BUSINESS IN BRIEF 19/9 PM attends Vung Ang 1 thermo-power plant inaugural ceremony Prime Minister Nguyen Tan Dung attended a ceremony to inaugurate the Vung Ang 1 Thermal Power Plant in Ky Anh district, the central province of Ha Tinh on September 17. Construction on the 1.25-billion-USD plant started in July 2009. The first turbine of the 1,200MW plant began operational in August 2014, while the second one started generating electricity in April this year, contributing a total of 3 billion kWh to the national grid so far. When running at full capacity, the plant is expected to provide around 7.2 billion kWh for the national grid each year, with annual proceeds of 7-8 trillion VND (308-352 million USD), thus helping deal with electricity deficiency and ensure energy security for the national industrialisation and modernisation. That the two turbines generate electricity at designed capacity marks a turning point as this is the coal-fueled plant having the biggest-ever capacity, PM Nguyen Tan Dung said at the ceremony. The Government leader praised efforts made by the Vietnam Lilama Machinery Erection Corporation and Vietnam National Oil and Gas Group, saying that it is the first time the main contractors of a large-scale project are Vietnamese-owned enterprises. Then he participated in a ceremony to inaugurate the first coal-fueled turbine of a power plant of the Formosa Group located in the Vung Ang Economic Zone. He expressed hope that the Taiwanese group will continue efforts to ensure the progress of the project and contribute more to the socio-economic development in Ha Tinh and the northern central region. The PM also visited the construction site of the Son Duong deep-water port at the economic zone. While meeting provincial leaders earlier, PM Dung asked them to continue ensuring defence security and social safety and order, attracting more investment, improving the investment environment and reforming administrative procedures, together with Party building and economic development. The province was urged to exert additional efforts to achieve 2015 targets, while working out socio-economic plans for the next five years. The Government always creates favourable conditions for Ha Tinh to grow further in order to speed up the development of the northern central region and the entire country, he added. According to Secretary of the provincial Party Committee Vo Kim Cu, Ha Tinh recorded an average annual economic growth rate of 18.7 percent over the past five years. This year, the figure is expected to reach over 28 percent. The province ranks sixth nationwide in terms of foreign investment attraction, and is one of the five localities leading the country in new-style rural area building. Some impact either way from Fed decision Vietnam’s foreign currency market will experience some degree of impact regardless of whether the US Federal Reserve decides to increase interest rates or postpone it to a later date. A report from Maritimebank’s research center stated: “Based on the exchange rate fluctuation we believe that Vietnam’s foreign currency market will be less affected by the Fed decision than by the devaluation of the Chinese Yuan.” It added that the actions of banks to hold more foreign currency before the Fed makes a decision is a normal step in preventing risk from major fluctuations. Since the start of the week beginning September 14 the USD/VND exchange rate has headed upwards, with USD sold to some commercial banks reaching VND22,540 per USD late on September 15, or an increase of VND30, which is VND7 lower than the ceiling. It may be too early to say that this is the start of any period of unstable fluctuations because of concerns over what might happen to the exchange rate after the Fed meeting, but the psychology of expectation is an issue that must be taken into account. In explaining its devaluation of the VND on August 19, the State Bank of Vietnam (SBV) said it was to prevent any negative influence from the FED increasing interest rates. Then, on August 25, at a meeting of the government, SBV Governor Nguyen Van Binh spoke of the importance of keeping the exchange rate stable, even by selling foreign currency. The Fed decision will result in two scenarios. If it increases interest rates, Vietnam will be affected directly by the devaluation of the VND and indirectly by the effect on the Yuan, which in turn would affect the VND. In this case, the SBV will have to make greater efforts and use every technique at its disposal to stabilize the market, which would include selling more foreign currency, as the central bank committed it would not devalue the VND any further on August 25. If the Fed was to postpone a decision on increasing interest rates, pressure to do so would not be higher but the market would anticipate a move at its next meeting. Maritimebank therefore said that the SBV should consider a more flexible exchange rate regime to adapt to market movements and, in particular, deal with any external shocks. OCB divests from ORS The Orient Commercial Joint Stock Bank (OCB) has registered to sell its entire holding in the Orient Securities Corporation (ORS), in which it is currently the major shareholder, with 2.64 million shares, or 11 per cent. The transaction will be conducted from September 16 to September 30. ORS shares are trading at around VND3,000 ($0.13) per share. In the first six months this year ORS recorded a profit of VND3.5 billion ($155,610), significant higher than the VND158 million ($7,024) recorded in the same period last year. At ORS’s 2015 annual general meeting its shareholders approved the pursuit of a merger and acquisition with a suitable partner. $43.9 million investment in Hanoi Landmark 51 The Song Da 1.01 JSC and the Vietnam Forest Corporation (Vinafor) have recently announced an investment of VND988 billion ($43.95 million) in developing Hanoi Landmark 51 in the capital’s Ha Dong district. Located in Van Phuc ward, the project has a total construction area of 2,186 sq m and a gross floor area of 103,104 sq m. The building comprises four underground basements for parking and 51 storeys with nearly 700 apartments for sale, shopping malls, and office space for lease. Other facilities will include kindergartens, a four-season swimming pool, clinics, pharmacies, a gym, and a spa, among others, to serve the residents. Hanoi Landmark 51 is expected to become the third-highest building in Hanoi once completed in the third quarter of 2017. Binh Phuoc commercial complex breaks ground The Hai Vuong Investment Joint Stock Company held a breaking ground ceremony on September 16 for its Nam An Loc - Binh Long Commercial and Urban Services Complex in southern Binh Phuoc province. The project is part of the Nam An Loc urban area, with total investment of VND279 billion ($12.5 million) on an area of 46,300 sq m. The complex will include the Anloc Plaza Hotel, the An Place wedding reception center, and Anloc Park. With a modern and luxurious design, all facilities are consistent with the local landscape and environment. It is expected to open on April 30, 2016 to meet shopping needs and demand for premium services. At the ceremony the company also signed agreements with three investors for the complex. CapitaLand & Thien Duc develop new HCMC project CapitaLand, through its wholly-owned subsidiary CapitaLand (Vietnam) Holdings, has entered into a joint venture with the Thien Duc Trading-Construction Company (Thien Duc) to develop a prime site in District 2 in Ho Chi Minh City. As the lead development manager, CapitaLand plans to develop the site into an upscale residential development with approximately 1,000 homes, at a cost of an estimated $150 million. CapitaLand is heartened by the continuous growth momentum in Vietnam, which is now the Group’s third-largest market in Southeast Asia, after Singapore and Malaysia, according to Mr. Lim Ming Yan, President & Group CEO. “We will continue to leverage our robust development capabilities, deep operating expertise, and wide business network to fuel further growth via suitable investments and management opportunities in Vietnam,” he said. The 2.6-hectare site is located in Thanh My Loi ward in District 2, on the fringe of the city center. It is only ten minutes from the future new CBD on the Thu Thiem peninsula and within easy reach of important transport networks such as the Long Thanh - Dau Giay Highway, the East - West Highway, and the Hanoi Highway. CapitaLand holds 80 per cent of the joint venture and Thien Duc 20 per cent stake. The joint venture development is CapitaLand’s seventh residential project in Vietnam and will increase its residential portfolio to over 7,500 units, in Ho Chi Minh City and Hanoi. It was one of the top performing foreign developers in Vietnam in the first half of 2015, selling 389 residential units worth $48.5 million. As at the end of June its total assets in Vietnam stood at $441.3 million. Thien Duc, a privately-owned Vietnamese real estate company, is one of CapitaLand’s strategic partners in the country and a shareholder of The Vista and Vista Verde - two of CapitaLand’s residential projects in Ho Chi Minh City. Vietnam to export 450, 000 tons of rice to Philippines Vietnam Food Association (VFA) has just won a contract to supply 450,000 tons of rice to the National Food Authority (NFA) of the Philippines. The NFA of the Philippines wants to purchase 750.000 tons of 25 percent broken long-grain white rice for delivery duty unpaid at US$ 426, 6 per ton. Accordingly, the bidding for the importation of 750,000 tons of rice would be from Viet Nam and Thailand.  Vietnam will supply 450,000 tons, and Thailand will provide 300, 000 tons at the same prices. The Philippines is one of the world's biggest rice importer with a total of 650,000 tons of rice under government-to-government contracts this year. Earlier, Vietnam won a 300,000 ton supply contract with the NFA, and delivered 150,000 tons to the Philippines in July. PetroVietnam plead to PM for restrictions on petrol imports According to the group, the refinery is scheduled to start operations in 2017 and reach its top designed output in 2018. At that time, total supply of petroleum products for the local market may reach 17.6 million cubic metres, including 7.3 million cubic metres from Dung Quat Refinery; 9.7 cubic metres from Nghi Son and the remainder from the four condensate processing facilities. The domestic total demand for petroleum products in 2018 will be at 17.4 million cubic metres, lower than the total the total supply of 17.6 million cubic metres. Meanwhile, from now to 2018, a number of petroleum products may become operational, which will also help to boost the supply. PetroVietnam is worried that due to the free trade agreements, petrol traders will be offered preferential import tariffs, so they will sell their imported products at lower prices than those produced by local oil refineries. PetroVietnam however has failed to clearly explain how petrol products produced within Vietnam and not subject to any import levies or transport costs could be more expensive that imported alternatives. PetroVietnam has pleaded for protectionist measures which run largely contrary to the government’s expressed opinions on increasing its global economic integration and increasing competition in a more liberalised domestic market. The group specified that the government should only provide import quotas for petroleum products when the consumption of all locally-made products is ensured. Hanoi to add 2,300 4G base transceiver stations Hanoi will install an additional 2,300 base transceiver stations (BTS) for implementation of 4G services in 2016, announced the Hanoi municipal Department of Information and Communications on September 16. Of the additional BTS stations, 1,648 will be installed by MobiFone, 594 by Viettel, 139 by Vinaphone and 12 by Vietnammobile. The installation aims to improve the quality of mobile services as well as meet the demands of residents and contribute to the socio-economic development of the capital. Currently, there are five mobile providers in Hanoi - Vinaphone, MobiFone, the Military Telecommunication Corporation (Viettel), Hanoi Telecom Corporation (Vietnammobile) and Global Telecom Company (Gmobile). Over 6,340 BTS stations bad been installed as of May 31, with 1,750 by mobile service provider Viettel, 1,600 by MobiFone, 1,900 by Vinaphone, 111 by SFone, 450 by Vietnammobile and 580 by Gmobile. If all stations are installed as planned, the number of BTS stations providing 2G, 3G and 4G services is estimated to reach more than 10,000 by the end of 2016. Leader of the Hanoi Department of Information and Communications emphasised that the agency will continue to co-ordinate with the municipal People’s Committee, the Ministry of Information and Communications as well as other departments, branches and localities to solve difficulties and create favourable conditions for telecommunications enterprises to develop their business. Taxi firms cut fares Many taxi companies have slashed fares by 4% to 12% following the recent fall in petrol prices. The Hanoi Transport Department said that diesel prices had fallen VND1,860 from January 21 to September 3 and it had asked taxi firms to cut their fares to mirror the decrease. Department deputy head Nguyen Xuan Tan said that as of September 11, 39 out of 89 taxi firms operating in Hanoi had publicly announced their new prices, with 11 out of 61 firms having cut prices by 11%. In similar moves, HCM City Transport Department and the HCM City Taxi Association also asked their members to reduce fares by VND500 per kilometre. Many taxi firms in Can Tho and Danang City have also slashed fares by an average VND500 per kilometre. Experts warn of risks over woodwork shipments to China Although Vietnam’s wood processing sector enjoys an annual trade surplus of around US$600 million with China, experts at a seminar in Hanoi on Tuesday warned of risks that local exporters could face in the neighboring market. Figures released at the seminar on Vietnam-China woodwork trade in 2012-2014 showed Vietnam exported more than US$845 million worth of wooden goods to China last year and over US$425 million in the first half of this year. Woodwork is Vietnam’s second biggest export earner from China after sliced cassava. However, wooden products shipped to the market are mostly raw materials such as wood dust, sawn timber and planks, among others. Nguyen Ton Quyen, general secretary of the Vietnam Timber and Forest Products Association (Vifores), described the way woodwork trade is done between Vietnam and China as risky, calling for Government agencies to find solutions to deal with this matter. Quyen explained that woodwork sold to China is mostly raw materials or semi-finished products. Out of nearly US$850 million worth of wooden exports to China last year, raw materials made up over US$700 million. Meanwhile, other markets mostly imported finished products. Apart from wood dust, China has great demand for rare and valuable timber but does not apply strict requirements for the origin of timber as other developed countries do, Quyen said. Unlike woodwork exports to the U.S. and EU, which are mostly shipped by sea, Vietnamese wood products are mainly sold to China via border trade, making it difficult for authorities to manage woodwork exports. Exporting to China is also risky in terms of unstable demand and prices. Huynh Van Hanh, deputy chairman of the Handicraft & Wood Industry Association of HCMC (Hawa), said a Chinese official in the forestry sector once told him that China has a plan to import materials for turning out finished products to earn higher profit margins. Experts at the seminar urged local firms to export more value-added woodwork to China. To Xuan Phuc from international organization Forest Trends said woodwork trade between Vietnam and China would be governed by rules in the agreements that Vietnam has signed with partners, including the Vietnam-EU Free Trade Agreement (FTA) and the Trans-Pacific Partnership (TPP). Vietnamese exporters have to show the origin of their products and abide by strict requirements for supply chains, Phu said. But he stressed that those conditions will force local firms to invest in value-added products. Phuc suggested the Government find ways to encourage firms to build sustainable long-term production strategies and tighten management to remove firms which only target short-term profit and overexploit wood resources. Smartphones have bigger market share The domestic market share of smartphones grew to 51% in the second quarter of this year, which had for the first time surpassed that of feature phones, according to the latest report of market research company IDC Vietnam. IDC’s market overview report showed that smartphones made up 51% of the volume of mobile phones sold in the second quarter of this year and feature phones accounted for 49%. The respective percentages were 44.5% and 55.5% in quarter one. The second quarter saw 6.5 million mobile phones imported into Vietnam, down 500,000 units compared to the first quarter. Of the total volume, smartphones accounted for 3.3 million worth a total of US$607 million, slightly higher than the 3.1 million in the first quarter. According to IDC, Samsung led the smartphone segment in terms of volume in the period with a 30% market share, followed by Asus with 14% and Microsoft with 13%. In terms of value, Samsung was still the leader with 36%. Apple was in the second place with 13% thanks to the high product value of iPhones and Asus followed with 11%. IDC said Vietnam imported 291,000 tablets with a total value of US$53 million in the second quarter, slightly to down from the same period last year. In quarter two, the average selling prices of smartphones and tablets fell 26% to US$183 and 31% to US$182 respectively. The average selling price of tablets dropped significantly due to the launch of 7-inch and 8-inch tablets with lower prices than the 10-inch versions. Draft decree makes construction insurance compulsory Enterprises would have to buy insurance for their construction activity if a draft decree guiding the implementation of the Construction Law 2014 is approved. The law regulates that insurance for construction activity is compulsory. The Ministry of Finance put the draft decree on the table for comment at a meeting with insurance companies in Hanoi on Monday. The draft clarifies insurance premiums for construction projects will not be lower than the total cost written in construction contracts of the structures. Insurance for workers at construction projects varies depending on the severity of injuries. The amount will be VND100 million (US$4,453) for a dead case. The draft decree says insurance premiums for construction projects should be enough for the investor to cover compensation and management costs. Before the law took effect, insurance firms benefited much from the premiums paid voluntarily by construction companies for their projects. Figures showed insurers had to spend only one-third of the premiums they had collected on compensation for accidents and damage at construction sites a year. In the 1994-2014 period, construction insurance premiums grew 12% annually and reached VND2.3 trillion (US$102.46 million) last year. On average, insurance companies spend a total of VND700 billion each year on compensation for project investors and contractors to partly cover damage at their projects. VietinBank finances Hiep Phuoc IP expansion Hiep Phuoc Industrial Park Joint Stock Company (HIPC) on September 16 inked a contract with the Vietnam Bank for Industry and Trade (VietinBank) to take out a VND1 trillion (US$44.5 million) loan to expand the Hiep Phuoc Industrial Park (IP) in Nha Be District by nearly 600 hectares. HIPC said phase one of the park covering about 312 hectares attracted 116 projects with total registered capital of over VND12 trillion (US$534 million) and these project have created jobs for nearly 9,000 workers.. Costing VND4 trillion (US$178 million) including the VietinBank loan, the second phase will see the IP expanding by nearly 600 hectares for tenants using high and clean technologies to produce and provide construction materials, mechanical and precision engineering products, machinery and equipment, electronic appliances, marine and measuring equipment, food processing and seaport services. The expansion of the IP will help develop Nha Be area, especially Hiep Phuoc port-urban area, into an industrial zone with port services, multi-storey and ready-to-use workshops for Japanese investors and firms in supporting industries and logistics. HCMC currently has 14 operational IPs and export processing zones (EPZs) covering nearly 4,000 hectares. In the next few years, the city plans to expand four IPs including Hiep Phuoc, Vinh Loc, Tay Bac Cu Chi and Le Minh Xuan by nearly 1,000 hectares as well as establish about seven new IPs. By 2020, the city is expected to have around 22 IPs covering nearly 6,000 hectares. Thailand remains Vietnam’s biggest fruit exporter Thailand continued to top the list of Vietnam’s biggest fruit and vegetable exporters in the first seven months of this year, with total export turnover of US$95.7 million, according to the Vietnam Fruit and Vegetables Association (Vinafruit). Vinafruit told the Daily that the association made the list of Vietnam’s top fruit and vegetable exporters in the period based on statistics of the customs and the Ministry of Agricultural and Rural Development. Durian, rambutan, tamarind, mango and mangosteen were among Thailand’s major fruits exported to Vietnam in the period. China came second with a fruit and vegetable export value of US$79.1 million, followed by the United States with more US$36.51 million, Myanmar with US$29.78 million, South Africa with US$9.74 million and New Zealand with US$8.7 million. Total import turnover from fruits and vegetable in the January-July period went down by 0.58% compared to the same period last year. China remained the largest consumer of Vietnam’s fruit and vegetables with revenue of US$282.5 million, followed by Japan, South Korean, the U.S., Malaysia, Taiwan, Thailand, Russia and Singapore. Vinafruit quoted the ministry’s data as saying that Vietnam shipped abroad more than US$1 billion worth of fruit and vegetables in the first eight months, up 3% versus the same period. The figure included US$118 million last month. Vietnam spent US$71 million importing fruit and vegetables last month and US$379 million in January-August compared to US$360 million in the same period of last year. Vietnam enjoyed a fruit and vegetable trade surplus of US$47 million in August and US$702 million in the first eight months. IPP Group seeks to buy more shares of Sasco Imex Pan Pacific Co. Ltd. (IPP Group) has proposed acquiring more shares of Airport Service Company (Sasco) but the proposal is deemed impossible this year. A source from the Ministry of Transport confirmed IPP Group’s proposal to buy more shares of Sasco, an affiliate of Airports Corporation of Vietnam (ACV). Airports Corporation of Vietnam (ACV) currently holds a 51% stake at Sasco after the latter launched an initial public offering in December last year. IPP Group is a strategic investor of Sasco with a 16% stake while Hoan Loc Viet Service Trading & Investment JSC has a 22.1% stake. IPP Group acquired a 16% stake at Sasco via a put-through transaction before the IPO auction. However, the firm has asked for more shares of Sasco, and pledged to keep the shares over five years and help Sasco enhance corporate governance. However, the source told the Daily that the Ministry of Transport has not received IPP Group’s proposal and it is difficult to sell more shares of Sasco this year. According to the roadmap for ACV’s restructuring after equitization, the firm will continue to be the biggest shareholder of Sasco. Sasco does not generate much profit for ACV. However, the financially dependent  affiliate of ACV operates at the biggest international airport in Vietnam, Tan Son Nhat International Airport in HCMC. ACV not only injects capital into its subsidiaries like Sasco but also control their operations. At present, ACV is preparing to go public and has completed assessing corporate value, including the value of its subsidiaries. If the corporation sells more shares at Sasco, it would have to reassess its corporate value and this is what ACV and the ministry have not planned. Sasco sells duty-free goods, handicrafts, gold, silver, precious stones and books, and provides catering and tourist transport services. Its consolidated profit totaled VND347 billion in the first six months of 2015. Six months after the IPO, Sasco’s share price rose sharply. The transport ministry said sales of additional Sasco’s shares would only be conducted on the Hochiminh Stock Exchange and the firm operates as a joint stock company. Foreign house buyer number far behind expectations The number of foreigners and oversea Vietnamese buying houses in Vietnam has been far behind forecasts since the Housing Law 2014 took effect in July, said economic expert Dinh The Hien at a seminar in Ho Chi Minh City on Monday. The seminar was hosted to solve problems for foreigners and oversea Vietnamese to buy houses in Vietnam. The Housing Law 2014 permitting foreigners to buy houses in Vietnam has been expected to heat up the real estate market with an increase of foreign house buyers. However it has not been as expected because of many reasons. Among them is that decrees and circulars guiding implementation of the Housing and Real Estate Laws have not been issued. Deputy chairman of the Committee for Oversea Vietnamese Affairs (COVA) in HCMC Tran Hoai Phuong proposed authorized agencies to simplify procedures and provide transparent database to improve the condition. The Ministry of Construction and the State Bank of Vietnam should ensure the rights of foreign house buyers, facilitating money transfer into their accounts when they resell properties, he suggested. According to statistics by lawyer Nguyen Van Hau from the HCMC Lawyer Delegation, about 400 oversea Vietnamese and foreigners bought houses in Vietnam in the period of 2009-2014. Fuel bills compulsory from 2018 Gas stations will have to issue bills for fuel buyers from July 1, 2018 as stated in a new circular issued by the Ministry of Science and Technology. Circular 15/2015/TT-BKHCN requires fuel sellers to install bill printers for customers. Details on the bill should include name and address of seller, time of fuel purchase, volume, price and total cost. Talking to the Daily, a fuel wholesaler in the south said the HCMC Department of Science and Technology last year kicked off a pilot invoice printing scheme at filling stations in the city to prevent trade fraud and protect consumers. However, the cost of a printer is a worry for fuel companies. He said few customers have asked for a bill because such bills do not carry the names of buyers and the goods sold is just classified as liquid. Therefore, the owners of gas stations could deny responsibility when a complaint is lodged. Gasoline retail prices likely to go up * Fuel trading firms predicted the retail prices of fuels would increase later this week as by last Friday the base prices (constituted by import prices, taxes and fees) of fuels were VND600 per liter higher than the current retail prices. They said the import prices of fuels from Singapore in the last six trading sessions had been up compared to the previous days. That means gasoline retail prices could be revised up this Friday when competent agencies review fuel prices. Increasing fuel prices in the past days have forced fuel trading firms to lower discounts to VND600 per liter. Cheaper loans sought for seafood exporters The Vietnam Association of Seafood Exporters and Producers (VASEP) has asked relevant agencies to consider providing cheaper loans for seafood exporters. VASEP is seeking short-term loans with the highest annual interest rate of less than 7% for seafood exporters to help them cut production costs and improve competitiveness, the Vietnam News Agency report. According to VASEP, the production cost of one kilogram of shrimp in India and Indonesia is US$2.5 on average but in Vietnam it is US$3.5-4. Therefore, making cheaper loans available is one of the solutions for seafood firms to better compete with regional rivals and boost outbound sales.   Statistics of the Ministry of Agriculture and Rural Development showed Vietnam exported seafood worth of US$4.2 billion in the first eight months of this year, down 17.2% compared to the same period last year. Especially, major seafood export products were down 6.5-28% year-on-year. Among the major seafood earners, shrimp, which is responsible for 43% of the country’s total seafood export revenue, plummeted by 29% to US$1.8 billion. The first eight months saw export of tra fish falling by 9% year-on-year to over US$1 billion, tuna by 7% to more than US$306 million, and squid and octopus by 11% to US$273 million. But outbound sales of fish caught at sea grew a slight 4% to US$660 million in the period. VASEP said shrimp shipments to the United States fell sharply due to lower prices and fiercer competition from India and Indonesia. Export revenues from shrimp, tra and tuna fish, squid and octopus from the European Union (EU) dipped as a result of the economic malaise and the depreciation of the euro against the U.S. dollar while seafood exports to that market are denominated in the dollar. Export of Vietnamese seafood to other major markets also declined in the period, except for ASEAN and Mexico which boosted fish imports. KIDO may become strategic partner at VDSC Viet Dragon Securities Co. (VDSC) plans an extraordinary general meeting to approve a share sale scheme via a private placement with local food firm KIDO Corp., a source told the Daily on September 14. At the general meeting planned for October 22, VDSC will seek approval from shareholders to cancel a share issuance plan worth VND200 billion approved at its annual general meeting in 2014 and pass the new plan. According to the source, VDSC will raise its capital from VND350 billion to VND700 billion by issuing an additional 35 million shares. KIDO and its related shareholder group will take part in the share purchase, aiming to hold a 50% stake at the stock brokerage. VDSC will also present a scheme to increase the numbers of board members and controllers for the 2012-2016 term. VDSC is still on the watch list of the Hochiminh Stock Exchange due to negative profit in 2013. However, the enterprise obtained better results in 2014 with profit reaching over VND105 billion (US$4.6 million). In the first half of 2015, VDSC gained VND7 billion in after-tax profit with brokering services remaining the main revenue generator. VDSC planned to raise capital in 2014 but failed to reach agreement with investors, partly due to unfavorable market conditions. Meanwhile, KIDO is strong in financial capability after completing the sale of 80% of its snacks business to Mondelez International at around US$370 million. Earlier, KIDO canceled its plan to buy VND1 trillion (US$45.9 million) worth of shares at DongABank. Explaining the decision, the firm said the bank’s financial situation still needed to be fixed. The central bank has put DongABank under special surveillance due to alleged illegal activities causing serious financial losses for the bank. According to stock market sources, KIDO is still in talks with shareholders of a large commercial bank to acquire shares. Both sides have yet to agree on prices and terms. Apart from key sectors such as instant noodle, cooking oil, ice cream and dairy products, KIDO plans to reach out to more segments in the food and beverage industry. KIDO now holds a 51% stake at Vietnam Vegetable Oils Industry Corporation (Vocarimex), a leading cooking oil firm in Vietnam. Tran Kim Thanh is chairman at both KIDO and Vocarimex while Nguyen Thi Xuan Lieu, deputy general director of KIDO, was appointed as CEO at Vocarimex on September 14. Can Tho to focus more on services sector Can Tho City will attend more to the quality of economic growth and development of the services sector in the restructuring of its economy with services, industry and agriculture on focus. The economic structure of Can Tho was unveiled by Tran Quoc Trung, deputy secretary of Can Tho City’s Party Committee, when he replied to the Daily’s relevant question at a press conference in the Mekong Delta city on Monday. Trung said in the past years, the city’s economy has grown on an industry-service-agriculture structure but it is very difficult for the city to attract investments in industrial projects while infrastructure and services cannot meet the demand of big investors. Currently, industry accounts for 6.75% of the city’s GDP, services for 35% and agriculture for the remainder. However, the focus in the 2015-2020 period is to spur the service sector to support industrial development in the 2020-2025 period. To achieve the target, Can Tho will boost the development of the trading-service sector and diversify services in this sector, especially in the financial, trading, tourism and value-added services fields, and make the most of the city’s advantages in transport, science and technology, and information and communications. In addition, the city will diversify retail services, call for investments in large shopping malls and supermarkets in residential and new urban areas. Regarding a plan to develop Can Tho City into an economic hub of the Mekong Delta, Trung said the city would be a driving force of the entire Mekong Delta region in 2020 as envisaged in Resolution 45 of the Politburo. So far, Can Tho has become a center of education, healthcare, finance and commerce of the region as the city is home to Can Tho University, Mekong Delta Rice Research Institute, Can Tho Bridge, Can Tho International Airport, Can Tho General Hospital and banks, supermarkets and commercial centers. New decree shortens business certificate issuance Enterprises can get business registration certificates within three working days after they submit legitimate applications, instead of five working days as before, according to a new decree of the Government. The new decree replaces Decree 43/2010 and Decree 05/2013 on requirements for business registration and establishment, according to the Government’s portal chinhphu.vn. Many businesses have expressed concern that it would be difficult for business registration certificates to be issued within three days. However, Minister of Planning and Investment Bui Quang Vinh said recently that more than one month after new business registration regulations took effect on July 1, the average time for completing business registration procedures had been reduced to 2.6 days. The new decree allows the business registration agencies to receive business registration applications and return results at designated places for business startups. According to the decree, a new company will be provided with only one code to use for business operation and tax payment when it is approved to come into life. The new decree also clarifies an automatic coordination system between business registration and tax agencies for the use of business codes issued for new enterprises. The business code is created and available on the National Business Registration Portal and tax registration portals and written on the business registration certificate of enterprises. State agencies will use the code for business management. The code rule and the automatic system are expected to help cut the time on granting business registration certificates to enterprises and support those who want to start up business. Regarding the seal, the new decree permits companies to design and decide the number of their seals with the same size and content. In accordance with the new decree, organizations and individuals can either use digital autographs or business registration accounts to make online business registration. Data of the Business Registration Management Agency showed that over 17,000 new firms have been established nationwide the first two months after the revised Enterprise Law came into force on July 1, a significant rise against the same period last year. Fast e-commerce development to benefit delivery firms The fast development of e-commerce sites and convenience stores has led demand for goods delivery to rise and created more business opportunities for delivery firms in Vietnam. Julien Brun, general director of CEL Consulting, a consulting company in the supply chain management field, said a large number of convenience stores and e-commerce sites have come on stream in the past five years and many more will be up and running at densely-populated areas in major cities to cater to the rising needs of consumers. With a population of 90 million people, Vietnam has less than 500 convenience stores while Thailand has 10,000 stores but its population is 60 million people and Japan with about 130 million people has 50,000 stores. E-commerce is also growing rapidly in Vietnam. The country ranks fourth in terms of e-commerce growth in the Asia Pacific region. E-commerce sales in Vietnam totaled US$2.97 billion last year, accounting for 2.12% of total retail sales, according to the Vietnam E-commerce and Information Agency. The strong expansion of e-commerce and convenience stores meant there will be more opportunities for delivery firms. However, Brun said these enterprises are required to be flexible and punctual in delivering small packs, especially to customers in suburban and rural areas. Brun said around 92% of registered trucks or approximately 700,000 units are owned by individuals and the majority of transport companies are small with an average of 10 vehicles each. These trucks have not been used efficiently with 70% of return trips unoccupied. Solving issues related to the efficient operation and goods deliveries for customers in suburban, rural and remote areas will help transport firms gain an advantage on the domestic market. Transport is part of the logistics industry whose contribution accounted for 20% of the country’s gross domestic product value of US$186.2 billion last year and expansion is 16-20% a year. However, the logistics outsourcing proportion in Vietnam is low with only 25-30%, while the rates are over 40% for Japan, European countries and the U.S., and 63% for China. Orchid Capital offloads Masan stocks Orchid Capital Investments Pte Ltd (OCI) issued a “Report on Change in Ownership of Major Shareholder” regarding its holdings in the Masan Group Corporation (MGC) on September 14. The report was sent to the State Securities Commission, the Ho Chi Minh City Stock Exchange, and MGC. OCI has sold about 5.54 million shares in MGC, reducing its share ownership from 64.77 million, or 8.67 per cent of total shares, to 59.23 million shares, or 7.93 per cent. The transaction was conducted on September 7 via negotiation at a price of VND77,500 ($3.45) per share, for a total value of VND428.98 billion ($19.07 million). It sold the shares to restructure its investment portfolio, according to the report. Since the beginning of this year OCI has sold about 15 million MGC shares. Hanoi office tenants in driving seat Diverse and active both describe Hanoi’s office market in Quarter 2 and 3, according to a new CBRE report released on September 15. Diversity of supply and active transactions have made the market more mature and more developed in terms of both quality and quantity. Now is a good time for Hanoi residents to consider relocating due to the range of supply and rents now reflecting the quality and services in a particular building, according to Mr. Greg Ohan, Senior Director of CBRE Brokerage Services. “Moreover, it is time for tenants to negotiate,” Mr. Ohan added. “This is completely opposite to Ho Chi Minh City, where it is hard for a tenant to find 1,000 sq m of office space and rents have started to go up.” Since early 2014 developers in Hanoi’s CBD have become more aggressive in offering attractive rental rates for new customers and in lease renewals so they can achieve or maintain higher occupancy rates. This puts pressure on all developers in in the Midtown area (Dong Da and Ba Dinh districts) and the West. Rents have fallen 10 - 20 per cent depending on the segment and the area. The strategy has so far proven to be correct. Buildings in the CBD have gradually achieved their goal of near-full occupancy, maintaining stability and attracting good brand names and long-term tenants. The West of the capital is still the preferred choice of big occupiers and South Korean companies, creating a private and competitive community. Rents have remained stable and developers must quickly fill up their buildings before new buildings are completed. According to the CBRE report there will be approximately 106,000 sq m of office space launched by the end of this year if projects are completed on schedule and that will affect rents in other areas. In addition to availability, tenants can now also choose office buildings that provide added value that improve the quality of the working environment, the enjoyment and satisfaction of employees, and the success of the enterprise. In Quarter 2 and 3 of this year, based on CBRE’s transactions in particular and those in the market in general, companies and organizations in the same sector tended to move to the same area. Pharmaceutical companies seem to be heading to the Midtown area and banks, investment funds, law firms, and consulting companies remain in the CBD and new entries still prefer the CBD. IT, telecoms, and logistic companies, meanwhile, more likely occupy the West. “If this movement trend continues it will create a more professional market that helps companies operate more efficiently,” the report stated. Hung Loc Phat introduces new HCMC apartment project On September 14 the Hung Loc Phat Construction & Manufacturing Co. officially announced that construction of its Hung Phat Silver Star project on Nguyen Huu Tho Avenue in District 7, Ho Chi Minh City, would be begin in October and be completed in the third quarter of 2017. The project will have three apartment blocks with a total of 447 apartments, a three-storey shopping mall, and a large rooftop swimming pool. This is the second apartment block project of Hung Loc Phat, with sales being conducted until 2018 to al customers, including overseas Vietnamese and foreigners. To 2018 the company will build four other projects in South Saigon with a total of 4,000 apartments and investment of VND8 trillion ($375.6 million). The Hung Phat Silver Star project is only 100 meters from an under-construction urban railway station, which will provide residents with easy access to the city center, hospitals, supermarkets, schools, and their place of work. Prices will be very competitive, lower than the average level by at least VND3 million ($140.8) per sq m because the investor has sufficient financial resources and will not rely on bank loans. For only VND1.3 billion ($61,000) and with flexible payment methods, customers can own a luxurious two-bedroom apartment. 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