Indexes move in divergent ways as foreign investors keep selling

The domestic market's two benchmark indexes saw opposite movements at the end of the week, while foreign investors pushed up their net selling.

On the HCM City Stock Exchange, the VN-Index ended last Friday at 604.24 points, losing 0.2 per cent compared to the previous Friday's close. The average value of trades reached VND1.8 trillion (US$84.9 million), gaining 7.8 per cent over the previous week, on a daily volume of 96.87 million shares.

Meanwhile, on the Ha Noi Stock Exchange, the HNX-Index rose 1.6 per cent to 82.23 points, as trading averaged VND774.7 billion ($36.5 million) and 58.7 million shares, increasing some 38 per cent.

Both indexes declined during the first two sessions last week, with selling pressure on large-cap stocks, such as dairy giant Vinamilk (VNM), private equity group Masan (MSN), the Bank for Investment and Development of Viet Nam (BID), insurer Bao Viet Holdings (BVH) and Vietcombank (VCB). The fall in this group of stocks stimulated large scale selling.

Excluding five listed banks, the 30 blue chips tracked by the VN30 Index saw total revenues for 24 companies reaching VND98.3 trillion ($4.6 billion) in the first half of this year, improving 42 per cent compared to the same period last year. However, total net profits decreased 18 per cent to VND69.17 trillion ($3.2 billion).

HCM City Infrastructure Investment (CII) saw the most impressive growth in revenues, soaring 727 per cent. Also, CII, realty shares FLC Group (FLC), Tan Tao Investment (ITA) and logistic firm Gemadept (GMD) recorded outstanding profit growth in the first six months.

On the down side, MSN, Pha Lai Thermalpower (PPC), Phu My Fertiliser (DPM) and property developer Vingroup (VIC) had negative profit growths, falling from – 344 per cent to – 53 per cent.

Meanwhile, lower share prices lured investors back on Wednesday and Thursday. But they could not last until the following session, when the VN-Index declined again and the HNX-Index struggled to add value.

Active trading on shares of PetroVietnam-related companies assisted the northern bourse index, including PetroVietnam Technical Services (PVS), Drilling Mud Corp (PVC), PetroVietnam Engineering Consultancy (PVE) and PetroVietnam Northern Gas (PVG).

Also, foreign investors continued to offload shares, with a net value of more than VND608 billion ($28.6 million). Their selling activities last week did not have a heavy impact on the market, as they concentrated only on some leading shares.

FPT Securities Co' Le Thi Bich Hang predicted that the VN-Index would not overcome its resistance of 610 points. In addition, the market is lacking supportive information. Similar to Hang, other securities analysts advised investors not to add more shares to their portfolios.

For a medium-term strategy, MHB Securities Co's head of brokerage, Hoang Thach Lan, predicted that cash would continue to flow to blue chips in HCM City and penny stocks in Ha Noi. "On the HCM City Stock Exchange, most of the large companies are still earning profits," he explained. Meanwhile, on the northern bourse, low-price shares were suitable for speculative activities and profitable for small investors, he added.

Agriculture ministry: 50% of cooperatives profitable

The Ministry of Agriculture and Rural Development said only half of the 10,000 cooperatives in the country are running at a profit with average annual earnings of VND133 million.

Statistics from the ministry showed although cooperatives can earn annual revenue of VND1 billion each, only 50% of them are in the black while 40% break even and 10% run at a loss.

Among the profitable cooperatives, 97% earn profits from transfer of new technologies, irrigation services, plant seedlings and fertilizer, and the remainder are producers and products suppliers.

A survey conducted by the ministry at 850 cooperatives in 26 cities and provinces as of June this year indicated 10% of 286 seafood cooperatives are in the process of being dissolved and salt cooperatives can post annual revenues of VND40-50 million.

Most of the cooperatives are small and have 10-20 members, while their working capital is just several hundred million dong.

According to the ministry, the majority of cooperatives operate inefficiently and perfunctorily due to capital shortages and weak governance. Only 10-20% of the cooperatives operate fairly well while the rest are ranked lower than the average level.

To improve the situation, the ministry will spend VND128 billion providing training and refresh courses for executives of cooperatives and draw up new operation models to help them run at a profit.

Toyota Vietnam posts highest sales growth in July

Toyota Motor Vietnam (TMV) announced that its sales volume reached 3,759 units in July, up 25% compared to the same month last year, and this was the highest sales growth in the first seven months of this year.

TMV said there were 1,836 units (49%) sold in the northern region, 419 units (11%) in the central region and 1,504 units (40%) in the southern region. The Japanese automaker said last month’s sales grew 10% over the month before.

Last month, the company sold 2,230 passenger cars, up 35% versus July last year. The Vios 2014 continued bringing a new record sales volume with over 1,100 units consumed, up 87% over the same period last year and 41% against June.

After more than four months available in this market, there have been over 3,700 units of Vios 2014 delivered to customers and over 2,000 have been contracted. July was the third consecutive month that Vios had been TMV’s best-seller in this market.

The company reported sales of commercial vehicles last month rose 14% year-on-year to 1,529 units. The total number included 600 Innova units, up 36% against the same month last year, and 704 Fortuner units.

For completely built-up (CBU) autos imported and distributed by TMV, sales of the Yaris 2014 grew 40% month-on-month to 298 units. Last year, Yaris’s average monthly sales totaled 70 units.

There were 179 Lexus cars sold in Vietnam after seven months the company officially introduced it to this market, including 26 units last month.

TMV made remarkable sales volumes of Hilux pick-ups (125 units) and Hiace minivans (57 units) last month, surging 229% and 128% respectively compared with July last year.

The company’s sales in the first seven months of this year exceeded 20,410 units, increasing 14% compared with the same period last year.

Land auctions to add VND4 trillion to city budget

HCMC is expected to obtain nearly VND4 trillion from auctions of land at some prime locations, which will make sizeable contributions to the city’s budget for capital construction that is estimated at a total of VND11.7 trillion this year.

An auction of a land lot at 164 Dong Khoi Street in District 1 is projected to generate VND1.6 trillion for the city budget. This area has captured strong interest from 70 investors since 2009.

The municipal authorities in July last year approved a plan to select developers for this 9,800-square meter lot bordered by Nguyen Du, Dong Khoi, and Ly Tu Trong streets and Tran Dai Nghia High School.

The land lot will be developed into a commercial and residential complex that costs more than VND7 trillion by a consortium comprising Sumitomo Realty & Development Co., Ltd. and Toshin Development Co., Ltd. from Japan, and Hong Kong Land International Holdings Limited from Britain.

Meanwhile, Bitexco Group has been approved to construct The One, a 55-storey tower shaped after the twin dragons at another land lot that covers 8,600 square meters opposite to District 1’s Ben Thanh Market.

Apart from the land recovery costs, the group will contribute VND300 trillion of land-use fees to the city budget this year.

This project got off the ground two years ago and is scheduled for completion next year. The tower will provide 31,800 square meters for retail sale, 17,300 square meters for offices, 350 serviced apartments and five-star Ritz Carlton Hotel with 250 rooms.

Besides, as much as VND2 trillion will be reimbursed by developers in Thu Thiem New Urban Area for the city budget as the city government has earlier advanced this sum for developing this new urban center.

The HCMC government in a report on its municipal bond issuance plan sent to the Ministry of Finance said the city’s outstanding loans had exceeded VND11 trillion as of end-July. As planned, the city can mobilize a maximum VND6.1 trillion for its capital construction this year.

The city will also issue as much as VND3,000 billion worth of bonds, divided into two phases with VND1,500 billion intended for each. The first will be conducted in late August or early September while the last phase will be in late September or early October this year.

Viettel 3G services to be faster after upgrade

Viettel will provide faster 3G service with a maximum transmission speed of 42Mbps after finishing its infrastructure development.

The faster service will be first made available in 13 cities and provinces in the Mekong Delta. As scheduled, Viettel will make this high-speed 3G service available nationwide in early 2015.

The speed upgraded to 42Mbps allows users to download a 5MB song within one second only.

Currently, this mobile operator is providing 3G services at a transmission speed of 21Mbps, three times faster than before.

Subscribers can experience the faster service at technology exhibitions between August and December at six Viettel stores in major cities of Hanoi, Danang, HCMC and Can Tho. Viettel’s events allowing users to experience 3G technology will be organized with the help of Qualcomm, a giant technology firm in the U.S.

Nguyen Manh Hung, deputy general director of Viettel Telecom, said the company now owns the nation’s most extensive 3G infrastructure with 26,000 base transceiver stations since it started offering 3G services in 2010. In the first seven months of this year, the number of Viettel’s 3G service subscribers has increased to nine million.

Thieu Phuong Nam, country manager of Qualcomm for Vietnam, Laos and Cambodia, said only a quarter of Vietnamese are using 3G services, while others know nothing about 3G technology or how to use 3G on their smartphones. Therefore, Qualcomm wants to support mobile service suppliers to boost the penetration rate.

Nam added Qualcomm is in talks with Vietnam Post and Telecommunications Group (VNPT) to boost the number of 3G users in Vietnam. Last month, Vinaphone also announced its upgrade for 3G services.

Coach fares for National Day holiday up 30-40%

Coach operators have registered to increase fares by 30-40% for long trips to and from HCMC during the National Day holiday on September 2.

They said they will adjust up ticket prices by 30% for the routes from Mien Dong Coach Station to Binh Duong, Binh Phuoc, Dong Nai, Ba Ria-Vung Tau and Binh Dinh provinces, and the Central Highlands region from August 29 to 31.

Thuong Thanh Hai, deputy director of Mien Dong Station Co. Ltd., said transport firms are allowed to raise ticket prices for holiday services by a maximum of 30% compared to normal days. They are required to submit their fare adjustment plans to authorities and list new fares on the quotation board at the station in Binh Thanh District.

However, Kieu Nam Thanh, general director of Mien Tay Station Joint Stock Company, said coach operators will likely hike fares by up to 40% for the trips from this station to the Mekong Delta during the holiday to offset the cost of taking their almost empty coaches back to the city before the holiday.

The companies said fares for the coaches departing from the largest coach stations in the city during the upcoming holiday will increase at the same rates compared to the year-earlier period.

Hai said people will have four days off for this year’s National Day holiday and forecast the busiest days for coaches departing from Mien Dong Coach Station will be from August 29 to 31. The number of passengers will jump on the routes linking tourist sites such as Vung Tau, Dalat, Phan Thiet and Nha Trang.

The overall number of passengers going through coach stations in HCMC during the upcoming holiday is projected to be the same to that of a year ago, and the daily figure on the busiest days could reach 32,000 passengers.

Thanh forecast August 30 and 31 would be the two busiest days at Mien Tay Coach Station in District 6 and the daily number would range from 43,000 to 45,000 passengers, up 5-7% compared to the National Day holiday last year.

To meet this rising demand, transport firms will add 230-430 services a day during the holiday.

More passengers will get on trains for their trips to tourist sites or back home for family reunion during the holiday. Thai Van Truyen, deputy chief of Saigon Railway Station, said there will be an additional 10 train services between HCMC and the coastal city of Nha Trang from August 28 to September 2. All the extra trains will leave the station in the evening and arrive in Nha Trang in the next morning.

Vietnam lacks huge vessels for int’l routes

The Ministry of Transport said Vietnam lacks large container ships able to run and compete on international sea routes but has plenty of vessels for bulk cargo.

“The country falls short of container ships while the fleet of vessels for bulk cargo is redundant,” the ministry said in a report released last week.

According to statistics from the Vietnam Maritime Administration, local enterprises operate nearly 1,700 vessels for cargo transport with a total of 6.9 million DWT. Of which, there are 28 container ships, 172 vessels for bulk cargo, 940 mixed-use vessels, 150 chemical and oil tankers, nine vessels for liquefied petroleum gas (LPG) transport, and 37 passenger ships.

The ministry said the current structure of vessels is imbalanced as the number of container vessels is far lower than that for bulk and general goods transport.

Development of Vietnam’s vessel fleet is also a great concern as the annual expansion of container vessels worldwide in the past four years is estimated at 6.8% while that of Vietnam is a mere 1.1%.

The vessels operated by foreign enterprises but owned by Vietnamese firms are 75 with a total of 1.3 million DWT and account for 18% of the fleet bearing the Vietnamese flag. Of the number, there are six container ships and 51 for bulk cargo.

About 400 of the 1,700 vessels run on international routes with the majority linking Vietnam to other parts of Southeast Asia and China. Most of the container ships only operate in Southeast Asia and on the routes to China, Hong Kong and Taiwan.

The ministry calculated local vessels can handle only 10-12% of export and import goods transported by sea while the rest is in the hands of foreign ships.

Vietnam sees 5% broken rice price up to US$465 per ton

Vietnam exported 615,800 tons of rice last month, with the export price rising to US$465 per ton for the 5% broken type from US$420 per ton in June, Tuoi Tre reports, citing the Vietnam Food Association (VFA).

Vietnam’s export price has now dropped to around US$450 per ton but still stays high compared to the price recorded in the past three years.

According to some traders in An Giang Province, the price of fresh rice was hovering around VND4,700-5,400 per kilogram on Monday, falling by VND100-200 against early this month. However, compared to the Mekong Delta region’s average price of the 2014 summer-autumn crop, at VND4,370 per kilogram, farmers still gained a profit of over 30% on  average.

The global rice market, according to VFA, is unstable and unpredictable. Thailand currently has 18 million tons of rice in stock but it has yet to boost export.

Regarding China stopping importing Vietnamese rice via border trade, experts said that the import suspension does not affect Vietnam’s rice exports much though such a move indicates instability and risk in border trade with China.

One-third of 615,800 tons of rice exported in July was shipped to China and the export volume to this market in the January-July period amounted to nearly two million tons.

Nguyen Duc Thanh, director the Vietnam Center for Economic and Policy Research (VEPR), said apart from importing Vietnamese rice, China also buys rice from Cambodia.

Vietnam’s rice exports have depended greatly on the Chinese market in the past three years. However, China did not buy local rice under government-to-government contracts but via traders and unofficial channels.

According to Le Van Banh, director of the Cuu Long Delta Rice Research Institute, farmers in the Mekong Delta region have harvested half of the summer-autumn crop but all harvested volumes have been consumed. Vietnam has also sealed many big contracts with other traditional buyers like the Philippines, Indonesia and Malaysia since the crop’s beginning, and thus the impact of China lowering imports from Vietnam is not considerable.

However, Banh stressed that though the impact is currently not high, Vietnamese enterprises should be cautious about trading via unofficial channels with China.

Vo Hung Dung, director of the Vietnam Chamber of Commerce and Industry’s Can Tho branch, shared the same view, saying that Vietnam has landed major rice export contracts with its traditional markets and it is likely Vietnam will export more to these markets in the coming time.

Vietnam Railway to divest all capital from ten firms

The State-owned Vietnam Railway Corporation (VRC) has said it will divest all its capital from 10 joint-stock companies this year and next to focus on railway transport as its core business, and sharply reduce its stakes in several others.

The divestment decision was just made by the chairman of the company’s board of members in Resolution No. 16-14/NQ-HDTV.

Under the resolution, Vietnam Railway will divest all investments from My Trang Stone JSC, Hanoi Investment and Construction JSC, Hanoi Investment and Construction Consulting JSC No. 1, Vinh Nguyen Investment Construction Trading Development JSC, and Vietnam Railway Signal Telecommunication JSC.

In addition, it will also sell all holdings in Hanoi Rail Tour, Danang Construction JSC, Railway Construction and Engineering JSC, Construction No.2 JSC and Railway Infrastructure Development JSC.

Apart from all-out divestment from these 10 enterprises, VRC will maintain less than 30% of chartered capital at three other companies namely Investment and Construction JSC No. 3, Railway Construction Corporation JSC and Construction JSC No.6. It will also reduce its stake to less than 20% at Transport Investment and Construction Consultant Joint Stock Company.

Previously, based on the restructuring scheme of VRC in the 2012-2015 period approved by the Government last year, the corporation must withdraw capital from six enterprises.

After rearranging the corporation, it will hold 100% of chartered capital at 23 one-member limited joint stock companies and stakes of 50-65% at two others.

In addition, the conglomerate will hold stakes of less than 50% at 22 other subsidiaries.

Based on the restructuring plan approved by the Government, Vietnam Railway is active in railway transport business and related spheres such as railway infrastructure management, and manufacture and maintenance of railway facilities.

To boost the restructuring process of the corporation, Transport Minister Dinh La Thang and his deputy Nguyen Ngoc Dong are holding weekly working sessions with leaders of the group.

Gov’t advances funding for ODA projects

Prime Minister Nguyen Tan Dung has signed a decision advancing reciprocal funding totaling more than VND3.59 trillion for official development assistance (ODA) projects, the Vietnam News Agency reports.

The Government decided to advance the sum, extracted from the Government bond funds for next year, for the ODA projects proposed by the Ministry of Transport and provinces and cities.

The advanced money will be disbursed prior to the end of March next year.

The Prime Minister also demanded the Ministry of Planning and Investment quickly send to the Government the list of ODA projects and information about the amount of counter capital for each project as well as guide relevant departments on giving advances for investors.

From 2015, the ministry will have to start withdrawing the Government’s advanced funds and secure sufficient counter capital for all ODA projects as pledged with donors.

Late last month, PM Dung had signed a decision approving the plan on improving the implementation of ODA projects and concessional loans in the 2014-2015 period.

According to the plan, the Ministry of Planning and Investment is tasked with building a scheme to attract, manage and implement ODA loans and concessional loans in the 2016-2020 period, allocate investments for projects under implementation that are expected to use ODA loans or concessional loans, and report to the Government in the fourth quarter next year.

The PM also required relevant ministries and deparments to complete the legal framework for ODA loans and concessional loans, ensure the progress of projects as pledged with ODA donors, improve the project management, increase transparency in implementing projects as well as fight corruption and enhance monitoring and evaluating activities.

More and more agricultural produces imported into Vietnam due to increasing demand; however, consumers have fretted about the quality and safety of imported produces.

Nguyen Xuan Hong, director of the Plant Protection Department, had a talk with Sai Gon Giai Phong newspaper on testing procedures of agricultural produces.

According to the regulation set by the Ministry of Agriculture and Rural Development, importing countries must send the registration to the relevant agencies. Then agencies will check the process to plant vegetables and fruits, pesticides, and preservation.

Staffs of relevant agencies will take 10 percent of samples from produce batches in the border gates for testing. If samples meet the standard, it will be get customs clearance.

However, if samples are discovered to have pesticide residue exceeding the limitable level and violate food safety regulation, they will be kept in the border gates for further testing.

Then, commodity batches of violating importers will be tested thoroughly. Inspectors will take 30 percent of the batch for testing and the batch will be kept in ten days. During this time, if the batch meets the standard, it will go through customs check; however, if it does not meet the standard again, it will be exported back to the original country.

The most current challenging matter is that Vietnam is lacking personnel. The Ministry of Agriculture and Rural Development has approved to purchase more equipment worth totally VND33 billion (US$ 1,558,260) for check-stations nationwide.

Vinalines seaports become joint stocks

Five seaports under the Vietnam National Shipping Lines (Vinalines) have been equitized while seven others are rushing to launch their initial public offerings (IPO) by the fourth quarter this year and early next year.

That is from reports at a meeting chaired by Minister of Transport Dinh La Thang on Vinalines restructuring and equitization on August 13.

The five ports changing into joint stock modal include Khuyen Luong, Quy Nhon, Hai Phong, Nha Trang and Da Nang. Vinalines Nha Trang One Member Co Ltd has also been equitized.

Quang Ninh, one of the two largest seaports in the north, is going to transfer into the joint stock modal.

Besides, five other seaports including Saigon, Cam Ranh, Nam Can, Nghe Tinh and Can Tho have completed paperwork requirements and are waiting for verification.

They are expected to conduct stock market launch by the end of this year. Saigon Port which is being removed from Ho Chi Minh City’s center area will carry out an initial public offerings (IPO) before the second quarter next year.

Vinalines plans to announce its value on October 24 and equitization method in December, and launch an IPO by the first quarter next year.

About debt restructuring, Vinalines director general Le Anh Son said that it is facing difficulties because there is no mechanism for the Debt and Asset Trading Corporation (DATC) to purchase Vinalines’ debts at banks.

The State Bank doest not permit the creditors to convert their loans into equity in Vinalines or its seaports and investment projects.

The holding rate of state capital at the seaports maintains high at 75 percent, which is among factors hindering Vinalines' debt restructuring. Some of the banks only agree to make their loans into equity if the Government reduces the capital holding rate to 51 percent or lower.

To boost equitization and restructuring at Vinalines, Mr. Son proposed authorized agencies to soon assign DATC to purchase the company's debts from banks that are in demand to sell the debts.

He also sent the proposal to the Government to permit Vinalines to keep the funds from IPOs of seaports and the parent company, and DATC to convert debts into equity in Vinalines when it launches IPOs.

Stainless steel producer SHI to hold new share issue

Stainless steel product maker SonHa International Corporation (HOSE: SHI) is issuing 10 million new shares to raise the liquidity of its stock.

Of the 10 million shares to be issued, SHI is selling 6 million to existing shareholders and the rest to strategic partners. “This increase in the holding of financial investors will help raise the liquidity of SHI shares,” deputy director Dam Quang Hung said.

SHI shares currently have very low liquidity, because large shareholders have bought up 70.7 per cent of the 26.7 million shares listed on the bourse.

As a result, SHI’s stock value is way below the par value of VND10,000/share, now hovering at around VND5,500/share, despite the firm’s strong performance. SHI shares ended the day on August 12 at VND6,300/share, up 1.61 per cent.

Hung said the low liquidity is partly due to SHI being a manufacturing firm, and its shares are not of particular interest to speculative investors.

SHI mainly imports stainless steel coils or sheets, and then rolls or cuts them to produce stainless steel products such as sinks, pipes, kitchen appliances, and solar energy water heaters. It sells 100 per cent of its consumer products in the domestic market, and almost all of its industrial products internationally.

SHI’s revenue grew by an average 14.28 percent per year in the 2009-2013 period. Revenue growth for the 2014-2018 period is expected at 15 per cent per year.

The firm is targeting the rural market and big government projects, such as those aimed at supplying clean water to rural areas.

As well as making stainless steel products, SHI also operates in retail and real estate and carries out environmental projects. According to the firm’s leaders, it and two foreign investors are negotiating to co-operate in running SHI’s supermarket chain Hiway, with the deal likely to be completed by the end of September.

Seedstars World to be launched in Vietnam

The only global startup competition for emerging markets, Seedstars World (SSW), will appear officially in Vietnam on August 16 in HCMC.

The jury of SSW’s competition in Vietnam this year includes Mr. Raphael Dana, CEO of Galixo; Mr. Christopher Zobrist, Deputy Director of John von Neumann Institute; Ms. Hang Do, Ivivu and Mr, Alan Jiang representative of Uber.

The competition originates in Geneva (Switzerland), initiated by Alisee de Tonnac and Pierre-Alain Masson, with the support of Seedstars SA investment company.

Following the success of its first time in 20 countries in 2013, SSW is planning to launch to more than 30 countries worldwide  in 2014. According to regulations of the competition, in regional round, 20 startup companies have to prove their ability in the limit of 6 minutes and answer questions of the jury including specialists and representative of SSW.

The winner of each regional event will be invited to Geneva to present his business idea and have a chance of winning an investment worth US$ 500,000.

Milk producers try to get around price regulations

Milk companies have been changing their labeling for children's formula in such a way that would make them exempt from the new taxes levied by the Ministry of Finance to put an end to price-gouging in the industry.

A number of brands, including Pediasure and Dielac Pedia have been using new labels for the same nutritional formulas they were selling before.

Recently, dairy products were made subject to government control, but food supplements and nutritional products are not. After the ministry created regulations to control the overpricing of milk products, especially those marketed for children, the companies printed that their products contained a lower percentage of milk, technically qualifying them as supplements instead of milk products.

Grow Plus, a brand produced by NutiFood, markets dairy products both in liquid and dry form, While their dry product is still sold as "milk formula" their liquid canisters have changed. It is now called a "nutritional supplement" for one to three-year-old children.

Dr Vu Dinh Anh, deputy head of Institute for Research on Market and Price said, "The regulations contain many loopholes. In the next six moths, it looks as if companies will re-brand their products just by adjusting the labels."

In response, the Ministry of Finance and the Ministry of Health decided to subject nutritional products and supplements to the same price stabilisation policies. The ministries will put ceiling on wholesale distribution prices for these products. However, many consumers have expressed worry over the authorities' ability to manage and control prices of children's formula on the real market.

Last year, the Ministry of Finance and the Ministry of Health were jointly blamed for inordinately high prices of imported milk products. According to statistics from the General Department of Vietnam Customs, the import price is only USD4-5, but the retail prices reach as high as USD20-43.

Firms owe total of USD523-million in social insurance

Companies in Vietnam still owe social insurance agencies a total of VND11 trillion (USD523.8-million) in overdue payments as of the end of July this year.

In late July, there were about 62.8 million individuals in Vietnam who bought social insurance, up 2.9 million from the year before.

However, the overdue payments amount to VND11 trillion, or just over 6% of all payments by companies into the fund. The late payments have had an effect on workers, and localities have been asked to increase oversight of businesses, and even to pursue legal actions against those who fail to pay.

The situation has been blamed on a number of reasons, including the economic downturn. However, 50% of the debt is owed by the government.

Also, many companies avoid fulfilling duties to employees, even though employees' salaries are garnished if they have insurance. Many businesses attempt to make up for the cost of benefits by making their employees work longer hours.

Punishments for violators remain weak and the social insurance agencies do not have a clear legal framework of regulations to conduct effective investigations.

Real estate association against looser foreign property ownership rules

The head of the HCMC Real Estate Association said authorities should not allow foreigners to buy homes in Vietnam even though the Ministry of Construction has been considering looser restrictions.

Le Hoang Chau, chairman of the HCMC Real Estate Association, confirmed the association's stand. According to Chau, many countries only allow foreigners to buy apartments in specific locations during the first stages of opening their markets.

"For the first five years, Singapore allowed foreigners to buy only apartments. The ban was gradually lifted over the next five years, but buyers still have to pay higher taxes. We shouldn't allow foreigners buy villas and houses yet while external security threats to Vietnam still exist. This would make the situation difficult to control in the future," he said.

Overseas Vietnamese and other foreign passport holders will be permitted to own apartments for a maximum period of 50 years. The Ministry of Construction proposed allowing foreigners buy more types of housing in order to relieve the real estate market slump.

Minister of Planning and Investment Bui Quang Vinh said that investment in the housing market by foreigners could provide a huge boost to the sector.

"The maximum term of ownership for residential property will still range from 50 to 70 years. A lot of people will buy homes if we open this market. We have about 130,000 South Koreans renting apartments in Vietnam because they can't buy houses. Those renters may try to find ways to evade taxes such as claiming lesser rental fees," he said.

Prime Minister Nguyen Tan Dung also gave his support to the proposal.

Moon cake supply up 10-15% this year

The volume of moon cakes made by domestic leading firms like Givral, Kinh Do, Nhu Lan, Bibica and Brodard for the coming Mid-Autumn Festival ranges from 170 to 2,800 tons each, up 10-15% compared to the same period last year.

Moon cake producers said their prices remain unchanged or increase by 7% depending on types of cake for this year’s festival which falls on September 8.

In addition to traditional fillings like roasted chicken, lotus seeds and green peas, makers also supply cakes with new flavors and of different categories to meet the diverse demands of consumers.

This year, Kinh Do will provide the market with 2,800 tons of moon cakes, up 15% over the same period last year, according to deputy general director Nguyen Xuan Luan. The firm will export to the United States 100,000 cakes of traditional flavors favored by overseas Vietnamese, equivalent to around 20 tons, and will also sell cakes to Cambodia.

Luan said Kinh Do neither sells moon cakes online nor offers discounts throughout the Mid-Autumn season to guarantee its customers are provided with products of same quality.

Meanwhile, Bibica has opened an online sales channel as well as offered consultation on nutrition of moon cakes in addition to putting up sales counters across big cities.

To have quality moon cakes, consumers are advised to buy at official agents and sales counters of well-known makers or at supermarkets.

Dai-ichi Life Vietnam posts strong premium growth

Dai-ichi Life Insurance Company of Vietnam, or Dai-ichi Life Vietnam, on August 13 said it obtained VND388 billion in new business premiums in the first six months of this year, up a staggering 33% against the same period of last year.

The Japanese life insurer’s total premium income reached nearly VND1 trillion in the January-June period, a 38% year-on-year increase, doubling the average growth rate of the life insurance market.

Between January and July, the insurer opened 10 new general agencies, taking to 130 the total number of offices and general agencies in the country.

Last month, Dai-ichi Life Vietnam launched its “Health Care Rider” product, a comprehensive medical insurance plan combining benefits of in-patient, out-patient and dental care, with the total sum assured up to VND630 million for each disease.

The enterprise is now serving over one million customers in Vietnam.

Local currency firmer against greenback

The value of Vietnam dong has risen against the U.S. dollar since early this week and compared to the time the central bank adjusted up the dong-dollar exchange rate by 1% in mid-June and allowed banks to sell the greenback at higher prices in mid-July.

At Vietcombank, the dollar has been traded at VND21,230 this week, VND30 lower than late last week. The rates at Eximbank and Techcombank are VND21,225 and VND21,240 respectively.

Greenback prices are lower than several days before the central bank revised up the dong-dollar exchange rate by 1% on June 19, when banks quoted the dollar at the ceiling price of VND21,246.

With a trading band of 1% on either side, banks are allowed to sell a dollar at the ceiling price of VND21,458 and the floor price of VND21,034.

According to an expert who spoke on condition of anonymity, dollar supply on the market is now ample. The inter-bank interest rates for dong have increased in the past few days as banks are inclined to sell dollar funds for dong, making the greenback supply plentiful.

The expert forecast the dong-dollar exchange rate to stay at VND21,250 this year.

A report by the central bank indicated after the exchange rate adjustment in June, the inter-bank exchange rate was stable and liquidity on the forex market was good. The number of daily foreign exchange transactions was equivalent to that in the first months of the year.

The greenback was firmer against dong between late June and July’s first half. To prevent the forex volatility, the central bank slightly devaluated the local currency to VND21,200 per dollar from VND21,100 to support exports, fuel economic growth and increase the country’s foreign reserves.

The report said after the rate was adjusted, the forex market continued to be stable and the central bank bought dollars on some days after two months of suspension. Nevertheless, on July 31, the dollar was traded at VND21,200-21,250 at commercial banks, much lower than the ceiling level.

Jan-Jul capital for traffic projects doubles

Capital disbursements for traffic projects nationwide are estimated to exceed VND57.5 trillion in the first seven months, doubling the amount recorded a year ago, according to the latest report of the Ministry of Transport.

The expanded parts of National Highway 1A and Ho Chi Minh Road in the Central Highlands alone have already got nearly VND11.2 trillion out of a total cost of VND17 trillion estimated for such projects.

The ministry said disbursements for most projects have been in line with schedule. However, for some other projects, disbursements are already finished but they are still in dire need of funding to continue construction, especially the project to widen a section of National Highway 1A from Thanh Hoa to Ha Tinh Province with VND2.2 trillion advanced by the transport ministry, or 86% of the total amount.

As much as VND11.4 trillion out of the planned VND30 trillion has also been disbursed as counter capital for official development assistance (ODA) projects. The ministry attributed the low rate of disbursements to the slower-than-scheduled progress of a number of ODA projects such as Danang-Quang Ngai and Ben Luc-Long Thanh expressways, Tan Vu-Lach Huyen Road, and certain roads in the Mekong Delta.

The ministry projected the capital disbursements for traffic projects to reach more than VND116.7 trillion this year. This ample capital supply will help contractors avoid taking out loans for their construction while regulatory agencies can also reduce the amount of debt owed to contractors of capital construction projects.

The Government has recently issued a directive ordering all ministries, local departments and sectors to refrain from capital construction debt from next year while the remaining arrears should be handled thoroughly by the end of this year.

If the capital construction debt recurs, agencies concerned should be held responsible and imposed penalties in accordance with the Law on Public Investment.

A report sent to the National Assembly by the Government said the Ministry of Transport owed the most capital construction debt, at VND1.212 trillion as of mid-2013.

Visa appoints new country manager

Visa has appointed Sean Preston to the position of country manager for its operations in Vietnam, Cambodia and Laos. Based in HCMC, Preston is responsible for overseeing all aspects of Visa’s business in Vietnam, Cambodia and Laos.

Having been with Visa since 2009, Preston was previously country manager for New Zealand for three years, followed by the post of vice president for Southeast Asia, based out of Singapore.

He has a diverse international career covering credit card portfolio development and management, loyalty, marketing, sales, operations, project management, and vendor management.

Prior to his appointment at Visa, he was national manager for cards business at ASB Bank Limited in Auckland — a role he held since 2003. For the seven years prior to that he was with Citigroup in a variety of roles that saw him based in Sydney, Singapore, and finally New York, where he was Vice President of Operations and Technology for Citigroup International.

“I had the pleasure of working right across Southeast Asia in my previous role with Visa, and I can say from experience that Vietnam is certainly one of the most dynamic growth markets in the region,” said the New Zealander Preston.

Central region holds the key to economic growth

Endowed with beautiful beaches and modernised seaports, the central region has many advantages to transform into a thriving and prosperous coastal urban area, said Deputy Prime Minister Nguyen Xuan Phuc.

Phuc made the remarks while addressing a central region economic forum held in Danang city on August 15, drawing the participation of many senior officials and leading economic experts nationwide.

The Deputy PM affirmed that the central region is seizing tremendous opportunities but simultaneously facing numerous challenges caused by territorial disputes at sea, including, but not limited to, China’s illegal acts in the East Sea.

Thanks to its favourable geographical location, the region enjoys convenient sea routes conducive to boosting foreign trade in the region and the world as a whole, Phuc said.

He stressed the need to improve the cohesiveness of central provinces and cities for stronger and sustainable economic growth.

Phuc’s view was echoed by Party Central Committee's Commission for Economic Affairs (CEA) Chairman Vuong Dinh Hue, who suggested fostering cooperation among localities to increase investment efficiency and create a healthier business climate in the region.

It is also essential to complete institutions for regional economy development and boost economic restructuring process in line with the shift of growth model, Hue added.

Dr. Tran Dinh Thien, Director of the Vietnam Economic Research Institute, spoke of the important role the central region play in speeding up the pace of national economic development apart from the country’s two largest economic hubs – Hanoi in the north and Ho Chi Minh City in the south.

He highlighted the central region’s enormous potential for tourism development. With its beautiful natural landscape, intimate beaches and mountains, the central region should cooperate with the Central Highlands to create a special connection between its “blue beaches” and “massive green forests”, he underlined.

Thien described central Vietnam as a rich gold mine full of miraculous treasures thanks to its seaports that enable the region to easily connect to foreign countries greatly facilitating international integration.

He also cited ocean tuna fishing following Japanese technology as another advantage for sea-borne economic development in the central region. To effectively explore sea potential, more support should be provided for local fishermen who also play an important role in protecting the national sovereignty over sea and islands, Thien noted.

Economist Tran Du Lich placed special emphasis on establishing island economic zones on Cu Lao Cham, Ly Son, Hoang Sa (Paracel) and Truong Sa (Spratly) in order to combine economic development with national defence.

The central region should focus on developing coastal urban areas in a number of tourist attractions such as Chan May, Danang, Hoi An, Can Tuong, Quy Nhon, Tuy Hoa, Nha Trang and Phan Thiet, he elaborated.

To this end, Lich said it is necessary to speed up the development of the Danang high-tech park and increase the effectiveness of key economic zones, including Chan May-Lang Co, Chu Lai, Dung Quat, Nhon Hoi, Nam Phu Yen, and Van Phong.

Sea-based tourism development is pivotal to the transformation of the central region as the spearhead economic sector, he said, adding that the region should invest heavily in developing high quality entertainment services on a par with international standards.

Most central provinces achieved an average annual GDP growth of more than 10% in the 2009-2012 period, much higher than the national average (5.96%).

In the first half of this year, the economic growth rate in nine central provinces was rather high, with Quang Nam, Khanh Hoa and Ninh Thuan taking the lead (over 11%).

In the reviewed period, Thua Thien-Hue, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa and Ninh Thuan attracted nearly US$200 million in foreign direct investment (FDI).

Cashew nuts, tea a hit at Hong Kong fair

Vietnamese tea and cashew nuts were amongst the most sought after products at the jointly staged Hong Kong International Food Exhibition and Tea Fairs, which kicked off on August 14.

Vietnamese Long An Food Processing Export JSC (LAFOOCO) reports that its cashew nuts were of interest to people of Hong Kong and foreign business owners.

Meanwhile, Tan Cuong-Hoang Binh Tea JSC in Thai Nguyen showcased a series of its finest tea products, which also garnered a great deal of attention from fairgoers.

The two events organised by the Hong Kong Trade Development Council (HKTDC) are taking place from August 14-18 with the participation of more than 1,400 businesses from dozens of regional countries and territories.

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