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Vietnam ranks fifth in global instant noodle consumption

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After two consecutive years of decline, Vietnam’s instant noodle consumption started recovering in 2017 with the total sale of 5.06 billion packets, up 3 per cent compared to 2016 and 5.4 per cent compared to 2015.

According to statistics published by the World Instant Noodle Association (WINA), Vietnam is currently ranked fifth in the world in terms of instant noodle consumption, following China, Indonesia, Japan, and India.

According to WINA, around 100 billion instant noodle packets are sold annually worldwide. Global sales saw a growth rate of 40 per cent from $44 billion in 2013 to $61 billion in 2017, as revealed by Euromonitor’s statistics.

In Vietnam, the wide range of products available to customers thanks to the growing number of both foreign and local firms joining the market is one of the reasons behind the increase in consumption.

At present, there are approximately 50 enterprises producing instant noodles in Vietnam. Seventy per cent of the revenue is made by Vina Acecook, Masan Consumer, and Asia Foods, the three largest instant noodle producers.

Notably, Vina Acecook ranks first with 43 per cent of the market share in general and 50 per cent of the market share in the urban areas in particular.

While Vina Acecook’s products are dominating the urban market, the products of Masan Consumer and Asia Food are in the lead in rural areas, with the total market shares of 60 per cent.

Regarding the high-end instant noodle segment, imported products are overwhelming the local products with the average selling price of VND23,700-35,000.

Recently, the increase in instant noodle consumption increased the revenue of manufacturers.

Notably, Acecook Vietnam reported that its revenue in the first half of 2018 saw an increase of 8 per cent on-year, thanks to favourable market conditions.

Similarly, Colusa-Miliket Foodstuff also reported an increase of 10 per cent on-year in revenue during the six-month period, reaching VND281 billion ($12.13 million).

Kim Oanh report on VIR

Reasons why Vietnam is a frontier market crown jewel

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Vietnam is the most exciting frontier market in Southeast Asia, a nation of 93 million people whose lives are being transformed by its economic doi moi programme.

Vietnam endured decades of civil war and foreign occupations by colonial France, the Imperial Japanese Army, the US and even Deng Xiaoping’s China Vietnam is also the gateway to the Mekong Delta and offers the lowest cost, educated, technology work force for Japanese, South Korean, Taiwanese, German, Chinese and US investors due to its pro-business foreign investment programme. Vietnam is also a classic expanding consumer economy with youthful demographics, accelerating urbanisation rates and a rise in per capita disposal income.

Vietnam’s stock market VN Index has fallen by 22 per cent since it peaked in April. It now trades at 14.6 times estimated 2018 earnings, down from a multiple of 20 at its early April peak. In most emerging markets, such a valuation hit is a symptom of systemic financial crisis, as proven by recent events in Turkey, Argentina, Brazil and Pakistan. However, this is not the case in Vietnam. Earnings growth of 15 per cent is powered by largely domestic spending, not just export growth. The ruling Communist Party is committed to the privatisation of state assets. Vietnam now has lower wages for factory workers than China, making it a magnet for foreign direct investment by both Asian and US multinationals.

The Vietnamese government has lifted restrictions on foreign investment and chipmakers. Samsung and Intel have made multi-billion-dollar investments in next-gen manufacturing plants. Vietnam’s economic trajectory is reminiscent of China’s opening under the late Paramount Leader Deng Xiao Ping (“to get rich is glorious, it does not matter whether a cat is white or black as long as it catches mice”). In the last decade, GDP growth has averaged 6 per cent per annum while per capita income has tripled. The Vietnamese dong has been stable against the currencies of its main trading partners. True, King Dollar, rising US dollar interest rates and a Washington-China trade war could hit the Vietnamese stock market this autumn but we are now near the point where the risk-reward calculus is skewed in favour of the bulls, not the bears.

The Philippine stock market initially surged after the election of President Rodrigo Duterte, who benefitted from the macro reforms, increase in the tax rate, public spending deficit and reduction in sovereign credit risk engineered by former president Benigno Aquino. Yet the Philippine stock market, sovereign debt and the peso have not escaped the brutal selloff in Asian emerging markets due to trade tensions, a strong US dollar and monetary tightening by the Federal Reserve.

Second-quarter GDP has slowed by 0.3 per cent in the Philippines, a bad omen for the future. The Philippines is also expensive at 17.4 times earnings, a valuation multiple that can easily derate if economic growth disappoints again. Of course, if the growth slowdown is protracted, the Manila central bank could cut policy rates, a scenario that will mean a softer peso. This could mean the Philippine stock market index corrects to 7,000. Value exists in Vietnam but not in the Philippines.

Turkey’s financial turmoil has left emerging markets at their cheapest valuation level since early 2016, when a botched Chinese yuan mini-devaluation triggered contagion across the asset class. The MSCI emerging markets index now trades at 10.8 times forward earnings. Macro risks like a strong US dollar, a hawkish Federal Reserve and political shocks will continue to pressure specific markets like Brazil, Russia and Argentina, the indiscriminate sell off in the asset class has created opportunities in specific countries where the fundamental outlook and the risk reward ratio has moved in the investors favour. Take Mexico, for instance. President López Obrador wants a negotiated Nafta deal with the US since 80 per cent of its exports are headed north of the Rio Grande.

Russia is also extremely cheap at only six times earnings and a dividend yield of 6.8 per cent, though the Russian rouble fell on contagion risk from the Turkish currency crisis due to fears of fresh Congressional sanctions to punish the Kremlin for election cyber espionage and the Sergei Skripal poisoning case in Britain. Yet Russian equities will remain hostage to political risks and a bull market in Moscow is impossible without stability in the rouble.

Financial stocks in India, notably its leading private bank ICICI or Taiwan’s semiconductor/memory shares offer both inexpensive valuations and earnings growth potential. Turkey, Argentina, Venezuela and Nigeria, unfortunately, remain emerging markets where investment risks are far too high, making them no go for now.

Local hotel operators worried over Airbnb services

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The number of local homeowners listing their properties on Airbnb has been surging, but they do not file and pay tax, thus unnerving traditional hotel operators over unfair competition.

A hotel staff member (R) is seen seeking customers at a tourism fair in HCMC

Hotels have now proposed that authorities take measures to place the service under tighter controls, in line with prevailing regulations, to ensure fairness among hospitality enterprises.

Airbnb, the world’s leading short-term home rental service, provided thousands of available rooms for rent two years ago in major cities, such as HCMC and Hanoi. Many experts and traditional hotel owners, particularly small-scale hotels, have expressed their concern that Airbnb hosts will soon become their rivals, due to the proliferation of this rental service.

The Vietnam Hotel Survey 2018 report, which was issued in July, reveals that the number of room listings on Airbnb in the two cities has exceeded 16,000, equivalent to that of two-to-three-star hotel rooms in HCMC, the country’s largest city by population. In particular, data from the HCMC Department of Tourism shows that the city currently has 341 two-to-four-star hotels, consisting of 16,912 rooms.

As noted by a small-scale hotel owner in downtown HCMC, he has begun paying close attention to Airbnb, and following-up on its rapidly lengthening listings, as Airbnb renters are sharing customers with traditional hospitality operators, such as himself. Meanwhile, Airbnb hosts neither pay tax nor comply with hotel business regulations, resulting in unfair competition, said the hotel owner.

Also, a hospitality expert, Tao Van Nghe, said that it is hard to curtail the proliferation of home rental services like Airbnb, which presently affect many one-to-three-star hotels in the country. To cope with the rapid growth of home-sharing services, he supported the idea of maintaining control over them. For instance, tax agencies can consider levying a lump sum tax on Airbnb hosts, while tourism departments can manage them based upon criteria, such as evaluating the quality of rental residences, Nghe added.

Vietnam has yet to adopt a law managing home-sharing services, such as Airbnb, while countries such as Singapore, Thailand, and Japan already have specific regulations on these rentals, said Vo Anh Tai, deputy general director of Saigontourist Holding Company.

In particular, Thailand does not allow leasing residences through Airbnb with lengths of stay of less than one month. Renters violating this rule are subject to large fines. As for Japan, visitors leasing short-term lodgings must be approved by local authorities, adding that all residential buildings in Tokyo are no longer permitted to operate Airbnb services.

According to a report on Vietnamnet

Minimum wages and workers’ life

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Tens of millions of salaried workers and employers in factories and industrial zones across the country are awaiting the wage recommendation from the National Wage Council.

At the meeting held by the council to discuss the minimum wage hike for 2019, the Vietnam General Confederation of Labor (VGCL) proposed a hike of at least 8% for the minimum wage while the Vietnam Chamber of Commerce and Industry (VCCI) suggested keeping the status quo. Each side has its own reasons.

According to a new report released by the VGCL, the current minimum wage can meet only 93% of the minimum living standard. Meanwhile, as per Resolution 27-NQ-TW issued recently, only two years remain for the wage hike so that by 2020 the region-based minimum wage must meet the minimum living standard. However, the resolution also states the principle of wage reform that the State will not interfere in the wage policy of enterprises and will encourage wage negotiation between employers and employees. It should be noted that the minimum wage is one of the strongest interventions in the manpower management of enterprises.

Obviously, all workers want to see their salaries increase. However, a hike in the minimum wage does not mean beneficial for all workers. According to the author’s calculation based on statistics of the survey on household living standards in 2016, the zero weighted rate of workers with salaries lower than or equal to the lowest minimum wage, at VND2.76 million per month for workers in Region IV, is about 20%. With more detailed calculation, the rate would be higher, as the minimum wage is based on individual regions with different living standards. However, it can somewhat tell the division in the interests of workers when the minimum wage is adjusted. The actual income of workers with salaries higher than the minimum wages may even be reduced, as they have to pay more for social insurance, which is mainly based on the minimum wage.

It’s not easy for the 20% of workers with salaries lower than the lowest minimum wage to earn more income, as even for enterprises, violations of minimum wage regulations still occur and are not yet handled properly. To cut costs when the salary fund swells, many enterprises will lay off workers, and those with salaries near the minimum wage level will be the most vulnerable. Then they will have to join the informal labor sector, with no labor contracts or social insurance. According to figures released by the General Statistics Office last year, the number of workers in this sector was nearly 18 million. Who are the people to protect their interests?

To enterprises, the impact of the minimum wage hike depends on many factors. A study by the Institute for Economic and Policy Research in 2017 shows that the minimum wage hike has a negative impact on profit, especially for private enterprises. Therefore, continuous minimum wage hikes may reduce the capital accumulation and growth of the private sector. The minimum wage hike also has an adverse impact on enterprises complying with labor regulations rather than on non-complying enterprises, and their growth as well.

It’s understandable that the minimum wage regulation causes heavy division among many stakeholders, including lawmakers, the trade union, enterprises, academics and policy lobbyists. In the world, 169 out of 187 countries, or up to 90% of the members of the International Labor Organization (ILO), have the regulation for minimum wages, but they are still engaged in endless debates about its effectiveness. In Vietnam, the minimum wage still cannot meet the minimum living standard of workers despite its fast hikes. In the 2010-2011 period, when inflation was high, the region-based minimum wage could meet only 47% of the minimum living standard of workers. In 2015, the level rose to 80% thanks to the fast pace of minimum wage hikes. According to the report of the VGCL, the current level is at 93%.

The minimum wage reflects the humanity of the State and is an instrument for rectifying defects of the labor market and ensure the minimum living standard for workers. However, incorrect determination of the minimum wage may lead to unemployment, especially for low skilled workers, and erode the competitiveness of enterprises. Therefore, the story of the minimum wage may probably has no ending. However, it should be noted that the ultimate goal of the minimum wage is to provide an appropriate and more complete social welfare system for workers.

In line with this spirit, apart from the minimum wage, the State can provide other forms of support, such as social housing, schools or hospitals near industrial zones. These efforts can not only help reduce the living cost for workers but also minimize their anxieties, so they can focus on their work and thus indirectly increase their productivity. In addition, they can help maintain security at industrial zones. According to the report of the VGCL, there were 131 strikes across the country in the first six months of this year, most of which (103) at foreign-invested enterprises and low-income industries like textile, garments and footwear.

Intensive minimum wage debates may make people forget that the life of workers is also affected by many other things, those which can be done right away without debate.

According to a reporton SGT

Vietnam launches innovation network to tap diaspora expertise

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The Vietnam Innovation Network, launched Sunday by the Prime Minister, aims to connect Vietnamese scientists across the world.

“The new network will enable Vietnamese experts working in technologically advanced countries to assist their home country in preparing for the Fourth Industrial Revolution,” Prime Minister Nguyen Xuan Phuc said at the launch.

The network has been joined by over 100 Vietnamese scientists and tech experts living overseas as well as hundreds of their peers in Vietnam.

Pham Minh Chinh, head of the Central Organizing Commission of the Communist Party of Vietnam and member of the Party Secretariat, expressed high regard for the network and its role in Vietnam’s push for “comprehensive development.”

Deputy Prime Minister Vu Duc Dam called for Vietnamese intellectuals overseas to express their love for their country through actions to help Vietnam develop and not miss opportunities brought forth by Industry 4.0.

Several Vietnamese scientists working overseas spoke at the launch and proposed ways for Vietnam to take advantage of advanced technologies, adopt new market approaches and attract venture capitalists from around the world.

Dr. Bui Hai Hung, a researcher at Google’s AI company DeepMind in the U.S., said that while there were many top AI experts of Vietnamese origin working across the world, Vietnam has yet to put itself on the map in this area.

He urged Vietnam to establish an AI Center, develop IT infrastructure and invest in training programs for cloud computing.

Associate Professor Ho Anh Van, who works in Japan, also affirmed that there are many Vietnamese teaching or researching in top Japanese universities, as well as experts working for top tech firms in the country.

This network would enable all Vietnamese to work and cooperate to help transfer technology back to their home country, he added.

To prepare for the Fourth Industrial Revolution, Prime Minister Phuc has approved a long-term strategy on scientific and technological development and innovation with vision, including Industry 4.0, until 2035, Minister of Science and Technology Chu Ngoc Anh said at the event.

Over the past two years, Vietnam’s ranking in the Global Innovation Index has jumped 14 places to 45th among 126 countries and economies, with many businesses focusing on investing in research and development, he noted.

However, Anh stressed that to develop further, Vietnam needs the assistance of Vietnamese scientists and experts living overseas.

The new innovation network was an important step in connecting them with the country, he added.

The launch of the Vietnam Innovation Network was the first event in a five-day program that also includes talks between scientists and the government and relevant ministries as well as visits to hi-tech parks in Hanoi and Ho Chi Minh City.

According to a report on VnExpress

Japan preparing to accept more caregivers from Indonesia, Philippines and Vietnam

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Japan plans to accept more caregivers from three Southeast Asian countries that have free trade agreements with Tokyo to help address the national labor shortage, sources familiar with the matter said.

By easing some restrictions on caregivers from Indonesia, the Philippines and Vietnam, the government will allow more of those with strong proficiency in Japanese to work in Japan starting next April, the sources said Sunday.

Under current terms, Japan accepts up to 300 caregivers from each country per year. The government aims to treat those with high language proficiency separately from those groups.

The number who want to be caregivers in Japan has been increasing. For fiscal 2018 ending next March, there were 298 from Indonesia, 282 from the Philippines and 193 from Vietnam — all record highs.

As Japan grays it is expected to see a shortage of some 340,000 caregivers in 2025, when many baby boomers are expected to be 75 or older and in need of nursing care services, the sources said.

The bilateral FTAs with Japan took effect in fiscal 2008 with Indonesia, in fiscal 2009 with the Philippines and in fiscal 2014 with Vietnam.

Under the deals, about 4,300 people arrived to work in Japan. They are employed as caregivers for three years while studying for a national language examination that must be taken during the four-year period of stay. If they pass, they can continue to work here.

According to a report on Japantimes

Oppo F9 launched in Vietnam, could be unveiled as F9 Pro in India

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Oppo F9 has been launched in Vietnam. The phone could be unveiled in India as Oppo F9 Pro on August 21. Here are price, specifications, and other details.

Oppo F9 has been launched in Vietnam. The smartphone comes with a new V-shaped notch on top of the screen, company’s propriety VOOC charging and a fullscreen display. Oppo F9 will be available in gradient colour options that the company says reflect different colors in different light settings. Oppo F9 is up for pre-order in Vietnam and the phone will be made available starting August 24.

Oppo F9 will likely be launched as F9 Pro in India on August 21. The company has sent out media invites for launch event. In addition, teasers with Oppo F9 Pro as hashtag are being shared by Oppo Mobile India on its official Twitter page. Here’s a look at the price, specifications, and features:

Oppo F9 price and sale date

Oppo F9 will cost VND 7,690,000, which is around Rs 23,200 on conversion. The price is for the 4GB RAMand 64GB memory option. Oppo F9 can be pre-ordered, and it will start shipping from August 24. Oppo is giving away a free 10000mAh power bank as part of its pre-order offers.

Oppo F9 Pro specifications and features

Oppo F9 heys a 6.3-inch Full HD+ display (2340 x 1080 pixels) with 19.5: 9 aspect ratio and screen-to-body ratio of 90.8 per cent. The phone sports the new waterdrop design, which the company claims increases viewing space. A small V-shaped notch on the top of the screen includes the front camera sensor. The phone will be available in Red Sun and Twilight colour options. It runs ColorOS 5.2, based on Android 8.1 Oreo

Oppo F9 features 16MP+2MP dual rear cameras with f/1.85 aperture on both lens. It supports Portrait mode as well. The front camera is 25MP. The phone is powered by an octa-core Helio P60 processor with 4GB RAM and 64GB storage, which is expandable up to 256GB via a microSD card slot. The battery is a 3500mAh one with support for the company’s VOOC fast charging technology, which is said to offer two hours of usage in just five minutes of charging.

Sensors on the Oppo F9 include: proximity sensor, light sensor, acceleration sensor, and digital compass.
Connectivity options are: 2G, 3G, 4G 2G, 3G, 4G, GPS, Bluetooth, Wi-Fi 2.4G / 5G, 802.11 a / b / g / n / ac, and OTG. The dual-SIM phone measures 156.7 x 74 x 7.99 mm, and it weighs 169 g.

According to a report on Indianexpress

HCMC: Vietnam Puppetry Festival opens

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Addressing the opening ceremony, Deputy Minister of Culture, Sports and Tourism Vuong Duy Bien said the festival will contribute to enriching cultural and recreational activities on Nguyen Hue Pedestrian street – VietnamNet reported.

He hoped that the festival would continue being held and become a tourist product and an art brand name, luring visitors to the pedestrian street and HCM City as well.

The three-day event offers Ho Chi Minh City dwellers as well as tourists free Vietnamese puppetry performances in an outdoor cultural exchange space for the first time.

Different forms of Vietnamese puppetry, such as rode, hand, string, and machine and water puppetry, are introduced to audience during the festival by hundreds of puppeteers from the Vietnam Puppetry Theatre, Phuong Nam Art Theatre, Hai Phong Puppetry Theatre, Dong Nai Art Theatre, Kite Theatre, and the Soul Music & Performing Arts Academy.

Through the activities, the festival is expected to bring the art of puppetry closer to the public in the southern region, as well as international tourists, thereby contributing to preserving and promoting the cultural value of the unique traditional art form.

Continue reading “HCMC: Vietnam Puppetry Festival opens”

ASIAD: Vietnam beats Japan 1-0

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Nguyen Quang Hai handed the Vietnamese the breakthrough at the Wibawa Mukti Stadium after just three minutes, which ultimately proved enough to hand his side maximum points.
Although they had already been guaranteed a knockout round berth prior to the match, Sunday’s victory means Vietnam will now meet one of the third-placed teams in the Round of 16.

Meanwhile, Thailand’s Group B campaign ended with a 1-0 defeat to Uzbekistan, courtesy of Zabikhillo Urinboev’s 17th-minute winner

Nonetheless, although they only managed to pick up two points from their three games, the Thais still stand a chance of advancing to the next stage as one of the four-best third-placed teams.

Facebook denies establishing rep. office in Vietnam

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Facebook’s representative in Vietnam has confirmed to VnEconomy that the world’s largest social media network has not set up a representative office in Vietnam as many people are mistaken.

On August 7, on social network and some media in Vietnam, there appeared the image of a business called “Asia Facebook Services Joint Stock Company”, based in the Binh Tri Dong B ward, Binh Tan district, Ho Chi Minh City.

The company’s logo is printed with blue – the featured color of Facebook – and Facebook CEO Mark Zuckerberg, and information stating “Representative office – Solving all Facebook issues in Vietnam.”

The logo also showcases a corporate tax code and a customer care hotline 1900299998. With the above-mentioned information, many people have questioned the fact that Facebook had set up a representative office in Vietnam.

Talking to VnEconomy on August 8, Facebook’s representative in Vietnam said that the logo is like Facebook advertising services, but it is not Facebook’s official office in Vietnam.

According to a study, on Facebook’s NewsRoom, there does not appear the name of Vietnam in the list of countries that Facebook have officially opened a representative office. At present, Asian countries on this list include India, Singapore, Thailand, Malaysia, and Japan.

As for the above-mentioned images, information from Vietnam’s business registration portal shows that the so-called Asia Facebook Services Joint Stock Company was licensed in July 2018, owned by Tang Thi Kim Lien, focusing on advertising activities. The firm is headquartered at No.37 24A street, Binh Tri Dong B ward, Binh Tan district, Ho Chi Minh City.

According to Statista, Vietnam had 59 million Facebook users as of July 2018, being the seventh-largest market worldwide.

According to a report on Hanoitimes

Typhoon Bebinca in Vietnam leaves 10 people killed, 3 missing

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Flash floods and landslides triggered by Typhoon Bebinca in Vietnam’s northern and central regions have killed 10 people and left three others missing, the National Steering Committee for Natural Disaster Prevention and Control said on Sunday.

According to a report on Xinhua, the floods and landslides killed six people in the central province of Nghe An, two in the central province of Thanh Hoa, and two in the northern province of Son La. Two people from Son La and one from Thanh Hoa were listed as missing by Sunday evening.

The floods also destroyed 33 houses, inundated 3,422 other houses, killed 401 cattle and 17,168 poultry, and slightly damaged 1,115 hectares of aquaculture ponds and three dykes in Thanh Hoa and the northern province of Bac Giang.

Landslides occurred on nearly 20 national road sections in Thanh Hoa, Nghe An and the northern province of Yen Bai, causing traffic congestion.

Typhoon Bebinca made landfall in Vietnam’s northern and central regions and quickly weakened into a tropical depression on Friday morning, said the committee.

Natural disasters, mainly typhoons, flash floods and landslides, had killed or left missing 78 people and injured 64 others, destroyed over 740 houses, damaged 18,100 other houses, and damaged 12,600 hectares of rice and other crops in the first seven months of this year, said Vietnam’s General Statistics Office.

The disasters also caused property losses of around 1,468 billion Vietnamese dong (63.8 million U.S. dollars).

VDSC: Vietnam Stock Market Weekly Recap – MWG, BMP

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The shocker this week has been about the Turkey crisis, which sent ripples through the global market and reached Vietnam bringing the market down -1.73% on Wednesday, August 15th. The market had not dipped under -1% since July 20 (-1.12%). A combination of factors have led to fears the country is sliding into an economic crisis.

For investors who have invested in Emerging / Developing markets this scenario will bring back horrid memories of the Asian Financial crisis in 2006.

A few fear that have started the nosedrive of the Turkish Lira vs the US Dollar is outlined below:

1) Turkish companies that borrowed heavily to profit from a construction boom may struggle to repay loans in dollars and euros, as the weakened lira means there is now more to pay back.
2) Turkey’s worsening relations with the US.
3) Mr Trump said he had approved the doubling of tariffs on Turkish steel and aluminium.

This week the VN Index closed out at 968.88, +0.48% for the day and +0.06% WoW. The VN Index started the week strong +0.99% on Monday but gave back all its gains on Wednesday. The 50dma has come down to 954.71 from 960.58 last week so we see the shorter term trend of the market continue to weaken this week. The mid-term trend has also fallen to 1015.11 from 1024.96 last week and is coming close to kissing the 200dma at 1012.43. However, the 200dma has increase from 1008.83 last week so we are seeing the longer term trend continue to rise. Thus, technically we expect the 100dma to cross the 200dma next week and we believe the market will continue to have a negative sentiment weighing on the market. The bears are still dominating the bulls.

This week’s liquidity has been slightly higher VND3.7bn (USD160mn) than last week’s VND3.4tn (USD147mn), and higher than MTD average so far of VND3.6tn (USD156mn), however still below the YTD average of VND4.9tn (USD210mn) with total liquidity reaching VND18.6tn (USD800mn), 86.51% of total trading value. Put-through value was VND2.9tn (USD125mn), 13.49% of total trading value. Total trading value reached VND21.6tn (USD925mn).

In the derivatives market this week 457,549 contracts changed hands at a total value of VND43.48tn (USD1.87bn). MTD 1,140,012 contracts traded worth VND107.5tn (USD4.6bn). At this pace, the volume should come close to 2.3mn contracts by the end of this month vs. 2.8mn in July. About a -18% decrease in total estimated volume.

Again Foreigners continued to be net sellers this week. Buying VND2.5tn (USD109mn) about 11.98% of the entire market value VND21.3 (USD913mn) including put throughs, while selling is VND2.8tn (USD120mn) about 13.16% of the total market value leading to a net selling of VND-251.2bn (USD10.8mn).

Mobile World Investment Corporation (HoSE: MWG): Update on 1H 2018’s result – Strengthening confidence in Bachhoaxanh

In 1H18, MWG posted an impressive growth of 43% in net revenue and 44% in net profit YoY. Moreover, even though it still has to make a profit, Bachhoaxanh is constantly improving and getting very close the break-even point.

Undisputedly domination in both sectors: mobile phone and consumer electronics

It is safe to say that the mobile phone market has entered a mature period with sales growth of only 4% in 1H2018 YoY

Consumer electronics grew 28% in 1H18 YoY while Dienmayxanh posted a growth of 90% in the same period to become the main driver of MWG (contributes 56% of revenue).

Strengthening confidence in Bachhoaxanh

In the previous MWG’s investor meetings, all eyes were on the company’s new business – Bachhoaxanh. Average monthly revenue per store has been increasing constantly.

Bachhoaxanh can be categorized into three main tiers:

Large store (from 200 to 300 sq meter): Established in high population-density areas and near traditional markets.
Standard store (from 160 to 200 sq meter): Also established in high population-density areas and on main routes that have high traffic.

Mini store (from 100 to 150 sq meter): These are the least effective stores of the chain with only limited amount of fresh foods being offered.

Binh Minh Plastics JSC (HoSE: BMP): Update on 1H 2018’s result

As of the end of 1H18, BMP had almost no growth YoY in most of the key indicators such as output, sales and EAT, completing over 40% of the year guidance.

BMP maintained a gross margin of 24% YoY, a plastic pipe manufacturer with a higher PPR and HDPE proportions, recorded a 1H18 gross margin decline YoY.

In terms of sales, BMP is currently selling through two main channels. More than 80% of BMP’s production is consumed by over 1,600 dealers, with the remainder directly supplied to infrastructure projects.

We expect BMP to boost its steel pipe sales a bit after the rainy season ends and complete the business plan of 100,000 tons of products, VND4.3tn of revenue and VND600bn of PBT. BMP will record an EPS of VND 5,843.

Marc Djandji, CFA
Head of Institutional Sales
Rong Viet Securities Corporation (VDSC)

Businesses, banks responsible for credit crunch: VCCI

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Both businesses and banks are to blame for the credit crunch facing the former, the VCCI says.

The Vietnam Chamber of Commerce and Industry (VCCI) says that a survey of 504 businesses in different sectors found that most of them were unable to prove their creditworthiness to banks and other credit institutions.

According to a report by Nguyen Vu on Vnexpress, releasing the survey results Friday, the VCCI said that firms did not have the right human resources to manage the business and lacked financial transparency, making banks deem them a high investment risk.

On the other hands, banks and credit institutions were also part of the problem, with complex, difficult to fulfill procedures, and and high interest rates.

VCCI recommended that businesses improve their human resourcess and transparency of their financial operations to show that they carry low investment risks. Banks and credit institutions, meanwhile, should simplify their procedures and make it easier for firms to access credit, it said.

They should properly assess a business’s development prospects, diversify credit products and come up with appropriate lending modalities.

The VCCI also suggested the government directs ministries to speed up administrative reforms and provide businesses with equal access to resources.

It said all stakeholders need to take action because accessing credit was crucial for a business to survive and succeed.

According to the General Statistics Office (GSO), Vietnam had more than 600,000 enterprises by the end of 2017, 95 percent of them small and medium enterprises with annual turnovers of less than VND100 billion ($4.3 million).

The number of enterprises with turnovers less than VND20 billion makes up over 70 percent of the total number of small and medium enterprises. VCCI statistics show that nearly 60 percent of these micro enterprises did not succeed in getting bank loans in 2016.

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Direct air route to Los Angeles considered

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Discussions have continued on the feasibility of direct flights between the US and Vietnam.

A Federal Aviation Administration (FAA) delegation recently came to Vietnam to survey the Civil Aviation Administration of Vietnam’s safety aviation. This was the third technical assessment by the FAA.

Earlier, deputy minister of transport Le Dinh Tho met Mayor of Los Angeles Eric Garcetti, to discuss air transport.

Some 260,000 Vietnamese people annually travel to Los Angeles. For this reason, the city might be the best choice for opening direct flights between Vietnam and the United States, the mayor added. In addition, Garcetti asserted that the city would create favourable conditions to execute the plan and help promote other fields involving local transport.

According to Vietnam Airlines General Director Duong Tri Thanh, the carrier could only open direct flights to the US by late 2019 at the earliest. He added that the firm would need 5-10 years to come to recover the investment.

In the first five years, Vietnam Airlines would face annual losses of USD30 million.

In 2004, the US’ United Airlines opened an air route linking Francisco and HCM City with a transit in Hong Kong. However, the route was halted since 2016.

Flights to the US need to meet International Civil Aviation Organisation (ICAO) and FAA standards.

Source: Dtinews