The total accumulative loss of the four biggest players in the e-commerce market has reached VND4.5 trillion.
E-commerce, which has witnessed a boom in the last five years, saw a high growth rate of 25 percent in 2017, according to the Vietnam E-commerce Association (Vecom).
Analysts believe it will be maintained in the 2018-2020 period.
Meanwhile, Statista estimates that the total revenue of the e-commerce sector would reach $4 billion by 2020.
In such a fledgling and fast-growing market, all the big players have been seeing losses as they are spending a lot scrambling for market share.
Joining the market in 2012, Lazada is the biggest spender. The finance report of Recess, the legal entity that owns Lazada, showed a loss of VND977 billion in 2015 and VND1.019 trillion in 2016.
The loss was even higher than its revenue, VND600 billion in 2015 and VND907 billion in 2016. The high expenses on sales and management were the major reasons behind the loss.
By the end of 2016, the accumulative loss of the e-commerce website had reached VND2.743 trillion, while its charter capital was VND15 billion only. Its working capital is mostly from loans.
In early 2018, Alibaba stated it will pour $2 billion into Lazada. Prior to that, it spent $2 billion to acquire 83 percent of Lazada’s shares in 2017.
Shopee has also found its name in the list of biggest losers. In 2016, when it joined the market, Shopee took a loss of VND160 billion. But the figure soared to VND600 billion in 2017.
By the end of 2017, Shopee’s total assets had reached VND730 billion, or 10 times higher than earlier that year.
If compared with these two e-commerce websites, backed by large corporations, Tiki and Sendo are smaller.
After seven years of operation, Tiki has incurred a loss totaling VND600 billion. While Tiki got high revenue of VND62.4 billion in 2016, which was six times higher than 2015, it still took a loss of VND179 billion in the year because of the high sale costs.
Like other e-commerce players, Tiki doesn’t need to worry about the loss. In early 2018, JD.com committed to pour more money into the website. The commitment was made just two months after the Chinese group invested $44 million in Tiki in November 2017.
Sendo spends less money that the other three. It reported a modest loss of VND60 billion in 2015 and VND136 billion in 2016. By the end of 2016, Sendo’s total loss had climbed to VND230 billion.
In the last two years, Vietnam saw many foreign finance institutions leaving Vietnam or scaling down their investment.
But the situation is different this year. Foreign banks tend to expand their operation in Vietnam by opening more branches and transaction offices over the country.
The move shows that foreign banks have big ambitions in the Vietnamese market and want to compete with Vietnamese banks in the retail banking sector.
Public Bank got the nod from the State Bank of Vietnam (SBV) to open three more branches and two more transaction offices. When the plan is fulfilled, the bank will have 18 branches and offices in major cities of Vietnam.
Prior to that, some other foreign banks took similar moves. Woori Bank Vietnam, for example, got approval for its plan to open five more branches and one transaction office.
In mid-May 2018, Shinhan Bank Vietnam officially opened four branches and transaction offices in Hanoi and HCM City, raising the total number of transaction points to 30. Shinhan with the largest network of any foreign bank in Vietnam.
Other foreign banks have poured more capital into their branches in Vietnam. NongHuyp Bank Hanoi branch and Bank of China HCM City branch have got the nod from the State Bank’s Governor to increase their capital.
The former has been allowed to raise capital by 2.28 times, from $35 million to $80 million, while the latter from $80 million to $100 million.
Meanwhile, some foreign banks which have representative offices in Vietnam have decided to extend their operation in Vietnam. DBS, JCB International in Hanoi both asked for extension of operation for five years.
Thoi bao Ngan hang reported that the leaders of Exim Thailand in May had a meeting with the representative of the State Bank, expressing its willingness to enter the Vietnamese market by setting up a representative office here.
However, some other banks still cannot make decision on whether to enter Vietnam. Krungsri, a large bank from Thailand, has postponed its plan to make investment in Vietnam after two years of surveying the market. The bank thinks the M&A cost may be higher than estimated, while there exist disadvantages in licensing and in the business environment.
Most foreign banks had a prosperous year in 2017 with business results better than Vietnamese banks with the same scale in capital and total assets.
Vietnam has become one of the most favored destinations for foreign property investors in the development of mergers and acquisitions (M&As), said real estate services provider Savills Vietnam in a statement on July 27.
In the first half of this year, Vietnam’s economy expanded 7.08% year-on-year, marking the highest first-half growth since 2011. Thanh Tho reported on Saigon Times.
The local real estate sector continued receiving robust interest from foreign investors, ranking first in the contribution to foreign direct investment (FDI) registration, with US$4.97 billion, according to Savills Vietnam.
The consultancy firm said that the smart city project in Hanoi City accounted for the majority of this funding.
Covering 271.82 hectares, this mega project is jointly funded by four local companies and Japan’s Sumitomo Corporation. The first phase is planned to start in the third quarter of this year and will be developed by a Sumitomo-BRG Group joint venture.
Once completed, the smart city is expected to be one of the most advanced smart cities in Southeast Asia, with a modern transport system.
Savills Vietnam said the property market in HCMC also witnessed strong interest from major players during this quarter.
Frasers Property entered into a conditional share purchase agreement to acquire 75% of the shares issued by Phu An Khang Real Estate, which owns a mixed-use development plot in District 2, for some US$18 million in April.
In early June, Malaysia’s Berjaya Land Berhad announced their proposed disposal of the Vietnam Financial Center project to Vinhomes and its affiliates for roughly US$39 million, following Vinhomes’ capital contribution of nearly US$88 million to the project back in March.
Upon completion of the transaction, Vinhomes and its affiliate will fully own the 6.6-hectare project in District 10 for mixed-used development. In addition, they have also injected some US$522 million as capital contribution, giving them a 99.2% stake in the 925-hectare Vietnam International University Town project, and are in the process of acquiring the remaining 0.8% stake from Berjaya.
Meanwhile, the residential sector was still the focus of local players. Xuan Mai Corporation successfully acquired Eco-Green Saigon, a 14-hectare project in District 7.
Nam Long Group continued their cooperation with Japanese investors, Hankyu Hanshin Properties Corporation and Nishi Nippon Railroad, to develop Akari City, an 8.8-hectare residential project in Binh Tan District.
Besides this, Nam Long also kicked off their key project, Waterpoint Township, in the neighboring province of Long An in June. Covering 355 hectares, Waterpoint consists of townhouses, villas, high-rise apartments, a mixed-use complex, a hospital, and education and sports facilities.
The second quarter of 2018 also recorded the notable initial public offering of Vinhomes JSC, the residential property development arm of Vingroup, drawing strong interest from domestic and foreign investors, including GIC, who acquired a 5.74% stake as Vinhomes’ cornerstone investor.
Aside from the positive outlook for the residential sector, Savills expected outstanding M&A performance from both the industrial real estate and office sectors. The industrial sector is fuelled by growing FDI being poured into manufacturing, improved infrastructure and a competitive outlook compared with other countries in the region.
Life used to be very isolated for Ho Ngoc Linh, an 11-year-old girl living in central Vietnam.
She lived at home with her family and went to school with her peers. But she could never make the connections she wanted – and needed – because she was deaf. Kate Veik reported on CNA.
“If you can imagine; you’re 11 years old, you aren’t able to communicate with your family or your friends or your teachers, you can’t hear anything,” said Leia Isanhart, a senior technical advisor for Catholic Relief Services.
“That’s going to be pretty frustrating. Especially as you get into this adolescent age.”
But Linh’s world shifted this year when she became one of the more than 5,400 children to benefit from Catholic Relief Services’ programs for children and adults with disabilities in Vietnam.
In February, Catholic Relief Services paired Linh with a speech therapist who taught her to read lips. Lip reading was the best option for Linh because her hearing loss was too profound for a hearing aid and nobody in Linh’s community knows sign language.
Linh attends a government-run school where neither her peers nor her teacher know how to communicate with her. But when Linh returns home, her speech therapist helps her to practice lip reading while reviewing lessons from the classroom.
When Linh began speech therapy in February, she was completely nonverbal. By June, she was making dozens of sounds.
“That’s a huge jump…she’s a very bright girl,” Isanhart said.
Isanhart visited Linh’s home in the Thang Bing district of Vietnam’s Quang Nam province in June. She said Linh’s new skills have transformed the 11-year-old’s home life.
Isanhart said Linh’s parents seem less frustrated, because they are finally able to effectively communicate with their daughter. Linh’s parents also have more support thanks to a parent association organized by CRS for parents of children with disabilities. Parents meet in their neighborhoods to learn positive parenting skills and techniques to handle common behavioral challenges, Isanhart said.
“We’re giving these families and children access to speech therapy that then is opening up their world and helping them to communicate,” Isanhart said. “That lessens some of the frustrations within the home.”
But Linh was also making meaningful connections with other children in her neighborhood.
During her visit in June, Isanhart watched as Linh’s speech therapist gathered Linh, Linh’s siblings and several neighbor children into a circle. The therapist then lead all the children in several popular Vietnamese games.
In one game, the children repeated one word while pointing to the object that word defined. Linh was able to look at her siblings and peers to see what that sound or word looked like on the lips of different people while also making associations between the words and the objects they described.
“Promoting social inclusion through play; it was quite impressive,” Isanhart said.
Linh’s story is just one of thousands from Catholic Relief Services’ long-running program for children and adults with disabilities in Vietnam.
CRS, which is celebrating its 75th anniversary of service this year, has several projects in Vietnam; including tracking unexploded landmines from the Vietnam War, disaster risk reduction and a clean water initiative. But Julie Keane, CRS’ country manager for Vietnam, said work with children and adults with disabilities is CRS’ flagship project in the country.
For more than 20 years, CRS has worked to offer direct services to people like Linh and her family, while also advocating for large-scale changes to make life in Vietnam more welcoming to those with disabilities. Their work ranges from providing ramps and handrails at schools to programs training children with disabilities to recognize and report abusive behavior.
“It’s kind of that dual approach that is really successful and helpful because you’re not just delivering a service that then is done when we’re done, but it’s really changing the overall system of support for children and adults with disabilities,” Keane said.
CRS is also introducing this year organized play and organized sports for the disabled in Vietnam. Through a partnership with the Special Olympics, CRS was able to host an inclusive soccer match and bocce ball competition this June for 100 children with disabilities and dozens of their peers.
“There are so many benefits that come to the child’s development through sport,” Isanhart said. “We’ll be tracking the benefits to all the kids who are playing together and forging friendships between kids.”
CRS’ ultimate goal is to empower communities to organize inclusive sports clubs, Isanhart said. The provinces that hosted the June events procured more than $800 in donations from members of the community.
“It was really great to see the buy-in of so many stakeholders from within the community to support these kids to have the opportunity to play and build their friendships through organized sport,” Isanhart said.
For Keane, CRS’ program for the disabled in Vietnam is one of the most life-changing programs she has seen in her more than a decade with the Catholic aid agency.
“In Vietnam, it (having a disabled child) is still truly very much still a stigma and so often parents don’t go and get help for their children…and that early intervention is so important,” she said.
“I think for us – for CRS – it’s really about ensuring that all human beings have a life that has value and that the most vulnerable are not left behind. There’s still a lot of work to be done … we are making progress on de-stigmatizing life for people with disabilities but there’s still a ways to go.”
Vietnam’s M&A market is forecast to reach 6.5-6.9 billion USD in 2018, which is lower than the 2017’s record of 10.2 billion USD.
“We expect the M&A value in 2018 to decline from 2017, as this year may not have as big deal as Sabeco,” said Dang Xuan Minh, AVM Vietnam’s CEO.
According to a report by VNS, Vietnam’s merger and acquisition (M&A) market hit over the 10-billion-dollar landmark for the first time last year and is at the turning point to reach a new era of opportunities in the next decade.
M&A value continued to rise 55 percent year-on-year to reach 3.55 billion USD in the first six months of this year.
“One year ago, even very optimistic forecasts hardly envisaged the M&A boom in 2017 which thrust Vietnam’s M&A value to 10.2 billion USD, a growth of 175 percent over 2016. This is a record number, far surpassing previous forecasts,” said Le Trong Minh, editor-in-chief of the Vietnam Investment Review (VIR).
Vietnam’s M&A market is forecast is expected to touch $6.5-$6.9 billion in 2018 @VIR
Minh was speaking at a press conference on June 24 introducing the Vietnam M&A Forum 2018 themed “New thrust, new era” which will take place on August 8 in HCM City.
Nearly 4,000 M&A deals with total value of 48.8 billion USD have been executed in the past decade. The market size in 2017 increased by nine-fold against 2008, of which the record deal of the decade was 4.8 billion USD ThaiBev (Thailand) paid for a 51-percent stake in Sai Gon Beer-Alcohole-Beverage Corp (Sabeco).
Though this value is still modest in comparison with Singapore (62.3 billion USD in 2016) and Indonesia, Thailand and Malaysia (11-16 billion USD), Vietnam’s M&A activity has grown tremendously in both quantity and quality.
It is an effective capital mobilisation channel, which contributes to the country’s economic reform and helps enhance competitiveness of Vietnamese businesses.
The M&A boom in 2017 and first half of 2018 was fueled by the initial public offerings (IPO) of big enterprises as well as encouraging economic policies, which will remain the driving force for the market in the next decade, Minh said.
Only 8 percent of State capital in State-owned enterprises has been sold, among them were record sales at Sabeco and Vinamilk.
According to Nguyen The Phuong, Deputy Minister of Planning and Investment, the process of economic integration and restructuring has accelerated SOE equitisation as well as the development of private sector and foreign investment, opening up more M&A opportunities in Vietnam.
However, he also pointed out some challenges to the M&A boom in the next period, including the rising protectionism, trade war (especially between the United States and China), geopolitical tensions and decelerating growth in big economies.
In a prudent scenario (without big deals), Vietnam’s M&A value will maintain at more than 5 billion USD for four consecutive years since 2015. However, to boost the market to a new high, it needs stronger moves by the Government and businesses, Minh said.
In 2018, M&A deals are expected to continue focusing on consumer goods, retail and real estate. In addition, the fields of telecommunications, energy, infrastructure, pharmaceutical and education will also be on radar of investors.
In 2017, the sectors with the highest M&A value were consumer goods (57 percent), real estate (27 percent), finance-banking (4 percent) and chemicals (3 percent). However, in the first six months of 2018, the leading sectors shifted to real estate (66.8 percent), finance-banking (19.1 percent) and industrial production (9 percent).
The 10th Vietnam M&A Forum 2018, co-organised by the Vietnam Investment Review and AVM Vietnam under the Ministry of Planning and Investment, will review the 10-year journey to assess the M&A trends in the next few years. The event will also announce awards to honour the best deals, best advisory firms of 2017-18 and the deal of the decade.
Authorities of the central city of Danang plan to build a system of drains for coastal wastewater in Ngu Hanh Son District.
Vietnam Water, Sanitation and Environment Joint Stock Company have been assigned to geologic survey and call for tenders to carry out the project which would have a total investment of VND211 billion (USD9.45 million) – Dtinews reports.
Municipal authorities have also asked Vietnam Water, Sanitation and Environment Joint Stock Company to conduct frequent checks to timely detect wastewater discharge into beaches, particularly during and after rains.
Authorities in Danang City recently warned people not to bath at local beaches following reports about tourists getting rashes after swimming. The problems started since June 18 and samples have been taken for testing.
While waiting for the test results, people are advised not to bath at Da Nang beaches at this time, the department said.
The management board of the city’s beaches have been required to provide updated information about the issue for tourists.
Many beaches in Danang are facing pollution due to the direct discharge of wastewater.
My Khe Beach, which used to be ranked among the world’s most beautiful beaches, is among those. Wastewater has been discharged from the city’s 41 wastewater discharge outlets directly into the sea, resulting in not only water pollution but also erosion of hundreds of cubic metres of sand.
Five foreign-invested real estate enterprises have been preparing dossiers and evidence to prove their financial activities are quite healthy, since a recent announcement by the Ministry of Finance revealed that they would be inspected within this July.
Talking with VIR last week in Ho Chi Minh City, a source of Keppel Land Watco II, one of the five companies on the list, stated that the company understands that the inspection by Vietnam’s Ministry of Finance (MoF) is part of the MoF’s periodic review of joint-venture entities in which Vietnamese state capital is invested.
“To our knowledge, Keppel Land Watco II complies with all applicable laws and regulations,” said the source. “We will work closely with the relevant authorities on this routine inspection.”
The other companies under inspection include Somerset Grand Hanoi, G.V.C Development Ltd., Indochine Park Tower, and Global Toserco Co., Ltd. All of these are large real estate developers in Hanoi and Ho Chi Minh City.
A public relations representative of Ascott Ltd., the developer of Somerset Grand Hanoi, confirmed that the company had completed all necessary measures to meet the requests from the inspection team. “The inspection into our company has just been completed and the final results show that we have obeyed all government regulations,” the representative for Ascott Ltd. told VIR. “No problems or violations were found in our company during this inspection.”
Two weeks prior, the MoF sent a document to the Ministry of Planning and Investment detailing the inspection into financial mechanisms and policy implementation in these five foreign-invested enterprises (FIEs) in July. The MoF will look into the value of contributed capital for each party, as well as the profits from the state investment capital within these FIEs. The preservation of the state capital in economic organisations, capital and project transfers, and these FIEs’ observation of Vietnam’s tax laws will also be determined.
Keppel Land Watco Co., Ltd. is a joint venture between Singapore’s Keppel Land, Southern Water Transport Corporation, and Saigon Real Estate Corporation (RESCO). This joint venture is the developer of Saigon Centre, a premium project of office space for lease along with a shopping centre tower complex, located in District 1 in Ho Chi Minh City. In 2017, Keppel Land spent VND845.9 billion ($37.3 million) buying an additional 16 per cent stake in Keppel Land Watco (from I to V), the joint-venture entities for Saigon Centre, through its subsidiary Krystal Investments Pte., Ltd. This transaction enabled Keppel Land to raise its stakes in phases 1 and 2 of the Saigon Centre project from 45.3 to 53.5 per cent, and to raise its stake in the two next phases of the project from 68 to 76.2 per cent.
Somerset Grand Hanoi is the property developed by Ascott Ltd., a wholly owned subsidiary of Singapore’s CapitaLand Ltd.
G.V.C Development Ltd. started operating in Vietnam in May 1998 and is an affiliate company of Housing Development Real-Estate JSC.
Indochine Park Tower is a joint venture between RESCO and Hong Kong’s AF Investments Ltd.
Global Toserco was established by Hanoi Toserco JSC, which is the owner of Pullman Hanoi Hotel, and PT Global Metropolitan, a joint venture of Ciputra Group, Metrolitan Group, and Praidha Ltd.
The PM has issued the list of online public service at level 3 and 4 for ministries, agencies and localities in the phase from 2018-2019.
Accordingly, ministries, agencies and localities are tasked to launch 128 online public services at level 3 and 127 online public services at level 4 in fields of energy, trade promotion, e-commerce, education and training, veterinary, aquaculture, roads, water resources, post and telecommunications, Internet, press, housing and pharmacy.
Online public services in Vietnam are classified into four levels, depending on the tasks that can be performed digitally.
The first level comprises public services that provide online access to all information regarding the service, including procedures, required papers, deadlines, fees and service charges.
The second level allows users to download the required forms to be printed and filled in later.
The third level allow applicants to fill and submit forms online, however, they still have to pay fees at the relevant government bodies.
Service payments can be settled online at the fourth level.
The cheapest and one of the most delicious places to find cuisine in Vietnam is in a traditional open-air market. Here, single-dish food stalls, run mostly by women, offer finely crafted dishes passed from mother to daughter for generations.
Ready to pull up a plastic stool? Here are 10 foods that will give you a perfect introduction to best street eats in Vietnam reviewed by CNN :
1. Pho
What list of Vietnamese cuisine would be complete without pho?
It’s almost impossible to walk a block in Vietnam’s major cities without bumping into a crowd of hungry patrons slurping noodles at a makeshift pho stand. This simple staple, consisting of a salty broth, fresh rice noodles, a sprinkling of herbs and chicken or beef, features predominately in the local diet — and understandably so. It’s cheap, tasty and widely available at all hours.
2. Bun cha
Pho might be Vietnam’s most famous dish, but bun cha is the top choice when it comes to lunchtime in the capital. Just look for the clouds of meaty smoke after 11 a.m. when street-side restaurants in Hanoi start grilling up small patties of seasoned pork and slices of marinated pork belly over a charcoal fire.
Once they’re charred and crispy, the morsels are served with a bowl of a fish sauce-heavy broth, a basket of herbs and a helping of rice noodles. Bun cha sets often come with the delicious nem cua be — fried crab spring rolls.
3. Xoi
Savory sticky rice is less of an accompaniment to meals in Vietnam; it is more a meal itself. The glutinous staple comes with any number of mix-ins (from slivers of chicken or pork to fried or preserved eggs), but almost always with a scattering of dried shallots on top.
4. Banh xeo
A good banh xeo is a crispy crepe bulging with pork, shrimp and bean sprouts, plus the garnish of fresh herbs that are characteristic of most authentic Vietnamese dishes. To enjoy one like a local, cut it into manageable slices, roll it up in rice paper or lettuce leaves and dunk it in whatever special sauce the chef has mixed up for you.
5. Goi cuon
These light and fresh spring rolls are a wholesome choice when you’ve been indulging in too much of the fried food in Vietnam. The translucent parcels are first packed with salad greens, a sliver of meat or seafood and a layer of coriander, before being neatly rolled and dunked in Vietnam’s favourite condiment – fish sauce.
Not ready to give up on the fried ones? In the north these fried parcels go by the name nem ran, while southerners call them cha gio. The crispy shell surrounds a soft veggie and meat filling.
6. Bun bo nam bo
This bowl of vermicelli noodles – widely popular in Hanoi – comes sans broth, keeping the ingredients from becoming sodden and the various textures intact. The tender slices of beef mingle with crunchy peanuts and bean sprouts and are flavoured with fresh herbs, crisp dried shallots and a splash of fish sauce and fiery chilli pepper.
7. Cao lau
This pork noodle dish from Hoi An is a bit like the various cultures that visited the trading port at its prime. The thicker noodles are similar to Japanese udon, the crispy won-ton crackers and pork are a Chinese touch, while the broth and herbs are clearly Vietnamese. Authentic cao lau is made only with water drawn from the local Ba Le well.
8. Banh mi
The French may have brought with them the baguette, but Vietnam takes it to a different level. How, exactly, depends on what end of the country you’re in.
In the north, chefs stick to the basic elements of carbohydrate, fat and protein — bread, margarine and paté — but head south and your banh mi may contain a more colourful combination of cheese, cold cuts, pickled vegetables, sausage, fried egg, fresh cilantro and chilli sauce.
9. Bot chien
Ho Chi Minh City’s favourite street snack, bot chien is popular with both the after-school and the after-midnight crowd.
Chunks of rice flour dough are fried in a large wok until crispy, and then an egg is broken into the mix. Once cooked, it’s served with slices of papaya, shallots and green onions, before more flavour is added with pickled chilli sauce and rice vinegar.
10. Ca phe trung
Vietnamese “egg coffee” is technically a drink, but we prefer to put it in the dessert category. The creamy soft, meringue-like egg white foam perched on the dense Vietnamese coffee will have even those who don’t normally crave a cup of joe licking their spoons with delight.
In Hanoi, follow the tiny alley between the kitschy souvenir shops at 11 Hang Gai into the clearing and up several flights of increasingly dicey stairs to pair your ca phe trung with an unbeatable view of Hoan Kiem Lake.
As the earnings season is well on its way, 21 companies of the 53 we cover have announced their Q2 business results. There is a generally positive bias on the numbers as eight companies announced better-than-expected results, ten were in-line with our forecasts, and only three has worse-than-expected results. You can find more details in our Coverage List attached.
Of note on the power sector, thanks to strong rainfall in the South of Vietnam, southern hydro-power producers have been doing pretty well. Our power analyst also mentioned HND (thermal power) as a stock to look at, as its operating earnings were quite positive last quarter and as the SCIC seeks to divest. If you’d like to speak with our power analyst, please let me know.
VN-Index has fluctuated within a narrow range of 920-940 points this week, and ended the week at 935.52 points on Friday up only 0.2% week over week. However the downtrend still dominated the market in the last trading week of July.
For the whole week, foreigners were net selling the market offloading VND490.4bn (USD21.3mn) worth of shares on the HOSE. However, they ended the Friday net buying VND16.3bn (USD0.71mn). Overall, foreigners represented 13% of this week’s total trading on the HOSE.
Both HNX and HSX indices bounced back after testing their support levels (920 and 100 points for HSX and HNX, respectively) thanks to the recovery of blue-chip-stocks. In contrast, the significant increase in speculative stocks triggered a profit taking pressure on them. The short-term trend is still unsettled, so investors should remain balanced portfolios with both cash and equity. Besides, shifting focus to companies establishing their Q2 earnings is advised.
Also worth noting, as of July 20, 2018, FDI disbursements reached USD9.85 billion, an increase of 8.8% over the same period in 2017. According to the report of the Department of Foreign Investment – Ministry of Planning and Investment, total 7 months in 2018, the total capital registered new and increased capital and share purchase of foreign investors is USD22.94 billion, up 4.6% over the same period of 2017.
According to the General Department of Customs, total import turnover of goods in Vietnam in the first 6 months of 2018 reached nearly USD110.9 billion, up 9.6% over the same period last year. In particular, the import value of the top 10 commodities reached more than USD76 billion, accounting for nearly 70% of the total import value of the country. Of these, only two categories of machinery, equipment and spare parts and computers, electronic products and components reached USD35.7 billion, accounting for 32.2% of the total import value of the whole country.
The Department of Trade and Industry (DGTR) – Ministry of Commerce and Industry of India has released the anti-dumping investigation data of filament yarn nylon or imports from the European Union (EU) and Vietnam. Accordingly, the DGTR determined that some Vietnamese and EU exporters had dumped into the market at a range of 0% – 55% for Vietnam, 10% to 20% for the EU. This has caused significant damage to India’s manufacturing industry. So far, this hasn’t caused any problem to Vietnamese firms’ activities as India is not the biggest importer of Vietnamese yarn.
Rong Viet Securities Equity Research Summary
Company Report
In the past week Rong Viet research initiated on two stocks: HCM DEVELOPMENT J.S. COMMERCIAL BANK (HSX: HDB) and FPT DIGITAL RETAIL (HSX: FRT) .
Ho Chi Minh Development Joint Stock Commercial Bank – Growth Drivers from Customer Ecosystem and Consumer Finance (Initiation, HDB VN, BUY, PT: VND42,000, TR: 23%)
HDB has achieved impressive results with 110% YoY growth in PBT 2017 and 170% YoY growth in PBT 1Q2018.
HDB will be able to maintain this robust growth following its retail banking strategy with advantages from huge customer ecosystem, extensive transaction network and efficiency improvements.
The contribution of HD Saison – the third biggest player in the booming consumer finance sector – is another significant competitive advantage of HDB.
The merger with PGBank will be a milestone in the comprehensive strategic partnership between HDB and Petrolimex.
The stock is trading at 2x current EPS of VND7,719. Furthermore, at its current price, it is trading at ~1.9x P/B. In this year, dividend yield is expected to be VND1,000.
FPT Digital Retail – Aggressive Plan Needs to be Proven (Initiation, FRT VN, ACCUMULATE, PT: VND84,000, TR: 17%)
Smartphone market still has room for growth.
F.Studio – take advantage of the unauthorized Apple market.
Though the outlook for mobile phones isn’t as attractive as it used to be a few years ago, FRT’s stock price is now at a level that is within a realistic trading range. After a 25% drop from its peak, the stock is not too expensive. Adding a cash dividend of VND2,000, the potential total return is 17%.
FRT is the second largest mobile phone retailer in Vietnam, after MWG. Its smaller size will allow FRT to expand, although the smartphone market is gradually becoming saturated.
The Long Chau pharmacy chain is promising. However, in order to truly become the driving force of FRT, Long Chau needs to succeed on a large scale, not only in Ho Chi Minh City. This is a difficult task, especially since the current environment is not really ideal for the development of pharmacy chains
By Marc Djandji, CFA
Head of Institutional Sales, Rong Viet Securities (VDSC) | marc.djandji@vdsc.com.vn
Asia has many fascinating things and experiences to offer from the most exquisite and exotic gastronomy to the most exciting adventures. And yes, here you can also find amazing live music bars and today Apoteka Gastropub will present them to you.
It is always good to have different things to do in the evenings, so if clubs are not your thing and you prefer to listen to great live music in a pretty good environment, then read and pay attention!
THE WANCH: THE ORIGINAL ROCK SPOT OF HONG KONG
If you are in HK and are looking for an authentic live rock music bar, then look no further than The Wanch. Since they opened their doors in 1987 they have remained as the original and authentic rock spot of this city.
It is accurate to say that practically every single band in this city has performed in this bar at some point. Even though this bar is not as glamorous as other places, it is an authentic music venue, especially for those who want to listen to new bands.
Therefore, if you are looking for something that completely breaks the mold, then you should visit The Wanch. If you really like live music and are looking for a truly interesting experience, then you need to visit this bar.
And what about food and drinks? Even though here you won’t find the great variety of other venues, the principal attractiveness of this place is the great music and environment. You can still enjoy of a tasty bacon, turkey or cheese buttie. Moreover, they offer a free snack plate from Tuesday to Saturday.
Therefore, if you are looking for a place with outstanding music and the authentic music venue atmosphere, then look no further than The Wanch in Hong Kong.
I know some will say that there are better options, but when it comes to live rock music this is the definitive winner.
ACOUSTIC BAR: THE REAL MUSIC VENUE IN HO CHI MINH CITY
If you want to enjoy of the finest rock music, then Acoustic Bar is the place to be. Here you will be able to watch the most talented bands in the country performing the best classics of rock music, and yes, you can also hear newer styles and songs.
The environment is pretty relaxed and cool, because it is a mix between a bar and a café, so you can either go in the afternoon and drink a good cup of coffee or join the night when things get more exciting and wilder…
The unique downside of this place is that they don’t serve food, so make sure to take this into account. On the other hand, you have at your disposal a great variety of cocktails, drinks and liquors.
What about the crowd? It is pretty mixed to be honest, because here you will find locals, expats and tourists in great quantities. Therefore, if you are looking to meet new and interesting people, then this place is ideal.
Everything in this place speaks rock, so if you are want of this genre and want to listen to the best rock songs from all eras, then you will have a great time at Acoustic Bar in Ho Chi Minh City.
PISCO BAR: A DIFFERENT BAR IN KUALA LUMPUR
If you didn’t know it Pisco is a grape spirit from Peru and this alone makes this bar kind of unique, because it is a fusion of Peruvian, Spanish, Malaysian and Japanese elements and styles…
Here you will be able to enjoy the most delicious Spanish tapas and paella along with the most exquisite dishes from Peruvian cuisine like ceviche, and of course, the emblematic Pisco Sour. You will have a great variety of dishes at your disposal so you can feel completely satisfied, and yes, clients love the food cooked by the talented chefs of this bar.
If we talk about food, spirits and cocktails then you can be sure that you will have a pretty good time in Pisco Bar… but what about music and the environment? Let’s review it!
What we love about this bar is the atmosphere: it is pretty chic, chilled and sharp. Therefore, it attracts a great variety of attendants from tourists to expats and professionals. That’s why you can come here and meet new people without problems.
Pisco Bar is known in Kuala Lumpur for bringing the best DJs in town for amazing live music performance, and not only that, because they also host live dancing performances.
There isn’t a determined style of music as it is up to the DJ of the day, but in general the environment is pretty fun and chilled.
Pisco Bar also allows you to rent the whole place and customize everything to what you have in mind. That’s a huge advantage, because you can customize everything from the music to the food. And yes, they do a pretty good job!
All in all, this is one of the best live music bars in Kuala Lumpur and Asia. It is definitively worth a visit if you are around!
CRAZY ELEPHANT BAR: BEST CHOICE IN SINGAPORE
If you are around Singapore and looking for a pretty good live music bar, then you should visit the Crazy Elephant Bar. The crowd in this place is very varied, as you will find locals, tourists and expats.
This bar is famous because it not only puts small local bands in scene but also big ones, because famous bands like Deep Purple and singers like Robbie Williams have performed here. So, you can deduce that this place is the bomb!
And we can name several others:
Rick Derringer of The McCoys
Eric Burdon of the Animals
The famous saxophonist Bobby Keys
And several others… this is more than enough to see that this place is an important part of the nightlife scene in Singapore. That’s why it is a must-visit if you want to watch some of the best live rock performances in whole Asia.
If you choose to attend Crazy Elephant Bar, then you will be happy to know that here you will find the trendiest and most talented rock and blues bands in Singapore. And well, just a little extra tip: go on Wednesday or Saturday for enjoying the performances of Blues Machine Band. If you are fan of blues, then by all means follow our advice!
Want to be part of the fun? Then you will be happy to know that you can perform on stage in the jam sessions that are usually organized on Sundays. You just need to tell the bar staff that you want to perform and that’s all.
And there’s another element that makes the atmosphere so good: they broadcast funny jokes on TV screens. This definitively adds a more special and fun vibe to the place.
The service is pretty good: they are fast and friendly. The staff is always ready to help and they actually enjoy their job, so that’s a huge plus!
The food and drinks are top-notch as well. You have a great variety of dishes, cocktails and spirits at your disposal, so there’s plenty where to choose from.
In conclusion this is the best live rock music bar you will find in Singapore… guaranteed!
PIZZA EXPRESS: BEAUTIFUL MUSIC AND EXCEPTIONAL FOOD IN DUBAI
Dubai has many great venues, but this British chain of Italian food restaurants is actually pretty good when it comes to live music, especially Jazz. And yes, the pizza is incredible and quite affordable in fact.
That’s how they advertise themselves: Beautiful music, stunning design, unique experiences and exceptional food. Hence, it is the perfect environment is you want to watch some of the best bands in the city while enjoying of a delicious meal.
You will watch live performances every single night, and yes, they solely offer the best singers and bands. That’s one of the reasons you need to visit, because they take quality very seriously.
The environment is pretty good as well, it is modern, comfortable and you will meet lots of new persons. As the city is primarily inhabited by expats, you will have high chances of meeting them here, especially if they are lovers of good jazz.
Here you will find world-class musicians every single day, an excellent and elegant environment and the best service. So, if you are around Dubai then this place is worth a visit, especially if you love Jazz music.
The legal framework to fight against transfer pricing is ‘not powerful enough’, while the defining of tax arrears that enterprises have to pay is still based on negotiations with taxpayers, experts say.
Thomas McClelland from Deloitte Vietnam said at a workshop on investment incentives held in Hanoi some days ago that transfer pricing is a normal business operation. The CEO of one of the world’s biggest tax consultancy firm said the problems related to transfer pricing are unavoidable.
Nguyen Van Chi from the National Assembly’s Finance & Budget Committee agreed with him, saying that this is a ‘natural phenomenon’ which is unavoidable.
Meanwhile, Nguyen Minh Phong, a respected economist, said transfer pricing is an ‘illegal’ and ‘immoral’ behavior. “I know all businesses seek profit. However, transfer pricing can be seen as a way of deliberately evading tax, which must be criticized,” he said.
Vietnam has attracted 24,000 foreign invested projects, which make up 20 percent of the state budget total revenue and nearly 20 percent of GDP.
However, according to the Ministry of Finance (MOF), transfer pricing conducted by foreign invested enterprises (FIEs) is a burning issue.
Vietnam sets low corporate income tax rates which has prompted multinational groups to carry out transfer pricing to optimize their profits.
MOF, after analyzing FIEs’ finance reports in 2012-2016, found that 44-51 percent of FIEs report losses each year.
The figures were high, 51 percent and 50 percent in 2015 and 2016, respectively. Despite the continued loss, many of them continued expanding their operation in Vietnam.
Tax bodies have discovered transfer pricing activities at multinationals such as Coca Cola, Metro Cash & Carry, Big C and Keangnam, and collected trillions of dong worth of tax arrears.
However, even though the wrong tax declarations by the groups were discovered, transfer pricing activities in Vietnam continued to increase.
The Corporate Finance Department has found a growing tendency of profits being transferred back from abroad to Vietnam by some FIEs in order to enjoy big corporate income tax incentives.
This can be seen in the extremely high ROE (return on equity) ratio of FIEs in some sectors such as electronics, telecommunication and software, which is always over 30 percent.
A report of the department showed that despite good operation, FIEs’ contribution to the state budget is low, not corresponding to the resources used. They exploit investment incentives, including land rent, corporate income tax, and personal income tax to conduct transfer pricing.
Experts from the World Bank have recommended that Vietnam replace current policies which offer investment incentives based on profit with investment incentives based on business efficiency.
Several banks in Vietnam have warned customers about credit card info being stolen using scam emails or phone calls.
The warnings have been issued in light of recent reports in which customers have received emails and phone calls, supposedly from the police or even the banks themselves, asking for personal information, including credit card and card verification numbers.
Thanh of HCMC recently received an email from the Vietnam Prosperity Bank (VPBank) asking for her name, home address and password to gain access to her bank account.
“These are all private information of card holders, so there’s no reason why the bank would email us to ask for them,” she said.
Thu, 68, from the central province of Quang Ngai, recently received a phone call from a man who claimed to be working for the police who said she was suspected of being part of a drug trafficking ring in Hanoi. Thu was asked to provide all information regarding the money she had stored in banks, and to transfer an undisclosed amount of money to an unknown account for a “lesser sentence.”
“I panicked and intended to do what they said at first, but then I thought, if I was staying home all day, how can I be involved in a drug trafficking ring? So I calmed down and said that I would discuss this further with my son before calling back.” No other call came after that incident.
In response to such news, the Maritime Bank has told its customers that banks would never require personal information from customers, for example bank account numbers, PIN, Internet Banking usernames or passwords. It also warned customers that any email or phone calls requiring them to provide such info are scams.
Additionally, customers should be wary of phone numbers beginning with +31385 or +36022, as they are most likely to do with staged kidnappings to demand ransom.
The HCMC branch of the State Bank of Vietnam has also asked all banks to reassess their internal control processes, issue warning to customers and alert the police about potential scam cases.
In Thanh’s case, VPBank immediately rechecked its systems and sent out warnings to other customers not to provide their account info to any other entities. The bank has also pledged to develop countermeasures to prevent future cases from happening.
Foreigners are not allowed to own land in Vietnam. In fact, even citizens are not allowed to own land. In Vietnam, land is theoretically collectively owned by the people, but regulated by the State.
Foreigners who are residents in Vietnam are permitted to purchase dwelling houses. They can own a house but not the land on which it is built. They have the option to lease the land from the State.
However the leading foreign estate agent in Vietnam, Chesterton, is marketing a 50-year lease scheme, which is almost a sale. Under this scheme, the buyer acquires a right to the apartment for 50 years, and the right to renew the lease at the term´s expiry without payment of additional rent. If property ownership by foreigners becomes legal within that time, the complex owner will transfer the apartment title to the buyer. If the building for some reason has to be sold, the buyer will get a pro-rata share of the proceeds. And because the contract is only a lease, the buyer can sub-let his apartment. In other words, the contract gives the buyer many of the rights of ownership. Chesterton for example sells 38-year leases in the Parkland building, which has been in existence 12 years (the maximum lease length under Vietnamese law is 50 years).
A foreign investor may also invest in Vietnamese real property by forming a joint venture company with a local partner, or a wholly foreign-owned company, or by forming a Build, Operate and Transfer (BOT) company or one of its variants.
Foreigners who are residents in Vietnam can own dwelling houses but cannot sub-lease these dwellings. Foreign residents can also sell, donate, inherit, or give dwelling houses as gifts. But where they terminate their residence in Vietnam without disposal of their dwelling, 90 days after their departure from Vietnam their dwelling house certificates will automatically cease to be valid, and the Vietnamese State will manage and use their houses.
One thing that separates real estate transactions in Vietnam from the rest of the world is it´s done in pure gold. In June, according to Thanhnien News, one tael (1.25 ounces) of gold is equivalent to VND11.45 million (US$510). It is very important to keep this in mind when looking for a property. The buyer must be aware of the prices and conversions at all times.
Registering property in Vietnam is not particularly onerous, taking about 43 to 71 days to finish the four procedures needed, and costing considerably less than elsewhere in the region.
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.
Notary Fee: around 0.06% of the property value.
Registration Fee: around 0.50% of the property value.
Need help with property legal matters in Vietnam? Contact:
Global Business Service (GBS) Co., Ltd
Level 8, 135A Pasteur Street, District 3, HCMC, Vietnam
Email: info@gbs.com.vn | https://gbs.com.vn
Call/ SMS/ WhatsApp/ Viber/ Zalo at: +84903189033
Reed Tradex – the organizer of “METALEX Vietnam” has announced the cooperation with the Japan External Trade Organization (JETRO) in Ho Chi Minh City, as well as the Investment & Trade Promotion Centre (ITPC) and Ho Chi Minh City Centre of Supporting Industries Development (CSID) to co-organize “Supporting Industry Show 2018” to tighten up the relationship between Vietnam- Japan supporting industries and strengthen the key pillars- electronic, automotive – to develop Vietnam’s manufacturing.
Recently, Vietnam has made steady progress in improving its investment climate. At the press conference on 26 July 2018, Mr. Suttisak Wilanan, Deputy Managing Director of Reed Tradex cited a number of positive indicators that “Vietnam went up five points to 55th place from last year in the World Economic Forum’s Competitiveness Index; and ranked 68th in the 2018 World Bank’s ease of doing business ranking, up 31 places since 2014. Vietnam’s network of 16 bilateral and multilateral free trade agreements is among the best that manufacturers will be able to find in a country at this point on the value chain. These trade agreements dramatically reduced tariffs, anchored difficult domestic reforms, and opened much of the economy to foreign investment.”
Same point of view, the representative from Japan External Trade Organization (JETRO) in Ho Chi Minh City, Mr. Takimoto Koji – Chief Representative shared more “The investment amount of registered FDI from Japan into Vietnam has increased significantly each year. It was a great leap forward, from 2150 million USD of total registered amount in 2016 to 8,640 million USD in 2017; the new registered amount takes up significantly from 1182 million USD to 7746 million USD. 70% of Japanese companies in Vietnam that answered the survey said their business will expand in the next 1- 2 years. It is the highest among the 6 countries in our survey which included Philippine, Indonesia, Malaysia, China, Thailand and Vietnam”
According to General Statistics Office, the index of industrial production (IIP) in the first quarter of 2018 has gained the highest year-on-year growth rate of 11.6% in the past three years. The manufacturing and processing industry continued to grow constantly at 13.9%, in which electronic is still considered as a key sector. Meanwhile, the automotive industry is becoming more active as domestic and FDI firms are rushing to set plan and respond to the challenge of the zero import duties applied earlier this year.
At the press conference, Mr. Suttisak Wilanan expressed his optimistic view on the exciting return of the automotive industry in Vietnam, and gave evidences such as the “Made in Vietnam” automobiles plan from Vinfast – a subsidiary of Vingroup, has invested and decided to cooperate with Italy’s leading design firm, Pininfarina and German luxury car company, BMW. At the same time, the over-20-year-old manufacturer Thaco also inaugurated the biggest and most modern automobile manufacturing factory in Southeast Asia last March to dominate the automobile industry.
Mr. Suttisak Wilanan insisted that “More than ever, car firms need to support and call on supporting industry businesses to supply them the necessary components”. He added more “There are over 30,000 parts per vehicle, it is almost impossible to have all components in the same country. That is why investors tend to establish factories in neighboring countries, surrounding their manufacturing base. Vietnam is in a strategic location astride, located in the center of ASEAN with many major seaports. Therefore, Vietnam can coordinate with key players – Thai & Indonesian car makers to set up a sustainable development cluster for the automobile industry.”
In additional, Mr. Luu Hoang Long, Chairman of Vietnam Electronic Industries Association (VEIA) said at the press conference that “According to data from the Ministry of Industry and Trade, the total number of enterprises currently involved in the supporting industry sector is 661 (591 enterprises produce electronic components, 56 enterprises produce computers and peripherals, 14 companies producing magnetic tapes and disks). However, the number of domestic enterprises in the supporting industries of the electronics as FDI’s supplier is not much due to the internal constraints of the enterprises, and also the limitation of understanding between the two sides, the connection between FDI enterprises and domestic enterprises is very necessary”.
For these reasons, Reed Tradex will cooperate with JETRO, ITPC and CSID to co-organize the exhibition “Supporting Industry Show 2018” at this year’s event. This alliance will empower the transfer of new technologies and the expansion of business networks between Japanese and Vietnamese businesses, which are vital to sharpen the competitive edges of supporting industry. Mr. Takimoto Koji shared “Local Procurement Ratio (LPR) of Vietnam was 33.2 % in 2017. It is the lowest among the 6 countries in our survey. With the “Supporting Industry Show 2018”, we aim to raise the local procurement rate by connecting companies at the exhibition.”
According to information from Mr. Takimoto Koji, to create “win – win relationship” between Japan and Vietnam at “Supporting Industry Show 2018”, there will be 18 Japanese major companies will join as Buyer. Another 30 Vietnam companies will exhibit as Supplier, which will be leaded by ITPC and CSID.
Supporting Industry Show will be organized in Ho Chi Minh City from 11-13 October, 2018
Participation in “Supporting Industry Show 2018” is a part of the comprehensive strategy plan for supporting industry (SI) development by ITPC in 2015-2020 and 2021-2025. According to Ms. Cao Thi Phi Van – Vice Director of the Investment & Trade Promotion Centre (ITPC), the orientation consists of 3 points. Firstly, to create a domestic production networks which can manufacture finished products, and engaged to the global value chain. Secondly, to attract more FDI to invest in high-value SI products. And thirdly, to support SMEs to be able produce SI products in the direction of import substitution and increase value added.
“There is great potential to develop the mechanical sector in the Ho Chi Minh City, especially the automobile industry as the city’s Index of Industrial Production (IIP) in 2017 increased by 7.9% compared to 2016. This year, CSID will work closely with JETRO to bring manufacturer in Ho Chi Minh City to join the “Supporting Industry Show 2018”. This is great opportunities for companies to raise supply capacity, connect with more domestic and oversea partners, thus gradually joining the global supply chain”, said Ms. Le Nguyen Duy Oanh – Vice Director of Ho Chi Minh City Centre of Supporting Industries Development (CSID).
“Supporting Industry Show 2018” will be organized on 11-13 October, 2018 at Saigon Exhibition and Convention Center (SECC). At the same time, “METALEX Vietnam 2018” will gather and introduce 500 brands of latest machine tools & metalworking solutions for production upgrade from over 25 countries. The exhibition is expected to be more comprehensive with the co-location of “NEPCON Vietnam 2018” which will be a platform for electronics manufacturers to meet with providers of technologies and solutions from 200 brands, 20 countries.
