Few bank stock options for foreigners

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Although Vietnamese bank stocks appear to have a bright future, foreign investors may find it difficult to join the parade due to a lack of progress on foreign ownership and corporate governance.

Hot stocks

The ups and downs of bank stocks tend to be closely monitored by investors and analysts in Vietnam, as these stocks take up 22 per cent of Vietnam’s listed equity market. Throughout the past quarter, bank stocks have been in a slump due to the corrective streak in the VN-Index.

Recently, however, with the bearish trend easing and the market bouncing back by 10 per cent from its July low, analysts and investors have regained their faith in the so-called “Vietnamese king stocks.”

For example, independent rating firm Moody’s upgraded its ratings for 14 Vietnamese commercial banks on August 14. The Moody’s upgrade is based on the assumption that the Vietnamese government will continue its support for banks’ asset quality and capitalisation. Indeed, as part of Decision No.986/QD-TTg released on August 11, the Vietnamese government has outlined its growth strategy for Vietnamese banks from now until 2025. This includes raising capital for three state-owned lenders and the possibility of listing them overseas.

“Such a path is, on the face of it, positive, as outside investors will be less of a minority and therefore able to exert more influence on the direction of the banks. Also, capital raising will be easier to conduct if there is a large body of outside investors,” said Long Ngo, associate director of financial institutions at Viet Capital Securities’ research team.

Meanwhile, Nguyen Thanh Lam, investment manager at Maybank Kim Eng Securities, expects net profits of listed banks to expand by 20 per cent in 2018, while returns on equity (ROE) will grow by 14 per cent. “The infrastructure is going through strong developments and consumer finance is forecast to boom from 2018 onwards. Many banks have made significant progress in solving sour loans,” said Lam.

Who can buy the shares?

The appeal of Vietnam’s bank stocks is thus very clear to both domestic and foreign investors. At first glance, it seems that foreign investors are at an advantage because they can provide domestic lenders with capital or know-how. However, there are significant challenges for foreign investors.

Firstly, the existing foreign ownership limit (FOL) at commercial banks in Vietnam is only 30 per cent, and the law stipulates that any one foreign entity can only own up to 15 per cent. One prominent example is Asia Commercial Bank (ACB), which is poised for 70 per cent net profit growth in 2018. ACB has reached the 30-per-cent FOL, which means overseas buyers can only gain a stake in this fast-growing bank if another foreign investor agrees to sell.

Similarly, last October, 3.4 million additional shares of Military Bank were made available to foreign investors, as the bank issued new shares from its employee stock ownership plan. Within 15 minutes of trading, all of those shares were devoured by foreigners and the bank quickly reached its FOL again.

Likewise, scores of investment funds and banks from around the world have joined in the initial share sales of VPBank, Techcombank, and HDBank. However, each investor bought less than 5 per cent due to the ownership cap.

“The current ownership limit at 30 per cent is quite low for investors, as they want a bigger say at the banks. This is especially true for strategic shareholders, so I would suggest relaxing this cap gradually to 49 and 51 per cent,” said economist Nguyen Tri Hieu.

Hieu added that thanks to their larger wallets, foreign investors are more likely to purchase Vietnamese bank stocks in bulk than domestic investors. “Foreigners are the ones who can easily invest $50 million or more in a Vietnamese lender,” he said.

Moreover, foreign strategic investors can offer valuable lessons on corporate governance and banking know-how to Vietnamese lenders – something domestic investors do not have. That said, Duong Nguyen, financial services and IT advisory leader at EY Vietnam, noted that foreign banks are reluctant to invest in Vietnamese banks due to the lack of Basel II standards. Specifically, she said that Vietnamese banks scored the lowest in the ASEAN Corporate Governance Scorecard. Vietnamese lenders are lagging behind their peers from Thailand, the Philippines, and Malaysia, who have already fulfilled Basel II.

As a result of these factors, experts believe that although the stocks of Vietnamese banks do have an upbeat future ahead, foreign investors will only come in droves if there is a systemic improvement in terms of FOL, corporate governance, and Basel II application.

How Locals are Tackling Vietnam’s Air Pollution Problem

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Recent data points to an alarming problem brewing in Vietnam. Air pollution is worsening, specifically in metropolitan areas such as Hanoi and Ho Chi Minh City. Worrying levels of harmful fumes and dangerous particles have locals and government officials scrambling to find a solution while keeping up with an increasing urban population.

High levels of PM 2.5

Vietnam ranks among the 10 countries with the world’s worst air pollution. Figures indicate the main factors contributing to the severity of the problem are traffic emissions, industrial production, and construction. Vietnam relies heavily on coal to generate much of the country’s power and an additional 26 coal power plants are planned to be constructed after 2020. These factors are causing Hanoi and Ho Chi Minh City to be cloaked by a dangerously thick cloud of smog, choking locals and posing serious health risks.

Gridlocked traffic during rush hour in Vietnam | ©M M/ Flickr

Exposure to chronic air pollution can first cause irritation to the eyes and throat before leading to more serious illnesses such as asthma, cancer, and chronic lung diseases. The World Health Organization (WHO) reportedly states that 6/10 diseases with high morality rates in Vietnam are related to air pollution. Dangerous levels of fine particulate matter measuring 2.5 micrometers in diameter (PM 2.5) are found to be five times the acceptable level in Hanoi and twice the recommended level in Ho Chi Minh City. These tiny particles can burrow deep into the lungs and cause a range of severe health problems.

Desperately needed solutions

In an effort to stray from power generated by environmentally harmful coal, locals have been investing in rooftop solar panels in increasing numbers. Solar energy saves 50% or more on electricity costs and there is often a surplus of energy, in which case homeowners can earn credit on electricity bills. It is an effective solution and the installation costs are reasonable compared with the long-term environmental and financial benefits of abandoning coal-generated power. The government is also accelerating the development of solar power plants to meet increasing domestic demand for power; solar power currently accounts for 0.01% of total power generated in Vietnam, but the government plans to increase it to 20% by 2050.

Industrial air pollution | ©Foto-Rabe/Pixabay

However, the bulk of the issue remains with the millions of cars and motorbikes crowding the narrow streets of Hanoi and Ho Chi Minh City. Traffic emissions in Vietnam account for up to 85% of total carbon monoxide emissions. Subway construction is well underway in both cities as the government struggles to meet the demand for public transportation. Old buses spurt black smoke as they careen through the streets, prompting officials to call for replacing them with new ones that use cleaner fuel. There has also been a push to enforce emission standards among cars and motorbikes; however, certification for emission standards is expensive and this has led to fake certifications and bribes given in exchange for an emissions certificate.

Solar power is becoming popular among homeowners in Vietnam | ©schropferoval/Pixabay

In 2017, the majority of Hanoi People’s Council voted to implement a motorcycle ban by 2030. Motorbikes will be banned in downtown areas and limited in districts with sufficient public transport.

An uncertain future

As higher populations flock to urban centers, cities struggle to meet the demand for safe and effective public transportation while air quality deteriorates. The first subway line in Hanoi is expected to open later this year while the first Ho Chi Minh City line won’t open until 2020; it will be decades before public transport can successfully alleviate congestion and mitigate emissions.

Vietnamese cities could experience Beijing-level smog in the not-so-distant future | ©LWYang/Flickr

The emerging demand for solar power will hopefully prompt nationwide interest in renewable energy sources, but unless the proposed coal plants are cut and public transport removes a high number of motorbikes and cars off the streets, Vietnam’s air pollution problem will continue to get worse.

By Katie Kalmusky, The Culture Trip

Powerful M6.7 earthquake rocks Hokkaido, at least nine dead and 31 reported missing

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According to Japantimes’ report, at least nine people are dead and 31 unaccounted for in Hokkaido after a magnitude 6.7 earthquake — reaching the maximum 7 on Japan’s seismic intensity scale in some areas — caused landslides that engulfed houses early on Thursday.

The quake centered east of the city of Tomakomai was felt strongly in Hokkaido’s capital of Sapporo, roughly 68 kilometers away. There was no tsunami risk.

A landslide along a long ridge in the rural town of Atsuma could be seen in aerial footage from NHK. The 3:08 a.m. quake also cut the power supply to nearly 3 million homes in the prefecture while grounding flights and disrupting train services.

Prime Minister Shinzo Abe put the death toll at nine while the Hokkaido Prefectural Government said about 300 people were injured in Sapporo and other cities.

The government said later in the day that about 340,000 homes had regained electricity.

The quake occurred at a depth of about 40 km and logged a 7 on the seismic intensity scale in Atsuma and a lower 6 in the city of Chitose, both southeast of Sapporo. The quake was initially reported to have registered a maximum intensity of upper 6.

A series of smaller shocks followed the initial quake, the agency said. At an early morning news conference, agency official Toshiyuki Matsumori warned residents to take precautions for potential major aftershocks in the coming days.

Prime Minister Shinzo Abe, arriving at his office before 6 a.m., told reporters his government had set up a command center to coordinate relief and rescue. His voice sounding haggard, Abe said saving lives was his government’s priority.

The Tomari Nuclear Power Station suffered a power outage but was cooling its fuel rods safely with emergency power, Chief Cabinet Secretary Yoshihide Suga said. External power at the station resumed by 1 p.m. Operator Hokkaido Electric Power Co. reported no radiation irregularities at the plant, which has been offline since shortly after the 2011 Great East Japan Earthquake, Suga told a news conference.

The power outage occurred when thermal power plants in the prefecture shut down automatically after the quake. The blackout also affected around 40 hospitals as well as telephone services and television broadcasting in the prefecture.

A fire broke out at a Mitsubishi Steel Mfg. Co. plant in the city of Nemuro but was later brought mostly under control, NHK said, quoting local officials.

There was also a fire at an oil refinery facility in Muroran, but it had almost been subdued by the afternoon.

New Chitose Airport was closed for the day after part of its terminal ceiling collapsed, as well as due to the power outage, the transport ministry said, affecting flights to and from Tokyo and other cities at the country’s fifth-busiest airport.

Bullet train and local train services were also disrupted by the quake, operators said.

In Tokyo, the central government said the Self-Defense Forces will dispatch 25,000 personnel for relief operations at the request of the governor of Hokkaido.

NHK footage showed a crumbled brick wall and broken glass at a home, and quoted local police as saying some people were trapped in collapsed structures.

Rescuers were shown surveying damage on a rural road that was blocked by fallen trees.

The footage showed the moment the quake struck Muroran, with its camera violently shaking and all city lights going out a moment later. In nearby Sapporo, a mudslide hit a road, leaving several cars half buried.

Some experts said the earthquake was likely caused by a series of slips on an inland active fault.

An active fault zone of more than 100 km in length runs north-south about 10 kilometers west of the epicenter. Although the Meteorological Agency says it is unclear whether the zone had something to do with the quake, the experts believe its displacement could be the cause.

Takashi Furumura, a professor of seismology at the University of Tokyo, said it is highly likely that the quake occurred in the southern part of the fault zone.

Furumura, who examined observed records of seismic waves, found that there were about three powerful shaking movements in a short period of time.

“Consecutive fault slips may have caused a strong shaking for a long time and triggered mudslides,” he said.

“The fault zone is massive and its structure is complicated,” said Yasuhiro Suzuki, a professor of geomorphology at Nagoya University.

But he noted there is not enough data on the southern part of the zone to tell if it has caused large-scale quakes in the past.

Collecting data on the southern part, which is more than 54 km in length, is difficult as it extends into the sea and partly runs under the seafloor, according to Suzuki.

Japan, situated on the “Ring of Fire” arc of volcanoes and oceanic trenches that partly encircles the Pacific Basin, accounts for about 20 percent of the world’s earthquakes of magnitude 6 or greater.

Will VND lose 3 percent of its value in 2018?

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The depreciation of the Chinese yuan against the dollar has raised concerns that Vietnam’s goods will become less competitive in comparison with Chinese goods if Vietnam does not devalue its currency.

Yuan depreciates

According to Vietnamnet, since mid-April, the yuan has depreciated sharply as a result of the withdrawal of foreign capital from emerging markets and the escalation of the US-China trade war.

China has become a net outward investor over the last four years. The sharp depreciation of the yuan will not bring benefits to China’s outward investments.

Meanwhile, since late 2016, the yuan has been added to the basket of currencies to estimate SDR, an international reserve asset created by the IMF. The Chinese government will consider thoroughly when intervening the exchange rate.

China’s foreign debts have been increasing steadily since 2015. Its foreign debts reached $1.214 trillion, or 13 percent of China’s GDP by the end of the first quarter. Though this is not a very high figure, the sharp depreciation of the yuan will affect China’s debt payment capability.

BVSC believes that the possibility of the Chinese government devaluing the yuan sharply is not high. Nevertheless, it says that investors’ excessive worries and market factors may still depreciate yuan further.

In order to neutralize the risks from bearing higher taxes on exports to the US and ensure the competitiveness of Chinese goods in the world market, the yuan needs to depreciate by 2.7 percent. As such, the 8 percent depreciation since April is too much.

BVSC: Vietnam dong to depreciate by 3 percent

After selling dollars to stabilize the market on July 3, SBV on July 22 raised the dollar selling price by VND223, or 0.9 percent.

“This is a sign showing that SBV decided to stop the stabilization of the market by selling dollars at low prices. With the move, the exchange rate truly reflects the real situation of the market,” BVSC commented.

BVSC believes that for foreign invested enterprises, the appreciation or depreciation of the dollar will not be a big problem for them. The dong appreciation will mostly affect the domestic economic sector, especially the exports of farm, forestry and seafood produce.

The yuan 8 percent depreciation against the dollar has caused the Vietnam dong to appreciate by 5 percent against the yuan. This has weakened Vietnam’s farm, forestry and seafood exports to the Chinese market.

The sharp depreciation of the dong will cause high inflation and reduce confidence in the dong. However, if the yuan continues depreciating against the dollar, Vietnam will need to act flexibly in adjusting the forex.

“We think that the Vietnam dong will lose 3 percent of its value in the year 2018,” BVSC said.

Vietnam to earn more from cashew nuts export in 8 months

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Vietnam gained nearly 2.3 billion U.S. dollars from exporting 243,000 tons of cashew nuts in the first eight months of 2018, up 2.5 percent in value and 8 percent in volume on-year, the Ministry of Agriculture and Rural Development said on Thursday.

According to the report, in the same period, Vietnam shipped abroad over 1.3 million tons of coffee worth nearly 2.5 billion U.S. dollars, up 14.8 percent in volume but down 3.1 percent in value.

Meanwhile, the country sold overseas 80,000 tons of tea worth 131 million U.S. dollars, witnessing respective year-on-year drops of 11.3 percent and 8.6 percent. It also earned 585 million U.S. dollars from selling offshore 175,000 tons of pepper, up 4 percent in volume but down 35.2 percent in value.

Vietnam earned over 3.5 billion U.S. dollars from exporting 352,205 tons of cashew nuts, mainly to the United States, the Netherlands and China, in 2017, while importing 1.1 million tons of raw cashew from Africa, said the ministry.

How Mercedes deal with scandal of water ingression into GLC’s front differential?

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During August 2018, Vietnam Insider found at least ten separate reports of water ingression into the front differential of the GLC while driving through water.

A member of otofun.net – the Vietnamese largest car’s owners forum posted “The authorized dealer said, I have water in my front diff. I drove through mud and some water holes. Nothing over half way up my tire”. He said, the authorized dealer of Mercedes-Benz Vietnam said, it’s a product’s warranty void and refuses to recall or fix it. The car owner have to pay VND170,000,000 (US$ 7,400) for spare parts of differential.

While researching car recall campaigns here, we could not find any related issue with GLC models world-wide, but 8 other recalls for GLC regarding to

The driver airbag may be defective
The steering column is not sufficiently earthed
The starter current limiter may be overloaded and overheat
The propellant mixing ratio in certain seat-belt pre-tensioner igniters may be incorrect
The electronic parking brake might not function.
Fuel may leak from the fuel pump
The on-board high-voltage battery charger may malfunction
Wiring in the vicinity of the steering column could be damaged which might cause failure of indicators, gear selection, electronic stability control and electric power steering.

According to a message sent to GLC owners on its website, Mercedes-Benz Vietnam said:

“We acknowledged customer concerns about the possibility of water ingression into the front differential of the GLC while driving through deep water. We fully understand the situation and please rest assure that Mercedes-Benz Vietnam is taking this feedback very serious and we are aiming to find a solution for our customers, albeit the root cause is not connected to product or product design issue but rather to improper vehicle handling.

By this chance and as a first step, we kindly like invite you as owner of the Mercedes-Benz GLC to visit the nearest authorised Mercedes-Benz workshop to perform technical check for the differential lubricant to assess any possible existing water ingression and where requried performing lubricant replacment by our well-trained technicians to minimize subsequent repair costs. For this, we are happy to offer free differential lubricant check from today until end of August 2018. Kindly be informed that replacing non-approved differential lubricant may cause damages to the differential.

Furthermore, as a preventive measure to minimize furture damages, our authorized dealers are working on a recommended retrofit solution for your GLC vehicle by using Mercedes-Benz Genuine spare parts and at a very affordable price. For further details and information we kindly ask you to contact your preffered authorized Mercedes-Benz Service Center who is happy to assist you further.

And once again we would like to remind you the maximum still water depth for the GLC is 30 cm (please refer to the GLC User manual, page 367). Even the heights of the air breathe valve of the GLC front and rear differentials are higherly positioned respectively, it is recommended to follow strictly the maximum water depth guideline as stated in the User manual to avoid water leaking into not only the differential and but also other equipment, as well as to avoid hydrolic lock.”

More about differentials

How Differentials Work?

If you’ve read How Car Engines Work, you understand how a car’s power is generated; and if you’ve read How Manual Transmissions Work, you understand where the power goes next. This article will explain differentials — where the power, in most cars, makes its last stop before spinning the wheels.

The differential has three jobs:

To aim the engine power at the wheels
To act as the final gear reduction in the vehicle, slowing the rotational speed of the transmission one final time before it hits the wheels
To transmit the power to the wheels while allowing them to rotate at different speeds (This is the one that earned the differential its name.)

Why You Need a Differential

Car wheels spin at different speeds, especially when turning. You can see from the animation that each wheel travels a different distance through the turn, and that the inside wheels travel a shorter distance than the outside wheels. Since speed is equal to the distance traveled divided by the time it takes to go that distance, the wheels that travel a shorter distance travel at a lower speed. Also note that the front wheels travel a different distance than the rear wheels.

Watch this video for a brilliant explanation of how a car’s differential works

Vietnam: 87,500 new enterprises set up in first 8 months, 2018

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Some 87,448 new enterprises in Vietnam were established in the January-August period, with total registered capital of VND878.6 trillion ($37.7 billion), a year-on-year increase of 2.4 per cent in number and 6.9 per cent in capital, the Vietnam News Agency quoted the General Statistics Office (GSO) as reporting.

There were 11,655 enterprises established in August with total registered capital of VND107.6 trillion ($4.62 billion), up 3.5 per cent in number compared to July but down 11.9 per cent in capital.

Average registered capital of each new enterprise was VND10 billion ($430,000) in the first eight months, an increase of 4.3 per cent year-on-year.

From January to August there were 20,942 enterprises resuming operations, up 9.3 per cent year-on-year.

New enterprises employed 734,700 workers, a 10.7 per cent decline year-on-year.

By sector, wholesale, retail sales, and automobile repair and motorbikes saw the most new enterprises, with 29,600, or 33 per cent of the total. Following were the construction and manufacturing and processing sectors, with 11,500 and 10,900 new enterprises, respectively.

The GSO also reported that 63,235 businesses ceased operations during the first eight months, up 38.1 per cent year-on-year. The number of those completing dissolution procedures rose 17.8 per cent to 9,135.

Support need to set-up your company in Vietnam?

Contact GBS – A legal services company at:

Email: info@gbs.com.vn
iMessage | SMS | WhatsApp | Viber | Call: +84903189033

VN-Index down in morning trade

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As of September 05, HSX had 171 losers and 99 gainers in the morning session on August 5, with the VN-Index closing down 1.23 points (0.13 per cent) to 974.71 points. Total trade was over 80 million units worth VND1.8 trillion ($77.3 million), down 13.62 per cent in volume but up 1.21 per cent in value compared to the previous session. Put-through transactions totaled 4.36 million shares worth VND96.97 billion ($4.1 million).

The HNX-Index also saw strong movements that pushed it below its reference level and selling pressure increased towards the close. HNX had 54 losers and 34 gainers, with the HNX-Index falling 0.39 points (0.35 per cent) to close at 110.84 points. Total trade was 20.45 million units worth VND293.93 billion ($12.6 million), down 3.54 per cent in volume and 20.29 per cent in value compared to the previous session. Put-through transactions were 1.42 million shares valued at VND28.9 billion ($1.2 million). Hai My reports on VNeconomictimes.

Among the Top 10 largest caps, VHM rose slightly, by 0.8 per cent, and CTG increased 0.2 per cent, VIC 0.4 per cent, and VCB 0.3 per cent, while MSN closed at its opening price and VNM lost 0.9 per cent, SAB 0.4 per cent, GAS 0.6 per cent, TCB 0.2 per cent, and HPG 0.1 per cent.

Blue chips such as VRE, VPB, PLX, NVL, and MWG also traded under their reference price.

While CTG and VCB edged downwards, BID recovered to VND32,700 ($1.4), up 0.6 per cent.

FLC led in liquidity, with 4.22 million units, but lost 0.5 per cent.

Major losers on HNX included ACB, by 0.8 per cent to VND37,700 ($1.6), PVS 1.8 per cent to VND21,400 ($0.91), VCG 0.6 per cent to VND17,400 ($0.74), and VCS 0.2 per cent to VND90,900 ($3.9).

The Top 5 strongest trading stocks on HNX in the morning session were SHB, with 3.55 million units, PVS with 2.63 million, ACB with over 2 million, KLF with 1.58 million, and VGC with 1.1 million.

The UPCoM-Index lost 0.44 points (0.85 per cent) to close at 51.11 points, with total trade of 4.9 million shares worth VND60.31 billion ($2.59 million). Put-through transactions totaled 619,182 shares valued at VND11.62 billion ($499,350).

Powerful M6.7 earthquake hits Hokkaido, causing landslides; at least 32 people missing

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A powerful earthquake of magnitude 6.7 on Hokkaido caused landslides that engulfed houses early on Thursday, injuring and trapping a number of people and cutting power in several areas.

According to a report on JapanTimes, A landslide along a long ridge in the rural town of Atsuma could be seen in aerial footage from NHK. Some 10 people had been taken to hospitals with injuries, one of them serious, it said.

Reports said up to 48 people were hurt and 32 missing.

There were widespread power outages and blocked roads, NHK said, but no early reports of deaths. A man suffered cardiac arrest after falling down the stairs, local media reported.

The quake, which struck at 3:08 a.m., posed no tsunami risk, the Meteorological Agency said. The U.S. Geological Survey said it struck some 68 km (42 miles) southeast of Sapporo, Hokkaido’s main city.

The Tomari Nuclear Power Station suffered a power outage but was cooling its fuel rods safely with emergency power, said Chief Cabinet Secretary Yoshihide Suga. Operator Hokkaido Electric Power Co reported no radiation irregularities at the plant, which has been shut since shortly after a massive 2011 earthquake, Suga told a news conference.

A fire broke out at a Mitsubishi Steel Mfg. Co. plant in the city of Nemuro but has largely been brought under control, NHK said, quoting local officials.

There was also a fire at an oil refinery facility in Muroran, but it has almost been subdued.

A series of smaller shocks followed the initial temblor, the Meteorological Agency said. Agency official Toshiyuki Matsumori, at a early morning news conference, warned residents to take precautions for potential major aftershocks in coming days.

Shinkansen trains were halted in some areas of Hokkaido, and New Chitose airport flights were scrubbed.

NHK Footage showed a crumbled brick wall and broken glass in a home, and quoted local police as saying some people were trapped in collapsed structures.

Rescuers were shown looking for damage on a rural road that was blocked by fallen trees.

Thursday’s quake caused the loss of power at nearly all of 3 million households and a nuclear power plant to go on a backup generator.

The quake’s epicenter was east of the city of Tomakomai. It also struck Sapporo, with a population of 1.9 million.

The Fire and Disaster Management Agency said a man was found without vital signs in Tomakomai, and several people were reported missing in the nearby town of Atsuma. At least 20 other people were injured in nearby towns, though their conditions were not immediately known.

Footage on NHK national television showed the moment the quake struck Muroran, with its camera violently shaking and all city lights going out a moment later. In nearby Sapporo, a mudslide hit a road, leaving several cars half buried.

In the town of Atsuma, a massive landslide occurred on the side of a mountain, crushing houses at lower levels.

Suga told a news conference that the authorities have received hundreds of calls about people missing and buildings collapsing. Officials are doing their utmost for the search and rescue while they assess the extent of damage, he said.

The temblor, which occurred in southern Hokkaido at a depth of about 40 km, logged upper 6 on the Japanese seismic intensity scale to 7 in the town of Abira and lower 6 in the city of Chitose, both southeast of Sapporo.

The Meteorological Agency said temblors on the Japanese scale to 6 can be expected for the next week.

Vietnam wins WTA Asia’s Leading Destination 2018

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Viet Nam was honored as Asia’s Leading Destination in 2018 at the World Travel Awards (WTA) Asia & Australasia Gala Ceremony 2018 held on September 3 in Hong Kong (China).

Viet Nam overcame China, India, Indonesia, the Republic of Korea, Macau (China), Malaysia, Singapore, Sri Lanka and Thailand to win the prize.

The WTA was established in 1993 to acknowledge, reward and celebrate excellence across all key sectors of the travel, tourism and hospitality industries.

Today, the WTA brand is recognized globally as the ultimate hallmark of industry excellence.

The awards, held annually, aims to honor service providers in such areas as airlines, hotels, reports, travel agencies, transport and tourist destinations.

The WTA is recognized all over the world with the participation of more than 200 nations through a network of communication partners attracting 1.7 million readers and 90 million viewers.

Other Viet Nam’s tourist businesses also won prizes at the event including Vietravel for Asia’s Leading Tour Operator, Viet Nam Airlines for Asia’s Leading Airlines- Premium Economy Class and Intercontinental Da Nang Sun Peninsula Resort for Asia’s Leading Green Resort.

The number of foreign visitors to Viet Nam increased from 10 million in 2016 to 12.9 million in 2017, up 29.1%.

In the first eight months of 2018, the nation welcomed 10.403 million foreign visitors, a year-on-year increase of 22.8%, including 8,422,300 travelling by air, 1,798,900 travelling by roads and 182,700 travelling by seas.

Source: Dtinews

VIB finances nearly $300 million for SME transactions

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Vietnam International Commercial Joint Stock Bank, also known as VIB, has been named the leading SME Trade Bank by the Asian Development Bank (ADB), thanks to its $276 million trade financing during the year ending on June 30, 2018.

At the TFP Awards and Partners Dinner which was held on September 4 in the framework of the first day of Global Trade Review’s annual conference in Singapore, VIB received one of the prestigious awards recognising leading partner banks in ADB’s Trade Finance Programme (TFP).

Based on transactions supported by TFP during the year ending on June 30, 2018, VIB was the leading bank in SME trade financing. The Vietnamese bank was also awarded the title by ADB in 2015 and 2017.

VIB is one of 10 banks selected by ADB to join TFP since 2009, aiming to provide companies with the financial support they need to engage in import and export activities and improve their productivity and competence in the market.

With the purpose of providing trade finance support, TFP works with more than 240 partner banks. In 2017, the programme supported $4.48 billion worth of transactions and 2,822 small and medium-sized enterprises.

Ha Vy report on VIR

Deputy PM calls for crackdown on Chinese digital wallet payments

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The Vietnamese government wants to stop tourists from using Chinese electronic wallets, saying it results in tax evasion.

Deputy Prime Minister Vuong Dinh Hue has ordered ministries and other agencies to crack down on the use of WeChat Pay, AliPay and illegal points of sale devices at travel hotspots frequented by Chinese tourists. Anh Minh reports on Vnexpress

He has also ordered the State Bank of Vietnam and the Ministry of Finance to consider international financial regulations and come up with solutions to prevent the use of foreign electronic wallets.

He also instructed them to put in place a legal framework to tax such payments.

According to some tour guides in tourist areas, many Vietnamese shop owners have bank accounts in China and payments made by Chinese visitors are transferred directly to those accounts.

Authorities in some tourist hubs frequented by Chinese had flagged difficulties in controlling payments since many used Chinese e-wallets, causing tax losses.

Authorities in Ha Long, Nha Trang and Da Nang beach cities called for technological solutions and specific regulations to stop these payments.

The deputy PM also ordered the Ministry of Planning and Investment to assess the impact of Chinese ‘zero dollar’ tours on the economy and security.

He urged local authorities to carry out surprise checks of tourism companies, shopping malls and restaurants reportedly involved in ‘zero dollar’ tours and publicly announce their penalties.

Huge numbers of Chinese tourists have been coming to Vietnam in recent years, many through ‘zero dollar’ tours that enable them to get free accommodation and meals for shopping at “Chinese customers only” stores for prices a few times higher than the market rate.

These stores are owned by Vietnamese nationals but are actually operated by Chinese investors, and their operations are very hard for authorities to control, one official at the Mong Cai International Border recently told VnExpress.

Fifteen such stores were closed last year after Prime Minister Nguyen Xuan Phuc told Quang Ninh Province to verify media reports.

In the first half this year Vietnam received 2.5 million Chinese visitors, or 32 percent of all international arrivals, a year-on-year increase of 36 percent.

Blood-Testing Firm Theranos to Dissolve

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Firm, tarred by scandal, will pay creditors its remaining cash

Theranos Inc., the blood-testing company accused of perpetrating Silicon Valley’s biggest fraud, will soon cease to exist.

In the wake of a high-profile scandal, the company will formally dissolve, according to an email to shareholders. Theranos will seek to pay unsecured creditors its remaining cash in coming months, the email said.

The move comes after federal prosecutors filed criminal charges against Theranos founder Elizabeth Holmes and the blood-testing company’s former No. 2 executive, alleging that they defrauded investors out of hundreds of millions of dollars and defrauded doctors and patients.

The executives have denied the charges and face a coming criminal trial.

The dissolution process was precipitated by the fact that Theranos breached a covenant governing a $65 million loan it received from Fortress Investment Group last year. Under the loan terms, Fortress was entitled to foreclose upon the company’s assets if its cash fell beneath a certain threshold.

In the email to shareholders, sent Tuesday, Theranos General Counsel and Chief Executive Officer David Taylor said the company is trying to negotiate a settlement with Fortress that would give the New York private-equity firm ownership of the company’s patents but leave its remaining cash—estimated at about $5 million—for distribution to other unsecured creditors.

Under a liquidation process known as “an assignment for the benefit of creditors,” getting that remaining cash to the unsecured creditors could take six to 12 months, Mr. Taylor said in the email. Most of Theranos’s two-dozen remaining employees worked their last day on Friday, Aug. 31. Only Mr. Taylor and a handful of support staff remain on the payroll for a few more days.

The action followed a failed bid to sell the company. Over four months, investment bank Jefferies Group LLC reached out on Theranos’s behalf to more than 80 potential buyers, and executed nondisclosure agreements with 17 of those parties, the email said, adding: “We assisted those parties with diligence and had numerous follow-on conversations.”

The big-name investors who poured money into Theranos will get nothing. All told, investors in Theranos have lost nearly $1 billion.

Theranos’s founder and chairman, Ms. Holmes, and her ex-boyfriend, Ramesh “Sunny” Balwani were indicted on nine counts of wire fraud and two counts of conspiracy to commit wire fraud in June. Mr. Balwani was Theranos’s president and chief operating officer until he retired from the company in May 2016. If convicted, they each face a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution to those found to have been defrauded, on each count.

The indictments followed months of reporting by The Wall Street Journal that raised questions about the company’s technology and practices.

Ms. Holmes sought to disrupt the blood-testing business. At the height of her fame, the Stanford University dropout claimed to have invented groundbreaking new technology that could run the full range of laboratory tests on just a drop or two of blood pricked from a finger.

On the strength of her claims, Theranos rolled out its vaunted finger-stick blood tests in Walgreens stores in California and Arizona and rocketed to a valuation of more than $9 billion, making Ms. Holmes a billionaire and media celebrity. Her bold talk and black turtlenecks drew comparisons to Steve Jobs. The pharmacy chain has said it was misled by Theranos about its technology and prospects.

But as the Journal revealed in a series of articles beginning in October 2015, Theranos’s blood-testing device was unreliable and the company used it for just a fraction of the more than 240 tests it offered to consumers. Behind the scenes, it performed the vast majority of the tests with commercial analyzers purchased from other companies.

Theranos become a symbol of the excesses of the current technology boom. Its failure was dramatic and painful for many. A biochemist who worked at Theranos for eight years committed suicide in 2013 after becoming distraught by its culture of fear and secrecy and its lack of progress with its technology, according to his widow. Tyler Shultz, a grandson of former Secretary of State George Shultz and the first employee to blow the whistle to a state regulator about what he saw as troubling practices, became estranged from his grandfather, a Theranos director.

The roster of Theranos investors—most of whom poured money into the company after its commercial rollout in Walgreens stores in late 2013—included the Waltons, heirs to Walmart Inc. founder Sam Walton; Atlanta’s Cox family; the family of Secretary of Education Betsy DeVos; and Rupert Murdoch, executive chairman of 21st Century Fox and of News Corp , the Journal’s parent company. Each invested $100 million or more in Theranos—investments that are now worthless.

Source: WSJ

Foreign capital finds its way to lucrative local fintech market

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Foreign players are eager to join Vietnam’s lucrative fintech market, while local banks have been scaling up co-operation with fintech firms to avail themselves of Industry 4.0 opportunities.

Latest figures by the State Bank of Vietnam’s Payment Department show that fintech companies in Vietnam now number around 100, compared to nearly 80 earlier this year.

Market survey firm Solidiance recently released statistics showing that the Vietnamese fintech market’s transaction value currently stands at $4.4 billion, which will climb to $7.8 billion by 2020, nearly doubling in only two years.

This explains why foreign players are seeking ways to inject capital into Vietnamese fintech firms.

South Korean group Keb Hana, apart from negotiating a stake purchase deal with local state-owned commercial lender BIDV, was reported to consider teaming up with a local fintech firm via direct capital injection or through an investment fund.

Similarly, Senjo Group, a major fintech firm based in Singapore with profit averaging at $400 million per year, is targeting payment fintech firms in Vietnam.

Senjo Group’s CEO Gavin Lock assumed that Vietnam will continue to be a tempting market to fintech firms in the coming time and that beside payments, they will possibly engage in lending after setting foot in the country.

Before the entry of Keb Hana and Senjo, China’s Alipay, through a Vietnamese intermediary, was reported to engage in negotiations on buying stake of a local fintech firm.

The State Bank of Vietnam’s statistics show that around $130 million of foreign capital has poured into Vietnamese fintech firms in the past two years.

Some eminent cases involve Korea’s UTC Investment spending VND542 billion ($24 million) on buying a 65 per cent stake in VNPT Epay, MOL Accessportal buying 50 per cent of Vietnam’s top online payment system Ngan Luong, NTT Data buying 64 per cent of Payoo, True Money buying 40 per cent of IPay, and a consortium of Credit Saison, Golden Gate Ventures, and GMO Global Payment buying 25 per cent of Bao Kim.

According to Nghiem Thanh Son, deputy head of the Payment Department under the SBV, with 51 million smartphone users (half of the population), 61 million Internet users (66.3 per cent of the population), and widespread 3G and 4G network, Vietnam provides ideal conditions for fintech development.

While foreign players are keen on joining Vietnam’s up-and-coming fintech market, local banks have been shaking hands with fintech firms to ensure their development.

Tran Cong Quynh Lan, VietinBank’s deputy general director, unveiled that despite having an expansive network with more than 1,000 transaction points, the bank has been cooperating with about 10 fintech firms both at home and abroad.

“It proves impossible for banks to go alone. That is why we team up with fintech firms for development at present and in the future. Leveraging this cooperation, we expect to launch new innovative products late this year or early next year,” he said.

Industry experts assumed that in this transitional period when foreign investors are exploring the potential of the Vietnamese fintech market, local banks need to boost cooperation with fintech firms to ramp up their market share.

Across the ASEAN, governments have been making efforts to create an enabling regulatory system to spur the development of banks and local fintech firms.

The SBV’s recent survey shows that 81 per cent of local banks opt for joining hands with fintech firms for development instead of self-studying products.

If these cooperations come to fruition, the sides will create a sustainable ecosystem to avoid hostile acquisitions and protect local production.

Ha Tam report on VIR

US $300 million for SMEs in Vietnam financed by VIB

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Vietnam International Bank (VIB), has just become the only bank in Vietnam named by Asian Development Bank (ADB) as the Leading SME Trade Bank thanks to VIB’s trade financing nearly US$ 300 million in one year period ending June 30, 2018.

At the TFP Awards and Partners Dinner which was held on September 4, the first day of the Global Trade Review’s annual conference in Singapore, VIB received one of the prestigious awards to recognize leading partner banks in ADB’s Trade Finance Program (TFP).

Based on transactions supported by TFP in one year ending on June 30, 2018, VIB is leading bank in SMEs trade finance. Previously, the Vietnamese bank was also awarded the leading SME Trade Bank by ADB in 2015 and 2017.

Le Quang Trung, Deputy CEO of VIB at the TFP Awards and Partners event in Singapore | Photo credit: ADB/ VIB

VIB is one of 10 banks selected by ADB to join the TFP since 2009, aiming to provide companies with the financial support they need to engage in import and export activities and improve their productivity and competence in the market.

With the purpose to provide trade finance support, TFP works with over 240 partner banks. In 2017, the program supported US$4.48 billion in transactions and 2,822 small and medium-sized enterprises.

Recently, Moody’s Investors Service has upgraded the long-term local and foreign currency bank deposit and issuer ratings of VIB to B2 from B1. The ratings agency has also changed the outlook for the local currency deposit and local and foreign currency issuer ratings of VIB to stable from positive. All other ratings were affirmed.