HCM City businesses resume operation as pandemic eases: city official
More than 6,000 enterprises in HCM City have resumed operations following the containment of the COVID -19 pandemic and more than 30,000 new ones with capital of 696 trillion VND have been set up this year, the city chairman has said.
Nguyen Thanh Phong, Chairman of the municipal People’s Committee, said of the new companies, 579 have registered capital of over 100 billion VND (4.3 million USD) each, indicating the vitality of the business community.
There are more than 438,000 enterprises in the city, accounting for 32 percent of the country’s total number, 54 percent of the city’s economy and 67 percent of its investment.
Phong said the city would continue to support enterprises as part of its effort to revive business activities.
“The city has basically contained the second wave of the outbreak and not detected any local infection for more than two months.
“It has entered a new normal status with the task of both containing the outbreak and reviving the economy.”
The top priority would be to help businesses maintain production and avoid bankruptcy, and prevent workers from losing jobs, he said.
He has urged the HCM City Business Association to develop software to collect information about businesses such as how seriously they have affected by the pandemic so that the city could easily address their problems based on the data.
Speaking at a seminar last week on reviving the city’s economy amid the continuing global pandemic, Phong pointed out the challenges facing the city.
“The city’s economy grew at less than 1.2 percent, the lowest ever. More than 27,000 businesses suspended operations because of the pandemic. The total registered capital of enterprises in the city has fallen by more than 140 trillion VND.”
Services, accounting for more than 60 per cent of the city’s economy, have been hit hardest, especially tourism and accommodation.
“Some 4,400 companies, including 1,300 travel businesses, have been affected with 100,000-120,000 jobs lost,” Phong said.
Small and medium-sized enterprises, which account for 98 percent of all enterprises, have been severely impacted, he said.
He promised the city would continue to help companies reduce costs and encourage replacement of imports with local goods.
“The city plans to soon announce specific policies to help badly affected enterprises and sectors such as travel, restaurants, hotels, and transport- and tourism-related services.”
It also plans to roll out a second aid package worth 12 trillion VND (517.64 million USD) exclusively for enterprises with preferential loans for employers to maintain production, retain workers and ward off bankruptcy with priority given to micro and small-sized enterprises, he said.
Chu Tien Dung, President of the HCM City Business Association, said the city should relax the conditions for enterprises to get easier access to support packages.
The State Bank of Vietnam should also amend Circular 01 for this purpose, he added.
It is important to support enterprises to ensure production and create domestic supply chains and reduce corporate income tax and value added tax for them, he said.
Phong also noted the importance of the city’s digital transformation as it aims to become a smart city with e-government, e-enterprises and an electronic society by 2030.
By 2030 it also aims to push all public services online and provide them on multiple platforms, including mobile devices. The digital economy is expected to account for 40 percent of the city’s economy.
The rate of individuals and enterprises having electronic accounts for payments will exceed 85 percent.
To obtain these goals, Phong said the city would strengthen communications and improve awareness among its workers, public and enterprises and create shared databases./.
Vinh Phuc – a magnet for Japanese investors
With significant investment in building transport and industrial infrastructure as well as favourable mechanisms and policies in support of investors, Vinh Phuc is emerging as an attractive destination for Japanese businessmen.
Japan is currently one of the top two foreign investors in the northern province, with 48 valid projects and nearly 1.2 billion USD worth of total investment.
Japanese conglomerates such as Honda, Toyota, Nissin, Exedy, and Sumitomo have selected the province to build their plants focusing on the production of automobile, electronic components, and spare parts.
Most of Japanese projects in the locality, particularly those of Honda and Toyota, have been implemented in line with schedules, operated effectively, thus contributing significantly to the provincial budget and creating jobs for locals.
The Japanese-based consultation company Nikken Sekkei has helped Vinh Phuc complete its urban planning by 2030 with a vision to 2050.
Most recently, in September, Toto Vietnam, a subsidiary of the Toto Group which produces construction materials, had asked local authorities for favourable conditions for its implementation of a 100 million USD project at the Thang Long Vinh Phuc industrial park.
TOTO Vietnam has invested in the country since 2002 with two factories established in Hanoi’s Dong Anh district and two others in nearby Hung Yen province.
The results were attributable to local authorities’ active work in building a favourable business climate via in-place investment promotion and prompt resolution of hurdles facing investors.
Aiming at markets with strengths in science and technology like Japan, local projects open for investment have been concentrated on the sectors of support industry, tourism services, high-tech agriculture, and socio-economic infrastructure development.
Vinh Phuc has also stepped up communication activities to promote local business climate, policies, potentials and opportunities in a creative, effective and practical manner.
The province established twin relations with Japan’s Akita prefecture. Annually, Vinh Phuc sends trade promotion delegations to the locality to boost its image among Japanese investors.
Meanwhile, the provincial People’s Committee and competent agencies have proactively taken part in conferences, forums and business matching events targeting Japanese investors held by different ministries, considering them an opportunity to introduce the local investment environment. Local authorities have also fostered good links with Japanese organisations, including the Japan Business Association in Vietnam (JCCI), Japan International Cooperation Agency (JICA), and Japan External Trade Organization (JETRO), in a bid to attract foreign capital and cooperation in organising promotion activities overseas.
As part of its investment attraction efforts, Vinh Phuc has been building its online portal to offer updated information to investors.
In 2018, the Vinh Phuc People’s Committee, the Sumitomo Group of Japan, and the local Thang Long Industrial Park Co., Ltd. signed a memorandum of understanding (MoU) on establishing an agency for promoting investment and supporting Japanese enterprises in investing in the province (Japan Desk Vinh Phuc).
According to Nguyen Tien Hanh, Director of the provincial Public Administrative Centre, the Japan Desk Vinh Phuc makes it easy for the province to introduce its investment and business climate, and for Japanese firms to seek partners and ask for approval for their investment projects in the locality.
Sumitomo is one of the five largest financial groups in Japan with experience in global-scale production and business sectors such as metal, means of transport, construction machines, infrastructure development, minerals, energy, chemicals and electronics. In Vietnam, the group has succeeded in developing, operating and managing industrial parks (IPs), including Thang Long I and II IPs, and Thang Long Vinh Phuc IP.
Sumitomo is responsible for seeking potential companies in Japan which intend to expand their business in Vinh Phuc, while assisting support industries in the locality.
Italian companies invest in VN textile industry to capitalise on EU trade deal
More and more Italian textile firms are investing in Viet Nam to take advantage of the EU-Vietnam Free Trade Agreement and export to the European market, experts said.
Deputy Minister of Industry and Trade Hoang Quoc Vuong said the EVFTA has opened up many opportunities for the two countries’ businesses, including small and medium-sized enterprises.
According to the General Department of Viet Nam Customs, trade with Italy was worth US$5.3 billion last year, up 13.71 per cent year-on-year, as exports jumped by 18.46 per cent to $3.44 billion.
The EVFTA, effective from August this year, is expected to help Viet Nam’s textile and garment industry increase exports to the EU by 67 per cent by 2025, according to the Ministry of Industry and Trade.
Textile, garment and footwear will be among the industries benefiting the most with their exports increasing by 13.49 billion euros ($15.23 billion) by 2035.
Giang said the EVFTA promises apparel export potential of more than $100 billion annually.
But to enjoy preferential tariffs, besides meeting strict quality criteria, Vietnamese businesses must also strictly comply with origin requirements. The rules of origin apply from fabric onwards, meaning exports to the EU must use fabric produced in Viet Nam, the EU or countries that have FTAs with both.
This is still a weak point for the Vietnamese textile and garment industry because most of its raw materials are imported from countries that have not signed trade deals with the EU.
VN seeks ways to increase wood products exports to Canada
Vietnamese wood processing companies have not made full use of the incentives on offer when exporting to Canada, an online conference heard.
Vietnamese ambassador to Canada, Pham Cao Phong, said at he conference last week that with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in force, Vietnamese wood products exports to Canada attract zero tax whereas similar products from China face a 9 per cent tariff.
But not many Vietnamese enterprises know how to take full advantage of this, and many opt to pay 6 per cent instead of furnishing certificates of origin which would exempt them from tax, he said.
Jacques Nadeau of the Food and Agriculture Organization said that the total value of Canadian imports of wooden furniture is around US$14 billion a year, with Viet Nam being the fourth largest supplier after China, the US and Mexico.
While Viet Nam’s share remains modest, it is a prospective market if Vietnamese enterprises know how to use their advantages, according to Nadeau.
“Due to the impact of the Covid-19 epidemic, having to work from home, the demand for both interior and exterior furniture is increasing, especially for furniture and other wooden items for setting up a work office at home.”
The Handicraft and Wood Industry Association of HCM City (HAWA) launched the HAWA Online Platform for Exhibition (HOPE) in August to connect Vietnamese wood processing and furniture firms with international and local buyers.
The website features 360-degree images of showrooms, factories and workshops, a 3D product catalogue, social apps to enable 24/7 interaction between exhibitors and visitors, digital marketing, live events, and others.
HOPE will display thousands of products from hundreds of manufacturers and exporters that are verified by HAWA so that buyers could have peace of mind when they select their potential suppliers and connect with the Vietnamese wood and furniture business community, HAWA deputy chairman Nguyen Chanh Phuong said.
HOPE would help Vietnamese wooden products directly approach Canadians, and this would help eliminate the problem of geographical distance between Vietnamese producers and Canadian consumers, but HAWA needs to be proactive and have a communication strategy, according to Nadeau.
HOPE is an effective way to help international buyers find products and suppliers at a time when many trade fairs and exhibitions have been delayed or cancelled due to COVID-19.
Canada’s wood products trading season is from April to June and from September to December, and HAWA needs to prepare before them.
It needs to use HOPE to organise online stores and introduce new product sets, while businesses must differentiate between various market segments and take advantage of the CPTPP to compete with similar products from other countries.
HCM City transport firms demand support to recover from Covid woes
The HCM City Department of Transport held a meeting with related departments on October 2 to discuss support measures for transport companies affected by Covid-19.
The Department of Planning and Investment suggested that the State Bank of Vietnam should instruct banks to waive loan interest for transport companies that have suspended operations for four months instead of just rescheduling.
Pham Minh Suong, general director of Mai Linh Taxi Group, said the pandemic situation has improved and taxis operate normally, but there are few passengers going to or coming from places like airports, restaurants and hotels.
Banks have cut loan interest rates by a paltry 0.1-0.5 percentage points, but to enable transport firms to overcome their difficulties, the cut should be 3-5 percentage points, he said.
According to the HCMC Taxi Association, in the first half of this year taxi firms’ revenues were down 40 per cent year-on-year.
Its member companies hope for loan interest subsidies, debt rescheduling and more support policies, it said.
Tran Quang Lam, director of the transport department, called on related agencies to simplify procedures to support businesses, including quickly resolving licensing procedures for vehicles carrying goods into and out of ports.
To aid businesses hit hard by the pandemic, the Ministry of Finance issued a circular cutting road maintenance fees by 30 per cent for passenger transport vehicles and 10 per cent for trucks, tractors and other special vehicles.
The reductions apply from August 10 to year-end.
The ministry said thousands of companies, co-operatives and household businesses in the transportation sector are facing difficulties due to the pandemic with more than 310,000 of their vehicles not operating normally and hundreds of thousands of workers suffering from lower incomes.
When social distancing was in place in the country, passenger transportation saw a 75 per cent drop in revenues, the transport ministry said.
Covid-19 offers Viet Nam opportunity to boost exports to Latin America
Mercosur countries, comprising Argentina, Brazil, Paraguay, Uruguay and Venezuela, could be a potentially lucrative market for Vietnamese exports such as textile and garment, footwear, handicrafts, and processed foods amid the disruption of many traditional supply chains due to the Covid-19 pandemic, an online conference between Viet Nam and the South American bloc heard on October 1.
Mercosur is the fifth largest economic entity in the world with more than 275 million consumers and GDP of US$4.58 trillion.
Do Thang Hai, deputy director of the Ministry of Industry and Trade, said Viet Nam has enjoyed consistent growth in trade with Mercosur in the last decade.
Their trade grew 2.5 times in the period to reach $8.68 billion last year. Viet Nam’s exports were worth $2.7 billion.
Viet Nam has set up dialogue mechanisms with most of the bloc’s members to promote the economy, trade and investment, and is negotiating a trade deal with Mercosur, Hai said.
The pandemic caused trade between the two sides to fall by 1.66 percent year-on-year to $5.53 billion in the first eight months of this year.
Viet Nam’s ambassador to Argentina, Duong Quoc Thanh, said in the last five years annual trade between the two countries has been around $3 billion, making Viet Nam Argentina’s largest trade partner in the ASEAN bloc, and this year it could reach $4 billion.
But Viet Nam’s exports to Argentina are only worth $500 million, or 1.4 per cent of that country’s total imports, he said.
Viet Nam sells garment feedstock, footwear, machinery and equipment, and parts, and imports animal feed, corn, wheat, and some seafood.
There is huge potential for Viet Nam to sell its products, Thanh added.
The ambassador to Brazil, Pham Thi Kim Thoa, said while Vietnamese seafood, footwear, processed food, beverages, and toys are popular, its exports only account for 1.5 per cent of Brazil’s total imports.
According to an the Viet Nam Trade Office in Argentina, Uruguay and Paraguay, Mercosur is a promising market for Vietnamese exports because their economic structures are complementary rather than competitive.
The Vietnamese envoys expected Mercosur to restructure its supply chains post-pandemic and said Vietnamese firms would then have a huge opportunity to increase their market share.
AEON Vietnam to open first mall in Hai Phong in December
AEON Vietnam is scheduled to open its first department store and supermarket, AEON Mall – Hai Phong Le Chan, in Hai Phong port city in mid-December this year.
As part of the AEON Mall – Hai Phong Le Chan Shopping Centre’s pre-opening activities, more than 2,000 candidates attended AEON Vietnam’s recruitment festival in Hai Phong on October 3 and 4
The event aimed to prepare human resources for AEON Department Store and Supermarket AEON – Hai Phong Le Chan, bringing hundreds of job opportunities for people and local workers, contributing to economic development and improving the quality of life of the community in Hai Phong City.
The recruitment festival is expected to continue at Mercure Hotel (12 Lach Tray Street, Hai Phong City) on October 10.
On October 3, nearly 400 workers of AEON Vietnam and guests took part in a tree planting ceremony, called “AEON Hometown Forests”.— Photo AEON Vietnam
On October 3, nearly 400 workers of AEON Vietnam and guests also took part in a tree planting ceremony, called “AEON Hometown Forests”. They planted more than 1,000 trees, including 10 Sakura trees. The company said that it will plant 10,000 trees surrounding the shopping centre, building a green shopping space for AEON.
Speaking at the ceremony, Deputy Ambassador of Japan to Viet Nam Shinichi Asazuma said that the active implementation of business activities of AEON Group made a great contribution to further local development as well as creating many jobs for local workers.
AEON Vietnam plans to open more shopping centres and specialised stores nationwide in the next 10 years to meet the increasing demand of customers in Viet Nam, especially in the retail business.
As of October 2020, AEON Vietnam opened and put into operation a nationwide retail system, including three shopping centres, two department stores and supermarket centres and 24 specialised stores nationwide in Viet Nam.
Quang Ninh aims for processing & manufacturing industry to be key pillar
The northern coastal province of Quang Ninh plans to make the processing and manufacturing industry one of the main pillars in the province.
The other two pillars include mining, especially coal mining, and the production and distribution of electricity and gas.
This is a new strategy introduced at the first October meeting to discuss tasks and solutions for socio-economic development of the province for the 2020-25 period.
Secretary of the provincial Party Committee Nguyen Xuan Ky said Quang Ninh is striving to make three breakthroughs in the development of the processing and manufacturing industry, including attracting investment capital and speeding up added value in production; increasing the contribution of the industry to the gross regional domestic product (GRDP) and local budget revenue; and attracting high-quality workers.
The province pays attention to four core solutions, specifically production site planning; synchronous technical and social infrastructure; available human resources; administrative reform and improving the business, investment and living environment.
Ky said the new development orientation is based on distinct potentials and competitive advantages of the province and region, its economic and industrial zones, especially preferential mechanisms to develop sustainable industrial parks following the “3-in-1” model of industrial parks-urban areas-service areas with synchronous social and technical infrastructure systems.
The province prioritises high-tech projects, intelligent industry, environmentally-friendly, high value-added, modern governance, efficient natural resources and land use, and high contribution to the province’s GRDP growth and budget revenue.
Quang Ninh’s career development policy will focus on the automobile industry, electronics, information technology, medicine, fashion, deep processing of wood products and seafood, Ky said.
Amid difficulties caused by the COVID-19 pandemic, Quang Ninh still targets a double-digit GRDP growth and State budget collection of VND48 trillion (approximately US$2 billion) in 2020.
Although affected by the pandemic, the economic growth of Quang Ninh still reached 6.5 per cent in the first nine months of 2020.
The industry-construction sector grew 8.9 per cent, continuing its role as an important contributor to local economic growth. Meanwhile, the service and agro-forestry-aquaculture sectors rose 3.5 per cent and 3.2 per cent, respectively.
However, the number of tourists to Quang Ninh was only 52 per cent of that in the same period last year.
The State budget collection of the locality in the reviewed period was estimated at over VND36.3 trillion, up 5.8 per cent from the same period last year.
The number of newly-established enterprises was estimated to decrease by 15.9 per cent over the same period last year, and local enterprises’ production and business have still faced difficulties.
To achieve the annual targets, the locality will focus on key measures such as supporting enterprises and investors, especially those operating in the mining industry, processing and manufacturing, to address difficulties facing their production and business activities.
Attention will be also paid to reviewing the disbursement of public investment capital, and adjusting capital plans of projects that fail to meet the rate of progress of disbursement.
Quang Ninh is viewed as a strategic destination in northern Viet Nam and an important link in the northern economic growth triangle of Ha Noi – Hai Phong – Quang Ninh.
The province possesses major advantages from Van Don District planning to become a multi-sectoral maritime economic zone and entertainment centre with a casino and high-end sea-island tourism and services. It is also a gateway for international trade, creating unique, modern, and high-quality products that are internationally competitive.
Bac Ninh targets 2,500 new enterprises a year
The northern province of Bac Ninh has set a target of registering 2,500 new enterprises each year from 2020 to 2025 as part of a scheme to support small and medium-sized enterprises (SMEs).
Under the scheme, provincial authorities will provide land for roughly 175 investment projects in the form of leases or industrial parks and industrial clusters when infrastructure is completed.
The province will also organise management training courses for 1,800 managerial positions, and vocational training for 15,000 workers.
Enterprises established from 2020-25 will be provided with free accounting and taxation software.
Relevant agencies will help local enterprises access fairs, exhibitions and workshops to seek business opportunities and new markets. They will also hold more events and programmes to provide local enterprises with accurate and up-to-date information on both the domestic and international markets to help them decide on a direction for production and business activities.
In particular, the province will build an innovate start-up centre tasked with connecting domestic and foreign resources to support local start-ups and develop the innovative start-up ecology in the province.
The scheme also aims to assist the development of the support industry, including enterprises that supply products and services for the Samsung complex and other foreign-invested enterprises in the province.
In the first eight months of 2020, Bac Ninh had 1,598 newly-established enterprises with total registered capital of nearly VND15.6 trillion, representing increases of 4.3 per cent and 1.94 per cent from 2019, respectively.
Hanoi aims to receive 39 million tourists by 2025
Hanoi has set itself a target to greet 35-39 million tourists by 2025, including 8-9 million foreigners, earning about VND151 trillion (US$6.53 billion), under the city’s recently-launched tourism development strategy with a view to 2030.
The capital city hopes to welcome 48-49 million visitors by 2030, 13-14 million of them foreigners.
Hanoi will work to turn tourism into its spearhead economic sector which also serves as a driving force for others. It will apply cutting-edge technology and take skilled human resources a breakthrough factor for tourism development.
To realise the targets, local authorities will bolster tourism infrastructure investment and resources which will be carried out in a concerted and harmonious manner.
They are speeding up procedures of conservation projects at the Thang Long Imperial Citadel and Duong Lam ancient village, and others to restore and develop cultural values in tandem with tourism in Bat Trang pottery village and Van Phuc silk village.
The city has rolled out incentives aiming at investment in shopping malls and transit areas for tourists, among others. Hanoi is also encouraging environmentally-friendly tourism facilities and prioritising the improvement of the products at tourist attractions.
The capital attracted just 6.29 million visitors in the first eight months of this year, tumbling 67.3% year-on-year, with international arrivals down 75.6% to just 1.02 million. Such figures have resulted in a large number of local travel companies suspending operation while many hotels have shut their doors.
As the resurgence of COVID-19 in Vietnam has been basically brought under control, the tourism sector of Hanoi has been swiftly making plans to attract visitors again and gradually return to previous levels of growth.
With this latest outbreak being contained, industry insiders now look forward to improved business performance.
Local travel companies are also moving to encourage customers to travel again, as all flight, train, and road routes to the central city of Da Nang, a major tourism centre and where the second COVID-19 outbreak started, have been resumed and many localities reopened places of interest.
There is only one week left before Hanoi begins to celebrate 1,010 years since it was established as Vietnam’s capital, called Thang Long at the time, with various activities such as a cultural week, a street festival, a craft village festival, a traditional boat race, a culinary festival, a calligraphy exhibition, and a dragon dance festival.
This represents an opportunity to promote local tourism after its long hiatus.
Many relic sites, places of interests, and entertainment venues have had their landscapes improved and new services opened to meet visitors’ demand.
Those activities focus on educating the youth on the tradition of national construction and defence and honouring the historical and revolution values.
A ceremony to mark the anniversary in association with the city’s Patriotic Emulation Congress in the 2020-2025 period will be held on October 10, with about 2,000 delegates expected to attend.
Representatives of international organisations in Hanoi as well as revolutionaries and Heroic Vietnamese Mothers will also be invited. During the event, the city will honour 10 most excellent citizens.
Incense offerings, exhibitions, cultural exchanges and sports activities will be held from October 1 to 15.
At the Temple of Literature – a must-see destination for every visitor to Hanoi, its centre for cultural and scientific activities is creating new mementos and introducing new methods of heritage education to inspire young visitors, while also developing night tourism by installing lighting to introduce the institution’s history.
Local entertainment venues are also revamping themselves to attract local visitors who are believed to be the best target in plans to recover the tourism sector at this point of time.
Data sharing and security top concern for banks
Big data is a vital issue for banks in the digital transformation process, with the issue of data sharing and security top concerns, experts have said.
They were speaking at a conference on intelligent data management in banking and finance, held by the Banking Strategy Institute and Banking Academy this week.
Deputy Governor of the State Bank of Viet Nam (SBV) Nguyen Kim Anh said the banking sector had been proactive in accessing research, building policies and facilitating the application of data in management and developing products and services over the past time, which created a driving force for digital transformation in the banking sector.
An SBV survey last month showed that half of local banks have built a centralised data warehouse.
About 50 per cent of banks have applied data analysis to optimise operating processes, increasing operational efficiency and managing risks.
Although commercial banks in Viet Nam have recognised data management as a basis for innovative activities, some surveys showed that nearly half of the banks had no action plan on data management.
Data cleaning had gone unnoticed from the data makers, said chief economist of the Bank for Investment and Development of Viet Nam (BIDV) Can Van Luc.
Banking data was still largely dispersed, the amount of junk information was quite large and data quality was still low, he said.
The same situation also happened for other financial companies and the construction of new data warehouses was at the beginning stage without the connection of different data sources, he added.
Banks in Viet Nam are quite open in sharing data with fintech and many other service providers such as electricity, water and telecommunications through application programming interface (API) portals.
However, leaders of many joint-stock commercial banks said sharing data with banks was still quite risky because there is no legal corridor related to this issue.
Le Anh Dung, deputy director of SBV’s Payment Department, said he expected the Ministry of Information and Communications would soon submit to the Government a decree on electronic identification, and the Ministry of Public Security would soon complete the development of a decree to protect personal data so that banks had a facility to exploit and protect data.
Dung also suggested the Government study, consider and enforce the law on user data protection and the law on user data privacy protection to create a clear and synchronous legal framework for data management for the whole economy.
Agreeing, Luc proposed developing appropriate management policies and mechanisms to promote data management and analysis.
The Government and businesses must see data as a precious resource, which needs a safe and effective management and exploitation process, and speed up the building of national databases, he noted.
Viet Nam willing to welcome investment from Japanese IT firms: official
Viet Nam is willing to welcome investment from Japanese IT enterprises, Deputy Minister of Information and Communications Pham Anh Tuan told an online conference.
Held to promote Japanese investment in the central city of Da Nang, the conference attracted the participation of about 200 investors and IT businesses from Japan.
In his remarks, Tuan said the Vietnamese Government had been completing its models, mechanisms, and policies for the breakthrough development of concentrated IT and high-tech areas in Viet Nam’s major economic hubs.
Da Nang was emerging as a “Silicon Valley” of Southeast Asia, with local authorities working to build its digital ecosystem and prioritising FDI projects in the high-tech sector, he added.
“Viet Nam is switching to the so-called “Make in Vietnam” movement, while boosting the formation of joint ventures and attracting foreign conglomerates, especially those producing smart equipment using the Internet of Things (IoT), artificial intelligence (AI), and big data technologies, among others,” he added.
The Deputy Minister also said that in the context of the world economy entering a period of growth mainly based on technology and innovation, Viet Nam’s strategy to attract investment was to ensure its competitive advantages.
In addition, the country would continue to invest in developing telecommunications network infrastructure, upgrading 4G mobile networks, and soon commercialising 5G mobile networks; reviewing and developing digital infrastructure in industrial parks, hi-tech parks, and IT parks to be ready to meet the needs of data connection and processing, and large-scale investment needs of multinational technology corporations. These would create a premise for smart production.
The country had already released a national programme for digital transition by 2030, to create a digital space that covers activities in health, education, finance, agriculture, and transport, and a co-operative environment that assists foreign investors in Viet Nam.
Tran Van Mien, vice chairman of Da Nang People’s Committee, said the city had paid attention to investing in five key areas, including tourism and high-quality services associated with resort real estate; seaports, aviation associated with logistics services; high-tech industry associated with innovative urban construction and start-ups; the IT, electronics and telecommunications industries associated with the digital economy; high-tech agricultural products and fisheries.
“With the return of international flights, we look forward to welcoming Japanese businesses and investors to work directly in Da Nang,” he said.
According to Vietnamese Ambassador to Japan Vu Hong Nam Viet Nam and Southeast Asian countries have a great opportunity as countries are restructuring the global supply chain.
“With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Viet Nam is playing an increasingly important role in Japan’s supply chain,” he said.
“With a focus on ICT development and an attractive investment destination for Japanese investors with a favourable location, Da Nang has conditions to become the regional ICT centre. Investment in ICT in the city would achieve success.”
Commenting that Da Nang has many points to attract investors, Onose Takahisa, Chairman of the Japan Business Association in Da Nang, also proposed to promote communication activities about the city both inside and outside the country to attract more investors and resources.
A Japanese representative at the conference said Japan was Viet Nam’s second-largest foreign investor, pouring over US$60 billion into some 4,200 projects, including more than 700 in IT and communications.
As of September, Japan led in foreign investment in Da Nang, with 214 projects and more than $816 million, mostly in industrial production and services. Japan possesses strengths in capital, high quality human resources, and advanced IT, so boosting its IT investment in Da Nang would bring benefits to both.
Japanese enterprises also joined a business matching event on the sidelines of the conference on the afternoon of September 30.
Over $623 million mobilised from Government bonds
The State Treasury mobilised over VND14.4 trillion (US$623 million) through Government bond auctions on the Ha Noi Stock Exchange (HNX) on Wednesday.
As much as VND11 trillion worth of G-bonds were offered, including five-year bonds valued at VND1 trillion, 10-year bonds worth VND4 trillion, 15-year bonds worth VND3 trillion, and 20-year and 30-year bonds, each valued at VND1.5 trillion.
The State Treasury raised VND300 billion worth of five-year bonds with an annual average yield rate of 1.35 per cent, down 0.29 per cent from the previous auction on September 9.
A total of VND4 trillion was mobilised from 10-year bonds with an annual interest rate of 2.75 per cent, down 0.04 per cent from the auction on September 23. The sub-auction for the 10-year bonds on the same day raised another VND2 trillion.
Bonds with 15-year maturity raised VND3 trillion with an annual interest rate of 2.96 per cent, down 0.04 per cent compared to the September 23 auction. The sub-auction for the 15-year bonds on the same day raised an additional VND1.5 trillion.
Meanwhile, VND1.5 trillion was collected via 20-year bonds with a yield rate of 3.26 per cent, down 0.01 per cent from the auction on September 23. The sub-auction for this kind of bond raised another VND750 billion.
Over VND1.39 trillion was mobilised from 30-year bonds with an annual interest rate of 3.48 per cent.
So far this year, the State Treasury has collected nearly VND228.7 trillion from G-bond auctions at the HNX.
Renewable energy firms rush to issue bonds
Renewable energy companies were becoming more active in the corporate bond market, according to brokerages.
Statistics from the Ha Noi Stock Exchange (HNX), the national trade promotion office of Finland Finnpro and Techcombank Securities Co showed that among the VND171 trillion (US$7.4 billion) of corporate bonds issued in the first half of this year, renewable energy companies accounted for 4 per cent.
The average interest rate of energy bonds was 10.3 per cent per year, only second after the real estate sector which stood at 10.6 per cent per year.
The successful issuance rate in that period reached 92 per cent, with an average term of 7.2 years.
Trungnam Group has mobilised up to VND4.5 trillion from bonds so far this year, with an interest rate of 10.5 per cent per year. Hong Phong 2 Energy JSC has also mobilised VND1.6 trillion from 6-year bonds with an interest rate of 10 per cent per year. Ea Sup 5 JSC collected VND1.14 trillion with an interest rate of 11.3 per cent per year and terms of 18 months to 9 years.
In August, My Son 1 Solar Power Co Ltd successfully issued VND300 billion of three-year bonds with an interest rate of 10 per cent per year.
Clean energy projects such as solar power and wind power are being promoted by the Government, with attractive electricity purchasing prices of 7.09 – 9.35 cents per kWh, tax exemptions for 4 years, and a reduction of 50 per cent of tax payable for the next 9 years.
With the advantages of stable operations, low operating and maintenance costs, and high economic efficiency, bonds issued by clean energy companies have lower risks than other issuers in the fields of real estate and construction, while offering interest rates that are attractive to investors.
Clean energy bonds have a relatively long maturity, averaging 7.2 years, and most of them are issued privately, meaning they are sold to no more than 100 investors in the first year under current regulations.
However, from the second year onwards, these bonds can be traded by more than 100 investors, so there is no difference in buying or selling clean energy bonds compared to other bonds like real estate, which usually have a maturity of about 2-3 years.
Buyers of corporate bonds are often banks. Previously, banks focused on real estate bonds but clean energy is becoming increasingly more attractive.
Although clean energy bonds tended to be low-risk, not all bonds were equal, according to investment banking directors at several major securities firms.
In addition to the interest rate, investors should also carefully check other factors and terms to avoid risks, they said.
Investors should check whether the energy project’s expected size, capacity, revenue and cash flow were sufficient to ensure the project’s debt obligations to avoid the issuer defaulting.
If a project does not go into operation, it is necessary to note its legal status, such as its investment approval, electrical activity and land allocation licences.
Investors should also seek advice from reputable and experienced consultants and financial experts.
From 2018 to June 2019, more than 330 solar power projects were submitted to the Government for approval. Of which, 121 projects were added to the national and provincial power plans, with a total power generation capacity of 6,100MW by 2020 and 7,200MW by 2030.
There are 221 projects awaiting approval, with registered capacity of more than 14,330MW.
Large solar power plants are concentrated in six provinces in the South Central region, the Central Highlands and the Southern region, including Khanh Hoa, Phu Yen, Ninh Thuan, Binh Thuan, Gia Lai and An Giang.
Ninh Thuan Province alone has 31 projects licensed for investment with a total capacity of 1,816MW and total registered capital of over VND5 trillion. Seven projects with a total capacity of 852MW have been officially put into operation.
LienVietPostBank to become first bank to move listing on HoSE this year
LienVietPostBank will become the first bank to complete the transfer of its LPB shares from the unlisted Public Company Market (UPCoM) to the Ho Chi Minh Stock Exchange (HoSE) this year, followed by ACB, VIB and SHB.
There will be a series of stock codes registering to change trading floor from UPCoM to HoSE before the effective date of the amended Law on Securities at the beginning of 2021, stemming from the requirement that a listed company must register on the trading system for unlisted securities for at least two years.
It is forecast that the number of enterprises transferring trading floors will increase by the end of the year to comply with the current regulations before the new Law on Securities takes effect.
A representative from LienVietPostBank said thanks to careful preparation and early submission of the application, the bank’s documents were approved in principle by HoSE. The progress of listing LPB shares will be one to two months earlier than other banks. LienVietPostBank has ensured the target of completing the listing in 2020 and is ready to take the lead in the switch among commercial banks.
The listing of LPB shares on HoSE would not only contribute to enhancing the bank’s image and brand identity, but also aim at improving investor relations and communication. It would make LPB shares an effective capital mobilisation channel for future growth goals, and bring the shares into the portfolio of ETFs on the stock market.
LPB stock trading is much more active with an average of tens of million shares per session. There was a record trading session with nearly 17 million shares matched, and a total trading value of over VND183 billion (US$7.9 million). LPB’s stock price was also improved significantly when it was traded at VND11,600 per share, the highest in many months.
Funds reports good performance in Q3
Investment funds have seen their net asset value (NAV) increase strongly during the third quarter of this year thanks to positive movements of the market.
The VN-Index gained 9.71 per cent in the third quarter. The VN30-Index also increased by 11.42 per cent in Q3. With these recoveries, the VN-Index and the VN30-Index were among the world’s top growing stock indices in the quarter.
Newly established domestic exchange-traded funds (ETFs) of VFMVN Diamond and SSIAM VNFin Lead had the best performance with a growth rate net asset value (NAV) of 16.6 per cent. Pyn Elite Fund also performed positively with a NAV increase of 14.67 per cent, far ahead of the rise of the VN30-Index and VN-Index.
Vietnam Enterprise Investments Limited Fund (VEIL), run by Dragon Capital, also outperformed in the third quarter with a NAV growth of 13.15 per cent.
The largest domestic ETF fund VFMVN30 ETF reported a growth of 12.04 per cent, slightly higher than the growth of VN30 index.
Yurie Vietnam Alpha Securities reported the lowest growth among listed funds with a 6.95 per cent increase.
Despite a positive performance in the third quarter, in the first nine months of the year, the VN-Index still fell 5.8 per cent and the VN30 Index dropped 2.33 per cent.
With less positive market movements, some funds also had negative growth in nine months such as VNM ETF, which was the fund with the worst performance as NAV growth was negative 7.18 per cent.
The fund with the best performance so far this year was VOF VinaCapital with NAV growing by 7.78 per cent.
The Pyn Elite Fund also reported a NAV growth of 2.4 per cent.
AES, PetroVietnam Gas to sign $1.4 billion LNG deal: Pompeo
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.
VN-Index bounces back as trading cools down
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.
Vietnam forecast to stay in top 10 remittance recipients in 2020
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
AES, PetroVietnam Gas to sign $1.4 billion LNG deal: Pompeo
VN-Index bounces back as trading cools down
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US backs a strong, independent Vietnam: Pompeo
Vietnam forecast to stay in top 10 remittance recipients in 2020
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