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Instead of the modest contribution made previously, the insurance business segment, or bancassurance (banks co-operate with insurers to sell insurance products), has now become the main source of income from service activities for many banks.

For the Military Commercial Joint Stock Bank (MBBank), revenue from services in the first half of this year surged sharply by 86 percent over the same period last year to more than 1.81 trillion VND (77.68 million USD).

MBBank’s impressive result was mainly thanks to the strong rise in its bancassurance business, which contributed about 60 percent to the bank’s total profit from service activities.

The good performance in the service business segment, together with credit, helped MBBank earn pre-tax profit of nearly 4.88 trillion VND in H1 this year, up 27.3 percent year-on-year.

The same trend was also reported at the Tien Phong Commercial Joint Stock Bank (TPBank). While income from the bancassurance service in Q1 last year contributed only 17 percent to the bank’s total service revenue, the ratio surged to 31 percent in Q1 this year.

Bancassurance became the strongest-growing service business segment for TPBank in Q1 2019 when it increased five times over the same period of last year, from 17 billion VND to 86 billion VND.

The high growth momentum continued for TPBank in Q2 2019. The rise helped the bank’s income from bancassurance reach more than 249.4 billion VND in the first half of the year, which doubled that in the same period of 2018 and accounted for 41 percent of the bank’s total service income.

The contribution of bancassurance helped TPBank gain profit of 1.62 trillion VND in H1 this year, an increase of 1.5 times over the same period of 2018.

The bancassurance business segment was also the biggest earner at the Vietnam International Commercial Joint Stock Bank (VIB) as it is a big partner of insurer Prudential Vietnam. VIB distributes more than 75 percent of Prudential Vietnam’s bancasurrance products. VIB’s profit from services in H1 2019 skyrocketed by 142 percent to 764 billion VND in H1 2019.

For the Asia Commercial Joint Stock Bank (ACB), the bank estimated to earn some 350 billion VND from bancassurance in H1 2019, 2.5 times higher than the same period of 2018. The result helped the bank rank fourth in revenue and second in profitability of bancassurance services on the nation’s bancassurance market.

In 2019, the bancassurance segment is expected to bring revenue of roughly 600 billion VND for ACB, three times higher than last year. The bank is also considering further cooperation with more insurers in 2020 to further cash in from the potential business segment.

According to experts, revenue from service activities, particularly bancassurance, will be continually on the rise and considered as the ‘goose that lays golden eggs’ of many banks in the future.

Analysts from the Saigon Securities Incorporation (SSI) forecast insurance premiums through bancassurance will grow by about 30-40 percent this year. It will also become one of the most preferred sales channels of the insurance market, contributing 14 percent to total insurance premiums.

Experts also said increasing profit from service fees in general and bancassurance in particular is the right strategy of banks in the context that the central bank is increasingly tightening credit growth.

According to banking expert Nguyen Tri Hieu, the bancassurance channel has high growth potential, given the rising number of middle and high income earners and better awareness on insurance of local people.

Hai Duong approves seven projects worth 11.6 mil. USD

Earlier this month, the Hai Duong People’s Committee granted in-principle approval for seven new projects valued at more than 267 billion VND (11.6 million USD) in total.

Among these projects are a 97 billion VND convention centre and office project, to be financed by Phu Thai trade and investment company; a 50 billion VND project producing electronics components to be funded by HTV investment and development company; and a petroleum trading project, to be developed by Anh Khoi trade and service company at a cost of 36 billion VND.

In addition to domestic investors, Hai Duong has also emerged as an attractive destination for foreign investment in recent years.

Statistics from the Ministry of Planning and Investment’s Foreign Investment Agency show that the province lured 450 million USD in foreign direct investment (FDI) in the first half of this year, ranking 10th among the 46 localities that received FDI in the period.

Of the total, 326 million USD came from 38 newly licensed projects while the remainder was added to 14 projects already in operation.

As of June this year, Hai Duong was home to 438 foreign-invested projects with capital totalling more than 8.15 billion USD, retaining its position as one of the top ten localities in the country in terms of attracting foreign capital.

In order to lure more investment capital, the province should continue working on administrative reforms, especially in the fields of taxes, fees, land and social insurance, as well as reducing the burden on enterprises during inspections, analysts have said.

They also highlighted the need to improve business consultations and promote the role of provincial business associations to consolidate the trust of the business community, adding provincial leaders and localities need to hold more dialogues with business communities to solve pressing problems quickly.

Ho Chi Minh City pours investment in infrastructure in south

Ho Chi Minh City will continue to invest in transport infrastructure in its south, according to a report by its transport department.

The southern area is comprised of districts 7, Nhà Bè and Bình Chánh.

Tran Quang Lam, director of the Department of Transport told Sai Gon Giai Phong (Liberated Sai Gon) newspaper that Huynh Tan Phat and Le Van Luong streets in District 7 would be upgraded and Nguyen Huu Tho Street widened from four lanes to six or eight.

Three bridges would be built to replace the decrepit Rach Dia, Long Kien and Rach Tom bridges.

This year the department plans to start construction of the Nguyen Khoai Bridge over the Kenh Te canal to connect districts 4 and 7.

The bridge will cost 1.2 trillion VND (51.8 million USD).

It is expected to reduce congestion on the Kenh Te Bridge during peak hours.

The department also plans to upgrade National Highway No.50 between the city and Long An province.

According to the department, the People’s Committee has approved 830 billion VND for building two tunnels at the Nguyen Van Linh-Nguyen Huu Tho intersection.

The tunnels will have a length of 480m and width of 13.7m.

They are expected to ease the congestion at the intersection.

The city will also continue to solicit investment in and speed up procedures for public-private partnership (PPP) projects.

In the last decade the southern area has got many infrastructure projects, with the city spending 115 trillion VND (4.9 billion USD) last year alone.

With development, the city hopes the southern area will ease the population burden in the more central areas.

Securities firms dominate derivatives broking activities

After two years of operation, smaller securities firms in terms of market capitalisation have beaten big players in derivatives brokerage market share.

In the early stages of the derivatives market, which was launched on August 10, 2017, SSI Securities Corp (SSI) held the biggest market share of 28.28 percent. It was followed by six other brokerage firms.

As of the end of 2018, three more had joined the market. VNDirect Securities Corp (VNDS) had the biggest share of 23.92 percent, followed by HCM City Securities Corp (HSC), MB Securities (MBS), SSI and VPBank Securities (VPS) with 22.4 percent, 16.57 percent, 14.53 percent and 13.61 percent, respectively.

At the end of the first quarter of 2019, VPS topped the derivatives brokerage market share with a holding of 37.50 percent. Following were VNDS (15.16 percent), HSC (13.79 percent) and MBS (12.84 percent).

At the end of the period from January to March, SSI fell to fifth position with a derivative brokerage market share of 9.87 percent.

On June 30, VPS continued leading the derivatives market in terms of brokerage market share, holding 51.82 percent of the market. It extended the gap with other firms such as VNDS (12.57 percent), MBS (10.65 percent), HSC (7.29 percent) and SSI (6.8 percent).

It is obvious that HSC and SSI – the two largest securities firms in terms of market capitalisation – have lost their market shares to smaller firms.

It is believed that leading securities firms in the derivatives market have won over customers by offering free or lower trading fees to their clients.

To carry out a derivatives transaction, a customer must bear a number of fees such as a services fee, which is paid to the stock exchange, and overnight position management fee and collateral management fee, which are paid to the Vietnam Securities Depository.

Therefore, any securities firms that provide low or free trading fees for investors will lure the attention of those investors especially when a majority of derivatives investors are individual.

According to the Hanoi Stock Exchange, 91.35 percent of total traded contracts in June (1.96 million contracts) belonged to individual investors.

According to Bui Van Huy, HSC director of market strategy department, brokerages seem to gain market shares thanks to their assistance in trading fees, thus increasing the market’s trading liquidity.

Investors may save a lot of expenses if they do a lot of trading. But expense is only a short-term factor as other securities firms can win over customers with their advanced technologies and high-quality services and products.

It is important for individual investors to save on trading expenses, according to Vu Duc Long, VPS director of investment consultancy department. But in the long term, securities firms will have to improve the quality of facilities and technologies to meet investors’ demand rather than depending too much on fee cuts.

After two years, more than 36 million futures contracts have been traded on the Vietnamese derivatives market. In the first seven months of 2019, the average trading volume of the VN30-Index futures was 100,000 contracts in each session. The figure was 1.27 times the number made in 2018 and 10 times the number recorded in August-December 2017.

There are now seven futures on the derivatives market, including four VN30-Index futures and three government bond futures. The government bond futures were launched on July 4, 2019. After more than one month of trading, more than 100 government bond futures contracts have been traded.

VN start-ups eyeing the world must have global mindset: forum

Vietnamese start-ups that wish to go global must have a “global mindset” and “decision-making power” and be willing to “take risks” to capitalise on the opportunities for success in the digital economy, experts have said.

Speaking at a recent forum in Ho Chi Minh City, Nguyen Quang Trung, senior lecturer and discipline lead for the International Business Programme at RMIT University Vietnam, said first and foremost global start-ups must be passionate about their adventure as “passion gives you vision and energy”.

“They must also have a strong international outlook and international entrepreneurial orientation, and proactively compete in the international market,” he said, adding that in addition, they must be willing to take risks.

For start-ups that want to go global, the key is to leverage advanced information and communications technology.

Also speaking at the event, Dr. Nguyen Quan, chairman of the Vietnam Automation Association (VAA) and a former minister of science and technology, said Vietnam was emerging as a new start-up hub in the region, adding the Government targeted developing the country into a technology powerhouse.

Global start-ups, especially those that lack experience, would face a lot of challenges, he said, explaining one of them is the conflict between mindsets due to cultural differences between Vietnamese and people in other countries.

To help start-ups go global, the Government has collaborated with global venture funds as part of a national programme to support an innovative start-up eco-system through 2025.

Besides ventures funds, Vietnamese start-ups can also receive support from incubators, mentors and accelerator programmes.

Under the national digital transformation plan, Vietnam aims to emerge as one of the top four countries in ASEAN in terms of digitisation by 2025 with 80,000 digital technology companies.

Vietnam is currently among the most dynamic start-up hubs in the world and its well-educated, young entrepreneurs are expected to improve the country’s position on the global start-up map.

There are no official statistics on start-ups in the country, but according to some regional tech sources, there are as many as 3,000 in the country, which makes it the third largest start-up eco-system in Southeast Asia.

The country jumped 12 places to 47th out of 127 economies on the World Intellectual Property Organisation’s 2017 Global Innovation Index, its highest ranking in the last 10 years.

In Southeast Asia, it is only behind two countries, Singapore and Malaysia.

Vietnam has become one of the fastest growing economies in the world and has begun to change its role in the international economic order, experts said.

A large number of Vietnamese firms are joining the disruptive, innovative global digital economy, which is already estimated to be worth 11.5 trillion USD worldwide.

These firms can immediately start dealing with international customers and suppliers and, so, are born global.

Titled ‘Born Global: The Future of Vietnam’s Digital Economy’, the forum was organised by RMIT University Vietnam.

Nearly 100 business executives, policymakers and academics from around the country took part.

Viettel Global posts 47 million USD pre-tax profit in Q2

Viettel Global posted record pre-tax profit of 1.09 trillion VND (47 million USD) in the second quarter of this year.

The company announced its consolidated financial report with net revenue of more than 4 trillion VND in the April-June period which equals that of the same period last year. However, gross profit increased by 200 billion VND to 1.5 trillion VND as it focused on the key telecom sector and increased average revenue per user (ARPU) while reducing purchasing equipment.

In addition, Viettel Global also paid attention to improving the effectiveness of financial activities and enjoying positive changes in foreign exchange rate.

In the first half of the year, its net revenue reached 7.9 trillion VND and gross profit 2.8 trillion (VND). The figures mainly came from high growth in Myanmar and Cambodia.

The company therefore achieved a pre-tax profit of 1.25 trillion VND in the first six months of the year.

Its share price – under code VGI – was also double in comparison with the beginning of the year to reach 30,000 VND per share. With this price, Viettel Global is one of the biggest companies in the market with capitalisation of 96 trillion VND.

PM orders acceleration of disbursement of public funds

Prime Minister Nguyen Xuan Phuc has demanded ministries, sectors and localities to take stronger actions to speed up the disbursement of the public investment capital plan for 2019, as the disbursement so far is at a critically low level.

According to the PM’s document, there remains 35.148 trillion VND (1.51 billion USD), or 9.3 percent of the state budget’s investment plan for 2019 approved by the National Assembly, on which allocation plans hasn’t been submitted to the PM by the Ministry of Planning and Investment.

The capital disbursed in the first seven months is very low, reaching only 32.27 percent of the year’s target. Notably, only 10.96 percent of the foreign capital planned for disbursement this year was allocated. The respective figures in the same period of 2018 were 37.64 percent and 22.63 percent.

Thirty-five ministries and central-level agencies and 26 provincial-level localities had less than 40 percent of their assigned disbursement targets fulfilled.

The snail’s pace of disbursement has undermined the efficiency of public funds use, which in turn has affected economic growth, fiscal and monetary policy implementation, as well as the investment and business climate, PM Phuc said.

Aside from several objective factors, subjective ones are the main causes, especially shortcomings in the management and implementation of disbursement plans.

Pointing out tasks to ministries, sectors and localities, the PM said their leaders must take responsibility for performing those duties, and they must discipline any organisations or individuals intentionally hampering disbursement progress.

PM Phuc is set to chair a national teleconference in the latter half of September to discuss ways to promote public investment capital disbursement.

Kien Hai island a major tourist attraction in Kien Giang province

Stunning landscapes, gorgeous white sand beaches, coupled with standout culture and excellent seafood have made Kien Hai island in the Mekong Delta province of Kien Giang an irresistible tourist destination.

From the outset of the year, the island welcomed over 311,000 arrivals, surging over 82 percent from the same time last year. The number of visitors is expected to shoot up in the coming time, especially on the National Day (September 2), mid-autumn festival, Christmas, and New Year Festival.

Locating in the southwestern waters, Kien Hai has 23 big and small islands, 11 of which are inhabited. Thanks to its huge potential, the island district is targeting to turn tourism into its spearhead economy, serving as a driving force to promote the development of other sectors and improve local livelihoods.

According to Chairman of the district People’s Committee Huynh Hoang Son, the locality has great advantage to branch out discovery tourism, resort tourism, eco-tourism, hiking, kayaking and water sports, among others.

For years, the district has invested heavily in socio-economic and tourism infrastructure while calling for investment from major corporations and encouraging local households to develop tourism. To date, the district has 135 accommodation facilities with nearly 1,150 rooms, and 40 tourist boats meeting demand of the visitors.

Standout tourism products have been built, with tours connected to famous destinations in the Mekong Delta region and Ho Chi Minh City, Son said, adding due attention has been paid to improving quality of tourism human resources and protecting the environment.

Tariff removal doesn’t mean easy entrance into EU market: minister

Overcoming tariff barriers doesn’t mean Vietnamese good and services can easily enter the European Union (EU), but they still have to satisfy strict non-tariff requirements of what is one of the world’s most demanding markets, according to Minister of Industry and Trade Tran Tuan Anh.

The EU-Vietnam Free Trade Agreement (EVFTA) was signed in Hanoi on June 30. Once taking effect, it will eliminate 99 percent of the import tariff lines between the two sides in 7-10 years. This is the highest commitment level Vietnam has received among the FTAs it has inked.

Notably, many commodities will benefit from the zero-percent tariffs immediately after the deal becomes effective such as coffee, peppercorn, honey and aquatic products.

At a conference in Ho Chi Minh City on August 21, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said agricultural products of Vietnam have been shipped to 185 countries and territories, including big markets like the US, Japan, the EU and the Republic of Korea. The EVFTA is hoped to help Vietnam strongly boost the shift of export to Europe.

Echoing this, Minister Anh said under the pact, Vietnam’s exports to the EU can rise by some 20 percent in 2020, 42.7 percent in 2025 and 44.37 percent in 2030, compared to the pre-EVFTA period. At the same time, imports from the EU will also increase but at a slower pace.

The EVFTA will help raise the country’s GDP by 2.18-3.25 percent by 2023 and 7.07-7.72 percent by 2033 on average.

It will expand the market for Vietnam’s strong produce like agricultural and aquatic products, facilitating their access to the market that groups 28 member countries with more than 500 million people and reducing its dependence on the Chinese and Southeast Asian markets, he noted.

Pointing out non-tariff challenges, Anh said the EU has many requirements relevant to not only quality but also production process. For example, manufacturers must not use seafood caught illegally or illegal timber. They also have to meet food safety, labour and environmental standards which are among the most stringent of their kinds in the world.

To capitalise on benefits generated by the EVFTA, businesses, especially small- and medium-sized ones, should actively acquire information to realise opportunities and challenges and take actions to improve their products and enhance competitiveness, according to the official.

Talking about ways to make use of the trade deal, Minister Cuong said his sector will work to step up agricultural processing and the export of vegetables, fruits, aquatic products, timber and wood products. It will facilitate expanding the size and boosting the competitiveness of domestic farms, encourage production under value chains, and strictly control the use of chemicals in agricultural practices.

To promote farm produce’s value, Vietnam needs to attract foreign investment to high technology application and the industries supporting agricultural production. Helping local firms better competitiveness and develop distribution channels in the domestic market, and preparing trade remedies for Vietnamese farm produce before the EVFTA is enforced are also measures to be taken in the time ahead, he added.

Vietnam posts positive trade balance with CPTPP

Vietnam posted a positive trade surplus of over 1 billion USD with ten countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) seven months after the trade deal came into effect, according to a report by the General Department of Vietnam Customs.

The country’s export turnover with CPTPP countries amounted to 15.4 percent of Vietnam’s total figure. CPTPP economies accounted for six of the 27 export markets with export value exceeding 1 billion USD, a sizable contribution in comparison to other FTA deals the country has signed.

While appearing modest at 7.5 percent, Vietnam’s export turnover growth was accompanied with a trade surplus with CPTPP economies, in stark contrast to the large deficit the country experienced when trade deals took effect with China in 1991, Thailand in 1995 and the Republic of Korea in 2018.

Exports to markets such as Japan, Canada and Mexico reported significant gains compared to the same period last year with Japan topping the chart at 1.01 billion USD, Canada at 546 million USD and Mexico at 290 million USD. At the same time, imports from Mexico decreased by 659 million USD, Singapore by 490 million USD and Malaysia by 219 million USD. It has helped the country turn a positive trade balance even posting a trade surplus with Japan for the very first time.

The figures indicated Vietnamese businesses were taking advantage of lowered tariffs and trade opportunities that come with the trade deal. Stronger demand for Vietnamese agricultural products from CPTPP economies was expected to help Vietnamese exporters to offset some of the adverse effects caused by China’s recent policy to reduce imports in the future.

 

On the other hand, measures must be taken to further boost the country’s exports as Vietnam saw a decline in exports to markets such as Australia and Malaysia and growing trade deficits with Singapore, Brunei and New Zealand.

The CPTPP, one of the largest trade deals the world has ever seen, covering a combined GDP of 13.5 trillion USD and free market of 500 million people, took effect in January with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam as signatories.

Work needed on non-cash payments for public services

Governor of the State Bank of Vietnam (SBV) Le Minh Hung Hung has asked relevant agencies to help implement non-cash payments for public services, including tax, electricity, water, hospital and education fees.

Under the instruction, Hung instructed the SBV’s branches in cities and provinces nationwide to propose effective measures for the People’s committees to further promote non-cash payments for public services as mentioned in the Government’s Decision No 241/QD-TTg.

Among the measures, the committees will direct public service providers in their cities and provinces to build information technology systems to enable it to connect with banks and payment intermediary service providers so the payment of public services will be made via bank accounts.

In addition, schools, hospitals and public service providers will install equipment and machines to accept bank cards and QR codes to ease the use of mobile devices and bank cards for payment, which is the same as the payment for goods purchased at stores and supermarkets.

According to Decision 241, Prime Minister Nguyen Xuan Phuc late last year approved a scheme to intensify payments for public services via banks, including tax, electricity, water, hospital and education fees.

Specifically, by 2020, 80 percent of tax payment transactions in central-level and provincial-level cities are hoped to be implemented via banks, while all State treasuries will have cashless payment devices.

The scheme also targets non-cash payments being accepted by 70 percent of power companies, 70 percent of water companies, 100 percent of universities and colleges and 50 percent of hospitals in major cities.

The country will focus on developing new and modern payment methods, especially those suitable for rural areas, and for people who don’t have bank accounts.

Besides, it will also develop new multi-functional and multi-purpose bank cards that allow different forms of payments such as internet banking, non-touch and near-field communication payments.

More efforts will be made to ensure security and safety during transactions to gain consumer confidence, while authenticity measures will be intensified to avoid fraud, according to the decision. -

Gov’t adopts intellectual property strategy through 2030

The Government has adopted an intellectual property strategy setting goal to further improve Vietnam’s global innovation index (GII), Vietnam Government Portal (VGP) reported.

Under the strategy, the Government expects the number of registered inventions will increase by 16-18 percent annually.

The number of applications for registration of industrial designs and marks is expected to increase by 6-8 percent per and 8-10 percent on average per year.

The total revenues of cultural industries are expected to contribute around 7 percent to the national gross domestic product by 2030, reads the strategy.

Over 40 businessmen licenced to export rice following new decree

A total of 42 businessmen have been licenced to export rice after the Government’s Decree 107 issued on August 15 last year on rice export took effect.

Tran Thanh Hai, Deputy Director of the Import and Export Department under the Ministry of Industry and Trade, said the decree enables wholesalers to export rice, while loosening the conditions for enterprises to become wholesalers.

Accordingly, the elimination of the condition on owning rice mills and warehouses has allowed firms to lease such facilities to reduce costs and make use of other businesses’ available ones.

Enterprises also do not have to register their export contracts as previously.

Vietnam exported 4.01 million tonnes of rice worth 1.73 billion USD in the first seven months of this year, up 2.1 percent in volume but down 14.3 percent in value year on year, according to the Ministry of Agriculture and Rural Development.

The figures include 651,000 tonnes worth 285 million USD in July.

In the year’s first half, the Philippines was the biggest buyer that purchased 33.7 percent of Vietnam’s rice exports.

Meanwhile, markets with strong growth in rice imports from Vietnam included Ivory Coast (up 67 percent), China’s Hong Kong (60 percent) and Saudi Arabia (38 percent).-

Sales of locally-assembled cars down, imported cars sharply up

The sale of domestically-assembled cars during January-July fell 14 percent year on year to some 107,000 units, while that of completely-built units (CBU) shot up 207 percent to over 73,900, the Vietnam Automobile Manufacturers’ Association (VAMA) said on August 12.

During the seven-month period, VAMA members sold 180,490 automobiles, a year-on-year surge of 22 percent. The sale included 132,550 passenger cars (up 35 percent), 44,883 commercial cars (down 1.5 percent), and 3,507 units (down 28 percent).

In July, a total of 26,666 cars were sold, sliding 3 percent from the previous month.

Auto dealers said many consumers were reluctant to buy cars in July as they are waiting for new models at the Vietnam Motor Show 2019 scheduled in October. At the event, they will have an overview of Vietnam’s auto market, consumption trend, and latest models from many renowned automobile brands.

Processing, manufacturing firms expect better performance in Q3

About 89.4 percent of surveyed processing and manufacturing enterprises expected their production output would increase and remain stable in the third quarter of 2019, according to the General Statistics Office (GSO).

About 53.1 percent of them said they are likely to witness better performance and 36.3 percent said that their production output would be stable while 10.6 percent predicted it would decrease.

Around 91.9 percent of firms in the industry were optimistic that they would perform better and have stable production in the second half of the year compared to the first half while 8.1 percent forecast their output would slide.

Of which, foreign direct investment (FDI) companies were the most optimistic in July – September when 91.1 percent of them predicted to see output expanded and remain stable, followed by non-State enterprises (88.9 percent) and State-owned enterprises (87.9 percent).

The FDI firms were also the most optimistic in the second half of the year when 93.1 percent of them expected production output to grow and remain stable, followed by non-State enterprises (91.6 percent) and State-owned enterprises (90.6 percent).

The GSO reported that 20.6 percent of the companies estimated to proceed the third quarter with higher costs per unit compared to the second quarter while 70.1 percent of them expected costs per unit unchanged. About 9.3 percent calculated to have lower costs per unit.

Lower costs per unit were mainly forecast in manufacturers of electronics, computers, optical products; manufacturing of paper and paper products; manufacturing of vehicles and manufacturing of electrical devices.

Around 47.9 percent of the surveyed firms said they would receive more orders in the third quarter compared to the previous one and 41.8 percent said the number of orders would not change, while 10.3 percent forecast to receive fewer.

For the second half of the year, 54.1 percent of the enterprises expected to receive more orders while 37.8 percent estimated the number of orders would not change.

Sectors with higher orders included electronics, computers and optical products; leather and leather products; clothing; vehicles; rubber products and plastics; and medicines, pharmaceutical chemicals and medicinal materials.

Lai Chau hydropower plant holds national security importance

The Lai Chau hydropower plant, a major facility on the Da River, has been listed as an important work related to national security.

The plant, located in Nam Nhun district of the northwestern province of Lai Chau, consists of three turbines with the total capacity of 1,200 MW, producing 4.67 billion kWh of electricity annually on average. Since its inauguration in late 2016, the plant has generated more than 15.1 billion kWh to the national power system.

Duong Quang Thanh, Chairman of the Members Council of the Vietnam Electricity (EVN) group, said at a ceremony on August 12 to announce the classification of the plant that aside from producing electricity and helping prevent floods in the Red River Delta, the Lai Chau plant also has the function of regulating the flow of water to enhance the power generation capacity of other cascade hydropower plants in the downstream of Da River, namely the Son La and Hoa Binh plants.

However, its national importance and location in a remote, mountainous and border area have also made the Lai Chau plant vulnerable to security and safety risks and be the target of hostile forces and criminal activities. Any incidents threatening its security and safety, especially the reservoir with the big water storage capacity, will directly and seriously affect other hydropower plants, along with economic facilities and communities, in downstream areas.

Due to its special importance to national development, Prime Minister Nguyen Xuan Phuc issued Decision 419/QD-TTg in April this year to classify the Lai Chau hydropower plant as one of the important works related to national security, Thanh noted.

The Prime Minister also assigned the Ministry of Public Security to coordinate with the ministries of industry and trade, finance and national defence, the Lai Chau provincial People’s Committee, the EVN and relevant agencies to make plans to protect the power facility.

So far, all the three cascade hydropower plants on the Da River, namely Hoa Binh, Son La and Lai Chau, have been recognised as important works related to national security.

HCM City eyes economic gain from treating garbage at landfills

Ho Chi Minh City plans to treat garbage buried at three non-active landfills, the municipal People’s Committee has said.

Speaking at a meeting recently, Vice Chairman of the municipal People’s Committee Vo Van Hoan said the city would also make urban development plans at these sites and nearby areas.

The city’s authorities have changed their mindset about waste treatment in recent years, he said.

“In the past, we only thought about burying garbage. But we can now generate economic benefit from garbage buried at the landfills," Hoan said.

Investors could earn money from treating the garbage and use the land to develop housing, golf courses and parks, he said.

Eight companies have expressed interest in exploiting Dong Thanh landfill and Go Cat landfill.

The three landfills that have run out of space, Dong Thanh in Hoc Mon district, Go Cat in Binh Tan and Phuoc Hiep in Cu Chi district, cover a total area of 118ha. They contain nearly 22 million tonnes of buried garbage.

Dong Thanh uses a leachate treatment system but does not have a system for collecting gas from the garbage while the other two do.

Hoan said the Departments of Natural Resources and Environment, and Planning and Investment have been instructed to draw up criteria for investment in treating landfills.

Investors could work along with city authorities to make urban development plans for these sites, which would be developed through public-private partnerships, he added.

Nguyen Thien Nhan, Secretary of the municipal Party Committee, said the investors should bring in all the money required since the city would not.

They should ensure there is no environment pollution during the treatment of the landfill, he warned.

He instructed relevant agencies to finalise the bidding criteria within the next three months.

The city needs to be apprised about what technologies would be used and how much time and money the treatment would take, he added.

Nguyen Cong Hong, General Director of TDH Ecoland Urban Development and Investment Joint Stock Company, said he went to Go Cat and Dong Thanh landfills to survey them.

His company has experience treating buried garbage at the Soi Nam landfill in the northern province of Hai Duong, and would complete treatment of the garbage at the Go Cat landfill within two years, he said.

After that it would take one more year to develop it into a residential area, he added.

The city will complete two plants to generate energy from garbage in September and October this year. They would help resolve 70-80 percent of the city’s waste problem by 2025.

The city generates nearly 9,000 tonnes of garbage daily, most of which continues to go to landfills.

Nhan said the city needs a comprehensive plan for garbage treatment to reduce pollution and have more land for development.

Listed companies with best investor relations for 2019 announced

Tai Viet JSC – Vietstock and finance and life newswire Fili.vn on August 9 announced and honoured a list of listed companies with the best investor relations.

The IR Awards 2019, in their ninth year now, seek to raise awareness among listed companies to improve the transparency and efficiency of corporate governance and contribute to an open, transparent and effective Vietnamese securities market.

Among 713 surveyed companies, 259 were transparent in information disclosure on both Ho Chi Minh City and Hanoi stock exchanges. Forty five of them were shortlisted and divided into large-cap, mid-cap and small & micro cap categories.

Accordingly, the top listed companies with the best IR voted by investors and financial institutions include Sai Gon Thuong Tin Commercial Bank (Sacombank), Netland Real Estate JSC, The Gioi Di Dong (Mobile World), Vingroup and Duc Thanh Wood Processing JSC, among others.

Last year, 38.78 percent of listed companies met criteria for information disclosure.

Steel companies post poor profits in second quarter

Second-quarter earnings of steelmaking companies showed signs of deterioration as prices of iron ore continued to increase, leading to higher production costs and lower profit.

Hoa Phat Group (HPG), the biggest listing steelmaker, reported revenue of 15.3 trillion VND (656.7 million USD) in the second quarter, up 6 percent year-on-year, but its profit after tax declined 7 percent in the reviewed period, reaching 2.05 trillion VND.

Ending June, the company’s revenue increased 10.3 percent on-year to more than 30 trillion VND, but its net profit dropped 12.8 percent to 3.86 trillion VND.

Hoa Sen Group (HSG) reported its net revenues slumped by 30 percent to 7.2 trillion VND (309 million USD) in the third quarter for the fiscal year 2018-2019 (April 1 – June) but its net profit rose 94 percent year-on-year to 161 billion VND.

It said it managed to cut management costs by 50 percent thanks to installing the enterprise resource planning (ERP) and focus on exploring new export markets.

Sharp increases in iron ore prices were attributable to unenthusiastic business results of steel companies, according to analysts at Vietinbank Securities JSC.

The price of iron ore, which account for 30-40 percent of the cost of steel production, rose to 130 USD per tonne in some future contracts, the highest since 2016. Higher cost of production accompanied by increasing capacity of domestic enterprises is driving up competition, a July report on the steel industry of Vietinbank Securities JSC showed.

“The increase in capacity is happening faster than in consumption which has pushed many businesses into losses since 2018 and early 2019,” the report said.

Except Hoa Phat which has a high profit margin, other businesses in the industry have very low profit margins and therefore are quite vulnerable when there are adverse developments in the industry, according to the report.

Investment in expanding capacity of large enterprises such as Hoa Phat would create competition and put pressure on many businesses in the coming years, it said.

A number of steel companies have posted their second-quarter and first-half earnings with lower revenues and profits. They included SMC, Vietnam Germany Steel Pipe (VGS), Thai Nguyen Iron and Steel (TIS) and Tien Len Steel (TLH).

For SMC, its revenue grew 8.7 percent in the first six months but its cost of capital increased by 10.56 percent, resulting in a decrease of 22 percent in gross profit.

VGS’s first-half revenue dropped just 1.3 percent year-on-year to 3.46 trillion VND but its profit after tax fell 11.7 percent to just 28 billion VND. Meanwhile, revenue and net profit of TLH declined 16.4 percent and 72 percent, respectively.

TIS reported a 5.4-percent decline in revenue and 10.5 percent drop in net profit in the first half to 5.5 trillion VND and 38 billion VND, respectively.

According to analysts, the steel industry is facing many challenges, including the trade war between the US and China, intense competition in the domestic market from cheap low-quality imports and slump of the property market.

In addition, the US imposition of anti-dumping tax on steel sheet products imported from Vietnam using materials imported from the Republic of Korea and Taiwan has also forced steel exporters to seek new material sources.

Vietnam seeks to boost agriculture and fishery exports

Vietnam will attract more foreign direct investment and boost its agricultural and fisheries exports through free trade agreements, experts have said.

The recently signed Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) would help the country increase its agricultural and fisheries output, Pham Tuan Long, deputy director of the division of agriculture, forestry and fishery at the Ministry of Industry and Trade’s export-import department, said.

“With commitments under FTAs, import tariffs will be reduced or eliminated in various markets, creating favorable conditions for Vietnam’s exports,” he told a workshop held in Ho Chi Minh City on August 7.

Vietnam is a leading producer and exporter of a variety of agricultural products, including rice, coffee, pepper, cashew and fish, he said.

Last year exports of its main agricultural products were worth US$27 billion, or nearly 11 percent of total exports.

Vietnam exports goods to more than 200 markets.

In the first half of this year, agricultural exports were worth 12.3 billion USD, with fisheries, fruits and vegetables, coffee, cashew, rice, and pepper exports each fetching more than 1 billion USD.

However, with technical barriers and strict requirements with regard to food safety and hygiene standards, Vietnam’s agricultural products face many challenges since agriculture is mostly done on a small scale.

The trade ministry has coordinated with the Ministry of Agriculture and Rural Development to update local businesses on technical barriers and trade protection measures in import countries, he said.

Pham Thiet Hoa, director of the Investment and Trade Promotion Centre of HCM City, said it is vital that local firms invest heavily in modern facilities and technology and carefully manage quality and food safety in both the farming and processing stages to fulfil the export potential.

But they need to be offered incentives to enhance capacity, develop brands and update themselves on export markets and market surveys, he said.

Retail chain applies measures to go green

VinGroup-run VinMart and VinMart+ supermarket system on August 9 launched a programme to protect the environment by a “three-green” solution: green supermarkets, green customers and green suppliers.

Specifically, single-use plastic products will be replaced with environmental friendly materials at 2,200 VinMart and VinMart+ supermarkets.

Degradable shopping bags will be provided and paper cups, bows and straws used for catering services.

Particularly, the supermarkets will use trays made of bagasse for storing raw foodstuff covered with degradable wrap.

Thai Thi Thanh Hai, General Director of VinCommerce, said that currently, the firm is serving more than 20 million customers each month.

VinCommerce hopes to collaborate with its customers and suppliers to protect the environment even from small actions.

In order to encourage the involvement from customers, VinMart and VinMart+ will discount 1,000 VND in each receipt of customers using multiple-use shopping bags.

Alongside, the supermarkets will gather used batteries and send them to specified agencies for treatment.

For suppliers, VinMart and VinMart+ will give a number of special incentives for those who provide environmental friendly products.