to review and give priority to essential projects. The city should also closely monitor construction projects, he said.

The city will offer incentives for enterprises to invest under public-private partnerships, especially in the city's seven designated "breakthrough" programmes: human resource development, administrative reform, growth quality, competitiveness improvement, traffic congestion and flooding control, and cityscape rehabilitation.

Anh said the department would also assist enterprises in resolving hurdles, including shortening the time to register businesses.

In addition, it will set up a comprehensive information system to help businesses, especially small- and medium-sized enterprises, to invest in the support industry.

Vo Van Hoan, head of the Office of the People's Committee, said the department should create better linkages among sectors and agencies to ensure consistent policy in licensing investment certificates.

The director of the city's Department of Home Affairs, Truong Van Lam, has asked the Department of Planning and Investment to closely oversee the operation of businesses after they receive investment certificates.

Nguyen Thanh Phong, chair of the city's People's Committee, urged the Department of Planning and Investment to develop a master plan for the city.

Because of the city's limited budget, the department must use investment carefully, with priorities given to projects in the seven breakthrough programmes, he said.

For other projects, the department must diversify investment models and seek investment from many sources in society, he said.

He also urged the department to complete a database on enterprises and work with agencies to develop sectors with high added value, especially the service sector.

The city has 290,000 enterprises. Of these, 36,000 were established in 2016, with 39.8 per cent in real estate and 18.7 per cent in trade and retail.

But only 175,000 firms are actually operating, while the rest have either suspended operations or moved out of the city.

The seven breakthrough programmes were approved last year by deputies of the 10th meeting of the city's Party Congress.

The programmes are expected to benefit residents and businesses as they deal with pressing issues such as flooding, traffic congestion, saltwater intrusion, air pollution and complex bureaucracy.

http://bizhub.vn/news/hcm-city-targets-87-per-cent-growth-in-2017_284090.html

Govt's Resolution 19 puts ministries under pressure 13/Feb/2017 Intellasia | The Saigon Times

With the 2017 version of Resolution 19 recently issued, the government has clearly indicated its resolve to further improve the business environment but ministries and local authorities will feel the heat of it as they will have a lot of work to do in the near future.

Nguyen Minh Thao, director of the Business Environment and Competitiveness Department at the Central Institute for Economic Management, said that given the strong determination of the government leader, Resolution 19 would produce good results.

The resolution contains 250 objectives regarding the business climate, innovation, competitiveness and e-government. The three previous versions of Resolution 19 focused on 10 objectives concerning the business environment based on the World Bank's Doing Business report.

The latest resolution delegates specific tasks to ministries. For example, the Ministry of Information and Communications is asked to review Decree 60/2014/ND-CP on printing business and clearly define those subject to the decree.

Regulatory restrictions provided in this decree, such as those on cooperation between printing houses, and import of machines used for post-press services, as well as the requirements that leaders of printing houses have college degrees in printing and that contracts with printing houses abroad must be licensed should be abolished.

The Ministry of Science and Technology is told to propose revising Circular 23/2015/TT-BKHCN governing import of used machinery, equipment and technology. Specific criteria should be set out for each area, rather than imposing the blanket limit of "no more than 10 years old" on all machinery and equipment.

Thao, who has got involved in the drafting of all the four versions of Resolution 19, said the objectives stated in the resolution were allocated to the right ministries and agencies to elevate a sense of responsibility.

"Responsibilities of ministers are made clearer than those in the previous versions of Resolution 19," Thao said.

http://english.thesaigontimes.vn/52242/Govt percente2 percent80 percent99s-Resolution-19-puts-ministries-under-pressure.html

Govt mindset towards business changed

13/Feb/2017 Intellasia | The Saigon Times

Deputy prime minister Vuong Dinh Hue has said the government will find ways to create favourable conditions for investors to do business and face less cost and legal risk, instead of coming to the rescue of firms in trouble as at present.

The government has long focused too much time and energy on removing hindrances to business and investment activities.

Hue, who also heads the Steering Committee for Enterprise Reform and Development, was speaking at a meeting in Hanoi yesterday on preparations for a forthcoming conference between the prime minister and the business community.

According to the Ministry of Planning and Investment and the Vietnam Chamber of Commerce and Industry (VCCI), the government's Resolution 35/NQ-CP on support for businesses has produced good results.

Business confidence in the government's promises to support their operations has improved. Central and local authorities are more aware of business support.

Last year saw the number of startups soaring to a record high of 110,100. Their registered capital totalled VND891 trillion, up a staggering 49 percent year-on-year.

The average capital of a startup was VND10 billion, a 40.9 percent pickup from a year earlier. New foreign direct investment (FDI) projects went up 23.3 percent with combined capital pledges of

$26.89 billion. FDI businesses disbursed $15.8 billion, rising 9 percent and reaching an all-time high. Ministries and agencies were told to look into company earnings, wages and incomes of workers to

gauge the health of the business community. VCCI chair Vu Tien Loc said the government and central agencies were striving to execute Resolution

35 but many local authorities are not.

The Ministry of Finance is a pioneer in implementing the resolution, which Loc said could be seen through its tax and customs procedure reform. The Ministry of Public Security comes second thanks to its electronic visa issuance mechanism, which will help boost tourism and investment.

Nguyen Phuoc Thanh, deputy governor of the State Bank of Vietnam, said ministries, agencies and localities should treat the handling of administrative paperwork as a public service as this minset change would help do away with hindrances to business.

Deputy minister of Finance Tran Xuan Ha said the ministry had taken various measures to fuel growth in the capital market.

http://english.thesaigontimes.vn/52244/Govt-mindset-towards-business-changed.html

Vietnam to export skilled labour 13/Feb/2017 Intellasia | The Saigon Times

The Ministry of Labour, Invalids and Social Affairs is drawing up a scheme to export high-skilled labour to choosy markets.

The ministry has assigned the Overseas Labour Management Department and other relevant agencies to formulate the labour export plan in 2017-2020 for the government's consideration.

In particular, well-trained health workers could be sent to Japan and Germany for guest work. Those specialising in information technology (IT), electronics, telecom, biology and agriculture will be sent to Japan. Mechanical engineers can land a job in South Korea, or some European and Middle Eastern countries.

The ministry is also finding new markets for Vietnamese labour such as Slovakia, the Czech Republic and Israel.

There will be plenty of opportunities for professionals to find a job in selective markets like Japan this year, said Pham Viet Huong, the department's deputy director.

In end-2016, Japan passed a law opening a new window for foreigners to come for guest work. Vietnam reached an agreement with Germany last year on recruitment and training of nurses for hospitals in the European nation.

Pham Do Nhat Tan, deputy chair of the Vietnam Association of Manpower Supply (VAMAS), said a lot of nurses and other health workers went abroad for guest work last year while there were few in other sectors. A small number of IT engineers went to Singapore.

Those wishing to work abroad, Huong said, must have good health, and essential skills such as foreign language and expertise. Labour export enterprises should also invest more in training facilities and meet stringent requirements of labour importing markets.

The biggest challenge faced by Vietnamese workers is the proficiency of foreign languages. A good command of a foreign language is of great help, according to Nguyen Thi Kim Thanh, director of the International Manpower Training and Supply Centre.

Tan noted jobseekers would need at least six months to learn a foreign language and get used to foreign working styles and culture.

The department said more than 126,000 Vietnamese were sent overseas for guest work last year, 26 percent higher than the 2016 estimate and up 9 percent year-on-year. Taiwan, the biggest importer of Vietnamese labour, took on 68,000 workers, followed by Japan with nearly 40,000 people.

The labour ministry aims to send 105,000 employees overseas, mostly to Taiwan, Japan and South Korea.

http://english.thesaigontimes.vn/52252/Vietnam-to-export-skilled-labour.html

PM calls for shift to innovation-based industry 13/Feb/2017 Intellasia | The Saigon Times

Prime minister Nguyen Xuan Phuc has urged the industry and trade sector to proceed with a shift to innovation-based industry, with science and technology serving as a driving force, and a platform for improving competitiveness and attaining sustainable development.

To do this, there must be a strategy to reduce the nation's heavy dependence on unsustainable competitive advantages that are based on natural resources, said the prime minister at an online conference which reviewed the sector's 2016 performance and discussed plans for 2017.

In the immediate future, industry will still rely on natural resources while adding more value to its products and increasing scientific and technological application, the government said on its news website.

The prime minister underlined the need to further encourage the private sector to get involved in the industrialisation and modernisation process. Private firms should be helped to grow business.

He basically agreed with the tasks and solutions set out by the Ministry of Industry and Trade. In 2017, the ministry and the business groups under its management will shore up divestment, equitisation and restructuring of State-owned enterprises. The ministry must focus on dealing with the loss-making and inefficient projects which it is in charge of, according to the government leader.

Action programmes should be deployed in accordance with Resolution 19-2016/NQ-CP dated April 28, 2016, Resolution 35/NQ-CP dated May 16, 2016 and Resolution 01/NQ-CP dated January 1, 2017 on the main tasks and solutions to carry out the socioeconomic plan and budget estimates for 2017.

Major balances in the medium and long terms in sectors like electricity, coal, petroleum, fertiliser and chemicals must be ensured to stabilise the macro economy. This should be seen as the political task of the Ministry of Trade and Trade.

Industrial development should be accelerated, coupled with environmental protection in the implementation of key projects.

The industry and trade authority should strive to achieve or even beat the export target set by the National Assembly for 2017. An appropriate mechanism should be developed for rearranging border trade, and creating a breakthrough in e-commerce.

A focus should be given to the solutions to enhance the rational management and control of technical barriers and trade defense. Proper policies should be drawn up to support the development of the spearhead industries, such as automotive, electronics and mechanical engineering.

Research institutes and schools should form a powerful link with manufacturers to increase intellectual, scientific and technological content of made-in-Vietnam products.

http://english.thesaigontimes.vn/52222/PM-calls-for-shift-to-innovation-based-industry.html

With TPP dead, Vietnam should focus on FTA with EU: EuroCham 13/Feb/2017 Intellasia | Tuoi Tre News

As the last hopes of implementing the US-led Trans-Pacific Partnership begin to fade, it is time for Vietnam to pivot towards a free trade agreement signed with the EU, the chair of EuroCham in Vietnam has advised.

Vietnam and the European Union signed a free trade agreement, the EVFTA, in Brussels in December 2015, just two months after the Southeast Asian country joined 11 other nations in reaching an agreement on then-much anticipated TPP deal in Georgia, USA.

As politics have begun to shift since the signing of the deals, EuroCham in Vietnam chair Michael Behrens said that even though Vietnam seemed to have paid less attention on the EVFTA than the TPP, things have changed since the US presidential election in November last year.

After winning the election, President Donald Trump signed an executive order in January for the US to withdraw from the TPP deal, a turning point in Vietnam's trade relations and a sign that the Southeast Asian country should pay more attention to the EVFTA, Behrens underlined in an interview with Tuoi Tre (Youth) newspaper.

With the EVFTA effective date less than a year away, Behrens said Vietnam should begin taking necessary steps to prepare for the deal's implementation, noting that the EVFTA will be a major contributor to bilateral trade growth between the country and the bloc.

Vietnam should consider EVFTA a major next-in-line goal, given that the EU is currently its third largest trading partner by total volume and second-largest importer, according to the EuroCham chief.

Major benefits Under the EVFTA, the EU is committed to removing 84 percent of tariffs on goods traded between the

two economies, which Behrens says is a huge opportunity for Vietnamese goods to penetrate deeper into the European market, particularly export staples such as pepper, coffee, textiles, and footwear products.

On the other hand, he noted, European merchandise, including wines, frozen pork, milk, and medicines will also have greater access to the Vietnamese market thanks to the corresponding tariff removal.

Asked to compare the benefits the EVFTA and the TPP may bring to Vietnam, Behrens said the EU agreement is expected to contribute seven to eight percent to Vietnam's overall growth on an annual basis.

Citing results from recent research conducted in Hanoi, Behrens added that Vietnam is expected to rake in $2.2 billion worth of gains in welfare from the trade pact by 2020, and $4.1 billion by 2025.

The EVFTA will also help increase wages for unskilled Vietnamese workers by 3 percent due to changing market dynamics and enable a 50 percent spike in Vietnam's exports to the EU by 2020. Vietnam's imports from the EU are also projected to rise 43 percent by 2020, he noted.

http://tuoitrenews.vn/business/39476/with-tpp-dead-vietnam-should-focus-on-fta-with-eu-eurocham

Growth remains without TPP 13/Feb/2017 Intellasia | VIR

Vietnam was the country with the most to gain from the Trans-Pacific Partnership. Increased market access, especially to the US, would have supported an export manufacturing boom and outsized GDP growth in what is already one of Southeast Asia's fastest growing economy.

The demise of the Trans-Pacific Partnership (TPP) at the hands of US President Trump, though, will not be matched by a hit to Vietnam's trade and investment boom.

First, TPP never came into force. Vietnam's gains from the agreement were both hypothetical and prospective. The demise of TPP is considerably less consequential for the participants than, for example, rewriting the North American Free Trade Agreement (NAFTA) will be. While there is anecdotal evidence that manufacturers had been building capacity in Vietnam in anticipation of TPP - especially in the textile and garment sectors, which would have enjoyed tariff-free access to the US - it is also evident that many other factors have driven investment into one of Southeast Asia's most dynamic economies.

Labour costs, rapid growth in the domestic consumer market, and a healthy network of existing trade agreements have all contributed to Vietnam's reputation as a magnet for foreign direct investment (FDI), and the growth of domestic exporters. Membership of the Asean Economic Community and the Vietnam-EU Free Trade Agreement (EVFTA) are more than sidebars.

Second, something will replace TPP. Positive statements from the prime ministers of Japan, Australia, and New Zealand all indicate a newfound willingness to reconstruct TPP without the US. These are trading nations, and the economic and social benefits of free trade to their citizens are self-evident. There is speculation that other countries - China, Indonesia, and Korea for example - will be invited to join TPP. Vietnam's Asian partners are important to its success. Trade with countries such as Japan and Korea typically comes hand-in-hand with much needed FDI - a more elusive feature in US trading relationships. President Trump's stated policy of negotiating bilateral trade agreements with TPP member states, Vietnam included, opens the door to the possibility of enhanced US market access in any case, although it remains to be seen just how attractive these "America first" trade agreements will be.

Third, Vietnam has made multiple statements since the US election that it will carry out the domestic reform commitments it made in TPP regardless. Commitments included reforms to the state-owned enterprises (SOE) sector, government procurement, labour representation, intellectual property (IP) rights, e-commerce, and the digital economy. Vietnam did not sign up for TPP without considerable internal debate, and the proponents of these reforms most probably won their arguments before the agreement was signed in Auckland in February 2016. While external commitments have been a powerful influencer in keeping Vietnam's domestic reform programmes on track, the government is committed, for genuine reasons, to pushing on with market liberalisation and other reforms. Apart from anything else, Vietnam recognises that reform is essential to maintaining its economic competitiveness.

And last, TPP was not a one-way street. US companies that were set to make significant gains under TPP have had those taken away. TPP would have eliminated Vietnamese tariffs on virtually all manufactured goods made in the US, and enhanced IP protection for American companies. This has animated US manufacturers in sectors such as automotive parts, industrial chemicals, information technology and communications, along with US agricultural producers. US exporters anticipated meeting Vietnam's burgeoning infrastructure needs and selling into its growing industrial supply chains.

US companies have made a lot of progress in Vietnam in the absence of TPP, and this will continue, but some of this lost opportunity will be captured by manufacturers from China, Japan, Korea, other Southeast Asian countries, and the EU. It is also possible that we will see some import-substitution in Vietnam, with what might have been "Made in USA" being produced in Vietnam's already booming industrial zones - which is good news for Vietnam's manufacturing workers.

http://www.vir.com.vn/growth-remains-without-tpp.html

Binh Dinh expects to attract $514m of investment in 2017 13/Feb/2017 Intellasia | VNA

The south central province of Binh Dinh expects to attract 47 investment projects in 2017 with a total capital of 514 million USD, including seven foreign-invested ones worth 70 million USD, said a provincial official.

Huynh Thi Thanh Thuy, vice director of the provincial Department of Planning and Investment, said that in order to create optimal conditions for investors, the province has sped up construction of infrastructure at the Nhon Hoi Economic Zone and other industrial parks and clusters as well as at seaport and transport projects.

The Department of Planning and Investment has coordinated with the provincial Economic Zone Management Board to provide the government and province's updated policies related to investment promotion and attraction for investors, especially those from Japan, the Republic of Korea and the US.

The department has also asked to pay more attention to big investors and those using advanced and environmental-friendly technologies, said Thuy.

According to Ho Quoc Dung, Chair of the Binh Dinh People's Committee, it is necessary for the province to change methods of calling investment by focusing on potential foreign and domestic investors.

Last year, Binh Dinh lured 40 projects with a total investment of 9.7 trillion VND (431 million USD), up 857 billion VND over the figure in 2015.

So far, the province has attracted 63 foreign-invested projects worth 738 million USD, including 10 projects worth 84.58 million USD in 2016.-

http://en.vietnamplus.vn/binh-dinh-expects-to-attract-514 million-usd-of-investment-in-2017/107059.vnp

US turbulence should steer clear of Vietnam trade 13/Feb/2017 Intellasia | VIR

Bilateral trade and investment from the US into Vietnam are expected not to see drastic changes under US President Donald Trump.

Michael Sieburg, associate partner at Asia-Pacific marketing strategy consulting firm Solidiance, talked to VIR's Hong Anh about the impact of the American withdrawal from the Trans-Pacific Partnership and other economic policies of the new administration on Vietnam.

US President Trump has been talking about bringing jobs back to the US. To what extent will this affect US companies' expansion plans in Vietnam, where a lot of local workers are employed?

While Trans-Pacific Partnership (TPP) related foreign direct investment (FDI) might be negatively impacted by Trump's actions, I do not believe his pledge to "bring jobs back to the US" will itself lead to investors switching their FDI plans from Vietnam to the US.

Rather, I anticipate that a number of companies will announce that they are considering investments in the US but will be non-committal on the specifics. The aim will be to appease the current administration and to cool tensions in this unpredictable political environment. I would bet many such 'considered investments' are never realised and those that are realised are predominantly linked to longer-term plans anyways.

Even if Trump imposes tariffs or other barriers, the long-term trend in the US will remain favourable towards globalisation, assuming the downsides of trade on specific communities are sufficiently addressed. But let's not forget that Democratic presidential candidates Hillary Clinton and Bernie Sanders also - at least verbally - opposed TPP, so the short-term trend will be less favourable to such agreements.

While withdrawing from TPP was done with the simple stroke of a pen, I do not think Trump will be so quick to start imposing tariffs on US trade partners - though if we were in China or Mexico, I would be more concerned that he would place tariffs or other barriers to trade and investment. Especially on Chinese investment in the US, President Trump has been true to his word across multiple campaign promises and his rhetoric on China and Mexico might well have consequences as he will not want to lose face by appearing to back down to these countries.

But for Vietnam, the tools Trump uses will be milder. Perhaps the use of non-tariff trade barriers will increase. Vietnam is accustomed to such actions - as was the case in the past with the US, considering previous battles over shrimp and catfish. But there are international legal arenas to deal with these issues and the US is not about to withdraw from the World Trade Organisation, or so one assumes.

If Trump actively listens to his advisors, Vietnam fortunes might be well-served by both US Secretary of State Tillerson and US Secretary of Commerce Ross, who have each had previous experience driving investments in Vietnam. Their familiarity with the country and direct experience here might well position Vietnam favourably - or at least not unfavourably - in a Trump administration.

Solidiance predicted a strengthening of bilateral ties between the US and Vietnam thanks to the appointments of Tillerson and Ross. During 2017, in which sectors can we expect growth in trade between Vietnam and the US, and in investment from the US into Vietnam?

I would not suggest that Tillerson and Ross will have any industry-specific benefits, though given their past direct involvement in energy and textiles, I suppose those industries could see at least increased attention from US businesses. Rather, the appointment of two Cabinet secretaries with direct Vietnam business experience at least gives Trump a voice from those who have done business here. That's better than nothing and about as much as one can hope for in such a turbulent US political environment.

Does Trump's position on China have benefits to Vietnam in terms of FDI? It remains to be seen how Trump will act on economic and trade issues related to China, but he will not

want to be seen backing down from his heated campaign rhetoric, so it would not be a surprise to see some sort of actions taken targeting China. In my discussions with foreign investors, there are already palpable concerns about what a Trump presidency means for their China-based business. And Vietnam is a natural alternative destination for such investors and they are exploring expansion here.

TPP no longer has the involvement of the US. If the remaining members ratify it, how different would the impact on Vietnam be compared to a US-involved version?

Given the size of the US economy, any deal without the US is clearly less impactful - but if Vietnam can get increased access to a market like Japan for its agricultural products, there is a positive impact there, even without US involvement. I am doubtful how seriously countries will pursue TPP without the US. Rather, I see Vietnam turning their attention towards other bilateral and regional trade deals, at least until a change of administration in the US.

http://english.vov.vn/trade/us-turbulence-should-steer-clear-of-vietnam-trade-343286.vov

Trade surplus reaches over $1b in January 13/Feb/2017 Intellasia | VGP

Total trade value in January dripped by 18.2 percent against the previous month to $27.53 billion, reported the general Department of Customs.

Of the figure, export volume fell by 13.5 percent to $14.34 billion while import decreased by nearly $3.89 billion to $13.19 billion.

The country enjoyed a trade surplus of over $1.15 billion, according to the customs agency. China, the Republic of Korea and the US still remain the biggest trade partners of Vietnam, according to

the customs agency. As of January 20, registered capital totalled over $ 1.4 billion, representing a year-on-year growth of 6.6

percent, said the General Statistical Office. In the reviewed time, FDI disbursement was $ 850 billion, up 6.3 percent against the same period last

year. The number of newly-registered projects was 175, worth $ 1,244 million, up 37.8 percent in number and

23 percent in value. Meanwhile, 76 projects got additional capital with $ 179 million. Processing and manufacturing absorbed the biggest amount of capital with $ 1,013 million, accounting

for 71.2 percent of total registered capital. The real estate sector ranked second with $ 297 million or 20.9 percent.

http://news.chinhphu.vn/Home/Trade-surplus-reaches-over-US-1 billion-in-Jan/20172/29787.vgp

FDI in textiles & garments slows 13/Feb/2017 Intellasia | Vn Economic Times

US withdrawal from TPP leaves a mark on foreign investment inflows. Inflows of foreign direct investment (FDI) into Vietnam's textile and garment sector will slow down due

to the collapse of the TPP, according to Le Tien Truong, CEO of the Vietnam National Textile and Garment Group (Vinatex) and deputy Chair of the Vietnam Textile Association (Vitas).

He emphasized, however, that the sector still has a bright future due to other free trade agreements (FTAs), in particular the EU-Vietnam Free Trade Agreement (EVFTA).

"Without the TPP, the speed of investment in Vietnam may fall but will remain strong in the future thanks to the FTA with the EU," he believes.

The "yarn-forward" rule of origin, he went on, was a requirement in the TPP that would have brought FDI to Vietnam. The end of the TPP may therefore impact much more on investors in textiles and dyeing than those in fashion items.

The EVFTA, to take effect in 2018, has a "fabric forward" rule of origin, which will now become a focal point of investors. Most investors primarily invest in weaving and dyeing activities.

The EU is a larger market than the US. Demand for garments in the EU is about $240 billion; double the figure in the US. Vietnam's textile exports to the EU remain modest, at about $4 billion per year, so the EVFTA represents a huge opportunity for foreign investors in Vietnam, Truong added.

Data from Vitas shows that 68.8 per cent of retailers and foreign brands choose Vietnam when moving from China or Bangladesh. China has become less attractive to investors while Bangladesh still faces political instability. Vietnam will therefore continue to be a popular destination for foreign textile investors.

Exports of textiles and garments reached $28.5 billion in 2016, up 5.4 per cent against 2015. Key markets declined: in the US by 4.5 per cent and the EU 3 per cent, while only Japan increased, by more than 1 per cent.

2016 was a year full of difficulties. The 5.4 per cent growth was the lowest since 2010 but growth in absolute value was higher than in previous years. The difficulties stem from the problems besetting the global market.

Total global demand did not increase last year. Moreover, many countries that are not in the TPP but wished to retain their market share have already adopted policies to reduce its impact.

Vietnam's textile and garment sector targets export growth of 6.5-7 per cent this year, to $30 billion. The industry has recorded strong results because enterprises focused on increasing productivity and met

deadlines when delivering goods, he said. Further, reforms to administrative procedures have improved the business environment and supported

garment exporters by increasing their competitiveness. http://vneconomictimes.com/article/business/fdi-in-textiles-garments-slows

$4.1m for trade promotion in 2017 13/Feb/2017 Intellasia | VNA

Vietnam will spend 93 billion VND (4.1 million US) on 199 trade promotion projects under the national trade promotion programme in 2017, according to the Ministry of Industry and Trade (MoIT).

The programme aims to expand export markets, targeting countries that signed free trade agreements with Vietnam, like Japan and the Republic of Korea, and member nations of the European Union, the Eurasian Economic Union, the Asean Economic Community, and the US.

Trade promotion will be also carried out in domestic markets, especially in rural and mountainous areas, to carry out the "Vietnamese use made-in-Vietnam goods" campaign.

Vietnam's import-export turnover in 2017 is expected to continue to increase thanks to the signing of a number of free trade agreements and foreign investment shifting from other countries to Vietnam. Participation in the Asean Economic Community will also bring opportunities by expanding export markets and increasing competitiveness.

The MoIT has set an export turnover target of 188 billion USD for 2017, or 6.9 percent higher than last year.

The country recorded a trade surplus of 2.68 billion USD in the year, accounting for 1.52 percent of total import-export turnover.

Vietnam's export turnover to traditional markets including Asia, Europe and the US saw growth last year. Export turnover to the US saw the highest growth rate of 13.2 percent, followed by Europe with 11.3 percent and Asia with 6.9 percent.

http://en.vietnamplus.vn/41 million-usd-for-trade-promotion-in-2017/107027.vnp

Responsible tourism driving development in Vietnam 14/Feb/2017 Intellasia | VOV

At a recent forum in HCM City, Peter Semone, chair of the Pacific Asia Travel Association, declared that tourism has the potential to become a pillar of the Vietnam economy.

Semone said that with its wealth of exceptional plant and animal life, legendary scenic landscapes and its mosaic of cultural heritage, tourism could serve as a catalyst for the country's economic growth.

Responsible tourism Responsible tourism development, he underscored implies a proactive approach by the companies in the

tourism segment towards the environment, through the promotion of balanced sustainable tourism. If the segment is to become the country's passport to prosperity and a transformative force for improving

the lives of millions it must be underpinned by sustainable environmental practices.

He emphasized that tourism development in Vietnam would never happen in the absence of responsible tourism and - unless the country can harness its abhorrent environmental pollution problems.

In line with this sentiment, he suggested that Vietnam could benefit greatly from the experience of Copenhagen, Denmark and learn from them the best practices to limit or reduce greenhouse gas emissions in the effort to create a tourism friendly environment.

Improving local economies Other speakers at the forum, noted that responsible travel companies in the segment are now beginning to

work on growing the local economic benefits that tourism can bring to an area. Established companies such as Saigontourist, Vietravel and Exotissimo are expanding their value-added

services to tourists by encouraging and assisting smaller local business owners develop complimentary products and helping them link with others in the segment.

Saigontourist has, for example, assisted local companies develop responsible tourism products that have helped them generate income. As one notable example, Saigontourist has provided visitors to local villages with tours of local handicraft establishments, which has helped them increase sales.

Saigontourist has also begun helping local villages properly plan carry out and manage their tourism development processes in line with market demands, which is helping them gain from higher employment and earnings.

Environmental responsibility The tourism industry greatly impacts the country's environment. All those involved in responsible

tourism in Vietnam must protect the authenticity of every travel destination and social structure. Here again, Saigontourist has taken the lead in assisting local tourism business owners. One simple

method the company has employed is in teaching business owners how to recycle the water used for bathing by using it for flower or vegetable gardens, lawns among other things.

This kind of activity shows resourcefulness by Saigontourist, a characteristic that contributes to effective management of costs and increased revenue for local tourism owners.

Speakers at the forum noted that if more companies followed the lead of Saigontourist, Vietravel and Exotissimo the tourism industry would go a long way in achieving the goals to improve its contribution substantially to the country's GDP and help to alleviate unemployment in the country.

The tourism industry has the power to accomplish all of its long-term goals for sustainability, but it will require a concerted unified effort by all within this industry to achieve them.

http://english.vietnamnet.vn/fms/travel/172515/responsible-tourism-driving-development-in-vietnam.html

China remains biggest trade partner of Vietnam in January: Vietnamese customs

14/Feb/2017 Intellasia | ECNS

China remained the biggest trade partner of Vietnam in the first month of 2017, according to Vietnam Customs on Monday.

Vietnam's exports to China went up 34.4 percent year-on-year while imports hiked 0.4 percent, helping reducing the country's trade deficit with China, said the customs.

South Korea and the United States were also among main trading partners of Vietnam last month. Vietnam saw growth in its exports to and imports from South Korea, with respective rises of 29.4 percent and 30 percent year-on-year. The country's exports to the United States rose slightly at 0.3 percent while that of imports climbed 14.6 percent year-on-year.

In January, Vietnam earned 14.34 billion US dollars from exports, down 13.5 percent over the previous month. Major revenue earners included cell phones and accessories, accounting for 16.2 percent of the national total exports, garment and textile, making up 15 percent, computers, electronic products and accessories, taking up 10.5 percent, among others.

The United States topped markets for Vietnamese garment and textile with revenue of nearly 1.08 billion US dollars, up 5.8 percent year-on-year, followed by Japan with 253 million US dollars, and South Korea with 215 million US dollars.

Most computers, electronic products and accessories of Vietnam were exported to China last month with revenue of 365 million US dollars, some 1.12 times as much as that of the same period last year, said Vietnam Customs.

Meanwhile, exports of these products to the Untied States went down 9.7 percent year-on-year to hit 163 million US dollars.

During the month, Vietnamese exported nearly 1.17 billion US dollars worth of footwear, down 4.8 percent year-on-year, with top sales to the United States of 379 million US dollars and China of 77 million US dollars.

Last month, Vietnam's exports of wood and wood-related products to China went up over 40 percent year-on-year, while those to the United States decreased by 6.6 percent year-on-year.

Also, Vietnam recorded sharp increase in rubber exports to China, with 131.4 percent year-on-year, said Vietnam Customs.

In the first month, the country spent nearly 13.19 billion US dollars on imports, down 22.8 percent against December 2016. As a result, Vietnam enjoyed a trade surplus of over 1.15 billion US dollars in January.

http://www.ecns.cn/business/2017/02-13/245147.shtml

All signs point to sustained growth 14/Feb/2017 Intellasia | VIR

Behind Vietnam's strong economic growth and widespread national development, there is an engine of increasing foreign direct investment.

Its big cities, HCM City and Hanoi, are at the forefront of the transformation, as more people flock there and new high rise buildings change the skylines.

Foreign investors are taking note: They ploughed an estimated $15.8 billion into the country in 2016 - setting a new record. And Vietnam's policy changes are encouraging them to do so. The country relaxed its foreign ownership rules for real estate in 2015. Vietnam witnessed strong growth in foreign direct investment (FDI) in 2016.

This can be attributed to a strong economy backed by political stability and relatively low labour costs when compared to the region. Manufacturing dominates FDI, accounting for 64 per cent, but 7 per cent of total FDI is attributed to real estate. The sector attracted $1.53 billion in newly registered capital in 2016 with 59 newly registered projects.

Changing ambitions, shifting gears Vietnam's upward trajectory looks set to continue, despite the slowdown affecting other Asian countries. It posted GDP growth of 6.2 per cent last year - a figure which is forecast to rise to 6.7 per cent this year

amid growing affluence and higher consumption levels of the country's middle-class, who are developing a taste for foreign brands such as Starbucks and Louis Vuitton.

Vietnam's middle-class is expected to double to 33 million people by 2020. HCM City is home to Southeast Asia's fastest-growing middle-class, according to Boston Consulting Group.

Vietnam is projected to continue to be an optimistic, prospective destination for investment, attracting higher growth in FDI inflows.

According to the Ministry of Planning and Investment's Foreign Investment Agency, in January 2017 Vietnam welcomed $1.42 billion FDI, an increase of 6.6 per cent year-on-year. The implemented capital was recorded at $850 million, rising 6.3 per cent compared with the same period in 2016, despite changes in trade agreements.

In terms of economic structure, most of the total foreign capital is poured into both the processing and manufacturing sector and real estate sector, bringing in $1.01 billion and $297.36 million at the beginning of 2017, respectively.

These sectors are expected to remain significant attractors of investment activity in the months to come. Recently, a large number of multinational companies have entered Vietnam by virtue of the country's

favourable business costs, which are highly competitive when compared with other countries in the region. Most FDI companies from Asian countries are tending to gravitate towards the potential economic hubs

of Binh Duong, Dong Nai, Ba Ria-Vung Tau, and Hai Phong. Investment into these hubs has been on the rise following the successes of HCM City and Hanoi. Furthermore, the emerging wave of dynamic entrepreneurs and innovation in technology are major

drivers in attracting foreign investment expansion in the outsourcing industry, and in lifting the Vietnamese economy as well.

The country has also benefitted from the return of overseas Vietnamese, known as Viet Kieu, who are becoming major players in spurring Vietnam's economy and growing its thriving startup scene in HCM City and Hanoi.

Such strong economic and population growth factors have led to both cities making the top 10 of JLL's latest Cities Momentum Index, with HCM City in second place and Hanoi in eighth.

Securing longer-term development However, both Hanoi and HCM City still have work to do to secure their longer-term positions. The

transition towards technology-based high-value activities remains at an early stage. Congestion and pollution remain serious impediments to quality of life and increasing productivity. A lack of strong higher-education institutions and technology skills may slow the transition towards a knowledge-based economy.

Such challenges will require planning and investment to overcome, yet are far from insurmountable. Indeed, with the government taking concrete steps to liberalise the business environment and create the right conditions for future growth, the country could well be on its way to becoming another success story in Southeast Asia.

Looking forward a few years, the flow of investment into the country will constantly outperform past levels, thanks to energetic demographics with more than 70 per cent of the total population of working age and well-trained. The business environment is stable and has improved, and the strong demand of the growing middle- and upper-classes, which is forecast to reach the fastest growth rate in Southeast Asia over the 2016-2020 period, can only be beneficial.

Real estate boom Demand is increasing for office, retail, and hotel stock around the country. In HCM City, the country's

tallest building, the Vincom Landmark 81, is under construction. Meanwhile, the Thu Thiem New Urban Area, a 657ha site east of the Saigon River, is earmarked to be

the new central financial district. And last year, Takashimaya opened its first department store in Vietnam, within Saigon Centre in HCM City, a mixed-use development by Keppel Land from Singapore.

In Hanoi, the office sector is also seeing high levels of development, according to JLL research, while a new urban living project, Starlake Tay Ho Tay, is being constructed by South Korean conglomerate Daewoo. Condotels and villas are also being built in secondary cities such as Danang to woo investors in the second-home market.

Vietnam's burgeoning tourism industry, which welcomed 10 million visitors last year, is driving hotel developments. The Hoi An South Integrated Resort is currently being constructed, with its first phase to be completed in 2019. Meanwhile, Halong Bay got its first five-star property, Wyndham Legend Halong Bay, last June.

There has been a lot of attention towards major tourist locations such as Danang, Nha Trang, and Phu Quoc in the last two years.

Industrial real estate is also enjoying a boost. Industrial parks in the north, south, and central regions are witnessing strong activity. For instance, Long An province in southern Vietnam is experiencing strong demand for ready-built factories and industrial land. Binh Duong and nearby provinces are witnessing developments of eco-industrial parks and modern townships, invested mainly by Japanese investors.

Singapore edges South Korea for FDI pole position With two newly-licensed megaprojects, Singapore overtook South Korea to become Vietnam's most

prodigious foreign investor in January 2017. Vietnam attracted $477.8 million worth of pledged capital from Singapore during the first month of this

year, accounting for 30.1 per cent of the country's total newly-registered capital, said the Ministry of Planning and Investment's Foreign Investment Agency (FIA).

With the sum, Singapore surpassed South Korea, which has often taken pole position among foreign investors in Vietnam. In January, South Korea ranked second with $471.2 million.

Singapore's ranking was attributed to two big projects licensed during the period. The Vietnam-Singapore Industrial Park project in the southern province of Binh Duong was invested at $284.75 million, with the province also hosting a $124 million packaging project invested by Tetra Pak Binh Duong.

According to the FIA, Singaporean direct investment inflows into Vietnam have grown significantly in recent years, with processing and manufacturing the most attractive sector, followed by real estate and services.

Singapore often came in third or fourth position through 2013-2014, and in 2015 was sixth-ranked among foreign investors in Vietnam. The situation has, however, improved much since early 2016, when the nation surpassed others to become the top foreign investor and then maintained its standing as second-biggest investor during the remaining months of last year.

"With edges in capital and technology, Singaporean investors in Vietnam have many opportunities to boost their presence in Vietnam. As Vietnam is prioritising high-tech and environmentally-friendly projects, more investment opportunities will be available for them in the near future," said Dang Xuan Quang, FIA's deputy director.

Many Singaporean firms have succeeded in Vietnam, such as Sembcorp, Mapletree, Keppel Land, Ascendas, and CapitaLand. On average, Singaporean-invested projects in Vietnam are worth $23 million each, compared to the $13.7 million of other countries' investors. Industry insiders forecast that Singaporean investors are planning to pump tens of billions of US dollars into Vietnam to tap the benefits of the country's free trade agreements.

Vietnam's improved business climate has also served to increase foreign direct investment (FDI) inflows. The country lured $1.42 billion worth of total newly-registered and expanded capital last month, up 6.6 per cent on-year.

Besides the two Singapore-invested projects, a $220 million investment by South Korean Kolon Industries Inc. to develop a factory manufacturing industrial fabric for automobile tyres in Binh Duong also contributed to the month's total.

In late 2016, Kolon announced a $1 billion future investment plan. $220 million is slated to be disbursed during 2017-2018, along with $600 million in the second phase of the plan, lasting until 2026.

Also in January, China's Wenzhou Hendy Mechanism and Plastics Co., Ltd was licensed to invest in a $150 million project in the northern province of Bac Giang.

http://www.vir.com.vn/all-signs-point-to-sustained-growth.html

Ministry recommends online energy labeling registration 14/Feb/2017 Intellasia | The Saigon Times

The general Department of Energy under the Ministry Industry and Trade has recommended enterprises register energy labeling online to help firms save time and money, and support State governance.

According to Circular 36/2016/TT-BCT effective from February 10 on energy labeling for equipment and devices using energy under management of the ministry, businesses can submit energy labeling documents to the ministry at http://nhannangluong.dvctt.gov.vn or by post. The first way is recommended due to the aforementioned reasons.

Procedures for energy labeling registration can be found on the website or provided at the department's office at 23 Ngo Quyen Street, Hoan Kiem District, Hanoi.

The ministry issued Circular 36 in late December last year to replace Circular 07/2012. The new circular enables firms to claim the energy efficiency level and stick energy labels on their products and imported ones but firms have to be responsible for the quality of their products and energy labeling.

With the new circular in place, companies are allowed to apply the results of an energy efficiency test to all products made in Vietnam and all imported goods with the same model, the same manufacturer, the same origin and the same technical features. The period of validity of such results is indefinite.

The circular also enables independent laboratories and those run by domestic and foreign firms to do such tests. Earlier, only laboratories selected by the ministry could do these tests.

Importers must send papers to prove that laboratories chosen by them meet requirements as well as documents about energy labeling registration to the ministry.

Notably, an exemption on energy labeling applies to non-commercial goods; a single product or component used in projects, works and factories; temporarily imported materials and equipment for re-export, transit goods, products of outsourcing firms, products in the national security and defense sectors and those relating to national secret and nuclear radiation.

The circular stipulates that management agencies must tighten inspections after companies stick energy labels on products and put them into circulation.

http://english.thesaigontimes.vn/52265/Ministry-recommends-online-energy-labeling-registration.html

Private organisations banned from 20 industries 14/Feb/2017 Intellasia | Vneconomic Times

The Ministry of Industry and Trade (MoIT) has proposed 20 industries from which private organisations are banned, in the latest draft decree on goods and services under State monopoly.

The 20 industries include gold bar production, the export and import of materials for the production of gold bars, lotteries, issuing Vietnamese stamps, and cigarettes and cigars.

The target of the draft is to cement the provisions in the Commercial Law of 2015. "The State exercises State monopoly in the commercial operations of a number of goods and services in certain areas to ensure the national interest," it states. "The government will regulate the list of goods and services and geographical areas under State monopoly."

The decree will also resolve the legal vacuum created by legal documents relating to State monopolies issued in the past, enhancing transparency, consistency and the completeness of the legal system regarding State monopolies in commercial activities.

Indexing goods and services is expected to contribute to enhancing competitiveness between enterprises in Vietnam.

It also improves Vietnam's prestige and creates a uniform legal basis during international economic integration.

MoIT said that issuing the decree is an urgent matter. Ministries and local authorities as well as business associations have been widely consulted on its contents.

The contents of the draft decree have been agreed to by ministries. However, issues relating to goods and services and areas of national defense and security must be agreed to by members of the government, while the State monopoly on the import of materials and gold to produce gold bars must receive opinions from the Governor of the State Bank of Vietnam.

http://vneconomictimes.com/article/vietnam-today/private-organisations-banned-from-20-industries

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