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BUSINESS IN BRIEF 17/2
Conference
talks up recovery
After
four years struggling with difficulties, last year saw an improvement in the
real estate market. Many challenges still remain but the market is opening up
with many new opportunities for buyers, investors and developers.
Recent
project launches have been crowded with potential homebuyers
Attendees
at a seminar held by the Vietnam Real Estate Association last week in
According
to Deputy Minister of Construction Nguyen Tran
Secondly,
Thirdly,
the stimulus package of VND30 trillion ($1.4 billion) experienced
positive levels of disbursement. As of January this year, more than VND10 trillion
($476 million) had been disbursed. With the participation of 15 commercial
banks and supportive regulations from the government, more than 12,000 people
had received mortgages.
Nam
added that to revitalize the real estate market, the State Bank of Vietnam
was co-ordinating with ministries and bodies to implement another stimulus
package valued at VND50 trillion ($2.38 billion). The new package would act
as a subsidy to the commercial housing sector, rather than the previous
package that centred on a much needed low-income housing segment.
“Apparently,
the implementation of the new laws such as Real Estate Business and Housing
laws from July 2015 and a range of other related regulations will help the
market,” Nam confirmed.
A
majority of the participants at the seminar believed the real estate market
had made significant steps towards a recovery last year. But they also
cautioned about being overly-optimistic.
Le Chi
Hieu, general director of Thu Duc House Company said that the development of
the Vietnamese real estate market depended much on the micro economy and
government regulations.
‘The
real estate sector received a lot of attention from the government last year,
in addition to resolving large housing inventories, bad debt and the
restructuring of the economy,’ Hieu said.
He
also emphasised that many developers were to blame for the overly-large
stockpiles seen in the past as they had not focused on market segments such
as low-income owners that had huge demand for housing and instead had wasted
finance on constructing supposedly luxury developments in which there was
little interest.
“The
real estate market is going to continue to be ruthlessly selective. Incapable
developers who lack capital, management skills and behave unprofessionally
will be purged,’ Hieu said.
Doctor
Le Xuan Nghia said interest rates, the global oil price and foreign currency
exchange rates will affect the real estate market.
“We
still have to also be aware that the problem of bad debts remains and does
affect the market, particularly when it comes to M&As,” Nghia said.
The
development of the real estate market is also closely related to the credit
market. The government has planned to issue a large number of mid and long
term bonds. Meanwhile commercial banks now hold a large amount of government
bonds, therefore if they want to increase their credit they have to release
their government bonds. This would mean bank interest rates could increase
because higher interest rates would have an impact on developers who had
attempted to turn their businesses around after a long period of suffering
losses, said Nghia.
“The
government should be very careful and map out suitable solutions to ease
interest rates down otherwise both the real estate market and the wider
economy could suffer,’ Nghia said.
Homebuyers
need guidelines for potential VND50 trillion package
A
VND50 trillion (US$2.38 billion) package to assist commercial housing
developments may spell good news for the property market, but experts say
authorities should prioritise showing homebuyers how to apply.
A
VND50 trillion package to assist commercial housing developments may spell
good news for the property market.- Photo danviet.vn
Deputy
Minister of Construction Nguyen Tran
HCM
City Real Estate Association Chairman Le Hoang Chau said he is glad to be
waiting for a response from the SBV. "This is truly necessary and
suitable for the practice of real estate market development," he told
the Phap luat Thanh pho Ho Chi Minh (HCM City Law) newspaper.
Chau
noted that property firms are in dire need of stable finances to calculate
loan costs for operational cycles amounting to at least three to five years.
They are currently unable to do this with short-term loans.
Seven
per cent will also be "a dreamy interest rate" for property
enterprises, which are now subject to annual rates of between 10 per cent and
12 per cent, he added.
Can
Van Luc, a senior advisor at the Bank for Investment and Development of Viet
Nam, told the newspaper that the authorities were only calling for lenders to
offer the VND50 trillion but had not made it mandatory.
Eximbank
Deputy General Director Tran Tan Loc and Vietinbank General Director Le Duc
Tho have reportedly said that these banks were considering taking part in the
programme.
However,
many people have raised doubts about the ability of commercial banks to raise
money for these long-term loans with the intended interest rates when they
are mostly offering preferential loans with rates of between seven per cent
and nine per cent and with loan terms of less than two years, according to
Luc.
"We
need to develop the securities and bonds market to mobilise medium- to
long-term capital for banks and enterprises," he said.
Thanh
Yen Land General Director Nguyen Duy Minh claimed that both enterprises and
homebuyers expect legal documents to be issued, providing detailed guidelines
on how to obtain the financial support. The market needs a capital source
that is truly accessible, not "spiritual therapy," he added.
According
to Chau, many experts suppose that the VND50 trillion package should be
offered with a term of 20 years and an interest rate of five per cent to
ensure debt settlement ability for the public.
Chau
noted that the package is intended to favour property investors, but the real
estate market needs funds to be allocated to homebuyers for stable and
sustained development. Low- and average-income citizens should be prioritised
within the scope of this programme, he noted.
Thuy
Lai, a cloth trader in
"Local
administrative procedures for certification are complicated," she
pointed out.
A
national property bailout package worth VND30 trillion ($1.43 billion) has
been implemented for two years in support of social-housing developments. As
part of this programme, loans have been offered to homebuyers with annual
interest rates of six per cent in 2013 and five per cent in 2014.
Tilapia
offers untapped potential for exports
Last
year, the total area of tilapia aquaculture at ponds and lakes nationwide
spanned 15,992 hectares with total output spiking up over 25% to 125,000
tonnes compared against the prior year.
Tilapia
now has become a key aquatic product for consumers in both the domestic and
foreign markets. Last year,
The
top ten import markets of
The
However,
Ten
years ago, the Ministry of Agriculture and Rural Development (MARD) began
implementing a project to develop tilapia as a key aquatic export. However,
tilapia output has not expanded as anticipated and hasn’t kept pace with
domestic demand. Moreover international marketing efforts have been stagnate
as the industry, fraught with raw material shortages and lack of investment
funds, simply isn’t in any position to make or keep large foreign commitments
In
Many
developing nations have considered tra fish an important source of protein in
and it has been one of top ten seafood products in the
The
MARD has now forecasted that tilapia exports could reach 21,000 hectares with
an output of 140,000 tonnes including 50,000 tonnes for exports in 2015.
Apart
from tra fish and shrimp exports,
French
firms updated with
On
February 10, the Vietnam Embassy in France and the French Institute of
International Relations (IFRI) co-hosted a seminar on
economic
reforms and the role of new strategic partners.
The
event is designed to highlight
introduce
the underway reforms by the Vietnam Government to help take advantage of the
country's economic advantages and opportunities in
order
to overcome challenges in regional and global connectivity.
Speaking
at the seminar, the Vietnam Embassy’s Trade Counsellor Nguyen Canh Cuong said
the purpose of the workshop is to update
information
to help scholars, officials and French entrepreneurs raise awareness about
recent economic reforms in
in the
Investment Law, the Corporate Law, and especially the two important trade
agreements Vietnam is actively engaging in negotiations- the
Vietnam-EU
Free Trade Agreement (EVFTA) and the Trans-Pacific Partnership (TPP)
Agreement.
Prof.
Dr. Nguyen Duc Khuong- a lecturer from IPAG Business School Paris reviewed
the process of
integration,
introduced new policies being implemented by the Vietnam Government to cope
with challenges and ensure sustainable growth.
Lawyer
Oliver Massmann from Duane Morris Law Firm Vietnam LLC, in his report, gave a
He
also expressed his optimism about positive changes in
During
the seminar, delegates raised questions concerning the underway reforms in
such fields as industry, energy and banking and touched upon
opportunities foreign firms, including French businesses can fully utilize to
accelerate investment cooperation.
As of
the end of 2014
Although
It is
being sent to all parts of the globe. The top five countries in recent
years have been
In
total
As of
the end of 2014 Vietnamese investors had disbursed total outward FDI of US$6
billion, which equates to 30.0% of the total of pledged outward FDI of
US$20.00 billion.
In
Leading
the pact of Vietnamese investors were the Vietnam Oil and Gas Group, Song Da
Corporation, Vietnam Rubber Group, Vietnam National Coal Mineral Industries
Group and Viettel.
For
2015, the FIA has forecast outward FDI will grow to US$1.5-2 billion for
which it estimates about US$1-1.2 billion will be disbursed.
SBV
appoints new deputy governor
The
State Bank of Viet Nam (SBV) now has a new deputy governor.
Following
Prime Minister Nguyen Tan Dung's directive issued on Sunday, SBV Personnel
Department Director Nguyen Kim Anh has been appointed to the position.
Anh
was the deputy director of the
Affordable
housing in demand
More
incentives are needed to encourage businesses to develop affordable housing
and social housing projects, a
The
official from the Housing Development and Real Estate Market Division under
the Construction Department, who declined to be named, said there were
insufficient incentives for enterprises to develop such housing.
He
said the city should use public land to create a Social Housing Fund by
calling on various sectors of society to invest in social housing, especially
in resettlement housing projects.
The
city should spend between 30 and 50 per cent from land-use money collected
from commercial housing projects to fund the Social Housing Fund.
The
city should also develop affordable house-leasing projects with an aim to
change people's perception of house ownership.
Le
Hoang Chau, chairman of the HCM City Real Estate Association, said the
Government and the Construction Ministry needed to focus on a national
programme to develop social housing for lease instead of for sale.
Chau
said it was better to lease social housing instead of for sale because the
price of many commercial housing projects was as low as social housing
projects.
Chau
said in order to encourage enterprises to invest in housing for lease
projects, the Government should extend the payment of land use for
enterprises.
This
year the city plans to build eight million of square metres of housing, which
will increase the average accommodation space to 17 square metres per person,
according to the Construction Department.
In
order to achieve the target, the city will continue to develop more social
housing projects to meet rising demand.
At
present social housing only meets one-third of the demand of the public.
This
year, the city will complete 13 resettlement projects with more than 7,000
apartments and land lots with a total of more than 905,000sq.m.
The
city will also develop five social housing projects with nearly 3,600
apartments, with a total area of 312,000sq.m.
In a
related issue, the Construction Ministry said this year it would focus on
social housing development.
Speaking
at a recent meeting held in Ha Noi, Construction Minister Trinh Dinh Dung
said the ministry had identified the real estate market as one of the
priority sectors for 2015, and that it would continue to implement measures
to tackle challenges facing the market.
According
to the ministry, more than 100 social housing projects in key cities like Ha
Noi and
Around
150 other projects are under construction, including 91 housing projects for
poor people and 59 projects with 122,500 apartments for workers, the ministry
said.
Gold
prices remain stable ahead of Tet
Domestic
gold prices are currently hovering at a low of VND35 million per tael, in
contrast with previous years when people used to flock to jewellery stores
ahead of Tet.
Gold
trading companies said the gold market had remained stable at the year-end
and had not been as heated as the previous years.
Representatives
from Bao Tin Minh Chau said trading at the company during the year-end had
remained normal and there had been no unexpected spikes in prices as seen in
previous years.
SJC
also said daily transactions at the company were only about 1,000 tael and
that the fillip during the year-end was insignificant.
It
added that this was much lower than the previous years when daily
transactions touched 10,000 tael and the figure surged by 50 per cent to
15,000 tael by the year-end.
Industry
insiders attributed the stability in the gold market to stability in the
country's macro-economy and the State Bank of
Earlier,
whenever the economy was unstable and inflation was high, people only trusted
gold investments.
Now,
they are seeking investments in securities and property, and feel that simply
depositing money in banks could offer them good returns, so demand for gold
has dropped sharply.
Nguyen
Anh Hong, a bank employee in the capital, said she used to store gold as a
hedge against inflation in the past. However, this year she turned to
securities as she saw them as more attractive opportunities.
According
to the latest report from the World Gold Council,
The
country's registered gold consumption during the third quarter reached 19
tonnes, which is worth US$783 million. Of the total, gold jewellery accounted
for two tonnes, worth $82 million, a 9 per cent decline, while gold bars and
coins made up for 17 tonnes, worth $701 million, reflecting a 29 per cent
decline.
The
council ranked
Yesterday,
domestic gold prices remained unchanged against the previous day despite a
fillip in the global market.
DOJI
Co. yesterday listed one tael at VND35.23/35.27 million ($1,646/1,648), while
the prices quoted by Phu Quy Co and SJC were VND35.24/35.27 million and
VND35.19/35.29 million per tael, respectively.
Gold
prices in the domestic market are still about VND3.3 million ($154.2) higher
than the global prices.
Slow
demand means hard year for rubber
With
global rubber prices continuing to fall after a rout last year, things are
expected to remain very difficult for the industry, the State-owned Viet Nam
Rubber Group has warned.
With
demand too not hot last year Viet Nam's exports fell by 0.7 per cent even as
prices plummeted by 28 per cent, Tran Thoai, deputy general director of VRG,
told a review meeting in HCM City yesterday.
The
average price was around VND37.3 million (US$1,751) per tonne compared to
VND51.8 million ($2,431) in 2013.
It is
expected to fall to around VND31 million ($1,408), he said.
The
group has urged its member companies to try and cut production costs to
around VND30 million ($1,401 ) per tonne from the current VND36 million
($1,682).
Vo Sy
Luc, VRG chairman, said the group planned to focus on producing rubber-based
products with high global demand.
He
called on member companies to research into intercropping other crops with
rubber to increase income.
Speaking
at the meeting, Minister of Agriculture and Rural Development Cao Duc Phat
called on the group to restructure to increase value addition and ensure
sustainable development.
"The
country exports nearly $2 billion worth of raw rubber, and imports large
quantities of rubber-based products at much higher cost, and this requires
the industry to tweak its product structure," he said.
"With
supply exceeding demand, the industry also needs to control rubber output and
stimulate domestic demand besides slashing production costs."
The
group has set itself a profit target of VND2.53 trillion ($118.7 million) and
revenue target of VND20.92 trillion ($982.48 million), or just 87 per cent of
last year's figure.
It is
expected to grow rubber on 416,000ha this year, including several thousand
hectares in
Pension
funds lack framework
Market
participants urged authorities to complete a legal framework on pensions this
year after the long-awaited circular on voluntary pension funds wasn't
submitted to the Government as planned.
"In
2015, we believe market development will be more stable and this year could
be a breakthrough for the fund management industry if voluntary pension funds
are allowed to operate," said Tran Thanh Tan, president of the Fund
Management Club, speaking to a State Securities Commission conference on
securities market development.
Tan
said that in the coming few years, and in the extended future, the
development of the fund management industry would largely depend on the
success of pension fund types. He said he expected the Ministry of Finance
would soon submit a draft decree on the organisation and operation of
voluntary pension funds to the Government.
Open-ended
funds and exchange-traded funds (ETFs) have faced many difficulties. Because
of this, it was necessary to launch voluntary pension funds to help the stock
market diversify products, as well as make more room for the fund management
industry to develop, Tan said.
Prime
Minister Nguyen Tan Dung vowed that cumulative assets of voluntary pension
funds would be reinvested in the economy, including in capital and securities
markets, and that they would reach VND10 to 12 trillion (US$467 to 561
million) by 2020.
"The
Ministry of Finance will submit a draft decree on the organisation and
operation of voluntary pension funds to the Government in 2015, which sets
out the legal framework for the implementation of this fund type," said
Deputy Minister of Finance Tran Xuan Ha.
Ha
said regulations overlapping with the Ministry of Labour, Invalids and Social
Affairs (MOLISA) caused the delay. While the Ministry of Finance prepared the
draft decree on voluntary pension funds, MOLISA was developing a policy on
additional mandatory public pensions.
While
the current payment of compulsory pension insurance was high it would be
difficult to ask employees and employers to pay more, Ha said. Thus, the
Government decided to expand multi-pillar pension funds with the development
of voluntary pensions.
The
Cuu Long (
The
provinces reported $850 million worth of exports for seafood and rice in
January alone.
The
office estimates that to achieve this target, the region will have to produce
3.7 million tonnes of seafood to meet demand for raw material from 198
seafood processing factories in the region.
These
provinces will also have to grow rice on a total land area of 4.2 million
hectares, including 80 per cent of the total area growing high-quality rice
products for export processing.
Meanwhile,
the provinces will work to improve the quality of trade promotion programmes
by lending support to enterprises for a market study, as well as conduct
marketing and advertising activities in many export markets in Asia, Africa,
They
have also paid attention to developing quality management according to
international standards and updated global experiences in risk management for
trading activities, along with coming up with specific financial solutions
for exporters.
The
provinces have implemented strong support programmes for the export rice
industry, export credit guarantees, and undertaken the development and
management of supply chain and value added services related to imports and
exports to limit risk in external trade relations to a minimum level.
Loans
worth VND56 trillion ($2.616 billion) in total have been taken for enterprises
to boost investment for the renovation of technology, expansion of production
scale and for changing the structure of export products to improve the
competitive ability and add value, according to the office.
This
measure is expected to increase export volume by 20 per cent for high-grade
rice and 5 per cent for high-grade seafood this year, compared with last
year.
Ca Mau
Province, the largest exporter of seafood over the past 15 years, expects to
touch $1.4 billion in export value this year, accounting for 19.4 per cent of
the total seafood export value of the Cuu Long Delta region.
Last
year, the Cuu Long Delta provinces reported a year-on-year increase of $700
million in export value of seafood and for rice to $8.9 billion.
They
also promoted trade activities in Asian, European and North American
countries, stepped up high-grade rice exports to
Sliding oil
prices to have ‘barbell impact': ANZ
Viet
Nam is likely to see a ‘barbell impact' from falling oil prices, ANZ Bank
economists Eugenia Victorino and Glenn Maguire said in a recent report.
An
engineer operates equipment at Dung Quat Oil Refinery in the central
The
correction in international prices of oil has entered its seventh month,
spelling a significant positive for most of the region. However, the economists
said the net impact across trade and expenditure patterns will be marginal
for
The
country's oil consumption has risen sharply, posting a 7.5 per cent compound
annual growth over the last two decades. This growth is the fastest in the
region, overtaking
"In
light of the surge in electronics production over the last three years, we
expect oil consumption to continue rising as total energy needs keep pace
with demand for manufacturing growth," the experts predicted.
The
price of Brent crude oil has pulled back by nearly 57 per cent since last
July. ANZ expects Brent prices to average at US$48 per barrel in 2015, seeing
a further downsizing risk during the first half of the year and rising up to
$58 per barrel by December.
The
economists concluded that the persistent decline in oil prices has exacerbated
the already-soft price gains in non-food and non-oil items in the consumer
price index basket.
They
further said the effect on state finances is marginal as the decline in the
subsidy bill is accompanied by a decline in export crude oil's tax revenues.
The slide in oil prices has not placed the trade balance at risk as the share
of oil-related trade has steadily declined since 2009.
In
2014, crude oil accounted for 5 per cent of
Last
year,
According
to the BP Statistical Review of World Energy 2014,
With
"Despite
the prospect of a new normal in low oil prices, we see the need for more
investment in downstream projects. Consequently, exports of crude oil should
decline to support local consumption," the economists stated.
Goodyear
to expand its Autocare network in Hanoi
Goodyear
Similar
to other Goodyear Autocare, Autocare Thanh Phat is built under Goodyear’s
strict standards to become a professional tire care center with experienced,
skillful technicians and modern equipments such as lifts, wheel alignment
machines and others… to better serve tire and vehicle maintenance.
In
addition, Goodyear Autocare also offers many new experience compared to old
models of a tire centre, by providing other facilities such as the reception area
which takes in requests and provides consulting services; the entertainment
area to provide customers with a place with Internet for working and
entertaining while at the same time be able to observe every step of
maintaining their vehicles through the camera system installed there.
The
ultimate goal of the centre is to provide customers with the best services
and products for them to have a comfortable and safe journey. Currently, the
Autocare service network has covered every part of the country, including the
southeast, southwest, the central and the north, and is still being expanded
to other provinces across the country.
On
this occasion, customers are gifted a car digital video recorder when
purchasing any two Goodyear tires at Goodyear Autocare Thanh Phat. The
programme takes place from now till February 18.
Israeli
textile firm invests in Binh Dinh
Delta
Galil Industries, an Israeli producer and distributor of apparel products,
has got a license to build a manufacturing plant in the south-central
According
to a source from the
The
project scheduled for operation in the fourth quarter of this year will
manufacture yarn and cloth and produce apparel items. The project is expected
to create many jobs and help spur socio-economic development in the locality.
Delta
Galil
The
source said Delta Galil Industries had got involved in this project probably
because of the Trans-Pacific Partnership (TPP) agreement which
Established
in 1975, Delta Galil Industries is a global manufacturer and marketer of
private label apparel products for men, women and children. It is also the
partner of leading fashion brands like Calvin Klein, Nike, Hugo Boss and
A vice
chairman of
Shuntaro
Ise said his three-day visit to HCMC aims to explore opportunities to partner
with local enterprises in the field and introduce eggs of the company.
ISE
Food also wants to share farming experiences with farmers in HCMC and
According
to Ise, the company has breeding farms for around 120 million hens in
An
exhibition on eggs will be organized in
HCMC
vice chairman Liem said the city consumes nearly three million eggs a day and
1-1.5 billion eggs a year.
At the
meeting, Liem assigned the HCMC Department of Agriculture and Rural
Development to consider cooperation with ISE Food.
The
HCMC visit by ISE is part of the agricultural cooperation program between
HCMC and the Japanese Ministry of Agriculture, Forestry and Fisheries. Both
sides signed an agreement on January 20 to attract Japanese agricultural
businesses to invest in the city.
Major
commercial center project get off ground in Haiphong
Vincom
Retail Joint Stock Company under Vingroup and Haiphong Real Estate
Development and Investment Company have started work on a shopping and
entertainment complex in the northern city of
Located
in the center of
Le
Khac Hiep, vice chairman of Vingroup, said Vingroup’s first project in
“We
will speed up construction so that the facility can be put into service
within this year,” Hiep said.
As
designed, the center will consist of an all-in-one shopping-entertainment
facilities and a commercial house project named ‘Shop House’. The shopping
mall will have floor space of 20,000 square meters for fashion and consumer
goods stores, entertainment facilities and eateries.
The
project also comprises of 47 blocks with six different types of housing.
Vincom
Retail Joint Stock Company had had total assets of US$1.7 billion as of the end
of 2014.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 16 tháng 2, 2015
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