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Asia Coffee — Tepid trade in Vietnam ahead of holiday, scarce supplies in Indonesia

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Vietnam coffee prices edged down amid dull trade ahead of the week-long Lunar New Year holiday, while trade has not yet picked up in Indonesia as stocks remain low until at least March, traders said on Thursday.

Farmers in the Central Highlands sold coffee at VND38,800 to VND40,200 ($1.71 to $1.78) per kg, little changed from last week’s range of VND38,800 to VND40,700.

“Prices are declining on increasing supplies but tepid demand,” said a trader in the coffee belt, adding that prolonged supply chain disruptions contributed to lacklustre trade.

“Farmers are holding on to beans as they are not under pressure to sell for the upcoming long holiday anymore. Some have already shut their shops.”

Markets in Vietnam will close next week for the holiday and traders said export activities would not resume until it ended.

Traders in Vietnam offered 5% black and broken grade 2 robusta at discounts of $270 to $280 per metric ton to the May contract, versus a range of $250 to $270 a week ago.

March robusta coffee shed $46, or 2%, to stand at $2,191 a metric ton on Wednesday.

Indonesia’s Sumatran robusta beans were offered at a discount of $120 per metric ton to the February contract, one trader said.

Another trader offered a discount of $200 a metric ton to the March contract, narrowing from last week’s $250.

“There were barely any new bean supplies and only traders with remaining stock could take part in trading this week,” said a regional trader.

Traders expect a mini-harvest between March and April.

($1 = VND22,645)

Source: https://tuoitrenews.vn/news/business/20220128/asia-coffee-tepid-trade-in-vietnam-ahead-of-holiday-scarce-supplies-in-indonesia/65480.html

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HCM City growth remains an X factor: foreign investors

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HCM City Chairman Phan Văn Mãi (second from left) speaks with representatives of businesses on the sidelines of a conference between city leaders and foreign investors last Friday. — VNA/ Photo

HCM CITY — Rising labour and production costs have prompted some relocation but HCM City remains an appealing investment destination given its market size and speedy recovery, experts say.

Speaking at a meeting between city leaders and foreign investors late last week, Hirai Shinji, chief representative of the Japan External Trade Organisation (JETRO) in HCM City, said while more manufacturers were looking to relocate their production to other provinces because of rising labour costs and land rents in HCM City, the city remained a popular investment destination.

A recent JETRO survey attributed it to the city’s great economic growth potential and market size, he said. 

HCM City has been praised for its achievements in speedy post-pandemic economic recovery, he added. 

Mary Tarnowka, executive director of the American Chamber of Commerce in Vietnam (AmCham Vietnam), said: “We continue to see a lot of interest from the US business community in the country, especially HCM City. 

“Investors are looking for a fair, transparent, predictable regulatory environment that values innovation.” 

The city should continue to attract investment into high-value manufacturing, develop the service economy, especially the digital economy, as well as financial services and healthcare, she said.

It is also critical that the city builds a “complete” infrastructure for sustainable growth and train a workforce that is globally competitive, she added.

The recently launched direct flight service between HCM City and San Francisco will help promote bilateral trade and investment between Việt Nam and the US. 

Allowing international tourism to resume will not only boost the local industry but also help speed up economic recovery, she said, reiterating that AmCham and its members are optimistic about the future here. 

According to the Foreign Investment Agency, as of February 20, 2022, the US ranked 11th among 140 countries and territories investing in Việt Nam, with 1,145 projects worth over US$10.3 billion. 

Traffic infrastructure 

Jean Jacques Bouflet, vice president of the European Chamber of Commerce (EuroCham), recommended that the city improve its traffic infrastructure to enhance connection with surrounding localities. 

He also said that “the fees for seaport infrastructure service in the city, applied from April 1, remain too high, worsening the cost burden, thus reducing the city’s competitiveness.” 

Bouflet suggested that all city agencies, particularly its Department of Industry and Trade, use digital signatures for all administrative documents and processes. 

Currently, not all processes are allowed to use digital signatures, though they have the same legal value in signing documents related to import-export activities and customs, he said.

The city should also develop policies to promote a green and energy-saving economy, he said, urging it to complete its socio-economic development plan for the 2021-30 period (with vision until 2045).

It needs to improve its investment environment further by upgrading infrastructure, reforming administrative procedures and applying new technologies to speed up digital transformation, Bouflet said. 

Phan Văn Mãi, chairman of the People’s Committee, said the city was committed to promptly resolving all problems faced by businesses and investors.

“It will continue to improve its business climate, streamline administrative procedures and speed up digital transformation to build a digital government and digital economy.” 

From June, the city will use a digital platform to connect with foreign investors and regularly organise online meetings to call for investment, he added.

HCM City attracted $1.28 billion worth of foreign investment in the first four months of this year, up 12.2 per cent year-on-year, according to the Department of Planning and Investment. —  

Source: https://vietnamnews.vn/economy/1194076/hcm-city-growth-remains-an-x-factor-foreign-investors.html

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Upgrading the market for the sake of all participants

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An employee passes electronic boards showing share prices inside Hồ Chí Minh Stock Exchange in HCM City. — VNA/ Photo Hữu Khoa

HÀ NỘI — An upgrade to emerging status will not only help the stock market develop quickly, transparently and sustainably, but also attract huge foreign capital inflows, said experts. 

Recently, the Government has directed to purge the market and improve the trading system’s capacity, showing its determination to enhance the quality of the stock market.

The refinement is to protect investors and open a door for the Vietnamese stock market to be upgraded from a frontier to an emerging market.

Prime Minister Phạm Minh Chính has taken an interest in the development of the capital market and the stock market, including the matter of upgrading the market. 

During a trip to attend the ASEAN-US Special Summit, on May 16, the PM visited the New York Stock Exchange (NYSE) – the largest stock exchange in the world – hoping it supports and shares experience to develop an effective and sustainable stock market in Việt Nam, and successfully build a regional financial centre. 

PM Chính also expected the NYSE and its Vietnamese partners to foster a sustainable, mutually beneficial partnership, contributing to making the Việt Nam-US comprehensive partnership more substantive and effective.

On the occasion, PM Chính witnessed the awarding ceremony of two cooperation documents in the fields of finance, banking and investment funds between Vietnamese and US partners, including a cooperation document between the Vietnamese State Securities Commission (SSC) and the NYSE regarding support to upgrade the country’s stock market and build a mechanism for investors to participate in both stock markets.

Previously, the PM chaired a conference on developing a safe, transparent, efficient and sustainable capital market to stabilise the macro-economy and ensure major balances of the economy.

At the conference, PM Chính also asked the Ministry of Finance to immediately solve the order congestion situation and invest in technological innovation and digital technology application, while urgently implementing measures to upgrade the market from frontier to emerging status to attract investment capital, especially foreign investment.

Dominic Scriven, head of the Việt Nam Business Forum’s (VBF) Capital Markets Working Group, said that the move to purify the market is a great effort and determination from the Government.

As the goal is to build and develop a safe, transparent and sustainable securities market, cleansing the market will ensure the interests of businesses and genuine investors, increase the stock market’s appeal, and attract more investment capital flows both at home and abroad.

Meanwhile, Phạm Lưu Hưng, chief economist of SSI Securities Company (SSI), said that the move to purge the market in recent years raised expectations that the upgrade process will be easier. Hưng hoped that in the next assessment, the Market Rating Organization (MSCI) will note some positive comments about what Việt Nam has done.

According to Minister of Finance Hồ Đức Phớc, the ministry is currently working with international organisations to deploy solutions to upgrade the stock market by 2025 as per the set roadmap.

Huge foreign capital inflows

Analysts believe that the upgrade from frontier to emerging status will be an important driving force for the market.

Zafer Mustafaoglu, World Bank (WB) Practice Manager for Finance, Competitiveness and Innovation (FCI) for East Asia and Pacific, said that the capital market development is a long-term effort, and there is still much work to be done in Việt Nam.

Upgrading to emerging market status is not only an improvement in position, but also signals strong enhancement in quality with a solid market foundation.

Upgrading to an emerging market also attracts the attention of high-ranking international investors to Việt Nam. In the stock market, upgrading to an emerging market could result in an additional US$10 billion in new investment for the country. The first year alone can receive an additional $2-5 billion.

According to Nguyễn Minh Tuần, General Director of AFA Capital Investment JSC, the criteria for upgrading from frontier to emerging status focus on two main factors – size and liquidity of the market (quantitative) and market access (qualitative).

In terms of size and liquidity, there are four criteria which are the number of companies included in the Standard Index, total market capitalisation, floating capitalisation and market liquidity. Việt Nam has almost met three standards, he said. 

The main issue is qualitative standards. In the latest ranking in June 2021, there are nine criteria that the country has not yet met, including the ownership rate, ownership restrictions and equal rights of foreign investors.

Source: https://vietnamnews.vn/economy/1194077/upgrading-the-market-for-the-sake-of-all-participants.html

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EVN accelerating projects to gear up for hot season

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EVN workers checks electricity equipment. — VNA/  Photo

HÀ NỘI — Vietnam Electricity (EVN) said it is accelerating power generation and grid projects, especially urgent infrastructure, to ensure supplies in the hot season.

The State-owned group said in the first four months of 2022, the firm and its subsidiaries had started work on 30 projects and put into use 31 grid facilities between 110kV – 500kV.

It cited meteorological forecasting centres as saying that heatwaves this year are likely to appear in the northern and central regions later than usual, but won’t be too severe.

Power demand in the north is unlikely to rise sharply in May, and daily consumption will be around 805 million kWh.

EVN noted that this month, it is working to guarantee supply for production and business activities as well as daily life, especially the 31st Southeast Asian Games (SEA Games 31) and the 15th National Assembly’s third session.

It is maintaining high water levels at multi-purpose hydropower plants in the north, operating thermal power plants in the region, and importing about 540MW of electricity in May.

Its subsidiaries were also requested to ensure power supply in the dry season, ready manpower and equipment for any possible incidents due to natural disasters, and recommend people, agencies and factories use electricity in a safe and economical manner.

In April, the entire EVN system produced 22.62 billion kWh of electricity, up 1.9 per cent year-on-year. That added up to a four-month figure of 85.65 billion kWh, increasing 6.2 per cent. —

Source: https://vietnamnews.vn/economy/1194045/evn-accelerating-projects-to-gear-up-for-hot-season.html

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