Stock market

20 years as bedrock of bourse 02/Feb/2017 Intellasia | VIR As one of the first developers of the Vietnamese stock market 20 years ago, State Securities Commission chair Vu Bang has seen plenty of ups and downs in the market. He talked about his experiences with VIR's Huu Hoe as the 2017 lunar New Year approaches. When the market overheats or encounters unexpected problems, has the State Securities Commission (SSC) considered suspending trading to protect investors? The option of suspending trade has been considered in the past, especially when the market grew too hot during the 2007-2008 period and market sentiment was tense. I was under immense pressure at that time, as a single second could make a drastic difference to investors, and the listed companies' market values. This is a common pressure for everyone working in the securities market. The most significant lesson we learned after these troubled times is that regulators must remain cool- headed in order to keep overheated situations calm. I'd like to give you a recent example: SSC proposed solutions to deputy prime minister Vuong Dinh Hue for how to control the Vietnamese market during Brexit [the UK's referendum to leave the European Union]. We received praise from the deputy prime minister as the proposal was detailed, timely, and practical, showing SSC's experience in protecting the market from external turmoil. Around the world, there are two kinds of trading suspension: temporary or long-term. Indonesia and Thailand have closed their markets for some years before re-opening, and we're proud to say that throughout its 20 years of development, the Vietnamese stock market has never been suspended. Trading continues with ever-increasing levels of security to this day. Do you have any regrets or unfinished tasks in your two decades of working at SSC? First, I have to say that to develop a sustainable market, we need a united effort from multiple industries. Cooperation on monetary policy is especially important. The stock market has improved greatly thanks to improved cooperation between Vietnam's monetary and fiscal policies. Over the years, SSC has tirelessly formulated solutions to improve transparency, information disclosure, and fairness in the Vietnamese market. However, our control remains limited, especially as SSC does not have any investigatory rights like other lawmakers. For example, we cannot access investors' bank accounts or emails, and cannot arrest any suspects. This has hindered our response to many scams, especially price manipulation and insider trading. We also cannot sign multilateral agreements with other countries due to the lack of investigatory powers. Moreover, Vietnam's punishments for white-collar crimes are not harsh enough to deter financial criminals. In other markets, fines can reach millions of US dollars for each case. Lastly, other countries have specific rules to protect lawmakers in the stock market. Vietnam does not have this yet, so many SSC officers have been blackmailed or harassed by criminals. What are some of the most difficult decisions that you've made during your tenure as SSC chair? The most challenging decisions for me have been criminal cases, which I need to transfer to the relevant authorities to prosecute in court. It's hard but necessary to protect the market, improve transparency, and earn investors' trust. In addition, we have to reduce the trading margin when mass selling occurs and market value falls. SSC receives a lot of criticism about this, so that also counts as a very difficult decision for us. That's a lot of pressure for you and SSC. What do you see as pleasurable about your work? Nothing can describe my happiness when seeing the market grow day by day and receiving positive feedback from investors. I'm also happy when I see that investors have reaped their well-deserved rewards from an increasingly transparent market. As the Lunar New Year draws closer, what message do you have for investors and the market? Often investors understand that some businesses are not transparent, and they will still buy stocks regardless, for speculative purposes. These investors tend to think they will be okay and all risks will be passed down to later buyers. However, reality has shown that this is not always the case, and many investors have lost money because of this attitude toward trading. Even if these investors win, this is not a fair victory. I mention this to remind investors that, to lower risks, they should pour capital into fundamentally good companies with great corporate governance. Investors should not be blinded by quick profits and speculation. When there is turmoil in the market, investors ought to remain calm to avoid losing money. http://english.vov.vn/trade/20-years-as-bedrock-of-bourse-342591.vov

Vietnam likely to launch bond derivative market in Q1 02/Feb/2017 Intellasia | Bizhub Vietnam will likely launch its bond derivatives market in the first quarter of this year. This is part of the four-year roadmap for the domestic bond market prepared by the Ministry of Finance and projected to be submitted to the prime minister this year. The development of the derivatives market is part of the government's strategy to support the country's stock market by providing more instruments to hedge risks and attract more investment. According to the announcement by the Hanoi Stock Exchange in June 2016, the derivatives market will initially start with stock index and government bond (G-bond) futures. The local G-bond market witnessed positive performance last year with total amount raised through the Hanoi Stock Exchange hitting a record VND316.73 trillion (US$14 billion), a rise of 26.9 per cent compared to the previous year, the northern exchange reported in the bond market review last week. G-bonds outstanding have reached 26 per cent of the country's GDP as of December 31, 2016. The participation of foreign investors increased in both transaction value and investor structure. They accounted for 12.4 per cent of total buyers, up 8.4 per cent over the previous year, while their transaction value rose 88 per cent year-on-year. The total listing value of G-bonds reached VND930.53 trillion, up 23.5 per cent over 2015. The average maturity extended to 5.21 years in 2016. Transactions on the secondary markets also improved with total value rising 73.8 per cent over the previous year, averaging VND6.35 trillion per session. The Ministry of Finance has set the mobilisation target of VND250 trillion worth of G-bond issuance in 2017. The 2017-20 development roadmap The finance ministry plans to submit the 2017-20 roadmap for the local bond market to the prime minister this year. Following which, it will enhance co-ordination between fiscal and monetary measures to better regulate the financial market. In the primary market, a pilot project of issuing floating rate G-bonds will be implemented from the second quarter of 2017. The ministry will continue to issue notes with long terms of 20 years and 30 years. In the secondary market, the bond derivatives market will be launched in the first quarter and settlement function will be transferred to the central bank. In a move to develop the corporate bond market, a database for corporate bonds will be built to improve transparency in the market. The State Treasury has announced it will diversify maturity of its G-bonds this year by between below one year to 30 years, focusing on the long term to extend the average maturity and reduce the pressure on the government's debt payment in the short term. Five-year to 10-year bonds will account for 60 per cent of total issuance while 1-3 year terms and 15-year terms onwards will each make up 20 per cent of total issuance. http://bizhub.vn/markets/vietnam-likely-to-launch-bond-derivative-market-in-q1_283848.html

Stocks expected to rise in the year of the Rooster 02/Feb/2017 Intellasia | Bizhub Vietnamese shares are expected to increase on both local exchanges in the first trading session of the new lunar year on February2, approaching a fresh nine-year high, according to securities firms. The benchmark VN Index climbed 0.9 per cent to reach a new nine-year high of 697.28 points on January 25, extending its rally of a total of 2.2 per cent to a fourth day. The HNX Index on the Hanoi Stock Exchange also rose 0.9 per cent the same day to finish at 84.46 points, lifting its gain of a total of 1.7 per cent for a second day. In the three trading days before the Tet holiday, market trading liquidity declined compared with the previous trading week. Some 117 million shares were on average exchanged in the three sessions, posting a weekly decline of 3.2 per cent. Average trading value in the three trading days was VND2.21 trillion (US$98.45 million), 11 per cent lower than the previous week's figure. Sai Gon-Hanoi Securities Co (SHS) said in a note the stock market was expected to make gains in the first two sessions of the new lunar year, with low market trading liquidity. The VN Index is heading to test the level of 700 points and the risk of correction is increasing. In that case, the nearest support level for the benchmark could be 689 points, SHS said. Investors with a taste of mid-term and long-term investment can look for opportunities to buy shares of companies that are expected to perform well in 2017, the Hanoi-based brokerage firm noted. Bao Viet Securities Co (BVSC) also agreed market trading will improve following the Tet holiday, since money will return and help increase market trading liquidity. Investors may purchase stocks that are currently attractive and are forecast to report positive earnings for 2016, BVSC said. Of the companies that are expected to report good 2016 earnings and perform better in 2017, pharmaceutical firms and steelmakers are the noteworthy targets after the two industries witnessed good growth in 2016. In addition, investor confidence could also be bolstered as foreign investors returned to net buyers in January, making a net buy value of nearly VND702 billion through the month. According to the financial-economic news site vietstock.vn, investors with short-term trading interest could lock in their profits on Thursday, February2, the first trading session of the Rooster year. If the benchmark VN Index is able to stay above the range of 680-690 points, it can approach and test the level of 720 points. In that case, the support range for the benchmark index will be between 675 and 680 points. The HNX-Index will likely maintain its upward trend and head to its former high of 88-90 points, wherein the support level for the northern market index will be 82.5 points. http://bizhub.vn/markets/stocks-expected-to-rise-in-the-year-of-the-rooster_283873.html

Vietjet to raise $84m from share issuance 02/Feb/2017 Intellasia | Bizhub Vietjet Aviation Joint Stock Company will issue more than 22.3 million shares, equal to 7.46 per cent of the company's outstanding shares, to Huong Duong Sunny Investment Co Ltd The move will raise nearly VND1.9 trillion (US$84.18 million). The decision was stated in the company's shareholder resolution, which was released last week. Huong Duong Sunny Investment Co Ltd, a finance consultancy company, will purchase those 22.3 million shares at the price of VND84,600 per share. The deal will be undertaken in 2017 on approval of the State Securities Commission and those shares will be suspended from trading for a year from the issuance date. The share issuance will increase Vietjet's chartered capital to VND3.22 trillion. The income raised from share issuance will be used to lease and buy planes, invest in the IT system and other business activities. Huong Duong Sunny Investment Co Ltd is a financial consultancy firm founded in November 2016 with chartered capital of VND1 billion by Vietjet's general director Nguyen Thi Phuong Thao. The company holds nearly 44 million shares in Vietjet, equal to 14.66 per cent of the aviation company's chartered capital. These shares may have been purchased when Vietjet sold 44.8 million of its shares to institutional investors at VND84,600 per share and 3.5 million shares to individual investors at VND86,500 per share. According to sources familiar with the matter, the purchase made by Huong Duong Sunny Investment Co Ltd is part of Vietjet's initial public offering plan. According to the plan, the additional shares issued by Vietjet will be purchased by Thao or her company. The quantity of additional shares is equal to half of the shares sold to institutional investors and the price of additional shares is equal to that of shares sold to institutional investors. Vietjet also said in its shareholder resolution that the company will set up subsidiaries and affiliates in jet leasing, airport services, franchising, e-commerce, and finance and insurance. Shareholders approved the company's listing on the HCM Stock Exchange. http://bizhub.vn/markets/vietjet-to-raise-84 million-from-share-issuance_283840.html

VN Index rallies for a fifth day 03/Feb/2017 Intellasia | Bizhub The VN Index on the HCM Stock Exchange rallied for a fifth session on Thursday as investor confidence was bolstered by positive earnings reports from listed companies. The benchmark index advanced 0.9 per cent to close the first trading day of the new lunar year at a new nine-year high of 703.18 points. It has rallied a total of 3 per cent after the last five sessions. Market trading liquidity fell from the previous session with more than 86.4 million shares being traded, worth VND2.06 trillion (US$91.84 million). The figures were 12 per cent and 1.6 per cent lower in trading volume and value, respectively. The southern market was lifted after listed companies such as private equity firm Masan Group (MSN), Eximbank (EIB), Bank for Investment and Development of Vietnam (BID) and HCM City Infrastructure Investment JSC (CII) announced their 2016 profits. MSN gained 2.3 per cent after Masan reported that its revenue for 2016 increased 41 per cent year-on- year to nearly VND43.3 trillion and net profit rose 44 per cent from 2015 to VND4.54 trillion. EIB surged 7 per cent after the bank recorded a net profit of VND308.9 billion for 2016, which was nearly eight times that of 2015, thanks to VND150 billion profit made in the fourth quarter last year. CII added 2 per cent after the southern infrastructure developer released its 2016 financial report. Last year, the company recorded a post-tax profit of VND1 trillion, which increased 28 per cent over the previous year and exceeded last year's target by 20 per cent. Other blue chips also made gains to support the market. PetroVietnam Gas edged up 0.7 per cent as oil prices remained positive on global trading. Brent crude rose 0.8 per cent to trade at $57.25 a barrel, lifting its gain to a third day with total growth of 3.6 per cent. On the Hanoi Stock Exchange, the HNX Index inched up 0.2 per cent to finish at 84.64 points. The northern market index has increased by total 2 per cent in the last three days. More than 16.6 million shares were traded on the northern bourse, worth VND172.25 billion. The trading figures fell 39 per cent and 35 per cent, respectively, compared to the previous session. http://bizhub.vn/markets/vn-index-rallies-for-a-fifth-day_283898.html

The market reached over 700 points after the holidays 03/Feb/2017 Intellasia | Vn Economic Times Only the HNX30-Index fell while the others increased. On the first day of trading after the holidays, Vietnam's main indexes saw positive performances as the VN Index increased by 5.9 points (0.85 per cent) and the VN-30 Index increased by 8.19 points (1.27 per cent) on the HSX. While the HNX saw the HNX-Index increase by 0.18 points (0.22 per cent), the HNX-30 Index decreased by 0.62 points (0.41 per cent). The VN-Mid Index increased by 2.9 points (0.35 per cent), the VN-Sml increased by 4.52 points (0.6 per cent) and the VN-All index increased by 6.98 points (1.09 per cent). The UPCoM index increased by 0.44 points (0.81 per cent) HSX saw a 158-point increase and a 90-point decrease while the HNX saw a 133-point increase and an 87-point decrease. Liquidity on the HSX reached VND1.8 trillion ($79.5 million) while the HNX reached 163 billion ($7.2 million). The VN Index increased right after opening as it reached 700 points before fell to 698 points. Then it fluctuated around this level until late in the session and recovered to finally close the morning session at 700.05 points. During the afternoon session, the VN Index fell slightly to 700.2 points before increasing to close the day's trading at 703.18 points. Most of the large caps on the HSX increased as the VNM moved up 3.1 per cent with liquidity peaking on the HSX at around VND223 billion ($9.84 million). The other large caps in food and beverage such as SAB decreased by 2.1 per cent. Other stocks in food and beverage saw MSN and KDC move up 2.3 per cent and 1.08 per cent respectively, while BHN and SBT decreased 2.2 per cent and 1.2 per cent respectively. In banking, EIB hit its ceiling when it increased by 7 per cent; BID went up 1.8 per cent; CTG 0.8 per cent, VCB 0.4 per cent, MBB 0.35 per cent, while STB decreased by 1.5 per cent. In energy, GAS increased by 0.7 per cent, PGD went down by 1.5 per cent and CNG by 1.2 per cent. ROS came second in terms of liquidity as is stocks saw VND197 billion ($8.7 million) and a price increase of 0.7 per cent. Other large caps on the HSX saw MWG go up 5.6 per cent, VIC up 1.2 per cent, HPG up 0.9 per cent and NVL up 0.5 per cent. On the HNX, PHP went up by 2.5 per cent, VCG by 0.7 per cent and ACB 0.8 by per cent. SHB moved down by 2.1 per cent, PVS 1.1 per cent, PVI 0.4 per cent, NTP 0.3 per cent and VCS 0.2 per cent. Foreign investors saw net sold on the HSX by VND4.3 billion ($189,931) and net sales on the HNX by VND10 billion ($441,700) http://vneconomictimes.com/article/banking-finance/the-market-reached-over-700-points-after-the- holidays

Stocks gain on first day after Tet 03/Feb/2017 Intellasia | Bizhub Shares advanced on both local exchanges on Thursday in the first session after Tet, driven by real estate and insurance sectors. The benchmark VN Index on the HCM Stock Exchange gained 0.5 per cent to reach a new nine-year high of 700.55 points. It had rallied by 2.2 per cent in four consecutive sessions before the Tet holiday. The HNX Index on the Hanoi Stock Exchange inched up 0.1 per cent to end at 84.56 points. The northern market index had risen 1.7 per cent in the last two days. The insurance-finance and property sectors pushed the market up this morning as large-cap stocks advanced. Among insurance-finance firms, BIDV Insurance Corp (BIC) and Bao Viet Holdings (BVH) went up by 1.2 per cent and 1.8 per cent, respectively. Large-cap property developers such as Sai Gon Thuong Tin Real Estate JSC (SCR), Vingroup (VIC) and Kinh Bac City Development Holding Corp (KBC) rose between 0.4 per cent and 1.7 per cent. Other blue chips that made gains include Faros Construction Corp (ROS), dairy producer Vinamilk (VNM) and PetroVietnam Gas Corp (GAS). At the other end, bank stocks were mixed, with Vietcombank (VCB), Sacombank (STB) and MBBank (MBB) declining. Around 62.2 million shares worth VND1.25 trillion (US$55.47 million) were traded. http://bizhub.vn/markets/stocks-gain-on-first-day-after-tet_283875.html

Finance Ministry eyes Securities Law update 03/Feb/2017 Intellasia | Bizhub The Ministry of Finance is drafting a document for the next generation Law on Securities in an effort to complete legislation for the securities market in line with the overall development scheme of the broader financial sector. The 2006 Securities Law took effect on January 1, 2007 and was amended in 2010. After 10 years of modifications, experts have called on more amendments to meet demand for more sophisticated securities market. The new paper drafted by the finance ministry outlines the objectives and content of the new legislation as well as measures to carry out the policy. One of its highlights is that the State Securities Commission (SSC) will be given the full authority to enforce the key functions of monitoring, inspecting and managing the market as well as handling violations. Under the new law, SSC may ask agencies, organisations and individuals to provide information and documents related to the subjects with signs of violations, or require credit institutions to provide information on bank account transactions. The new law also obliges stricter disclosure regulations, following which disclosure obligation will be based on the capital size of public companies. Process, objects and content of information disclosure by big shareholders owning over 5 per cent of the company's capital and disclosure of employees have also been clarified. Regarding the market restructuring, the two stock exchanges will be merged into one and operate under the specific business type which manages three market segments including stock market, bond market and derivatives market. Market transactions will be under three-tier supervision including securities companies, the stock exchange and SSC. Thus, the new law adds securities firms to be the first tier of supervision and ask these firms to build their supervision mechanism. The new law also sets targets to diversify products on the securities market and improve conditions for offering securities. In an effort to attract more foreign capital, the Ministry of Finance is expected to approve the 100 per cent foreign ownership in domestic public companies which are included in the list of conditional business lines to foreign investment without specific ratio of foreign ownership. The Vietnamese government last year issued Decree 60, which lifted limits on foreign holdings in domestic public companies and triggered new foreign capital inflows in the stock market. However, the spillover effect of this regulation is limited, due to complicated rules of different authorities which are beyond the power of the SSC and the finance ministry. SSC's chair Vu Bang in a meeting early this year said the new generation Securities Law are expected to facilitate foreign investments and overcome obstacles from Law on Investment. The new law is calling consultation from ministries and sectors which are subjects to the policy. http://bizhub.vn/markets/finance-ministry-eyes-securities-law-update_283907.html

Finance

Central bank moves to accelerate restructuring of credit institutions 02/Feb/2017 Intellasia | VNA Governor of the State Bank of Vietnam (SBV) Le Minh Hung has called for more efforts to reshuffle credit institutions and settle bad debts to enhance the banking system's safety. According to recently-signed Directive No.2/CT-NHNN, Hung requested more mergers and acquisitions of credit institutions to increase their competitiveness and remove poor-performing ones. He also ordered the accelerated restructuring of State-owned commercial banks to guarantee stability in the monetary market and safety in credit institutions. Measures to increase the affordability of commercial banks and to improve the transparency of credit institutions' activities are equally important, he said. The Governor also asked credit institutions to draw up measures to handle bad debts and prevent new ones while curbing credit growth and quality, and promptly detecting and punishing violations in the field. The SBV will not allow credit institutions without loan classification and risk provision to open new branches, transaction offices and ATMs, or share dividends and profits for shareholders, he said. Instead, credit institutions will be required to gradually set up a transparent debt trading market for investors. The directive states that credit institutions need to have a full and accurate assessment of credit growth in high-risk fields such as real estate, securities, build-operate-transfer (BOT) and build-transfer (BT) transport projects. Any unhealthy competition behaviors in banking activities are banned, especially in capital mobilisation, the Governor said. He also called for an improved legal system to open the financial market, develop the banking system, and ensure safety for business activities of credit institutions. http://en.vietnamplus.vn/central-bank-moves-to-accelerate-restructuring-of-credit- institutions/106415.vnp

Interest rate under pressure to remain unchanged 02/Feb/2017 Intellasia | Bizhub The central bank has targeted keeping interest rate stable in 2017, however, the market's developments in the first half of January 2017 show that lending rates are suffering from many pressures, the Nguoi Lao Dong (Labourers) newspaper has reported. Analysts said the goal to stabilise interest rates this year may face many challenges, such as the recovery trend of commodity prices in the world market, including petroleum; the price adjustment of essential commodities of electricity, health service and education; and the risks of climate change and natural disaster. Besides this, economist Bui Quang Tin said the exchange rate will also put pressure on interest rates in 2017. Tin said the US dollar is forecast to continue strengthening due to the expectation that Fed will continue increasing interest rates this year and in 2018 and 2019. This trend will make it difficult for local commercial banks to reduce interest rates because at that time, the exchange rate between the US dollar and other currencies, including the dong, will hike. If Vietnam lowers interest rates, it will make the US dollar/dong exchange rate increase, resulting in imported goods becoming expensive and making it difficult for businesses, he said. In addition, the central bank's regulation on reducing the ratio of using short-term capital for medium and long-term loans from 60 per cent to 50 per cent fromJanuary 1, 2017, will also affect deposit rates, especially terms that are more than 12 months. Prime minister Nguyen Xuan Phuc also admitted interest rate is a serious problem for the central bank in 2017, especially in the context that inflation must be curbed and the macro economy must be stabilised. The country this year is targeting a GDP growth of 6.7 per cent and inflation at some four per cent. In a bid to stabilise interest rate and control inflation, Tin suggested the central bank adjust inter-bank rates reasonably through the open market operation (OMO). Commercial banks can borrow capital from the OMO market to stabilise liquidity and deposit interest rates. Besides preparation to cope with the US's Fed policy on increasing interest rates, measures to support commercial banks enhancing medium- and long-term capital sources must be also taken, Tin said. Economist Ngo Tri Long recommended the government continuously regulate prices of petroleum, electricity and public services according to the market mechanism with the State's management. Any changes in the prices of such commodities and services must be considered carefully and taken at a suitable time to avoid strong negative impact on the price level, Long said. http://bizhub.vn/banking/interest-rate-under-pressure-to-remain-unchanged_283857.html

Lending rates hard to decrease 02/Feb/2017 Intellasia | BizLive In 2016, deposit rates increased slightly compared to 2015 with a few dozen basis points depending on short, medium or long term, including two relatively clear adjustments in Q1 and the end of Q4. Although deposit rates increased slightly, lending rates in 2016 were quite stable and less volatile. Accordingly, lending rates for priority areas were popularly 6-7 percent/year for short term and 9-10 percent/year for medium and long term. Lending rates for business sectors were 6.8-9 percent/year for short-term; 9.3-11 percent/year for medium and long term. For good customer group with healthy and transparent financial situation, lending rates ranged at 4-5 percent/year. Although the government and the State Bank have repeatedly expressed determination to create favourable conditions for small and medium enterprises (SMEs) to develop, in which one of the most recent moves was to urge commercial banks to reduce lending rates, as per some experts, the interest rate reduction is still fairly unfeasible. Talking to reporters of BizLIVE, Dr Nguyen Tri Hieu, a financial expert believed that the interest rate reduction in 2017 is difficult because of both external and internal elements. Regarding the world situation, the expert said that the new government of Donald Trump might create some instability, especially, this administration promotes trade protectionism and extremism. "If Trump implements the policy, Vietnam's exports will be affected. Once exports are affected, one of the policies that we used to carry out is to push exchange rate up to create competition in export. The increase in exchange rate may lead to a shift from dong to US dollars for the purpose of speculation. To limit that, in the past we had to push up interest rates in dong and fixed the interest rate of zero percent for US dollars", said Hieu. Accordingly, the expert said, this year, if the world economy is really caught up in extreme protectionist policy of the US administration and Vietnam's export markets are limited, perhaps one of the measures we can use is to adjust exchange rate to create competitiveness for exports. At the same time, we must consider adopting a certain interest rate for deposits to keep the difference in interest rate between dong and the US dollar. This difference must be large enough to limit the shift from dong to US dollars. Meanwhile, this year, Fed may raise interest rates. If this happens, we may have to consider raising interest rates on US dollar deposits. "And to keep the difference in interest rate between dong and US dollars as mentioned above, we will have to increase deposit rates in dong. And if we increase deposit rates, lending rates must be increased accordingly", the expert warns. Regarding internal factors, Hieu said that the interest rate reduction also had some unfavourable conditions. "We have two macro objectives i.e. to control inflation at no more than four percent and GDP growth at 6.7 percent. I think, it will be a very difficult thing to achieve both of these objectives". "To achieve the growth target of 6.7 percent, it means we have to push a large amount of credit into the market. As in 2016, we achieved credit growth rate at 18 percent while the GDP growth was only 6.3 percent. To attain the growth rate of 6.7 percent this year, we have to push a large amount of credit, at least equal to last year. In order to push credit, banks must push mobilise capital. According, deposit rates will have to be pushed up, unless the central bank creates a huge liquidity". "With the high level of credit growth and banks need to mobilise a large amount of capital to finance credit activities, I find that lending rates are more likely to increase rather than decrease", said the expert.

Banks race to offer promotions to attract deposits 02/Feb/2017 Intellasia | Tuoitre Resuming operations on February 2, many banks launch promotional programmes at the beginning of the year to attract depositors. Specifically, at SHB, with the minimum deposit of 20 million dong, customers will be granted a code with two opportunities for lucky drawing. Some other banks give lucky money for first customers in the day. Eximbank presents gifts or money (100,000 dong for each 100 million dong/account) for customers depositing from 15 months to 36 months. Customers opening savings book with a term of six months or above at SeABank during promotional period will receive shopping voucher at BigC supermarket with value depending on the amount of deposit. Earlier, before the Lunar New Year, some banks increased deposit rates such as VPBank by 0.1 percent/year for interest rates of 12-month and 13-month terms. Eximbank also raised interest rates by 0.1-0.2 percent/year depending on each term. Currently, the bank's highest interest rate is 7.5 percent for 13-month term when customers deposit a large amount of money. Dong A Bank also raised interest rates for some terms. Currently, the highest interest rate of Dong A Bank is 7.5 percent/year for terms of 18 months or above.

Small banks avoid being merged or acquired 02/Feb/2017 Intellasia | Bizhub Small-sized banks are making great efforts to grow to avoid being merged or acquired, however, it is not easy, according to the Dau tu chung khoan (Securities Investment) newspaper. VietA Bank, for example, plans to promote retail sales and focus on individual customers and small- and medium-sized enterprises (SMEs). Although VietA Bank's non-performing loan ratio in late September 2016 reduced to 1.17 per cent from 2.25 per cent in early 2016, its provisions for risky loans rose by 82 per cent to VND71 billion (US$3.12 million), strongly affecting the profit result. Following the first three quarters of 2016, VietA Bank posted pre-tax profit of only VND101 billion. Another case is Kienlongbank, which was transformed from a rural bank to an urban bank. The bank aims to become a retail bank targeting SMEs operating in agriculture and rural areas. However, Kienlongbank is also facing difficulties like other small banks in the banking system. The bank failed to complete its 2016 profit plan, with pre-tax profit of only VND19.8 billion recorded in the first nine months of 2016, a decline of 90 per cent compared with the same period of 2015. Kienlongbank's bad debts increased from 1.12 per cent in the beginning of 2016 to 1.46 per cent by late September 2016. Financial expert Tran Du Lich said the more important task for small banks, at present, is to find solutions to successfully carry out restructuring and improve financial capacity, thereby avoiding being merged or acquired. In an attempt to avoid M&As, small banks also plan to raise capital and have conducted self-restructuring in recent years through internal resources, however, many have repeatedly been unsuccessful. Saigonbank, for example, has not fulfilled its plan to increase charter capital to VND4 trillion following its refusal to merge with Vietcombank. VietA Bank also managed to raise its capital to just VND3.5 trillion in early 2016 and no further progress has been recorded since then. Following the failure of the merger deal (according to rumours) with Export Import Commercial Joint Stock Bank (Eximbank), NamA Bank has also been unable to increase capital as expected. The current charter capital of the bank is just more than VND3 trillion. The central bank recently also allowed VietBank to increase charter capital from VND3 trillion to VND3.249 trillion. With this level of charter capital, VietBank remains at the top of banks with the lowest charter capital in the market, along with other banks whose legal capital has reached only VND3 trillion, such as Kienlongbank, VietCapital Bank, NCB and Saigonbank. However, according to experts, if small banks want to survive without conducting M&As, they must raise their financial capacity. Meanwhile, foreign investors are not interested in weak domestic banks if the controlling regulations are not relaxed. As long as the ownership limit of foreign investors is still less than 51 per cent, foreign shareholders cannot take control of the bank. According to economist Le Xuan Nghia, since weak and small banks are finding it difficult to increase financial capacity to accelerate the settlement of bad debts and restructuring, it is in their interests to find potential partners to conduct M&As. http://bizhub.vn/banking/small-banks-avoid-being-merged-or-acquired_283835.html

SBV: Using policy to battle volatility 02/Feb/2017 Intellasia | VIR Emerging markets are expected to experience great volatility and challenges in 2017, and their banking systems will likely be at the forefront of these difficulties. Yet, as State Bank of Vietnam deputy Governor Nguyen Thi Hong tells VIR's Hong Dung, things are brighter than they sound, given her great belief in local credit institutions and their development in 2017. Economists say that the global economy is rather insecure, as many policies in the US stand to be changed under the reign of US President Donald Trump. What is your take on this? 2017 will witness a great deal of difficulties and challenges in emerging markets, including Vietnam. Following the presidential election in the US, the market placed great expectations on the US economy to grow strongly, should the new government carry out its plans for tax cuts and renewed investment in infrastructure. The Federal Reserve (Fed), in addition, is expected to hike its rates two to three times this year on the basis of higher inflation and economic growth outlook. This will pose a hard math issue to solve for many emerging markets, as the cost of borrowing USD will soar. The USD is also forecast to strengthen further against the emerging markets' currencies on the back of Fed rate hikes. This trend will pose a threat to central banks in emerging markets, as they have no room to trim interest rates any lower. Very often, central banks will cut their rates to stimulate the economy. However, as domestic currency loses its value against the greenback and US interest rates rise, cutting interest rates will not be simple. We do not actually know at this stage what policies Trump will come up with when he takes office. The global economy and financial markets will be on a rocky road. Although there may be many difficulties and unpredictable developments ahead of us both internationally and domestically, my view is the same as the result of the survey on business trends at credit institutions, carried out by the Monetary Forecasting and Statistics Department under the State Bank of Vietnam (SBV): a belief in positive developments at credit institutions in 2017. Vietnam has taken part in many new-generation trade pacts. So what are the opportunities and challenges arising from the pacts for the local banking sector? Vietnam's economy has achieved much in the process of international economic integration in the past years. Nevertheless, I think that there are still many difficulties and challenges, and should we not recognise them, they will be hard to overcome. Stout economic integration means strong flows of trade and investment, of sizable scale, which will have an impact on the monitoring of local monetary policy. There are numerous economic indicators that link to the international market like FX, interest rates, and capital inflow and outflow, which the central bank will have to follow closely and adjust its policies accordingly. With regards to opportunities, it is the participation of foreign investors that helps transfer the management skills and technologies to diversify financial services available to the entire economy. This means that the local banking system will face fierce competition that requires them to operate more safely and efficiently, as well as enhance the competitiveness of payment systems and increase revenues from bank services. SBV has set a target for stabilising interest rate levels and lowering medium - to long-term lending rates in 2017. How is SBV working towards this target? Despite the unexpected developments in the global economy in 2017, I believe that Vietnam's macro- economy will continue to be stable. The government's commitment to a constructive economy will continue revamping the financial and public sectors, which in turn will take the country on a more sustainable path in the future. The banking sector, however, will still be facing many daily issues, which could be even tougher than those in the previous year. For instance, it must solve the issue of lowering the lending rate given the possible increase of inflation in 2017, and at the same time take into account the rising demand for government bonds. While the government has been working on necessary steps of reform to drive economic growth on a sustainable path, we need to look at the possibility of room for quantitative easing being limited. I also would like to say that the inflation target for 2017 is, on average, 4 per cent, and to achieve it will be tough. If we can promote a method of cooperation between monetary policies, price controls, and the other macro-economic policies as in 2016, 2017's inflation target could be realised. To get to the point where inflation is under control, the scope and level of the rate cuts will need to be constrained. The SBV's objective is to keep interest rate levels as steady as they were in 2016 - and should conditions allow, we will cut the rate under certain conditions. Accordingly, via the open market operations, SBV will monitor liquidity and interest rates so that credit institutions having difficulty raising capital through the inter-bank market will not have to mobilise funds in M1 [demand deposits from individuals and economic organisations]. Credit institutions themselves need to balance their sources of funding and use them effectively, while at the same time minimise their costs in a bid to keep lending rates down. What will SBV's FX management look like, given the unpredictable movements of the global financial market? For the FX market, SBV will continue monitoring our daily fixing rate on the basis of the fluctuations of the currencies that have a large trading volume with Vietnam. Domestic developments and considerations of the FX rate to fit macro-economic factors are also taken into account when calculating the daily fixing rate. All of these actions are necessary to stabilise the VND and subsequently enhance confidence in the local currency. As I've mentioned, the global economy, especially the global financial market, still holds many uncertainties. The openness of our economy is rather broad so the impact of the uncertainties may well be complicated. As such, the monitoring of the FX and FX market must go hand-in-hand with daily and hourly changes, in order to respond quickly to fluctuations arising from offshore and onshore developments. SBV will, accordingly, carry on monitoring in a proactive and flexible manner using our monetary tools to stabilise the liquidity in the banking system, as well as manage the interest rates together with the FX rate to reduce speculation in the market. http://www.vir.com.vn/sbv-using-policy-to-battle-volatility.html

Vietinbank, not Vietcombank, has the largest profit in 2016 02/Feb/2017 Intellasia | Vneconomy Commercial banks have announced Q4 financial reports. The banks that have the highest profit in the system have been finalised, with the difference of only a few tens of billion dong. Specifically, the financial statement of the Vietnam Bank for Industry and Trade (VietinBank) finalised the pre-tax profit of the bank in 2016 at more than 8.271 trillion dong. This is also the highest profit in the system of commercial banks in Vietnam in the past year. Very close, the Bank for Foreign Trade of Vietnam (Vietcombank) also finalised the final figure with 8.220 trillion dong individual pre-tax profit. Previously, which bank had the largest profit was yet finalised between these two members because of waiting for the consolidated profit. With the recently released financial report, VietinBank is slightly higher than Vietcombank in the consolidated profit with only a few dozens of billion dong. Specifically, Vietinbank's consolidated pre-tax profit last year reached 8.530 trillion dong compared with 8.517 trillion dong in Vietcombank. However, regarding the growth rate over the previous year, Vietcombank outperformed with 23.5 percent compared to 16.1 percent at VietinBank. Meanwhile, Vietcombank's pre-provisioning net profit from business operation was higher than other bank, amounting to over 14.612 trillion dong compared to over 13.186 trillion dong in Vietinbank. The aforementioned correlation also shows that Vietcombank put greater provision than VietinBank, leading to the post-provisioning pre-tax profit to be lower and the bank also failed to attain the biggest profit. Though it was just about figure, it drew market attention on rankings. The credit risk provisioning between these two banks also has significant difference. If Vietcombank had total outstanding loan at more than 457.137 trillion dong, the risk provision for loans to customers was over 8.068 trillion dong, Vietinbank's total loan to customers was 649.342 trillion dong and the provision was 6.711 trillion dong as of the end of Q4/2016. Regarding absolute figure, by the end of 2016, Vietcombank had more than 6.789 trillion dong bad debts; VietinBank has over 6.706 trillion dong. However, by the end of 2016, Vietcombank was the first and the only bank to bring the entire bad debts to a book. There is not any bad debt at Vietnam Asset Management Company (VAMC), so there is the difference in comparing quality here. Also as per the recently published report, by the end of 2016, Vietcombank alone had 15.164 employees, while VietinBank had 21,895 people; Vietcombank had over 48.185 trillion dong and VietinBank had 61.655 trillion dong.

Foreign capital to financial companies keeps rising 02/Feb/2017 Intellasia | VNA Foreign investors have been acquiring major stakes in financial companies in Vietnam in recent years and the trend is expected to continue in 2017. Major acquisitions in recent years include Japanese Shinsei Bank's purchase of 49 percent of MCredit, a financial company of the Military Bank, which was renamed the MB Shinsei Consumer Finance Company. Yukio Nakamura, vice Chair of the Shinsei Bank, said the deal will open up opportunities and improve the competitive edge of the MB Shinsei in Vietnam. The State Bank of Vietnam also approved a deal allowing the HCM City Development Bank (HD Bank) to transfer 49 percent of the charter capital of HDFinance, a HD Bank affiliate, to Japan's Credit Saison Corporation. Katsumi Mizuno, director of Credit Saison's International Market, said Vietnam still holds great potential for personal consumer credit and card services thanks to a young population. Experts said a wave of similar acquisitions is expected to take place in 2017 and beyond. A Japanese partner is negotiating for 49 percent of the financial company FE Credit of the VPBank while SHB will soon establish a consumer financial company after taking over the Vinaconex - Viettel finance joint stock company. In recent years, the consumer finance sector in Vietnam has grown 27 percent and is predicted to maintain the growth until 2020. The number of rich and middle class people is forecast to double in the next 15-20 years, making Vietnam a lucrative market for consumer finance. http://en.vietnamplus.vn/foreign-capital-to-financial-companies-keeps-rising/106419.vnp

Shared interests 02/Feb/2017 Intellasia | Vn Economic Times Banks and fintech companies could do worse than look at working in tandem rather than trying to compete. Partnerships between fintech companies and traditional banks in Vietnam have been receiving greater attention as they represent a solution for the development of the country's financial market. But whether such cooperation would truly alter the banks' business strategies and change the way Vietnam approaches financial services remains up for debate. Timo, a digital banking platform borne of a combination between VPBank and Global Online Financial Solution Company, was launched in May 2015 in HCM City and arrived in Hanoi at the end of November, with expectation of developing nationwide with millions of users after making a solid start by signing up 20,000 users in its first six months. It may be too early to judge whether relationships between fintech companies and banks can be successful, but how this particular "marriage" proceeds will be an interesting case study. Competitors or partners? The way profits are shared is crucial in any business relationship. As a digital banking platform offering free services, Timo has become a capital mobilisation channel for VPBank from the retail market. VPBank, of course, will benefit from deposits from Timo's users to provide banking services. "Timo will be a channel for customers to deposit money and for VPBank to use these deposits to provide banking services." Claude Spiese, CEO of Timo, told VET. Having yet to take any real steps in cooperation with fintech companies, Techcombank nonetheless seems to be welcoming them in order to broaden their business activities. "Techcombank acknowledges fintechs can be an extension of the bank and partner us in providing more modern solutions in products and services, especially in payments, transfers and digital banking," Phan Thanh Son, deputy CEO of Techcombank, said. Striking partnerships is the way VPBank and Techcombank have reacted to the development of fintechs in Vietnam. Other banks, meanwhile, don't seem so welcoming. State giant Vietcombank has warned customers about entering their banking information into the Money Lover app - a Vietnamese fintech product with millions of users globally. "The providing of Vietcombank account information to any unauthorised website or app is providing Vietcombank security information to other parties and bears a security risk," Vietcombank said in a press release in July. Results from a PwC survey released in March that assessed the rise of new technologies in the financial services sector and their impact on market players revealed that 83 per cent of respondents from traditional financial services firms believe part of their business is at risk of being lost to fintechs, and this reaches a staggering 95 per cent among respondents from banks. The threat is real, but competing or partnering will depend on each bank's background and strategy. And the wave of fintechs intervening in the financial market is inevitable and requires that traditional bank react smartly. "Whether to view fintechs as a threat or an opportunity to traditional banking is a simple question," said Nguyen Hoa Binh, Chair and CEO of the NextTech Group. Uber and AirBnB are examples of technology winning over the traditional transport and hotel business models, he said, and if fintech companies create new value in services they may replace all or some traditional banking activities. Opportunities will come, however, if fintechs and banks become partners, supplementing, supporting, and transferring traditional banking activities to a technological base. The relationship would result in more customers and transactions and it could assist financial institutions willing to cooperate. "When fintech companies and banks work together in financial markets, the market will widen, as larger numbers of customers can access financial services as Vietnam's banking system is still developing," said Doan Thanh Hai, deputy director of the Information Department at the State Bank of Vietnam (SBV). The two are already competitors and partners in certain products. But if they were to work together they could use the advantages the other holds to grow the market, he added. "When the pie is bigger, banks also benefit," he said. The space for developing fintechs in Vietnam is huge, according to Son. In general, Vietnam is a "gold mine" for technology companies, as the country has a young and active population, the proportion of the population connected to the internet stands at 44 per cent, and 40 per cent of the population owned a smartphone in 2016 and this is expected to increase in the years to come. In contrast, the coverage of financial services among the population is still low, at 30 per cent, of which only 16 per cent of the rural population have a bank account, compared to the global average of 60 per cent. "For fintechs, developing products in the financial sector is a matter still waiting to be explored," Son said. Given that not all of Vietnam's commercial banks have a strong technology background, the development of fintechs can be considered as a major boost to broaden the market. "For banks not sufficiently strong in technology to develop payment systems or for those averse to the cost of investing in research and development, the arrival of fintech companies can help customers approach banking activities more easily," according to Buy Quang Tien, director of Payment System Department at the SBV. They can also help commercial banks cut costs in technology infrastructure and diversify their product and services to customers, he added. Fintechs hold certain advantages in technology, but banks also have their own core strengths regarding customer base and networks, and the majority of Vietnamese people still prefer cash as the main method of payment, making it hard for fintechs to win in competition with banks, Son said. But fintechs are capturing the global attention of banks, with incumbents reacting by scanning for opportunities to emulate, acquire or partner with fintechs. Such collaborations are mutually beneficial as banks can provide the existing customer base, funding, infrastructure, mentoring and regulatory experience, while fintechs offer technological expertise, the capacity to innovate, and agility in the market. However, as banks explore opportunities to work with fintechs on cutting-edge digital services, what are the specific risks brought about by fintech companies, wondered January Bellens, head of Global Banking and Capital Markets Emerging Markets at Ernst and Young. In order to partner with fintechs, banks should consider regulatory risk, third party vendor risk, and project risk, and strengthen their cyber security strategy through cyber threat intelligence, identity and access management, and adopt other strong authentication for sensitive internal activities, and introduce security awareness and training. Banks also need to clearly articulate controls around the data security and protection framework, safeguard data privacy, and minimise the risk of data loss, Bellens emphasized. Policy support Financial inclusion is a goal for Vietnam as 2020 approaches and the contribution of fintech companies are included in formal documents from policy makers, in particular a decision signed by former prime minister Nguyen Tan Dung on the master plan for delivering financial services at affordable cost to disadvantaged and low-income segments of society. In order to do so, the SBV is working on another master plan to develop non-cash payments in the 2016-2020 period and is completing the legal framework, policy and regulations for encouraging non-bank financial institutions to support banks in terms of banking activities, especially payments, according to Hai. The government is keen on supporting the development of fintech companies but has been tardy in improving the sector. "In 2009, digital wallets were allowed to be piloted by the government, but by the end of 2015 there were only four companies officially licensed," according to Son. From the view of a fintech company, Binh stressed that the State needs to encourage the pilot use the global fintech innovations in Vietnam, and the country could learn a great deal from how Singapore opened databases via an app programing interface for people to use their creativity to create new value. Giving the regulatory risk when banks work with fintechs, Bellens said the former needs to review new product features and functions regarding any potential regulatory impact. This would ensure that no new regulation has come into play and that existing regulatory compliance is not compromised. "Management is especially critical, as non-banks may lack comprehensive security policies and be on less stringent financial regulations compared to traditional financial institutions," he said. "There needs to be adequate board oversight of emerging technology risks from a regulatory risk standpoint." ♦ "The potential is clearly there but Vietnamese fintech companies are only in their early stages and most focus on payment methods, which is a small field." Phan Thanh Son, deputy CEO of Techcombank ♦ "Despite Vietnam's fintech companies developing at a low level, the speed in which payments are developing is fast. In this context, there are many activities where banks could corporate with fintech companies. Instead of competing, both sides should cooperate and develop together." Ivan Mortimer Schutts, World Bank Specialist ♦ "Infrastructure is the issue that Vietnam must improve to support the development of fintech companies, such as having a solution on fingerprint scanning to allow people to conduct banking services on the go." Tran Nhat Minh, deputy CEO of VIB ♦ "Banks are competing with fintechs and the newcomer is totally different to traditional banks. Fintechs are more active and creative, which most banks aren't, and if banks cannot win it is better to go with the trend." Tran Cong Quynh Lan, deputy CEO of VietinBank ♦ "Only a few fintech companies have a major influence on the market as there is no clear legal framework for them to follow, so there needs to be greater focus from the government." Tran Huu Duc, director of FPT Ventures http://vneconomictimes.com/article/banking-finance/shared-interests

NCB posts 90pct increase in profit 02/Feb/2017 Intellasia | Bizhub NCB has announced its business results for 2016, reflecting a high and positive growth rate. By the end of last year, the bank's total assets were VND69 trillion, a 43 per cent year-on-year increase and 2.5 times higher in comparison with the period before its restructure. Last year, its capital mobilisation rose by 25 per cent to reach VND42.7 trillion, which was 2.3 times higher than that of 2013. NCB's total lending in 2016 was 24 per cent more than 2015, reaching VND25.3 trillion. Its bad debt rate was less than 2.07 per cent, reducing by three times following its restructuring. "NCB has rapidly become one of the banks with high growth rate in profit from one of nine banks which were listed as weak and required restructuring," the bank said. The bank has focused on niche markets with individual customers and small-and-medium sized enterprises instead of the large firms segment. In 2016, NCB successfully implemented the change of its core banking system, which is a pre-condition for modernisation. The system has helped the bank improve its ability to offer multi services, simplifying and closely controlling professionals as well as managing customers' information. Navibank was renamed NCB follow its self-restructuring in 2014. http://bizhub.vn/banking/ncb-posts-90-increase-in-profit_283869.html

Eximbank schedules 2017 AGM amid mountain of bad debts 02/Feb/2017 Intellasia | Vn Economic Times AGM set for April 21 in HCM City, with Board elections and pressing matters on agenda. Eximbank will hold its 2017 annual general meeting on April 21 in HCM City, where a vote will be taken for additional Board members for the 2015-2020 term and discussions on other matters expected to be put forward at an extraordinary shareholders meeting last year. A maximum of three Board members are to be voted in but the specific number will be determined later by the Board itself, according to a bank announcement released on January 20. The bank will receive nominations from January 21 to March 3 and expects to check nominees' profiles from March 7 to March 17. It also expects to submit nominees' documents to the State Bank of Vietnam for approval on March 20. Last year, the bank held its annual Board meeting twice, but both failed to gain a quorum of 65 per cent of shareholders. An extraordinary shareholders meeting was then scheduled for August 2 but was postponed, as the central bank requested the bank check information regarding shareholder group rights to nominate candidates to the Board. In 2015, Eximbank postponed its annual Board meeting three times, to the end of July. In December, an extraordinary shareholders meeting was held in order to vote for the Board of directors and a representative of a main shareholder group was eventually selected. Questions were then raised about the vote's transparency. In December last year, the bank asked the HCM City Stock Exchange (HoSE) to extend the deadline for submission of its 2016 financial statements. It said in the request that the preparation of the financial statements had met timing difficulties due its reliance on figures from its subsidiary, the Eximbank Asset Management Company. Once a leading commercial lender, Eximbank is experiencing the worst difficulties in its history. Its consolidated financial statement for the third quarter of 2016 showed a pre-tax profit of VND202 billion ($8.95 million) for the first nine months of the year, down 70.15 per cent year-on-year and equal to just 20.23 per cent of the annual plan. The modest figure was due to a decline in lending while at the same time risk provision costs had increased 85.2 per cent since the beginning of 2016. From January to September, lending fell 4.79 per cent to VND80.69 trillion ($3.57 billion) and was the lowest among listed banks. Its loan-to-deposit ratio (LDR) fell from 86.11 per cent to 78.2 per cent at the end of 2015 and stood at 80 per cent as at the end of June 2016. In a report released in November last year, the HCM City Securities Corporation (HSC) predicted that Eximbank would continue to record heavy losses in the fourth quarter of 2016 and that profit figures were unlikely to turn around in the short term. Non-performing loans (NPLs) fell from 5.3 per cent as at the end of June to 3.35 per cent as at the end of September, thanks to the conversion of bad debts to bonds from the Vietnam Asset Management Company (VAMC). But its adjusted bad debt rate is the highest among the group of listed commercial lenders, at 8.7 per cent, followed by Sacombank with 7 per cent and Saigon-Hanoi Bank with 4.9 per cent, according to a banking report released in December last year by Vietcombank Securities. http://vneconomictimes.com/article/banking-finance/eximbank-schedules-2017-agm-amid-mountain-of- bad-debts

Moving in 02/Feb/2017 Intellasia | Vn Economic Times Foreign banks did well in Vietnam during 2016 and more are set to arrive in the country in 2017. 2016 was as equally as tough as, if not tougher than, 2015 for Vietnam's banking sector, with two of the greatest challenges facing the industry remaining bad debts and high credit growth. With around VND200 trillion ($8.78 billion) in bad debts parked at the Vietnam Asset Management Company (VAMC), it is critical for the private sector, including foreign investors, to participate in banking sector restructuring, which is in line with the State Bank of Vietnam (SBV)'s expectations. On a positive note, both the central bank and banks themselves have been recognised for their efforts in bringing down lending rates to support business while maintaining foreign exchange stability. Domestic banks have been more proactive in resolving bad debts via selling them to VAMC or provisioning to cover losses. In the midst of all that, foreign banks have quietly deepened their presences in the country's banking sector with no great fanfare. Ups and downs Unlike domestic banks, which must publicly report their financial statements to the SBV each quarter, the performance of foreign banks remain largely unknown as they are not subject to the same requirements. HSBC Vietnam and ANZ Vietnam were among the first to gain approval to open as wholly-owned units in Vietnam, in 2008 and 2009 respectively. 2016 was a great year for the largest foreign-owned bank in Vietnam in terms of total assets and registered capital. Pham Hong Hai, CEO of HSBC Vietnam, told VET that the bank has enjoyed an increase in customer advances reflecting continuous support in customer operations. The bank has maintained its capital strength and strong liquidity and capital, with a rather high 18 per cent capital adequacy ratio as at June 30. Together with steady interest income of VND1.12 trillion ($49.2 million) and fee and commission income of VND327.2 billion ($14.4 million), the bank recorded impressive year-on-year growth of 47 per cent in foreign currency exchange, generating a net gain of VND448.8 billion ($19.7 million) in the first half. As at June 30, its bad debts had fallen to 0.97 per cent of its total loans, from 1.06 per cent at the end of 2015. From such figures, HSBC Vietnam recorded a handsome after-tax profit of VND785.4 billion ($34.5 million) in the first half of 2016, an 18 per cent increase year-on-year. The Hong Kong-based bank also continued to top the list in total card payment volumes and total credit card payment volumes for the sixth year in a row, according to VISA International. ANZ Vietnam, meanwhile, recorded modest results in the first half. Interest income fell 17.3 per cent year-on-year to VND578 billion ($25.4 million) and fee and commission income was down 5.6 per cent year-on-year to VND153.3 billion ($6.7 million). The bank would have made a loss if drastic changes in other income sources had not saved the day. From a net loss of VND21.7 billion ($953,000) during the first half of 2015, foreign currency exchange recorded a net gain of VND163.3 billion ($7.2 million) for the bank in the first half of 2016, securing an after-tax profit of VND176.8 billion ($7.7 million) as at June 30, up 30 per cent year-on-year. Its bad debt ratio rose to 1.25 per cent from 1.16 per cent as at the beginning of the year. Ins and outs 2016 continued to witness an increasing flow of foreign direct investment (FDI) into Vietnam, with an estimated $18.1 billion new and additional capital in the first eleven months. South Korea remained the largest investor, with 5,656 projects and $52.58 billion in capital, accounting for 30 per cent of all FDI. Three banks joined the five existing fully foreign-owned banks: Malaysia's Public Bank Vietnam received a license in March, its compatriot CIMB Bank Berhad, with registered capital of VND3.2 trillion ($144 million), was granted a license in August, and Woori Bank - the largest South Korean bank in terms of consolidated assets - made it eight in early November. The lender to leading South Korean giants such as Samsung, Lotte, LG, and Posco believes that Vietnam, with its unlimited growth potential, has made the world sit up and take notice and is an important strategic market. With two existing branches in Hanoi and HCM City, Woori expects to open 21 branches and transaction offices nationwide over the next three years. One way or another, the South Koreans are coming, not with K-pop but with bank branch openings. In August, BNK Busan Bank opened a branch in HCM City, becoming the first South Korean regional bank to stake out a presence in the south of Vietnam. Nong Hyup also made its way into the country after receiving in principle approval for a branch in Hanoi. While some are arriving, others may be departing. ANZ Group CEO Shayne Elliot was quoted as saying to foreign media in October that the bank would look to exit its retail and wealth assets in the Philippines and Vietnam, but has no plans to do likewise in Cambodia and Laos. "Further investments do not make sense for us given our competitive position and the returns available to ANZ," he said. In response, an ANZ Vietnam representative told local media in early November that there are currently no plans to sell its retail and wealth businesses in Vietnam but it will continue to examine ways to improve its retail and wealth operations. Looking at its modest figures for the first half of 2016, however, the immediate future may will be a test for the bank's long-term commitments in Vietnam. Diversified approach Many analysts say that foreign banks, with little understanding about Vietnam and a limited retail network, are no real threat to domestic banks. While neither targeting to dominate the local banking market nor suffer from low profits or losses, foreign banks have identified their own strategies to access undeveloped sections of the market while also turning local banks' limitations into their own strengths. Support for female entrepreneurs remains lacking to say the least and their existence is still underestimated in Vietnam. In 2016, Standard Chartered Bank Vietnam entered into a one-year partnership agreement with the HCM City Association for Women Executives & Entrepreneurs (HAWEE) to provide fast-track term loans at preferential interest rates for the Association's corporate members. Technological innovations are shaping developments in the banking sector but domestic banks, with limited capital and experience, have exhibited shortcomings in staying abreast of trends. Standard Chartered Bank Vietnam, with deep roots and a broad knowledge of the market, has been one step ahead by bringing the best possible convenience to customers. The London-headquartered bank was the first to launch a travelling app in the local market, which allows credit card holders to access 800+ airport VIP lounges worldwide, while "The Good Life" offers cardholders discounts at more than 700 merchants in Vietnam and more than 3,500 throughout Asean. "We are one of very few banks in Vietnam offering digital banking and are highly successful at it," Nirukt Sapru, CEO of Standard Chartered Bank Vietnam, told VET. Last year saw quite a few fraudulent payments plaguing domestic banks such as VPBank and the semi- private BIDV and Techcombank. With one bank employee accused of stealing funds from accounts, customer belief and loyalty have undoubtedly been challenged at these local financial institutions. While domestic banks are now in the midst of closing loopholes, foreign banks have, in general, been quick to adapt to the circumstances. "Building a culture to fight against financial crime is the ultimate priority for HSBC Vietnam," Hai said. For this year, "we will continue to provide training while enhancing our systems and people to detect and deter criminal activity, protecting the bank, its employees, and society against any threats." Real threat Soon enough, Vietnam will see even stiffer competition from the arrival of new foreign banks. Primarily located in the larger metropolitan areas, with access to FDI enterprises and export-oriented businesses, foreign banks are at an advantage from their global connections compared to domestic banks as economic integration continues. More importantly, they are also tapping into market segments where domestic banks are standing still. In 2017, HSBC Vietnam commits to "leveraging our international network to support the business of our clients, specifically focusing on business corridors with top FDIs in Vietnam and industry leaders, providing them with one-stop solutions while growing our retail portfolio," Hai said. "We will continue to digitalise to further streamline our processes, deliver automation to our corporate clients and enhance our digital channels to increase customer engagement in the retail business." Woori Bank isn't about to waste too much time on its opening celebrations, and plans to boost its retail business by establishing transaction offices in northern and southern provinces and entering the credit card market in the first half of 2017. The bank also plans to connect various deposit and loan products, including mortgages, credit loans and bancassurance, offering comprehensive financial services to Vietnamese customers. Meanwhile, "serving small and medium-sized enterprises (SMEs) will be a key task for Standard Chartered Bank Vietnam in 2017," said Sapru. In November the bank implemented a preferential credit package worth VND330 billion ($14.5 million) in an effort to promote the business activities of SMEs in HCM City. The package will primarily be used to realise its Bank-Business Connectivity Programme and remove financial difficulties facing businesses. There is not much time left for domestic banks to up their game, especially following the establishment of the Asean Economic Community in 2015, with more foreign banks expected to arrive Vietnam. By 2020, in accordance with commitments made to the WTO, Vietnam will have to completely open the doors of its banking sector. Sadly, "there are still too many banks offering terrible products in Vietnam," Sapru said. Those that do not make the cut will be left behind. "Only banks that really understand the needs of customers and offer superior quality services and products will win," he believes. http://vneconomictimes.com/article/banking-finance/moving-in

Reference exchange rate drops 3 dong 02/Feb/2017 Intellasia | VNA The State Bank of Vietnam revised the reference VND/USD exchange rate down 3 VND from January 25 to 22,199 VND on the morning of February 2. With the current/- 3 percent VND/USD trading band, the ceiling exchange rate is 22,864 VND per USD and the floor rate is 21,534 VND per USD. Vietcombank set the buying rate at 22,560 VND and the selling rate at 22,630 VND, for one USD, unchanged from January 25. Eximbank adjusted its buying and selling rates up 30 VND to 22,550 VND and 22,650 VND per USD, which remained unchanged from January 25. BIDV listed the buying rate at 22,580 VND per USD, up 40 VND, and the selling rate at 22,650 VND per USD, up 10 VND, in comparison with the January 25 level. http://en.vietnamplus.vn/reference-exchange-rate-drops-3-vnd/106605.vnp

Vietnam takes stronger stance against banking reform evaders 02/Feb/2017 Intellasia | VnExpress Banking bigwigs are going to have to show how they got so rich in the first place. Vietnam is planning to introduce a law that requires large shareholders in privately-owned banks to disclose their assets and incomes to prove they are in a financial position to own stock. The move is an aggressive signal that the Vietnamese government is seeking ways to clean up a banking system saddled with Southeast Asia's highest ratio of non-performing loans. Bad debts have been a burden on Vietnam's economic growth since 2012 when total non-performing loans, mostly in the real estate sector, reached VND280 trillion ($12.5 billion), equivalent to 11 percent of gross domestic product. State Bank Governor Le Minh Hung has vowed to crack down on abuse of power and stock manipulation by groups of large shareholders at banks. "We will be introducing stricter regulations requiring bank chiefs to disclose how they have financed their stock ownership," Hung said at a recent meeting in HCM City. "They could be banned from joining a board of executives for life if they are caught breaking the law." The central bank has already nationalised troubled lenders Global Petro Bank, Vietnam Construction Bank and Ocean Commercial Bank for failing to restructure. "I believe that the plan will provide us with the proper tools to keep these banks under control and restore the people's confidence in the banking system," said the governor. http://e.vnexpress.net/news/business/vietnam-takes-stronger-stance-against-banking-reform-evaders- 3533652.html

Cash demand soaring ahead of Tet holidays 02/Feb/2017 Intellasia | VnExpress Crowds of up to 50 people have been seen outside banks even hours before they opened. Despite the rapid development of electronic payment systems in Vietnam, demand for cash particularly runs high ahead of the Lunar New Year. People are queuing at cash points these days to withdraw money for big holiday spending that will include gifts for families and relatives and cash-filled red envelopes meant to bring good luck in the New Year. Bank staff in major cities have been stressed out in recent days handling transactions for clients who are willing to wait in long lines before opening time. Meanwhile, many people say they've been unable to log in to their bank accounts because the system is constantly crashing. The central bank has been pouring cash into the banking system to make sure ATMs across the country don't run dry ahead of the Lunar New Year celebrations this weekend. However, several ATMs in Hanoi and HCM City have been out of service over the past few days. "I desperately need to make a cash transfer but despite several attempts this morning, I've been unable to access the internet banking services that my bank has strongly urged its clients to use to avoid an endless wait at the counter or at ATMs," complained Tran Hang, a Hanoi resident who spent about half an hour trying in vain to log in to her online bank account. Crowds of up to 50 people have been seen outside banks even hours before they opened. "We have dispatched more staff from headquarters but it's still challenging to handle this sudden surge in demand," said a branch director, adding that over the past few days the lights in his office were still on at 9 p.m. Things are less stressful in the country's southern business hub HCM City as many migrant workers from industrial parks on the outskirts of the city have traveled home for family reunions ahead of Tet. "I only had to wait for about 5 minutes to withdraw money from the ATM. Just a few days ago I must have waited for more than an hour," said Ha, a blue-collar worker at the Tan Thuan Export Processing Zone. A senior Vietcombank official said demand for cash in the run-up to Tet is two to three times higher than usual as people often get their end of the year bonuses just before the holidays. "We are trying stop our ATMs from drying up but the traffic is so heavy that we can't restock the machines in time," he said. However, it is difficult to calculate exactly how much is needed for Lunar New Year spending and how much is needed to keep the banks liquid. http://english.vov.vn/economy/cash-demand-soaring-ahead-of-tet-holidays-342469.vov

Vietnam continues pursuing plan to raise the value of dong 03/Feb/2017 Intellasia | Vneconomy January 11, 2017 has passed in silence. That is the anniversary of 10 years that Vietnam officially joined the World Trade Organisation (WTO). However, there are many worth remembering events. Six months after joining the world largest trade organisation, on July 4, 2007, the prime minister issued Decision No. 98/2007/QD-TTg approving the scheme on convertibility enhancement of dong, overcoming the dollarisation in the economy. So far, the scheme has been implemented for 10 years. Many issues in negotiations, integration commitments in the field of currency was put forward, protected, agreed, approved or selected following the roadmap, etc. The scheme on convertibility enhancement of dong was accordingly more related, especially in the liberalisation of capital transactions. Even, a year earlier, in 2006, to prepare for the planned WTO accession, Vietnam had to carry out liberalising current transactions, and this point was recognised by the International Monetary Fund. The liberalisation of current transactions was also one of technical conditions to help improve the convertibility of dong in the international market. Back to 10 years ago, in the WTO accession atmosphere shown evidently in the markets, in the information flow, the scheme on improvement of the convertibility of dong following integration must certainly be put under general expectation. In that integration atmosphere, to put it simply, enhancing the convertibility of dong may be seen from a specific, "romantic and uplifting" desire i.e. Vietnamese people may hold dong when travelling abroad, or businesses can easily make payment of orders to foreign partners in dong instead of throbbing with the exchange rate. More broadly, if the convertibility is improved, the external relation position of dong, the value in import and export payment and operation of macro economy will have more favourable conditions to have better results. Like ten years ago, when introducing the scheme, the government stated: "In the current context of economic globalisation, raising the convertibility of the currency has important implications for economic development career and international integration process. With the liberalisation trend of trade and investment, the currency with high convertibility will link domestic economy with the world, supporting, promoting foreign economic development, strongly attracting foreign sources of capital, improving competitiveness and creating national position in international market. The currency with high convertibility will also reduce the dollarisation, thereby improving the operating efficiency of monetary and exchange rate policy". Two halves of implementing the scheme need to be reviewed: the degree of convertibility in domestic and international markets. After ten years, the plan to improve the convertibility of dong can be said to achieve only half, but is valuable and important. Ten years ago, the convertibility of dong in the country was even limited by the goldenisation and dollarisation at high level, facing disadvantages due to rising inflation. Capital in gold, foreign currency used to be popular in the capital mobilisation of the banking system, in the psychology and asset accumulation habit of the people. Overall, the government used to assess: "Based on the development of the economy, the level of dollarisation, the level of the banking system, payment service, scale and performance of financial markets, the inconvenience in usage, and especially the rise of inflation rate, we may say, the position of dong is not high, the market does not really trust and prefer; dong still virtually has no convertibility abroad". So far, after ten years, the value of dong has been confirmed: the convertibility of dong in the country was enhanced and strengthened. The evidence was the dollarisation rate declined dramatically in recent years, the capital in gold was completely removed from the mobilisation and lending structure in the banking operation, inflation was controlled at low level; the value and position of dong was strengthened and the exchange rate remained stable; the national foreign exchange reserves rose to a record in 2016. However, conditions for the enhancement of convertibility of dong in international market are still far from reality. As per the general analysis of experts ten years ago when the aforementioned scheme started to be carried out, technically, to improve the international convertibility of dong, there must satisfy essential requirements such as liberalising current transactions, loosening capital account transactions, floating exchange rates, there must have a financial market, especially an open foreign exchange market. So far, after ten years, the basic requirements are still there, the US dollar/dong exchange rate has not been floated, the liberalisation of capital transactions is still gradually reviewed in selective direction. And in fact, if determining in a general way, dong still cannot be the currency with high international convertibility, confirming its position as a strong currency in a strong economy. Or the "romantic and uplifting" desire of Vietnamese people to be able to hold dong when travelling abroad is still not feasible on a large scale, even very narrow; or businesses have yet been easy and convenient in making payment and investing in dong. The aforementioned other half of the goal on enhancement of convertibility of dong accordingly still continues to be put in place although the roadmap is still very far. In 2016, the prime minister approved the scheme on orientation of roadmap on Vietnam's liberalisation of capital transactions, stating that in the context of the stable macro economy, supporting factors in the financial and monetary markets are strengthened, it is necessary to consider developing policies to enhance the convertibility of dong in international market. Specifically is to allow using dong to invest abroad with capital receiving countries to be the ones that have agreement on investment and payment in local currency with Vietnam, allowing dong to engage in lending transactions abroad in case the borrower has demand for using loans in dong to pay directly to the beneficiaries in the territory of Vietnam or clearing for the third party in dong. That is the next technical steps that the State Bank will start implementing since 2017 under Directive No.01 that the Governor has issued.

Eximbank reports over 300b dong profit in 2016 03/Feb/2017 Intellasia | Tri Thuc Tre Vietnam Export-Import Commercial Joint Stock Bank (Eximbank - coded EIB) has announced Q4/2016's consolidated financial statement. Accordingly, the bank's total assets reached more than 128 trillion dong, up slightly from the beginning of the year. Loans to customers touched more than 86 trillion dong, up 2.5 percent. Customers' deposits hit more than 102 trillion dong, up nearly four percent. In Q4, Eximbank's net interest income was nearly 700 billion dong, down 26 percent year-on-year. Cumulatively, the net interest income was more than three trillion dong, down 9.2 percent. Notably, Eximbank's business activities in the last quarter brought about flourishing results. Service activity earned 81 billion dong profit, forex trading activity yielded nearly 100 billion dong profit, investment securities trading also brought about more than 13 billion dong profit, all were more positive than the same period last year. Operating expense decreased 20 percent to 556 billion dong. Provisioning cost was also cut strongly 82 percent to 165 billion dong. After deducting expenses, Eximbank's total pre-tax profit was 188 billion dong, improving compared to the negative 617 billion dong in the same period of 2015. In the whole year, Eximbank earned 390 billion dong pre-tax profit, more than six times higher than the previous year. The bank's after-tax profit was 308 billion dong. Eximbank's total bad debt was 2.558 trillion dong, accounting for 2.94 percent of the total outstanding loan, up from the beginning of the year (1.85 percent). Bad debts mainly soared in group 3 (sub-prime debt). Recently, Eximbank announced to organise 2017 annual general meeting (AGM) on April 21 in HCM City. The meeting is expected to discuss some contents expected to present to the extraordinary general meeting in 2016; contents under the jurisdiction of the AGM in 2017; additionally elect board members for tenure VI (2015-2020) and some other contents under the jurisdiction of the AGM. The bank will receive opinions of shareholders/shareholder groups nominating candidates to hold the post of member of the Board of directors from February 21, 2017 to June 3, 2017 and is expected to check nominations from July 3, 2017 till March 17, 2017. On March 20, 2017, Eximbank is expected to submit to the State Bank of Vietnam for its approval of personnel expected to be additionally voted to the Board of directors before voting at the AGM. In 2016, Eximbank did not organise the shareholder meeting successfully twice. The first one was because there were not enough attendants. The second time was because of intricacy and unwanted reasons. The third meeting was expected to be organised on August 2, 2016 but the bank declared to postpone. As said by the bank's board of directors, on July 29, the state bank steered Eximbank o test and review some information related to the nomination of the entire group of shareholders to report before the state bank approved additional members of the board.

Vietnam banks offer promotions as gold market tenses for God of Wealth Day 03/Feb/2017 Intellasia | Tuoi Tre News Banks in Vietnam return after the Lunar New Year festival with promotions to attract deposits while the local gold market builds up speed in anticipation of the God of Wealth Day. At Saigon-Hanoi Bank (SHB), customers who add from VND20 million (US$893) to their savings accounts on the days immediately after the Lunar New Year (Tet) fest, which lasted a week from January 28, are given codes to participate in lucky draws to win valuable prizes. Other banks hand out 'lucky money' to the first customers after the week-long Tet holiday, while Vietnam Export Import Bank (Eximbank) returns VND100,000 (US$4.5) for every VND100 million (US$4,464) deposited in those savings accounts with terms of between 15 and 36 months. Those who open a new savings account at Southeast Asia Bank (SeABank) are given a gift voucher for shopping at the BigC supermarket chain, the value of which depends on the amount of money deposited. Many local banks had raised their deposit interest rates by 0.1-0.2 percentage points prior to Tet, with the highest interest at Eximbank and DongA Bank currently at 7.5 percent for long-term deposits. Meanwhile, local gold dealers have also returned to business on Thursday as global prices are rising in the wake of the weakening of the US dollar since US President Donald Trump took office last month. Gold supplied by HCM City-based Saigon Jewellery Company (SJC) are selling at VND37.55 million ($1,676) per tael (37.5 grams) and being bought at VND37.1 million ($1,656) per tael, according to local gold dealers. Experts predict Vietnam's gold market to be building up speed in the coming week as locals wait for the God of Wealth Day to buy their first gold in the new lunar year in the hope of a prosperous year. As per Vietnamese tradition and custom, the tenth day of the lunar year, which will fall on February 6 this year, is the day when the God of Wealth returns to heaven, creating the belief that buying gold then will bring good luck and prosperity throughout the year. http://english.vov.vn/trade/vietnam-banks-offer-promotions-as-gold-market-tenses-for-god-of-wealth- day-342698.vov

Sacombank saw a business downturn in 2016 03/Feb/2017 Intellasia | Vn Economic Times The HCM City-based bank is named as one of the top five banks to undergo restructuring processes in 2017 due to dismal 2016 financial reports. Sacombank recorded a total loss of VND18.5 billion ($817,145) during the fourth quarter of 2016. This confirms the pre-tax profit for the whole year 2016 of only VND531 billion ($23.4 million), down 64 per cent year-on-year, the bank's consolidated financial statement for 2016's fourth quarter showed. As of December 31, 2016, the bank's total assets stood at VND333.3 trillion ($14.7 billion), up 14 per cent from the start of the year. Customers lending was recorded at VND198.8 trillion ($8.8 billion), up 6.9 per cent year-on-year while customer deposits reached VND291 trillion ($12.85 billion), up 11 per cent year-on-year. During 2016's fourth quarter, net interest income reached VND1.4 trillion ($61.8 million), up 54 per cent year-on-year but the full year figure went down by 22 per cent year-on-year and stood at VND5.12 trillion ($226.1 million). Most of the bank's activities during the September-December period were less than satisfactory except services which brought a net income of VND418 billion ($18.5 million), up 19 per cent year-on-year. Foreign currencies trading saw a heavy loss of VND275.2 billion ($12.1 million) even though loss of this activity in 2015's fourth quarter was only VND29 billion ($1.3 million). Against a profit of VND16 billion ($706,720) in 2015's fourth quarter, securities trading recorded a loss of VND2.6 billion ($114,842) in 2016's fourth quarter. Net loss from investment securities was recorded at VND37.4 billion ($1.6 million) for the quarter. During the fourth quarter, operating costs surged by 29 per cent to VND1.58 trillion ($69.8 million). But the total loss of the quarter, despite being recorded at VND18.5 billion ($817,145), was only "secured" because Sacombank had cut down its credit risk provision from VND1.13 trillion ($50 million) in 2015's fourth quarter to VND23.5 billion ($1.04 million) in 2016's fourth quarter. Its net operating revenue during the period stood as low as VND5 billion ($220,850), down 91 per cent year-on-year. The bank revealed its full year's pre-tax profit of VND531 billion ($23.4 million), down 64 per cent year- on-year, and an after-tax profit of VND372 billion ($16.4 million). Its charter capital remained at VND18.85 trillion ($832.6 million) as of December 31, 2016. Last month, Sacombank was named one of the top five banks to undergo restructuring in 2017, together with the three zero dong banks that the central bank acquired for the price of zero dong in 2015: the VNCB, PG Bank, Ocean Bank and Dong A Bank. It became the fifth-largest lender in the local banking sector in 2015 after the voluntary merger with Southern Bank. But while the State Bank of Vietnam (SBV) has praised the joint entity, saying it had synergy that brought greater benefits to shareholders and customers, Moody's confirmed the merger resulted in high solvency and liquidity risks for Sacombank. In its October 2016 report, it changed the bank's outlook to negative because its problem assets had been increasing substantially since the pre-merger period and its credit provisions were slim by the end of June. That's not the only thing working against Sacombank, as related risks include its corporate behavior, opacity and complexity. The corporate behavior risks originate from the situation where the majority of Sacombank's shares are managed by the SBV, which creates uncertainty around the financial health and future development of the bank. Opacity risks stem from the fact that the bank has not yet published its audited financial report for 2015, which raises the possibility they may be restated. "The negative outlook for Sacombank reflects the uncertainty around the strategic direction of the bank, its unclear ownership structure, and the true scope of asset quality challenges," wrote Moody's. In its latest response, Sacombank Chair Kieu Huu Dung declared that Sacombank is not a weak bank, pointing out that it still leads the commercial group. He also revealed that many potential investors are keen to lend a hand to address the consequences of the Southern Bank merger, and, in the meantime, the bank's restructuring plan is to be submitted to the central bank. "We are determined to start the process as soon as the plan is approved," he added. http://vneconomictimes.com/article/banking-finance/sacombank-saw-a-business-downturn-in-2016

Vietinbank recorded $378m pre-tax profit in 2016 03/Feb/2017 Intellasia | Vn Economic Times It continues to be one of the leading banks in State budget contribution. Vietinbank posted a 2016 pre-tax profit of VND8.53 trillion ($378 million) and an after-tax profit of VND6.825 trillion ($302.4 million) according to the bank's consolidated financial statement for 2016's fourth quarter. As of December 31, 2016, Vietinbank's total assets stand at VND948.7 trillion ($42 billion), up 22 per cent year-on-year and have a charter capital of VND37.2 trillion ($1.65 billion). During the fourth quarter, customer deposits reached VND654.4 trillion ($29 billion) while customer lending stood at VND662 trillion ($29.3 billion). During the September-December period, the bank's after-tax profits reached VND1.63 trillion ($72.2 million), up 30 per cent year-on-year while pre-tax profit stood at VND2.045 trillion ($90.6 million), up 26 per cent year-on-year thanks to significant improvements in some of the bank's activities. Net revenue from foreign currencies trading during the fourth quarter was VND210 billion ($9.3 million), up VND286 billion ($12.7 million) 378 per cent year-on-year. Net revenue from capital contribution, equity investments was recorded at VND91 billion ($4 million), up VND103 billion ($4.6 million) or 839 per cent year-on-year. During the fourth quarter, net revenue from services stood as high as VND488 billion ($21.6 million), up VND92 billion ($4.1 million) or 23 per cent year-on-year. The bad debts rate fell as low as 1 per cent by the end of December 31, 2016. Credit provision cost during the fourth quarter was as low as VND44 billion ($1.95 million), down 95 per cent year-on-year. However, the whole of 2016's credit provision cost reached VND5 trillion ($221.5 million), up 7 per cent year-on-year. The bank's return on equity (ROE) and return on assets (ROA) were 10.9 per cent and 1 per cent respectively in 2016. It continued to be one of the leading banks in State budget contribution, with a total of more than VND2.274 trillion ($100.7 million) contributed to the State budget during the year. This year, Vietinbank will completely settle bad debts instead of in 2018 as planned earlier and will keep bad debts at only 0.5 per cent of total outstanding loans in 2017. From 2007 to 2010, Vietinbank settled nearly VND10 trillion ($440.52 million) of bad debts through a provision of risk loans and a recoupment and sales of bad debts. During the bank's end of the year conference that was held last month, Chair Nguyen Van Thang revealed that Vietinbank will merge with PG Bank in the times to come. Also, the bank sets to raise its total assets by 15 to 17 per cent and outstanding credit by 18 per cent this year. On an earlier note, the bank issued non-convertible five-year bonds worth VND2 trillion ($88.6 million) at annual interest rate of 5.8 per cent. Compared with the interest rates of other bonds issued recently, the 5.8 per cent rate is considered to be the lowest rate. It's even lower than the 7 per cent interest rate per year for deposits that are over three years in Vietinbank. In December of 2016, the bank also issued 10-year bonds worth VND2.9 trillion ($128.5 million) at and interest rate of 7.5 per cent for the first five years. http://vneconomictimes.com/article/banking-finance/vietinbank-recorded-378m-pre-tax-profit-in-2016

Vietnamese banks named among world's most valuable brands 03/Feb/2017 Intellasia | VnExpress BIDV, Vietinbank and Vietcombank have once again been listed in the top 500 banking brands compiled by Brand Finance. The UK business consultancy company Brand Finance has recently listed three Vietnamese lenders among the world's 500 most valuable banking brands of 2017. The Bank for Investment and Development of Vietnam, or BIDV, ranked 401st with a brand value estimate of $255 million, up $37 million and 12 spots from a year ago. Meanwhile, Vietinbank fell out of the top 400 to hit number 408 this year. Vietcombank, another major lender, was ranked at 461st with a brand value of $201 million total, down 11 spots. The three banks were also named in Forbes' list of 2,000 largest companies in the world last year, with BIDV coming in at number 1691, followed by Vietinbank at 1808 and Vietcombank at 1843. This year, China's Industrial and Commercial Bank of China (ICBC) surpassed the US bank Wells Fargo to top the Brand Finance list with a value of $47.8 million, up 32 percent year-on-year. The U.S lender, after seeing its brand value fall by 6 percent, followed with $44.1 million. http://e.vnexpress.net/news/business/vietnamese-banks-named-among-world-s-most-valuable-brands- 3535469.html

Reference exchange rate goes down 1 dong 03/Feb/2017 Intellasia | VNA The State Bank of Vietnam set the reference VND/USD exchange rate at 22,198 VND per USD on the morning of February 3, down 1 VND from the day before. With the current/- 3 percent VND/USD trading band, the ceiling exchange rate is 22,863 VND per USD and the floor rate is 21,534 VND per USD. The opening hour rates listed by commercial banks saw rises from the previous day. Vietcombank bought one USD for 22,605 VND, and sold one USD for 22,675, up 45 VND. BIDV listed the buying rate at 22,620 VND per USD and the selling rate at 22,690 VND per USD, up 40 VND. In Eximbank, the buying rate was 22,590 VND per USD, up 40 VND, while the selling rate was set at 22,680 VND per USD, up 30 VND. http://en.vietnamplus.vn/reference-exchange-rate-goes-down-1-vnd/106653.vnp

Corporate

Agricultural production chain attracts billions of US dollars of foreign capital 02/Feb/2017 Intellasia | BizLive Many foreign businesses and investment funds are pouring tens to billions of US dollars in agricultural value chain in Vietnam. Raj Sharma - CEO of Sunrise Orchards Company (USA) said on the first days of 2017, this business signed a commitment with the Institute of Vietnam Organic Agricultural Economics on investment of $1 billion to develop agricultural value chain in Vietnam, in which Tay Ninh province is selected as the initial model. Under the tentative plan, Sunrise Orchards will make long-term investment in 50 years to develop fruit growing area and processing plants of international standard in order to gradually bring Vietnam's agricultural products to access to the US market. Together, this $1 billion of capital is also used to build distribution channel for importing products that Vietnam has not been able to grow (typically walnuts) and synchronously develop agricultural value chain through investment in other ancillary works such as hospitals, resorts, etc. "Vietnam origin tropical vegetables are favoured in temperate countries, but these kinds of agricultural products are still caught by many barriers in terms of quality, so it is very difficult to assess these potential markets. With this investment plan, I will bring the world leading technology to apply on the basis of taking favourable conditions in soil, climate, water resource, and then act as distribution agent to help farmers feel assured of farming", said Raj Sharma. Recently, United Technologies Carrier Corporation (USA) also signed commitment to support Tay Ninh province to access capital through the Green Climate Fund to develop cold supply chain system under advanced standards to minimise post-harvest losses. Under the scheme to be completed in this June, the investment package worth about $90 million and is disbursed in two forms i.e. non-refundable financing and preferential financing. Currently, many businesses, foreign investment funds are also seeking and initiating the funding process, of which Japan is considered as a country pioneering in the investment in strong links in the agricultural value chain such as human resources training, development of wholesale market system and agricultural product processing line. Typically, Daiwa investment fund under Daiwa Securities Group Inc. agreed on cooperation contents with Lavifood JSC (Long An) that operate in the field of fruit processing for export. Investing in the value chain of the agricultural sector, many businesses said this model requires strong financial strength as the chain's construction cost in the early stage is tremendous. Gabour Fluit, CEO of Co. De Heus Co., Ltd (under De Heus Group, the Netherlands) cited that this unit has signed a partnership with Hung Nhon Company (Binh Phuoc) to build a fresh food chain with the total investment estimated at about $50 million. Under the cooperation plan, this project forms a closed food chain from seed stage to finished products to supply the local market, targeting to export six groups of safety agricultural products with traceability. De Heus is the input quality assurance chain such as seed, food and arranges human resources to support Vietnam businesses in the process of growing and managing the chain. At the same time, it also works with two foreign companies in the field of fresh food management consulting from Belgium and the Netherlands so that the chain is independently controlled from seed stage to finished products. "The investment in traceability in livestock is very expensive, but this is the requirement and inevitable trend of the future market. When farms have stable operation and achieved international certification, the chain development costs will be reduced, profits are guaranteed for involving parties", said Fluit. As per the statistics of the Foreign Investment Agency (Ministry of Planning and Investment), as of the end 2016, there were 518 valid foreign direct investment projects with a total capital of over $3.6 billion, accounting for less than 1.3 percent of the total FDI. In 2016 alone, only 12 projects with foreign investment in agriculture, forestry and fisheries were newly granted with a total capital of nearly $45 million. The fact shows that the proportion of foreign direct investment in agricultural sector has increased over the years but still accounted for a very small, modest proportion and has not really matched with the inherent potential of the agricultural sector. However, this sector is still expected to be one of the potential keys in attracting foreign investment when the draft strategy on FDI attraction in agriculture by the Ministry of Agriculture and Rural Development is planned to be submitted to the government for approval in the first quarter of this year.

Railways lag behind in Vietnam 02/Feb/2017 Intellasia | VNA The decline of the railway's popularity in Vietnam is not new: back in 2010, the European Union labelled rail transport as the country's "least relevant" mode of transport. The issue was recently brought into sharp focus after Transport minister Truong Quang Nghia claimed the booming air transport industry had "scooped up" all the customers of other modes of transportation, especially of the railway. However, the reason that rail use lags behind other forms of transportation in Vietnam has more to do with weak infrastructure of the rail system, high overhead, expensive fares and loss of competitive edge. Dao Thanh Nga from Thanh Hoa central province worked as an accountant in Hanoi and had to travel regularly to Dong Hoi City in Quang Binh central province - her husband's hometown. In the past she used the train because of its safety, given that travel time was the same as road transportation, taking about 11-12 hours. "In train stations, direction signs have been erected, carriage entrances and exits are on the same level as the station, making things easier. (Trains offer) clean beds, helpful staff, nice food catering services, and on-time departures and arrival. The whole journey takes nine and a-half hours. Train travel has really improved, shedding its 'outdated' clothes," Nga told VietnamPlus e-newspaper. However, those improvements are not sufficient to keep customers like Nga, who now prefers affordable flights that offer the same service quality but shorter travel time: flight plus airport procedures take just under four hours, she said. "Airlines frequently offer low-cost deals. Sometimes, the total price for a round-trip stands at just about 1 million VND (44.2 USD). Meanwhile, a train ticket with air-con costs around 400,000 VND, and a ticket for a bed and air-con is priced as high as 800,000 VND. A wise customer will choose to travel by air," she said. According to Doan Duy Hoach, deputy general director of Vietnam Railways (VR), from 2013, passenger transportation via railways has been in a decline, even on 300 to 500km journeys, which previously rail transport dominated. There are many reasons for this sad state of affairs. Uneven investment Road transport continues to receive the lion's share of state budgets for development, and the allocation for the railway system pales in comparison. In 10 years, from 2001 to 2010, the total budget for transport infrastructure was approximately 160 trillion VND (7 billion USD), 88 percent of which went to road transport, while a mere 3 percent was targeted for rail transport. The dichotomy persists: in the next five years (2011-2015), nearly 90 percent of the colossal 330 trillion VND budget is reserved for road transport, and 3 percent for rail transport. Hoach said this was the leading reason that rail transport lags behind other modes of transportation, accounting for a meagre 1.14 percent of passengers and 2 percent of transported freight. According to him, the budget allocation could only meet 60 percent of maintenance requirements for existing infrastructure. Single tracks accounts for 85 percent of the country's railway network - an outdated infrastructure that greatly limits speed and capacity, a transport expert said. "For years, investment for upgrading the railway system has never increased," Pham Thanh Quang, representative of the Vietnam Railway Transport Economy Association, told the Thanh Nien newspaper (Young People). Meanwhile, Hoach said rail transport still relied on a system built during the French colonisation. Even with upgrades and regular maintenance, the 100-year-old infrastructure could not help but showed its age and failed to attract private investors. "Previously, two foreign investors invested in railroad operations, but the outdated infrastructure rendered their businesses futile. Even with five-star trains, their projects fell through," he added. He also admitted the main advantage of rail transport, namely safety on long-distance travel, could not make up for the inconvenience that customers had to endure. Competition For the time being, rail transport firms have no choice but to compete by providing better services. VR is implementing renovation projects on existing lines. This includes the trans-Vietnam route which is being upgraded to allow 19-20 pairs of trains to operate per night, reduce travel time from over 30 hours to 26-28 hours; upgrade train stations, coaches and online ticket sales; and strive for on-time arrival and departure (95 percent on-time trips). Train tickets are also on average cheaper than fares of other transport modes, especially air transport, but might be 5-15 percent higher than road transport, depending on the journey. "The aim of rail transportation is to cut back on costs, and then lower transport fares down to a level comparable to that of road transport," Hoach said. Nguyen Ngoc Dong, deputy minister of Transport, said that the government must assume a 'pivotal role' in railway infrastructure investment. The Ministry of Transport has submitted to the government an investment plan for a north-south railroad that would enable travel at 160-200km/h on a 1.345m double-track to accommodate both freight and passenger transport. "If we want rail transport to develop, the capital investment structure must be adjusted with a priority for railroad, but this adjustment requires time," Dong said. Back in September, Dong told a session of the National Assembly's Standing Committee discussing the adjustments to the Amended Law on Railway, that if the law was amended, "the State's role will be managing infrastructure while train services will be ceded to private businesses." "In 2017, when transport companies are equitised, business activities are expected to be more robust and proactive to gain back the lost costumers in an increasingly competitive market," Hoach said firmly. http://en.vietnamplus.vn/railways-lag-behind-in-vietnam/106586.vnp

VN E-commerce well placed to meet growth targets 02/Feb/2017 Intellasia | Bizhub E-commerce is no longer an option that Vietnamese enterprises can ignore. It has become an indispensable extension for businesses as a rapidly growing country with growing Internet connectivity deepens its global integration process. The development of multi-channel businesses that combines physical stores with an online presence has become an inevitable trend. Vietnam has a gross domestic product (GDP) growth rate of more than six per cent per year. Internet connectivity is growing by 50 per cent plus every year. Online marketing revenues in the country increased from $26 million to nearly $330 million in the 2010-2015 period. It is not surprising that with these advantages, the nation's e-commerce market has witnessed the entrance of large players in the last few years. The Vingroup officially stepped into e-commerce in 2015 with its Adayroi trading floor. Earlier, several savvy entrepreneurs had launched online shopping websites that became popular, like sendo.vn, nguyenkim.com, tiki.vn, zalora.vn and lazada.vn. The South Korean Lotte Group also entered e-commerce market in Vietnam last year with its lotte.vn website. It was followed soon by Japan's largest retailer Aeon, which launched aeoneshop.com at the beginning of this month. Given their brand prominence and their large story systems, aeoneshop.com and lotte.vn are expected to offer stiff competition to sites like lazada.vn and tiki.vn that currently dominate the domestic market. Tran Trong Tuyen, general secretary of the Vietnam E-commerce Association, told the Hai Quan (Customs) online newspaper recently that in the past, it was important for businesses to open their stores at a good location, but the situation has changed with 40 million Internet users having the option to buy things online. "If retail companies do not invest properly in e-commerce, they will gradually lose customers," Tuyen said. The newspaper also quoted Trinh Van Hoa, director of the Nguyen Kim E-commerce Centre, as saying that the centre studied customer's shopping habits and understood that they were looking for multi-business shopping facilities. Its focus on providing the most convenient shopping solutions for customers has seen the company grow rapidly in recent years, she said. The growth of the company, accordingly, also increased several times compared to the previous years, she said. Impressive figures E-commerce revenues in Vietnam reached $4.07 billion in 2015, a 37 per cent year-on-year increase. It also accounted for about 2.8 per cent of total retail trade and services revenue. Last year, e-commerce revenues increased to $5 billion, accounting for about three per cent of the total retail trade and services revenue. The popularity of Online Friday, a mega sales event held every December, has soared, with last year's sales of VND664 billion, triple that of the previous year. These figures show that the nation is well placed to meet its e-commerce targets. The 2016-2020 e- commerce master plan envisages $10 billion in business-to-consumner (B2C) turnover by 2020, accounting for five per cent the country's total retail sales. Despite the rapid growth and enormous potential, the e-commerce market share of Vietnamese enterprises was still modest, Tuyen remarked. He said that even though famous names like Tiki and Sendo had millions of users and tens of thousands of orders per day, they were limited to the national scale, and although e-commerce revenue in 2015 was five times that of 2012, the Vietnamese market, had yet to match world leaders. In the US, e-commerce transactions accounted for five per cent of total retail sales, and it was 9-10 per cent in China, and about three per cent in Vietnam. Shopping trends Market research firm Nielsen recently released the results of an online survey covering 63 countries It found more than six out of ten (64 per cent) Vietnamese consumers purchased fashion products online. More than half the Vietnamese respondents said they purchased books, music and stationery products (51 per cent) and 47 per cent said they bought travel products or services online. Four in 10 respondents (40 per cent) said they purchased personal-care and beauty products online. About one-fourth (26 per cent) said they placed online orders for babies and infants; an equal number ordered meal-kits or restaurant deliveries and one-fifth ordered packaged groceries online. http://bizhub.vn/tech/vn-e-commerce-well-placed-to-meet-growth-targets_283841.html

Vietnamese to be allowed to gamble in casinos 02/Feb/2017 Intellasia | VNA Prime minister Nguyen Xuan Phuc has signed a decree allowing Vietnamese to gamble at casinos in Vietnam. It will come into effect on March 15. The decree, titled 03/2017/NĐ-CP, allows foreigners and overseas Vietnamese situated abroad with a valid foreign passport to gamble in casinos in Vietnam. Vietnamese citizens can now also be admitted into domestic casinos, on a three year trial basis. After which, the government will decide whether or not to continue allowing domestic citizens to participate in casino gambling. All players must have full capacity for civil acts of individuals according to Vietnamese law and be willing to accept the terms and conditions of the games and the casino's regulations. Vietnamese citizens admitted into casinos 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 10 million VND (450 USD) or be subjected to third degree taxation according to the law on individual income tax. The Ministry of Finance is responsible for providing citizens application forms for these conditions. Only enterprises with a Certification of Business will have the legal right to run a casino. The business must be a conditioned commercial act that is closely inspected by the appropriate government authority to ensure operations follow the decree's regulations and other legal procedures, the decree dictates. Players must buy tickets to the casino at 1 million VND (45 USD) for 24 hours entry and 25 million VND (1,126) per person monthly. Players must not be related to casino owners in any way. Vietnamese players at casinos must exchange VND for tokens and vice versa. Vietnamese citizens who violated national security or committed other crimes abroad resulting in more than three years of imprisonment will not be admitted to casinos. This includes those serving jail time, with or without bail, or any other form of legal punishment. The decree did not restrict the amount of capital for business owners, but differentiated between large casinos (of more than 2 billion USD) and small casinos (less than 2 billion USD in capital). The decree states that the casino business must be linked to the entrepreneur's key commercial operations to help boost tourism, trade, diversify entertainment and recreation and enrich tourists' experience, while assuring security and nation defence, social order and moral health. The operation of and participation in gambling games must be transparent, coherent and honest, to protect the rights and legal benefits of parties involved. The decree bans gambling between players on results of games at casinos; cheating during preparation, organisation or participation in the casinos; any action that affects security and order in casinos and using gambling machines, tables, tokens and other devices with content not approved by the government. The decree also forbids the casino businesses from providing illegal gambling online or telecommunication networks, from smuggling and transferring foreign currency, precious gems and metals and other acts of money laundering, sponsoring terrorism and prostitution and paying out the wrong amount of prize money, among others. Organisations and individuals linked to the games' operations must comply with the decree in its entirety and other legal requirements. http://en.vietnamplus.vn/vietnamese-to-be-allowed-to-gamble-in-casinos/106621.vnp

MOIT works to boost auto industry localisation in 2017 02/Feb/2017 Intellasia | VOV The Ministry of Industry and trade (MOIT) has big plans to work closely with foreign and domestic automakers in hopes of making the country's auto industry a key economic manufacturing segment in 2017. Speaking at a recent business forum in Hanoi, minister Tran Tuan Anh of the MOIT expounded upon the opportunities for growth in the segment within the context of the larger AEC marketplace. Currently, the auto segment in Vietnam is comprised of some 400 manufacturers, principally smallholders, employing roughly 100,000 workers, said minister Anh, noting he would like to see those figures substantially expanded. Per MOIT statistics, the country's total production capacity for passenger vehicles is currently about 460,000 units per year, which are produced about equally by the foreign and domestic sectors. Since 2010, the country has principally been involved in the assembly of trucks and passenger busses with ten seats or more, noted minister Anh. The direstion he would like to see the industry focus on in 2017 is developing the small sedan segment with nine-seats or less, which are not only suitable for Vietnamese families and their budgets, but also matches the world trend towards smaller cars that consume less energy and are more environmentally friendly. While the domestic sector has been able to produce some simple parts - such as mirrors, glass, seats, electric wires, batteries, tubes and some plastic products - few companies have invested in advanced production technologies such as those used in the manufacture of auto bodies. In terms of sales prices in the retail market, auto prices in Vietnam remain relatively high when compared to other Asian countries. To purchase a passenger vehicle in Vietnam, customers must pay three types of taxes and five different fees. This leads to higher prices for autos produced in Vietnam, according to Michael Sieburg, associate partner at Solidiance, an Asia-focused management consulting firm headquartered in HCM City. However, with many bilateral and free trade agreements coming into force over the next couple of years, import taxes on auto vehicles and parts should greatly reduce, translating into opportunities for more price competitiveness in the market. Passenger vehicles with small engines should benefit the most from these lower tariffs and hence lower costs and the market should see strong retails sales growth from the synergy of lower sales prices combined with higher purchasing power of citizens as the country's middle income population rises. It is expected that there will be a new investment wave from global automakers setting up facilities in Vietnam with an eye on the regional market, fuelled by the government's policies aimed at encouraging and enticing investment. http://english.vov.vn/economy/moit-works-to-boost-auto-industry-localisation-in-2017-342434.vov

Real estate firms breaking the mould 02/Feb/2017 Intellasia | VIR 2016 was a successful year for the real estate market. However, with the fast growth of the economy and the real estate market, real estate developers are being forced to diversify products and apply more advanced technologies to anticipate the market of 2017. Sacomreal, the developer of Jamona Golden Silk, a villa project located in District 7 of HCM City, recently shocked the market with the inclusion of a garden plot behind every villa. This offer stepped up the lifestyle arms race by serving a need unnoticed by other developers. "This idea shows our efforts to respect our buyers. We believe that buyers will stay a long time with our projects, so we wanted to offer them something very special, very attractive," said a representative from Sacomreal. "This is what we need to do to woo buyers in a competitive market." Sacomreal's innovation directly targeted home buyers who wish to cultivate vegetables by themselves to ensure food security. Having a space for gardening is a dream of many prospective homeowners, who mostly sacrifice that hope for the convenience of living closer to the city. Other developers have also looked for ways to differentiate their products. Novaland public relations director Nguyen Thuy Duong carefully thought about how to promote Novaland's activities in 2017 - a milestone year for the company. With 24 years in real estate development, Novaland's brand is now entering its most important time yet. The company is considering innovations to better equip themselves to cope with the increasing demand of the market. In its development strategy, Novaland assigns five core standards to a real estate project: good location, reasonable pricing, suitable zoning, a track record of schedule and quality, and high liquidity. However, in order to keep up with the increasing demands of the market, developers like Novaland must diversify their portfolios. From its core field of residential development, Novaland has been expanding into officetels, resorts, and hotels. According to Greg Ohan, business development director of real estate consultancy JLL Vietnam, due to increased investment across all real estate sectors, certain local developers have stepped up their capabilities and improved their products, services, and offerings. This has allowed them to compete on a regional scale while remaining competitive in a local market now offering more options and choice. Ohan said that in the residential sector, 2016 saw Vietnam's first central business district (CBD) luxury residential project launched by a foreign developer, "D1mansion", through CapitaLand. The project, which was launched internationally in Singapore last year, has yet to be launched in HCM City. "The development attracted very strong demand and secured prices not seen in the HCM City CBD since pre-2006. Following this, local developer Son Kim Land recently launched a comparable CBD luxury project in January 2017, offering a quality not seen by a local developer prior, setting a high benchmark for all local and international residential developers," Ohan said. In order to attract more buyers to their projects, in addition to run-of-the-mill incentives such as discounts, lavish presents, and exemptions from management fees, developers have started creating additional incentives for prospective buyers. Many projects have now started to sell units when they are nearly finished, instead of selling units in advance. This gives confidence to buyers that they will be handed their units on time, without delay. According to Vu Anh Tam, general director of Tai Nguyen Real-Estate JSC and the developer of the Kenton resident project in HCM City, buyers only have to pay 30 per cent of the price for the project's units before they can move in. Thu Duc House in HCM City's District 9 has implemented the same policy. Le Chi Hieu, general director of Thu Duc House, said that changing the way of selling products is necessary to help his projects stand out from the hundreds of other projects in the same segment. "If you do not change your mindset and business approach, you can find yourself in very difficult circumstances," Hieu said. Many other marketing tools are also being used in real estate promotion, such as advertising in social media and advanced technologies in sales management to reduce cost and risk. Consultants have been introducing another method of diversification - those relating to capital inflows. Some have introduced Vietnam-based projects to Singaporean investors, which has resulted in a number of these investors coming to Vietnam to make real estate purchases. Other developers have set up special teams to deal with Japanese, Korean, and Chinese buyers. Innovations have also been seen in the industrial real estate sector, where local industrial park operators have improved their service offerings across the country, by partnering with a variety of experienced Japanese, Malaysian, and Singaporean developers. Factory and warehouse developers offer high-quality, international standards-based, incubation space, ready-built warehouses, and ready-built factory space to satisfy the requirements of multinational manufacturers. As the market matures, so too have the promotional mediums local developers have been employing. In the past, print media - particularly glossy magazines and local and foreign newspapers - were a critical part of any developer's 'below the line' marketing campaign. While many developers and agencies tend not to respect privacy and continue to spam through cold- calling, SMS, and smartphone applications, others have shifted to more innovative, cost-effective, and far- reaching mediums - in particular, those in social media. Online advertising is only expected to continue. As demand for Vietnamese property has now secured regional attention, such mediums have allowed local developers to expand their reach and cater to rising foreign investment interest. http://english.vov.vn/trade/real-estate-firms-breaking-the-mould-342589.vov

Steady foundations 02/Feb/2017 Intellasia | Vn Economic Times Some segments did better than others in Vietnam's real estate sector in 2016 but overall trends are positive. It's generally agreed that 2016 was a dynamic year for Vietnam's real estate market. Nguyen Manh Ha, deputy Chair of the Vietnam National Real Estate Association (VNREA), told the "Prospects for the Real Estate Market in 2017 - Impact of Policy" conference held in Hanoi in late December that the country's real estate market saw steady development in all segments during the year, with particularly strong growth in the high-end and luxury segments. Healthy year The property market picked up in number of units launched and sold, according to Stephen Wyatt, general director of JLL Vietnam. There were 40,000 units launched across all segments in HCM City, an increase of 62 per cent year-on-year, and 35,000 units sold across all segments, up 45.5 per cent. In Hanoi, approximately 36,700 units were launched across all segments, an increase of 30 per cent year-on-year, and 33,600 units sold across all segments, 19 per cent higher. New supply and sales in the condominium for sale market continued to be strong, with major developments by Vingroup, Son Kim Land, Novaland, Keppel, and Capitaland in HCM City, according to Nguyen Hoai An, director of Research, Consulting and Asset Management Services at CBRE Vietnam. Hanoi, meanwhile, saw ground broken at new sites in prime locations such as Lieu Giai and Giang Vo Streets in the mid-town area and Tran Duy Hung Street in the west. According to a Savills Vietnam report on the third quarter, eleven new projects and the next phase of one active project were launched in the condominium for sale market in HCM City, supplying more than 4,600 units, down a significant 47 per cent quarter-on-quarter. There were approximately 40,300 available units across all grades. Sales reached 7,500 units, an increase of 7 per cent quarter-on-quarter and 43 per cent year-on-year. In Hanoi, total primary stock was 17,000 units, down 2 per cent quarter-on-quarter but up 16 per cent year-on-year. Thirteen projects with fresh launches and ten newly-launched projects supplied 5,700 units, down 6 per cent quarter-on-quarter. There were approximately 5,700 sales, a decline of 6 per cent quarter- on-quarter and 15 per cent year-on-year. According to An, the market also welcomed new players with major projects, such as Maeda in HCM City and the Sunshine Group and the Sun Group in Hanoi. Regarding second home developments, Da Nang, Nha Trang, and Phu Quoc Island continued to be hospitality hot spots. New supply and sales of condotels surged in Nha Trang and Da Nang. Ha Long city and Sapa have also emerged in the sector, with significant projects including FLC Ha Long and Sapa Jade Hill. Large property developers such as the BIM Group, the Sun Group, Vingroup, and the CEO Group also entered the race to develop luxury resort properties on Phu Quoc Island in 2016. Da Nang remains on the radar for foreign investors in the hospitality market due to its long, white-sand beaches and increasing international connectivity. The city has pioneered luxury coastal homes and is second behind Nha Trang in total available property, with 1,199 villas and 3,367 apartments, according to a recent report from Savills Vietnam. Last year also saw more foreign players becoming involved in merger and acquisition (M&A) deals. Notable M&As included Low Keng Huat, a Singapore-based group, selling the Duxton Hotel Saigon in HCM City's District 1 to New Life RE for approximately $49 million, the Kumho Asiana Plaza Complex in HCM City being sold to Singapore's Mapletree Partner Investments Pte Ltd by the Kumho Industrial Company Limited, and the sale of the Sofitel Legend Metropole Hanoi. The supply of affordable apartments has continuously increased over the last few years in Hanoi and HCM City. In 2013 there were only some 4,200 units launched in Hanoi and 3,000 in HCM City. The figures tripled in 2015, with nearly 12,800 units launched in Hanoi and over 8,800 in HCM City. "The affordable sector is most likely to see higher growth than high-end or mid-end products," said Wyatt. government policies also gave the real estate market a boost in 2016. In the closing months of the year the real estate market has been especially dynamic in the affordable segment, with Vingroup planning to build 200,000 to 300,000 apartments under the VinCity name over the next five years at prices starting from VND700 million ($31,800). Figures from CBRE show that by the end of 2016 the affordable segment accounted for 26 per cent of total accumulated supply in Hanoi and 32 per cent in HCM City. The State Bank of Vietnam (SBV) issued Circular No. 06 during the year, replacing Circular No. 36 and aimed at tightening regulations on asset-liability management and real estate loans. The amendments show that the government has begun to look closely at the real estate market again as it does not want a recurrence of the difficulties experienced in 2007, when a property bubbled appeared and later burst. Circular No. 06, according to Le Hong Lien, Head of Institution Research at Maybank Kim Eng Securities, will indeed help to prevent this from happening again, while David Blackhall, Managing director of Real Estate at VinaCapital, said the amendments are expected to be helpful in monitoring and controlling liquidity in the real estate market. Future prospects Vietnam's real estate market will continue to see stable development in all segments with abundant supply in 2017, according to a number of economic experts. "Stable development will continue in 2017, especially in the high-end and mid-end segments," said Ha from VNREA. "The luxury segment will not be as vibrant as in 2016 and the affordable segment will see more opportunities to grow but will be affected by government policy." The supply of C-class apartments will witness a strong increase, according to Do Thu Hang, director of Professional Services at Savills Hanoi. "There are 2.6 million workers in industrial areas, with 200,000 more each year, of which 75 per cent are immigrants, 75 per cent are under 35 years old, and the average income is $2,500 per year," she said. "The affordable segment is suitable for this market." Tran Kim Chung, deputy director of the Central Institute for Economic Management (CIEM), said that prices in the primary market increased 5 to 7 per cent since the beginning of last year. Prices in the secondary market also rose between 10 and 15 per cent. Transactions slightly recovered in the second half after a pause in the first half. The apartment segment saw absorption rate rise sharply, to nearly 80 per cent. "This is the highest absorption rate for the last four years," he said. Tourism and resort real estate, meanwhile, will continue to grow strongly on the back of greater participation by investors and residents given the country's tourism potential. Addressing the "Vietnam's Real Estate Market 2016-2017: Overview and Forecast" conference held by batdongsan.com.vn in early December, Dang Hung Vo, former deputy minister of Natural Resources and Environment and now a real estate analyst, said he believes that hospitality real estate will continue to possess the greatest potential into 2017. Anthony Couse, Asia Pacific CEO at JLL, also sees development in the retail and hospitality sectors. In August, HCM City welcomed Vietnam's largest department store, Takashimaya, at the new 590,000 square foot Saigon Centre. Elsewhere, the Hoi An South Integrated Resort is currently being built, with the first phase to be completed in 2019, and Ha Long Bay received its first five-star property, Wyndham Legend Halong Bay, in June. Many major hospitality projects were launched in 2016, accounting for 10 per cent of the total. Investment in the segment has become something of a trend and results in significant benefits for investors. Vo forecast that development in the segment will increase in many locations in 2017. However, space should only be allocated in areas that have potential in tourism. Finance and banking expert Can Van Luc agrees that the segment currently has high demand, which should continue into 2017. Growth in foreign tourist arrivals is high, at 25 per cent, and Vietnam will host the Asia Pacific Economic Cooperation (Apec) summit in Da Nang this year, presenting further opportunities for the segment's development. Experts have said that demand among buyers in the hospitality segment is higher than in residential. "Investing in the high-end real estate segment will shift to investing in the hospitality segment in 2017," Vo believes. A report from Cushman & Wakefield (C&W) states that in 2017 there will be nine more projects with nearly 229,300 sq m, some of which have been delayed by six to nine months compared to their initial schedule, including large-scale buildings such as HUD Tower, Discovery Complex Cau Giay, and vicem Tower. In HCM City, nearly 180,000 sq m of new Grade B supply was expected to be completed in the final quarter of 2016. Vietnam's real estate market will witness a strong movement to segments with reasonable prices that meet actual demand, according to the end of the year report on the real estate market in 2016 and forecasts for 2017 from the HCM City Real Estate Association (HoREA). This will contribute to dealing with the existing supply - demand imbalance, which now tends to lean towards the luxury housing segment, including hospitality property. "The domestic real estate market is unlikely to see a bubble in 2017," the report stated. Another report from JLL said that foreign investors will remain keen on Southeast Asia in 2017, especially Vietnam. Its figures show that foreign direct investment (FDI) capital in Vietnam's real estate market increased 12 per cent year-on-year in 2016. It also believes the favourable conditions will continue, with GDP growth expected to reach 6 per cent. http://vneconomictimes.com/article/property/steady-foundations

Hanel dragging feet post-IPO 02/Feb/2017 Intellasia | Vn Economic Times Giant apparently not keen to move towards becoming a joint stock company, as required by equitisation process. Mention his name and the name of the State-owned enterprise he has been at since 1987, the Hanel Co. Ltd, and an air of respect will materialise. Chair and CEO of the Hanoi-based company, Nguyen Quoc Binh, has guided it through hardships over many years, in a State sector plagued by inefficiency, low profitability, and bad debts. Since its initial public offering (IPO) in April last year, however, when the firm was to be equitised, no transformation has taken place to turn it into a joint stock company. Diversified investment Originally operating in the electronics production, information technology and telecommunications sectors, Hanel has grown tremendously and its businesses now covers real estate, support industries, and logistics. It has nine subsidiaries and five associated companies, such as Hanoi Telecom, which owns telecoms provider Vietnamobile. It became the leading investor in a 43-ha high-tech park located in Hanoi's Long Bien district last year, with total investment of VND10.5 trillion ($471.89 million). It previously invested in a software technology park in the capital and the South Hanoi-Hanssip support industry park. The firm provides software solutions for government and businesses, in traffic, health, education and smart agriculture, contributing significantly to the country's modernisation. Hanel has been an industry pioneer, introducing the Made-in-Vietnam Hanel TV. It has also been a pioneer in developing support industries to support the country's electronics sector. Of particular note, it was selected to provide information technology systems for the implementation of the national single window in the Ministry of Transport. Helping administrative reform towards e-government, the systems will later connect with other ministries such as Industry and Trade, Finance, Health, and Agriculture and Rural Development. The most well-known deal under Binh's time at Hanel was the acquisition of 30 per cent of the Hanoi- based five-star Daewoo Hotel, in 1996. In 2012, Hanel acquired 70 per cent of the hotel after the South Korean parent company, Daewoo, went bankrupt, at a price believed to be $100 million. It then sold 40 per cent to the Hop Thanh Mineral JSC and the Hop Thanh 1 JSC, and despite still being under wraps the figure received from the deal is rumoured to be just $5 million. It still holds 30 per cent in the hotel. Perhaps the sale of its stake in the Daewoo made it less attractive, as during its equitisation, which Binh viewed as a turning point for Hanel, it didn't receive much attention from the public. Only 3.9 million shares, or 20.4 per cent of the total of 19.13 million on offer, were sold. There were 42 individual investors at the auction, and the two institutional investors with the highest bid volume reached three million shares. Post-IPO, the State stake stood at 29 per cent while 9.94 per cent was held by general investors. It also picked up two strategic investors: the Tien Viet Tech Co., with 36 per cent, and Singaporean-Sebrina Holdings Ltd, with 25 per cent. Passing the buck While the country is striving to hasten the SOE equitisation process, many leaders at SOEs don't want to lose control of enterprises that have made them wealthy. For Hanel, nearly a year has passed since the IPO, and the individual investors that bought shares remain frustrated. Its transformation into a joint stock company lies somewhere over the horizon still. Despite having received multiple complaints from investors, the firm has steadfastly refused to reply. VET has tried to reach Binh numerous times in the last couple of months, and has received the same answer from his office every time: he has gone overseas. According to Nguyen Hoang Hai, vice Chair of the Vietnam Association of Financial Investor (VAFI), Hanel's case is in breach of the law. Under Clause 45 in Decree No. 59 from 2011, regarding the transformation of 100 per cent State-owned firms into joint stock companies, within 30 working days of selling stakes they must hold their first annual general meeting to become a joint stock company and conduct the necessary registration procedures. "Enterprises taking money from investors need to act responsibly," Hai said. The selection of its strategic investors has also been questioned by many, as the Tien Viet Tech Co. was only formed in 2015. Hanel has stated it is not their duty to answer such questions and passed the buck to the Steering Committee on its equitisation, which was created by the Hanoi People's Committee, where Binh is a delegate. Conversely, Pham Cong Binh, deputy director of the Hanoi Department of Finance and a member of the Steering Committee on Hanel's equitisation, told local media he is aware of the fact that Hanel is in breach of Decree No. 59 but responsibility lies with the company's management, not the Steering Committee. http://vneconomictimes.com/article/business/hanel-dragging-feet-post-ipo

VN seeks opportunity to export salt to Indonesia 02/Feb/2017 Intellasia | Bizhub Indonesia is allowed to import 1.4 million tonnes of salt this year because local supply failed to meet the demand of consumption and production, the Vietnamese Trade Office in Indonesia said. The office said Indonesia had not yet said which country it would import salt from; however, it was an opportunity for Vietnamese salt businesses to access and expand their market to Indonesia. The lack of salt was blamed on the heavy rainfall in recent days, which impacted the country's salt production and harvest. According to calculations, the reserve volume of salt in Indonesia is 110,000 tonnes. Meanwhile, the market demand in the first six months of this year is estimated at 700,000 tonnes. To address the shortage, the Indonesian Ministry of Marine Affairs and Fisheries (KKP) and the Indonesian Central Bureau of Statistics (BPS) proposed that the government import 1.4 million tonnes of salt this year, of which, 226,124 tonnes of salt would be imported in the first quarter of this year. The Vietnamese Trade Office in Indonesia said GARAM Company (Persero) was assigned to exclusively import salt for the country. The company has asked for a licence and is expected to import salt before May. http://bizhub.vn/news/vn-seeks-opportunity-to-export-salt-to-indonesia_283874.html

Cooking gas price increase 02/Feb/2017 Intellasia | Bizhub The price of gas continued to rise with a hike of VND28,000 (US$1.12) for a 12 kilogram canister of cooking gas with effect from February 1. Accordingly, retail price for consumers will increase to VND360,000-390,000 per 12kg canister. The price of 30kg and 45kg canisters will increase to VND1.3 million and VND1.45 million, respectively. Gas traders explained that the latest hike was on account of the $90 per tonne increase in the world gas price this month over the previous month's level, taking it to $555 per tonne. The price of the domestic gas had to be adjusted in accordance with the market. With this latest hike in gas price, February becomes the second consecutive month for this trend as January, too, had witnessed a hike of VND21,000 per 12kg canister. Suppliers and distributors announced the increase in price on January 31. The gas prices were maintained at less than VND300,000 per 12kg canister throughout the last year before these were hiked twice in two consecutive months this year. http://bizhub.vn/news/cooking-gas-price-increase_283867.html

Heineken says deals an option as it eyes growth in Vietnam 02/Feb/2017 Intellasia | Reuters Heineken NV said it will consider deals to expand its presence in Vietnam - a young, beer-loving economy that is already its second-most profitable market globally - as the southeast Asian country loosens its grip on state-run brewers. Vietnam, where Heineken sells Tiger and Larue beer as well as its eponymous brew, is a global hot spot for the industry, due to a youthful population and beer-drinking culture, making it a battleground for global brewers trying to offset mature economies with newer markets. Adding to investor enthusiasm, the government is in the process of selling stakes worth over $6 billion in its two major brewers, HCM City-based Sabeco, the market leader known for its Bia Saigon and 333 beers, and Habeco in the north, of which Carlsberg A/S owns 17.5 percent. Frans Eusman, head of Heineken's operations in Asia, said 2016 had been "spectacular" and Vietnamese growth would continue, though a shorter Lunar New Year holiday could temper that. The Tet holiday, Vietnam's new year celebration, begins on Thursday and runs to February 1. Heineken, holding roughly a fifth of the Vietnamese market after 25 years in the country, bought the Vung Tau brewery in south Vietnam from Carlsberg last year to expand brewing capacity, and Eusman said it is eyeing a push into the north to enlarge its footprint. Growth could be organic, or through deals, he said. "Vietnam is exceptional because alcohol consumption is focused on beer," he told Reuters, contrasting it with countries such as India, where the alcohol-consuming minority drinks spirits. "The privatisation of Sabeco and Habeco will potentially lead to change and opportunities within the Vietnamese beer market and we are following these developments closely," he said, declining to comment on Heineken's interest. The price of both Sabeco and Habeco shares have soared since they began trading as part of a complex state sale process, due to a small free float. Sabeco listed at 110,000 dong ($4.87) but has touched 226,300 dong; Habeco has touched 225,800 dong from a 39,000 dong starting price - prompting Carlsberg, in talks to buy more shares, to dismiss the rise as speculative. Eusman declined to comment on the matter. "I don't think there is a clear cut, formalised divestment process," Eusman said. Elsewhere in Asia, Heineken is growing in new markets like Myanmar, and expanding newer products such as non-alcoholic beer and cider, popular with sweet-toothed Asian drinkers. Heineken also owns 43 percent of India's largest brewer, United Breweries Ltd - a stake it could raise, Eusman said. Heineken initially acquired 37.5 percent of United Breweries in 2008 through its takeover of Scottish & Newcastle Ltd It later raised its holding. "If shares are brought to the market and offered to us, of course we would consider buying them," said Eusman. "But we are not obsessively trying to take control." The second-largest shareholder in United Breweries is tycoon Vijay Mallya, who is wanted by authorities in India for questioning and left the country last year. He was charged with fraud earlier this month. Reuters reported last year that Heineken would likely ask Mallya to step down from the board, as a prelude to raising its stake above 50 percent. Eusman declined to comment. http://www.reuters.com/article/heineken-vietnam-idUSL5N1FF4YC

Vinacomin targets 5.5-6pct annual revenue growth 02/Feb/2017 Intellasia | Bizhub Vietnam National Coal and Mineral Industries Group (Vinacomin), the nation's biggest coal miner, is eyeing average annual revenue growth between 5.5 per cent and 6 per cent, until 2020. Vinacomin has got prime minister Nguyen Xuan Phuc to approve its five-year business production and investment plan, which seeks to produce 42 million tonnes of coal and cut the extraction losses between 5 per cent and 20 per cent. It expects to meet the domestic demand, ensure national energy security and seek new export markets. The company also plans to import nearly 8 million to 9 million tonnes of coal to serve the economic sectors at home, especially in electricity generation. Further, it will operate thermal and hydropower coal plants with a total output of 10.2 million kWh, accounting for over 4-5 per cent of the country's total electricity. Earlier this month, deputy prime minister Trinh Dinh Dung urged Vinacomin to renovate its production technologies in the chemical industry to supply industrial explosive material, drilling and blasting services for coal and mineral production, and improve the production capacity at mechanical factories. He also advised Vinacomin to focus on coal exploitation and trading to ensure national energy security. Besides, it must improve the competitiveness of its products and help protect the environment to contribute to the socio-economic development of the country, he said. He also expected the group to improve the quality of its investment projects to prevent losses. The coal sector should seek solutions to protect the environment during coal exploitation, transport and usage, he said. In addition, Vinacomin should focus on restructuring and reviewing its key products in each investment period. It should also invest in technologies and human resources to increase productivity, and labour safety. Last year, the group earned a revenue of more than VND101 trillion (US$4.45 billion), 5 per cent lower than 2015, while its profit hit VND800 billion, baodautu.vn reported. The online newspaper quoted Vinacomin general director Dang Thanh Hai as saying that 2016 was considered the most difficult year for the group, as it saw a significant increase in the quantity of coal imported. http://bizhub.vn/news/vinacomin-targets-55-6-annual-revenue-growth_283856.html

VnSteel aims to increase revenue by 800b dong 02/Feb/2017 Intellasia | VNA The Vietnam Steel Corporation (VnSteel) aims to earn consolidated revenue of 18.8 trillion VND (835.5 million USD) in 2017, an increase of 800 billion VND from 2016. It will produce around 2.4 million tonnes of steel billets this year, up 17 percent from 2016, VnSteel said. To accomplish these goals, VnSteel will work on improving its business efficiency through better market forecast analysis, better corporate governance and supervision and close monitoring of activities, senior company leaders said. The corporation will also focus on enhancing the quality of its human resources, it will practise thrift and strive to prevent corruption, under the direction the Ministry of Industry and Trade and the prime minister. VnSteel has suggested that the government put in place policies and measures to control the import of steel products that the domestic steel industry is able to produce, particularly the massive import of cheap Chinese steel; and fight anti-commercial fraud that is damaging to domestic producers. In 2016, VnSteel produced around two million tonnes of steel billets and met its target, which was also a year-on-year increase of 24 percent. The production and utilisation of construction steel crossed three million tonnes, approximately 105 percent of the estimate. It accounts for 39 percent of the domestic market share. http://en.vietnamplus.vn/vnsteel-aims-to-increase-revenue-by-800 billion-vnd/106623.vnp

Agro-forestry-aquaculture export at $2.54b in January 02/Feb/2017 Intellasia | VNA The export turnover of agriculture, forestry and aquaculture in January is estimated at 2.54 billion USD, a year-on-year decrease of 1.4 percent, according to the Ministry of Agriculture and Rural Development. Of which, aquatic products earned 518 million USD, down 5 percent against the same period last year, while major forestry products brought home 652 million USD, up 2.1 percent year-on-year. Vietnam exported about 325 tonnes of rice worth 136 million USD in the review period, a year-on-year decreases of 32 percent in quality and 35.1 percent in value, the ministry said. Meanwhile, 127,000 tonnes of coffee were shipped abroad in January for 287 million USD, down 25.5 percent in volume and 3.6 percent in value against the same period last year. Strong tumbles were recorded in the export value of other farm products such as tea, cashew nut, pepper, and cassava. The country earned 16 million USD from exporting 11,000 tonnes of tea in the period, reducing by 3.6 percent in volume and 8.6 percent in value compared to those in January last year. The export of cashew nut saw decreases of 20 percent and 4.4 percent in terms of volume and value, respectively. Rubber was the only product maintaining stable export growth, with 193 million USD earned from shipments of 102,000 tonnes, up 84.8 percent in value and 10.5 percent in volume from the same period last year. http://en.vietnamplus.vn/agroforestryaquaculture-export-at-254 billion-usd-in-Jan/106441.vnp

Seafood sector aims high despite barriers in international market 02/Feb/2017 Intellasia | VNN Seafood producers and exporters have been warned that many barriers, from protectionism to media campaigns, will affect them in the international market in 2017. Vietnam estimates it exported $7.1 billion worth of seafood products in 2016, an increase of 8 percent compared with 2015, despite difficulties, including drought, saline intrusion and environmental disaster in four central provinces caused by Formosa's untreated waste water discharge. VASEP (Vietnam Association of Seafood Exporters and Producers) have consulted with leading experts who say that there would be seven challenges for Vietnam's seafood sector in 2017. The drought and saline intrusion which occurred in 2016 would continue have effects on fresh water fish breeding. This would have a big impact on the cultivation area and material output. With trade barriers removed, Vietnam's seafood products would have opportunities to penetrate the world's markets. However, they would meet non-tariff barriers set up by import countries to prevent them from penetrating the markets. Import countries' regulations on inspecting import quality are one barrier. Japan, for example, examines shrimp import consignments from Vietnam to detect Furazolidone, Enrofloxacin and Sulfadiazine. Meanwhile, Australia has announced it will strengthen the examination for biological toxins and microorganisms. From January to September 2016, 11 seafood consignments from Vietnam to the EU were warned for the heavy metal concentration (cadmium and mercury) higher than the allowed level. In the latest news, the Vietnam News Agency has reported an Australian ban on green and raw shrimp from Asia, including Vietnam, commencing from January 9. The Australian government banned Asian shrimp imports after detecting white spot viruses in shrimp sold at stores and after a white spot outbreak occurred in Queensland. The anti-dumping duty and catfish inspection programme will still be a barrier to Vietnam's catfish in the US market. With high anti-dumping duties, only two or three Vietnamese companies can keep exporting products to the market. Meanwhile, Vietnam's material production cost is relatively high. A survey found that the production cost in Vietnam is 10-30 percent higher than in India and Thailand. This will make the material shortage become more serious. The risk is believed to come from media as well. On January 5, 2017, a video clip on Spanish television gave incorrect information about Vietnam catfish. However, despite the risks, Vietnam still hopes it can boost seafood exports in 2017. Nguyen Hoang Anh, general director of Nam Mien Trung Seafood Investment, first mentioned the possibility of earning $10 billion from shrimp exports. He said Vietnam, with its long coast and brackish areas in Mekong Delta, can expand the shrimp breeding area to 2 million hectares. In 2016, Vietnam exported $1.7 billion worth of catfish. http://english.vov.vn/economy/seafood-sector-aims-high-despite-barriers-in-international-market- 342465.vov

Earnings from key product exports fall in January 02/Feb/2017 Intellasia | VNA Vietnam's trade value was estimated at 29.3 billion USD in January, down 13 percent from the previous month, according to the general Department of Customs. Of the figure, export turnover touched 14.6 USD, dropping by 12 percent from December 2016, while import value was 14.7 billion USD, falling by 14 percent month-on-month. Key products saw declines in export revenue included phones and components (down 7.1 percent); garments and textiles (down 10.8 percent); and computers, electronic products and spare parts (down 14.1 percent); Footwear exports also suffered a fall of 10.2 percent, while earnings from machines and spare parts dropped by 12.9 percent. The highest declines were seen in the export value of aquatic products, and wood and wooden furniture, with decreases of 16.2 percent and 17.3 percent, respectively. http://en.vietnamplus.vn/earnings-from-key-product-exports-fall-in-Jan/106423.vnp

Rice exports decline in January 02/Feb/2017 Intellasia | VNA Vietnam exported 325,000 tonnes of rice worth 136 million USD in January, down 32 percent in volume and 35.1 percent in value compared to the same month in 2016. Chair of the Vietnam Food Association Huynh The Nang said the rice sector will face more difficulties this year. In 2016, China was the biggest rice importer of Vietnam by purchasing 1.74 million tonnes of rice worth 782.3 million USD, representing a respective yearly decline of 17.5 percent and 8.6 percent. Other major rice importers in Asean such as the Philippines, Malaysia and Indonesia also witnessed strong reduction of 64.1 percent, 45.5 percent and 51.8 percent, respectively. http://en.vietnamplus.vn/rice-exports-decline-in-Jan/106470.vnp

Rice/shrimp rotation a hit in Bac Lieu 02/Feb/2017 Intellasia | VNA Farmers in the Mekong Delta province of Bac Lieu have had bumper harvests of paddy rice and shrimp with higher profits and yields than in previous years. Farmers who take part in the rice/shrimp rotation model on the same field have also seen fewer outbreaks of disease. Luong Ngoc Lan, head of the province's Department of Agriculture and Rural Development, said that the 2016-17 rice/shrimp rotation crop covered more than 31,000 ha, an increase of more than 10,000 ha compared to the last crop. The harvest, which ends in mid-February, is expected to bring profits of 50 million VND (2,202 USD) per ha, he added. The rice/shrimp rotation model uses no chemicals or fertilisers for paddy rice, while shrimp are not fed, which saves costs. Lan said that safe and clean shrimp and rice would sell easily as they are favoured by customers Mai Van Thiet of the province's Hong Dan district, who has expanded his field to two hectares, said that he had received training in modern cultivation techniques, including shrimp breeding and selection of seeds for paddy rice. Irrigation systems have also been built in the fields. Last year, the result was a good harvest, leading to profit of more than 250 million VND (11,013 USD) from two crops of shrimp and one for paddy rice, Thiet said. Tang Van Dinh of the province's Phuoc Long district, who had a bumper harvest of shrimp, operates a farm that covers more than one hectare, generating profit of more than 20 million VND (879 USD). Pham Thanh Hai, chair of Phuoc Long district People's Committee, said his district had more than 9,000 hectares for rotating rice-shrimp, an increase of more than 2,000 ha compared to the last crop. Shrimp production was nearly 0.2 tonne per ha and nearly five tonnes per ha for paddy rice, he said. He expects profit of more than 50 million VND per hectare for shrimp and paddy rice, double compared to rice monoculture in the past. By 2020, the province aims to expand rice-shrimp farming to 40,000 ha, mostly in Hong Dan and Phuoc Long districts and Gia Rai town. http://en.vietnamplus.vn/riceshrimp-rotation-a-hit-in-bac-lieu/106612.vnp

Algeria ranks fourth among Vietnam's export destinations in Africa 02/Feb/2017 Intellasia | VNA Algeria is currently the fourth biggest export market of Vietnam in Africa, following South Africa, Ghana, and Egypt. Vietnam's shipments to this African nation were estimated at 271.42 million USD in 2016, up 16 percent year-on-year. Among the main export items, 64,050 tonnes of coffee worth 112.96 million USD were sold to Algeria, up 74 percent in volume and 64 percent in value. About 40,097 tonnes of rice were exported to bring home 15.36 million USD, rising 6 percent in volume and 3 percent in value. Other commodities seeing an increase in shipments were pepper, steel, aquatic products, computers, electronic products and components, machinery and spare parts. Meanwhile, the export turnover of telephones and components fell by 26 percent to 76.86 million USD. Last year, Vietnam's trade office in Algeria organised an array of trade promotion activities, including five workshops on bilateral trade potential. It also assisted two delegations of Vietnamese businesses to attend international fairs and stepped up communication activities there such as publishing business news bulletins in French. The Ministry of Industry and Trade also sent staff members to Algeria to work with local ministries and agencies, seeking ways to boost cooperation in the time ahead. To strengthen trade ties and also to mark 55 years of the countries' diplomatic relationship, Vietnam will work harder to promote bilateral trade in 2017 such as through helping enterprises to participate in the Algiers International Fair and holding four business seminars on economic and trade partnership potential. http://en.vietnamplus.vn/algeria-ranks-fourth-among-vietnams-export-destinations-in-africa/106544.vnp

Two waves of European investment to hit Vietnam 02/Feb/2017 Intellasia | VNA Two waves of European investment will hit Vietnam after the European Union - Vietnam Free Trade Agreement is signed, a foreign expert has forecast. Vincent Repay, who has nearly 30 years of experience in international contracts and over 10 years training Vietnamese officials in market economics, said the first investment wave will be short-term with the shifting of European manufacturing facilities to Vietnam to use the country's competitive costs and young workforce, and take advantage of a lack of import tariffs in Europe. The second wave will be medium and long term, he said, adding that European firms will produce items of demand for Vietnam by improving their manufacturing capacity. He advised Vietnam to thoroughly check the quality of materials used for production scheduled for export while heeding quality management and accessing training offered by EU nations. Trade ties between Vietnam and the EU have been growing in recent years. Two-way trade between the two sides averages 40 billion euro each year and is expected to hit 100 billion euro by 2025. http://en.vietnamplus.vn/two-waves-of-european-investment-to-hit-vietnam/106620.vnp

Giant Dung Quat steel project approved 02/Feb/2017 Intellasia | NLD The prime minister has agreed to start the VND60trn (VND2.7bn) steel project in Dung Quat Economic Zone in Quang Ngai Province which has been delayed for years, according to the Ministry of Industry and Trade. The ministry will review the first design to make sure that investors have met technology and environmental commitments. The Ministry of Science and Technology was asked to work with provincial authorities to monitor progress. The Ministry of Natural Resources and Environment will evaluate the report on the environmental impact. The Hoa Phat-Dung Quat steel project is a continuation of Guang Lian Dung Quat steel project that was licensed in 2006 with an initial investment of USD1bn by Taiwanese Tycoons Group. Later, the investment was increased to USD3bn in collaboration with another Taiwanese group, E-United. However, construction was slow to start. In mid-2015, Tycoons halted the project due to financial difficulties and global steel demand. The management board of Dung Quat Economic Zone proposed the prime minister revoke the project's investment certificate. In last October, the steel producer Hoa Phat Group officially proposed to resume the construction of the Guang Lian Dung Quat steel project. The government recently sent a draft plan to seven ministries to gather opinions. In the plan, the Dung Quat-Hoa Phat steel project would cost VND60trn (USD2.7bn) to build a hot-rolled steel and construction steel project on an area of 350ha. VND40trn will be raised from other sources. Hoa Phat Group also proposed a plan to develop the steel project with a capacity of four million tonnes per year after operation. http://www.dtinews.vn/en/news/018/49220/giant-dung-quat-steel-project-approved.html

18 major projects under reassessment 02/Feb/2017 Intellasia | Dtinews The government Office has announced an audit of major state-invested projects with funding of more than VND10 trillion (USD443.27 million). In the instruction, PM Nguyen Xuan Phuc agreed with a proposal from the Ministry of Planning and Investment not to reassess projects that had more than half of its investment implemented. PM Phuc asked the ministries of Transport, Defence, Industry and Trade, Construction, and Science and Technology to cooperate with localities to reassess underway projects that are less than half-finished. The Ben Thanh-Suoi Tien and Ben Thanh-Tham Luong Urban Railway lines in HCM City, the Da Nang- Quang Ngai Expressway, and the Nhon-Hanoi Station metro route in Hanoi are among 11 transport projects which will be reassessed this time. Hanoi's first urban railway from Nhon to Hanoi Railway Station which was kicked off in September 2010 and scheduled to be completed by 2016 may have its completion date adjusted to 2019. Its investment was also raised to USD1.57 billion in 2015, while costs continue to spiral. The Industry and Trade sector also has three projects subject to inspection, O Mon 3 and 4 Thermal Power Plants, and the Bac Ai Hydropower Plant, while the construction sector has two - stage 2 of HCM City's Environmental Project and the Yen Xa Wastewater Treatment System in Hanoi. Earlier, in a meeting with the Ministry of Planning and Investment in mid-2016, the PM had raised the issue to ensure that investment was being properly used. http://www.dtinews.vn/en/news/018/49289/18-major-projects-under-reassessment.html

Jetstar announces non-stop service to Australia 02/Feb/2017 Intellasia | VOV Air travellers will be able to fly from HCM City to Australia without stopping after Jetstar announced its first direct passenger route between the two continents will open this coming May. Boeing Dreamliner will make the epic 9-hour journey from HCM City to Melbourne and Sydney, said Jetstar Group Chief Executive Jayne Hrdlicka. Jetstar will be the sole low-cost airline conducting direct service to Australia, she announced, with four weekly flights to Sydney and three to Melbourne beginning the second week of May. In connection with the new service, Jetstar has on offer highly discounted fares at http://www.jetstar.com/ or in ticket offices throughout Vietnam with prices starting as low as $159 one-way. http://english.vov.vn/economy/jetstar-announces-nonstop-service-to-australia-342429.vov

Dai Nam racecourse opens without gambling 02/Feb/2017 Intellasia | VIR On January 29, the Dai Nam racecourse started operation at the Dai Nam tourism zone in Hiep An commune, Thu Dau Mot city in Binh Duong province. On this occasion, the racecourse, in cooperation with the Binh Duong Department of Culture, Sports and Tourism and the Vietnam Association of Sports Bicycles and Motorcyles announced the start of its first horse racing and motorcycle racing tournament This is the first tournaments held at the racecourse. The racecourse is going to start full operation with other sports such as dog racing, water motorcycle racing and bicycle racing soon. The racecourse only aims to provide a form of entertainment to attract more visitors to the Dai Nam tourism zone. According to the local authorities, the developer had promised that the racecourse does not have gambling as part of the package. The racecourse's construction started in June 2016. The racecourse has area of 60 hectares and is located in the Dai Nam tourism zone. The racecourse is going to organise horse racing, dog racing, motorbicycle racing, go-kart racing, jet-ski racing and fly-board performances. The horseracing course is 1.6 kilometres long and 16 metres wide on a surface of soft sand. The motorcycle and go-kart racing course has length of 2.2 kilometres on a polymer surface. The dog racing course is 500 metres long and the lake for jet-ski racing and fly-board performances has area of 10,000 metres. The bleachers around the racecource can fit 18,000 people, and there are also two LED screens. Earlier this month, prime minister Nguyen Xuan Phuc signed a decree allowing Vietnamese to gamble at casinos in Vietnam. The decree, titled 03/2017/ND-CP, allows Vietnamese citizens to be admitted into domestic casinos, on a three year trial basis. After which, the government will decide whether or not to continue allowing domestic citizens to participate in casino gambling. It will come into effect on March 15. http://www.vir.com.vn/dai-nam-racecourse-opens-without-gambling.html

New projects in 2017 to supply power to Hanoi 02/Feb/2017 Intellasia | Dtinews The Northern Vietnam Power Projects Management Board (NPMB) said it will start work of 15 power projects in 2017 to ensure power supply stability and prevent overloaded power transmissions to Hanoi and industrial zones in the region. The overall cost is estimated at about VND3.3 trillion (US$146.2 million). Although Vietnam has made remarkable progress in its power sector over the last two decades-with the percentage of households without electricity decreasing from 50 per cent in 1995 to 2 per cent in 2014-the distribution of electricity is still uneven among regions. In regions with high power demand like the North or the South, overloading still occurs at some parts of the power grid. This year includes some important projects, such as West Hanoi - Thuong Tin 500 kilovolt power transmission line, Nho Quan - Phu Ly - Thuong Tin 500/220kV transmission line and the 220kV transformer station Thanh Nghi, which will connect local power grid to the national one. In 2017, the NPMB will also complete and bring into operation 24 other projects to supplement electricity in Hanoi and neighbouring provinces. NPMB director Phan Luong Thien said land clearance is considered crucial to carry out the projects this year, as the issue have always been a major obstacle. He said the projects will mostly be executed in Hanoi and the Nothern Delta, where land price tends to fluctuate and planning of localities is often adjusted. Debating land price has caused land clearance delays, while defining land origins, owners, boundaries have also caused a lot of difficulties, Thien said. There remain gaps between government and local compensation policies, which make it very time- consuming to explain to local people and address their demands, Thien added. Due to land clearance problems, all the scheduled projects were late in handing over land for construction work in 2016. To ensure completion of the projects within this year, NPMB will proactively cooperate with local authorities to be updated about the problems and frequently assess the development of projects to find timely solutions once problems arise, Thien said. http://www.dtinews.vn/en/news/018/49259/new-projects-in-2017-to-supply-power-to-hanoi.html

Vietnam begins granting e-visas for visitors from 40 countries 02/Feb/2017 Intellasia | Vn Economic Times The visa does not require letters of guarantee or invitation. Vietnam began granting electronic visas for foreign citizens from 40 countries worldwide as from February 1, 2017, the Vietnam News Agency (VNA) reports. According to the State news agency, under the Decree 07/2017-ND-CP issued by the government on January 25, procedures for applying and payment will be done online. It will take 3 days to process application for an e-visa valid for 30 days. The visa does not require letters of guarantee or invitation. Foreign citizens will be granted e-visas for exit and entry through international border gates as listed in Appendix II attached to Decree 07/2017-ND-CP. The 40 countries include Azerbaijan, Argentina, Armenia, Ireland, Poland, Belarus, Bulgaria, Brunei, South Korea, Germany, Chile, China (not applicable to Chinese e-passport holders), Colombia, Czech Republic, Cuba, Denmark, Timor Leste,United States of America, Hungary, Greece, Italy, Kazakhstan, Russia, United Kingdom, Luxembourg, Myanmar, Mongolia, Japan, Panama, Peru, Finland, France, The Philippines,Romania, Spain, Sweden, Uruguay, Venezuela, Norway, and Slovakia. Major general Le Xuan Vien, director of the Immigration Department under the Ministry of Public Security, was quoted by VNA as saying that it will benefit the country's economic development and international integration target, contributing to ensuring national security and social order. The granting of normal visa will still be implemented in line with regulations of the Law on Entry, Exit, Transit, and Residence for Foreigners in Vietnam, he noted. The move demonstrates the government's determination to promote administration reform, the official added. http://vneconomictimes.com/article/vietnam-today/vietnam-begins-granting-e-visas-for-visitors-from-40- countries

Home appliance retailers gear up in race to expand 02/Feb/2017 Intellasia | Dtinews Not only are they expanding networks by setting up new shops, home appliance chains are also trying to change their business models and increase online sales in an effort to get bigger market share. Opened in 2010, Dien May Xanh in late 2014 reported revenue of VND1 trillion a year. Since early 2015, Dien May Xanh has been gearing up with the application of digital technology to internal administration and sales management. In August 2015, Dien May Xanh began conquering the northern market. It had opened 75 supermarkets by the end the year which brought the turnover of VND4.4 trillion, holding 5 percent of the market share. The figure reportedly had increased to 14-16 percent by the end of 2016. According to Tran Kinh Doanh, CEO of The Gioi Di Dong JSC, the owner of Dien May Xanh brand, after two years of following the 'fast fight fast victory' strategy, with 266 supermarkets, Dien May Xanh has become the biggest partner of home appliance manufacturers and distributors in Vietnam. The owner of Dien May Xanh hopes its revenue in 2016 can reach VND12 trillion and the figure would be double in 2017 to VND25 trillion. Not only are they expanding networks by setting up new shops, home appliance chains are also trying to change their business models and increase online sales in an effort to get bigger market share. Analysts commented that unlike other retailers, Dien May Xanh has been following its own business strategy because it arrived later than other rivals. A Dien May Xanh centre covers 800-1,000 square meters, while the standard area for one home appliance supermarket is 4,000-5,000 square meters. With such a scale, the cost for one Dien May Xanh is VND6-10 billion, which is much lower than the traditional model. Meanwhile, Dien May Xanh can receive financial support from The Gioi Di Dong which is believed to have powerful financial capability. Analysts also praised Dien May Xanh's policy on developing centers in city suburbs and provinces. This is believed to be a reasonable decision as retail premises in the central business districts of Hanoi and HCM City have become too expensive. Other home appliance retail chains, having realised the efficiency of Dien May Xanh's small-centre model, have also followed the development model. The centers of Media Mart developed recently, for example, have an area of between 700 and 1,500 square meters. Even Nguyen Kim, which only developed large shopping centers, has also changed its strategy. Eight of 14 supermarkets put into operation in December 2016 run under the shop-in-shop model with the average area of 300 square meters. They are located in big shopping malls such as Big C in HCM City, and the provinces of Binh Duong, Binh Thuan and Thanh Hoa. Meanwhile, strong brands including Thien Hoa, Nguyen Kim, Phan Khang and Dien May Xanh all have spent money to develop online sales. The number of customers buying goods on nguyenkim.com rises by 400 percent during sale promotions. http://www.dtinews.vn/en/news/018/49253/home-appliance-retailers-gear-up-in-race-to-expand.html

Telecom giants must develop equitisation plans: MIC 02/Feb/2017 Intellasia | Dtinews The three telecommunication groups under direct management of the Information and Communications Ministry (MIC) will have to develop their equitisation plans in 2017, according to minister Truong Minh Tuan. The three groups are the Vietnam Post and Telecommunications Group (VNPT), Vietnam Multimedia Corporation (VTC) and MobiFone Telecommunications Corporation (MobiFone). The equitisation of the three telecom giants has to be speeded up in accordance with a December 2016 decision by the prime minister on criteria to differentiate State-owned enterprises (SOEs) and State- invested companies, he added, speaking at a meeting on January 23. Along with the decision, the PM also published the list of 240 SOEs that have to be equitised by 2020. On the list of 240 SOEs to be equitised, VNPT and MobiFone are the two among 27 firms in which the government will hold 50-65 percent ownership. VTC is among 106 SOEs in which the State's stake will be reduced to below 50 percent. Among the rest of the 240 SOEs, the State's ownership will remain 100 percent in 103 SOEs while its stake will stay over 65 percent in four others. VNPT in 2016 recorded revenues of 135 trillion VND (6.09 billion USD), up 7 percent from 2015, whereas income rose by 20 percent to 4.16 trillion VND. MobiFone reported revenues of 38.4 trillion VND, up 14.5 percent from 2015 with 19 million subscriptions. VTC surpassed their goal for 2016, with total revenues reaching 5.2 trillion VND, up 39 percent compared to 2015. The government has enhanced divestment from SOEs, ranging from breweries to dairy producers. Those deals have attracted intense attention from foreign investors given that Vietnam is one of the fastest growing economies due to its young population and rapidly increasing export turnover, the Wall Street Journal reported last week. In the past 15 years the number of SOEs has fallen from around 6,000 to over 700. Between 2011 and 2015, almost 600 SOEs were equitised, 96 percent of the targeted number. http://www.dtinews.vn/en/news/018/49249/telecom-giants-must-develop-equitisation-plans-mic.html

FPT records $2b in revenue 02/Feb/2017 Intellasia | Bizhub FPT Corporation recorded consolidated revenue of VND40.5 trillion (US$1.8 billion) last year, a year- on-year increase of 1.4 per cent. Pre-tax profit was up 6 per cent year-on-year to more than VND3 trillion. Profit after tax was VND2.6 trillion, 6 per cent higher than the previous year. The corporation's technology and telecom sectors sustained the double-digit growth, accounting for 76 per cent of the consolidated pre-tax profit. The firm's technology sector recorded revenue and pre-tax profit of VND9.9 trillion and VND1.1 trillion, a year-on-year increase of 16 per cent and 19 per cent, respectively. The telecom sector saw revenues rise 22 per cent to VND6.67 trillion, and pre-tax profit up 15 per cent to VND1.2 trillion. In the distribution and retail sector, the retail segment continued to be a highlight last year with revenue up 35 per cent year-on-year, and pre-tax profit up 44 per cent. Meanwhile, the distribution business has recorded a drop in revenue and profit due to Apple's change in distribution policy and Microsoft's closure of its Lumia phone business. The education segment continued to perform reasonably with 18 per cent surge in number of enrolments versus 2015, in which the university has recorded the highest growth of 36 per cent in terms of number of enrolled students. FPT's overseas market has recorded healthy growth with revenue increasing 26 per cent year-on-year to VND6.12 trillion, and pre-tax profit up 40 per cent to VND936 billion. This sector continues to be a key growth driver for the future. Overseas performance mainly came from two segments. Firstly, the software outsourcing segment which focuses on developed markets such as Japan, South Korea and the US. Secondly, the software solutions segment which focuses on developing markets such as Cambodia and Bangladesh. The firm successfully implemented Bangladesh's integrated income tax administration system, demonstrating FPT's capabilities in delivering software solutions overseas, opening up opportunities to win more contracts going forward. The company signed another two sizable contracts, amounting to $17.9 million last year. http://bizhub.vn/tech/fpt-records-2 billion-in-revenue_283842.html

Vietnam imposes tax duty on foreign room-booking sites 02/Feb/2017 Intellasia | VnExpress Firms such as Agoda and Expedia will have to pay a 10 percent duty. The Ministry of Finance has told foreign accommodation booking services to pay taxes if they wish to continue operating in Vietnam. A document recently released by the ministry asked booking sites like Agoda, Traveloka and Expedia to pay a combined 10 percent of their total revenue made in Vietnam. Vietnamese accommodation providers that have signed contracts with these foreign sites are obliged to fulfill these tax duties on behalf of them. The ministry said that the move aims to prevent tax losses from foreign-based companies that are gaining from online business transactions. Vietnamese accommodation booking site Vntrip had previously held a press conference and sent a document to the ministry accusing Singapore-based travel agency Agoda and some other sites of tax evasion. Vntrip said that the acts of these foreign companies had resulted in huge losses to the state revenue and created unwholesome competition. This is not the first time the Vietnamese government has imposed taxes on international businesses operating in the country. Last September, the popular ride-sharing service Uber was officially ordered to pay taxes after two years of providing transport services in Vietnam. http://e.vnexpress.net/news/business/vietnam-imposes-tax-duty-on-foreign-room-booking-sites- 3533361.html

State Audit should boost international cooperation to strengthen capacity: PM 03/Feb/2017 Intellasia | VNA Prime minister Nguyen Xuan Phuc has asked the State Audit Office of Vietnam (SAV) to enhance international cooperation to learn from other countries, helping improve its capacity. Meeting with SAV staff in Hanoi on February 2, he said the government hopes the agency will become an effective tool of the Party and State in financial and public asset management. Highlighting successful auditing activities, especially the recovery of more than 115 trillion VND (5.08 billion USD) for the State budget, he said the SAV's activities have won increasing support from the Party, State and people. The SAV has also found loopholes in state management through its activities, which helps the government address shortcomings, he noted. PM Phuc said he wants the SAV to become an incorruptible, facilitating and action-oriented part of the government. As the SAV prevents the misuse of power in financial and state asset management, it should reinforce its apparatus, enhance its capacity and professional etiquette. The leader asked the SAV to be proactive in development while pressing ahead with policy research to give suggestions to the government and other agencies. It is also critical to step up administrative reform and cut down auditing time to better serve people and businesses, he added. At the meeting, SAV Auditor general Ho Duc Phoc reported auditing has helped fine-tune regulations, policies and laws, contributing to the fight against corruption and wastefulness. The SAV has proposed penalties for hundreds of violating collectives and persons, transferred many cases to investigation agencies and provided documents for authorised bodies to carry out examination, supervision and legal proceedings. The SAV succeeded in auditing the restructuring and assessment of the value of State-owned enterprises, helping protect the State's benefits before equitising these firms, Phoc noted. http://en.vietnamplus.vn/state-audit-should-boost-intl-cooperation-to-strengthen-capacity-pm/106666.vnp

Experts back retail property sector 03/Feb/2017 Intellasia | VNA Retail space is set to be a cash cow for the property sector soon, particularly in Hanoi and HCM City. Experts from property consultant firm Savills Vietnam said despite closures and fierce competition last year, the outlook for 2017 and beyond is rosy. Convenience store chains that open round the clock are expected to thrive this year. In addition to successful long-standing Thai investors, retailers from Japan, China and the Republic of Korea are landing in the Vietnamese property market. In Hanoi, sources of retail property are projected to concentrate in the downtown area and the west between 2017 and 2018. A signal that bodes well for the sector is an increasing number of newly registered enterprises, with the figure for 2016 exceeding 22,000, up 19 percent year-on-year. Savills' counterpart CBRE Vietnam highlighted two recently debuted projects in the capital, Vincom Pham Ngoc Thach shopping mall and Vincom Plaza in north Tu Liem, adding 45,900 square metres of retail space to the market. Hanoi's retail space now amounts to approximately 758,216 square metres, with a good occupancy rate. The closure of poor performing shopping centres has boosted the occupancy rate. Due to restricted space in central Hanoi, a shift to suburban districts is on the cards. Retail space supply this year stands at about 106,000 square metres, all in the suburbs. Average leasing prices have fallen slightly, increasing competition. HCM City also has an active retail property market. A CBRE study found that 17 international brands entered the southern hub last year, nearly tripling the figure for 2015. Big brands, such as Zara, H&M and 7-eleven, are set to expand. In the next three years, the city expects to have 500,000 square metres of retail space leased, with shopping malls accounting for 75 percent of the supply. http://en.vietnamplus.vn/experts-back-retail-property-sector/106629.vnp

More ample cheap housing supply forecast in 2017 03/Feb/2017 Intellasia | DtiNews Vietnam Real Estate Association Chair Nguyen Tran Nam said that the local property market would see more cheap housing supply in 2017 to meet increasing demand. Nam cited some statistics from big real estate firms saying that in 2016, up to 80 percent of real estate supply in Vietnam were high-grade homes, much higher than real demand. Meanwhile, affordable housing supply was limited. To date, cheap housing projects have been able to provide a total area of 3 million square metres compared to the demand of 10 million square metres. Vietnam's population has reached 94 million people and the figure is expected to reach 100 million by 2020. Each year, around 1 million people come to urban areas to work or live, a move which is expected to offer a very good opportunity for the real estate market's development, particularly the low-cost segment. VinGroup recently announced a plan to develop 200,000 to 300,000 apartments priced between VND700 million (USD31,800) and VND1 billion (USD45,450), mostly in outlying areas of Hanoi and HCM City. Hoang Quang Real Estate Company has set a target to launch around 34,000 low-cost apartments in the southern region from now until 2019. Experts suggested that businesses need more favourable conditions from the government to invest in affordable property projects, especially site clearance and infrastructure development. The government also should offer them more preferential loans. According to Nam, the Vietnamese real estate market would be more transparent and open in 2017 as the government has further simplified administrative procedures and tightened policies on land planning. Mergers and acquisitions in the local real estate market are forecasted to jump in 2017 as foreign investors look for local partners due to many factors the country's the country's fast-growing economy, accelerated urbanisation and expanding middle-class population with higher incomes. For instance, a large number of Japanese property developers including Sumitomo, Sanyo Homes, Daiwa House, Aeon and Toshin have pledged to invest up to USD2 billion in the country. http://www.dtinews.vn/en/news/018/49313/more-ample-cheap-housing-supply-forecast-in-2017.html

PM urges stronger development of affordable housing 03/Feb/2017 Intellasia | VGP The PM has issued Directive No. 03/CT-TTg requesting relevant ministries, sectors and localities to accelerate the development of affordable housing. The move aims to basically finalise the goals concerning affordable housing development set out in the national housing development strategy until 2020, with a vision to 2030. Improving housing quality and reducing housing cost Regarding the tasks and solutions to develop affordable houses and accommodations for workers, the PM asked the chairpersons of the municipal and provincial People's Committees to create favourable conditions, concerning land and administrative procedures, in order to call on property developers, businesses using a large number of labourers and the people to invest in developing affordable housing, particularly accommodations for employees at industrial zones, economic zones and industrial clusters in the locality. The government leader also insisted on improving the quality of affordable housing and developing the suitable housing product structure and ensuring the essential technical and social infrastructure in terms of transport, healthcare, education and culture of affordable housing construction projects in urban areas and at industrial zones. In an effort to enhance the quality of affordable housing, the PM told the Ministry of Construction to issue additional standards and criteria on affordable housing; research the application of scientific and technical advances and new materials to reduce housing costs; develop the suitable housing product structure; ensure the essential technical and social infrastructure in terms of transport, healthcare, education and culture of affordable housing construction projects in urban areas and at industrial zones; and propose measures and resources to radically deal with the issue of anti-flood houses for needy households in the central region. Enabling businesses and people to participate in developing affordable housing The PM also requested the People's Committees of provinces and centrally run cities to review and revise the urban and industrial zone planning, aiming to ensure the sufficient land fund for the development of affordable housing. Planning on affordable housing and accommodations for workers and students must be part of the planning for new urban areas, industrial zones and educational institutions, he insisted. http://www.vir.com.vn/pm-urges-stronger-development-of-affordable-housing.html

Vietnam's casinos report slow business before lifting of gambling ban for locals 03/Feb/2017 Intellasia | VnExpress The numbers cast doubt on whether the industry, set to soon benefit from eased restrictions, has been as lucrative as many have thought. For the last few years, Royal International, which runs the only casino in the northern border province of Quang Ninh has been in the red. In 2014, its net losses reportedly hit VND153 billion (US$6.7 million). Since 1992, Vietnam has opened seven casinos in some of the most popular tourist destinations - Quang Ninh, for instance, is home to the famous Ha Long Bay. The casinos however are strictly reserved for foreigners only due to a long-running ban on gambling. Various reports have suggested that it's a lucrative industry. But now casino owners across Vietnam claim that they are either losing money or making very little because foreigners, especially those from China and Taiwan, are becoming less inclined to gambling in Vietnam. The casino in the northern port city of Hai Phong posted losses of up to VND169 billion a year between 2008 and 2012, according to a report from the local government. Meanwhile Australia's Donaco International Limited, which operates leisure and entertainment businesses across the Asia Pacific region, highlighted in its annual report that last year's net profit from its casino and hotel complex in the northern province of Lao Cai was one-tenth of its counterpart facilities in Cambodia. The owners have also blamed their lagging business in recent years on a rapidly growing competition in which more casinos are fighting for fewer players from overseas. According to Bui Quang Vinh, the minister of Planning and Investment, many local governments have planned to bet big on gambling. Even one of Vietnam's poorest provinces Ha Giang, with a majority working in agriculture, has asked for permission to build a casino. The government last month said it would allow citizens over 21 years old with a monthly income of at least 10 million dong (US$445) to hedge bets in local casinos from mid-March under a three-year pilot programme. Vietnam's average annual income was around $2,200 last year. Since Vietnamese gamblers have no access to local casinos, they often go across the border to Cambodia where there are many centers mostly targeting Vietnamese players. Vietnam's decision to lift the ban, after long consideration, has sparked hopes that the local casino industry will soon witness a boom. "Vietnam was viewed as a potential great investment opportunity should the government allow locals," said Grant Govertsen, founding partner of Macau-based research firm Union Gaming Group, in a note to CNBC. The Southeast Asian country is seen as a bright spot on the global gaming market as nearly 60 percent of its population is under 35, according to market research firm Nielsen, expecting the middle class to more than double in size between 2014 and 2020, from 12 million to 33 million. http://english.vov.vn/economy/vietnams-casinos-report-slow-business-before-lifting-of-gambling-ban- for-locals-342685.vov

Rescuing Vietnam's rice sector by improving quality, branding 03/Feb/2017 Intellasia | VNN In the last 30 years, Vietnam has been trying to produce as much rice as possible but has not focused on improving quality. Vinh Hoan Seafood Company has decided to quit rice production and export though it spent big money on building a factory and choosing high-quality rice sources for export. Analysts said that Vinh Hoan made a reasonable decision. Many other rice export companies took a loss in the last year, had to be dissolved or kept operations at a moderate level. Many exporters reported a sharp decrease of 40-45 percent in export volume in 2016 compared with the year before. Vietnam's rice experienced an unsuccessful year in 2016 with the decline in both export quantity and turnover. China, Vietnam's major export market, had the consumption decreasing by 35 percent. The demand was also lower from other loyal markets, including the Philippines (65 percent), Malaysia (48 percent) and the US (33 percent). The total export volume in 2016 was 1.6 million tonnes lower than predicted by the Vietnam Food Association (VFA) in early 2016. The latest report of MARD showed that Vietnam could only export 4.9 million tonnes in 2016, worth $2.2 billion, down by 26 percent in volume and 21 percent in value compared with 2015. The director of a rice export company in the south said his company could not export one tonne of rice in 2016. Though Laos and Cambodia exported less rice than Vietnam, their products could enter the choosy market of Japan. Meanwhile, Vietnam's rice still cannot enter the market. Nguyen Trung Kien from IPSARD (Institute for Policy and Strategy of Agriculture and Rural Development) commented that Vietnam's rice sector has high production cost but the profit is lower than that of Thailand, India and Cambodia. Meanwhile, the post-harvesting loss rate and poor infrastructure conditions all make the transport costs high, thus weakening competitiveness. VND7 trillion to improve Vietnam's rice Seventy-six percent of Vietnam's rice is exported to Asian markets at low prices, which explains why Vietnam can only obtain modest profits despite high export volume, according to Kien. Meanwhile, more orders have been placed with neighbouring countries. Pakistan, Vietnam's loyal market, on January 4 suggested an inter-governmental rice purchase mechanism with Myanmar. Vietnam was warned that even Cambodia could also be a strong rival, though it has been exporting rice only in the last few years. MARD has approved a VND7 trillion plan on restructuring the rice sector which says that 50 percent of rice exports by 2030 will bear a Vietnamese brand, 30 percent of which will be specialty and fragrant rice. Of the total amount of VND7 trillion, VND5 trillion will be spent on upgrading rice fields, transport conditions, irrigation systems and the electricity systems in rice growing areas in the Mekong Delta, Red River Delta and coastal areas in the south central region. http://english.vietnamnet.vn/fms/business/171719/rescuing-vietnam-s-rice-sector-by-improving-quality- branding.html

Players continue to come and go in Vietnam's ecommerce 03/Feb/2017 Intellasia | VIR As soon as Deca.vn and Lingo.vn closed, Shopee.vn and aeoneshop.com were launched. There is no lack of vibrancy in Vietnam's e-commerce arena. Players keep popping up In Vietnam today there are three popular e-commerce models: C2C (which connects customers to customers), B2C (business to customer) and Marketplace (which provides a platform to process transactions). In the pure C2C model, similar to classified advertisements which connects the buyers and the sellers only in terms of information, chotot.vn remains the most prominent. However, to Vietnam's e-commerce, buyer's trust and delivery have been the issues, and supplying information seems not enough. Many companies provide a platform with third-party services such as shipping or payment. Among this group, Sendo.vn, owned by tech giant FPT Group, is a prime example. Recently Zalo of VNG Corporation, a technology company, also ventured into this market. But the name that has received the most attention recently was Shopee, a company started by Singaporean tech company Garena. After nearly two years in Vietnam, this company has been downloaded two million times on mobile and processed 10,000 orders per day. Customer base and volume of orders have been growing 20 per cent per month. In the B2C group, after the departures of Lingo.vn, and Deca.vn earlier, and while Adayroi.vn of property giant VinGroup has not made any breakthrough and Lotte.vn remained an unknown, Tiki.vn has continued to be the leader. Founded in 2010 as an online bookstore, Tiki.vn has expanded into other fields such as cosmetics and electronics. According to Tran Ngoc Thai Son, chief executive officer of Tiki.vn, book sales accounted for 70 per cent of the company's revenue in 2014, but that ratio is only 30 per cent today with the rest of revenue coming from other fields. Now, Tiki receives 15,000 to 20,000 orders per day. Even though Cdiscount.vn, the online shop of Big C supermarket which was acquired by Thailand's retail giant Central Group, was closed and merged with Zalora, the e-commerce space remains attractive to other retail companies. Not long after Korea's Lotte Group entered Vietnam's e-commerce with the Lotte.vn website, Japan's biggest retailer Aeon also arrived with aeoneshop.com at the beginning of the year. Finally, in the Marketplace group, Lazada.vn has seen no match with its 30 per cent market share (by revenue) in Vietnam's online retail market. Fierce competition The race will intensify in the coming months, because up to now no company has made a profit in e- commerce in Vietnam, so they will compete fiercely for larger market share. The prizes await the final winners of this race. Alexandre Dardy, chief executive officer of Lazada Vietnam, said Lazada will focus on attracting more brands to do business on its website in 2017. Its goal is to attract 10,000 companies, triple the current number. As for Tiki.vn, the focus will be on sustainable growth. In 2017, Tiki.vn will continue to invest heavily in fulfillment, a service in which sellers just need to send their products to Tiki's warehouses and let Tiki handle marketing and sales. Currently the company has two warehouses in HCM City and one in Hanoi, with total area of 10,000 square meters. Meanwhile, although arriving late, traditional retail companies are always considered strong contenders. While Lotte.vn focuses on cosmetics and fashion that are the strength of Korean brands, aeoneshop.com targets electronics and baby products carrying Japanese brands. Currently aeoneshop.com owns a chain of large modern retail stores from shopping centers to convenience stores. In addition directly owning four shopping centers in HCM City and Hanoi, Aeon bought 30 per cent stake in Fivimart and 49 per cent share of Citimart in 2015, and now indirectly owns 18 Fivimart stores in Hanoi and 66 mini-shops in HCM City. In essence, the race between purely e-commerce companies and traditional retail companies in Vietnam has not seen the clear winners, and purely e-commerce firms currently have an edge. However, with the determination of retail companies to expand online, the competition will be exciting to watch in 2017. http://english.vietnamnet.vn/fms/business/171974/players-continue-to-come-and-go-in-vietnam-s- ecommerce.html

State-owned corporations ask for preferences, again 03/Feb/2017 Intellasia | VNN The government has set up a steering committee to deal with state-owned enterprises' (SOEs) unprofitable multi billion dong projects. The projects will be dealt with market rules instead of preferences. Meanwhile, other state-owned corporations continue to ask for preferential treatment. The managers of Vinacomin, the national mining group, can sigh with relief as they did not find Vinacomin's projects on the list of the 12 projects incurring big losses put under the Ministry of Industry and Trade's (MOIT) control. However, Vinacomin, like in previous years, still has shouted for help. Vinacomin's chair Le Minh Chuan at a MOIT conference held days ago, once again asked for investment incentives, including preferential export tariffs, natural resource tax cuts and preferential loans. It also asked the government to instruct thermal power plants, which signed contracts with Vinacomin before, to buy coal domestically. Meanwhile, the biggest coal consumers in the national economy, including steel mills and electricity generators, don't want to buy coal domestically from Vinacomin. An official report showed that enterprises imported about 10 million tonnes of coal in 2016. The director of an enterprise pointed out that Vinacomin, on one hand, complained that its coal cannot be sold and the inventory volume is high, but on the other hand, continues to import coal. The miner mixes import coal with its coal for sale, or sells the import coal for profit. Since coal is now cheap in the world market, electricity plants and steel mills tend to import coal instead of buying coal from Vinacomin. The Vung Ang Power Plant, belonging to PV Power, for example, only bought 11.5 percent of coal output in the first four months of the year under a contract signed with Vinacomin. Regarding the proposed preferential taxes and fees, the Ministry of Finance (MOF) said the natural resource tax must not be lower than 10-12 percent. In an effort to help Vinacomin ease difficulties, MOF suggested granting bigger coal export quotas to Vinacomin, which would be allowed to export 3-4 million tonnes a year instead of 2 million tonnes. However, the export extension did not help in the first half of 2016, because Vietnam's export price was higher than the world's price. Analysts commented that the key problem of Vinacomin lies in the high production cost, and that no special policy can save Vinacomin if it continues exploiting coal at such high cost. Deputy PM Trinh Dinh Dung in the third quarter of 2016 requested Vinacomin to reconsider its exploitation technology, increase the productivity and minimise loss instead of relying on the state's support. If it cannot do this, even the modest profit of VND800 billion gained in 2016 would be unattainable in the next years. http://english.vietnamnet.vn/fms/business/171720/state-owned-corporations-ask-for-preferences- again.html

Vietnam spends over 112b dong daily to import chemicals from China 03/Feb/2017 Intellasia | Dan Tri As of the end of 2016, Vietnam spent more than $6.9 billion to import chemicals and chemical products. Of which, the import of raw materials to produce other active substances was $3.2 billion, according to the data of the general Administration of Customs. Notably, China was Vietnam's major import market of chemicals. Specifically, in 2016, imports of chemicals and chemical products were $1.8 billion. In particular, chemicals import to produce other substances hit $1.02 billion. This was the first year that Vietnam's chemical raw materials import turnover reached $1.02 billion. In terms of total import turnover, Vietnam had to spend more than 112 billion dong to import chemicals from China each day. Notably, apart from China, import of chemical products from countries that have developed chemical industry such as India, the U.S, Canada, Israel, Japan, Korea, etc. to Vietnam in the past year was very little. Specifically, import of chemicals and chemical products from these markets stood at $145 million -nearly $300 million for the entire year, not equal to 1/4 of the chemical import turnover from China. Earlier, in 2015, Vietnam spent nearly $1.6 billion to import chemicals and chemical products from China; of which it spent more than $ 900 million to import chemical raw materials and more than $700 million to import finished chemical products. The total value of chemicals imported from China in 2016 increased $200 million just after one year. As per the general Administration of Customs, imports of chemicals from China increased because the price of chemical products from this country was much cheaper than many other markets. The reason was the chemical transport through road and railway from China to Vietnam was favourable. In particular, the huge imports of chemicals to Vietnam were because Vietnam had many businesses, merchants that had business relationship with China. For example, the chemical import from China to Vietnam related to a series of spinning, weaving, dyeing mills whose record investment from Taiwan, Hong Kong and the Chinese mainland was poured into Vietnam over the last period. These plants imported a large amount of chemicals used for cleaning fabrics, fibres for the domestic textile industry. Besides, import of chemicals for agricultural production such as production of pesticides, inorganic fertilisers in the country also increased the chemical import from China into Vietnam. Also as per the data of the general Administration of Customs, in 2016, Vietnam imported more than $730 million insecticide and pesticide ingredients. Of which, the import of this item from China alone was over $350 million, accounting for more than 50 percent of the turnover. Regarding fertiliser, in 2016, Vietnam spent more than $1 billion to import four million tonnes of fertiliser. Of which, imports of this item from China market was $1.9 million tonnes, reaching a turnover of $500 million. The import from China market alone accounted for nearly 50 percent of the total import value.

Thai billionaire wants to pour more money into Vinamilk 03/Feb/2017 Intellasia | VOV F&N Dairy Investments has registered to purchase 21.77 million shares of Vinamilk in February after acquiring more than 16.5 million shares before the Lunar New Year Festival. If the transaction is successful, F&N Dairy Investments will own nearly 236.5 million Vinamilk shares, equaling to 16.29 percent of Vinamilk charter capital. With the current price of VND133,000 (US$5.78) per share, F&N Dairy Investments will have to spend nearly VND3 trillion (US$130.4 million). Earlier, from December 30, 2016 to January 27, 2017, it had registered to buy the same number of Vinamilk shares but succeeded in purchasing only 16.5 million shares worth more than VND2.1 trillion (US$91.3 million). F&N Dairy Investments belongs to Singapore F&N owned by Thai billionaire Charoen Sirivadhanabhakdi. Vinamilk has recently announced its trading results in 2016. Its total revenue increased by 16 percent to VND46.965 trillion (US$2.041 billion) and after-tax profit grew 20.52 percent to VND9.364 trillion (US$407 million). http://english.vov.vn/investment/thai billionaire-wants-to-pour-more-money-into-vinamilk-342701.vov

Total drops deal to buy Petronas' Vietnam LPG operations 03/Feb/2017 Intellasia | VIR Totalgaz Vietnam Limited Liability Company, a subsidiary of French integrated oil and gas corporation Total, has terminated the agreement to buy Thang Long LPG Co., Ltd, the liquefied petroleum gas (LPG) storage and bottling subsidiary of Malaysian oil and gas company Petroliam Nasional Berhad. "In relation to the Sales and Purchase Agreement (SPA) entered into by our wholly-owned subsidiary PDB (Netherlands) B.V. to divest its entire 100 per cent equity interest in Thang Long LPG Co., Ltd to Totalgaz Vietnam Limited Liability Company (TGV), we wish to inform that TGV has issued a notice to terminate the SPA effective from January 31, 2017," Petroliam Nasional Berhad (Petronas) announced in a filing with Bursa Malaysia. According to Petronas, the termination of the SPA is not expected to have any material effect on PDB Group's financial position. Liquefied petroleum gases (LPG) is a group of hydrocarbon gases, primarily propane, normal butane, and isobutane, derived from crude oil refining or natural gas processing. These gases may be marketed individually or mixed. One of the main uses of LPG is as cooking fuel. Totalgaz Vietnam and PDB signed the SPA in December 2015. The agreement covered Petronas' two liquefied petroleum filling facilities in the northern city of Hai Phong and the southern province of Dong Nai, along with Petronas's portfolio of customers and partners. Totalgaz is the second biggest producer of LPG in Vietnam, with 12.5 million cylinders a year, 10,000 distributors all over the country, and about 1 million households as customers. Total, one of the largest integrated oil and gas companies in the world, has been present in Vietnam for over 20 years in the LPG, lubricants, and retail fuel segments. In May 2015, Total sold its Totalgaz operation in France. In 2014 and 2015 the company sold its LPG marketing and sales operations in a number of European markets. http://english.vov.vn/trade/total-drops-deal-to-buy-petronas-vietnam-lpg-operations-342691.vov

Vinaseed records high profits 03/Feb/2017 Intellasia | Vn Economic Times The company's profits are the highest they've ever been since entering the stock market. The Vietnam National Seed Joint Stock Company (Vinaseed) recorded high profits in 2016 after ten years of being listed on the stock market. The company's revenue in quarter 4, 2016 reached VND434.6 billion ($19.1 million), up VND8 billion ($352,000) compared to quarter 4 of 2015. The company's profit before tax reached VND81.12 billion ($3.56 million), up 74 per cent compared to quarter 4 of 2015. Profit after tax reached VND73.4 billion ($3.2 million). In 2016, Vinaseed's revenue reached VND1.32 trillion ($58 million), up 6 per cent year-on-year and higher 4 per cent compared to what was planned. The company's 2016 gross profit reached VND501 billion ($22 million), up VND46 billion ($2 million) compared to 2015. Profit after tax reached VND193 billion ($8.49 million), up 23 per cent year-on-year. Although it did not reach its target, the profit after tax in 2016 was the highest since the company got listed on the stock market. By the end of 2016, Vinaseed's total assets reached nearly VND1.5 trillion ($66 million), down 60 billion ($2.64 million) compared to the early part of the year. Its equity reached VND1.08 trillion ($47.5 million). Vinaseed has been standing out in the agriculture sector for the last three years, conducting a number of merger and acquisitions (M&A) worth VND379 billion ($16.67 million) in total. It increased its ownership in the Quang Nam Seed Agriculture and Forestry Company (QSC) from 60.24 per cent to 85.8 per cent, became the largest shareholder in Thai Binh Seed JSC, and increased its holding in SSC to 61.4 per cent. Tran Kim Lien, Chairwoman and CEO said that the three greatest successes in 2016 were establishing two new branches, one in the central highlands and the other in the Mekong Delta's Dong Thap province, initially restructuring the Southern Seed JSC (SSC), and expanding Vinaseed's agricultural production chain by establishing a high-tech company in the northern province of Ha Nam. Though optimistic about the development of agriculture in the times to come, Lien is nonetheless focused on the challenges that await. "Global climate change is becoming more serious and will significantly have an impact on agriculture," she said. "We are now thinking of solutions to cope." How to operate the Southern Seed JSC well is also a concern. "After the merger and acquisitions, differences in work culture and governance are challenges that I have to work on to improve in 2017," she said. http://vneconomictimes.com/article/business/vinaseed-records-high-profits

Garment companies expect to perform better in 2017 03/Feb/2017 Intellasia | Bizhub Garment corporations expect to earn more through improved production and increased exports, hope to attract investments and go ahead with their expansion plans in 2017. The Hanoi Textile Garment Company (Hanosimex) has targeted a 10 per cent increase in revenue this year compared to 2016. Nguyen Song Hai, general director of Hanosimex, said the company aimed a revenue of between VND2.8 trillion (US$123 million) and VND3 trillion, higher than last year's VNĐ 2.7 trillion, with a profit of around VND75 billion. To achieve this, Hanosimex must make significant changes to increase labour productivity and earn a free-on-board (FOB) export value of more than 50 per cent of the company's total export, Hải said. Hanosimex will focus on improving quality, determining its traditional customers and taking steps to develop new markets. Hai said the company would constantly study and improve product designs to suit the tastes of its consumers. In 2016, because of difficulties in the world market, the export value of Việt Nam's textile and garment industry touched only $28.3 billion. However, Hanosimex met its assigned target and had encouraging achievements, Hải said. Despite everything, the company's revenue in 2016 rose by 11.3 per cent compared to 2015 and profit reached VND74 billion, up 31.4 per cent year-on-year. Meanwhile, the Việt Tiến Garment Joint Stock Corporation (VGG) aims to make $1 billion in exports by 2020, with an average growth rate of 15 per cent a year, its general director Bui Van Tien said. In 2017, Tien said, VGG would focus on its ongoing investment projects, increase production at the local level, invest in automation technology and apply innovative production technologies to improve labour productivity and the quality of its products, especially using lean manufacturing tools designed to improve workplace efficiency. The company will also endeavour to improve its work environment, better the living standards of its workers, develop distribution channels system and boost its image and brand, Tiến said, adding that the goal is to transform VGG into a multinational economic group over the next 40 to 60 years. In 2016, the company's revenue touched VND12.6 trillion, up 12 per cent year-on-year, while its pre-tax profit reached VND664 billion, up 4 per cent against 2015. Its export turnover was around $700 million, of which the Japanese market accounted for 32 per cent, the US 22 per cent and the EU 18 per cent. The average monthly income of its workers was VND8.8 million, a five per cent year-on-year increase. Meanwhile, the Pho Noi Textile and Garment Infrastructure Development Joint Stock Company, an investor in the Pho Noi textile industrial park (IP) in the northern Hung Yen Province, has announced that it would arrange for funds to complete its infrastructure system and develop the remaining area of the IP. The company's general director Nguyuen Hai Ha said it would carry out professional services and utilities for investors, such as workers' housing, customs service, offices for lease, commercial services, entertainment, child care and cultural and sports activities. The company will also increase its water supply and drainage systems to the IP and collaborate with the municipal wastewater treatment centre and electricity providers to ensure the smooth operation of Pho Noi IP. In 2017, the company will focus on improving development, strengthening its investment promotion programme, attracting investments for expansion of local production and seeking new customers. Last year, the company pushed up its international integration, which was possible because of the various bilateral and multilateral free trade agreements, and the government's determination to improve the business environment. However, attracting investments remains a major challenge when the market offers many other attractive options. Besides, standards and regulations for environmental protection have been tightened, Ha said. By the end of 2016, 80 per cent of Pho Noi IP's infrastructure development was complete and its occupancy rate in Phase 2 had risen to 70 per cent from 35 per cent in 2015, with many investors from the US, the Republic of Korea and Hong Kong coming in. Most investors have started the construction of their plants as soon as they got possession of the land, Ha said. http://bizhub.vn/news/garment-companies-expect-to-perform-better-in-2017_283895.html

VN's top ten 2016 exports 03/Feb/2017 Intellasia | Bizhub Vietnam's top ten products in terms of 2016 export turnover accounted for 71.8 per cent of total national export value, according to a recently announced statistics report by the general Department of Customs. At the top of the list was mobile phones and phone accessories: Vietnam's biggest export was valued at $34.32 billion, up by 13.8 per cent compared to the same period last year. Major importers included the European Union with a turnover of nearly $11.24 billion, up by 11.1 per cent from 2015; the US with $4.3 billion, up by 55.5 per cent, the United Arab Emirates at $2.27 billion, up by 6.2 per cent. Second on the list was textile products, with a total export value of over $23.84 billion for 2016, up by 4.6 per cent from 2015. The chief importer was the US with an import turnover of more than $11.45 billion, up by 4.6 per cent from 2015, followed by the EU at $3.56 billion, up by 2.7 per cent, and Japan at $2.9 billion, up by 4.2 per cent. Third place belonged to computers, electronic devices and accessories, clocking in at $18.96 billion, up by 21.5 per cent from 2015. Main importers included China at $4.1 billion imported value, up by 47.2 per cent from 2015, followed by the EU at $3.73 billion, up by 16.5 per cent, the US at $2.89 billion, up by 2.05 per cent, and most significantly the Netherlands at $1.75 billion, up by 53.5 per cent compared to last year. The fourth was footwear, with the annual value of $13 billion, up by 8.3 per cent from 2015. Major importers included the US, EU and China, all having increased their imported values compared to last year. Other products on the list were machinery and tools, up by 24.3 per cent from 2015 at $10.14 billion in exported value; seafood at $7.05 billion, up by 7.4 per cent; wood and wooden products at nearly $6.97 billion, up by 1.1 per cent; agricultural products, including vegetables, pepper, coffee and rice, at a total of $12.45 billion, up by 16.2 per cent despite a drop in rice's export; transport vehicles and accessories at $6.05 billion, slightly up by 3.7 per cent and in tenth was baggage and headgear at $3.16 billion, up by 10.2 per cent from 2015. Overall major importers for Vietnam were the US, China, the EU and Japan. The ten products' export value reached $126.85 billion, in a context where many other Vietnamese exports had experienced sharp decline in exported value compared to the same period in 2015, with crude oil down by 36.5 per cent, cement down by 16 per cent, coal down by 23.8 per cent, ores and minerals down by 28.8 per cent or fertiliser down by 24.9 per cent. http://bizhub.vn/news/vns-top-ten-2016-exports_283908.html

Vietnam focuses on spearhead export sectors 03/Feb/2017 Intellasia | VOV Vietnam will focus on exporting staple products and adjust growth orientations of sectors in 2017. Deputy director of the Export and Import Department of the Ministry of Industry and Trade, Tran Thanh Hai, said the country will concentrate on product quality and added values instead of quantity. "In the international market, good distribution, trade mark promotion, and product diversification will earn high profit. Planting and processing earn less profit or added values. Restructuring economic sectors is closely associated with trade policies, particularly export regulations. Import what we lack will benefit the economy," he said. Vietnam's export growth rate in 2016 increased 8 percent compared with the previous year. Export surplus was at $2 billion. Experts said Vietnam's export and import are increasing in a sustainable manner. http://english.vov.vn/economy/vietnam-focuses-on-spearhead-export-sectors-342683.vov

Vietnam is the fourth largest squid exporter to European Union (EU) 03/Feb/2017 Intellasia | Vn Economic Times The seafood industry in Vietnam continues to grow an develop. Vietnam is the fourth largest exporter of squid to the European Union (EU). The Vietnam Association of Seafood Exporters and Producers (VASEP) said that in recent years the European Union (EU) has increased octopus imports. Spain is a leader in this sector. Accordingly, Spain accounted for 39 per cent of all octopus exports to the EU; Italy accounted for 33 per cent and Portugal for over 6 per cent. The EU's top import is frozen squid followed by frozen octopus. The two items account for over 80 per cent of total imports to the EU. Vietnam is the fourth largest squid exporter to the European Union in Europe, accounting for over 6 per cent of the total value of EU imports. The amount of Vietnamese squid exports in the first 9 months of 2016 was higher than the same period in 2015. However, the average price of Vietnamese squid exports from the same time period has decreased compared to 2015, but it is still higher than the average price of EU imports. VASEP is a social organisation composed of professional businesses and organisations that are active in the field of production, processing and exporting Vietnam's seafood. It was established to gather and unite its members, protect rights, legitimate interests, and the legitimacy of its members; it also helps raise the value, quality and competitiveness of Vietnam's seafood products. In addition, it was developed to create tools for seafood processing and contribute to the economic development of Vietnam. http://vneconomictimes.com/article/vietnam-today/vietnam-is-the-fourth-largest-squid-exporter-to- european-union-eu

Affluent China emerges as Vietnam's major seafood buyer 03/Feb/2017 Intellasia | VnExpress Seafood producers in Vietnam are expected to cash in on China's rising consumption. China's growing appetite will significantly increase Vietnamese seafood exports this year, industry insiders say. The Vietnam Association of Seafood Exporters and Producers (VASEP) forecast that the neighbouring country's seafood imports will hit a record high of more than $1 billion in 2017. China is emerging as a top buyer of Vietnamese seafood, just behind the US, the European Union and Japan as many consumers can now afford to add more seafood in their daily meals. Besides, with polluted and overfished waters at home, China is buying more from other countries, said the Food and Agriculture Organisation. The United Nations body added that China has transformed from the world's top producer and exporter of seafood to the world's biggest market for seafood in 2016. Last year, China's shrimp imports from Vietnam, mostly unprocessed, jumped 23 percent to $431 million. China also surpassed the E.U. to become Vietnam's second biggest buyer of pangasius catfish with total imports of $305 million, a 90-percent increase from 2015. China is a large market but not without risks because it is not always easy to predict the long-term demand, said Truong Dinh Hoe, the chair of VASEP. But he said imports will certainly increase this year and Vietnam will benefit from this trend. "As Chinese consumption rises, Vietnamese seafood exports are expected to top $1 billion in 2017," said Hoe. Despite adverse weather conditions and an environmental disaster along the central coast, Vietnam's seafood exports, one of the country's top earners, managed to hit $7.1 billion last year after sales to overseas markets slightly fell to $6.7 billion in 2015, according to VASEP. http://e.vnexpress.net/news/business/affluent-china-emerges-as-vietnam-s-major-seafood-buyer- 3535483.html

Vietnam targets vegetable, fruit export value at $3b 03/Feb/2017 Intellasia | VNA Vietnam expects to achieve 3 billion USD in its total export value of vegetables and fruits this year. "After many years of export value under 1 billion USD, in recent years, the export value has made a breakthrough, which is why it was able to exceed the target this year, although there were many difficulties," Huynh Quang Dau, deputy chair of the Vietnam Vegetable and Fruit Association, told Vietnam News. This year and beyond, the vegetable and fruit industry will face long-term difficulties, including climate change, which would result in a reduction of vegetable and fruit output and quality, and land accumulation for the industry, Dau said. Meanwhile, most enterprises of the industry are small- and medium-sized units with less capital, said Dau, adding that technical barriers in vegetable and fruit importing countries have also increased further. However, in recent years, Vietnam's vegetables and fruits have entered markets with strict rules, such as the US, Japan, the Republic of Korea and Taiwan, as well as Australia, New Zealand and Chile, following 4-5 years of successful negotiations by the Ministry of Agriculture and Rural Development. Further, farms and enterprises have produced vegetable and fruit products meeting the quality and food safety standards in those countries, he said. "That would be the basis for promoting exports this year and beyond," Dau said. Nguyen Do Anh Tuan, head of the ministry's Institute of Policy and Strategy for Agriculture and Rural Development, said this year, enterprises and farmers would pour investment into fruits, cashew and shrimps because those products have great potential in production and business. In particular, they would invest in high-technological and clean agriculture to create leading brands for the global market, he said. The enterprises would focus on processing farming, forestry and fishery products to create new value and improve the level of Vietnam's products in the international market. Fruits have great potential as people's income increases, so does the demand for high-quality fruits, he said. Last year, the nation's total export value of vegetables and fruits was 2.4 billion USD, 200 million USD higher than the yearly target. http://en.vietnamplus.vn/vietnam-targets-vegetable-fruit-export-value-at-3 billion-usd/106658.vnp

Secondhand clothes favoured by shopaholics 03/Feb/2017 Intellasia | VNN Lovers of fashion and high- quality goods are willing to pay more for high-end secondhand goods, priced at tens of millions of dong or several thousand dollars. Dang Thi Thuy Dung, a mid-tier management officer of a bank on Ba Trieu street in Hanoi, went out last weekend in a Chanel coat with fox fur collar valued at VND25 million, a slim tweed dress she bought at VND7 million and Louis Vuitton handbag priced at 12 million. The clothes and bag went well her blue Vespa. Dung, wriggling through many streets, drove the Vespa to Goc De alley. She came to pay a deposit for a Prada handbag she had dreamed of for a long time. Dung said she began hunting secondhand branded goods three years ago. At that time, it was difficult to find beautiful items. Now as Dung has become VIP client, it is easier to find luxury items she wants. "The owners of secondhand shops have their 'rings' which find original products bearing the world's luxury brands such as Chanel, Gucci, LV or Versace," she explained. Dung, like many other Vietnamese women, like wearing branded clothes and handbags. However, they cannot afford new luxury products, priced at thousands of dollars at big shopping malls. The choice for Dung and other women like her is secondhand goods. "I have about 10 coats, 20 dresses and 5-6 handbags. All of them are branded goods. The total amount of money I spent on them was just enough to buy 3-4 brand new coats, about hundreds of millions of dong," she said. Hai Yen, a secondhand goods trader on Dong Tac street, has a shop which specialises in providing clothes to consumers with average incomes, and another shop with original products only reserved for high-income earners. Yen said the HCM City secondhand clothes market is busier than in Hanoi. She usually flies to Saigon and travels to Cambodia from there to hunt for goods. "The demand is always very high," she said. "Clients are willing to pay tens of millions of dong for the items they like." According to Yen, there are 'secondhand goods rings' with members overseas and in Vietnam. Clothes are collected from many different sources around the world, including flea markets in Waterlooplein (the Netherlands) and Notting Hill and Camden in London. Phuong Anh, a Viet Kieu in the Netherlands, said joins a group of Vietnamese students to hunt for secondhand goods. "If I find something good, I will call my partners in Vietnam and inform about the products and prices. If my partners say 'okay', I will buy the goods and ship to Vietnam after money is remitted to my bank account," she said. http://english.vietnamnet.vn/fms/business/171543/secondhand-clothes-favoured-by-shopaholics.html

Exports to US up nearly 15pct 03/Feb/2017 Intellasia | VOV Vietnam exports to the US increased by nearly 15 percent to $38.5 billion last year while imports rose by 11.7 percent to $8.7 billion, according to statistics of Vietnam Customs. Thus, Vietnam still enjoyed a trade surplus with the US - its second largest trade partner after China. The US is also the top importer of many Vietnamese key products. Garment ranked first with an export value of $11.5 billion, accounting for nearly 30 percent of total exports to the US and 48 percent of Vietnam's total garment exports in 2016. Footwear came second with $4.5 billion, making up 11.7 percent. Telephones and components went third with $4.3 billion, accounting for 12.5 percent. The US has overcome the UAE to become the biggest importer of Vietnam telephones and components. Other products having an export value of more than $1 billion included computers, electronics and components (US$2.9 billion), wood and timber products (US$2.8 billion), machines, equipment and tools (US$2.1 billion), seafood (US$1.4 billion), bags, wallets, suitcases, hats and umbrellas (US$1.3 billion). In general, most export products to the US obtained a growth. It's noteworthy that steel grew 328 percent to $568.5 million and film cameras skyrocketed more than 200 percent. http://english.vov.vn/market/exports-to-us-up-nearly-15-342704.vov

VN to produce 4b litre of beer in 2017 03/Feb/2017 Intellasia | Bizhub Vietnamese beverage producers plan to produce about 4 billion litres of beer in 2017, up by 10 per cent from 2016, according to the Vietnam Beer Alcohol Beverage (VBA). In 2016, domestic production has already reached nearly 3.8 billion litres of beer, about 85.6 per cent of the predetermined goal. The Saigon Alcohol Beer and Beverages Corporation (Sabeco) produces the most beer in Vietnam, with a total of 1.6 billion litres of various beers in 2016. Heineken's Vietnam Brewery limited company, having acquired several beverage factories from other businesses in the same field, has risen to second place-with the total amount produced over 1.1 billion litres. Beer accounts for 94 per cent of alcoholic beverage consumption in Việt Nam. According to Canadean, world-class research company on international soft drink and alcoholic beverage industries, the market for the alcoholic beverage in Vietnam has doubled growth in the past 10 years at a 6.4 per cent per year growth rate and 5.7 per cent for the past 5 years. Prediction for beer production growth in the next 5 years is around 4 to 5 per cent per annum with the higher value as high-end products have become more appreciated in the market. http://bizhub.vn/news/vn-to-produce-4 billion-litre-of-beer-in-2017_283896.html

Consumption of beer in January 2017 rose 20 per cent compared to the same period of 2016 in Vietnam 03/Feb/2017 Intellasia | Vn Economic Times Various products reach record sales during the Lunar New Year month. Consumption of beer in January 2017 rose 20 per cent compared to January 2016. Vietnam sold nearly 322 million litres of beer during the Lunar New Year month, up more than 9 per cent compared to the same period in 2016 This is according to the Economic - Social Report in January 2017 generated by the General Statistical Office of Vietnam. In particular, bottled beer and draft beer were the two most consumed product lines having reached sales of 6.7 million, and 154.4 million litres respectively. That's an increase of 20.6 per cent and 23.3 per cent respectively compared to the same period in 2016. Canned beer consumption decreased by 2 per cent, reaching nearly 159 million litres, while other beer products reached only 1.6 million litres, an increase of 6.9 per cent compared to same period last year. Other consumer products such as cigarettes, milk, and processed seafood increased compared to January 2016. Cigarette consumption reached nearly 419 million, up 0.6 per cent compared to the same period. Electrical appliances and transport also recorded an increase for the Lunar New Year. In electronics, televisions were the most sought after in January 2017 with 670,600 units sold, up 35.2 per cent compared to January 2016. Cars and motorcycles increased significantly, reaching 19,400 and 342,000 units respectively. According to reports of the Ministry of Industry and Trade, the volume of beer sold in 2016 was 3.788 billion litres meaning each person in Vietnam drank 42 litres of beer. That shows an increase of approximately 4 litres each compared to the previous year. In 2016 cars and motorcycles saw record sales with 3.12 million cars and more than 300,000 motorcycles having been sold. That's an increase of 24 per cent and 9.5 per cent respectively over the same period in 2015. http://vneconomictimes.com/article/vietnam-today/consumption-of-beer-in-january-2017-rose-20-per- cent-compared-to-the-same-period-of-2016-in-vietnam

Binh Thuan wants floating solar power plant 03/Feb/2017 Intellasia | Bizhub The People's Committee in southern Binh Thuan Province has given its approval in principle to the Da Nhim-Ham Thuan-Da Mi Joint Stock Company for a project on Da Mi Lake. According to the Ministry of Industry and Trade, the company is allowed to conduct a research and feasibility study to build a floating solar power project on the lake. The plant is not on the list of power sources of the national power planning until 2030, thus the committee has asked the ministry's general directorate of Energy to assess and add the project to the list under current regulations. The plant will cover 57ha of lake surface on which solar panels will be installed and 67ha of land surface on which transformer stations and inverters will be constructed. With an investment of VND1.5 trillion (US$66.7 million), the project will be able to produce an average of 69 million kWh in the first year of operation. Located in the districts of Tanh Linh and Ham Thuan Bac, the project is expected to begin operation in 2019. http://bizhub.vn/news/binh-thuan-wants-floating-solar-power-plant_283876.html

Hanoi's wastewater treatment plant financial issues audited 03/Feb/2017 Intellasia | Dtinews The State Audit Office of Vietnam has requested the investor of the Yen So Sewage Treatment Plant to return millions of US dollars after uncovering various violations. Yen So Plant is a build-transfer project between Hanoi authorities and the Malaysian group Gamuda Berhad. The project's investment was estimated at nearly USD250m. The plant was built from 2009 to 2012. However, according to the State Audit Office of Vietnam, there were errors in the project's balance sheet that cost up to USD147.8m. It demanded the group to adjust final accounts at the end of the project to USD61.9m. The State Audit Office of Vietnam asked the investor to return USD22.1m to the city. The investor can either return the plot of land of equivalent value or the money or both. The Taxation Department was asked to review the declaration and payment of taxes of Gamuda Berhad and the authorities of Hanoi was asked to deal with over USD86.8m in other financial issues. In addition, the group hasn't returned the investment in several constructions that were not approved by the city. For example, five reservoirs that cost USD6.77m which were not approved in the investment decision. The office also proposed to review responsibility of the Department of Natural Resources and Environment and the Gamuda Land Vietnam Company. Yen So Sewage Treatment Plant was part of the Yen So Park before being converted into a BT project. http://www.dtinews.vn/en/news/018/49306/hanoi-s-wastewater-treatment-plant-financial-issues- audited.html

Viglacera builds homes for workers 03/Feb/2017 Intellasia | Bizhub Viglacera Infrastructure Development Company, a subsidiary of Viglacera Corporation, on Thursday kicked off construction of a housing project for workers. The project will provide accommodation to 4,000 employees working in the Yen Phong Industrial Zone. The housing and industrial service zone covers an area of 20ha in Dong Tien Commune of the northern province of Bac Ninh. It includes residential buildings of 9-12 floors. Total living area of each apartment ranges between 25sq.m. and 50sq.m. The investor also set aside a land lot of 7,000q.m. to build a kindergarten and parking areas and a land lot of 13,000sq.m. for parks and sports facilities. According to the company, the housing project will help improve living conditions of workers, shorten the time they spend travelling to their work place and indirectly reduce traffic jams during rush hours. At the ground breaking ceremony, minister of Construction Pham Hong Ha highly appreciated the company's social responsibility, saying the project would contribute to the province's social economic development. Built in 2005, the 658ha Yen Phong Industrial Zone has attracted $8 billion worth of investment, including $7.2 billion in foreign direct investment from large investors such as Samsung, Orion and Dawo Vina. http://bizhub.vn/property/viglacera-builds-homes-for-workers_283904.html

Startup dreams bring real money to Vietnam's office market 03/Feb/2017 Intellasia | VnExpress Young companies looking for their first home are spiking the demand for small-sized office space. Tan, a self-employed real estate broker, paid $5,000 per month for the use of a six-story building in downtown HCM City. He then turned it into 15 office rooms with polished tiled floors, private bathrooms and internet connections. The offices, ranging from 25 to 40 square meters, are now rented out to startups at between VND5 million and VND10 million ($220 - $440) per month, said Tam, who asked to be identified by his first name only. For fledgling startups, which try to make every penny count, these small-sized offices with good locations fit their budget. Tan said currently 10 companies are his tenants, claiming a return of 20-25 percent. Local brokers said some estates in the city's downtown areas are becoming mini-hubs for startups. These young companies give the office market in HCM City and Hanoi a much-needed boost as many landlords struggle to fill space, they said. However, according to Le Huu Dung, chief executive at brokerage Weland Investment, not just any space will do. "We have seen a strong growth in mini-office rentals in HCM City in the past two years following the recent startup boom," Dung said. "While some investors have earned decent profits, others are losing money." No one who starts out in such a tiny office expects to stay there for long, Dung said, referring to the fact that when startups become bigger, they will move to larger offices. Another flip side of the business is that this segment mainly relies on idea-stage companies, which may not even last longer than just a few months. Dung warned that if the occupancy rate is lower than 80 percent, the investor will start losing money. http://e.vnexpress.net/news/business/startup-dreams-bring-real-money-to-vietnam-s-office-market- 3534660.html

30pct of Vietnamese population to shop online by 2020 03/Feb/2017 Intellasia | Dtinews The Ministry of Industry and Trade has set a goal to get 30 percent of Vietnamese people shopping online by 2020. The target is part of the general plan for e-commerce development during the 2016-2020 period, which has been approved by the prime minister. The plan aims for an average growth rate of 20 percent per year for business-to-customer transactions to reach USD10 billion by 2020, accounting for 5 percent of total retail and consumer service value, with an average spending at USD350 per capita. Nguyen Thu Thuy, Senior manager of Consumer Insights Board of Nielsen Vietnam, said Vietnam boasts many favourable conditions for economic development when young people account for a third of the country's population. Meanwhile, the middle class is expected to rise to 33 million by 2020. Around 50 percent of Vietnam's urban residents who use smart phones engage in online shopping activities. Meanwhile, 92 percent of internet users in Hanoi and HCM City also shop online, particularly those aged between 21 and 34. The draft plan for e-commerce development in the 2016-2020 period has also set a goal of approximately 60 percent of businesses having a presence on the internet, regularly updating information to introduce and sell products, with 80 percent of businesses taking orders online. http://www.dtinews.vn/en/news/018/49305/30-of-vietnamese-population-to-shop-online-by-2020.html

Economy

January agro, forestry, fishery exports drop to $2.54b 02/Feb/2017 Intellasia | Bizhub This was stated by the Ministry of Agriculture and Rural Development. Major farming products saw a year-on-year reduction of 1.7 per cent to $1.2 billion and seafood export value reached $518 million, down five per cent against the same period last year. Meanwhile, the local forestry industry saw a year-on-year increase of 2.1 per cent in export value to $652 million in January. Also in January, Vietnam saw a strong reduction in both rice export volume and value. Exports dropped by 32 per cent in volume to 325 tonnes of rice and by 35.1 per cent in value to $136 million compared with the same period last year, the ministry said. Huynh The Nang, chair of the Vietnam Food Association, said the rice industry would face more difficulties this year. The association said in 2016, China was the largest rice importer of Vietnam, purchasing 1.74 million tonnes of rice worth $782.3 million, representing a yearly decline of 17.5 per cent and 8.6 per cent in volume and value, respectively.Other major rice importers in Asean such as the Philippines, Malaysia and Indonesia also witnessed strong reduction of 64.1 per cent, 45.5 per cent and 51.8 per cent, respectively. The local coffee industry did not maintain its growth of last year in the first month of this year, with the industry witnessing a fall in export volume and value in January. Exports dropped by 25.5 per cent in volume to 127,000 tonnes and 3.6 per cent in value to $287 million against the same period last year.Strong declines were also recorded in the export value of other farm products, such as tea, cashew nut, pepper and cassava. The country earned $16 million from exporting 11,000 tonnes of tea in the period, reducing by 3.6 per cent in volume and 8.6 per cent in value compared with January last year. The export of cashew nut saw a sharp decrease of 20 per cent in volume but just a slight drop of 4.4 per cent in value due to the high level of export price. Vietnam witnessed strong reduction in pepper exports by 18.3 per cent in volume to 8,000 tonnes and 37 per cent in value to $56 million year-on-year. Rubber was the only product which maintained stable export growth, with $193 million earned from shipments of 102,000 tonnes, 84.8 per cent in value and 10.5 per cent in volume from the same period last year. http://bizhub.vn/news/january-agro-forestry-fishery-exports-drop-to-254bn_283868.html

Top 10 economic events in 2016 02/Feb/2017 Intellasia | VNA The following are Vietnam's top ten economic events in 2016. 1. The 12th National Party Congress set a goal of rapid, sustainable economic development The Resolution adopted at the 12th National Party Congress has defined tasks of stepping up renovation in a comprehensive and synchronous fashion; accelerating the economy fast and sustainably; and developing Vietnam into a modern, industrial country. The five-year average economic growth is expected to reach 6.5-7 percent per year. By 2020, an average gross domestic product (GDP) per capita will stand at about 3,200-3,500 USD, whilst the proportion of industry and services will make up some 85 percent of the GDP. Total average social investment in the next five years will account for 32-34 percent of the GDP, and State budget overspending will comprise of only 4 percent of the GDP. 2. National Assembly approves master plans for finance and investment The second session of the 14th National Assembly has approved a national financial blueprint in the 2016-2020 period, along with a middle-term public investment plan. Accordingly, the proportion of State budget overspending between 2016 and 2020 will not exceed 3.9 percent of the GDP. The annual public debt index, the government debt, and the foreign debt are set within the limit of no more than 65 percent, 54 percent, and 50 percent, respectively, of the GDP. 3. Economy grows despite difficulties The drastic direction and administration of the government, the high determination of the whole political system, and the active involvement of the business community, have backed the national economy to continue recording a positive growth in 2016. The gross domestic product (GDP) was estimated to expand by 6.21 percent compared to the previous year in spite of difficulties posed by natural disasters and the marine environmental incident in the four central provinces and the global economic headwinds. The macro economy remained stable while inflation was put under control. 4. Construction of nuclear power plant in Ninh Thuan halted Deputies agreed to stop the implementation of the nuclear power project in the south central coastal province of Ninh Thuan at the second sitting of the 14th National Assembly. This was because since 2009 - the moment when the legislature approved a policy of investing in the project - the domestic and international situation has witnessed a lot of socio-economic changes. On the one hand, Vietnam's scientific and technological capability at present has been limited to develop nuclear power. On the other hand, the project's economic efficiency has yet been ensured while the production cost of nuclear power is higher than that of other energy resources. 5. government issues Resolution 35/NQ-CP on supporting and developing businesses Regarding businesses, especially private ones, as a driving force to increase competitiveness and economic autonomy, the government on May 16, 2016 promulgated Resolution 35/NQ-CP on supporting and developing enterprises through 2020. The document sets the goal of having at least one million active businesses by 2020, including large-scale and financially strong ones. The State is committed to ensuring equal rights for all companies without discrimination of business forms and economics sectors in accessing financial resources. 6. Number of newly-established firms hit record The number of newly-established businesses set a record high since 2013. More than 100,000 companies have registered to set up with a total investment of over 800 trillion VND (35.3 billion USD), up over 17 percent in number and 48 percent in registered capital against 2015. The figures show that the new legal framework, solutions, and the action role of the government in supporting and encouraging businesses to develop have continuously proved effective. 7. Maritime environmental pollution incident in central region The waste discharge of the Taiwanese-invested Hung Nghiep Formosa Ha Tinh Steel Co. Ltd caused serious impacts on the marine environment from the central coastal province of Ha Tinh to Thua Thien- Hue, heavily impacting local production and lives. With the policy of not exchanging the environment with investment projects, the government, ministries, sectors and localities took drastic measures to strictly deal with the wrongdoings, address consequences, support fishermen and force Formosa to make compensations. 8. The State Bank of Vietnam applies new exchange rate management mechanism In 2016, the State Bank of Vietnam (SBV) has applied new mechanism of exchange rate management. The SBV announced a reference exchange rate between VND and USD on a daily basis. The new mechanism allows flexible fluctuations of daily exchange rates according to domestic supply and demand of foreign currency and global market developments, but still ensures the regulatory role of the SBV in monetary policy management. 9. Vietnam promotes international economic integration The trade and economic ministers of 12 countries joining the Trans-Pacific Partnership (TPP) agreement signed this global trade deal on February 4, 2016, in Auckland, New Zealand, marking the official completion of negotiations and the start of ratification procedures in each country. After that, the free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU) came into effect on October 5, 2016. The conclusion of the TPP and FTA has reaffirmed Vietnam's efforts to promote international economic integration. 10. Vietnam sets record to welcome 10 million foreign tourists Vietnam welcomed 10 million international visitors for the first time in 2016, a year-on-year rise of 25 percent. The country also served 62 million domestic vacationers. The tourism sector raked in 400 trillion VND (17.65 billion USD) in revenues. This is an important milestone in the tourism sector's path to become a national spearhead economic sector and make Vietnam a primary destination in the region. http://en.vietnamplus.vn/top-10-economic-events-in-2016/106484.vnp

What were the best investment channels in 2016? 02/Feb/2017 Intellasia | VNA People are investing their money in five main channels of stocks, gold, foreign currencies, property assets and savings but which of these offered the highest returns in 2016? Stocks: 14.8 percent Stocks, which were deemed risky and volatile assets, paid the highest returns last year. The benchmark VN Index hit the eight-year peak at 692.17 points on September 29. Investors could earn a 34.9 percent profit when investing in the VN Index and nearly 26 percent rate of return with investments in VN-30 during the peak period. The stock market entered a downward correction from October but the VN Index still ended the year up 14.8 percent over December 31, 2015, a good performance compared to an 8.7 percent growth in 2015. However, actual earnings depended on the portfolios of investors. Gold: 10.6 percent Domestic gold prices jumped to a four-year high in July at 39.8 million VND (1,786 USD) per tael, paying the gold investors a 17 percent rate of returns at this time. Investors could buy a tael of gold for 33.16 million VND on April 6 and sell it at 38.8 million VND on July 6. Gold prices slowed down its pace from early October and kept abreast with world gold prices. In the last months of 2016, domestic gold prices still increased despite a steep fall in the global market, partly due to the unfounded rumours of demonetisation. On December 31, 2016, SJC gold was quoted at 36.18 million VND per tael and 36.28 million VND per tael for buying and selling, respectively, with equivalent rises of 10.9 percent and 10.6 percent, respectively. Savings: 6.5 percent This safe-have investment channel was offering around 6.5 percent to 6.9 percent per year. Ending September, the average deposit interest rate increased by 0.4 percent by the end of 2015. However, short-term deposits of less than six months were subject to the ceiling interest rate of 5.5 percent. Popular interest rates at most commercial banks were between 6.5 percent and 6.9 percent per year. Bac A Bank, PVComBank offered a higher rate of 7.4 percent to 7.5 percent per year. With the annual inflation rate of 4.74 percent, depositors still received earnings from savings. US dollar: 2.4 percent The USD/VND exchange rate started to be flexibly adjusted daily since early 2016 with the fluctuation band of/-3 percent. The greenback was stable for the first ten months of 2016 and began to strengthen following the US presidential election. The US dollar was quoted at between 22,720 VND and 22,790 VND per dollar, up 1.2 percent and 1.1 percent over the previous year, respectively. In the black market, the dollar hit 23,370 VND per dollar in the last days of the year but calmed down soon after. The dollar gained 2.38 percent in the black market last year, a modest return rate compared to a 5 percent gain seen in 2015. Property The 30 trillion VND credit package to support low-income groups to buy social housing stopped disbursement on December 31, 2016. Circular No 06/2016/TT-NHNN eased some safety ratios for banks to channel capital in the real estate sector. However, Circular No 19/2016/TT-BXD tightened re-sale procedures which affected short-term investors. Prices of real estate projects differed depending on locations and house types. According to CBRE, the townhouses and villas project in District 2 in HCM City could reward investors a profit of 10 percent in the third quarter. http://en.vietnamplus.vn/what-were-the-best-investment-channels-in-2016/106509.vnp

Buoyant investor morale brightens economic outlook for 2017 02/Feb/2017 Intellasia | VOV The mood among Vietnamese analysts and investors is sanguine in the early weeks of 2017 after an overall solid economic performance report card for the Vietnam economy last year, say experts. The general Statistical Office has reported that the GDP rebounded strongly in the second half of 2016 registering growth at 6.21 percent for the year after a slight dip in the first six months - and is now on track for continued healthy growth in 2017. This puts Vietnam at the top of Asian countries in terms of GDP growth, which had been projected by the Asian Development Bank to grow overall at 5.7 percent for 2016, slightly down from the 5.9 percent growth in 2015. Manufacturing, construction, and services expanded robustly in Vietnam during 2016, driven by inflows of foreign direct investment. Disbursed foreign investment surged to a record $15.8 billion last year However, growth in the GDP was weighed down by weak performance in agriculture and mining that were crippled by natural disasters, droughts and floods, particularly in the Mekong and Central regions. Inflation stirred during 2016 but remained moderate as the government manged to keep it in check, measuring 4.47 percent, which was well within the maximum target rate of 5 percent set by the National Assembly at the beginning of the year. In the last two months of 2016, the Manufacturing PMI climbed to an 18-month high thanks to a surge in new orders, while industrial output accelerated, which bodes well for production heading into 2017. The ongoing rise in output for last year is reflected in the double-digit annual growth in exports observed for the year. Manufacturing and commercial trade look set to continue in the new year as the two main drivers of growth. The country took further steps last year to expand its geographical footprint into foreign markets through the negotiation of several strategic bilateral and free trade agreements, foremost among them those with the EU and the Eurasia economies. International travel into the country jumped significantly in 2016 with the number of foreign business and tourist arrivals having increased by an estimated 25 percent, apparently boosted most by the creation of the AEC and associated business travel. Against this backdrop, the withdrawal of the US from the Trans-Pacific Partnership (TPP) by President Trump is unclear at this point. While it is true that economic expectations were high for Vietnam under the proposed TPP, until new bilateral or free trade agreements are worked out with the US and other TPP members, it is impossible to gauge the overall impact. Notably, Vietnam stock analysts say the benchmark index will jump to a 10-year high this year as the strengthening economy, sales by the government of its stakes in state-owned enterprises and growing company listings continue to entice portfolio investors to the Southeast Asian country's market. The VN Index, they say, will rise to 745 by the end of 2017, or 12 percent above its 2016 closing level, according to the average estimate of 11 analysts surveyed by Bloomberg News. http://english.vov.vn/economy/buoyant-investor-morale-brightens-economic-outlook-for-2017- 342198.vov

Apec Year 2017: Vietnam actively promotes international integration 02/Feb/2017 Intellasia | VOV5 Vietnam hosts this year Asia Pacific Economic Cooperation forum following its first hosting of the event 11 years ago. Apec 2017 marks Vietnam's new achievements in international integration. After more than 25 years of formation and development, the Apec forum has confirmed its role as a leading regional and world economic cooperative mechanism towards trade and investment liberalisation and cooperation trends. In an ever-changing world, Apec is an absolute mechanism to secure peace, stability and cooperation for prosperity, as Vietnam wishes to reflect in its strategy during the Apec Year. The Apec Year theme of "Creating new driving force for a common future" defines members' priority to seek for new momentum for better economic and trade growth as well as cooperation in new areas and regional connectivity. This will consolidate the Asia Pacific region of peace, stability, development and prosperity. Executive director of the Apec Secretariat, Alan Bollard praised Vietnam's role in hosting the event. "It is a challenging year for Vietnam to be hosting. We are pleased with that you have picked up that challenge. The Peru Summit sent a message of unanimous agreement on the movement of globalisation. We expect to see Vietnam leading further work on the way that Apec goes forward, which is voluntary consensus and incremental. We are not a legally-binding institution like TPP. And we expect some of those will happen with the work programme for the free trade area for Asia and Pacific," said Bollard. Foreign friends' trust in Vietnam is conducive to its achievements after 30 years of renewal and active contribution within Apec and other multilateral mechanisms. Ambassador Nguyen Nguyet Nga, Senior Advisor to Vietnam's Apec 2017 National Secretariat said Vietnam's upcoming initiatives will be more proactive in Apec. "Existing initiatives focus on Apec priorities in terms of growth and connectivity requirements, especially quality in growth. This will be an area for Vietnam's initiatives and in line with our needs. Vietnam will make initiatives to support small and medium sized enterprises as well as vocational training in digital era," Ms Nga noted. Vietnam's hosting of the Apec Year represents Vietnam's key foreign relations objective and its determination in international integration, making Vietnam's major contribution to the forum towards Vietnam's 20th anniversary of its Apec membership. "The Apec Year 2017 will be a chance for us to show our economic image of renovation, dynamism with abundant potential and active mindset in international integration. This will promote the image of Vietnamese peace-loving and friendship where local businesses and people could contribute to Apec cooperation for practical benefits," said deputy Foreign minister Bui Thanh Son. http://english.vov.vn/politics/apec-year-2017-vietnam-actively-promotes-international-integration- 342557.vov

Making the AEC work for Vietnamese small business 02/Feb/2017 Intellasia | VOV As the 10 member states of the Asean Economic Community (AEC) move towards closer economic integration, more attention must now be accorded to the needs of small businesses, say the experts. The creation of the AEC in December 2015, intended to support the free flow of commercial goods and services within the 10-member region, was an important economic and policy milestone. Though larger more sophisticated businesses have and are expected to continue to prosper in the new competitive environment, it is obvious to most all the experts that smaller businesses are now struggling in the new marketplace. Given that 90 percent of all businesses in Vietnam are smallholders, the experts say, members of the public, private and social sectors have their jobs cut out for them to make the transition to the AEC a success. One important first step is to increase small businesses understanding of the AEC and the opportunities it creates. Surveys have shown that the overwhelming number of small businesses (as many as seven out of 10) have little to no awareness or understanding of the AEC. Only three out of 10 thought they fully understood how the AEC would affect their business operations. Comprehending the 10 economies, each with its own set of laws and regulations, varying stages of economic development along with differences in business culture and social norms, poses one of the more troublesome aspects of the AEC for small businesses to cope with. To succeed, these businesses must now recruit high calibre employees with skillsets capable of navigating the laws and regulations of each of the countries their employer plans to conduct operations or trade in. They must also be able to bridge the wide and varied cultural divides, say the experts. Most notably, employee recruitment comes to the forefront and requires a more diligent and thorough employee search by prospective small business employers. It also requires them to offer more attractive compensation packages. The increased openness of the AEC marketplace puts more pressure on the country's smallholders to innovate and improve employee productivity to remain competitive within the region, the experts underscore. Most significantly, those with a desire to expand their footprint across the AEC will need to establish close business relationships with established foreign regional business partners in order to bridge cultural differences. Members of the private and social sectors such as trade associations, colleges and universities have a more pivotal role to play in catalysing the process of fostering strong business networks within the AEC. In addition, it will take small businesses pooling their limited resources in ventures that seek to maximise the use of those assets. For example, local small businesses could and should form alliances with local food manufacturers and market their products in other AEC markets under a collective Vietnamese brand, they note. This would ease the cost burden of attempting to sell their products in other AEC member countries for such things as marketing, selling, general and administrative expenses as well as other overhead costs. The AEC, they say, requires academia to drive towards better training of the workforce for small businesses, which in turn directly bears on improving labour productivity. It also readily lends itself to advances in innovation that leads to enhanced quality of products from both cost and quality perspectives. In terms of the law, they say, the AEC places greater emphasis on the government to put in place a regime that is well thought out and established in clarity in terms of both intellectual property protection and enforcement. Vietnamese small businesses must now evolve and move from producing commodities on a large scale having tiny profit margins to smaller support industries focusing on manufacturing or production processes that add high value with large profit margins. They must most of all - learn the importance of establishing good brand reputations that have the capability of expanding within and without Vietnam and position themselves for competition within the much larger AEC and global marketplaces. http://english.vov.vn/trade/making-the-aec-work-for-vietnamese-small-business-342264.vov

Big challenges face economy 02/Feb/2017 Intellasia | Dtinews Local economists forecast that the Vietnamese economy will face greater challenges in 2017 amidst global geopolitical changes and financial uncertainties. Speaking with DTiNews, Dr Nguyen Tri Hieu said that Vietnam has set a GDP growth target of 6.7 percent and inflation rate of 4 percent for 2017, which is a big challenge as the country wants to both curb inflation while boosting GDP growth. "The two goals of GDP growth and inflation control often do not support each other. Aiming for higher economic growth means that the country has to accept higher inflate rate," Hieu added. Dr Hieu also noted that the US President Donald Trump may boost protectionist policies which restrict imports from many markets, including Vietnam. Meanwhile, the Vietnamese economy depends much on exports to the US. According to Dr Hieu, the dong will continue falling against the US dollar if the Federal Reserve further lifts interest rates. Regarding the dong/dollar exchange rate, Governor of the State Bank Le Minh Hung said the dong lost only 1.2 percent of its value in 2016. However, analysts do not believe that modest depreciation will continue in 2017. If US President Donald Trump expands fiscal policy, the US dollar would continue appreciating in the world market and capital flows would head for the US, putting pressure on new emerging economies like Vietnam. Meanwhile, the zero percent ceiling interest rate on dollar deposits has made it less attractive to bring dollars into Vietnam. Nguyen Duc Thanh, head of the Vietnam Institute for Economics and Policy Research, said that globalisation had exposed the weakness of many local firms and low-quality products meanwhile the administrative restructuring process is being carried out too slowly. Vietnam was too dependent on FDI firms. 60 percent of export value was from 100 percent-foreign- invested firms, with Samsung alone accounting for 20 percent of this total. Thanh went on to say that this was dangerous because Vietnam might have to depend solely on Samsung but technology was ever changing, Thanh claimed. Vietnam also needs better mechanisms to handle shocks that may come from the US under Donald Trump's presidency. The currency war between US and China would cause headaches for Vietnam and the world, he warned. http://www.dtinews.vn/en/news/018/49284/big-challenges-face-economy.html

Economic outlook for 2017 through eyes of foreign investors 02/Feb/2017 Intellasia | VOV The Vietnam economy showed resilience in 2016 with GDP growth an estimated 6.2 percent bolstered mainly by robust domestic demand and strong performance in foreign sector manufacturing exports. Yet the economic outlook for 2017 remains mixed in the eyes of foreign investors amid rising global economic uncertainties and questions about the government's commitment to sell off state owned enterprises (SOEs) as part of the effort to resolve the banking system's bad debt crisis. In November of last year, the National Assembly adopted a revised economic restructuring plan for the next four years, which emphasizes the need for continued restructuring of SOEs. Reforming Vietnam SOEs The restructuring plan calls for the government to retain full ownership in SOEs operating in 11 segments of the economy. The segments outlined in the plan include military mapping and measurement, industrial explosive material production and trading, management of national power grid, nuclear power, management of national railway and urban railway infrastructure, aviation control, search and rescue services, lottery and money printing among others. In addition, the government announced a specific list of 103 SOEs for which it would continue to hold a 100 percent stake over the four-year period and another 137 for which its interest would be partially to wholly liquidated during the period 2017-2020. Among those that would be sold, the state would continue to hold more than a 65 percent ownership interest in four, 50-65 percent in 27, and its interest would fall to below 50 percent in 106 of the SOEs. As outlined, the plan through 2020 demonstrates a high commitment by the government to let go of its state-owned monopolies in the private sector for consumer goods such as the dairy company, Vinamilk, and alcoholic beverage manufacturers, Saigon Beer (Sabeco), and Hanoi Beer (Habeco). The announcement of forthcoming sales of these monopolies has garnered considerable attention and positive feedback from foreign investors and others, particularly the international media. The reasons for this are twofold. First, foreign investors view SOEs as a costly burden on the Vietnam economy that would best be left to the country's private sector, thereby reducing government debt. The benefit from private sector efficiency and ingenuity would in turn bolster further economic growth. Second, an accelerated agenda for restructuring SOEs would also go a considerable way towards resolving the bad debt crisis in the banking system, which has been a long-standing problem that must be addressed in a substantive and meaningful way before the economy can truly move forward to more prosperous times. If the non-performing loans (NPLs) that were transferred to the Vietnam Asset Management Corporation (VAMC) in 2013 are not considered then it would appear that the ratio of NPLs to total banking assets has fallen to around 3.7 percent, well within an acceptable range. However, the receivables by the banks from the VAMC are still there and the banks still own the underlying NPLs transferred to it - so they cannot be glossed over and ignored by anyone's measure. The original plan was for the VAMC at some point to issue refunding bonds to raise money to partially satisfy the bad loans. The plan was and still is a viable and a good temporary solution, but it does not make the NPLs problem go away. Translated this means that insolvent banks have effectively been provided, at least temporarily, liquidity, but there remains a need to further address the underlying liquidity problem at some point. Foreign investors are under the distinct impression that either the banks underlying debt from the VAMC must be funded in whole or in part or many of them might be forced to shutter their doors, which could be disastrous for the country's economy. They look at the sale of SOEs as a solid mechanism to solve the underlying bad debt problem because the government can take some of the money that would have gone to fund non-performing SOEs and use it to repay the NPLs that were transferred to the VAMC. The government's commitment to selling its ownership interest in SOEs as demonstrated by past actions and the concrete plan laid out by the NA last November and resolve the lingering banking system bad debt problems bodes well for the Vietnam economy in the eyes of foreign investors. It instils confidence in foreign investors to continue to look favourably upon the Vietnam business climate and the country as a good place to invest, which in turn tremendously benefits the economy and social welfare of the country's citizens. http://english.vietnamnet.vn/fms/business/171945/economic-outlook-for-2017-through-eyes-of-foreign- investors.html

Samsung pledges $2.5b FDI, asks for more investment incentives 02/Feb/2017 Intellasia | VNN Samsung Display Vietnam (SDV) has expressed its willingness to invest $2.5 billion more in Bac Ninh province, thus raising total investment scale of the project in the locality to $6.5 billion. However, its claims for investment incentives have raised controversy. Samsung wants its operational project in Bac Ninh province to enjoy the preferential policy offered to 'large scale projects' and the investment incentives for 'high technology project'. It also wants the additional investment capital of $2.5 billion to enjoy corporate income tax incentives as now applied. Meanwhile, the Bac Ninh provincial authorities have proposed to the prime minister to retain the additional incentives (SDV can enjoy preferential corporate income tax rate of 50 percent for three more years for its project in Yen Phong Industrial Zone after it shifts from 'high-technology project' to 'large scale project'). Vu Duc Quyet, director of the Bac Ninh provincial Industry and Trade Department, said since this case does not come under the local authorities, Bac Ninh will have to report to the prime minister for the final decision. According to Nguyen Hong Nga from the Economics & Law University, it is necessary to clarify that the promised $2.5 billion is 'additional investment capital'. It will be unreasonable to add the newly pledged sum of capital of $2.5 billion and the $4 billion for the operational project to calculate tax incentives. Nga believes that Samsung can enjoy investment incentives for its operational project until 2019. As for the new project capitalised at $2.5 billion, it will be able to enjoy investment incentives from 2018 to 2022. This means that the two projects will be treated separately. Agreeing with Nga, Bui Ngoc Son from the Institute of World Economics and Politics, said it is necessary to refer to current laws about 'large scale projects'. Some investors in the past committed $10 billion with disbursement within five years. But they only disbursed money in the first year or two and then stopped disbursement due to financial difficulties. The problem was that they still enjoyed investment incentives in the first two years offered for a $10 billion project. Son noted that Samsung has received many investment incentives from the government of Vietnam and local authorities. Meanwhile, what Vietnam has received is just jobs for local residents. "Samsung reports the export turnover of several billions of dollar a year, but Vietnam can pocket some tens of millions of dollars only," he said. Meanwhile, Nga said it would be better not to consider Samsung's proposal for incentives, at least for the next five years, because Vietnam now prioritises to attract investment into high-tech sector. Exports revenues from the two plants of Samsung Electronics Vietnam (SEV) in Bac Ninh Province and Samsung Electronics Vietnam - Thai Nguyen (SEVT) in Thai Nguyen Province were estimated to reach $35 billion in 2016, posting a 7 percent year-on-year increase despite the impact from Note 7 incident. http://english.vietnamnet.vn/fms/business/171539/samsung-pledges-2-5 billion-fdi-asks-for-more- investment-incentives.html

Vietnam, RoK boost economic ties 02/Feb/2017 Intellasia | VOV5 Vietnamese and Korean diplomats have praised the rapid, sustainable, practical and comprehensive development of bilateral cooperation over the past quarter century, particularly the economic results. Vietnam and the Republic of Korea are celebrating the 25th anniversary of their diplomatic ties this year. Both nations established diplomatic ties on December 22, 1992. In August 2001, the two countries signed a Joint Statement on "The Vietnam- Republic of Korea Comprehensive Partnership". They upgraded their ties to strategic partnership during Korean President Lee Myeong Bak's visit to Vietnam in November, 2009. Impressive cooperation results Economic cooperation between Vietnam and the Republic of Korea has developed rapidly over the past 25 years. RoK is the largest investor out of 112 countries and territories investing in Vietnam. Last year, Korea exported much more to Vietnam than to Japan. Processing, manufacturing, real estate, and construction are among the 19 areas where Korea is investing in Vietnam. Pham Huu Chi, Vietnamese Ambassador to the Republic of Korea, said "In 1992, economic cooperation was almost nil. But by the end of last year, two-way trade reached more than $42 billion. The Republic of Korea's investment in Vietnam was $50 billion." Vietnam is the Republic of Korea's biggest ODA recipient. The Republic of Korean ODA projects in Vietnam are effectively implemented and promptly disbursed. The two sides are discussing the signing of a Framework Credit Agreement in the 2016-2020 period under which Korea will provide $1.5 billion worth of ODA to Vietnam. Korean Ambassador to Vietnam Lee Hyuk said "The rapid growth of bilateral ties due to the mutual economic support mechanisms. Many Korean enterprises have shifted their investment in China to Vietnam. Vietnam has a young, skilled, and hard working labour force while Korea has capital and the world's leading technology. The combination of the two countries' advantages has boosted bilateral economic ties." The two countries have maintained bilateral economic cooperation through the Inter-governmental Committee for Economic, Scientific and Technological Cooperation, and the ministerial Joint Committee for Cooperation in Nuclear Power, Energy, and Industry. The bilateral Free Trade Agreement, which came into force on December 20, 2015, has created new momentum for raising bilateral trade to $70 billion by 2020 under an agreement signed in 2003. New flow of Korean investment to Vietnam In the past 25 years, Korean investment in Vietnam has mainly focused on labour. In recent years, leading Korean technological groups including Samsung, LG, and Hyosung have increased investment in high technology in Vietnam. Since 2008, Samsung invested in two factories in Thai Nguyen and Bac Ninh province that produce 150 million mobile phones each year. Samsung, LG, and other global economic groups have enabled Vietnamese enterprises to participate in the accessories and spare part supply chain. Ambassador Kee Hyuk said, "Many Korean enterprises have praised Vietnam as the world's most favourable investment destination and Korean investment into Vietnam will continue to rise. I encourage Korean investors not only to gain profit but also support Vietnam's economy and create social benefits for Vietnam. Economic groups, and small and medium sized enterprises exercise social responsibility while doing business in Vietnam. As Korea's Ambassador, I serve not only the Republic of Korea but also Vietnam". http://english.vov.vn/trade/vietnam-rok-boost-economic-ties-342247.vov

Vietnam's economy less dependent on cheap labour force 02/Feb/2017 Intellasia | VNN Labour-intensive industries such as mining and agriculture are no longer expanding, according to Nguyen Duc Thanh, director of the Vietnam Institute for Economic and Policy Research (VEPR). Speaking at a seminar to release the 2016 macroeconomic report, Thanh was optimistic about the country's economic restructuring. For a long time, Vietnam has been considered an economy that has taken advantage of its cheap labour force. Foreign experts say this is 'economic development with no depth'. However, Thanh said he can see signs of the national economy developing with less reliance on a cheap labour force. Thanh cited an official report as saying that while the number of businesses has increased sharply to a record high, the number of workers has decreased. This can be explained by the fact that the economy has not expanded in labour-intensive fields such as mining and agriculture. Both sectors saw lower growth rates last year. Meanwhile, the sectors, which do not need high numbers of workers, while utilising many machines and equipment, have witnessed strong growth. Bui Trinh, a respected economist, when asked what were the 'brightest parts of the picture of Vietnam's trade' by Hai Quan's reporters, said he can see a sharp increase in exports of agricultural produce and seafood, except rice, and a gradual decrease in the exports of minerals such as crude oil and coal, commenting that Vietnam is escaping from an economy based on the export of products 'dug from the earth' and natural resources. International and Vietnamese experts in recent years repeatedly have warned that Vietnam can no longer count on the cheap labour force as the competitiveness of the economy. Deputy prime minister Pham Binh Minh, in his recent speech, also said that in the years to come, under the pressure of the labour unions and employees' expectations on minimum wage increases, cheap labour force will no longer be the advantage for Vietnam to attract FDI. "We need a new economic growth model with focus on quality, productivity and knowledge," he said. The National Wage Council has decided to raise the regional minimum wage by 7.3 percent in 2017. Thanh Nien quoted its sources as saying that in order to improve the current situation that Vietnam has been developing based on a cheap labour force, it needs big changes in policies on education and bigger opportunities for youth to approach technology. This is a difficult task, but feasible. At Intel Products Vietnam, for example, every Vietnamese worker there can create export value which is 93 times higher than average export value created by one worker at one foreign invested enterprise in Vietnam, according to a Fulbright survey. http://english.vietnamnet.vn/fms/business/171637/vietnam-s-economy-less-dependent-on-cheap-labour- force.html

Super-rich in Vietnam on sharp rise, public debt nears ceiling 02/Feb/2017 Intellasia | Dat Viet A lot of Vietnamese have become rich not because of legitimate production and business, but from corruption, tax evasion and illegal activities, experts say. Oxfarm has released a report showing that the one-year income of a group of 210 super-rich people in Vietnam is more than enough to help 3.2 million people escape poverty. The 2016 Wealth Report showed that in 2015, Vietnam had 168 super rich people, i.e those who had $30 million and more, or 12 people higher than the year before. Vietnam is forecast to be the country with the highest increase (140 percent) in the number of super rich, to 403 persons, in the next decade. Pham Tat Thang, a senior researcher at the Ministry of Industry and Trade, said it is not a surprise that Vietnam has had many more super rich in recent years. According to Thang, the average income per capita in Vietnam has been increasing rapidly in the last 30 years. The current figure is $3,100. However, compared with other regional countries, Thang believes that Vietnam has lagged far behind. "Vietnam is among the countries with the lowest income in Asean," he said. Nguyen Cong Nghiep from the Hanoi Business & Technology University, former deputy minister of Finance, while commenting that this is good news that Vietnam has more rich people, said that it is difficult to exactly know the real value of super-rich people's assets. In recent years, the assets of the super rich have been measured by the volume of stocks they hold and the assets they declare. However, there are still 'hidden' billionaires as their assets are not made public. Meanwhile, cash remains the major payment method in Vietnam. Some analysts pointed out that while the number of super rich has been increasing sharply, the public debt has also increased and has nearly hit the ceiling while GDP growth has slowed down. According to Thang, there are three groups of super rich. First, people who made money thanks to big stock assets. Second, those who got rich from real estate, and third, people who exploited natural resources in Vietnam or other countries. He noted that not many people got rich by producing high-quality goods which create jobs, contribute to Vietnam's GDP, or engage in sustainable development. He also noted the relation between the sharp increase in the number of super rich, GDP growth slowdown and the public debt increase. Nguyen Tri Hieu, a renowned expert, in an interview with Dat Viet, said this is a 'matter of concern'. Many rich people have not contributed to the country's development. http://english.vietnamnet.vn/fms/business/171764/super-rich-in-vietnam-on-sharp-rise-public-debt-nears- ceiling.html

VN expects closer business connectivity with South Africa 02/Feb/2017 Intellasia | Bizhub Vietnam hopes to increase the exchange of economic information with South Africa and enhance connectivity between businesses of the two countries, the Vietnamese ambassador to South Africa has said. Ambassador Vu Van Dung held a meeting with leaders of South Africa's Durban Chamber of Commerce and Industry (DCCI) on Monday to discuss issues related to cooperation between Vietnam and South Africa as well as the embassy and the DCCI. The Vietnamese diplomat believed Vietnam and South Africa - a large economy of Africa and the world - hold great potential for stronger trade cooperation, with two-way trade reaching only $1.2 billion in 2016. Vietnam will host Apec Year 2017, with some 200 activities, and Apec High-level Week at the end of the year, which is a good opportunity for enterprises from Durban and South to reinforce connections with their partners in the Asia-Pacific region, he said. Dao Manh Duc, head of the Vietnamese Embassy's office for trade affairs, said although Vietnamese products are suitable for the South African market, they are not as popular among South African consumers and businesses due to a lack of information and inadequate business exchange channels. Meanwhile, South Africa's main products, such as beef, fruits, wine and mineral products, have yet to successfully enter the Vietnamese market, Duc said. He also asked the DCCI to enhance the sharing of information and partnership opportunities through trade promotion events hosted by the DCCI and increase meetings between trade delegations of both sides. Alta Keyter, DCCI director for marketing and communications, said in future, the DCCI would promptly update information about Vietnam's goods, tourism and trade fairs and exhibitions in its news bulletins, in addition to actively exchanging information with the Vietnamese Embassy to provide South African businesses with opportunities to study the market, products and tourism of Vietnam. Durban is the largest port city in South Africa and a major container port of the southern hemisphere. It is an economic hub of South Africa with diverse sectors, including production, tourism, transportation, finance and import-export activities. With a long coastline, vast beaches, warm weather and unique culture, the locality is also an attractive tourist destination. The DCCI was established in 1856, grouping over 2,800 firms. It is one of the largest and most prestigious commerce and industry chambers of South Africa. http://bizhub.vn/news/vn-expects-closer-business-connectivity-with-south-africa_283872.html

VN faces strange steel shortage 02/Feb/2017 Intellasia | VNS Though Vietnam possesses huge amounts of iron ore, there is a serious shortage of steel for the mechanical engineering industry and defense industry, the Ministry of Industry and Trade's Heavy Industry Department director Truong Thanh Hoai was quoted by the online newspaper news.zing.vn on Monday. This is the paradox of Vietnam's steel production, causing a trade deficit and affecting the stability of the macro economy. Vietnam's steel industry has great potential but the industry's development is not synchronised. For example, hot rolled coil (HRC) and alloy steel cannot be produced domestically, therefore, Vietnam still has to import a large quantity of these raw materials and semi-finished products, he said. "The country's ship-building industry is depending entirely on imported steel," Hoai said, adding that Vietnam has spent billions of dollars to import steel annually, reflecting the huge domestic demand of a developing country requiring infrastructure and undergoing rapid urbanisation. By 2020, Vietnam will face a shortage of about 15 million tonnes of crude steel and up to 20 million tonnes by 2025, Hoai said, adding that the country must develop steel complex projects to produce all kinds of steel to serve the country's mechanical industry. According to the Vietnam Steel Association (VSA), steel imports in 2016 surpassed the country's total steel production, reaching 17.5 million tonnes, up 16.8 per cent year-on-year, of which the amount of consumption reached 15.3 million tonnes, up 23.7 per cent compared to 2015. VSA vice chair Nguyen Van Sua warned that Vietnam risks being flooded by imported steel products, adding that strong rises in imports are hindering the growth of domestic producers. According to the general Department of Customs' statistics, Vietnam spent $11 billion importing over 22 million tonnes of steel and iron products in 2016, an increase of 18.4 per cent and 7.2 per cent in volume and value, respectively, against the same period in 2015. Imported steel from China amounted to more than 10 million tonnes, worth nearly $4.5 billion, and accounting for 50 per cent of Vietnam's imported steel. The figures represent year-on-year increases of 14 per cent in volume, and 7 per cent in value, he said. Japan, the Republic of Korea are the other major steel exporters to Vietnam, making up 20 per cent of the country's total imported steel. Import numbers from Japan and South Korea were 2.6 million tonnes and 1.8 million tonnes, worth $1.2 billion and $1 million, respectively Meanwhile, Vietnam exported approximately 3.9 million tonnes of steel of different types to traditional Asean and US markets. Sua said that last year, steel export faced many difficulties due to trade defence lawsuits filed by the US, Canada, India, Thailand and Malaysia. "China steel massively penetrating into Vietnam is mainly produced at industrial zones and factories located in the country's coastal region. This type of steel is competing with local steel as sea transport costs are very cheap, not to mention the convenient transport conditions," Hoai said. Hoai said 18 Vietnamese steel companies had petitioned the government and the Ministry of Industry and Trade to extend the scope of application of trade defense tax, tightly controlling steel imports to prevent trade fraud and tax evasion. In March 2016, the Ministry of Industry and Trade issued a decision to apply additional tariffs on imported steel products as a temporary safeguard against inexpensive imports that were allegedly threatening the domestic industry. Temporary safeguard duties of 23.3 per cent were imposed on steel billets and 14.2 per cent on long steel products for a maximum of 200 days. However, the foreign steel exporters avoided the tax by changing their product codes. http://english.vietnamnet.vn/fms/business/171892/vn-faces-strange-steel-shortage.html

HSBC: Manufacturing in the lead for Vietnam's economy 03/Feb/2017 Intellasia | Dtinews Backed by a strong end of year with 2016's fourth quarter GDP growth of 6.8 per cent and a growth rate of 6.2 per cent for the whole year, the primary driver of Vietnam's robust economic expansion is manufacturing, HSBC wrote in its latest report. Despite a disappointing start in 2016, economic growth gathered pace in the second half accelerating to 6.8 per cent year-on-year in the fourth quarter from below 6 per cent earlier in the year. Agricultural production stabilised during the quarter, after a severe drought, while output in mining and quarrying declined. This was, however, offset by robust growth in manufacturing. Construction activity also picked up, reflecting ongoing infrastructure investment and strength in the housing market. Vietnam continues to gain global market share in key products, ranging from apparel to electronics, partly reflecting the economy's integration into the regional supply chains of multinational companies. The country's highly competitive labour force is a key attraction, leading to another record high of FDI disbursement in 2016. As of December 26, 2016, foreign direct investment (FDI) worth $15.8 billion was disbursed. This is about 9 per cent more than what was disbursed in 2015. The largest contributions came from Korea, Japan, and Singapore - in that order. All in all, about 19 sectors received FDI, but the largest share was absorbed by the manufacturing sector. In December, industrial production accelerated 7.8 per cent year-on-year, from 7.4 per cent in the previous month. Double-digit growth in manufacturing production, which accounts for 75 per cent of total industrial production, helped offset yet another steep fall in mining and quarrying output. The readings of the manufacturing PMI are also in agreement. At 52.4, the December PMI was solid and reflected sustained improvements in operating conditions of the sector. Gains in new orders, including those in new export orders, kept production ticking along. Confidence in the sector is further bolstered by firms' decisions to hire more staff and accumulate inventory - of both preproduction and finished goods. All this signals expectations of higher demand, and thereby stronger economic growth in the quarters to come. But while macroeconomic indicators are upbeat, fast paced economic expansion will not be sustainable without continued investment in infrastructure. In Vietnam, there's certainly a need for continued public investment in infrastructure to sustain the heady pace of economic expansion. Domestic demand too, has been substantially underpinned by rapid credit growth and government spending which, if unchecked, could pose challenges in the medium term. Despite increased focus on efficiencies in government spending and tax collection, public debt has come under pressure. Much of this debt is in the form of long term development assistance loans, which are likely to be rolled over on the back of the economy's transition to a "middle income country" from a "low income country." Government accounts, however, appear a little stretched at the moment, highlighting the need for public finance reform. This includes the sale of government stakes in State-owned enterprises (SOEs), a process that helps raise revenue, reduce potential future cost burdens like subsidies, and raise the efficiency of SOEs. In a recent decision, the government announced the total rate of State ownership in "firms" that are set to be equitised (or privatised). Previously, the rates were fixed by "sector" leading to low divestment. Faster divestment will open for the government some fiscal space to stimulate economic activity. Although a small move, the decision highlights the government's resolve to deepen structural reforms that should help improve the economy's long-term growth prospects. Reforms around public finance should not only include more effective management of public funds and better management of debt, but also a speedy equitisation of SOEs. The current average divestment rate at SOEs is 8 per cent. In other words, the State still holds 92 per cent of charter capital post-equitisation. But the privatisation reform was revitalised when a fresh decision was issued on 28 December 2016, where the government announced the total rate of state ownership in "firms" that are set to be equitised. Previously, the government only regulated the extent of state ownership rates by sector, not specific SOEs, leading to low divestment. Additionally, the decision lists 103 SOEs in which the state will hold a 100 per cent stake and a further 137 that will be equitised from 2016-2020. Among those to be equitised, the state will hold over 65 per cent of charter capital in four, 50-65 per cent in 27, and less than 50 per cent in 106. SOEs operating in sectors such as national defense and security, nuclear power, and money printing will not be equitised. This decision supersedes the earlier one and comes into effect from 15 February, 2017 of which this will likely accelerate the divestment process, according to HSBC. http://www.dtinews.vn/en/news/018/49308/hsbc-manufacturing-in-the-lead-for-vietnam-s-economy- .html

Vietnam's manufacturing sector stays strong despite dim prospects for trade deal 03/Feb/2017 Intellasia | VnExpress The sector still grew at the start of 2017 amid concerns that the Trans-Pacific Partnership will die after the U.S's withdrawal. Vietnam's manufacturing purchasing managers' index fell to 51.9 in January from 52.4 the previous month. It was the modest growth in the last three months of the Nikkei-Markit survey, but the manufacturing sector in Vietnam remained in expansionary territory and came second among the countries in Southeast Asia. "It was a steady start to the year for the Vietnamese manufacturing sector with growth of output, new orders and employment maintained," said Andrew Harker from IHS Markit. New orders continued to grow in the first month of 2017, but the rise was also the slowest in a three- month period. There was also an increase in new export orders due to stronger demand from foreign customers. Although the rate of job creation eased for the second-straight month, Vietnamese manufacturers still reported more jobs in January. "Although rates of expansion generally slowed, the ability of firms to secure a further solid increase in new work bodes well for coming months," said the Markit expert. Business conditions have strengthened in each of the past 14 months and business sentiment remained strongly positive as firms generally expected increases in new orders and new product launches, according to the survey. Given the fact that there will be highly likely no Trans-Pacific Partnership (TPP) under Donald Trump's presidency, Vietnam, which is supposed to be among the biggest beneficiaries of the trade deal, may be viewed less attractive as an investment destination than it could have been. Trump officially pulled the US out of the ambitious 12-nation pact right after taking office. "This means that Vietnamese firms won't see the benefits of the trade pact with the US in the longer term in areas such as textiles and clothing analysts," said Harker. "Despite this setback, the near-tem outlook remains positive." The headline Nikkei Manufacturing Purchasing managers' Index, a composite single-figure indicator of the manufacturing sector, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 industrial companies in Vietnam. A reading above 50 indicates the manufacturing sector is the expansionary territory, while a reading below 50 points toward contraction. http://e.vnexpress.net/news/business/vietnam-s-manufacturing-sector-stays-strong-despite-dim-prospects- for-trade-deal-3535760.html

National CPI hits two-year high in January 03/Feb/2017 Intellasia | Bizhub The January's CPI also experienced a year-on-year rise of 5.22 per cent, much higher than 1-per-cent growth seen in same period last year, GSO said. Do Thi Ngoc, deputy head of GSO's Price Statistics Department, attributed the index's significant increase to three rises in the petrol prices in December 20, 2016, January 4 and January 19, 2017 and high consumption demand for the Tet (Lunar New Year) holiday which fell in January. The prices of 9 among 11 major groups of goods and services increased in January. Transport witnessed the highest growth at 3.2 per cent, followed by pharmaceuticals and healthcare service at 1.01 per cent, beverage and tobacco at 0.78 per cent and education at 0.5 per cent. Prices also surged by 0.6 per cent for housing and building materials as the cost of cooking gas rose by about 8 per cent since January 1 and local people had tendency to repair their houses to celebrate the nation's biggest festival. Meanwhile, a downturn was seen in food and catering service and post and telecommunications with 0.24 per cent and 0.15 per cent, respectively. In January, domestic prices of gold and dollars decreased by 0.18 per cent and 0.07 per cent year-on-year, respectively while the exchange rate was stable at about VND22,900 per US dollar. The GSO reported that core inflation (CPI excluding food, fresh foodstuff, energy and State-owned products such as healthcare services and education) in the month rose 0.28 per cent over the previous month and 1.88 per cent year-on-year, which reflected the stability of the monetary policy. It also forecasts that February's CPI will continue rising as the prices of food, foodstuff, entertainment, and catering services go up during the festive first lunar month. http://bizhub.vn/news/national-cpi-hits-two-year-high-in-january_283897.html

Vietnam attracts more than $1.4b FDI in January 03/Feb/2017 Intellasia | Nhip Cau Dau Tu Since the beginning of the year till January 20, the total foreign direct investment in Vietnam reached $1.423 billion, up 6.6 percent year-on-year, according to the data of the General Statistical Office. In the aforementioned period, Vietnam attracted 175 newly licensed projects with the registered capital of $1.244 billion, up 37.8 percent in the number of projects and 23 percent in the amount of registered capital compared to the same period of 2016. Besides, 76 projects licensed from the previous years registered to adjust investment with the additional capital of $179.2 million, bringing the total FDI to Vietnam in this month to more than $1.4 billion. The disbursed FDI in January 2017 alone was estimated to reach $850 million, up 6.3 percent year-on- year. The foreign direct investment of newly granted projects in the month focused mainly in processing and manufacturing industry with the registered capital of $834.9 million. If including the additional registered capital of projects granted with license since the previous years, the total FDI in this industry reached $1.013 billion, accounting for 71.2 percent of the total registered capital. Real estate business attracted $297.4 million investment, reckoning for 23.9 percent. Nationwide, 26 provinces and cities directly under the central government had newly granted FDI projects in which Binh Duong had the largest registered capital with $666.2 million, followed by Bac Giang with $159.5 million. Out of 31 countries and territories with newly granted projects in Vietnam in January, Singapore was the largest investor with $416.7 million, making up 33.5 percent of the total registered capital, followed by South Korea with $347.8 million, or 28 percent; China with $310.1 million, or 24.9 percent.

January 2017 FDI higher year-on-year 03/Feb/2017 Intellasia | Bizhub Foreign direct investment (FDI) into Vietnam reached $1.42 billion from the beginning of the year until January 20, according to data from the general Statistic Office. The amount exceeded FDI during the same period in 2016 by 6.6 per cent. During this time, Vietnam attracted 175 newly-approved projects with total registered capital up to $1.24 billion, up by 37.8 per cent in terms of project number and 23 per cent in terms of capital compared with the same period last year. Simultaneously, 76 projects from previous years had applied for capital adjustment with an additional amount of $179.2 million. Estimation of capital disbursement for FDI in January 2017 alone reached $850 million, up by 6.3 per cent from the same period in 2016. The real estate business attracted $297.4 million, accounting for 23.9 per cent of total national FDI. In total, 26 cities and provinces of Việt Nam approved renewed FDI projects, in which southern Binh Dương Province had the largest amount of registered capital at $666.2 million, followed by northern Bắc Giang Province at $159.5 million. In January 2017, out of 31 countries and territories with renewed FDI projects in Việt Nam, Singapore was the most significant investor with $416.7 million, accounting for 33.5 per cent of total renewed capital. The Republic of Korea was in second place with $347.8 million at 28 per cent, followed by China with $310.1 million at 24.9 per cent. http://bizhub.vn/news/january-2017-fdi-higher-year-on-year_283877.html

January records trade deficit 03/Feb/2017 Intellasia | VNA Vietnam ran a trade deficit of 100 million USD in January, after enjoying a trade surplus of billions of USD in 2016. In the first month of 2017, the country imported 14.7 billion USD and exported 14.6 billion USD worth of commodities, down 14 and 12 percent compared to the figures for December 2016, respectively. A number of major hard currency earners saw a drop in revenue in comparison with December. Phones and components felt 7.1 percent to 2.5 billion USD, apparel, down 10.8 percent to 2.05 billion USD, and computers-electronic devices, down 14.1 percent to 1.6 billion USD. Similar downward trend was seen in the import of key goods, with machinery and spare parts reporting a decrease of 15.3 percent to 2.6 billion USD, while computers-electronic devices and petroleum products faced a respective drop of 10.3 and 32.7 percent from December of 2016 to 2.25 billion USD and 510 million USD. The Ministry of Industry and Trade is implementing a programme on sustainable export, which puts forth measures to restructure the market and boost product competitiveness. The programme also highlights product quality improvement, trade promotion and market expansion. http://en.vietnamplus.vn/january-records-trade-deficit/106634.vnp

More businesses try their hand as customs simplifies procedures 03/Feb/2017 Intellasia | VNA The number of companies involved in foreign trade has increased, indicating simplified customs procedures, a senior official of the Customs general Department said. "In 2016 import-export companies increased by 15.4 percent from the year before to 73,170," Nguyen Cong Binh, deputy head of the department, was quoted as saying in Thoi bao Kinh te Vietnam (Vietnam Economic Times) newspaper. Last year the department received nearly 10 million customs declarations, an increase of 17.2 percent, with declarations for exports increasing by 14.4 percent to 4.76 million, and for imports by 19.8 percent. There were 943,000 vehicles entering and leaving the country, an increase of 2.8 percent. The department has adopted new technologies and regulations to help reduce the time it takes to make checks while also improving oversight of the movement of goods. "Early in March customs will work with relevant authorities to deploy a national one-stop check at airports like it has done at seaports," Binh said. Nguyen Van Can, the customs chief, said, "The industry has focused on dealing with many existing problems and now we have recognised 700 companies as customs agents and granted agents' codes to 1,170 of their staff." He revealed that since installation of new systems have not been completed at seaports yet, customs procedures remain slow. The software used by businesses and customs and port management units are different and so need to be made compatible, and cameras have not been installed in some port warehouses to monitor the movement of goods, he said. "We have not been able to set up a national one-stop check on the rail and road networks due to lack of regulations and [as a result] all checking is done manually, reducing efficiency." He said border smuggling is very sophisticated. But monitoring of domestic waterways is not efficient because of their complex networks, he said. "There is no master plan for customs warehouses on borders while border gates attract too many goods with poor infrastructure, leading to an overload [at the gates]. "Customs is trying to strengthen the checking system to improve oversight and reduce the time it takes for enterprises." http://english.vov.vn/trade/more-businesses-try-their-hand-as-customs-simplifies-procedures-342670.vov

VN predicts strong business confidence 03/Feb/2017 Intellasia | Bizhub Business confidence is expected to improve in 2017, following the government's hastened reform efforts aiming to create momentum for firms and boost start-up entrepreneurship. After a year of record firm foundations, which is considered a silver lining although the country failed to meet its growth target, the government signaled ongoing determination to improve the business climate and national competitiveness this year. "I believe that business confidence will strengthen and help boost economic growth," said Tran Thi Hong Minh, director of the Business Registration Department under the Ministry of Planning and Investment. Convenience in setting up firms - such as free online business registration from the beginning of this year - will promote private investments into the economy, Minh said. According to the General Statistical Office, 8,990 new firms were founded in January with a total registered capital of VND90.3 trillion (US$4.01 billion), representing increases by 8.1 per cent and 52.3 per cent, respectively, over the same month of last year. Registered capital averaged VND10 billion, a whopping rise of 40.9 per cent. Existing firms registered to increase capital by a total of VND114.6 trillion in January, statistics showed. In addition, over 5,560 firms resumed operation, up by 14.2 per cent. The reform effort is being geared up across many sectors. minister of Finance Dinh Tien Dung said that finance-related policies will continue to promote private investment and business foundation, especially start-ups. Dung added that the ministry will focus on issuing policies which will encourage the application of technologies to create high-added value products. The number of new firms hit a record of more than 110,000 in 2016, two years since the amended laws on Enterprise and Investment came into force. The ministry's statistics showed that it now took an average of only 2.9 days to handle procedures for setting up a firm. All business registration status were now updated on a national information system. However, new firms are mainly of small and medium sizes with the average registered capital of around VND8 billion. "It is critical to improve the climate to create condition for businesses to grow," Minh said. Tran Dinh Thien, director of the Vietnam Institute of Economics said that the record number of 110,000 new firms in 2016 was just a number. "It is more important how to develop strong private companies in the next five years, which will become the backbone of the economy," he said. http://bizhub.vn/news/vn-predicts-strong-business-confidence_283905.html

Nearly 9,000 new companies launched in Vietnam in January 03/Feb/2017 Intellasia | VnExpress A strong start for the economy in the new year after a record high number of new openings in 2016. Vietnam's business community has hit the grounds running in the new year. Official reports showed that 8,990 companies opened in January, up 8 percent from last year. Their registered capital surged 52.3 percent to VND90.3 trillion ($4 billion) in total. The new companies are expected to create 104,100 jobs. In comparison, there were 8,320 new companies with 124,000 new jobs in January last year. Nearly 5,600 suspended companies also resumed operations last month. The number of businesses shutting down increased 18.3 percent year-on-year to 1,583. Vietnam hopes to see over one million businesses in operation by 2020. It is now halfway to that point. The country saw a record number of business openings of 110,000 last year, strengthening hopes for robust growth and strong investment in the near future. Officials from the labour ministry reportedly said that Vietnam aims to create 1.6 million jobs this year, roughly the same figure last year. More than 3 percent of the country's urban adults are unemployed while the rural rate is nearly 2 percent. http://e.vnexpress.net/news/business/nearly-9-000-new-companies-launched-in-vietnam-in-january- 3535705.html

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