Lower oil prices, interest rates should improve spending: CBRE

A stable economy is having a positive effect on consumer confidence and this together with lower oil prices and interest rates should cause spending to improve this year, Richard Leech, Executive Director of CBRE Vietnam, has forecast.

He said lower oil prices result in lower transport costs and thus lower prices of goods.

Retail sales and services last year were worth around US$140 billion, but growth had slowed significantly over the last few years, according to the Retail Market Update report CBRE released.

The update reviews the past 12 months and forecasts trends for 2015.

Supply of retail space has grown in both the major markets of Hanoi and Ho Chi Minh City and will continue to grow in 2015. By the end of the year it is expected that Hanoi will have approximately 900,000sq.m of retail space and HCM City, 600,000sq.m.

In terms of the number of projects and square metres in the pipeline, Hanoi and HCM City stack up well against its regional neighbours, with Hanoi in 7th position. Most other cities ahead of Hanoi are in China.

HCM City is expected to have at least five new projects in 2015 – two being developed by SSG, a megamall by Vingroup and the eagerly awaited Vivo City due to open in District 7 in April 2015.

Apart from having more supply of formal retail space than HCM City, Hanoi has lower rents and higher vacancies.

HCM City rentals have remained stable at approximately US$100 per square meter in the central business districts (CBDs) and about US$40  per square metre in non-CBD locations. HCM City's vacancies are at less than 8 percent compared with more than 20 percent in Hanoi.

New supply that came on line in 2014 was dominated by Lotte in the north and by Aeon in the south. Both these retail giants, respectively from the Republic of Korea and Japan, opened multiple locations in Vietnam and will continue to expand in 2015.

Leech noted that HCM City's first metro line, which is currently under construction, would link together several shopping centres in the CBDs and District 2.

"With the completion of The One, Sai Gon Centre Phase 2 and the Tax Plaza in District 1, HCM City shoppers can anticipate a shopping district on a par with Sukhumvit Road in Bangkok or the famous Orchard Road in Singapore."

The development of new shopping centres has resulted in an influx of new tenants to Vietnam. In 2014 Hanoi saw 27 new brands come to new developments such as the refurbished Trang Tien Plaza and the Royal City Megamall in Thanh Xuan district. New brands on the HCM City retail scene in 2014 included Robins Department Store, Lalique and Marks and Spencers.

Apart from the aggressive expansion plans by foreign and local retailers in Vietnam in 2015, one of the most noticeable trends is ‘affordability'.  

The emergence of new bazaars containing hundreds of small kiosks, rent-free shopping malls such as Hoa Binh Green City, and low price supermarkets are all reinforcing the trend that consumers demand better value for money.

Food and beverage outlets were the standout sector in 2014 and will continue to dominate the high streets.

CBRE said that nearly 50 percent of its enquiries for retail space were in this sector and that the enquiries were more likely to be for fast casual dining rather than high-end dining.

"The F&B sector is leading the charge in terms of occupying ‘unconventional' retail space, and grouping together in specific nodes such as West Lake in Hanoi and Crescent Lake in HCM City" Leech explained.

Competition for a share of the consumers' wallet is fierce while consumers are now more sophisticated and knowledgeable and place value on an overall retail experience when shopping, Leech explained.

Shopping centre managers will need to have a good understanding of what their customers want, leverage the data they can collect from smart phone applications and digital marketing, provide more and better quality entertainment facilities and collaborate more with retailers, CBRE said.-

Businesses lack information about AEC

The establishment of the ASEAN Economic Community (AEC) late this year will help Vietnamese businesses expand trade exchange, attract investment, speed up exports and approach larger markets.

Meanwhile, they will have to compete fiercely with rivals from ASEAN and ASEAN plus like the Republic of Korea, Japan and China. However, they have not paid due attention to ASEAN market, particularly AEC.

It is because they have less access to information about the regional economic than that of WTO and free trade agreements. Besides, local businesses just place emphasis on their traditional markets.

Rector of the Economics College under VIetnam National University, Hanoi Assoc. Prof. Dr. Nguyen Hong Son said upon joining AEC, the Government, businesses and associations should closely work together to grasp opportunities and overcome challenges.

Vietnam should continue keeping macroeconomic stability, improving business environment and supporting business development. Methods to disseminate information about AEC should also be renovated, Son added.

Retailers’ holiday hopes up after busy six weeks

A busy six weeks in the lead up to the Lunar New Year (TET) has buoyed retailers' hopes that the holiday shopping season will end strong after a solid start to overseas sales.

Orders from Overseas Vietnamese (OVs) have really jumped this year said Dong Nai, the owner of Tran Gia Company in Bien Hoa City adding that the company has had to step up production of Chung cakes, Tet cakes, and  marmalades to meet the increased demand.

The owner of Tran Thanh Toan Company in turn said it has shipped over 60 tonnes of Chung cakes and other traditional holiday specialties like Dong leafs, sticky rice and spices to 10 countries.

In fact, Toan said that business has been so brisk the company hasn’t been able to fill all of the orders for Chung cakes. Most orders have come from OVs in the US, Canada and Australia he said adding that orders from the US alone amounted to over 38 tonnes of product.

Phan Quoc Nam, director of the Long Uyen Company in Chau Thanh district, Tien Giang province said his company has also been frantically shipping fruits, farm produce and specialty cakes for the past six weeks overseas.

We shipped right at 20 tonnes of Tet cakes, frozen bulbs and potatoes to North Europe and Germany just in the past week, Nam added.

A lot of work goes into preparing product for shipment Nam said adding that because of the lengthy transport time the cakes need to be packaged carefully and all the production processes must be meticulously monitored.

In particular, the EU food hygiene and safety import restrictions are very stringent Nam said so we have to be extra careful or all our hard work would have been for nothing.

Meanwhile the owner of a Tet and coconut cake unit in Chau Thanh district, Ben Tre province said his company has just received 20-30 foreign orders with sizes ranging from 10,000-30,000 cakes.

Tran Thanh Phu owner of Tan Dong Company in Thu Duc district, HCM City said he has a two tonne shipment of product headed for the EU and Australia sitting packaged and ready to ship.

Tri Duc Food Company said it exported around 20 tonnes of gingersnap, bamboo shoot, sweet potato, and potato marmalades to the US, the EU and some other Asian countries.

Vice Director of Hoang Mai Tea Company Pham Thu Nga said this year his company successfully shipped 20 tonnes of fungi, vermicelli and rice sheet abroad on the occasion of the TET holidays.

Vinamit Company has completed contracts to ship dried fruits to China, Cambodia and Laos.

Supermarkets are also busy with orders to ship TET specialities overseas.

Director of Big C supermarket Ho Quoc Nguyen revealed that Big C exported six containers of dried vermicelli, instant noodle soup, fish sauces and dried fruits to other countries in Asia so far this holiday season.

We’re having a great holiday season, said Nguyen adding that he just hopes it finishes as well as it started.

Hanoi’s CPI down 0.07% in February

Hanoi’s February consumer price index (CPI) inched down 0.07% from last month, but marked a rise of 0.11% against the same period last year, according to the municipal General Statistics Office (GSO).

During the month, transportation recorded the steepest decrease of 3.38%, followed by housing, electricity, water, fuel and construction materials (down 0.62%).

Only post and telecommunication services kept unchanged. Eight out of 11 products saw price increase, however, they just rose slightly, such as restaurant services (up 0.48%), beverages and tobacco (0.42%), culture, entertainment and tourism (0.41%), equipment and household utensils (0.4%) and pharmaceuticals and medical services (0.06%).

According to Hanoi GSO, the CPI decline is attributable to the recent reduction in petroleum prices, pushing transportation prices down sharply although citizens’ travel demand rocketed now that the Lunar New Year (Tet) is approaching.

Online shopping brings US$3 billion to nation

The Business-To-Consumer (B2C), a kind of e-commerce, in Vietnam achieved a revenue of nearly US$3 billion in 2014, according to the E-commerce and Information Technology Agency, under the Ministry of Industry and Trade.

Notably, its sales accounted for 2% of total revenue of the country’s retail industry.

Most popular were technological and electronic products, fashion, cosmetics, household items, books and stationery.

The report also said that more sales were successfully made through social networking and forum seeding.

Anti-dumping protectionism: A double edged sword

Despite World Trade Organization (WTO) commitments made by countries around the globe to liberalize trade and fight against protectionism, the tendency to impose trade-restricting measures and harm exports of other countries has been on the upswing.

Against the backdrop of a world economy in recovery, protectionism is particularly important because it runs contradictory to international integration and fuels continuing economic uncertainty.  It also damages value chains.

During the past 20 years there have been a total of 80 trade-unfriendly measures, principally anti-dumping lawsuits, lodged against Vietnam according to the Competitiveness Management Department under the Ministry of Industry and Trade.

The number of measures filed affecting Vietnamese exports has been trending upwards, with the US accounting for the highest number, 20%.  

The European Union (EU) made up 15% of the total cases and India and Turkey, 11%.

The number of incidences for which countries have imposed new export restrictions has also been on the uptick, a trend seen as worrisome for the detrimental consequences such practices can have for both the global commodity markets and value chains.

Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses, new import licensing procedures, reference values, minimum transaction prices or banning trade altogether.

These measures have most seriously impacted the Vietnamese seafood, garment and textile and footwear exporters, causing them to lose markets.

Notably, however, protectionism measures have not been that well understood nor utilized by Vietnam. As of September, Vietnam had conducted merely three anti-dumping investigations on imported goods.

The only measure that was successful resulted in Vietnam imposing an anti-dumping duty on cold-rolled stainless steel from China, Malaysia, Indonesia and Taiwan (China) from October 5, 2014 forward.

 Vietnamese exporters should increase links amongst themselves and seek information on international legal regulations to reduce losses to the manufacturing sector by unfair trade practices, said Nguyen Huu Truong Hung at the Competitiveness Management Department.

Trade protection measures are a valid tool the WTO allows its member countries to use legally if member countries fail to strictly comply with agreements of the WTO on anti-dumping, anti-subsidy and self-defence capital.    

Deputy Minister of Industry and Trade Do Thang Hai in turn noted many countries have used anti-dumping lawsuits quite effectively as tools to fight against unfair competitiveness of foreign importers.

If found guilty of unfair trade practices a foreign company would be prohibited from exporting to the Vietnam market for a period of five years, which could be extended if investigations show the practices were continuing.

Anti-dumping lawsuits and other measures should not be viewed as protectionism measures, but rather as trade policy tools to protect fair and balance trade, Hai underscored.

Vietnam’s financial services sector growing fast

Vietnam’s economy has a proven track record for growth and is shedding a wealth of potential employment opportunities for young people and this is the message that Dragon Capital will convey to its clients, said the company's CEO Dominic Scriven.

“Vietnam is a highly dynamic economy in the Southeast Asian region and its economy is generating enormous business and employment opportunities, particularly in the financial services sector,” Scriven said at a recent dialogue in London with Vietnamese students.

The government’s determination to equitize state-owned enterprises (SOEs) is a significant factor in the nation’s economic success and its working— that's the word we want to send to our investors throughout the world, he said.

In 2014 alone, the Vietnam Vegetable Oils Industry Corporation (Vocarimex) and Vietnam National Textile and Garment Group (Vinatex) were equitized successfully, he noted.

The dialogue in London was organized for the purposes of expanding the horizons of Vietnamese students to help them better understand employment opportunities in the financial sector as a whole.

Dragon Capital Group is a leading integrated investment group centred on the emerging financial markets of Vietnam with offices in Ho Chi Minh City, Hanoi, the United Kingdom, Bangkok and Hong Kong.

Construction sector to bolster competitiveness

The Government has recently approved a plan of restructuring the construction sector to increase the quality and competitiveness for the period of 2014-2020.

The restructure aims at meeting the demand of socio-economic development and the country's industrialisation and modernisation process, increasing the production capacity, quality and competitiveness, and gradually approaching the international market.

The plan sets an annual growth target of 9 – 14 percent for the construction section during the period.

In terms of construction investment, the plan set a target by the 2020 of building essential construction works which are well-designed, good quality and reasonable prices.

According to the plan, spontaneous and lavish investment, losses and corruption in the construction investment, especially for the State-funded project, will be closely controlled.

Management and using the public fund sources will be closely supervised as well as increase the proportion of non-State investment capital, especially focusing on model of public-private partner (PPP).

In the field of urban development, the plan aims to develop sustainable, clean and green urban cities, and to form some cities as big and modern as the ones of the other countries in the region. By the year of 2020, the target of urbanisation will be reached about 40 percent.

During the period of 2016-2020, 12.5 million of sq.m of social houses in urban areas will be built and per capita housing area will reach 25 sq.m nationwide.

The real estate market will be sustainably developed with a proper mechanism to overcome the present imbalance of demand-supply. The construction sector must provide a wide range of products and service as well as meet the demands of housing and real estate. It should further invest into building social houses and high-end houses as well as house-for-rent projects.

The revenue from real estate and land trading will account for 10-15 percent of the total State revenue.

To fulfil the objectives, the Government needs to further its role of management and control to the real estate market by legal tools and regulate the market by issuing proper policies relating to credit and tax issues.

The projects relating to real estate and housing nationwide will be also re-assessed and re-classify requiring the real demand of the market.

The construction sector must have concrete plans to solve suspended projects in big cities especially in Hanoi and Ho Chi Minh City.

As per the plan, the Government will have incentive policies through the financial aids, tax and credit programmes to encourage all economic sector to invest into social houses for privileged people, public employees, armed forces, and low-income people.

Besides, real estate trading will be opened for foreigners and foreign entities and overseas Vietnamese as well.

The restructuring will include speeding up the equitisation of the State-owned companies with a model which the government will not hold main shares.

The management will be improved in order to ensure the businesses operating under the market mechanism and health competition.

Upgrade of Chan May Port to complete by May

Chairman of the Thua Thien-Hue People’s Committee Nguyen Van Cao said the province has reached agreement with the Royal Caribbean Cruise Company of Malta on speeding up the upgrade of Chan May Port to welcome cruise liners.

All dredging works and upgrade will complete before April 30.

The upgrade is intended to allow the port to receive super-size ships and contribute to the province’s increasingly important tourism.

The project includes increasing the length of Wharf No 1 from 300m to 360m, dredging an area of 90mx450m in front of the wharf and expanding the turning area.

When the project, which is estimated to cost 85 billion VND (3.96 million USD), completes, the Chan May Port will be able to accommodate Quantum- or Oasis-class super-large ships.

In January, Thua Thien Hue welcomed the first cruise liner, the Celebrity Century, carrying 2,500 tourists to the ancient imperial city of Hue.

The central province has set its sight on drawing 60,000 tourists via Chan May Port.

Vietnamese community in Sweden greets New Year

The Vietnamese Embassy in Sweden has hosted a New Year get-together to welcome the Year of the Goat in the lunar calendar, with the participation of overseas Vietnamese people and students living and studying in the country.

Addressing the event, Ambassador Tran Van Hinh reviewed the achievements that Vietnam gained last year, praising significant contributions of overseas Vietnamese (OVs) worldwide, including those in Sweden, to the homeland’s development.

He stressed that the Party and State always consider overseas Vietnamese communities are an indispensable part of the Vietnamese nation.

The diplomat wished the Vietnamese community in Sweden a happy, peaceful and prosperous New Year.

Previously, on February 10, the embassy also organised a meeting with Swedish friends in honour of the traditional Lunar New Year (Tet).

Participants praised Vietnam’s achievements in its renewal process and national construction. They also expressed their hope that the friendship and cooperation between Vietnam and Sweden will be further stepped up in the future.

SBV moves to restructure even well-performing banks

The State Bank of Vietnam (SBV) plans to deal with six or eight banks in 2015, including efficiently-operating ones, according to Governor Nguyen Van Binh.

The State-run banks will be merged or with joint-stock ones, while those with poor performance will be sold back by the SBV, he said.

The move aims to create banks with bigger operational scale and better performance, he explained.

In the first phase of the banking system restructuring plan from 2011 to 2015, the SBV has only focused on handling the worst-operating banks.

The second phase will concentrate on rearranging not only weak banks but also healthy ones to enable their stronger operations, Binh said.

Vietnam currently has nearly 40 banks, which will be reduced to roughly 20 through merger and acquisition (M&A) by 2017. This will happen based on the banking sector’s restructuring strategy approved by the Government.-VNA

EVN expedites key power projects

The Electricity of Vietnam (EVN) has asked the National Power Transmission Corporation to double efforts to put into use a number of power projects as soon as possible.

The projects include the upgrade of the 500kV Nho Quan (northern Ninh Binh province) – Ha Tinh (central province) power line.

The EVN Hanoi was asked to ensure the building progress of the 220kV Chem-Tay Ho power line and the 220kV Tay Ho transformer station.

Meanwhile, the Northern Power Corporation needs to speed up the installation of the 110kV Hiep Hoa-Yen Phong power line, which will supply electricity for the Bac Ninh-based Samsung group’s factories, together with other 110kV lines connecting with the 220kV Than Uyen and Hai Ha transformer stations.

The Southern Power Corporation should ensure electricity access for people in Kien Hai island district, the southern province of Kien Giang .

In January 2015, two turbines of the Mong Duong and Duyen Hai thermal power plants with a combined capacity of 1,162 megawatts were commissioned.

In addition, the capacity of the 220kV transformer stations of Soc Trang, Chau Doc, Phan Thiet, and the 220kV Vinh Tan (northern Bac Ninh province)-Phan Thiet (central Binh Thuan province) power line was increased, well serving local needs.

Vietnam’s economy sees stable recovery: UK businessman

Vietnam’s macro economy has begun a sustainable recovery period, bringing opportunities on investment and job in the country, said Chief Executive Official of the UK’s Dragon Capital Group Dominic Scriven.

During his recent talks with Vietnamese young intellectuals and students working and studying in the UK, the executive stressed that a stable, though not strong, recovery seen in Vietnam’s stock market over the last three years is an important sign of the country’s economic recovery because it reflects the general situation in enterprises.

Dominic Scriven hailed the Vietnamese Government for its effort in accelerating the equitisation plans for State-owned enterprises (SOEs), citing successful cases of Vocarimex (Vietnam Vegetable Oils Industry Corporation) and Vinatex (Vietnam Natioal Textile and Garment Group). He added that the process is going to attract great interest from international business communities.

The business leader said young Vietnamese trained abroad are an asset for Vietnam and the country should try to better use this human resource for promoting development.

The Dragon Capital Group put Vietnam’s growth rate in 2014 at 6 percent, the highest level since 2011. Positive indexes were reported, giving out signals of the economy’s new growth period.

Vietnam’s industrial production saws a strong growth, while the country’s financial reforms and economic restructuring reaped remarkable outcomes.-

Incentive policies necessary to develop support industry

More support should be given to several key industries to help add value and increase the localisation ratio of exports, the Industry and Trade Department of HCM City has said in a new report.

The department urged the city to develop incentive policies for support industries, especially for engineering, electronics and garments, and encourage local enterprises to use domestic technology, machinery and materials.

To help businesses, the department said it has provided capital, business space, IT application and re-investment for new technology.

In the near future, the city plans to give priority to increase exports that have special advantages, including high value-added and high-technology exports.

It will also reduce exports of raw materials.

Support industries will be set up in high-tech parks, new export markets will be approached, and high value-added agricultural products and food will be created. More worker training courses are also part of the city's plan.

As for exports, the proportion of technology, processing and manufacturing industries comprise 68.26 percent, more than the city's target of 62 percent by 2020. On a national level, it is 58.5 percent.

The proportion of four key industries in HCM City to total industry increased from 54 percent in 2006 to 59.4 percent in 2014.

For two labour-intensive industries, shoes and textiles and garments, most workshops have been moved to rural areas where industries can take advantage of the supply of labourers.

Value-added processes like design, new models and luxury fashion have remained in HCM City with a proportion of 18 percent.

SSC calls for changes to real estate funds

The State Securities Commission (SSC) has suggested easing regulations in the hopes of developing the investment tool of Real Estate Investment Trusts (REIT), which have been officially permitted in Vietnam since September 2012, but no such funds have been launched so far due to tight restrictions.

REITs are a popular investment in developed countries. By purchasing REIT fund certificates, investors can invest in real estate assets without having to buy property.

The funds were expected to provide a new channel to raise funds for the real estate market and help reduce real estate-related bad debts in banks.

However, current regulations do not allow real estate companies or property owners to contribute property to the funds. The rules also prohibit the funds from borrowing more than 5 percent of its net asset value after its establishment.

Fundraising in recent years has hovered around 50-100 billion VND (2.3-4.7 million USD), much lower than the real value of properties. The lack of capital further impedes funds from seeking investment opportunities. Moreover, unlike laws in other countries, the law includes no preferential tax policies for real estate funds, such as tax exemptions.

Property prices in big cities remain high while rents of office and retail centres will likely continue their downward trend. This not only negatively affects profits of the leasing segment, but also makes financial institutions and real estate companies and investors less interested in REITs.

In an effort to promote REITs, the SSC's Fund Management Department said the commission has plans to change Circular 228, which guides the establishment and management of real estate investment trusts, this year. Contribution of property to REITs would likely be allowed.

To do this, sponsors must register to contribute property that they own, such as shopping malls, apartments or hotels, to the real estate fund management company. Then the property must be approved by the fund manager and its value and business prospects must be evaluated. Finally the property must be issued a valuation certificate and published in the prospectus of the fund.

Assets of the fund are separate from the assets of the fund management company. Ownership of contributed property will be transferred to the real estate fund and sponsors will receive cash or fund certificates for their contribution. The fund manager will register listing and trading of fund certificates on the stock market. In addition, the authority will also consider introducing the accounting method and preferential tax policies for real estate funds in line with international practice.

Credit growth seen in January

Credit growth rose slightly in January, a good start for efforts to achieve a credit growth of 13 -15 percent this year, reported the Cong Thuong (Industry and Trade) newspaper.

According to Hanoi’s Statistics Department, during the first month of this year, total capital mobilisation was estimated at over 1,204 trillion VND (56.4 billion USD) in January, up 1.1 percent against the previous month. Lending rose by 0.7 percent to 1,017 trillion VND (47.7 billion USD).

Meanwhile, in Ho Chi Minh City, bankers mobilised approximately 1,355 trillion VND (63.6 billion USD) in HCM City, up 0.83 percent from the previous month. The city's lending in January has risen by 1 percent to 1,078 trillion VND (50.6 billion USD).

The positive results were attributable to the launch of several credit packages with preferential interests, the paper said.

For instance, VietinBank has offered loans for auto purchase at an annual interest rate of 7 percent, while VIB announced a short-term lending package of 1 trillion VND (47 million USD) at an interest rate of from 8.49 percent for a year.

Most creditors agreed that to achieve the growth target, it is necessary to have further support localities and the State bank so as to deal with bad debts and facilitate enterprises to access available loans.

Economics experts noted that the interest rate was in a downward spiral over the last two years.

Both economists and the National Financial Monitoring Committee recommend bankers to continue following the trend with more interest cut made in mid- and long-term loans.

Maritime Bank allows to acquire textile finance JSC

Maritime Bank (MSB)’s request to take over Textile and Garment Finance Joint Stock Company (TFC) has recently received approval from the State Bank of Vietnam (SBV).

Under Official Letter No.1003/NHNN-TTGSNH, the SBV Governor agreed in principle the merger plan approved by Boards of Directors of MSB and TFC.

TFC is a subsidiary of the Vietnam National Textile and Garment Group (Vinatex).

MSB is requested to complete paperwork required in Point 2, Article 19, Circular 04/2010/TT-NHNN of the SBV on the merger and acquisition of credit institutions.

Provinces highlight tourism contributions

Provinces have given high estimation to travel companies’ contributions to local socio-economic development by making Xong Day “first-footing” visits to some of them on February 19, the first day of the Lunar New Year.

Southern Ba Ria-Vung Tau province officials visited and extended New Year greetings to local tourist companies, marking the activity as a tradition that has been carried out for nearly a decade in the locality.

The visit meant to deliver a wish for a prosperous year for the tourism sector and cement the relationship between the administration and businesses.

Nguyen Van Trinh, Chairman of the provincial People’s Committee, spoke highly of efforts made by the local tourism sector thus far, adding that the quality and diversity of tourism products meeting customers’ demand must be prioritised.

According to Trinh, Ba Ria-Vung Tau received some 14 million tourists last year, earning 3.3 trillion VND (153.8 million USD) in revenues and realising 104 percent of the year’s target.

The visit was held ahead of the 2015 Ba Ria-Vung Tau cultural festival, which runs from February 19 to 28.

Meanwhile, on the same day, in the northern province of Quang Ninh, local leaders received the first tourists to the world heritage site Ha Long Bay.

A traditional music programme was also held to warmly greet those visitors who came from France, the Republic of Korea, and Israel.

More remittances to fund property purchases

Viet Nam is expected to see rising remittances enter the property market, following the amended housing law that allows Viet Kieu (overseas Vietnamese) to own a house in the country.

The amended law, which takes effect on July 1, 2015, will allow those Vietnamese people residing in foreign countries who are allowed to enter Viet Nam, to own houses in the country. The law does not impose any limits on the number of houses or kinds of houses they might own.

In addition, foreigners allowed to enter Viet Nam can also own houses. Foreign individuals and organisations can invest in building houses for giving them on rent.

The new regulations for overseas Vietnamese and foreigners who want to buy houses in the country are more flexible in comparison with the previous regulations, which were so tight that only a little more than 400 overseas Vietnamese and foreigners have managed to buy houses in the country since 2009.

According to Vo Tri Thanh, deputy director of the Central Institute for Economic Management (CIEM), the flexible regulations will attract more remittances into the property sector.

Estimates show that about US$1.5 billion of a total $12-billion of remittances into Viet Nam was used for buying houses and land last year.

Thanh said that the figure will rise in the coming years, when the amended law comes into force.

A research conducted by CIEM and Western Union at the end of last year in seven provinces and cities that receive huge remittances, showed that 30 per cent of the receivers put the money in deposits; 27 to 30 per cent invested the funds in production and services; 20 per cent bought gold; and 16 to 17 per cent bought land and houses.

Experts also said that the amended law will make Viet Nam's property market more appealing to foreigners living and working in the country, and those who desire to invest in its property market.

Richard Leech, executive director of CBRE Viet Nam, was quoted by Dau Tu (Investment) newspaper as saying that the relaxation of regulations marked an important step in widening the door of the property market to foreign investors.

He added that the only two limitations that remain are foreigners are not allowed to own a house for a period exceeding 50 years and the percentage of apartments foreigners can own in a building or an area has been capped.

Leech did not expect any immediate impact of the new law, but said that the housing market will gradually improve.

An increasing number of foreigners are expected to participate in the property market this year, as opportunities are large with the market recovering after having allegedly hit rock-bottom levels.

Vietnamese consumers preferring domestic confectionary to imported ones

Vietnamese confectioners have gained the trust and love of local customers again during recent years, gradually controlling the market in spite of fierce competition from imported foreign confectionary.

Confectionary products imported from other countries, such as Denmark, France and New Zealand, which used to be a favourite among many local customers earlier, have now been replaced by local-made products.

Domestic products from prestigious confectioners, such as the Kinh Do, BiBica, Hai Ha and Huu Nghi corporations, now make up for a major portion of products on sale at many supermarkets and confectionary shops.

Nguyen Thanh Huong, a resident of Hai Ba Trung District, said she will also opt for domestic confectionary as gifts for relatives and friends during this Tet (Lunar New Year) festival.

"Their prices are cheaper than imported ones and the quality is also quite good. I particularly feel secure about the products' origin," she said.

Pham Minh Ha, the owner of a confectionary shop in Hoan Kiem District, said the consumption of domestic confectionary products this year had risen by 1.5 to 2 times in comparison with imported products.

Consumers are turning to buy local products because of their cheaper prices and clear origins, she stated.

"Domestic products' designs have also improved much more, making them more attractive to consumers," Ha pointed out.

The achievement is attributed to businesses' investment in technology renovation, development of strategic products, product design improvement and reasonable prices.

They have also applied international standards to produce safe and qualified products.

For this year's Tet, confectioner Kinh Do corporation produced around 5,000 tonnes of products, while the Huu Nghi corporation produced 13,000 tonnes of products to meet market demand.

The improvement in local products has also drawn notice from many supermarkets, which have started giving priority to local-made products.

The Director of the Co-op Mart Supermarket, Nguyen Tien Dung, said domestic confectionary often makes up for more than 90 per cent of the products on sale at the supermarket.

Local products have a similar design and quality as imported ones and they are also priced affordably, because of which they were chosen by many consumers, he said.

However, with the entry of more foreign brands into the market, such as Tous Le Jour, Paris Bagguette and Lottee, domestic businesses are facing fiercer competition, forcing them to continue renovating technology and focus on the development of key products to maintain a firm position in the market.

Vietnamese consumer confidence "largely intact": Economist

Vietnamese consumers started 2015 with their confidence broadly unchanged after a tumultuous 2014, ANZ Bank Economist Glenn Maguire said in a recent report.

According to the chief economist of the bank, in South Asia, ASEAN and the Pacific, the ANZ-Roy Morgan Vietnam Consumer Confidence index fell slightly to 135.4 in January, down 0.2 points from the previous month, and slightly above the 2014 average of 133.3.

The report said that in terms of personal finances at present, 33 per cent (down 1 percentage point) of the Vietnamese people said their families are "better off" financially than a year ago, compared with 21 per cent (down 1 percentage point), who said their families are "worse off".

Among the respondents, 53 per cent (down 5 percentage points) expect their families to be "better off" financially this time next year, compared with just 6 per cent (up 1 percentage point), who expect them to be "worse off".

Half said Viet Nam will see "good times" financially during the next year and only 14 per cent (down 1 percentage point) expect to see "bad times".

Fifty-seven per cent (down 2 percentage points) expect the country will see "good times" economically over the next five years, compared to 7 per cent (down 1 percentage point), who expect to see "bad times".

Forty-three per cent (up 3 percentage points) said now is a "good time to buy" major household items, compared to 11 per cent (down 2 percentage points), who said now was a "bad time to buy".

Glenn further said that the most interesting aspect of the Vietnamese consumer confidence readings was that the considerable decline in international oil prices has not been able to arrest the modest deterioration in confidence during recent months.

"We suspect that the on-going slowdown in China, and the interaction of that slowdown with the decline in international oil prices, might hold the key to understanding why Vietnamese consumer confidence appears to be underperforming and lead to a pick-up in confidence amongst regional peers," he said.

"To the extent that concerns over China's slowdown are outweighing the positive impact of falling oil prices, Vietnamese consumer confidence might continue to remain ‘sticky' at current levels," he added.

ANZ Bank and Roy Morgan Research had launched the monthly private consumer index for Viet Nam last July, with surveys covering major cities and provinces across the nation.

DATC posts rise in profit in 2014

The Debt and Asset Trading Corporation (DATC) last year bought debts of 36 businesses, valued at VND825.4 billion (US$38.5 million), posting 52 per cent year-on-year increase.

Its total revenue in 2014 reached VND1.03 trillion ($48.1 million), representing a 91 per cent year-on-year increase and 21 per cent higher than the set target. Its posted profit that was 2.54 times higher than of 2013. DATC contributed VND50 billion ($2.33 million) to the State budget.

The corporation said that in the past 10 years, its activities of buying debts and assets from restructured State-owned enterprises have accelerated the change of ownership of companies.

DATC received debts and assets from 2,468 businesses, worth about VND4 trillion ($186.9 million), during the 10-year period.

By the end of last year, DATC had contributed VND558 billion ($26 million) to the State budget during the period. This included buying of assets worth VND440.3 billion ($20.5 million) and collection of debts worth VND20.6 billion ($962,000).

The corporation said that the results achieved from buying of debts in 2014 were a breakthrough.

DATC's total investment in other businesses was VND1.07 trillion ($50 million) through buying of debts, financial restructuring and capital contribution.

Last year, Prime Minister Nguyen Tan Dung agreed to give an additional VND3.1 trillion ($144.8 million) to the corporation's charter capital in the 2014-15 period. Of this, VND2.5 trillion ($116.8 million) will come from the Fund for Business Restructuring and Development, while the remaining will come from other resources.

Viet Nam to boost textile and garment exports

Viet Nam expects to raise its textile and garment production by 20 per cent in order to boost the sector's export value by US$4 billion to $28.3 billion this year.

This is because production costs, including oil and fibre prices, have dropped recently, said Le Tien Truong, General Director of Vietnam National Textile and Garment Group (Vinatex).

Viet Nam also intends to step up its textile and garment exports by 13 per cent to $11 billion in the United States, by 17.6 per cent to $4 billion this year in the European Union (EU) and by 9 per cent to $2.9 billion in Japan this year, he said.

According to the General Customs Department, Viet Nam's export-import turnover touched US$27.17 billion, an increase of 1 per cent from December, and 25.5 per cent from January 2014.

Of that, textile and garment exports rose by 2.1 per cent to $1.9 billion, ranked behind cell phone and spare part exports, which drove up the country's exports by $2.4 billion, an increase of 41 per cent over last January.

The General Customs Department also reported that the United States is still the largest market for Viet Nam's textile and garment products, with an export value of $926.6 million last month, a decrease of 3 per cent over the same period last year.

However, Vietnamese producers saw an increase of 6 per cent to $242 million in textile and garment exports to Japan, compared with the same period last year.

The General Director of Vinatex cautioned that Vietnamese producers will encounter some problems this year.

He said Viet Nam had gained considerable market share in major markets, including the United States, EU and Japan last year, due to which its competitors will also ramp up competition to regain market share this year.

Viet Nam achieved a growth rate of 12.6 per cent in the United States last year, while other major competitors, including China and India, could only achieve a growth rate of below 1 per cent and 6 per cent, respectively.

In Japan, Viet Nam boost its market share to 6.6 per cent in 2014, up 0.6 per cent from 2013, while the biggest exporter to this market, China, cut its share from 70 per cent to 67.2 per cent, Truong stated.

He pointed out that Vietnamese producers also improved their production facilities. However, it will take a long time for these facilities to start functioning properly.

Viet Nam has signed several free trade agreements with some countries and regions, Truong said. But it will take a year and a half for them to be approved.

Truong added that these agreements will help Vietnamese producers create partnerships with their potential customers, till the Trans-Pacific Partnership becomes effective.

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