finance & business news 31 August 2017 FINANCE. 1 Tra Vinh approves VND850 billion for Cau Quan IP project 28 Reference exchange rate up 5 dong 1 CII to spend VND3.4 trillion on infrastructure projects 29 Worries still remain as SBV is likely to pour to the market Vung Ang attracts investments after Formosa incident 29 nearly 700tr dong 2 BIZ NEWS . .30 Is credit growth worth worrying? 3 Business Briefs August 31, 2017 30 Which banks benefit when the ratio of short-term funds Markets fall on ETF withdrawal 31 for long-term loans is not yet tightened? 4 VN Index rebounds, boosted by VIC and MSN 31 FE credit launches Fast Cash, Simply Text – Get Cash 5 HSX up while HNX down 32 BC Card Signs MOU with Vietnam's NAPAS 5 Derivatives trading: Individual investors must pay 0.1% tax 32 Growing interest in transaction banking 6 Cash flows will rotate faster 33 Minister optimistic about achieving economic growth target 8 LHG issues 1.3mln shares to invest in Long Hau 3 industrial park 34 Set targets might be unachievable without drastic efforts: PM 8 New buildings in Hanoi must have underground parking lots 34 Cutting regular spending, not raising taxes, will reduce public debt 9 Real estate inventory falls sharply 34 Standing witness to Vietnam’s rise 10 Ha Noi taxis to use common operating software 35 IIP up 6.7 per cent in eight months 13 Huge steel projects in Ha Tinh are scrapped 35 August CPI edges up on food, fuel price hikes 13 Quang Binh gets green light for cable car project 36 Strong exports in Jul-Aug help narrow trade deficit 14 Loss-making PVTex may have way out 36 Asia seen as key buyer of Vietnam shrimp 15 VNITO to open ‘bridge’ engineer training center this year 37 Large-scale investments promise FDI breakthrough 16 Vinalines, Belgium’s Rent-A-Port N.V ink cooperation deal 38 Health insurance fund may grapple with overspending 16 RoK group invests in renewable energy power in Quang Binh 38 PM orders prompt settlement of admin procedures in September 17 Mobile World and Tran Anh confirm acquisition 39 HCMC demands more for regular spending 18 BKAV puts faith in tapping high-end phone market 39 HoREA proposes not classifying tourism land as farmland 18 Vinpearl Land launches giant Sky Wheel 41 Insufficient land use affects Can Tho’s economy 19 Mövenpick’s Asian hospitality expansion to ramp Finance Ministry wants 1% tax on transfer price in M&A deals 19 up presence in Vietnam 41 New circular delays modern slaughterhouses 20 $9 billion Nghi Son refinery and petrochemical complex Taxman will closely supervise casino operations 21 about to start operating 42 Vietnam Customs holds dialogue with European businesses 22 Ho Tram Strip moves ahead: Kahuna unveiled 43 SOEs divest 163.4 million USD in 8 months 22 Investor accused of lying about apartment sizes 44 Increase in registered capital in real estate sector Biologist warning on building paper mill 44 not yet the signal to feel happy 23 Lee&Man warned to have pulp mill license revoked 45 Startups on the move in Vietnam social media market 24 Over 700 businesses to attend Int’l Travel Expo HCM City 46 Vietnam nearly stands the last in Southeast Asia in online sales 25 14th China ASEAN Expo on horizon 47 Domestic brands held at gunpoint by international fashion brands 25 Tech Expo 2017 held in HCMC 47 Automobile importers hit hard by recent scandals 26 AgroViet 2017 set for HCMC 48 State-owned aviation firms soon for heavy divestment 27 Mining industry indicator continues to dip 28 FINANCE FINANCE Reference exchange 31/AUG/2017 INTELLASIA| TIN TUC rate up 5 dong The daily reference dong/US dollar exchange rate set by the State Bank of Vietnam (SBV) on August 31 was 22,438 dong, up five dong from the previous day. With the current trading band of +/- 3 percent, the ceiling rate applied by commercial banks on August 31 is 22,116 dong and the floor rate is 21,770 dong per US dollar. Exchange rate at commercial banks almost saw no change. Vietcombank kept both rates unchanged from a day ago at 22,695 dong (buying) and 22,765 dong (selling). BIDV also maintained the same rates as on August 30 at 22,695 dong (buying) and 22,765 dong (selling). Similarly, both rates at Techcombank were kept unchanged for the third consecutive day at 22,680 dong (buying) and 22,775 dong (selling) per US dollar. Intellasia Tel: +844 2213 2244 No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi Fax: +844 3759 2034 © All Rights Reserved Email: [email protected] Websites: www.Intellasia.Net www.TriTueAChau.com Vietnam finance & business 31 August 2017 Worries still remain as 31/AUG/2017 INTELLASIA| THOI BAO KINH DOANH SBV is likely to pour Recently, the Government has asked the State Bank of Vietnam (SBV) to calculate the to the market nearly ability to raise the credit growth target for the whole year to 21-22% instead of 18%. If 700tr dong this goal can be achieved, this is the year that marks the return after seven years of credit growth at less than 20%. As per the National Financial Supervisory Commission (NFSC), during August 14-18, interbank interest rates may increase slightly 0.3-0.5 percentage points in terms but as of August 25, interbank interest rates gradually decreased to 1-1.3%. As per NFSC's assessment, the current interest rates in the interbank market are still relatively low and are similar to the same period of 2016. It is forecasted that the low interest rates will maintain in Q3/2017. The State Bank issued 15 trillion dong worth of T-bills via outright method with 7-day term and 0.3% interest rates. During August 21-25, there were 21 trillion dong matured T-bills under outright method. Generally, the State Bank net withdrew six trillion dong during the week. As per NFSC, it is expected that at the end of this week, there will have 15 trillion dong matured T-bills under outright method while T-bill interest rate still maintains at record low level of 0.3-0.4%. The plentiful liquidity of the banking system along with flexible operating policies, stable lending rates, even the downward trend of interest rates in some priority sec- tors, etc. are positive factors that support the economy and the credit growth target. FINANCE Earlier, in the Government's regular meeting in July, the Prime Minister asked to raise the whole year credit growth target to at least 20%. If this target is completed, this year will be the first year since 2010 that credit growth is more than 20%. With the Prime Minister's aforementioned suggestion, if this year's credit growth reaches the highest level of 22%, that means a four percent increase in capital from the initial estimate (at 18%), equal to about 220 trillion dong. As per the estimate of economic experts, the total outstanding loans to the economy at the end of 2016 was about 5,500 trillion dong, equal to the growth rate of 22% in the aforementioned assumption, which may have an additional of about 1,210 trillion dong this year. NFSC's data show that in the first seven months of this year, credit has grown about 9.3%. Following the aforementioned growth direction of 22%, there will have about 698.5 trillion dong additional capital to accrue in the last five months of the year. Many credit experts said since the beginning of this year, credit has grown quite strongly in terms of outstanding loans especially consumer credit and real estate cred- it. Meanwhile, in production sector, many businesses still have difficulties in assessing loans. As per the data of the Business Registration Department under the Ministry of Plan- ning and Investment, in the real estate business sector, in January-August, the number of newly established businesses were 3,156 units (up 65.8%) and the registered capital was 217.139 trillion dong (up 62.8%) That means real estate is showing signs of prospering again. Therefore, the massive in- crease in credit may cause real estate sector to absorb the most capital not business and production sector. Dr. Vo Tri Thanh, former Deputy Head of the National Economic Research Institute (NERI) said the total real estate outstanding loans are about eight percent out of the total credit but consumer loans are mostly real estate loans. If that is included, the fig- ure must be more than 10%. Interbank interest rates are currently relatively low and tend to decrease in the coming time, but with the likelihood of adjusting lending rate to achieve the credit growth tar- get under the requirement of the Prime Minister, the State Bank is likely to pour to the market nearly 700 trillion dong. The end of the year is the time when the demand for real estate booms, especially the low-cost housing segment and resort real estate. The people's consumer loans to pur- chase houses have increased rapidly over the last period and is expected to continue rising sharply in the last five months of the year. So, is there any other way to limit the flow of money into real estate? As per economic experts, money from bank from now until the end of the year, though unwilling, is still most likely to run partly into real estate. Therefore, the State Bank must have monetary tightening policies to divest this capital flow to the right target.