BUSINESS NEWS 25/6
HCM City’s retail, service revenues reach US$ 19.8 bln in first five months of 2019
According to a report from the Ho Chi Minh City People's Committee, the city earned VND 463,527 billion (US$ 19.8 billion) from retail sales of goods and service in the first five months of 2019, an increase of 12.3 percent over the same period of last year.
Of which, total retail sales and revenue of consumer service were estimated at VND 91,326 billion (US$ 3.9 billion) in May, up 0.9 percent from the previous month and 17.8 percent over the same period in 2018.
Total export turnover of goods was estimated at US$ 15.7 billion, a rise of 7.2 percent over the same period in 2018. The turnover was at US$ 14.8 billion, an increase of 8.3 percent over the same period of last year (excluding crude oil value).
The city’s export markets to some countries as the Philippines, Taiwan (China) and India remain fast growth while exporting to Germany, Australia, Indonesia, Japan and South Korea is struggling a slowdown in the sectors of computers, electronic products, components and vegetables, etc.
In the period, the city’s import turnover of goods was estimated at US$ 19.8 billion, up 5.4 percent over the same period in 2018, focusing on computers, electronic products and components, chemicals, iron and steel, etc.
BZZ offloads GTNfoods shares
BZZ Invest Joint Stock Company has offloaded its entire holding in the Vietnamese food company GTNfoods.
BZZ sold all of its 17.5 million shares of GTN, equivalent to 7 per cent of the total number of voting shares in circulation. It is no longer a shareholder of GTNfoods as of June 4, 2019.
This transaction was completed with an average selling price of VND17,500 (US$0.75) per share, bringing BZZ over VND306 billion ($13.2 million).
In March 2019, BZZ purchased a large amount of GTN shares and became a major shareholder.
At that time, the largest shareholder of GTNfoods was West Ocean Invest Joint Stock Company, holding 28 per cent.
However, on May 31, Vinamilk surpassed West Ocean Invest to become the largest shareholder in GTNfoods by purchasing 90 million shares. After the transaction, Vinamilk holds 95.85 million GTN shares, equivalent to 38.34 per cent.
Thai Binh seeks Singaporean investment
The northern province of Thai Binh called on Singaporean businesses to invest in prioritised projects during a conference held in Singapore on Wednesday.
The projects cover infrastructure and industrial production, transport – especially seaports and transportation networks in economic parks – restaurants, hotels, luxury resorts, urban infrastructure and high-tech farming.
In his speech at the forum, Chairman of the provincial the People’s Committee Dang Trong Thang said his province pays special attention to attracting strategic investors including those from Singapore and will create the best possible conditions for them to operate.
The locality has set aside around 8,000ha for the development of industrial zones, the chairman said. He encouraged Singaporean firms with sufficient financial capacity and business experience to invest in these areas.
He added Thai Binh will continue to foster administrative reform with a focus on simplifying procedures and slashing the amount of time needed to complete necessary investment documents in an effort to improve the investment climate.
Investors at the conference showed their interest in areas such as petrol-chemistry and high-tech agriculture, and raised feasible proposals.
Ahmad Magad, General Secretary of the Singapore Manufacturing Federation (SMF), praised the province’s substantial potential to attract investors, saying that many Singaporean businesses have considered investing in the locality which is offering tax incentives at local industrial parks.
Within the framework of the conference, Thai Binh and the SMF signed a memorandum of understanding to promote co-operation opportunities in the future.
The SMF gathers 3,000 businesses that make up 20 per cent of Singapore’s gross domestic product (GDP) and is an important partner of Vietnamese firms.
According to Thai Binh's portal, the province strives to have 12 industrial zones (IZs) covering a total area of more than 2,500ha by 2020. Seven have been approved for construction while six are already operational.
As of May 25, the province's IZs had attracted 189 projects, including 142 foreign-invested ones, with combined investment capital of more than VND31 trillion (US$1.33 billion).
The province is also home to 45 operational industrial clusters which had lured 380 projects as of May 27.
VFMVN30 becomes largest domestic exchange-traded fund
The portfolio value of Viet Nam's first exchange-traded fund (ETF) VFMVN30 as of June 13 touched VND6.3 trillion (US$272 million), making it the largest domestic stock fund in the market.
The VFVMVN30 ETF is currently approximately the scale of the UK-based FTSE Russell's exchange-traded fund FTSE Vietnam ETF, standing at about $291 million.
Established in 2014, VFMVN30 ETF is the first ETF managed by VietFund Management Joint Stock Co (VFM) with initial mobilised capital of VND202 billion.
The VFMVN30 ETF tracks the performance of the VN-30 Index, a basket of the 30 largest stocks by market capitalisation and liquidity on the Ho Chi Minh Stock Exchange (HoSE).
Despite its relatively young age, in recent years, VFMVN30 ETF has attracted strong capital inflows, especially in the early period of 2018 and early 2019. In 2018, VFMVN30 ETF issued fund certificates worth more than VND2 trillion and in the first half of this year, the fund continued to issue fund certificates worth VND2.2 trillion.
Noticeably, capital inflows poured into VFMVN30 ETF in early 2018 were mainly from Korean investors. Meanwhile, capital inflows in the first half of this year were contributed significantly by Thai investors.
With its scale, each time VFMVN30 ETF restructured its portfolio caused many disturbances for the market, which is previously seen in the portfolio restructuring of ETF funds such as VNM ETF and FTSE Vietnam ETF.
Besides holding a portfolio of stocks in the VN-30 basket, VFMVN30 ETF is also involved in the derivatives market. In April, VFVMVN30 held 4,620 VN30F1905 derivative contracts, equivalent to 2.83 per cent of the open interest (OI), the total number of open or outstanding options and futures contracts.
On June 13, the net asset value/share (NAV/share) of VFMVN30 ETF reached VND14,269 per fund certificate, almost the same as the beginning of the year.
Apart from VFMVN30 ETF, another active domestic ETF fund is SSIAM VNX50 the SSI Asset Management Co (SSIAM).
Vietnamese firms join consultation programme
Sixty Vietnamese enterprises have participated in a consultation programme supported by Samsung experts since 2015, helping to reduce their error rates and improve productivity.
The information was released during a visit to three enterprises in the northern region conducted by Samsung Viet Nam and the Ministry of Industry and Trade on Tuesday as part of the programme. The companies that received visits were Ha Noi CNC Technology Investment and Development Company Limited (CNC Tech), Viet Chuan Joint Stock Company and Thien My Vinh Phuc Company Limited. These enterprises all work in the field of plastic injection, moulding and plastic plating.
After three months of consultations, CNC Tech has been able to achieve remarkable improvement, including a 97 per cent increase in productivity and increased production accuracy (contributing to inventory, delivery and loss analysis management).
Through the programme, Viet Chuan has increased production output by 96 per cent and improved the customer complaint rate by 67 per cent. Viet Chuan has eliminated waste in the production process, stabilising its production line, reducing material costs and raising awareness about warehouse management efficiency.
Choi Joo Ho, President of Samsung Viet Nam Complex, said: “This year we have been focusing on consulting and supporting high-tech enterprises and plastic injection moulding manufacturers, especially conducting in-depth consultation on moulds. This is a field that we are continuing to seek potential vendors and enhance consultation for Vietnamese enterprises to improve their capacity for further involvement.”
He also said Samsung's innovation consultancy model was created not only for enterprises in a specific field but also to support development in many different fields.
“At the same time, the model also reflects our effort to develop Viet Nam’s support industry,” he said.
This has been an annual activity since 2015 within the framework of Samsung’s 12-week innovation consultation programme. In the programme, South Korean experts survey and evaluate business activities, provide direct consultation and work with the Vietnamese enterprises to improve production processes. They help finalise the standards for supply products and components and aid Vietnamese enterprises in joining Samsung's component supply chain. Since 2015, Samsung has carried out nine consultations for 54 enterprises.
This year, Samsung also directly co-operated with experts from the Samsung mould centre to provide consultations for mould manufacturing businesses.
Samsung has a total of 308 suppliers. The number of Vietnamese enterprises supplying Samsung with parts has increased from four in 2014 to 35 by the end of 2018. It is expected to rise to 50 by the end of next year.
Hòa Phát Dung Quất port project gets approval
Dung Quất Economic Zone and Quảng Ngãi’s industrial zone management board have approved a project by Hòa Phát Multi Purpose Port Joint Stock Company to build a general and container port worth more than VNĐ3.77 trillion (US$162.5 million).
The port is expected to process 5-6 million tonnes of goods each year.
In the first phase of the project from 2019 to 2020, the company will build a 300m-long wharf that can deal with cargo vessels with loads of up to 50,000DWT and other facilities to meet import-export demands in Dung Quất Economic Zone.
In the second phase from 2021 to 2024, two other wharves will be constructed with a total length of 450m to deal with vessels with loads above 50,000DWT.
Once the port is operational, it is expected to create regular jobs for 350 local people.
According to the economic zone management board, Dung Quất Economic Zone is developing rapidly and attracting big projects. However, only eight of the existing ports in the zone can deal with vessels with loads of 50,000-70,000DWT.
Last year, as much as 20 million tonnes of goods were transferred via the ports.
Belgian programme supports projects on developing Vietnam
The Belgian Directorate-General for Development Cooperation and Humanitarian Aid (DGD) has recently launched the Business Partnership Facility to support and develop the private sector involvement in Sustainable Development Goals (SDGs) in Vietnam and other developing countries, according to the Vietnamese Trade Office in Belgium.
The programme aims at creating and maintaining jobs, improving average income for families with low incomes, accessing affordable goods and services for low-income earners, and developing projects which have positive impact on the environment through saving resources, reducing emissions and by preserving biodiversity.
Each applicant must be part of a partnership that brings together actors from the private sector, civil society, academia and/or the public sector. The partnership must comprise at least one organisation from the for-profit private sector.
The projects should be planned for a period of 5 years. Funding of up to 200,000 EUR (225,300 USD) is available for each project selected.
Certificate of Eligibility goes online for garment and textile exports
The Ministry of Industry and Trade (MoIT) officially launched an electronic certificate of eligibility (C/E) issuance system for garment and textile exports to Mexico on June 20.
The move is part of the efforts to accelerate administrative procedure reforms and facilitate imports and exports of garment and textiles products in line with the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP).
According to Deputy Minister of Industry and Trade Tran Quoc Khanh, member states of the new-generation trade pact account for 13.5 percent of the global GDP, and the CPTPP is expected to bring them wonderful trade opportunities, particularly in the garment and textile sector.
The MoIT has worked with competent authorities in Mexico to build a rational mechanism to control the flow of garment imports and exports between the two countries, he stressed, adding that the electronic issuance of C/E will help connect supply chains in both nations.
Attending the launching ceremony, Mexican Ambassador to Vietnam Valdes Bolano described Vietnam as a significant trade partner of the American country while speaking highly of the former’s response to its commitments in the garment and textile sector.
Deputy head of the MoIT’s Foreign Trade Agency Tran Thanh Hai said that, along with CPTPP’s documents and commitments so as to enjoy favourable duties, Vietnam should abide by two exchange letters on garment and textile tariff rate quotas and monitoring system signed between the two industry and trade ministries.
In a bid to receive preferential taxes, exporters are required to have certificate of origin (C/O) and C/E, he added.
Japanese-assisted project to improve equity market’s transparency
The Japan International Cooperation Agency (JICA) and the State Securities Commission (SSC) on June 20 jointly held a seminar to launch the “Project for Capacity Building on Improving Fairness and Transparency of Vietnamese Equity Market”.
At the seminar, JICA’s consultant team announced key findings of a baseline survey of Vietnam’s securities market and market participants, which can provide backgrounds for analysis and feasible solutions with priority order to design related capacity building programmes for Vietnamese counterparts.
Addressing the event, Chairman of the SSC Tran Van Dung said that the project is part of the cooperation between the Vietnamese and Japanese Governments to support the Vietnamese stock market, which directly benefits the SSC and the stock exchanges in Hanoi and Ho Chi Minh City.
Dung expressed his belief that the project will make important contributions to the speedy and sustainable growth of the Vietnam’s stock market and the Vietnamese economy in general.
Right after the event, Japanese experts will be sent to Vietnam to start the project, he added.
JICA Vietnam Chief Representative Tetsuo Konaka said that in the future, Vietnam should make improvement in stock market’s equality and transparency, making it a channel to mobilise capital for enterprises.
The official lauded Vietnam’s efforts in the field, including the revising of the Securities Law and the plan to unite the stock exchanges in Hanoi and Ho Chi Minh City.
For more than two decades, the JICA has been supporting the Government of Vietnam to develop market-oriented economy and promote international economic integration through various technical and financial cooperation projects. For the securities sector, it has been supporting many capacity-building activities including joint researches/surveys and training courses on bond and stock markets.
FPT joins IT giants to kick off Airbus's Skywise certified partner program
FPT signed an agreement with Airbus on June 19 in Paris to become one of the aircraft manufacturer’s first Airbus Skywise certified partners, driving digital collaboration across the global aviation industry. IBM, Accenture, Capgemini, and Sopra Steria were also handpicked by Airbus to kick off the program.
Airbus’s selection criteria for certified partners include companies having a global presence, a familiarity with Skywise technology, high-quality human resources, existing business with airlines, and existing business relationships with Airbus.
Skywise certified partners will benefit from dedicated training and certification to help aviation players develop more robust, richer applications within the open data platform. They will also have access to their own working space on Skywise and to additional platform features.
“The beating heart of aviation”, as Airbus calls it, Skywise is a digital, hyper-connected, and secure data platform that enables users to optimize and predict everything from engineering and maintenance to flight operations. Launched at the Paris Airshow in mid-2017, it has grown to become a platform of reference used by 80 aviation players and is expected to welcome dozens more onboard by the end of this year.
“Airbus has introduced Industry 4.0 into aviation through its Skywise platform,” said FPT Software Chairman Hoang Nam Tien. “FPT is proud to stand alongside IBM, Accenture, Capgemini, and Sopra Steria to shape the future of aviation. Our software engineers are working around the clock to develop and deploy Skywise applications for airline applications around the world.”
FPT has been a trusted partner of Airbus since 2017, when the two companies signed a Letter of Intent to strengthen the development of the Skywise ecosystem in Asia. Over the past two years, it has helped Airbus gather, standardize, and integrate data from more than 30 carriers onto the Skywise platform. “The two companies have cooperated comprehensively and extensively,” said Mr. Mathew Evans, Airbus Director of the Global Skywise Project. “Skywise is a global aviation industry project. We are in this together not only for the short term but also for the long future ahead.”
After two decades of leading Southeast Asia in IT services, FPT has recently decided to shift its focus to digital transformation, looking to be named among the world’s Top 50 digital transformation service providers within ten years. The company has partnered with major carriers in Europe, the US, and Vietnam to transform the global aviation industry through disruptive digital services and solutions.
Greek property developer Euroterra Capital makes inroads into Vietnam
Euroterra Capital have made their debut in Vietnam with Denzell as their exclusive partner. The partnership is a keystone to introduce prime development projects in Greece to Vietnam-based investors.
With over 39 years of experience, Euroterra Capital are leaders in the global real estate development and investment industry. The firm has successfully cemented their name as one of the most esteemed developers in Europe with approximately 3 million square feet of residential and commercial space across Europe, including London, Greece, and Bulgaria.
Euroterra Capital places a particular importance on local knowledge and specialises in creating bespoke living spaces to provide both potential investors and residents the opportunity to invest in and be part of the most characteristic developments at the most desirable addresses in Europe.
Pantazis Therianos, CEO of Euroterra Capital, said that we have been paying close attention to Vietnam and we have high confidence in the fast-growing Vietnamese market as it can be seen in the growing number of private equity investments and the government’s support to privatise many state-owned enterprises. We want to offer overseas investment opportunities as a good investment alternative for Vietnamese investors.
He further noted that investing in foreign real estate, especially Greece, is still a new concept to the Vietnamese market. Besides, the Greek economic crisis is still alive in the minds of Vietnamese investors, even though it has been over for a long time now and the economy has been blooming since.
“We try to overcome the challenge by operating trips for Vietnamese buyers to visit Euroterra Capital’s projects after placing a deposit. It will help investors understand more about Greek culture and local people,” he said, noting that the partnership with Denzell will bring Euroterra Capital’s products closer to Vietnam-based investors.
greek property developer euroterra capital makes inroads into vietnam
Denzell Limited is a Hong Kong-based real estate agency with years of expertise in global investment
Denzell is a rising brand for global investment in Vietnam. Denzell Limited is a Hong Kong-based real estate agency with years of expertise in global investment. With offices in Hong Kong, Thailand, and Vietnam, Denzell has established a distinctive presence in the Asia-Pacific region, serving more than 8,000 clients worldwide.
The company collaborates with leading real estate developers from top investment destinations such as Thailand, the United Kingdom, Australia, and Greece to help clients diversify their portfolio strategically and maximise their returns in the long run.
In Vietnam, Denzell will be a bridge connecting Vietnamese investors to globally reputable real estate developments. Recently, Denzell has signed an exclusive strategic partnership with Thai real estate developer Sansiri Public Co., Ltd. in Vietnam at a press conference held in August 2018.
Through the strategic partnership with Denzell Vietnam, Euroterra Capital wants to expand its presence as well as explore the potential of the Vietnamese real estate market. This is also an opportunity for Denzell customers access the firm's trustful and quality investment environment with high-end residential developments in the form of individual houses, apartment blocks, and multi-unit sites.
Since the Greek government launched the Golden Visa programme in 2013, the country has attracted more than9,000 applications from international investors and become the most affordable residence-by-investment programmes that provides access to Europe.
Golden Visa became the most desirable programme at the moment, as not only applicants and their families are able to benefit from visa-free access to Europe’s Schengen area, but also from the return investment from leasing or re-selling property.
Besides, Greece has been a major tourist destination and attraction in Europe since antiquity, for its rich culture and history which is reflected in large part by its 18 UNESCO World Heritage Sites, among the most in Europe and the world, as well as its long coastline, many islands, and beaches.
In May 2019, after Crystal Waters’ tremendous success in Lefkada Island with 150 villas all sold out, Euroterra Capital has launched new projects in Mykonos, the most charming and luxurious island in Greece. This is a development under the Crystal Waters brand, which was founded by Pantazis Therianos, CEO of Euroterra Capital.
Crystal Waters Aquamarine is a magnificent collection of luxury villas within a short distance of the Elia and Agrari beaches. The development will boast Crystal Waters signature features of privacy, luxury, finest design, and stunning sea views. It is situated within a large luxury development where five-star hotels, villas, and high-end communal facilities such as restaurants and bars and a spa will also be constructed. Crystal Waters Aquamarine is primed to become a new global hotspot in Mykonos.
Meanwhile, Crystal Waters is one of the iconic brands of Euroterra Capital. The vision for Crystal Waters was inspired in a return visit to Pantazis’ childhood town. Crystal Waters specialises in creating unique living spaces near the waterfront, with a focus on promoting local culture and traditional living within the communities Euroterra Capital’s builds.
Crystal Waters aims to deliver a network of serviced luxury villas and apartments in exceptional locations around the world, with on-site swimming pools, restaurants, bars, and other resort-style facilities. Widely considered a success in tandem with a boom in the market, Crystal Waters is now expanding into Euroterra Capital’s secured developments in Santorini, Tinos, Mykonos, and other prestigious locations.
Unease over condotel ownership issue
Experts have sounded the alarm over the development of the condotel segment in Vietnam after the first project was forced to revise the ownership duration which it had issued to buyers.
Located in the central city of Danang – one of the cities with the highest number of condotels currently, 586 Company is the owner of a land area which was approved by the local authorities for manufacturing, trading, and service activities and includes condotel units.
In 2008, Danang authorities issued permanent ownership over the condotel units to the buyers of this project. However, the Government Inspectorate last week announced that this condotel project was not permitted to issue permanent ownership to buyers because the units’ approved function is leasing, not living.
Danang authorities therefore had to revise the unlimited ownership to a duration of 50 years, which is the duration applied for commercial and trading properties.
The revision shocked many buyers who had bought a condotel in Vietnam, and developers are also looking it more difficulties in sales when their condotel units cannot be given permanent ownership.
Condotels have been the rising star in the Vietnamese real estate scene in recent years. However, as a novelty it is not fully covered by current regulations. The related laws on Housing and Real Estate Business make no mention of this type of property.
Therefore, according to policymakers, because condotels are built on land areas which have been approved by the government for the purpose of manufacturing, trading, commerce, and services (for trading and for lease), they cannot be given a red book which is given to properties earmarked for residential purposes. However, at present, besides Danang, some other condotels in the south-central provinces of Khanh Hoa and Binh Dinh have also been advertising that they can provide a “red book” representing permanent ownership.
Together with high rental yield commitments, permanent ownership is one of the largest points of attraction among buyers. However, in fact, no condotel units have been granted permanent ownership yet.
According to Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, some local authorities such as Danang have issued permanent ownership for condotels (for leasing only, not for living) which was not in line with current regulations. “Permanent ownership can only be given to properties that are earmarked for living, not for leasing,” Chau said, adding that permanent ownership can be given to two types of properties including land and house for living, and land for graveyards. All other properties are limited in ownership duration of 50 years maximum.
According to Tran Duc Phuong, a lawyer from the Ho Chi Minh City Bar Association, local authorities which had issued permanent ownership to condotel developers will be penalised because this is against the current law.
“Advertisements promising permanent ownership to buyers is a sign of violation as it is a false promise to customers. This issue puts buyers into difficult circumstances as they cannot transfer condotel units to other buyers if they want because the units does not have a red book,” Phuong said.
On the side of policymakers, Nguyen Trong Ninh, head of the Department of Housing Management and Real Estate Market under the Ministry of Construction (MoC), said condotels are in fact hotel rooms and according to current regulations on trading and commercial land usage, they can only have limited-duration ownership. “For any other purposes, we still have to wait for more guidelines from the government,” Ninh said.
According to the MoC, the legal framework for condotels will be released within 2019. In the last three years, condotels have been booming in the coastal localities. In Nha Trang, Danang, Phu Quoc, and Halong, more than 30,000 condotel units were launched into the market as of March 2018. It is estimated that in 2020 there will be an additional 20,000 condotels up for sale.
New SBV regulation to help realty market grow sustainably
The State Bank of Viet Nam (SBV) has recently made public a draft circular on safety limits for banks and called for public comment on the proposed changes. The circular would tighten regulations on lending, especially in the high-end real estate segment.
Nguyen Quoc Hung, director of the SBV’s Credit Department, talked with the media about the issue during a meeting last week
Some are concerned about the draft that will replace Circular 36/2014/TT-NHNN, saying it could have adverse impacts on the real estate market. What do you think?
The draft circular amends a number of regulations related the capital safety ratio in the operation of domestic and foreign banks in Viet Nam. The revision includes a reduction of the ratio of short-term capital for medium- and long-term loans. Under the three-phase roadmap lasting until 2022, the maximum ratio of short-term funds used for medium- and long-term loans will be reduced to 30 per cent by July 1, 2020.
The regulation will be applied to loans in all sectors of the economy, not only the real estate sector.
The change will help the SBV control liquidity risks to ensure the safety of the banking industry in the face of economic changes, contributing to the country’s sustainable development.
The draft circular also sets the risk weight ratio for home purchasing loans worth VND3 billion and above at 150 per cent and the rate for loans worth VND1.5-3 billion at 100 per cent. [The current ratio for both loans is 50 per cent.]
For loans worth less than VND1.5 billion and loans to buy property in social and Government-supported housing projects, the rate is set at 50 per cent.
The regulation is designed to direct real estate credit to people with real housing needs [avoiding speculators] and promote the development of low-cost commercial and social housing as demand in this segment exceeds supply. Therefore, the draft circular would not negatively affect the real estate market.
The adjustment is in line with the Government's policy of fine-tuning legal regulations and mechanisms related the real estate market to ensure the market’s effective and sustainable development as well as the safety of the banking system.
The change is also expected to encourage real estate enterprises to improve their capacity and reputation, which will enable them to raise capital from both domestic and global markets. It will help reduce their dependence on bank loans, which is in line with current international trends.
If the proposed regulations will not have a negative effect, why was the market stagnant in the first months of this year, with declines reported in both supply source and transactions?
The real estate market operates based on the law of supply and demand, and a difference between supply and demand can create stagnation. Many investors focus on high-end or tourist apartments but the demand of the majority of local customers is affordable housing which is in short supply.
In addition, it is normal to see fewer real estate transactions made in the first months of the year after the Lunar New Year due to the habits of local consumers.
Many cities and provinces across the country have strengthened inspections, supervisions and the review process for the approval of real estate projects. Adjustments to the plans of some projects have also caused construction to lag behind schedule.
Recently, there have been many disputes and complaints about the management of residential buildings due to the failure of property developers to meet their commitments. This has led to reduced trust among home buyers.
In my opinion, State agencies need to improve their handling of violations according to the law to regain consumers’ trust. The stagnation of the realty market can also be an opportunity for State management agencies and real estate firms to scrutinise their long-term development orientation, restructure portfolios and improve product quality and financial capacity.
Has credit growth in the real estate sector met the goals of the Government and the SBV so far this year?
By the end of last year, loans to the real estate sector expanded 31.76 per cent (for both realty developers and house buyers).
In the first quarter of 2019, loans of the real estate sector increased by 3.29 per cent compared to the figure at the end of 2018, higher than the average growth rate of the entire economy.
Therefore, it is inaccurate to say the Government tightened credit for the real estate sector. Though we all know real estate is a business with high risks, it does not mean banks restrict loans to the sector. Credit institutions do not lack capital, but to limit risks, they will only lend to effective investment projects with the potential to be highly profitable.
The credit growth for the real estate sector is currently in line with policies of the Government and the SBV, which aim at preventing loans to speculators and providing loans to cheap social and commercial housing projects to meet demand.
Over 500 local, foreign exhibitors to participate in MTA Vietnam
More than 500 exhibitors from 22 countries and regions will participate in the 17th edition of international precision engineering, machine tools and metalworking exhibition (MTA Vietnam 2019) in HCM City from July 2 to 5.
Covering an area of 13,900sq.m, MTA Vietnam 2019 will have 14 international group pavilions from the UK, Germany, South Korea, Japan, Singapore, Taiwan, and Thailand.
Speaking at the press meeting held in HCM City on June 18, BT Tee, general manager of Informa Markets Vietnam, the event organiser, said as many as 80 per cent of exhibitors are foreign companies, including Amada, Sodick, Mazak, Van Su Loi, and CyberTech.
The exhibition will showcase a strong lineup of Industry 4.0 products, technologies and innovative solutions used in the engineering and metalworking industry.
Tokahito Otsu, general director of YAMAZAKI MAZAK Vietnam Co., Ltd, said in addition to introducing advanced machineries, the company will also showcase Industry 4.0 services solutions for customers, including automation solutions that help customers reduce labour costs and improve business efficiency.
Pham Xuan Da, head of the Ministry of Science and Technology's ational office in the southern region, said the mechanical engineering industry plays an important role in the manufacturing and processing industry, which is considered the backbone of the economy as it improves product competitiveness and economic sustainability.
The Government in the past years has issued policies to boost the development of the industry.
In the past few years, the number of mechanical enterprises in Viett Nam increased rapidly, from about 10,000 enterprises in 2010 to more than 21,000 enterprises in 2016, accounting for 28 per cent of total processing enterprises.
In recent years, export turnover of mechanical products has also increased, he said. “Some products that previously we had to import, now local enterprises can produce them.”
Although the industry has achieved certain results, it still has many limitations and weaknesses, including market access, level of science and technology, materials, and human resources.
“Amid the 4.0 revolution and global integration, I have suggested to State agencies and enterprises that they should capitalise on opportunities to boost the development of the mechanical engineering industry,” he said.
The exhibition will be an opportunity for domestic businesses to update new technologies and meet foreign partners, he said.
Held at the Saigon Exhibition and Convention Centre, the exhibition will also include seminars and conferences.
Housing and green bonds are potential growth areas in Asia, says ADB experts
Viet Nam's domestic bond market has rebounded in the first quarter of this year, marking an increase of 0.7 per cent in value of the domestic currency to US$51.4 billion after falling 5.3 per cent in the fourth quarter of 2018, according to the Asian Development Bank (ADB)’s latest issue of Asia Bond Monitor.
ADB said that this growth was due to an increase in the balance of treasury bonds at 0.9 per cent in the first quarter of this year to $47 billion, after a 6.1 per cent decline in the fourth quarter of 2018. In addition, the growth of the Government bond market also offset the 1.3 per cent decline in the corporate bond market in the period.
The quarterly report also showed that the local currency bond markets in emerging East Asia continued to expand over the first quarter of 2019 despite trade conflicts and moderating global growth. Housing bonds and green bonds are potential areas of future growth.
ADB Chief Economist Yasuyuki Sawada said the region’s bond markets are holding firm but the risks are still to the downside.
“That said, we see potential in the development of housing bonds to finance growing demand for homes as countries urbanize and for green bonds to fund clean energy and other climate-friendly projects,” Sawada said.
At the end of March, there were $15 trillion in local currency bonds outstanding in emerging East Asia, 2.9 per cent more than at the end of 2018 and 14 per cent more than at the end of March 2018. Bond issuance in the region, meanwhile, amounted to $1.4 trillion in the first quarter, 10 per cent higher than in the last quarter of 2018 on the back of stronger issuance of government debt.
Emerging East Asia markets comprise China, Hong Kong, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore, Thailand and Viet Nam.
Foreign investors were upbeat on China in the first quarter of this year due to better-than-expected economic performance. Indonesia also enjoyed greater foreign investment but foreign holdings in the Philippines took a hit as investors cashed out profits. Uncertainty over the general election spurred a wait-and-see approach among foreign investors in Thailand.
Government bonds accounted for 61.7 per cent of emerging East Asia’s total local currency bond stock at $9.3 trillion as of the end of March, a 14 per cent increase versus end March 2018. Meanwhile, there were $5.8 trillion in corporate bonds outstanding, 14.2 per cent more than a year earlier.
China remained the largest bond market in terms of size in emerging East Asia, with 75.3 per cent of the region’s total outstanding bonds. Malaysia had the largest market for sukuk, or Islamic bonds, while the Republic of Korea had the largest bond-to-gross domestic product ratio in the first quarter of this year, at 125.6 per cent.
In a special chapter, the report noted that developing a market for housing bonds would increase access to home loans at a time of rising demand and diversify housing finance, traditionally provided by commercial banks. Provision of housing finance through the bond market would also mitigate the maturity mismatch arising between typically long-term borrowing by homeowners and short-term bank loans.
“Developing a housing bond market can help countries raise funds to build more housing units, meeting the increasing housing demand while also contributing to growth and development through job creation,” the report said.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion.
HCM City chairman requires to clarify time to complete projects
Chairman of HCMC People’s Committee Nguyen Thanh Phong yesterday urged his deputies to specify deadline and roadmap for public projects and asked agencies to further take the initiative in carrying out the projects at a meeting on socioeconomic conditions in May and the first five months of 2019.
Investors have been interested in some projects but the city’s implementation has been very slow. So he prompted relevant sides to drastically take action to prevent projects from long lasting or even lasting endlessly as their implementation plays a very important role in boosting the city’s socioeconomic development.
In order to speed up the projects’ progress, from now on the working group on investment in the city which Mr. Phong is leader of will meet weekly. Aside from that, agencies must drastically work and coordinate with each other to speed up the projects’ progress.
He again talked about removal of Sen Hong stage, bus stations and motorbike parking lots as well as exploitation of the underground part at September 23 Park. Previously the chairman assigned the Department of Construction to report about these works before April 30 this year but a month had gone by without completion time specification.
Director of the Department of Construction Le Hoa Binh said that the agency has suggested the city People’s Committee to arrange a meeting for it to specifically report about the issue.
At the meeting, Mr. Phong said that currently HCMC eliminates about 8,900 tons of household waste a day excluding industrial and medical waste. For a long time, the city has majorly buried these waste.
In a conference recently organized to call for investment into waste to energy, many businesses were found elated. However the city has not selected any investor a year after the conference.
Explaining the lateness, director of the Department of Natural Resources and Environment blamed for unreasonable waste treatment price and strict and time consuming bidding process. The process still takes more than 40-50 days after streamlining for getting stuck with common regulations, which cause the city unable to further shorten the investor selection time.
The agency is scheduled to reopen bid invitation in July this year and find investors in the second quarter next year.
Nghe An closes ten mineral mines
The People's Committee of Nghe An province has just decided to close nine mines of stone for construction and one iron ore mine in district of Quy Hop.
The Provincial People’s Committee licensed exploitation certificates of ten mines for nine enterprises in period of 2004 - 2009.
The closure aims to hand over the mining areas to local authorities to serve land management, protection of unexploited mineral resources and adopt relevant tasks based on regulation.