Connect with us

Business

Finance ministry concerned about costly investment in Long Thanh airport

Published

on

An artist’s impression of Long Thanh International Airport. The Ministry of Finance has expressed concern over the large amount of capital being poured into the Long Thanh International Airport project – PHOTO: LE ANH

HCMC – The Ministry of Finance has expressed concern over the large amount of capital being poured into the Long Thanh International Airport project, stating that the ratio of US$188 million per one million passengers is very high, according to Tuoi Tre Online newspaper.

The first phase of the project will see an investment of some VND109 trillion or around US$4.66 billion, with a capacity of 25 million passengers a year. Therefore, the ratio of US$188 million per one million passengers is high compared with airports on the same scale across the world, it said in a document recently sent to the Ministry of Planning and Investment.

According to the project appraisal unit, materials, equipment and building technologies chosen for the first phase are available in the domestic market, environmentally friendly and mobilizable.

Therefore, the Finance Ministry suggested the Ministry of Planning and Investment and the appraisal unit clarify the cause of the costly investment plan in comparison with similar projects worldwide as well as the advantages and distinctions of the Long Thanh project.

As planned, the mammoth project will be divided into four component projects, including offices of administering agencies such as customs, public security and quarantine that will be invested in by the State budget. Meanwhile, the Vietnam Air Traffic Management Corporation will invest in air management facilities and the Airports Corporation of Vietnam (ACV) will cover the expenses of key infrastructure works.

Last, service works such as cargo terminals, logistics warehouses, a fuel pipe system and an aircraft maintenance zone will be put up for public bidding to attract private investors.

Besides this, the Ministry of Finance also cast doubts on the capability of the investors.

According to the ministry, the assigning of ACV as the investor of important works of the airport project is completely founded, meeting the requirements of the National Assembly and the Government and Vietnam’s laws.

However, the works are seeing a combined investment of around VND93 trillion, including VND36.1 trillion of the ACV’s available fund and VND56.9 trillion worth of credits without a government guarantee. Therefore, it is necessary to review its feasibility and financial safety during the construction process.

Of the ACV’s available fund, its cash, after the deduction of dividend, is around VND29.2 trillion and its accumulative cash in the 2021-2025 period is projected at around VND6.8 trillion. For the remaining over VND56.9 trillion, the firm will take out loans from local and international banks and via export credit contracts.

However, ACV now incurs a payable debt of some VND21.4 trillion, including VND6.5 trillion in short-term debts.

The enterprise has been assigned to build or upgrade 21 of the 22 airports and terminals under its management. ACV is also seeking approval for many projects, such as the Dien Bien Airport worth over VND1.5 trillion, the Na San Airport worth nearly VND2.3 trillion, the expansion of the T2 terminal of Noi Bai International Airport at a cost of over VND4 trillion and the T3 terminal of the Tan Son Nhat International Airport with over VND11.4 trillion.

Source: https://english.thesaigontimes.vn/78969/finance-ministry-concerned-about-costly-investment-in-long-thanh-airport.html

Business

AES, PetroVietnam Gas to sign $1.4 billion LNG deal: Pompeo

Published

on

HANOI — AES Corp. will sign a deal with PetroVietnam Gas GAS.HM to develop a $1.4 billion liquefied natural gas (LNG) import terminal in Vietnam, U.S. Secretary of State Mike Pompeo said on Wednesday.

“Vietnam has given the green light to AES Corp., a company based in Virginia, to go forward with the project,” Pompeo said at a virtual Indo-Pacific Business Forum.

The deal will open the door for the import of billions of dollars worth of U.S. LNG to Vietnam each year, Pompeo said, describing it as a “real win-win situation”.

The forum, also attended by his Vietnamese counterpart Pham Binh Minh, comes as the United States ramps up its rhetoric against the regional influence of Chinese state firms.

“American companies adhere to the rule of law and transparency and have very high standards of quality for their products,” Pompeo said. “I say that because that’s quite a contrast with the Chinese state-backed companies.”

Vietnam is building numerous LNG-to-power plants, with the first to be operational by 2023, an ambitious move that could see LNG become a major energy source for its fast-growing economy.

Much of that will be imported from the United States, which wants to narrow its trade deficit with Vietnam, which widened to $44.3 billion in the first nine months of this year from $33.96 billion in the same period of 2019.

Also at Wednesday’s forum, Delta Offshore Energy formalised an earlier announced plan for a $3 billion agreement with Bechtel Corp., General Electric nd McDermott for the development of a 3.2-gigawatt LNG power plant in Bac Lieu province, the U.S. Embassy in Hanoi said.

Source: https://tuoitrenews.vn/news/business/20201028/aes-petrovietnam-gas-to-sign-14-billion-lng-deal-pompeo/57488.html

Continue Reading

Business

VN-Index bounces back as trading cools down

Published

on

VN-Index bounces back as trading cools down

An investor looks at stock prices on a screen at a brokerage in Ho Chi Minh City. Photo by VnExpress/Quynh Tran.

After four consecutive losing sessions, the VN-Index rose 0.7 percent to 925.47 points Friday.

The benchmark index had continued its corrective momentum in the morning and early-afternoon sessions, falling by as much as 10 points before rebounding within the final hour of trading to gain around 14 points as buy orders for blue chips, especially VIC of Vingroup, piled in.

The Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based, was predominantly green with 225 stocks gaining and 181 losing. Total trading volume fell nearly 30 percent over the previous session to VND6.56 trillion ($282.15 million), on par with last month’s daily trading average.

According to analysts, after four sessions in which the VN-Index plunged a total of 4.39 percent, investors stopped trying to take profits and are now bottom-fishing, causing the market to rise again.

A restructuring of their portfolios by exchange traded funds like the VN Diamond ETF, the VNMVN30 and the SSIAM VNFIN Lead was also a reason for large movements during the at-the-close trading, which takes place within the final 15 minutes, they added.

The VN30-Index for the stock market’s 30 largest caps rose 0.66 percent, but only 11 stocks gained compared to 15 that lost.

Topping gains was VIC of private conglomerate Vingroup, HoSE’s largest cap, with 5.8 percent, contributing a 5.5-point gain to the VN-Index, according to data from brokerage VNDIRECT.

However, its subsidiaries, VHM of real estate developer Vinhomes and VRE of mall operator Vincom Retail, shed 0.3 percent and 1.2 percent respectively.

Other big gainers this session were spread among different sectors. KDH of real estate developer Khang Dien House rose 4.4 percent, PNJ of jewelry retailer Phu Nhuan Jewelry was up 4 percent, HDB of private HDBank, 2.5 percent, and MWG of electronics retailer Mobile World, 2.3 percent.

The remaining blue chips in the green, which included PLX of petroleum distributor Petrolimex, VPB of private VPBank, and VNM of dairy giant Vinamilk, rose between 0.7 percent and 2 percent each.

In the opposite direction, TCB of private Techcombank led losses with 2.1 percent, followed by POW of electricity firm PetroVietnam Power, down 2 percent, and STB of private Sacombank, down 1.5 percent.

All three of Vietnam’s largest state-owned lenders by assets slumped this session, with VCB of Vietcombank down 0.7 percent, BID of BIDV, 0.4 percent and CTG of VietinBank, 0.3 percent. MBB of mid-sized Military Bank kept its opening price.

An industry group which saw most of its tickers perform negatively was real estate and construction. In addition to VHM, TCH of Hoang Huy Group shed 1.1 percent, ROS of FLC Faros 0.9 percent, while NVL of Novaland kept its opening price.

Meanwhile, the HNX-Index for the Hanoi Stock Exchange, home to mid- and small-caps, was up 0.57 percent, and the UPCoM-Index for the Unlisted Companies Market gained 0.18 percent.

Foreign investors continued to be net sellers this session to the tune of over VND565 billion on all three bourses. The most net sold stocks were again MSN of food conglomerate Masan Group, which remained flat, and VNM of Vinamilk, up 1.1 percent.

Source: https://e.vnexpress.net/news/business/economy/vn-index-bounces-back-as-trading-cools-down-4181267.html

Continue Reading

Business

Vietnam forecast to stay in top 10 remittance recipients in 2020

Published

on

In the East Asian and Pacific region, Vietnam ranked third after China and the Philippines.

Vietnam is forecast to remain the ninth largest remittance recipient globally with an inflow of US$15.6 billion in 2020, slightly declining from US$17 billion received in 2019 and accounting for 5.8% of its GDP, according to the World Bank’s latest data.

This was a fourth consecutive year that Vietnam remains in the top 10 ranking in terms of inbound remittance, with the figure being US$13.8 billion in 2017 and US$15.9 billion in 2018.

 Top Remittance Recipients in 2020. Source: World Bank. 

India claimed the top spot in the top 10 with an estimated of US$76 billion, followed by China with US$60 billion and Mexico with US$41 billion.

In the East Asian and Pacific region, in 2020, Vietnam is set to rank third after China and the Philippines (US$33.3 billion) – the world’s fourth largest recipient.

 Top remittance recipients in the East Asian and Pacific region, 2020.

According to the World Bank, remittance flows to low and middle-income countries (LMICs) are projected to fall by 7%, to US$508 billion in 2020, followed by a further decline of 7.5%, to US$470 billion in 2021.

As the Covid-19 pandemic and economic crisis continues to spread, the amount of money migrant workers send home is projected to decline 14% by 2021 compared to the pre Covid-19 levels in 2019.

The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.

“The impact of Covid-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances,” said Mamta Murthi, Vice President for Human Development and Chair of the Migration Steering Group of the World Bank. “The World Bank will continue working with partners and countries to keep the remittance lifeline flowing, and to help sustain human capital development.”

The declines in 2020 and 2021 will affect all regions, with the steepest drop expected in Europe and Central Asia (by 16% and 8%, respectively), followed by East Asia and the Pacific (11% and 4%), the Middle East and North Africa (8% and 8%), Sub-Saharan Africa (9% and 6%), South Asia (4%and 11%), and Latin America and the Caribbean (0.2% and 8%).

 Projected Growth of Remittances by Region, 2020.

Importance of remittances to amplify in 2020

The importance of remittances as a source of external financing for LMICs is expected to amplify in 2020, even with the expected decline. Remittance flows to LMICs touched a record high of US$548 billion in 2019, larger than foreign direct investment flows (US$534 billion) and overseas development assistance (about US$166 billion). The gap between remittance flows and FDI is expected to widen further as FDI is expected to decline more sharply.

Migrants are suffering greater health risks and unemployment during this crisis,” said Dilip Ratha, lead author of the Brief and head of KNOMAD. “The underlying fundamentals driving remittances are weak and this is not the time to take our eyes off the downside risks to the remittance lifelines.”

This year, for the first time in recent history, the stock of international migrants is likely to decline as new migration has slowed and return migration has increased. Return migration has been reported in all parts of the world following the lifting of national lockdowns which left many migrant workers stranded in host countries. Rising unemployment in the face of tighter visa restrictions on migrants and refugees is likely to result in a further increase in return migration.

“Beyond humanitarian considerations, there is a strong case to support migrants who work with host communities on the frontline in hospitals, labs, farms, and factories,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.

According to the World Bank’s Remittance Prices Worldwide Database, the global average cost of sending US$200 was 6.8% in the third quarter of 2020, largely unchanged since the first quarter of 2019. This is more than double the Sustainable Development Goal target of 3% by 2030. 

Despite being the cheapest, money transfer and mobile operators face increasing hurdles as banks close their accounts to reduce risk of non-compliance with anti-money laundering (AML) and combating terrorism financing (CFT) standards, stated the World Bank.

To keep these channels open, especially for lower-income migrants, AML/CFT rules could be temporarily simplified for small remittances. Further, strengthening mobile money regulations and identity systems will improve transparency of transactions. Facilitating digital remittances would require improving access to bank accounts for mobile remittance service providers as well as senders and recipients of remittances. Hanoitimes

Ngoc Thuy

Source: https://vietnamnet.vn/en/business/vietnam-forecast-to-stay-in-top-10-remittance-recipients-in-2020-685053.html

Continue Reading

Trending