Vietnam, Customs Union put final touches on FTA

Final touches were put on a free trade agreement (FTA) between Vietnam and the Customs Union of Belarus, Kazakhstan and Russia during the eighth negotiation round in Phu Quoc island district, the southern province of Kien Giang, from December 8-14.

The event was co-chaired by the Vietnamese Minister of Industry and Trade Vu Huy Hoang and the Minister for Trade of the Eurasian Economic Commission Andrey Slepnev with the participation of six negotiation groups on trade in goods, trade in services, investment, and personal movement; rule of origin; trade remedy; customs cooperation; trade facilitation; and legal and institutional issues.

In a bid to conclude the FTA talks in late 2014 as set by the two sides’ leaders, the negotiators fine-tuned the wording of the chapter on customs cooperation and basically finalised that of the remainders.

They signed an announcement on the basic conclusion of the negotiation and the promotion of internal consultation so as to finalise remaining technical matters and ink the FTA in early 2015.

HNX launches VN's first total return index

The Ha Noi Stock Exchange (HNX) yesterday officially launched HNX30 Total Return Index (HNX30 TRI), which is the first-ever total return index calculated and introduced in Viet Nam.

The Index, calculated based on HNX30, which tracks the top 30 shares in accordance with the liquidity of the Ha Noi bourse, aims to provide investors with another effective evaluation tool for investing in exchange-traded funds (ETFs), the exchange said in a press release.

The total return index is popular with global index providers such as MSCI, FTSE, international investment funds and especially passive ETF investment funds because it reflects returns more accurately than a price index.

HNX TRI tracks changes in the market price of the 30 stocks in the HNX30 basket, as well as follows the cash dividends of these stocks, assuming they are reinvested in the basket following this formula: Changes in HNX30 TRI = Changes in HNX30 + Effects of dividend of each HNX30 Index basket constituent.

The calculation of the Index is made with the assumption that the dividend is available on the ex-date and reinvested in the index basket at the end of the day preceding the ex-date. The dividend used in this calculation method is the total cash dividends of the stocks in the HNX30 Index basket.

Similar to the HNX30, the review index is annually evaluated during April and October. Any adjustment in the basket would be made and reflected in the respective stock price index.

The Ha Noi exchange has exerted efforts to diversify products in the market by introducing many new items recently, including HNX30, ETF SSIAM HNX30 managed by SSI Fund Management Co, HNXFF-Index and HNXLarge Cap. It also presented HNX-Midcap and HNX30.

Seafood enterprises asked to improve quality

The seafood enterprises are asked to improve the quality of their products to meet demands required by customers in big markets, a recent conference has heard.

Addressing the conference on seafood consumption trend in big markets and enterprises’ social responsibilities held in Can Tho on December 12 by Swiss GSG Group, Nguyen Hoai Nam, Deputy Secretary of the Vietnam Association of Seafood Exporters and Producers, said that the seafood industry was facing a number of difficulties and challenges.

Those challenges are the growing local seafood production cost, low quality varieties, problems in planning and implementation, commercial lawsuits, weak connection in the industry, and inadequate and inefficient policies relating to value chains, Nam said.

For big markets such as the United States, the European Union and Japan, the biggest challenge is consumers’ growing demand for products produced in sustainable ways and certificates of origin of the products, he said, adding that enterprises must compete via the quality products.

Tran Huu Hiep, head of the Economic Department under the Steering Committee for Southwest Region, said that big opportunities are lying ahead as the ASEAN Economic Community is formed in 2015 but asks companies to boost both their product quality and competitiveness to seize the chance.

According to the VASEP, the seafood industry has exported to 165 markets with an estimated total export value of 7.94 billion USD in 2014, up 18.2 percent from last year and makes the country the world’s fourth biggest seafood exporter.

On this occasion, the GSG launched its office, the sixth of its kind in Vietnam, in Can Tho to provide assistance in certification, verification, inspection, and testing for enterprises in the Mekong Delta region, especially seafood processing and export enterprises.-

Mekong Delta targets 10 percent growth in 2015

The Mekong Delta region targets an economic growth of 10 percent in 2015, the same figure for this year, according to the Steering Committee for the Southwestern Region.

Deputy head of the committee Nguyen Phong Quang said to realise the goal, the region’s localities will invest nearly 250 trillion VND (11.9 billion USD) to improve infrastructure facilities for socio-economic development, with focus on road and waterway systems, sea, river and air ports and irrigational network for agricultural production.

The region will speed up the implementation of key projects such as the O Mon power plant, while cooperating with Ho Chi Minh City and the southeastern region in food and aquatic product processing with the application of advanced technologies, helping local businesses enhance their competitiveness, expand markets and improve products’ quality.

Apart from developing aquaculture in coastal provinces, other provinces such as Kien Giang, An Giang and Dong Thap will focus on production of construction materials.

Can Tho city will promote its strength of heavy and hi-tech industries, consumer goods for exports.

The region expects to earn 220 trillion VND (10.5 billion USD) from the processing sector in 2015.

Besides, the Mekong Delta will boost vocational training along with the upgrade of existing universities, establishing new colleges to provide vocational training, while generating jobs for 400,000 workers.

The Mekong Delta comprises 12 provinces and a centrally-run city with a total area of 40,000 km2 and a population of 18 million. It is the country’s largest granary and a major aquaculture region.

Steel industry told to boost quality

Insiders and experts have said the sheet steel industry needs to improve quality and bring down prices to combat fakes, which have become pervasive.

Le The Bao, Chairman of the Vietnam Association for Anti-counterfeiting and Trademark Protection (VATAP), told Viet Nam News that counterfeits are a hot issue in the country, affecting every industry, especially makers of sheet steel.

"Developing production" will help improve product quality and cut down prices, enabling the industry to take on counterfeits, something that "has been stressed by the Government," he said.

Companies should make cheaper products targeted at rural consumers - a very big market - so that low-income people could buy genuine products, he said. Le Phuoc Vu, Chairman of steel giant Hoa Sen Group, said his company will make every effort to fight fakes. Along with improving quality and reducing prices, it will also widen its distribution system, doubling the number of branches around the country to 300 within three years, he promised.

His company's branches will lend equipment to customers to check products even when they do not buy from them. There will be programmes to educate and inform people, and a hotline has been set up at 1800 1515 for callers to inquire about real and fake steel sheets, he said.

Consumers must insist on a tax invoice if they want to join hands with manufacturers to fight counterfeits, he said.

The Vietnam Steel Association (VSA) and some traders called for using modern technology to imprint manufacturers' names and other information on steel sheets, making it harder to fake them.

“The technology is very expensive, which will help curb the fraud," a marketer who asked not to be named said.

On the sideline of a conference organised by the VSA, the VATAP and the Vietnam Economic Times late last month, the Market Surveillance Department reported that in the first 10 months of the year it detected and seized 10,000 tonnes of fake steel sheets.

The conference also heard that market watch officials routinely unearth fakes masquerading as well-known brands like Ton Hoa Sen, VnsteelThang Long and Phuong Nam, seizing tens of thousands of tonnes of fake sheets and other products whose quality do not match up to claims.

Nguyen Van Sua, VSA Deputy Chairman, said the counterfeits are produced in northern provinces and cities like ThanhHoa, Bac Ninh, Bac Giang, Hanoi and PhuTho.

The fake sheets are flooding the market, causing much heartburn to legitimate producers.

A Hoa Sen Group spokesperson told Viet Nam News that his company's market share kept rising steadily until last year, but has fallen this year from 40 percent to 37 percent.

He blamed it squarely on counterfeit products, adding they are likely to cost the company 118 billion VND (5.6 million USD) in revenues this year.

Government bond sale raises over 9.3 billion USD

The State Treasury has raised over 195 trillion VND (9.2 billion USD) through the selling of Government bonds since the beginning of this year.

On December 11, the Hanoi Stock Exchange HNX sold a total of 2,185 billion VND (104 million USD) worth of government bonds with three and five year terms.

The yields for the three- and five-year bonds were 5.2 and 6.05 percent, respectively, which were both higher by 0.2 percent than the interest rates for those sold on December 4.

At the auction on December 4, the government bond fetched a total of 2,650 billion VND (126 million USD) in three- and five-year term.

Vingroup begins construction of tallest building in Vietnam

Vingroup officially began construction of the tallest building in Vietnam up to now, The Landmark 81 in Ho Chi Minh City on December 13.

The 350-metre tall and 81-storey building is built on the bank of the Saigon River. It is situated in the high-class and multi-functional ecological urban area, Vinhomes Central Park and is scheduled to be inaugurated by late 2017.

The Vinhomes Central Park covers an area of 141,000 square metres. It consists of functional spaces including hotels, apartments, shopping centres, restaurants, bars and an observatory centre.

In particular, a five-star hotel with 450 rooms will spread 1,000 square metres and look out on a 360° view of the city. Vincom Centre shopping mall covers a total area of 59,000 square metres. A large square and a modern fountain system will connect the residential quarter with a green park and Saigon river.

The Landmark 81 is expected to break other records such as the highest observatory centre and apartment building in Vietnam and the highest restaurant and bar in Southeast Asia.

Dragon fruit exports to India surge sharply

Dragon fruit of Vietnam has been much sought after in India recently and the import value has risen nearly 20 times over the past two months, according to the Africa, West Asia and South Asia Market Department under the Ministry of Industry and Trade.

The change of transportation from air to sea route leads to the increase of dragon fruit imports from Vietnam to India. It helps to reduce the transportation cost from 150 Rupee to 20 Rupee per kilogram.

Vietnam’s dragon fruit is now popular in urban area, particularly in southern India. The price of dragon fruits planted in India is cheaper than that of the imported ones, however, the harvest in India only lasts five months, while in Vietnam, it prolongs for 10 months a year.

With its strange appearance, the dragon fruit is served as a favourite dessert in luxury hotels in India. The fruit has also become popular among the middle class and other customers in this country.

Seafood sector: Rays of sunlight in marketplace

The Vietnamese seafood sector has expanded its footprint in the global marketplace, particularly live and frozen shrimp, much to the chagrin of China and Thailand, thanks to their high quality and disease free seafood products.

While the traditional leading Asian market sales plummet as a direct result of the EMS breakout earlier this year, the Vietnam seafood sector is cashing in, having experienced strong growth in three key markets – the RoK, EU and US – in the 10 months leading up to November.

The Ministry of Agricultural and Rural Development (MARD) in turn is now forecasting that shrimp exports will reach US$3.6 billion in 2014, up from US$3.1 billion in 2013, an event barely fathomable at this time last year.

As a perfect example, RoK imports of the country’s shrimp have skyrocketed to over 150.2% of last year’s volume to 19,646 tonnes at the expense of their counterparts in China and Thailand, resulting in an 11% jump in market share to 44%.

The overall export value of shrimp to the RoK also vaulted to an estimated 187.2% higher than last year to US$ 205.3 million, which is principally attributable to the increased volume. Though in recent weeks the price of shrimp has stabilized and all indications are that it is on the uptick.

 At present, the RoK remains the fifth largest shrimp importer of Vietnam trailing the US, Japan, EU and China from largest to smallest in terms of volume. The uptrend in shrimp exports has also had a spill over effect, positively benefiting cuttlefish and octopus exports.

Apart from shrimp, exports of octopus and cuttlefish to the RoK in the ten month period have also spiralled upwards to 131.5% of last year’s corresponding figure and now comprise 35% of market share.

The RoK’s monthly import volume was somewhat erratic early on in the year, swinging wildly 4%-8% from month-to-month.  However in recent weeks the vagaries have become less volatile and economists remain relatively sanguine with a positive outlook in the near term.

In the fourth quarter of the year, economists are saying it is becoming increasingly clear that exports will accelerate 5%-6% both on-month and on-quarter, offering a good opportunity for local businesses to exploit.

However to take full advantage of the opportunity Vu Van Tam, MARD deputy minister says Vietnam needs to reduce its dependence on imported shrimp brood stock to lower the production costs of farmed shrimp and become more price competitive.

Vietnamese shrimp hatcheries need 180,000 white shrimp brood stock a year, which they import from the United States, Singapore, Indonesia and Thailand, to produce more than 100 billion post larvae.

Currently, Vietnam imports 20% of its giant tiger shrimp (Penaeus monodon) brood stock and 100% of its white shrimp (P. vannamei) brood stock Tam says, adding that localities in Vietnam are often short of materials, forcing them to import from other nations as well, which negatively affects price competitiveness.

A prominent representative from a local exporter says local exporters also are forced to pay higher costs for other supplies and materials, which adds to higher overall costs. This year he says, Vietnam mainly imported these items from India.

Vietnam could become much more competitive in terms of both cost and quality by developing its supply chain infrastructure and replacing materials purchased from nations such as India, Morocco, Senegal keeping the profits at home to benefit the local economy, he suggests.

Developing a niche in the global cuttlefish and octopus markets is a troublesome proposition that requires careful planning and finesse, highly dependent on a well thought out and implemented strategy, say most leading market analysts.

They caution Vietnam operators will encounter nothing but difficulties in this market if they do not devise proper plans with prudence. All eyes are focused on the southern province of Kien Giang as best equipped to tackle the cuttlefish and octopus markets.

Experts postulate there is sunlight on the horizon for a sustainable seafood sector if Vietnam can remain EMS disease free and address the thorny supply issues.

Young people build career in AEC 2015

A forum focusing on how young people build career in ASEAN Economic Community (AEC) 2015 took place in Hanoi on December 14 in the lead up to the 7th Congress of Vietnam Youth’s Union.

The event draws the participation of former Deputy Prime Minister Vu Khoan, Vice President of the Vietnam Young Entrepreneurs Association (VYEA) Cao Hoai Duong and CEOs of some companies.

They shared with young people opportunities and challenges after the ASEAN Economic Community is formed in 2015.

Vietnam will have opportunities to access a large market of 600 million people, modern technologies, diversified capital sources and different forms of doing business.

So the young Vietnamese should be fully prepared for the process of integration.

The speakers suggested ways for young Vietnamese to successfully build their career and do business after the establishment of AEC.

Seafood exports estimated to earn US$7.7 bln in 2014

Vietnam’s seafood export value is forecast to achieve more than US$7.7 billion by the end of this year, according to Deputy General Secretary of Vietnam Association of Seafood Exporters and Producers (VASEP) Nguyen Hoai Nam.

The figure accounts for 6-7% of the country’s total export value and shows a year-on-year increase of 18%.

Currently, Vietnam's seafood industry is a world leader in aquaculture and ranking fourth in seafood exports. Vietnamese seafood has been exported to 165 countries and territories.

Nam said now that bilateral agreements between Vietnam and large export (or import) markets are going to be signed, particularly the Vietnam-EU free trade agreement, from early 2015, Vietnamese seafood exports will enjoy much preferential treatment, including tax incentives.

However, Vietnamese seafood exporters should ensure their products are of good-quality to sharpen their competitive edge to meet international standards, he noted.

Garment export turnover to top $24 billion this year

Viet Nam's garment and textile export turnover is likely to reach US$24.5 billion this year, a 19 per cent rise against 2013 and the largest increase in the past three years.

With this result, the garment and textile sector will bring in a trade surplus of $12 billion this year, according to the Viet Nam Textile and Apparel Association (VITAS).

The Ministry of Industry and Trade (MoIT) reported that the sector earned $19.18 billion from exports in the 11-month period, increasing 18 per cent against the corresponding period last year. Exports of fibre rose 19 per cent to $2.3 billion.

The association also mentioned a shift of orders from other countries to Viet Nam thanks to bilateral and multilateral free trade agreements the country has signed and will sign with its partners.

In recent years, the sector has focused on diversifying material supply sources to ease the dependence on foreign source and increase competitiveness. To date, it has raised the localisation rate to more than 50 per cent.

A report from the MoIT showed that in the January-November period, cotton production from natural fibre reached around 300 million sq.m, posting a 15.8 per cent year-on-year increase.

Cotton production from synthetic fibre was estimated at 666 million sq.m, rising 5.6 per cent over the same period last year.

Last month alone, the cotton production from natural fibre was 28.7 million sq.m, representing a 15 per cent month-on-month rise, while that from synthetic fibre rose 12 per cent in comparison with the previous month to 60 million sq.m.

Le Tien Truong, General Director of the Viet Nam National Textile and Garment Group (Vinatex), said the group's subsidiaries have increased investment in material production, adding that their textile fabric output can meet 60 per cent of domestic demand.

He emphasised the need to build a trademark for Viet Nam's garment and textile products. The sector also needs to improve its competitiveness in the global garment supply chain, he added.

Besides, domestic garment and textile businesses have also searched for other material suppliers from ASEAN countries, particularly India, to avoid over-dependence on a single market, said the MoIT.

It said the search for new material suppliers will also help businesses take advantage of the Trans-Pacific Partnership agreement.

DATC to get $146m infusion for tackling SOE bad debts

Prime Minister Nguyen Tan Dung has agreed to give an additional VND3.1 trillion, or roughly US$146 million, to the Debt and Asset Trading Corporation (DATC) for the 2014-15 period.

According to business news website Gafin, VND2.5 trillion or $117 million of the additional funds for the DATC's charter capital will come from the fund for enterprises arrangement and development, and VND600 billion or $28 million from other sources.

The finance ministry is responsible for arranging the financial resources for the DATC.

Established in 2004 with a charter capital of VND2 trillion ($94 million), funded by the State budget, the DATC was recognised as a special State-run company. It aims to deal with bad debts and unused assets of State-owned groups and corporations to improve their financial condition, promote restructuring and transform them into joint-stock companies.

According to the finance ministry's regulation, the DATC has to use at least 70 per cent of the total investment capital to purchase debts and assets of companies with 100 per cent State-invested capital.

Mekong to see wind turbines

The HCM City-based Phu Cuong Corporation has unveiled plans to invest US$436 million in building a 170MW wind power plant in the Mekong province of Soc Trang.

Speaking on the sidelines of a wind-power conference held by the Swedish consulate in HCM City last week, Nguyen Viet Cuong, president of Phu Cuong Group, said work on the plant is scheduled to start in 2016 and it would start generating power in 2017.

Initially 15 turbines with a total capacity of 30MW will be built in the coastal town of Vinh Chau at a cost of $75 million.

He said Phu Cuong Group has plans to build wind power plants with a total capacity of 800MW.

At the conference, Vestas Wind Systems, a Danish company producing wind power equipment and parts, signed an agreement to supply equipment for the Vinh Chau plant.

A master plan for the development of wind power in Soc Trang has been approved by the Ministry of Industry and Trade, and the provincial People's Committee has issued a licence for Phu Cuong's project, Dau Tu (Vietnam Investment Review) newspaper reported. According to the ministry's General Department of Energy, nearly 50 wind power plants with a total capacity of 4,876MW have been licensed in the last three years. However, just three plants are up and running so far.

Exports to Italy surge 18% in first 11 months

Viet Nam's exports to Italy reached US$2.5 billion in the past 11 months, surging 18.2 per cent against the same period last year, according to the Ministry of Industry and Trade.

Among the key Vietnamese exports to Italy included handsets and components, which totaled $913.4 million, up 9 per cent year – on-year and accounting for 40 per cent of the total, followed by footwear at $238 million and coffee, reaching $211 million.

Also, from January to November Viet Nam's imports from Italy reached $1.19 billion.

According to the ministry, Italy is Viet Nam's eighteenth largest export market and fifteenth largest import market. In recent years, Vietnamese exports to Italy saw an annual growth rate of 19 per cent.

Italian companies remain interested in Viet Nam, a growing market with untapped co-operative opportunities and high consumption demand, according to Raffaella Carabelli, president of the Association of Italian Textile Machinery Manufacturers, as quoted by Vietnam News Agency.

These firms were also seeking new partners in Southeast Asia in such areas as textiles, garments, furniture and footwear, Carabelli said.

Meanwhile, Deputy Head of the ministry's Trade Promotion Agency, Ta Hoang Linh, said over the past three years many delegations from Italian businesses had visited Viet Nam to study the country's investment climate and seek out new business opportunities. Recently in November, a delegation of some 100 Italian companies involved in sectors such as engineering, energy, infrastructure and transport, arrived in Viet Nam to explore new investment opportunities.

Of note, trade experts forecast that the Viet Nam – EU Free Trade Agreement, which was expected to be signed in the near future, would open a new page for bilateral trade between Viet Nam and Italy.

Mekong Delta suffers high post harvest losses of rice

Post harvest losses of rice in the Mekong Delta appropriate 13.7 percent, equivalent to 20 million tons or US$635,000 a year, revealed scientists at a seminar in Can Tho City on Friday.

Despite of considerable advances in preservation technologies, the loss rate is still high in most post harvest stages, they said.

Of these, cleaning and drying loss as much as 4.2 percent, milling 3 percent, and preserving 2.6 percent.

Rice milling plants are short of capital to equip driers and advanced milling machines, and build storehouses.

The government should provide capital or interest rate assistances so that local farmers and businesses can buy machines for post harvest processing of rice, they proposed.

SOE listings draw more investors

Recent initial public offerings (IPOs) of State-owned enterprises (SOEs) have attracted more attention from investors than previously.

The latest IPO was from seafood processor Seaprodex, which sold over 45 million shares with an average price of VND10,100 (US$0.47) yesterday. This volume accounted for 75 per cent of the total offering, which was purchased by 55 investors.

The State now holds 63 per cent after the IPO.

On Thursday, Ca Mau Fertiliser had a successful initial offering, selling all of its shares to nearly 1,200 investors and earning VND1.58 trillion ($74.2 million).

A day earlier, Union of Survey Companies Ltd also sold 100 per cent of its IPO to 24 individual investors.

Other recently concluded IPOs included Ben Thanh Tourist and Sai Gon Ground Services.

However, the buyers of the IPOs were mainly domestic investors.

Nguyen Tuan Hai, CEO of private equity firm Alphanam, told Dau tu chung khoan (Securities Investment) that the asset portfolios of these SOEs made them appealing to investors, especially since they possess land use licences in major cities.

In particular, Ben Thanh Tourist owns two major hotels in the busy and crowded HCM City.

Can Gio Tourist, with 11.5 million shares sold by Saigontourist on Wednesday, has one of Viet Nam's largest polder projects – the Sai Gon Sunbay beach tourism complex.

Meanwhile, there have been a few companies operating in the ground service sector. Therefore, investing in businesses such as Sai Gon Ground Services will generate both short – and long-term profits.

In the first six months of this year, the company's revenue and profit reached VND237 billion ($11.12 million) and VND43 billion ($2 million), respectively.

Nearly 400 more SOEs are scheduled to be equitised by the end of next year, which is expected to create many more investment opportunities.

Banks launch promotions for money transfer services

Local banks have put on multiple promotional programs for their money transfer services in the lead up to the traditional Lunar New Year holiday.

Incoming remittances normally grow prior to the Lunar New Year holiday, or Tet, so banks have adopted new measures to benefit from this market movement.

Vietcombank is among the banks through which US$1 billion is remitted home a year. This year, the bank has deployed a promotion program for recipients of remittances via MoneyGram, UniTeller and TNMonex services.

Meanwhile, Saigon Commercial Bank (SCB) has begun a promotion program for clients using Western Union service.

Le Duc Tho, general director of VietinBank, said the bank has repeatedly improved remittance and payment services to raise its competitiveness. “We have a global money transfer service firm to facilitate services in Vietnam. In the coming time, it will provide individual payment services as part of a strategy to increase its market share.”

Currently, banks are handling remittances from important markets such as the United States, South Korea, Taiwan, Malaysia, Japan, Germany, Russia and Australia.

The central bank’s HCMC branch estimated remittances via local commercial banks and economic organizations in the city at US$4.4 billion in the January-November period and over US$5 billion this year.

Meanwhile, the World Bank (WB) projected Vietnam would remain in the list of the world’s top 10 remittance recipients with over US$12 billion this year, rising 10% against 2013. Researchers of the Bank for Investment and Development of Vietnam (BIDV) also predicted this year’s remittances could reach US$12 billion.

Nguyen Duc Kien, vice chairman of the National Assembly Economic Committee, said there have been many policies issued to support more remittances to flow into Vietnam.

Macro-economic stability and low inflation have facilitated the central bank to keep the Vietnam dong-U.S. dollar exchange rate steady.

Banks have also launched promotion programs for money recipients and improve remittance services, Kien said.

According to the central bank, remittances into Vietnam have increased steadily over the past three years, from US$9 billion in 2011 to US$10 billion in 2012 and US$11 billion last year.

Steel industry told to boost quality

Insiders and experts have said the sheet steel industry needs to improve quality and bring down prices to combat fakes, which have become pervasive.

Le The Bao, chairman of the Viet Nam Association for Anti-counterfeiting and Trademark Protection (VATAP), told Viet Nam News that counterfeits were a hot issue in the country, affecting every industry, especially makers of sheet steel.

"Developing production" would help improve product quality and cut down prices, enabling the industry to take on counterfeits, something that "has been stressed by the Government," he said.

Companies should make cheaper products targeted at rural consumers - a very big market - so that low-income people could buy genuine products, he said.

Le Phuoc Vu, chairman of steel giant Hoa Sen Group, said his company would make every effort to fight fakes. Along with improving quality and reducing prices, it would also widen its distribution system, doubling the number of branches around the country to 300 within three years, he promised.

His company's branches would lend equipment to customers to check products even when they do not buy from them. There would be programmes to educate and inform people, and a hotline had been set up at 1800 1515 for callers to inquire about real and fake steel sheets, he said.

Consumers must insist on a tax invoice if they want to join hands with manufacturers to fight counterfeits, he said.

The Viet Nam Steel Association (VSA) and some traders called for using modern technology to imprint manufacturers' names and other information on steel sheets, making it harder to fake them.

"The technology is very expensive, which will help curb the fraud," a marketer who asked not to be named said.

On the sidelide of a conference organised by VSA, VATAP and the Vietnam Economic Times late last month, the Market Surveillance Department reported that in the first 10 months of the year it detected and seized 10,000 tonnes of fake steel sheets.

The conference also heard that market watch officials routinely unearth fakes masquerading as well-know brands like Ton Hoa Sen, Vnsteel Thang Long and Phuong Nam, seizing tens of thousands of tonnes of fake sheets and other products whose quality do not match up to claims.

Nguyen Van Sua, VSA deputy chairman, said the counterfeits were produced in northern provinces and cities like Thanh Hoa, Bac Ninh, Bac Giang, Ha Noi and Phu Tho.

The fake sheets are flooding the market, causing much heartburn to legitimate producers.

A Hoa Sen Group spokesperson told Viet Nam News that his company's market share kept rising steadily until last year, but has fallen this year from 40 per cent to 37 per cent.

He blamed it squarely on counterfeit products, adding they are likely to cost the company VND118 billion (US$5.6 million) in revenues this year.

A Phuong Nam Steel Sheet Company Ltd executive told Viet Nam News without disclosing numbers that his company had been affected by the fake products.

The problem was becoming trickier since it is not easy for consumers to recognise them, he said.

A journalist in Ha Noi who asked not to be named said he bought steel sheets for his roof three years ago and they had rusted.

They were purportedly made by a famous local company — he had seen the brand name on the sheets and the seller, a local retailer, had also assured him.

But he later discovered they were fake when the company tested them.

And if an educated, aware person like him can be taken in, what chance do farmers and other rural people have?

Viet Nam News asked some experts working for sheet steel manufacturers about this. They said the fakes are usually thicker and poorly plated as a result of which they last no more than two or three years compared to the dozens of years that quality sheets last.

Microfinancing needs improvements: experts

Experts urged increased transparency and an improved legal framework to allow poor and low-income earners to have access to financial services.

At a seminar on Thursday, experts said microfinancing services, created in the 1980s, increased accessibility of financial services to poor and low-income earners, which brought economic benefits to millions of households and contributed to the country's reduction in poverty.

However, there remains a need to improve the efficiency of microfinancing to assure the nation's sustainable development.

According to Pham Huyen Anh, Director of the Banking Operation Policy Security Department under the State Bank of Viet Nam, microfinancing institutions helped raise incomes of more than 90 per cent of its customers.

However, several rules regulating microfinancing operations were proved inappropriate and there was a lack of consistency among existing regulations, Anh noted.

The operation of microfinancing institutions has remained at a busy level, with loaning as a major activity, while other basic microfinancing services, such as pensions, money transfers and insurance, have not been developed.

Anh said the legal framework for providing microfinancing must be improved to enhance the financial and management capacities, as well as its transparency, adding that the operation of microfinancing institutions should be associated with the operation of other credit institutions.

Microfinancing expert Nguyen Manh Cuong said many requirements about microfinancing operations should be loosened, such as a minimum solvency ratio of 20 per cent, which he said was too high.

Also, experts have called for tax incentives to be provided to microfinancing operations, together with policies to encourage insurance companies to join with microfinancing institutions to bring insurance services to the poor.

The establishment of a microfinancing association was also essential, experts said.

As of the end of September, three of the country's microfinancing institutions had a combined equity of VND238.9 billion (US$11.2 million) with total deposits of VND439.2 billion ($20.7 million) and outstanding loans of VND787 billion ($37.1 million).

Notably, the ratio of bad debts of microfinancing institutions was very low, at 0.01 per cent, or VND75.2 million ($3,540).

Techcombank wins STP Award

Vietnam Technological and Commercial Joint Stock Bank, commonly known as Techcombank, has won the Straight-Through- Processing (STP) Award by Citibank for its advanced payment capabilities.

The STP Award is granted to banks with high quality of payment services based on straight- through processing (STP) rate, an important indicator for accuracy and automation of payment messages. With a high STP rate, Techcombank is able to provide timely and accurate payment services, at the same time, save time and costs for the bank and its clients. The award also confirms advanced IT infrastructure and excellent capabilities of operations staff at Techcombank.

Speaking at the award ceremony, Techcombank’s Head of Financial Institutions Do Diem Hong emphasised: “We would like to thank Citibank for all your support during the years. With over 20 years operating in Vietnam, Citibank has supported us to expand our international business, especially in trade finance and payment areas. We value and treasure the relationship with Citibank and let us work together to better serve our clients in Vietnam and global-wide".

Apart from Citibank, many other international banks like Bank of New York Mellon, Wells Fargo, Standard Chartered Bank, HSBC and JP Morgan Chase have also recognised and granted international payment awards to Techcombank for a number of years in a row. The STP Award from Citibank is the 17th award that Techcombank has received from many different institutions in 2014.

Masan Consumer Holdings issue landmark bond transaction to boost expansion drive

Masan Consumer Holdings, a wholly-owned subsidiary of Masan Group, which is one of Vietnam’s largest private sector business groups, last week eyed a landmark deal after raising $100 million from a bond sale.

The 10-year bond transaction is something of a rarity for a Vietnamese private sector company. At the total amount of VND2.1 trillion ($100 million) and a fixed rate coupon of 8 per cent per annum for the entire tenure of the bonds, the transaction would be both the largest and lowest coupon issuance attributed to a 10-year deal in the Vietnamese private-sector corporate bond market.

Such terms reflect the long-term nature of Masan Consumer Holdings’ commitment to consumer-related businesses and its strong business platform. This transaction has also introduced a new, longer maturity asset class into the market, making it an attractive investment instrument for insurance companies to diversify their assets into non-sovereign holdings. The deal was fully subscribed by financial companies, primarily global insurance companies with operations in Vietnam.

The bonds are guaranteed by the Asian Development Bank’s (ADB) credit guarantee and investment facility (CGIF) trust fund.

This is the first bond in Vietnam to be guaranteed by CGIF, a multilateral facility whose contributors include certain governments of the ASEAN members, Japan, Korea, and China, as well as the ADB.

As a key component of the Asian Bond Market Initiative of these governments, CGIF is committed to mobilising Asia’s savings for the development of the ASEAN local currency bond market and supporting strong ASEAN corporate or project bond issuers.

“As CGIF’s first transaction in Vietnam, this marks another milestone in our journey of supporting the development of local currency bond markets in the ASEAN+3 region by backing strong national champions. In that context, we are glad to partner with Masan Consumer Holdings, which has successfully built winning consumer businesses in Vietnam by combining international best practices with superior local execution,” said CGIF CEO Kiyoshi Nishimura.

Masan Consumer Holdings is Masan Group’s main vehicle for consumer-focused businesses. The proceeds of the bond will be reinvested in consumer-focused businesses. Standard Chartered Bank acted as the issuer’s agent in this transaction, while Societe Generale Corporate and Investment Bank acted as the international advisor, with local Techcombank Securities acting as the agent for the bonds.

Growers optimistic for the new year

As Tet nears, peach and kumquat trees growers in Hanoi look forward to bountiful crops and good business after a year of favourable growing weather.

According to many garden owners, the this year's sunny weather helped their flower buds to bloom in time. They also expect customers to have more spending money this year due to a recovering economy.

Aside from well-known traditional flower villages such as Nhat Tan, Quang Ba and Nghi Tam, Hanoi also has new flower gardens are emerging in places like La Ca Village in Ha Dong District. La Ca Village is known for the quality and diversity of its flowers, and is becoming the largest flower growing area in Hanoi.

A one-metre-height tree will cost about VND500,000 (USD24) and a shaped tree may be anywhere from VND700,000 to VND1.5 million depending on its height.

Dang Van Manh, owner of a flower garden in Nhat Tan Village, said last year, he was only able to rent out a few dozen peach trees. However, this time, he's already had more than 100 customers. "Last year, the weather was unpredictable and the frost prevented flower buds from blooming. On the other hand, some trees bloomed too soon, forcing the owners to sell fast," Manh said.

Last year was also a harsh year for kumquat growers. Long and heavy rains killed off a large number of kumquat trees and caused huge losses to owners.

Even though the flowers will bloom sooner than normal, the growers said they were not worried much because Tet would start sooner this year.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR