BUSINESS NEWS 23/8
Da Nang city to boost cashless transactions
The central city of Da Nang is making every effort to raise awareness on the benefits of cashless transactions as well as building financial and technical infrastructure for the future development of a cashless society.
The city has implemented a project to help distribute information on cashless transactions to local businesses and people. Da Nang’s State Bank Branch and other credit institutes have taken measures to help customers understand that their rights will be protected and their privacy and conveniences are top priorities.
Credit institutes have been reviewing the city’s POS (point-of-sale) and mPOS network to recall rarely-used POS machines, installing modern ATM machines with a wide range of functions to provide customers with more services as well as online support.
Deputy Chairman of the Da Nang People’s Committee Tran Van Mien said the project aims to change residents’ mindset and perception on cashless transactions, widen the city’s electronic-payment network coverage and cater to the needs of local residents and international visitors.
Despite the rising popularity of cashless payments, especially among youngsters and high-income earners, the city still faces difficulties in getting through to small-time vendors, local markets and restaurants, who prefer cash-based transactions. In addition, there is a lack of financial services designed to support such small businesses.
The city has set a target to bring the amount of cash-based transactions to less than 10 percent and to reach 30 million credit and debit card transaction in 2020. It also plans to upgrade its electronic payment network and develop numerous forms of cashless products.
Financial experts said cashless payments could help propel economic development. US-based Boston Consulting Group said a simplified process of sending and receiving payments can spur growth and boost financial inclusion with economies that are quick to adapt and switch to digital tend to be doing better.
While the outlook of cashless payment development in Vietnam remains positive with the implementation of modern infrastructure and technology as well as the support of the Government, the country is still lagging behind. A CEO of a major e-commerce website in Vietnam said the Vietnamese customer-preferred mode of payment was still cash with 65 percent of buyers prefer Cash on Delivery payment, eight times the world’s average.
Stable outlook for Vietnam’s banking system on robust economic growth: Moody’s
Credit ratings agency Moody’s Investors Service on August 19 said its stable outlook for Vietnam’s banking system reflects the country’s robust economic performance, which will support asset quality and profitability.
According to Rebaca Tan, a Moody’s Assistant Vice President and Analyst, Vietnam’s GDP growth is forecast to moderate to 6.7 percent in 2019 and 6.5 percent in 2020 from 7.1 percent in 2018, but even at these projected rates the country will still remain the fastest-growing economy in the Southeast Asia.
Vietnam’s commercial banks have been cleaning up their balance sheets, supporting asset quality, and problem loan ratio of the bank system is expected to decline to 4.8 percent at the end of 2020 from 5.1 percent at the end of 2018, Tan said.
Capital ratios should remain broadly stable over the next 12-18 months, backed by growth in retained earnings, although a number of banks will need to raise capital to meet stricter Basel II capital requirements while sustaining asset growth.
Profitability will improve as the banks increase their lending to the higher yielding retail and small and medium enterprise (SME) segments, while credit costs will remain stable when banks continue to make provisions against legacy problem assets.
The Vietnamese Government will continue to provide support when needed, mainly in the form of liquidity assistance and regulatory forbearance, as it has done in the past.
Administrative red tape tangles up property firms
Complicated procedures have been hindering the progress of real estate projects in major cities, insiders have claimed.
Vietnam Economic Times quoted comments by the Vietnam Real Estate Association as saying that the real estate market has been stagnant as localities have intensified the inspection of real estate projects and the control of credit flows into the sector has been tightened.
Nguyen Quoc Hiep, Chairman of the real estate company GP Invest, blamed administrative red tape and new regulations for the standstill facing the sector.
“We had completed procedures for our project in accordance with previous regulations, but our efforts were in vain as the Land Law 2014 accompanied by new rules came into force. The current regulations required for real estate projects are extremely challenging to firms,” Hiep claimed. He underpinned his view by preliminary statistics that Hanoi had only six commercial housing projects approved during the first half of 2019.
Nguyen Ngoc Thanh, Chairman of the Haiphong city Real Estate Association, complained that he had taken three years to finalize procedures in relation to adjustments to the planning of a project. While the dossiers were submitted to competent agencies, an official in charge of receiving such procedures was reportedly joining a refresher course and no one was assigned to assume the responsibility.
Capricious inspections of real estate projects have broken out following the official finished the training course. This has incidentally extended the time for adopting the adjustments.
There is no consistency of the laws and regulations related to real estate, subsequently deferring the implementation of investment procedures, Thanh noted.
He explained that the Law on Investment prescribes that in order to become the investor of a real estate project, firms must have the project okayed by competent agencies whilst investors must gain approval for the planning of their project if they want their project to be approved. As a result, a number of investors have finalized preparations for real estate projects but their planning has yet to be ratified due to the administrative overlaps.
Le Hoang Chau, Chairman of the HCM City Real Estate Association (HoREA) said there exist considerable overlaps between the Law on Urban Planning and the Law on Investment regarding the detailed planning and in-principle investment approval of real estate projects.
To overcome these barriers, HoREA called upon the HCM City People’s Committee to assign the Department of Planning and Architecture to receive and handle project documents on detailed planning with the 1/500 scale proposed by investors.
Meanwhile, the Department of Finance and the Department of Natural Resources and Environment should complete the process and administrative procedures related to calculating land use fees for commercial housing projects, in order to save time and increase State budget collection.
In fact, only three commercial housing projects were submitted by the HCM City Department of Construction to the municipal committee for granting investment permits during the first half of this year, representing 16 projects lower than the figure approved in the corresponding period last year, or an annual drop of 84.2 per cent.
The construction department has also sent a list of 10 new commercial housing projects to the municipal committee for approval, dropping by 46 projects or 82.2 per cent on year. Besides, only 24 valid housing projects have been allowed to make debut in the time ahead, plunging by 29.4 per cent on year.
More importantly, there were no affordable housing projects launched to the market during the second quarter of this year. In short, HCM City’s real estate market saw slumps in the first seven months of the year, causing many adverse impacts on other economic sectors.
A large number of real estate developers have been at a complete standstill while some are on the edge of bankruptcy, Chau stressed.
Nguyen Van Dinh, General Secretary of the Vietnam Association of Realtors (VARS), asserted that complicated procedures have been hindering the progress of launching new real restate projects while giving a threat to the balance of supply and demand.
Administrative red tape would also increase time and costs for the implementation of real estate projects, hence making negative impacts on investors’confidence.
Demand for organic fertilisers rising steadily
Many fertiliser companies are steadily increasing production of organic fertilisers since they expect demand to rise sharply over the coming years.
The use of organic fertilisers is on the rise as farmers see improvements in the soil, crops and environment when they dispense with chemicals, they said.
Phan Van Tam, marketing director of Binh Dien Fertilizer Joint Stock Company, told Nguoi Lao Dong (The Labourer) newspaper that his company has been supplying organic fertilisers to the market for three or four years, now produces nearly 20,000 tonnes a year and plans to increase production.
They are produced only at two subsidiaries, Binh Dien - Mekong and Binh Dien - Lam Dong, and so the output is still modest, he said.
Another, Binh Dien Quang Tri JSC, has got a licence and would start producing soon, he said.
In the near future the parent company and Binh Dien Ninh Binh Company would also start production, and the output would increase significantly, he said.
The Ministry of Agriculture and Rural Development's Plant Protection Department has collaborated with major companies such as Loc Troi Group JSC, Con Co Vang Hi-Tech, Que Lam, Phuc Thinh, GNC, Hiep Thanh, and Green Powers to develop organic fertilisers.
Loc Troi, which entered the organic fertiliser market in 2009 with only one product, now has a total of eight, and supplies to the market two million litres and 10,000 tonnes of organic fertilisers annually.
Loc Troi and the department recently signed a deal to enhance production and usage of the fertilisers.
Many companies have shifted to organic products to meet the demand for safe agricultural produce.
According to the Ministry of Agriculture and Rural Development, as of December 2017 the country had only 713 organic fertiliser products, accounting for 5 per cent of total fertiliser output. In April 2019 they had increased to 2,312 and 11.1 per cent.
But the output was still very modest at just 1 million tonnes last year out of 11 million tonnes of fertilisers overall.
The country is striving to increase that to three million tonnes by next year.
Licences have already been issued to produce 3.36 million tonnes a year.
Meanwhile, imports have been skyrocketing in recent years from Japan, the EU, China, Myanmar, Cambodia, and Laos.
The ministry said Viet Nam has great potential in organic fertiliser production since annually 60-70 million tonnes of agricultural by-products and 20 million of seafood by-products are produced.
The by-products can be used as raw materials for making organic fertilisers, but they have not been properly exploited for a long time, it said.
This would also help reduce pollution and improve soil fertility and farm produce quality, it added.
VN imports more petroleum in July
Viet Nam imported more than one million tonnes of petroleum products in July worth more than US$633.2 million, up 99 per cent in volume and 107 per cent in value from the previous month, according to the General Department of Vietnam Customs.
Notably, the import price of petroleum in July was 4.2 per cent higher than in June, reaching more than $600 per tonne.
In the first seven months of 2019, a total of 5.44 million tonnes of petroleum products worth US$3.35 billion were imported, down 30 per cent in volume and 35 per cent in value from the same period last year.
Viet Nam imported petroleum during this period primarily from the markets of Malaysia, the Republic of Korea, Singapore and China.
From January to July, 1.54 million tonnes of petroleum was imported from Malaysia, a year-on-year decrease of 31 per cent. Next was the Republic of Korea with 1.25 million tonnes, down 39 per cent.
Viet Nam also imported 1.29 million tonnes from Singapore and 838,229 tonnes from China during the period, down 29 per cent and 6.4 per cent, respectively.
Banks raise certificates of deposit rates to more than 10%
Banks have increased their interest rates on certificates of deposit (CDs), bringing them in excess of 10 per cent per year with the aim of mobilising long-term capital.
Ban Viet Bank recently announced it was issuing long-term CDs with record high interest rates. Specifically, an interest rate of 10.2 per cent per year is applied for a 60-month CD valued at a minimum of VND10 million (US$430) for individual customers and VND100 million for institutional customers.
The rates for shorter terms of 24, 36 and 48 months are also high at 9.5, 9.8 and 10 per cent per year, respectively.
VIB and VietABank have also issued CDs with high interest rates of 9.1 per cent per year to lure depositors.
The rates at many other banks, such as Sacombank, BIDV, SHB, MSB and SeABank, are averaging at more than 8 per cent per year.
According to experts, CDs are increasingly popular as interest rates are currently some 1-2 percentage points higher than normal savings and they are easy to transfer.
Meanwhile, a bank leader, who declined to be named, said that banks are often willing to mobilise capital via the issuance of CDs with high interest rates when they need capital to fund projects or lend to customers at high lending rates.
Industry insiders also believed banks had to issue CDs at high interest rates as they faced difficulties luring long-term capital.
Many banks are in dire need of long-term capital as their ratio of medium- and long-term capital out of their total capital remains limited. According to State Bank of Viet Nam (SBV) regulations, banks must reduce their short-term funds for medium- and long-term loans to 40 per cent from this year against last year’s rate of 45 per cent.
Banks also need more capital to meet a capital adequacy ratio (CAR) of 9 per cent in 2020 as per the SBV’s Basel II norms. Fitch Ratings estimated the Vietnamese banking system could face a capital shortfall of almost $20 billion to meet the standards.
However, experts are also concerned that the rate hikes would cause a domino effect on interest rates of long-term loans.
Blockchain tech is applicable in many banking activities: expert
Blockchain technology can be used in many different fields of modern economics, especially banking activities, banking expert Can Van Luc has said.
Blockchain helps save time and costs for businesses and government agencies when they make payments via international banking networks for trade activities, he said at a workshop on Sunday in HCM City.
Stakeholders in a trade deal can replace paper with e-paper, which can be uploaded onto the blockchain platform, then it will become shareable, Can said.
Doing business online using blockchain platforms is time-saving and cost-saving because it takes seconds to connect to each other and stakeholders don’t have to contact through brokers like they used to, he said.
The information of the deals will remain confidential because the data uploaded onto the blockchain platform cannot be changed without stakeholders’ mutual agreement, he added.
“Beside payments, blockchain technology is also used for other financial tasks such as transaction settlement, lending, crowdfunding, securities trading activities, tax collection and auditing,” Can said.
Viet Nam is among the world’s top 20 countries in terms of the number of internet users, social network users and smartphone users. In addition, the young population, fast internet development and increasing e-payment are other factors that make Viet Nam favourable for blockchain technology.
However, there are still difficulties and challenges for blockchain development in the country. The biggest challenge is changing the habits of businesses, consumers and government agencies, according to Luc.
There is no specific legal framework to supervise new tech-based business models such as lending, fintech and digital asset management. Meanwhile, there is a lack of good-quality labourers to develop products and services on artificial intelligence (AI), blockchain and big data. In addition, Viet Nam is vulnerable to cyberattacks.
Apartment buildings to have co-holders of maintenance fund
The Ministry of Construction’s latest draft regulations on apartment building management and use stipulates that there should be three to five co-holders of the apartment maintenance fund.
They include one representative for the apartment owners, one representative for the investor and other members of the apartment management board up for a vote at an annual conference.
Nguyen Manh Khoi, Deputy Director of the Ministry of Construction’s Housing Management and Real Estate Market Management Agency, said the conference will also decide co-holders of the apartment maintenance fund.
In addition, Khoi said the withdrawal of funding as required needs approval from all members of the apartment management board.
Nguyen Minh Tuan, chief executive officer of VietBuilding Management Co Ltd was quoted by the Dien dan Doanh nghiep (Business Forum) newspaper as saying that "as a person working in the management of real-estate and buildings, I think the draft is useful and should be issued soon."
As a business, Tuan said VietBuilding currently manages 12 buildings in Times City. Each building has five co-holders of the apartment management fund, including three members who are residents of that building, one representative who is the head of the Management Board and one representative of the investor.
For its other projects, it is possible to add one owner of another area, such as commercial and office areas, and management board members decided by the residents.
The investor should be one of the account holders of the apartment maintenance fund, Tuan said.
A representative of the HCM City Real Estate Association said the account holders must have at least two from the apartment management board to avoid abuse of power. Moreover, the State needs to require apartment management companies to prove their financial ability to afford civil compensation when accidents occur.
Mud drilling firm revenue down a third in Q2
PetroVietnam Mud Drilling Corporation has reported its Q2 revenue dropped 34 per cent year-on-year to VND413 billion (US$17.76 million).
However, as gross profit gained 22 per cent year-on-year to VND63 billion, the company recorded VND16 billion in Q2 post-tax profit, almost double last year’s figure.
According to the company, sales of drilling liquid increased and helped boost gross profit. Meanwhile, the decline of revenue came after the firm shut down its plastic bead business.
In the first two quarters of the year, PetroVietnam Mud Drilling Corp earned nearly VND987 billion in revenue, down 13 per cent year on year.
The company saw its net profit reach VND20.6 billion from last year’s two-quarter loss of VND6.6 billion.
In 2019, the firm targets to record VND1.96 trillion in total revenue and VND170 million in post-tax profit.
By June 30, total assets reached VND1.88 trillion, which included VND866 billion worth of collectables, VND350 billion worth of cash and savings, and VND337 billion worth of stockpiles.
The company saw its short-term loans and financial debts fall to VND398 billion in the first half of the year from VND603 billion at the beginning of January.
The company shares are listed on the Ha Noi Stock Exchange, ending Monday down 1.4 per cent at VND7,300 per share.
KDF achieves 17 per cent revenue growth as ice-cream sales zoom
KIDO Food (KDF) has reported a 17 per cent rise in revenues in the first seven months to VND938 billion (US$40.4 million).
In July they surged 80 per cent to over VND171 billion ($7.4 million), with the company attributing to soaring ice-cream sales.
In a release, KDF said: “Sales have grown strongly through modern retail channels including mini-marts in major cities. This new trend has helped the company widen its network.”
Products sold at this channel have jumped 40 per cent this year, it said.
Other reasons for the jump in revenues were the launch of new products and the good weather condition, it said.
The gross profit for the first seven months was VND570 billion ($24.6 million), up by 35 per cent year-on-year, with the July numbers skyrocketing by 128 per cent to VND109 billion ($4.7 million).
Profit before tax was VND155 billion ($6.7 million) against a full-year target of VND150 billion ($6.5 million).
KDF said it plans to further study consumer tastes to diversify its products expand its distribution system.
KDF is a subsidiary of food producer KIDO Group, which launched it in 2003 after acquiring the Wall’s ice-cream plant from Unilever.
KDF is now a giant in the chilled foods sector with a 40.2 per cent share of the ice-cream market.
Techcombank to issue 3.5 million shares to employees
The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) plans to issue more than 3.5 million shares for its employees in the form of an employee stock ownership plan (ESOP) at the price of VND10,000 per share.
Techcombank said in a statement that of the total, 325,000 bonus shares will be set aside for the bank’s foreign employees while the remaining shares will be for Vietnamese workers.
The issuance will take place this year after it is approved by the State Securities Commission. The bonus shares will be available for trading.
At Techcombank’s annual general meeting in April, the bank’s shareholders approved a plan to issue 10 million shares under the ESOP programme at a price of VND10,000 to increase its charter capital to more than VND35 trillion.
Techcombank has targeted pre-tax profit of more than VND11.7 trillion (US$504.3 million) for this year, which would represent a 10 per cent year-on-year increase.
The bank also plans to increase its total assets by 17 per cent to VND375.8 trillion this year while holding outstanding loans at VND245.4 trillion, up 32 per cent from last year. Its bad debts will be limited to less than 2.5 per cent in 2019.
Techcombank posted a pre-tax profit of VND5.7 trillion and revenue of VND9.1 trillion in the first half of 2019, up 32 per cent and 19 per cent from the same period last year, respectively.
Techcombank's shares ended Monday’s morning trading session at VND21,500 per share, down 1.8 per cent from the end of last week.
VN firms must act fast on digital transformation or be left behind: FPT executive
Vietnamese businesses need to consider digital transformation soon in order to not be left behind in the ongoing industrial revolution, Phan Thanh Son, chief business development officer of FPT Information System, told Viet Nam News.
On the sidelines of a forum on August 17, he said: “Digital transformation is no longer a matter of should or should not, but a must; businesses that do not partake in this may not survive in a new digital economy.
“Businesses have to adopt it; it is only a matter of when and how quickly.”
The old economy was slowly becoming more and more “inappropriate,” while new economy models such as Uber and Grab were being created in place of old models.
Adopting digital transformation helped businesses improve the experience of customers, who were demanding more and more from them.
Workers of the future would also come from a digital age, with different mindsets and expectations, and businesses had to adapt so that they would have room to be innovative and contribute.
Businesses could also create or partake in new business models and operate more efficiently.
Viet Nam adopted new technologies relatively quicker than other countries, especially thanks to its youths and its telecommunication infrastructure which had seen great improvements.
Many sectors such as agriculture were adopting digital technologies and improving productivity.
But some were doing it at a slow rate, still not fully aware of the danger of being left behind as a result.
Neither were they fully aware of the opportunities it brought.
There had not been enough investment in creating a workforce that could support the digital transformation; it had only starting recently.
Many universities lacked streams such as AI and data science.
Authorities were aware of the importance of digital transformation and making efforts to raise awareness of this and programmes to push for it.
Businesses were now more aware of digital transformation, and while some remained sceptical, others were seeing the real challenges and beginning to take actions.
Business leaders were looking into it.
Each business should “think big, do smart and scale fast” when it came to actions and digital transformation programmes.
Vinafood 2 maintains losses in first half
In the first half of the year, the profit of Vinafood 2 remained negative, and inventories were 83,313 tonnes of rice short.
Vietnam Southern Food Corporation (Vinafood 2, UPCoM: VSF) has just announced its consolidated financial statement for the second quarter of 2019.
Accordingly, as of June 30, 2019, the total assets of Vinafood 2 rose by 7.6 per cent to VND9.571 trillion ($416.13 million), including increases of 20 per cent in short-term assets to VND4.867 trillion ($211.6 million) and 80 per cent cash to VND1.1 trillion ($47.83 million), mainly in bank deposits.
During the quarter, the inventory of Vinafood 2 reduced by 7.6 per cent but remained at a high level of VND2.604 trillion ($113.22 million), including products, goods, materials, and goods sold.
Notably, the inventory of the corporation was 83,313 tonnes of rice short of its paper records, equivalent to VND662 billion ($28.78 million) from Honda Imextravinh. Meanwhile, the Thot Not branch was missing VND220 million ($9,560) worth of goods as of April 20, 2019.
At the parent company, 1,521 tonnes of goods, which were insured to be exported to the Philippines, were missing. This amount will be offset by the insurance company. However, on June 30, 2019, this case had yet to be handled so it was entered under the "missing property, pending processing" title.
The bad debts of Vinafood 2 amounted to VND1.3 trillion ($56.52 million) as of June 30, 2019, while short-term loans increased by nearly 17 per cent to VND3.853 trillion ($167.52 million).
In the second quarter of 2019, Vinafood 2 gained VND4.97 trillion ($216.1 million) in net revenue, while expenses were VND394 billion ($17.13 million), interest of loans was VND58 billion ($2.52 million), sales expenses were VND299 billion ($13 million), while corporate management costs were VND97 billion ($4.22 million).
Thereby, net profit was negative VND93 billion ($4.04 million), while pre-tax profit was negative VND86.3 billion ($3.75 million) and after-tax profit was negative VND91.5 billion ($3.98 million).
In the first half of the year, Vinafood 2 lost VND75 billion ($3.26 million), while net revenue was VND8.652 trillion ($367.17 million), and gross revenue was VND866 billion ($37.65 million).
The two largest shareholders of Vinafood 2 are the state (holding 51.43 per cent) and T&T Group (25 per cent).
Last month, Vinafood 2's Board of Management cancelled the 2019 annual general meeting of shareholders scheduled for July 31.
The stocks of Vinafood 2 were listed on the UPCoM on April 23, 2018. They are now traded at VND7,100 apiece now, down 40 per cent compared to the VND12,000 peak on last March 12.
MobiFone's bright performance before equitisation
MobiFone reported more than VND13.4 trillion ($582.6 million) in bank deposits, painting bright prospects for its upcoming equitisation.
Prime Minister Nguyen Xuan Phuc on August 15 officially approved the decision on equitising 93 state-owned companies until 2020. The name drawing the most attention is MobiFone, which is put on the table after dozens of failed equitisation attempts.
As of the end of June 30, 2019, MobiFone’s total assets reached VND29.181 trillion ($1.27 billion), down 4 per cent against earlier this year. The value of state-owned capital was VND15 trillion ($652.17 million), investment fundsfor development also contributed VND5.08 trillion ($220.87 million), and undistributed profit was VND150 billion ($6.52 million).
In addition, its revenue hit VND15.168 trillion ($659.48 million), down 12 per cent on-year. Pre-tax profit also reached VND2.644 trillion ($114.96 million), up 8.6 per cent on-year, and after-tax profit was VND2.115 trillion ($91.96 million), up 8.4 per cent on-year.
At the time, MobiFone had VND11.678 trillion ($507.74 million) and VND1.745 trillion ($75.87 million) in bank deposits and cash. Bank deposits include VND8.445 trillion ($367.17 million) in capital and VND329 billion ($14.3 million) in interest. MobiFone gained VND418 billion ($18.17 million) from bank interest during the first half, five times as much as last year.
2018 was a tough year for MobiFone because many former leaders and key executives were prosecuted for purchasing 95 per cent of Audio Visual Global JSC’s (AVG) shares. Accordingly, MobiFone forked out VND16.565 trillion ($720.22 million), while AVG’s real valuation was VND1.983 trillion ($86.22 million).
The upheaval in personnel made MobiFone only able to achieve 50-70 per cent of its targets on signing contracts and revenue in 2018. Despite, the telco also got VND38.883 trillion ($1.69 billion) in integrated revenue, down 12 per cent on-year, and VND5.919 trillion ($257.35 million) in pre-tax profit, up 27.5 per cent on-year.
The large local interest in services like Zalo, Viber, and Skype have been impacting MobiFone’s telecommunications business. Therefore, the company has shifted to invest more in 3G, 4G, and even 5G several years ago. The growth of data in Vietnam remains at 22.5 per cent annually – a great opportunity for telcos.
Its plan in 2019 is to ensure full 4G coverage across the country and begin testing 5G. In addition, the company will also boost investment in technology projects to serve its data business like Internet of Things (IoT), M2M, Big Data, cybersecurity, and others.
The Ministry of Information and Communication also granted a license for MobiFone to test 5G in Hanoi, Danang, Haiphong, and Ho Chi Minh City between April 23, 2019 and April 22, 2020).
Giants like MobiFone, Agribank, and SJC set to be equitised next year
Only 15 months remain for 93 state-owned enterprises and groups, including MobiFone, Agribank, SJC, VICEM, and Vinacomin, among others, to finish equitisation.
Prime Minister Nguyen Xuan Phuc has just issued Decision No.26/2019/QD-TTg approving the list of corporations to be equitised by 2020.
Accordingly, 93 corporations must finish the process by the end of 2020, including big-shots like Agribank, SJC, and MobiFone.
Specifically, these 93 SOEs include four where the state holds at least 65 per cent of the capital, namely Agribank, Vinacomin (code: TKV), Vietnam Northern Food Corporation (Vinafood 1), and Vietnam Mineral One Member Co., Ltd.
Additionally, there are 62 enterprises where the state owns 50-65 per cent of the charter capital, including MobiFone, VNPT, Vinacafe, Vietnam Cement Industry Corporation (VICEM), Hanoi Transport and Services Corporation (TRANSERCO), and Urban Infrastructure Development Investment Corporation (UDIC).
Lastly, there are 27 firms where the state holds less than 50 per cent of the charter capital, such as Housing and Urban Development Corporation (HUD), Vietnam Paper Corporation, and Saigon Jewelry Co., Ltd. (SJC).
The prime minister asked the SOEs to complete the equitisation according to the timeline. Every quarter and before September 20, 2020, ministers and the heads of cities and provinces and SOEs must report on their progress to the Ministers of Planning and Investment, Finance, and the Steering Committee for Innovation and Development of Enterprises which will in turn report to the prime minister.
Fintech firms need clear policy to develop
Vietnam needs a proper legal framework for financial technology (fintech) services, a State Bank of Vietnam (SBV) official said on August 20.
Ngo Van Duc, Deputy Director of Payment Method Supervision at the State Bank of Vietnam, said there was no law or regulation on the management of fintech businesses and their services.
The development of fintech businesses had not met expectations in recent years, he said.
According to the SBV, there are now about 150 active fintech firms – most of which focus on payment methods – and 30 companies that are licensed by SBV and operate as payment middlemen.
Fintech businesses are also in other fields such as bank lending, electronic confirmation, blockchain applications and individual financial services.
Therefore, a fintech law must be provided to protect the rights and benefits of both service suppliers and customers, Duc added.
Fintech helped ease financial and monetary transactions, making them more convenient, more accurate and faster. But it also means fintech firms may find opportunities to carry out illegal activities.
Regulations often tighten the operation of fintech firms, not foster the conditions for them to function, said lawyer Phung Anh Tuan, deputy chairman and general secretary of the Vietnam Association of Financial Investors (VAFI).
Two decrees were issued by the Government in July 2016 and February 2019 to replace Decree 101/2012/ND-CP regulating cashless payment. The two decrees cap the limit of foreign ownership in local fintech firms at 30 percent of 49 percent.
Meanwhile, maximum purchase of a personal e-wallet is 20 million VND each day and 100 million VND each month while that of an institutional e-wallet is 100 million VND each day and 500 million VND each month. Each person can only use one e-wallet provided by the fintech firm.
“Fintech companies need foreign capital to develop further, invest more in technology, marketing and human resources. The limit of foreign capital inflow may hinder their growth,” Tuan said.
Duc said the central bank had almost completed the policy on piloting a regulatory sandbox – in which government agencies and businesses are free to experiment with new ideas – and it would submit the plan to the Prime Minister for approval.
The policy aimed to create a suitable environment for businesses to test their products and services and meet market demand, he said.
In 2019-20, the central bank would continue improving its payment-related policies, especially electronic payment, and create a test management mechanism for fintech firms after its regulatory sandbox policy was passed.-
Made-in-Vietnam social network Lotus to make debut
VCCorp has informed that the pilot version of its “Lotus” social network will officially be launched on September 16.
The project has been developed by over 200 technical engineers of the firm, who are working in various fields of mobile application, artificial intelligence (AI), and Big Data.
The social networking project was established, invested and implemented by VCCorp, with the participation of domestic companies and individuals.
Designed by a group of user-experience experts, Lotus is a social network that goes in a different direction with the content as its focus, thus creating an effective platform to support content creators and individuals to create better contents for users.
It will be made public in two forms on the website at http://lotus.vn, and mobile app.
Shrimp export to China sees positive signs
Vietnam’s shrimp export value to China in July saw a year-on-year increase of 48 percent, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
The strong growth in July helped the seven-month figure improve by nearly 2 percent.
Shrimp exports to China were gloomy in the first five months of this year as the Chinese Government tightened control over cross-border trade and food safety. However, official exports by sea are likely to increase, as seen in the 1.5-fold increase in sea shipments of white-leg shrimp to China in June compared to May.
This trend is expected to bring positive results for the shrimp sector in the last months of 2019, the association forecast.
After continuous declines in the first months of the year, overall shrimp exports also began to recover in July with an increase of 13.4 percent and reached 334 million USD thanks to businesses’ efforts to boost sales to such major markets as the US, China, and Australia.
Vietnam aims to earn 4.1-4.2 billion USD from shrimp exports this year, higher than 3.6 billion USD recorded in 2018, according to the Directorate of Fisheries under the Ministry of Agriculture and Rural Development.
Vietnam’s total export turnover from aquatic products in the first seven months of 2019 reached 4.7 billion USD, nearly equal to the same period last year.
Biwase, Vietinbank form comprehensive partnership for water supply
The Binh Duong Water – Environment JSC (Biwase) and the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) signed a comprehensive credit cooperation pact in the southern province of Binh Duong on August 20.
The partnership will enable Biwase to implement a series of large-scale projects on water supply and wastewater treatment for 2020 – 2025. These projects are worth 4 trillion VND (172 million USD) in total, of which 3 trillion VND is loans.
The two sides have a history of collaboration in terms of credit services, trade finance, and international payment.
Currently, the bank is providing Biwase with credit packages worth over 600 billion VND.
Biwase’s water supply capacity exceeds 450,000 cubic metres per days, serving demand across Binh Duong and a number of localities in the neigbouring Binh Phuoc province.
Largest ever trade fair of medical-pharmaceutical industry slated for September
The 14th edition of the Vietnam International Exhibition on Products, Equipments, Supplies for Medical, Pharmaceutical, Hospital & Rehabilitation will take place in Ho Chi Minh City from September 11-14.
Nguyen Dinh Anh, director of the Department of Communication, Emulation and Awards under the Health Ministry, said the exhibition will be the biggest of its kind so far with 600 pavilions.
Exhibitors will come from 25 countries and territories worldwide, with Germany attending for the first time.
The event is the place to introduce the latest advances and development of the medical and pharmaceutical industry both in Vietnam and the world.
It also provides a venue for manufacturers to seek customers, and for Vietnamese hospitals and doctors to shop for new equipment and technologies.
Within the framework of the exhibition, several workshops will be held on latest legal documents regarding pharmaceuticals and medical equipment, new medicines and technologies, and advances in cancer diagnosis and treatment.
Officials stress connectivity in central region’s development
Officials attending a conference on August 20 underlined the need to promote connectivity among central localities so as to create a driving force for economic growth of the whole region.
The central region consists of 13 provinces and one city, stretching from Thanh Hoa to Binh Thuan. As part of it, the central key economic region comprises Da Nang city and the provinces of Thua Thien-Hue, Quang Nam, Quang Ngai and Binh Binh.
At the conference held in Binh Dinh province, Secretary of the Quang Nam provincial Party Committee Phan Viet Cuong said with enormous potential and advantages, the localities in the central key economic region are aware of the importance of regional connectivity so as to optimise advantages of each of them with the ultimate goal of sharing long-term interests and improving their stature.
To make connectivity policies effective, at first, it is necessary to perfect institutions and enhance their realisation, and this work should be piloted in the central key economic region first.
He said pending the building of a plan for the whole region, the Ministry of Planning and Investment (MPI) should coordinate with the central key economic region’s council to make plans on the arrangement of economic sectors and development fields in the region; the building and upgrade of local infrastructure, especially transport facilities; human resources development; and climate change response.
The Government and the MPI need to consider adjusting the targets and size of economic zones, industrial parks and hi-tech parks in the central key economic region, Cuong said, adding that they should also weigh the delegation of power to economic zones’ management boards.
Meanwhile, Chairman of the Binh Dinh provincial People’s Committee Ho Quoc Dung said to step up attracting investment, promote the central region’s development and capitalise on local advantages, the Government needs to direct the early building of an overall plan for the region in accordance with the Law on Planning. This plan needs to clarify orientations for the development of the central region in relation to the Central Highlands region and the East-West Economic Corridor.
The central key economic region holds a special role in terms of defence, security and socio-economic development of the country. It currently houses four coastal economic zones, four deep-water ports and four airports, which is favourable for industry, logistics, seaport and tourism services.
However, compared to the northern and southern key economic regions, the central one is still lagging behind, Dung noted.
The official asked the Government to accelerate the construction of the North-South Expressway, part of which will traverse Quang Ngai, Binh Dinh and Phu Yen, along with a coastal road connecting central localities, so as to facilitate goods transportation and tourism.
He also proposed transport facilities be built and upgraded to link coastal central localities with Central Highlands provinces and bring into full play their role as a gateway to the sea of the Greater Mekong Sub-region’s countries.
Echoing the view on the need to boost transport infrastructure, Minister of Transport Nguyen Van The said his ministry has determined the mechanisms for mobilising and using resources for local transport infrastructure development. As a result, transport infrastructure has been gradually improved, creating better connectivity for the region and the whole country.
However, he also admitted a lack of expressways through the region, inter-connected roads among localities, as well as the connectivity among different means of transport here. He called on the Government to remove bottlenecks in transport infrastructure development to fuel economic growth in the time ahead.
At the conference, Minister of Culture, Sports and Tourism Nguyen Ngoc Thien also highlighted the need for tourism connectivity to optimise advantages in this field of each locality.