BUSINESS IN BRIEF 28/4

Low liquidity sparks alarm over withdrawal of capital

Shares closed last week sending mixed signals as trade volumes remained low and sent alarm bells ringing about investors feeling insecure and withdrawing capital from the market.

On HCM City Exchange, the VN-Index rose 2.4 per cent during the week to end at 578.9 points while the HNX-Index on the northern bourse lost slightly by 0.01 per cent to close at 80.5 points.

Investor sentiment remained cautious and, coupled with the capital outflow, resulted in liquidity being exhausted during the week, according to Vietstock.vn.

The average trading volume and value on the southern bourse were 77.3 million shares and VND1.37 trillion (US$65.2 million), accounting for 40 per cent and 41 per cent below average figures, respectively, than the previous week.

On Ha Noi Exchange, the trading volume and value averaged 54.8 million shares and VND573.9 billion ($27.3 million), dropping 25 per cent and 30 per cent over the previous week, respectively.

The bottom-fishing of investors was not strong enough on the first trading day of the week, causing stocks to decline for seven consecutive days. Losses from large-caps stocks such as PetroVietnam Gas Corporation (GAS), BIDV (BID), Vietcombank (VCB) and Vinamilk (VNM) as well as stocks of the securities sectors dragged down the benchmark indices.

After witnessing a technical recovery on Tuesday despite petrol price hikes, the market slid again as investors sold stocks, both large-caps and speculative ones, following fears of a bull trap.

The market liquidity hit low mark of the year on Thursday with only 55.7 million shares, worth VND1.18 trillion ($56.1 million), changing hands as a sentiment of caution spread through the market. However, the market posted a slight gain with update of consumer price index. The index increased 0.08 per cent in April.

With supports from large-cap stocks such as GAS, FPT Group (FPT) and Hia Pht Group (HPG), shares maintained a gain on Thursday to end Friday in the black on both bourses.

Although there was capital outflow last week, foreign investors were net buyers of a marginal value of VND391 billion ($18.6million) on both bourses for the second consecutive week, the trend becoming a highlight in a low-liquidity trading week.

Foreign investors mainly bought shares of Vietcombank (VCB), PetroVietnam Gas (GAS), Kinh Do Corporation (KDC) while they sold Hoang Anh Gia Lai (HAG), PetroVietnam Fertilisers and Chemicals Corporation (DPM) and Vingroup (VIC).

According to FPT Securities, as a cautious sentiment ran through the market with sluggish trading with supportive information lacking, the upward trend would not be very strong this week and the benchmark indices might experience trading sessions with losses.

FPT Securities also urged investors to remain cautious and watch the foreign investors' buying and selling activities.

The market will open today and tomorrow before closing for a five-day-long public holiday. As a result, analysts said it would be difficult for the market to witness liquidity improving this week. 

Japanese firms explore agriculture investment

A delegation of executives from 40 Japanese firms attended a seminar on "Investment Environment and potential for agricultural co-operation between Japan and the Mekong Delta" held in Can Tho city on Monday.

Speaking at the seminar – which was organised by the Steering Committee for the Southwest Region — Nguyen Phong Quang, deputy head of the committee, said the Government has prioritised development of the Mekong Delta into a hub for rice, fruits, and aquaculture using high technology.

Officials from the ministries of Agriculture and Rural Development and Planning and Investment and provincial authorities in the delta apprised their Japanese guests about proposed projects in growing and processing farm produce.

The Japanese delegation was visiting to study the co-operation potential based on Viet Nam's rice, coffee, pepper, and seafood potential and Japan's technological and management expertise.

HK textile firm invests $136m in Long An

The Long An Provincial People's Committee has approved in principle Huafa Company (Hong Kong) last week to invest in a coloured spinning plant (including cotton dyeing, spinning) in Thuan Dao Extension Industrial Zone (Long Dinh commune, Can Duoc District).

The plant, which covers 20ha, has total investment capital of US$136 million.

This project aims to build a cotton dying and coloured spinning plant to produce high quality fibre to meet domestic and export demand.

AIA, Citibank unveil bancassurance pact

AIA Viet Nam and Citibank N.A. Viet Nam have recently announced their landmark bancassurance partnership for the Viet Nam market.

The agreement between AIA and Citibank is the widest-reaching bancassurance distribution partnership in Asia.

The strategic alliance builds on the leading presence, complementary strengths and established bancassuarance capabilities of both AIA and Citibank around the region.

KBC raises capital with share offering

Kinh Bac City Development Holding Corp (KBC) on Tuesday reported it had sold 100 million shares for VND1 trillion (US$47.4 million). They were put for sale to increase its charter capital to cover debts (debt-to-equity swap).

The shares were sold last week through a private offering to the company's shareholders and creditors. Three female shareholders paid billions of dong to buy a third of them.

More than 33.3 million shares, equivalent to 33.3 per cent of KBC's capital, were obtained by Sam Thi Huong, Quach Thi Nga and Pham Thi Le.

Le now owns 4.94 per cent of the company's stakes, Nga 3.79 per cent and Huong 2.62 per cent.

According to the company, the three stakeholders are long-term investors and do not represent any other companies.

Almost 67 per cent of shares were purchased by two companies, of which Kinh Bac Consultants and Investment Joint Stock Co bought more than 60.3 million shares and the Kinh Bac Investment and Trading Joint Stock Co bought 6.3 million.

After the purchase, Kinh Bac Consultants and Investment Co raised its stakes in KBC to 15.26 per cent and Kinh Bac Investment and Trading now own 1.6 per cent.

Last year, total revenue of the company reached more than VND1.131 trillion ($53.6 million), a 242 per cent increase over the previous year. Net profit also rose 16 per cent, reaching VND78.8 billion ($3.7 million), ending six consecutive quarters of posting losses.

In 2012, KBC incurred a loss of nearly VND484 billion ($23 million).

According to its 2013 annual business report, KBC will invest in eight projects; mostly industrial park projects. Last year, the company restructured its investment business, focusing on industrial zones which made up 74.4 per cent of total investment while narrowing financial venture to 0.18 per cent.

Salt-water filter sold to Saudi Arabia

A 4,500 tonne device making fresh water from salt water has been sold by Doosan Heavy Industries Vietnam Co. Ltd. (Doosan Vina) in central Quang Ngai Province to Saudi Arabia on Monday.

It is the first one provided to the country under a contract signed between the two sides for Yanbu Phase 3 project in 2013.

Under the contract, Doosan Vina manufactured four salt water filtering systems for the country. The first one was 143m long and 34.4m wide. It was able to produce almost 95 million litres of clean water per day from seawater.

The four systems are expected to create a total of 377 million litres of clean water per day, meeting the demand of more than one million Saudi Arabians.

The project with total capital of US$1.47 billion has been implement by nearly 100 per cent of Vietnamese workers.

Doosan Vina is the first company in Viet Nam to apply vapor multi-stage technology in the project.

Central city to host Viet Build exhibition

As many as 270 businesses from the US, Italy, China, Singapore, Malaysia, Indonesia, Thailand and Viet Nam have registered to participate in the International Vietbuild Exhibition from April 30 to May 4th.

Director of the trade promotion centre under the city's trade and industry department, Hua Tu Anh said yesterday that businesses would display their products including construction materials, electronic technology, furniture, real estate, interior and exterior decoration in 500 stalls at the city's exhibition centre.

The organising committee also host business forums among businesses, partners and customers during the five-day exhibition.

Retail prices of petrol, diesel, kerosene rise

The Ministry of Finance (MoF) increased the retail prices of petrol, kerosene and diesel from 12am yesterday.

The increase was between VND130 and VND210, or between 6 and 10 cents, per litre.

The ministry also permitted distributors to decrease the mazut price because its base price is now VND61 ( 2.9 cents) lower than its selling price.

Petrolimex, the country's largest fuel wholesaler, has raised the price of the popular gasoline RON92 by VND210 per litre to VND24,900, or $1.18, per litre.

Its diesel price has been raised by VND170, or 8 cents, per litre to VND22,680, or $1.08, per litre.

Its kerosene price would be increased by VND130 per litre to VND22,480, or $1.07, per litre.

The corporation also decreased its mazut price by VND70 per litre to VND18,590, or $0.88, per litre.

According to MoF, the average price of RON 92 between March 23 and April 21 was over $160 per barrel. Its statistics show that the base price is now VND214, or 10 cents, per litre higher than the selling price. The difference between the base price and the selling price of kerosene and diesel fluctuates from VND130 to VND170 per litre.

This is the third time that MoF has increased the petrol price since the beginning of this year.

US, ASEAN launch alliance to promote small-business growth

The US-ASEAN Business Council and the US Agency for International Development (USAID) on April 22 launched a partnership programme to promote the development of small- and medium-sized enterprises (SMEs).

The US-ASEAN Business Alliance for SMEs, which will focus on training and mentoring, builds on an SME-training programme created in 2011 at the request of ASEAN's Economic Ministers.

Speaking at a workshop held yesterday in HCM City, Joakim Parker, director of USAID's Viet Nam Mission, said the partnership would make it easier for SMEs in ASEAN (Association of Southeast Asia Nations) to be more competitive internationally.

"The training will provide what ASEAN needs: leadership talent for high-potential and high-growth SMEs, and strong corporate governance and business ethics," he added.

Alexander Feldman, president of the US-ASEAN Council, said that SMEs in ASEAN, as in the US, were a critical part of the economy and would continue to power Southeast Asia in the years to come.

As part of the programme, a workshop was held yesterday to provide more than 100 Vietnamese entrepreneurs with the skills and knowledge needed to enter international markets.

At the workshop, experts from US companies discussed cross-border e-commerce, exports to global markets, and best practices of global suppliers.

Future activities of the US-ASEAN Business Alliance will be organised throughout the region with the next event planned for June in Malaysia.

Viet Nam achieves $700m trade surplus

Viet Nam was estimated to enjoy a trade surplus of US$700 million in the first four months of this year, according to data from the General Statistics Office (GSO).

The country shipped $45.74 billion worth of goods during this period, making a year-on-year increase of 16.9 per cent, while it spent $45.05 billion to import goods and services, posting an increase of 13.7 per cent over the same period last year.

The country's key export items in the period included mobile phones and accessories ($7.6 billion); garments and textiles ($5.94 billion); and electronic products, computers and spare-parts ($2.94 billion).

Its key imported products in this period were machinery and spare-parts ($6.7 billion); electronic products, computers and spare-parts ($5.8 billion); petroleum ($2.6 billion); and clothes ($2.75 billion).

In April alone, the country's export turnover was posted at $12.2 billion. The Foreign Direct Investment (FDI) sector continued to top exports last month. The sector's exports were worth $8.02 billion, accounting for 66 per cent of the country's total export values in the month.

Meanwhile, Viet Nam's import values in April were estimated at $12.6 billion. Of which, imports of the FDI sector were worth $7.4 billion, accounting for 59 per cent of the country's total import turnovers. The country saw a trade deficit of $400 million in April.

Viet Nam's export turnover to the US posted a 25.6 per cent year-on-year increase in the first quarter, while imports from the US were up 22.4 per cent, according to figures from the General Department of Customs.

Export turnover was $6.15 billion, while import value was $1.61 billion.

Textile and garment exports continued to be the highest earner, while phones and component turnover increased sixfold over the same period last year.

Vinamilk forecasts downswing in profits for 2014

Shareholders of dairy giant Vinamilk (VNM) approved the company's 2014 business plan yesterday.

According to the plan, total revenue is projected to increase 15 per cent over last year, reaching VND36.30 trillion (US$1.72 billion), but profits will fall 8 per cent to nearly VND6 trillion ($284.4 million).

Vinamilk's 2013 revenue reached nearly VND31.77 trillion ($1.5 billion), up 17 per cent, while profits climbed 12 per cent to over VND6.53 trillion ($309.7 million).

Vinamilk's chairwoman Mai Kieu Lien explained the company faced fierce competition while purchasing power was declining despite big advertisement and promotion campaigns.

"This year's plan is feasible. Although the profit target is lower than last year, the company's indicators are still better than our peers in the country and the region," Lien said at the shareholders' meeting yesterday, emphasising that Vinamilk was determined to keep its market share at all costs.

Currently, Vinamilk holds 90 per cent of the yogurt market, 75 per cent of the sweetened condensed milk market, nearly 50 per cent of fresh milk and 30 per cent of powdered milk.

As for competition with foreign milk, Lien said Vietnamese consumers still preferred imported powdered milk to local products, but in the last two years, Vinamilk had developed good products and even exported to other countries.

China is one of the company's target export markets. Vinamilk is working with the Ministry of Agriculture and Rural Development to negotiate a bilateral dairy agreement to export dairy products to China.

Lien said the published information that the price of raw milk fell sharply was incorrect. In reality, the price decreased for only four weeks and began to increase as of April 24.

The milk price should be raised 11 per cent to offset inflation but Vinamilk increased prices by just 6 per cent, Lien said. Raising prices of dairy products is currently under inspection by the management authority in Vietnam.

Vinamilk decided to raise the 2013 dividend from 34 to 48 per cent. The company paid 28 per cent of its dividend last year and the remaining 20 per cent, around VND1.668 trillion ($79 million), will be paid by the end of May.

This year, Vinamilk projects the rate of cash dividend will not exceed 50 per cent of its net profit and plans two payments, one in September 2014 and one in July 2015. The company will also issue bonus shares to shareholders at the ratio of 5:1 with a total offering of 166.79 million shares in the next two quarters.

Mekong Delta rice yield surges after zoning, irrigation work

Farmers from the Cuu Long (Mekong) Delta region have harvested 11 million tonnes of rice in the spring-winter crop, an increase of 200,000 tonnes against the previous one.

According to the Steering Committee for the south-western region, the outcome is a result of local efforts in zoning off areas for cultivation and equipping farmers with techniques and useful scientific measures to prevent the spread of grain diseases.

Regional localities have also been proactive in carrying out irrigation and drainage work, the committee noted.

As the nation's key rice producer, the Cuu Long (Mekong) Delta has been tasked with ensuring the country's food security.

From now until 2030, the region will grow rice across an area of 1.8 million ha, more than half of which will be for exports. It is also striving to maintain an annual output of 24-25 million tonnes of rice.

The Cuu Long (Mekong) Delta, the country's largest rice granary, comprises of 12 provinces and one centrally-run city with a total area of 40,000 square kilometres and a combined population of 18 million.

Sai Gon Co.op opens first store in Binh Chanh District

Sai Gon Co.op, owner of the Co.opmart supermarket chain, yesterday opened its first outlet in HCM City's Binh Chanh District, making it the 70th outlet under the Co.opmart chain nationwide.

Covering more than 2,000sq.m Vinh Loc B resettlement area, Co.opmart Vinh Loc B has an investment of over VND30 billion (US$1.42 million) and sells more than 20,000 items, including foods, cosmetics, fashion clothes, electronic and household utensils.

It also provides price-stabilised goods for local residents and neighbouring areas.

To mark its opening, Co.opmart Vinh Loc B is offering discounts of up to 50 per cent on thousands of products until May 4.

Grant Thornton announces merger with ACPA

Auditing and business consultancy firm Grant Thornton Viet Nam announced on Thursday a merger with Nexia ACPA Auditing&Consulting Co. (ACPA) with effect from July 1.

The merged firm will be part of the Grant Thornton global network and operate under the Grant Thornton name.

Kenneth Atkinson, managing partner of Grant Thornton Viet Nam, will become executive chairman of the merged firm and Nguyen Chi Trung, managing partner of ACPA, will be managing partner.

PVI Insurance gets financial strength rating upgrade

The A.M. Best Company, the world's oldest insurance rating and information source, has upgraded the financial strength rating of Viet Nam's PVI Insurance Corporation (PVI Insurance) from B+ to B++.

The improved rating reflects PVI Insurance's satisfactory business results, prudent investment strategy, safe liquidation performance, and strong capital capacity in Viet Nam's non-life insurance market.

The ranking also recognises the support from PVI's shareholders, such as Viet Nam National Oil&Gas Group (PetroVietnam), Germany's Talanx Group, and the Oman Investment Fund (OIF).

PVI Insurance was ranked as the largest industrial insurer in Viet Nam in 2013, successfully renewing and providing new insurance services to large projects in and outside the energy sector, such as Nghi Son oil refinery complex, Phu My 3 Thermal Power Plant, and Lai Chau Hydro Power Plant.

With the upgrade, PVI became the third insurer in Viet Nam to have achieved the B++ rating level. The other two are the Samsung Vina Joint-Venture Insurance Company and Vinare Insurance Viet Nam.

Industrial sector sees 5.4% jump in production

The national industrial production during Jan-April 2014 saw a 5.4 per cent year-on-year increase, a positive sign of production recovery at enterprises, noted the General Statistics Office (GSO).

The office claimed that the index of industrial production (IIP) in April surged 6 per cent against the corresponding period last year, according to the Thoi bao Kinh te Viet Nam (Vietnam Economic Times).

Of the total reported rise, the growth rate of industrial production was 0.4 per cent for the mining industry, 7.5 per cent for the processing and manufacturing industry, 10.6 per cent for electric production and distribution, and 3.3 per cent for water supply and wastewater treatment.

During the period, the industrial production rose 7.4 per cent for the processing and manufacturing industry, 9.6 per cent for electric production and distribution, and 5.4 per cent for water supply and wastewater treatment.

Also, in the initial four months, many products registered a growth rate in production, such as television up 32.9 per cent, footwear up 31.1 per cent, rolled steel up 22.4 per cent, auto up 16.7 per cent, and processed seafood products up 13.7 per cent.

However, some other products registered a decline in production, such as raw steel down 11 per cent, motorbike down 7.4 per cent, coal down 5.8 per cent, and textile down 3.1 per cent.

The office also reported that the consumption index of the local industry for the first quarter rose 5.5 per cent in comparison to the same period last year.

The production sectors having high consumption were electric equipment production with a growth rate at 21.8 per cent, leather and related products (up 19.8 per cent), products made from prefabricated metal (up 13 per cent), and vehicles (up 1.28 per cent).

The inventory index of the processing and manufacturing industry at April 1 posted a month-on-month increase of 13.9 per cent and a year-on-year surge of 13.1 per cent.

Other sectors reporting higher inventory than the same period last year were electronics, computers, tobacco products, medicines, pharmaceutical products and materials, leather, and paper.

Farmers toast good harvest, rue decrease in salt prices

Farmers in Bac Lieu, the country's largest salt producing province, have had a good harvest this year, but the low salt price is affecting their livelihoods.

Ho Thanh Dan, who makes salt on 10ha of land in Dong Hai District's Long Dien Dong Commune, said this year the weather was favourable for salt production.

"In recent days, the weather as been hot, resulting in high salt output."

However, traders buy at the field for around VND1,000 a kilogramme, the same as more than 10 years ago, according to Tran Cong Khanh, a worker at a salt co-operative in Dong Hai.

Dong Hai produces salt on more than 2,000ha, the largest in the province.

But salt fetches the lowest income among 20 agricultural production models in Bac Lieu because of low prices and high costs, according to the provincial Department of Agriculture and Rural Development.

To increase farmers' profits, local authorities have been urging them in recent years to use advanced techniques.

One such technique involves using plastic or canvas sheets to produce clean salt. It has the advantages of shorter production period, whiter salt, and lower labour costs, but requires greater investment to buy the sheets.

This technique is applied on only around 100ha.

Mai Thanh Hung, deputy head of the Dong Hai Agriculture and Rural Development Bureau, said the district encourages farmers to use this method to improve salt quality, but added that most farmers lack the resources to employ it.

With its more than 2,660ha of salt fields, Bac Lieu in the Cuu Long (Mekong) Delta region targets production of around 150,000 tonnes this year.

The province's salt is famous for its high sodium chloride content and low magnesium, calcium, and sulphate contents, which makes for better taste.

Earlier this year Bac Lieu salt was granted protection under geographical indication by the National Office of Intellectual Property.

HCMC to host major regional IT event

A major information technology event with three separate components is slated to be held in HCM City in September, IDG Viet Nam and the city Department of Information and Communications announced.

The 19th Viet Nam Consumer Digital World Expo (VCW 19th) will also feature the second Demo Asean and Asean CIO/CSO Summit and Awards.

The VCW is a large prestigious technology, electronic, and telecom exhibition.

IDG Viet Nam, the main organiser, said the exhibition this year would focus on products, services, and technical solutions for enterprises and other organisations.

It is likely to have 100 booths and attract 20,000 visitors.

Demo Asean allows young companies to show off their new IT products and technology breakthroughs.

At a conference, more than 30 speakers from all over the world will discuss future trends and leading opportunities in the IT space and talk about the deal-flow pipeline.

The Asean CIO/CSO Summit and Awards will honour outstanding chief information officers and chief security officers in member countries.

More than 300 CIOs and CSOs will take part in a summit to discuss IT and IT security.

The three events will be organised at the Convention Centre in Vo Thi Sau Street, District 3.

Ha Noi Exchange reviews index system

The Ha Noi Stock Exchange yesterday reported the regular review of its index system, including the HNX 30 Index, HNX FF Index, HNX size-based indices and HNX sector indices.

The review, conducted twice a year (in April and October), compiled data for 12 months on March 31. The adjustment of the index system will take effect from May 5.

With regard to the HNX 30 Index which tracks the top 30 shares by market value and liquidity on the bourse, the exchange added five stocks in the new basket, including PetroVietnam Construction Co (PVX), KLF Joint Venture Global Investment (KLF), Hai Minh Corp (HMH), Doan Xa Port (DXP) and Tay Ninh Cable Car Tour (TCT).

The five stocks being removed are PV Power Land (PVL), Song Hong Construction (ICG), PetroVietnam Engineering Consultancy (PVE), IDJ International Financial Investment & Enterprise Development (IDJ) and Vinacomin – Nui Beo Coal (NBC).

The HNX 30 Index, opened on December 2, 2013, with the base point of 100, closed at 122.62. By the end of March 2014, the Index reached 184 points, up 50 per cent over the first trading day, the highest increase in the index system in this review.

Meanwhile, there was no adjustment in the HNX FF Index, the price index which is calculated based on free float adjusted market capitalisation of all companies listed on the Ha Noi Stock Exchange. The free-float ratio is equal to 5 per cent or more.

The index is expected to have 376 shares next month. In April, three companies debuted shares, including Mineral Ferrous Metallergy (KSK), Ninh Binh Phosphate Fertiliser (NFC) and Central Hydropower (CHP) while two will be delisted by the end of April - Network Infrastructure Service (NIS) and Song Da 19 Co (SJM).

The HNX FF Index was launched on December 2, 2013, with a close on 65.19 points. Closing March 31, the index ended at 90.45 points, up 38.75 per cent.

The HNX sized-based indices comprises HNX Large Cap Index and HNX Mid/Small Cap Index. The HNX Large Cap Index includes the top 50 stocks by market value for the last six months. The HNX Mid/Small Cap Index comprises stocks which are eligible securities and not included in the HNX Large Cap Index.

Five stocks were removed from the HNX Large Cap Index this time - DANA-Y Steel (DNY), Ninh Binh Thermal Power (NBP), PVE, PetroVietnam Premier Recreation (PVR) and Vinacomin – Deo Nai Coal (TDN).

The newly-added five stocks were Petrovietnam General Distribution Services (PSD), KLF, Hudland Real Estate Investmnet and Development (HLD), Asia - Pacific Investment (API) and FIT Investment (FIT).

The HNX Sector Indices include HNX Manufacturing Index, HNX Construction Index, HNX Financials Index and also is calculated based on the free-float ratio of the stocks according to the selection criteria of the index. These three industry indexes opened on December 2, 2013. By the end of March, the manufacturing index rose 31.91 per cent, the construction index increased 48 per cent and the financial index climbed 43 per cent.

Vingroup announces special offer to lure new occupants

Vingroup's Vincom Office Company announced a special "office-for-lease" programme termed Golden Opportunity 2014 in Ha Noi and HCM City.

The programme offers special incentives and preferential lease conditions to new tenants at the Vingroup's Royal City and Times City in Ha Noi and the Vincom Center Dong Khoi in HCM City between April 15 and July 15, 2014.

According to the group, tenants will be able to enjoy different incentive lease prices and free access to the building's facilities and complementary services, with specific terms and conditions applicable to each project.

All the localities of Royal City in Nguyen Trai Street, Times City in Minh Khai Street in Ha Noi, and Vincom Center Dong Khoi in Le Thanh Ton Street, District 1 in HCM are among the most populous centres in the country.

Real estate sector attracts foreign investors' interest

Foreign direct investment (FDI) into the country's real estate sector ranked second in the first quarter of 2014, proving that foreign investors have developed renewed interest in the property market.

According to statistics revealed by the Ministry of Planning and Investment's Foreign Investment Agency, the nation approved five FDI projects in the sector with a total registered capital amounting to over US$288 million. The figure constituted 8.6 per cent of the total US$2 billion pledged FDI capital during the period.

Of note, Hong Kong investor, SunWah Viet Nam Estate Limited Company invested over US$200 million in the condo building project in HCM City, thereby boosting investment capital in the sector. This has been the largest FDI project in the sector since last year.

Last year, even though there were no major property projects, yet the total FDI in the sector reached US$900 million.

During the 2009-2013 period, the country welcomed Japanese Tokyu Garden City project in the southern Binh Duong Province with a total investment capital of US$1.2 billion, which was granted licence in 2012.

Experts have forecast that the market will receive more large-scale FDI property projects this year.

Timothy Horton, the general director of the property advisory firm, Cushman &Wakefield Viet Nam informed Viet Nam Investment Review that international investors who had been closely tracking the country's market in 2008-2009 had made a comeback. Asian investors, such as Japan, China, Taiwan, and Hong Kong have shown keen interest in the market.

He noted that the company had been working closely with investors and businesses from China as they considered real estate prices in Viet Nam to be cheaper than that in China.

Sharing the same viewpoint, Troy Griiffiths, the deputy general director of Savills Viet Nam, remarked that from the beginning of the year, the company has received a large number of orders from Chinese businesses for buying real estate projects in Viet Nam.

Sharing the ideas, Marc Townsend, CBRE's general director, stated that foreign investors from Japan and Russia contributed to the country's property market in 2013. This year, Chinese investors had penetrated the market.

He explained that the property market in Viet Nam has certain advantages in comparison to other countries in the region, thereby offering price advantage to international investors.

He added that foreign investors were keen on investing in hotels, resorts, and entertainment areas in Viet Nam.

FDI forecast to increase at IZs and EZs

Foreign direct investment (FDI) influx into the country's industrial zones (IZs) and economic zones (EZs) will continually increase till year-end, noted Planning and Investment Ministry's Department for Economic Zones Management.

According to the department, over the past three months, the IZs and EZs attracted US$800 million from 70 foreign-invested projects.

The projects were mainly related to electronics, telecommunications, and the support industry.

With the latest addition, the total FDI registered in the zones has crossed over US$112 billion as of March, accounting for 50 per cent of the nation's registered FDI over the past 25 years.

In 2013 alone, the FDI pledged for the zones constituted over 92 per cent of the country's total FDI at US$19.94 billion.

The impressive figures have demonstrated the zones' advantages in investment attraction, especially from foreign investors. This information was published on baodautu.vn.

These zones are now home to large-scale projects applying advanced technology, such as Samsung Group's projects worth a combined total of over US$3.2 billion in the northern Thai Nguyen Province and LG Electronics Viet Nam's US$1.5 billion factory complex in the northern port city of Hai Phong.

Currently, Viet Nam has 289 IZs with a total area of 81,000 hectares and 15 EZs with a total area of 697,800 hectares.

Local property market likely to improve

Local real estate industry experts have forecast positive development in the domestic property market this year, including lower inventory and reasonable prices of property products.

At an online dialogue on Real estate market 2014: Opportunities from policies held by www.dddn.com.vn, on Wednesday, in Ha Noi, Nguyen Manh Ha, the director of the House Management Department under the Ministry of Construction, stated that since the beginning of this year, the local property market has shown positive development with an increase in transactions against the same period last year, the prices of houses and apartments stopped declining and even slightly surged in some projects located in Ha Noi and HCM City.

So far, this year, there were 2,300 successful transactions in Ha Noi's property market, including many transactions of projects at inventory. The inventory of Ha Noi property market had reduced, thereby resolving the difficulties of enterprises, while property prices had become stable, creating customer confidence in the market, Ha reported.

Meanwhile, the supply of property products in HCM City stood at a high level, including many finished products and products of projects that had been re-offered to the market after a period of no trading, he added.

However, the recovery of the local property market would focus on the popular property segment with small and medium areas and with a price not crossing VND20 million per square metre, he stated.

Medium- and high-class apartment projects at prominent locations and nearing completion would have an increase in transactions, he pointed out.

Nguyen Huu Cuong, the chairman of the Ha Noi Real Estate Club, remarked that 2014 was a potential year for the domestic property market because the state policies on regulating the local property market had made a positive impact on the market.

The State Bank of Viet Nam had committed to offer total loans worth VND3.29 trillion (US$156 millon) to 3,990 customers and also signed contracts for disbursing VND1.89 trillion ($90 million) to 3,983 customers, an increase of 135 per cent in value against December 31, 2013, Cuong noted.

The local property market had started recovering after going through a three-year turbulent period, he emphasised.

According to Matthew Powell, the director of Savills Viet Nam, 2014 would still present many challenges to the local property market as recovery had only occurred in segments of popular and medium-class houses for sale and lease, but not in the entire market.

However, the demand for property products recently increased as his company received many orders on providing consulting services on evaluation and lease, he affirmed.

Regarding the prices of property products, Pham Thanh Hung, the deputy chairman of CEN Group, claimed that currently, the property prices in Viet Nam were considered steep as compared to the prices in other regional countries.

According to Hung, the local prices are not higher than those in other regional countries, but are high in comparison with the average income of the people.

The prices of property products located in central areas of the city have increased 5-7 per cent due to immediate use and limited supply, while the prices of products in projects having limited infrastructure and located far from the centre will continue to drop.

Nguyen Thuy Nhan, the general director of the Binh Chanh Investment and Construction Joint Stock Company, pointed out that the comparison between the local prices and foreign ones is not justified because of different situations at home and abroad.

Sharemarket needs to woo investors

The stock market needs to address shortcomings, mostly to do with the dearth of investment options and size, to attract foreign investors, the chairman of the HCM Stock Exchange has said.

Speaking at a recent seminar on the country's capital market, Tran Dac Sinh listed the unavailability of derivatives, the narrow daily price band, and small size of listed companies as the main drawbacks.

Only eight of 800 listed firms have a market capitalisation of more than US$1 billion, while Thailand has 23 such firms, according to Sinh.

Major international institutional investors preferred markets with large market caps and which have average trading of US$1 billion a day, he said, pointing out that Viet Nam's average figure was only $100 million.

The band within which stocks are traded daily is 10 per cent in Shanghai, 15 per cent in Korea, and 30 per cent in Thailand, Malaysia, and Japan, while it is just 5 per cent in HCM City and 7 per cent in Ha Noi, according to Sinh.

The foreign ownership cap is still low (49 per cent in a company and down to 30 per cent in a bank), and this too acts as a drag on foreign investment.

In some cases foreign investors have to buy through deals outside the exchange at 20-30 per cent higher than market price.

He called for simplifying procedures for foreigners seeking to open trading accounts.

In an article he wrote in Dau tu Chung khoan (securities investment) magazine, Christian Kamm, chairman of HCM City-based investment consultancy Kamm Investment, said foreign investors are happy with a draft regulation increasing foreign ownership to 60 per cent, especially in terms of the Government's attitude towards foreign investors.

They realise that the government is well aware of not only the importance of the stock market to economic development but also the necessity of maintaining foreign investors' interest.

Setting up the Vietnam Assets Management Company helped increase credit growth, stimulating the economy and attracting foreign investors' attention, he said.

They trusted the government's determination to resolve the bad debts problem plaguing the banking system, he added.

Ministry urges power, fuel suppliers to be transparent

A directive by the Industry and Trade Ministry calls on Electricity of Viet Nam (EVN) and Viet Nam National Petroleum Group (Petrolimex) to publish power and petroleum prices, besides salaries and bonuses.

The directive 11/CT-BCT dated April 22, 2014 is aimed at enhancing transparency in electricity and petroleum business activities.

According to the directive, electricity and petrol are essential goods that have a heavy impact on the lifestyles of people.

In keeping with the Prime Minister Nguyen Tan Dung's instructions, Minister of Industry and Trae Vu Huy Hoang has requested EVN, Electricity Regulatory Authority of Viet Nam (ERAV), and other agencies to swiftly implement the directive.

He also asked for the input of factors used for price calculations.

Accordingly, EVN will have to publish electricity tariffs and list changes in input factors, production costs, average basic prices, and retail prices.

The group will also have to publish audited financial reports, business results, and production costs, which should be clearly broken down into power generation, transmission, distribution, and retail.

In accordance with the directive, the minister urged Petrolimex and other relevant agencies to publish as soon as possible petrol prices, factors for defining prices along with the usage and management of the petrol stabilisation fund.

Both EVN and Petrolimex will also have to publish details about their financial situation, the effectiveness of using State-owned capital and workers' average incomes, including the salaries and bonuses of their leaders.

The information will be declared once a month on the ministry's website.

The ministry also asked the Domestic Market Department and the Viet Nam National Oil and Gas Group (PVN) to publish information on world petrol prices, a list of wholesalers, and retail prices. Its Financial Management Department was instructed to biannually publish production and business results for EVN and Petrolimex and to closely supervise the financial situation of the two groups.

VN's exports to Japan hit US$3.7b

Viet Nam exported US$3.66 billion worth of goods to Japan during the first quarter, up 17.3 per cent year-on-year, according to statistics from the General Department of Customs.

During the reviewed period, crude oil took the lead in terms of export turnover with US$620 million, up 8 per cent. It was followed by textiles and garments with US$589.5 million (up 11 per cent) and transportation spares and components with US$501.2 million (up 22 per cent).

Contrarily, some export items, such as computers, electronics and parts, steel and iron as well as plastic materials also experienced a decline in value.

Currently, Japan is Viet Nam's second-largest trade partner in Asia after China.

Russia seafood exports to increase

Vietnamese mollusc exports will increase significantly in the second quarter of the year, according to forecast by the Viet Nam Association of Seafood Exporters and Producers (VASEP).

After three consecutive slumps, mollusc exports to Russia rebounded in June 2013, and have steadily edged up ever since, thereby experiencing exponential growth of between 163 per cent and 966 per cent over the previous year.

However, exporters who are keen on massively expanding their exports and penetrating deeper into the Russian market will still have to face tough price competition, VASEP warned.

Tyre, tube industry leaps ahead as costs fall

Tyre and tube production in Viet Nam has enormously increased since early this year due to low price of natural rubber on the local market, according to experts.

According to the Ministry of Agriculture and Rural Development, Viet Nam saw a year-on-year decline of 23.1 per cent in export volume of rubber to 144,000 tonnes and 42 per cent in export value to US$292 million in the first quarter of this year.

Over the last few months, export price of local rubber dropped many times to as low as VND40 million ($1,900) per tonne recently, that is, a drop to half the price from 2011 because of oversupply in the world market.

Farmers and enterprises producing rubber faced difficulties in production and business due to the decline in exports.

Nguyen Hong Phu, deputy general director of the Viet Nam Rubber Industrial Group (VRG), said the drop in price of rubber, however, was advantageous to the tire and tube industries in Viet Nam, reported Thoi bao Kinh te Viet Nam (Viet Nam Economics Time) newspaper.

Therefore, in the first quarter of this year, VRG gained an increase of 10 per cent in export value of tire and tube compared with major export markets of ASEAN and Middle East countries the same period last year, he added.

Meanwhile, the Viet Nam Chemical Group (Vinachem) claimed its production of rubber tyres and tubes had increased in the first quarter of this year due to the low price of rubber.

Its industrial production value reached VND1.62 trillion, which is 2.4 per cent higher than the same period last year.

In the first quarter of this year, output of its products had an increase of 6.5 per cent to 434,772 units of auto tire, of 12.7 per cent to 1.3 million units of motor bicycle, and 13.4 per cent to 2.5 million units of bicycle compared with the same period last year.

Vinachem's exports of tyres and tubes accounted for 29.6 per cent of the group's export value.

At present, Viet Nam has 830 enterprises in the tyre industry, including 30 production enterprises, 170 trading companies, 170 exporting companies, and 460 tyre importing companies.

In recent years, Viet Nam has changed from being a country that imported rubber tyres and tube products to one that exports them.

Now, the local tyre and tube industry has ramped up technological investment to produce high-grade products such as radial and steel-belted radial tyres for all markets.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

trade surplus, Vinamilk, Vingroup, foreign investors, property market
 
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