As many as five million workers in Vietnam are at high risk of losing their jobs by 2020 because of the boom in artificial intelligence, which may replace laborers with robots, according to a recent study by the International Labor Organization (ILO).
The quality of Vietnamese human resources stood at only 3.79 out of 10 points, ranking the country 11th out of 12 countries surveyed in Asia, said Tran Anh Tuan, deputy director of the HCMC Center of Forecasting Manpower Needs and Labor Market Information, as quoted in Thanh Nien newspaper.
The country also had a low competitiveness index, earning 4.3 out of 10 points and being placed 56th among 133 countries, while only 20.3% of the workers had adequate qualifications in 2015. Moreover, Vietnamese laborers lack the necessary skills in foreign languages, information technology, teamwork and communication, besides responsibility.
In the next 20 years, more than half of the workers in five Southeast Asian countries, including Vietnam, may lose their jobs, with those in the textile-garment sector being the most vulnerable.
The ILO’s study shows that most of the workers in the apparel sector are from Indonesia, Vietnam and Cambodia, with 64%, 86% and 88% of them respectively likely to lose their jobs to automation.
Many domestic enterprises, such as Viet Thang Jean Co., Ltd, (VitaJean), have invested heavily in modern technologies and equipment, thus reducing the number of workers. VitaJean expects to replace 60-80% of its employees with machines.
According to Pham Van Viet, general director of VitaJean, the number of workers may be cut to 450 from the current 1,800. The company will complete installing automatic production lines by next year, enabling it to reduce the prices of products by 20% and recover the investment within five years.
Gas stove manufacturer Namilux has also automated its production lines. The application of advanced technology will help enterprises reduce the number of laborers to one-third, one-fourth or even one-tenth of their current payrolls, Namilux General Director Nguyen Manh Dung said.
Despite high costs, it is necessary for enterprises to automate their production lines to raise their competitiveness and avoid lagging behind rivals or going bankrupt, he added.
Do Quynh Chi, director of the Research Center for Labor Relations, cited data from the ILO to warn that 86% of Vietnamese workers in the textile-garment, footwear and electronics sectors will be replaced with robots by 2050.
According to Vu Quang Tho, head of the Institute for Workers and Trade Unions under the Vietnam General Confederation of Labor, the trend of using modern equipment and technology rather than workers is aimed at generating higher profits.
As for solutions to support the workers, Tho called for the improvement of manpower skills so that they can operate modern equipment. In addition, the Government should issue effective welfare policies for workers.
He also stated that enterprises, especially foreign-invested ones, must commit to hiring a certain number of local workers and providing them with the training needed to run modern machines before they are permitted to do business in the country.
Nguyen Dinh Hoa, dean of the Faculty of Labor Relations and Trade Unions of Ton Duc Thang University, stressed that the number of local enterprises replacing workers with robots remained small. However, the trend is unavoidable, so it is crucial to provide training for workers.
The Vietnamese e-commerce market is one of the leading ones in the region for investment. According to Nielsen, the annual growth of the e-commerce market is 22 per cent and is expected to hit $10 billion in annual revenue by 2022 from the current $4 billion. Thus, the Vietnamese e-commerce market has received great attention from new investors.
It has drawn in a large number of players to become a highly-contested segment with low profit margins while expenditures for sales, logistics, and promotion programmes are too large.
The make-or-break factor is financial capacity, as players are expected to suffer heavy losses to maintain their market share until the retail market ripens and profit starts to roll in.
The domestic e-commerce market is ruled over by big names like Adayroi, Lazada, Tiki, Shopee or Sendo. These firms are backed by foreign e-commerce firms as well as firms having great financial potential.
According to Nielsen, the annual growth of the e-commerce market is 22 per cent and is expected to hit $10 billion in annual revenue by 2022 from the current $4 billion. The Vietnamese e-commerce market shows great potential for development and receives great attention from new investors.
However, in order to gain market share, these firms have to burn massive amounts of money on sales and promotion programmes to lure in passengers, which is the major reason behind their massive losses. Lazada is the e-commerce platform with the largest loss, followed by Tiki and Shopee.
Notably, Lazada reported a loss of VND1 trillion ($43.39 million) in 2015-2016, increasing its accumulated losses to VND2.7 trillion ($117.1 million) by the end of 2016. In the context of fierce competition, Lazada’s losses in 2017 alone are estimated at VND1 trillion ($43.39 million) and its accumulated loss may increase to VND4 trillion ($173.56 million) by the end of 2017.
After seven years, Tiki has accumulated nearly VND600 billion ($26.43 million) in losses, including VND308 billion ($13.56 million) in 2016 and VND284 billion ($12.5 billion) in 2017.
Tiki reported a revenue of VND62.4 billion ($2.7 million) in 2016, up six times against 2015. However, the e-commerce platform took losses of nearly VND179 billion ($7.9 million) in the same year due to overly high sales expenses. Accordingly, sales expenses in 2016 were over VND222.5 billion ($9.8 million), tripling against 2015.
In fact, Tiki JSC only reported revenue from services and e-commerce trading recorded by its subsidiary Tiki Trading. In 2016, the subsidiary’s revenue hit VND817 billion ($36 million) with the gross margin of 9 per cent. Despite this, Tiki Trading suffered a loss of VND41 billion ($1.8 million) as sales expenses exceeded the business’ profit.
Shopee was officially launched in August 2016, however, by the end of the same year, the firm reported a loss of VND164 billion ($7.1 million), which increased to VND600 billion ($26.03 million) in 2017, twice as much as the loss of Tiki.
E-commerce players stocking up on ammunition
Vietnam’s e-commerce platforms are still receiving heavy investment to develop despite big losses.
Earlier this year, Tiki received $54 million in Series C investment made by Chinese internet giant JD.com and South Korea’s STIC Investments. The additional capital is expected to help Tiki to consolidate its market presence.
According to DealStreetAsia.com, Tiki plans to collect an additional $50-100 million in capital in 2019, including JD.com’s contribution.
Regarding Lazada, in March, Chinese tech giant Alibaba Group announced that it will invest an additional $2 billion in the platform, two years after it acquired a controlling stake in the Singapore-headquartered e-commerce site.
Thus, Lazada Vietnam will receive a massive capital boost to increase its activities.
The latest move brings Alibaba’s total investment in the online shopping platform to $4 billion. This is part of the company’s efforts to “accelerate the region’s e-commerce development,” as stated by Alibaba.
Shopee’s parent company, Sea Limited announced a great capital expansion in Shopee to provide ammunition in the prolonged war in Vietnam. In the first six months of this year, SEA poured an additional $50 million into Shopee.
Shopee aims to continually enhance its platform and become the region’s e-commerce destination of choice.
Along with these names, Sendo e-commerce platform, which is backed by FPT, mobilised VND400 billion in 2015-2016. Along with the financial support from FPT, Sendo will receive investment capital from SBI Holdings, Econtext Asia, and Beenos Asia.
HANOI, July 16 — Rescuers were searching for three Vietnamese fishermen who went missing after a fishing ship collided with a cargo ship in Vietnam’s northern Quang Ninh province, provincial authorities said on Monday – Reported by Xinhua
The fishing ship, registered in northern Hai Phong city, collided with an identified cargo ship near Co To island in Quang Ninh early Sunday, which threw seven fishermen into the sea.
Four fishermen were rescued and brought onshore for medical treatment.
The ongoing search on Monday was hampered by strong winds and high waves, authorities said.
France won the World Cup for the second time in spectacular style on Sunday as a 4-2 victory over Croatia in one of the most entertaining and action-packed finals for decades ended the battling outsiders’ dreams of a first title – Reuters reports.
Kylian Mbappe and France put on a thrilling show in winning the World Cup title. Photo: India TV News
After an early own goal by Mario Mandzukic France’s big guns delivered on the biggest stage of all as Antoine Griezmann – with a penalty awarded after a VAR review – Paul Pogba and teenage tyro Kylian Mbappe hit the target.
Ivan Perisic and Mandzukic replied for Croatia, who ended beaten but unbowed after making much of the running in their first appearance in the final.
It was the highest-scoring decider since England beat West Germany 4-2 after extra-time in 1966 and the most goals in normal time since Brazil defeated Sweden 5-2 60 years ago.
There were as many goals in 90 action-packed Moscow minutes as in the last four finals combined, and three of those went to extra time.
The game featured the first final own goal and the first VAR-decided spot-kick — one Croatia were furious about and which was arguably the turning-point of the game.
But the only statistic France really care about is that the result makes them world champions for the second time following their triumph on home soil in 1998.
Having lost the 2006 final on penalties to Italy, it also meant there was no repeat of two years ago when they were beaten in the European Championship final by Portugal in Paris.
Didier Deschamps, captain of the 1998 France side, became the third man to lift the World Cup as player and coach after Brazil’s Mario Zagallo and Germany’s Franz Beckenbauer.
“This is not about me, it’s about everyone around me and the players,” Deschamps said having been carried shoulder-high by them during a post-match downpour.
“It’s a young team who are on the top of the world. Some are champions at the age of 19, but my greatest source of pride is they had the right state of mind.
France coach Didier Deschamps became only the third man to win the World Cup as a player and a coach. Photo: India TV News
“Today we did not do everything right but have those mental and psychological qualities which were decisive – and we did score four goals.
“It hurt so much to lose the Euro two years ago, but it made us learn too and we worked so hard for 55 days here. Maybe if we were Euro champions we would not have been world champions today.”
OWN GOAL
Croatia started full of energy but went behind in the 18th minute when a Griezmann free kick skidded in off the head of Mandzukic, who scored the extra-time winner against England in the semi-final.
It was the fourth successive knockout game in which Croatia conceded first but again they found a way back as Perisic, who got the equalizer against England, smashed in a low shot 10 minutes later.
Then came the moment which will keep the VAR debate at the top of the sport’s agenda.
Perisic flapped an arm at a corner and after Argentine referee Nestor Pitana conducted a protracted VAR review he awarded the 28th penalty of the tournament, another record.
Ignoring Croatian protests, Griezmann stroked the ball home in the 38th minute for his fourth goal of Russia 2018.
That made it the highest-scoring first half since 1974, when West Germany led the Netherlands 2-1 – also the final score – but this time there was much more to come.
Croatia were on top again after the break but France went 3-1 up on the hour as Mbappe and Griezmann combined to set up Pogba on the edge of the box. The midfielder’s right-foot shot was blocked but he coolly curved the rebound in with his left.
Six minutes later Lucas Hernandez tore down the left to set up Mbappe to drill home a low shot as the 19-year-old young player of the tournament claimed his fourth goal in Russia and became the first teenager to score in a final since Pele in 1958.
After three successive extra-time knockout games the chances of Croatia coming back again looked impossible but they were thrown a lifeline by Lloris, who tried to dribble round Mandzukic only for the striker to block the ball and send it into the unguarded net.
Croatia, beaten by the French in the 1998 semi-finals in their first World Cup appearance, continued to press but their energy was sapped and France held out.
Croatia’s shirtless fans saluted their players as torrential rain lashed down on the presentation ceremony and coach Zlatko Dalic had few regrets.
“We are sad but proud at the same time,” he said. “We played well but the penalty knocked the wind out of us and after that it was very difficult. We have been dignified in our victories and we must be in defeat as well.”
Reporting by Mitch Phillips, editing by Ken Ferris and Ed Osmond
The Vietnamese government should create “digital chances” for enterprises to engage with the Fourth Industrial Revolution (Industry 4.0), representatives of enterprises and experts, told Prime Minister Nguyen Xuan Phuc at the Industry 4.0 Summit and Expo 2018 in Hanoi.
The summit discussed the “Vision and Development Strategy in the Fourth Industrial Revolution”, connecting political leaders with experts in information technology.
It also reviewed the role of policymakers in formulating a proactive approach to Industry 4.0 and international co-operation, as well as proposing solutions and options to optimise breakthrough technologies in all socio-economic fields in the country.
Industry 4.0 Summit and Expo 2018 follows from the Smart Industry Word 2017 conference and exhibition, which attracted over 2,000 local and international delegates from manufacturing, energy, IT and telecommunications sectors.
Other recommendations brought to the table by business representatives during the reception with PM Phuc include that the government cuts the red tape and builds special policies for IT enterprises.
If applied, they argued, these measures should create favourable conditions for enterprises to launch new technologies.
They also suggested that the Government helps in enhancing the quality of human resources, particularly high-quality personnel in the field of IT.
Speaking at the meeting, head of the Party Central Committee’s Economic Commission Nguyen Van Binh declared Vietnam’s special focus on developing IT, and that Vietnam will consider the building of specific policies following the model of a “legal framework 4.0” to create optimal conditions for enterprises and people to take advantage of technological productions in the future.
PM Phuc stressed the fact that Vietnam has jumped 12 notches on the Global Innovation Index for 2017 and two for 2018 but also acknowledged that the country is still weak in the stage of implementation, requiring more drastic measures to enhance the speed of IT application, especially among science and technology officials and enterprises.
Highlighting the significance of the Industry 4.0 Summit and Expo 2018, PM Phuc expressed his hope that the delegations will give answers to the question of how Vietnam can become successful in the Fourth Industrial Revolution and also clarify some of the Industry 4.0-related concepts.
Activity in the luxury real estate market is surging in Vietnam, mirroring a booming economy that posted a 7.38% year-over-year increase in GDP in the first quarter of 2018—the country’s strongest in a decade.
In Hanoi, plots in Starlake City, a multimillion-dollar planned community of luxurious villas and landed homes featuring a lake, international schools and office towers, sold out in a matter of days.
In Ho Chi Minh City, luxury real estate developers are upping their game with projects like the Serenity Sky Villas, featuring penthouses asking 60.84 billion Vietnamese dong (US$2.64 million), with private elevators, designer lighting and furnishings—each with its own swimming pool on the balcony. Nearby, the premium tower of the Feliz en Vista residences—a 34-floor mix of garden villas, penthouse duplexes and sky mansions—boasts five-star facilities such as a VIP lounge, cigar bar, saltwater swimming pools, hot spring Jacuzzis, outdoor movie theaters and a treetop adventure walk bridge.
An interior view of a Serenity Sky Villas home Savills
“For the last three or four years, we’ve seen an increase in development activity, with new launches in the premium and luxury end of the market,” said Stephen Wyatt, head of Jones Lang LaSalle, or JLL, Vietnam. He points out that a change in foreign ownership legislation in 2015 gave international buyers the ability to acquire a long-term lease and buy property in Vietnam more easily. Now, foreigners are allowed to buy for a renewable term of 50 years, and for reasons other than personal use. In addition, developers can sell up to 30% of units in a condominium building and 10% of landed property in a residential compound to foreigners. Before, the allowance was a single unit.
In addition to the major cities of Hanoi and Ho Chi Minh City, luxury real estate activity is heating up in the coastal cities of Danang and Nha Trang, beach towns like Ho Tram, as well as Phu Quoc island.
“It’s an emerging market for luxury real estate, but it has a young, dynamic entrepreneurial population of 95 million whose wealth is growing rapidly,” Mr. Wyatt said. In fact, the country’s “middle and affluent class” is expected to double by 2020, according to The Boston Consulting Group, which will create additional demand for resale and leasing.
This has not gone unnoticed by investors. May was an especially big month for the Ho Chi Minh City Stock Exchange. Vinhomes, the largest residential property developer in Vietnam, raised VND 31.1 trillion (US$1.35 billion) in an initial equity offering—the largest the country has ever seen.
Vinhomes, which owns approximately half of the country’s high-end luxury condos, noted in a statement that the volume of its contracted sales is expected to reach VND 105 trillion (US$4.6 billion) by the end of this year, and jump again to VND 175.2 trillion (US$$7.6 billion) in 2019. Indeed, a recent Savills report revealed a 9% annual increase in apartment prices from 2013 to 2017, with average prices across the broader market expected to continue rising.
Some of the grand Vinhomes developments in progress include the Berjaya Vietnam Financial Center, a mixed-use project in Ho Chi Minh City comprising of a premium office building, five-star hotel, serviced residences, and a shopping mall across 16.4 acres.
A Perfect Storm for Developers
According to Matthew Powell, director of Savills Hanoi (which manages roughly 10,000 units in the capital city), more developers are actively trying to enter the high-end property market in the country.
Better still, “significant” demand is attracting developers, both domestic and international, Mr. Powell said.
Helping the cause is the fact that they benefit from regulations that leave them less dependent on loans. In Vietnam, property can be pre-sold once the foundations—like infrastructure, street lights and landscaping—are completed.
Despite the country’s status as an emerging market, the standards and expectations for luxury real estate are quickly improving as developers adjust, learn and adapt to international tastes.
High-caliber property design and services are “already here and quickly improving,” Mr. Powell said, with a rise in concierge-type property management and resort-like communities with grand amenities. “They skipped the awkward part and went straight to the top end of the scale.”
A Value-Add for Buyers and Investors
Sunny Hoang, associate director of International Residential Sales at Savills in Ho Chi Minh City, attributes skyrocketing demand to a low price point for luxury, as compared to other Southeast Asian cities like Bangkok and Singapore, where premium apartments cost significantly more.
In Ho Chi Minh City, it can cost upward of VND115.3 million per square meter (US$5,000) for a luxury apartment close to vibrant city life and within a central business district, but elsewhere in Asia, like Hong Kong, it costs four times more.
Domestic demand drives the majority of the market, but for real-estate buyers in Taiwan, Hong Kong, Korea and China who are keen on premium product, Vietnam is emerging as a better destination than in their own countries. “We’re seeing a lot of demand for luxury—higher than supply—so the next three to five years should be very good compared to other countries in Asia,” Ms. Hoang says.
For investors, the return on investment is equally attractive. Because luxury apartments are in very limited supply, they correspond with higher capital returns, which have been increasing by double digits annually. She adds that opportunities are particularly good in District 1, Ho Chi Minh City’s central business district, and at properties with views of the Saigon River or close to the forthcoming metro public transit line, expected to be completed in 2022.
The Rise of Coastal Homes
A tourism boom in coastal Vietnam is another contributor to the rise of Vietnam’s luxury residential market. Danang, along with other coastal cities like Phu Quoc, Ho Tram and Quang Nam, are experiencing a growing market for vacation and second homes, due to world-class golf courses, tourist hotspots and a solid infrastructure. For instance, hilltop three-bedroom villas at the Banyan Tree Lang Co Residences, which cost VND29.5 billion (US$1.28 million) and are within striking distance of the Danang airport, boast panoramic ocean views and a private pool, and are decorated with locally inspired furnishings.
“High-end coastal properties began springing up in 2006,” said David Blackhall, managing director of Real Estate at Vinacapital. “We invested in development around golf courses and coasts, and we thought we’d be selling a lot of product to foreigners, but more than 90% have been to Vietnamese buyers because they have an affinity with owning real estate and now have access to modern, well-designed, top-end residential products.”
Mr. Blackhall noted that certain regulations on foreign ownership, particularly when it comes to reselling property, are still unclear, but the number of overseas buyers should continue to grow over the next decade as mass transit systems in Hanoi and Ho Chi Minh City, and new airports in Phu Quoc and Danang, are completed.
“If you look at Vietnam from a geographical perspective, it’s in the center of Southeast Asia, there are lots of recreational opportunities like golf courses and casinos under development, as well as an enormously long coastline—and coastline views sell,” he says.
Beautiful beach in Nam Du island cuongvnd / Getty Images
Outlook: Significant Growth
As the economy continues to grow, developers anticipate more expats seeking high-quality housing, and to close that gap, are launching more luxury projects to match the expectations of foreign buyers and investors.
In fact, CBRE, the world’s largest commercial real estate services and investment firm, reported that the total supply of luxury apartments for sale in Ho Chi Minh City sits at approximately 4,000 units. Meanwhile, the population of the largest city in the country is pushing past 10 million.
The upward trend is already visible in the improved quality of new launches and rapidly increasing property prices, with square-foot prices in central business district areas approaching VND 12.84 million (US$557), up from an average of VND 9.64 million (US$418) just two years ago.
“Vietnam is still behind Bangkok and tier two and three cities in China, but the general feeling is it will catch up within the next five or 10 years,” Mr. Wyatt said, adding that JLL forecasts up to 10% annual growth in residential real estate values in major cities this year, with more gains on the way.
Making money — both for itself and, on occasion, even for customers — is no longer enough for the asset management industry.
Being seen to do the right thing for society seems to have equal status, hence the scramble by fund managers to signal devotion to the all-conquering creed of environmental, social and corporate governance-based investment.
Arguably, though, some of the fund managers that have done most to improve the lot of humanity have not been trying to participate in this orgy of ESG.
After all, what, within the power of a fund manager, could be more beneficial than pouring money into the poorest countries with functional stock markets, helping lower their companies’ cost of capital and spurring economic growth where it is most needed?
Frontier funds (and their investors) do precisely this, pumping money into the likes of Nigeria, Kenya, Senegal and Ivory Coast — the mainstream emerging markets equity index ignores sub-Saharan Africa except South Africa — as well as Bangladesh, Vietnam and Sri Lanka.
This feel-good story has also felt good for investors since 2010, producing three times the returns of the mainstream EM index as assets have tripled to about $20bn.
Yet it is in jeopardy. Last month’s annual index review by MSCI, the US group that controls the dominant frontier index, led to cries of “oblivion”, “existential crisis” and the potential “twilight” of the index.
The cause of the angst was MSCI’s decision to promote Argentina from frontier to EM status next year and earmark Kuwait for a possible upgrade in 2020. Assuming Kuwait gets the nod, the frontier index, which has already been stripped of the United Arab Emirates, Qatar, Pakistan, Ukraine and Bulgaria since 2014, would lose 38.4 per cent of its market capitalisation.
Vietnam would become an outsized 25 per cent of the frontier firmament, based on current prices. If it too was promoted, as many observers think is likely, the index would be left with just 45.5 per cent of its current market cap, and even less of its liquidity, given that no countries are being groomed for entry.
“This probably makes the MSCI FM index ever more irrelevant,” pushing it “closer to oblivion,” said Hasnain Malik, head of equity research at Exotix Capital, an investment bank that focuses on emerging markets.
In one sense, MSCI’s actions are understandable. Its rules state that if a bourse boasts an adequate number of large and liquid stocks it should be included in either its emerging or developed market indices. Promoted countries are simply being rewarded for meeting these requirements.
What is lacking, though, is any sign of a master plan from MSCI. Its approach treats the frontier basket as a nursery for future EMs. This is fine in itself but is indifferent as to whether the resulting index is a worthwhile or usable benchmark, either for active or passive managers.
The frontier index has always been an oddity. Alongside the nations mentioned above, it includes middle-income countries such as Slovenia, Estonia and Bahrain, which just happen to have small stock markets.
Yet this slightly random combination has its attractions, such as a higher dividend yield (3.9 per cent), return on equity (13.8 per cent) and consensus earnings growth forecast than either developed or emerging equities, as well as low correlation to other indices, according to data from Andrew Howell, frontier market strategist at Citi.
These attributes partly stem from the fact that frontier markets are under-owned by international investors, which is likely to become more marked still if the frontier concept withers on the vine.
Maybe the solution is for fund managers and their overseers to have the courage to invest more off-benchmark, and for investors to give them the freedom to do so.
Perhaps then more capital will flow “downhill” to poorer countries, as economic theory suggests it should, whether or not a mid-sized New York company decides to keep its frontier index in good working order.
Though Vietnamese shares bounced back strongly in the last two sessions of last week, analysts and brokerage firms remained skeptical that the stock market had actually overcome a difficult period and begun its consolidation.
The benchmark VN Index on the HCMC Stock Exchange finished last week at 909.72 points, marking a two-day increase of 1.85 per cent, but it fell a total of 0.85 per cent after one week.
The HNX Index on the Hanoi Stock Exchange ended Friday at 102.51 points after rallying a total of 4 per cent in two sessions. The northern market index notched weekly growth of 1.8 per cent.
According to analysts, the latest two-day rally did not guarantee short-term growth of the stock market even though some positive signals have appeared in key industries such as banks, securities and real estate.
Manager Dương Văn Chung at MB Securities Company told tinnhanhchungkhoan.vn that most investors and specialists had the same idea that the market had consolidated after it had fallen sharply in the past three months, thus, they thought the market would move in a positive direction this week.
“Based on analysing the market regarding its technical and fundamental factors, I think the latest two-day increase was just a technical recovery and the stock market is not likely to have sustainable growth at the moment,” Chung said.
The benchmark VN Index may rise to a maximum 929 points in the first two sessions this week and then move sideways in the rest of the week, he forecast. “If the VN Index beats the 884-point level on its way down, the market downtrend will continue.”
According to Dương Hoàng Linh, a senior analyst at Sacombank Securities Company, last week’s strong gains were normal as such gains often happen during the downtrend of the stock market after the indices have declined for a long time thanks to depressed investor sentiment.
“It is difficult to hope for positive growth next week as fundamental elements such as cash flow, macroeconomic conditions, global tensions and foreign trading have shown little support for the market’s growth,” he said.
Macroeconomic factors, especially the trade tension between the US and China, would likely damage investor confidence in the stock market, especially domestic ones, Viet Capital Securities Company (VCSC) Head of Brokerage Châu Thiên Trúc Quỳnh said.
“Foreign investors have kept net-selling while domestic investors tend to stand by and take careful watch over the flow of foreign capital. Some of the domestic investors are still worried and pessimistic about the market’s short-term development.”
Trading liquidity remained modest last week with an average of nearly 158.5 million shares being traded in each session, worth VND3.16 trillion (US$140.4 million).
The trading figures were down 18.3 per cent in volume and 27 per cent in value compared to the previous trading week. That indicated investor confidence in local stocks had been declining, according to analysts.
Financial-banking stocks played the important role in driving up the market during the final two sessions of last week.
Bank stocks led to the market’s upward turn, including Vietcombank (VCB), Vietinbank (CTG), Bank for Investment and Development of Vietnam (BID), VPBank (VPB) and MBBank (MBB).
Those bank stocks gained a total of 4.6 per cent, 3.7 per cent, 2.2 per cent, 4 per cent and 3 per cent, respectively.
Analysts have said financial-banking companies, especially banks, may achieve high growth in their earnings for the second quarter and the first six months of the year.
Bank stocks are among the groups of companies that have positive prospects in the short term after some of them reportedly revealed “big” earnings for the second quarter, Quỳnh at VCSC said.
FPT Securities Company (FPTS) said in its report that there had been less negative news from the world’s markets while banks had led the indices up in the last two sessions.
“Friday’s session may be the first signal that reflects investors’ expectations in listed firms’ earnings reports for the first half of 2018. Banks will be in focus next week for investors,” it said.
Incorporation in Vietnam is generally considered a lengthy and bureaucratic process.
Step 1: Check the proposed company name; obtain a business registration certificate as well as a tax registration certificate from the local business registration office under the Department of Planning and Investment
The first step in the incorporation of a Vietnamese entity is to submit the relevant documents in accordance with Government Decree 43/2010/ND-CP (15 April 2010) on enterprise registration, as amended by Government Decree 05/2013/ND-CP (9 January 2013) (“Decree 43”). Provided the application file for enterprise registration fully satisfies the conditions for issuance of an enterprise registration certificate, information about that file shall be transferred to the database of the Department General of Taxation (Ministry of Finance). The Department General of Taxation will then create a unique enterprise code number and transfer it to the national database within two working days from the date of receipt of information from the national database of information. The provincial business registration office will then issue it to the enterprise. This code number is both the business registration code number and the tax code number of that enterprise (Article 8 of Decree 43).
Agency: Department of Planning & Investment
Time: 14 days
Cost: VND 200,000
Step 2) Make a company seal
The company obtains a company seal from a seal maker.
Agency: Sealmaker
Time: 8 days
Cost: VND 165,000 – VND 370,000 for bronze seal
Step 3) Registration of the seal-sample at the Police Department
In Vietnam, most business transaction documents must be signed and stamped in order to be considered valid and legal. When registering the seal at the police division, the company representative also has to lodge a copy of the enterprise’s Business and Tax Registration Certificate and also present his or her identity card.
Agency: Local Police Office
Time: 1 day
Cost: VND 50,000
Step 4) Open a bank account
It is worth noting that the minimum deposit to open an account differs by bank. To open the account, applicant will require a bank- issued application form, the company seal, the company’s business registration certificate, and the resolution of the management board on the authorised signatures.
Agency: Bank
Time: 1 day
Cost: No charge
Step 5) Publish the registration contents on the National Business Registration Portal (NBRP)
Under Decree No. 05/2013/NĐ-CP dated 09/01/2013, enterprises are required to post their registration contents on the National Business Registration Portal (NBRP)within 30 working days since the date of the establishment or the amendment registration.
They are also required to pay a publication fee of VND 300,000 as per Circular No. 106/2013/TT-BTC of the Ministry of Finance dated August 9, 2013.
Agency: National Business Registration Portal (NBRP)
Time: 5 days
Cost: VND 300,000
Step 6) Pay business license tax
The business license tax is paid to the tax authority where the enterprise registers its tax reports or through designated commercial banks. This is an annual tax and is paid in the first month of the enterprise’s operating year and in the month it obtains its tax registration certificate and tax code. Companies established during the first 6 months of the year are required to pay the entire annual business license tax and 50% if established in the second half of the year.
Agency: Tax office or commercial bank
Time: 1 day
Cost: VND 1,000,000
Step 7) Buy pre-printed VAT invoices from the Municipal Taxation Department or obtain and print self-printed VAT invoices
All companies are required to use self-printed VAT invoices from 1 January 2011. As such, a newly established enterprise is required to order its VAT Invoice Books from a publisher and register the circulation of its VAT Invoices with the Municipal Taxation Department.
To register for self-printing, the company founders must submit a standard-form along with (a) a sample of the company’s self-printed invoice, including all statutory details; (b) a map showing the location of the company’s office or copy of the lease contract if the premises are leased, certified by the ward commune people’s committee; (c) the general director’s identification card; (d) a copy of the business registration certificate; and (e) and the tax registration certificate as well as a copy.
Agency: Municipal Taxation Department
Time: 10 days
Cost: about VND 200,000 per book
Step 8) Register with the local labour office to declare use of labour (Municipal Department for Labour, Invalids and Social Affairs).
Within 30 days of starting operations, the employer must register all employees and their qualifications with the Labour Office.
Agency: Municipal Department for Labour
Time: 1 day
Cost: no charge
Step 9) Register employees with the Social Insurance Fund for the payment of health insurance and social insurance.
All employees who have contracts for 3 months or longer must be registered with the Social Insurance Fund. The employer must complete a form provided by the Hanoi Social Insurance along with the following information: the employee name and date of birth, salary (as stated in the labour contract), the social insurance book serial number (for employees already issued with those books), a certified copy of the company’s business registration certificate, and a copy of each labour contract.
The Social Insurance Office will issue an insurance registration book for each new employee that was not issued such book by the previous employer within 30 days of receipt of the application. Health insurance certificates are issued during the first month of the year.
Agency: Social Insurance Fund
Time: 1 day, simultaneous with previous procedure
Cost: no charge
Step 10) Registration for trade union with Vietnam General Confederation of Labour
The employer must register with the local trade union or industry trade union (as defined below) no later than 6 months from the date it starts operations.
The term “trade union” includes (a) provincial or municipal-level confederations of labour under the Vietnam General Confederation of Labour; (b) central-level industry trade unions; (c) trade unions of corporations under the Vietnam General Confederation of Labour; (d) confederations of labour of districts, towns, and provincial cities; (e) local-level industry trade unions, (f) trade unions of processing zones, industrial zones, and high-tech zones; (f) trade unions of corporations; and (g) superior trade unions of other establishments. These trade unions are responsible for establishing a trade union for the company, according to the provisions of the Labour Code, the Law on Trade Unions, and the Charter of the Trade Union of Vietnam, to represent and protect the lawful and legitimate rights and interests of the employees and the labor collective.
If a company trade union is not established within 6 months, the superior trade union shall appoint a provisional executive committee of the trade union.
Agency: Confederation of Labour
Time: 7 days
Cost: no charge
Advisory services
GBS – one of the best business law firms in Vietnam with a network South East Asia, Middle East, Japan, HongKong, Malta and Poland – offers simple direct advice to start your operations in Vietnam. They provide the help you need to understand your options, obtain your business license and complete the registration of your own company.
Nha Trangs Po Nagar Cham Towers dating back to the 8th century. PA Photo/Ed Elliot
Having survived a chequered past, train travel is a lovely and leisurely way to see Vietnam, says Ed Elliot from Dorsetecho
“Given the catastrophic damage over a period of three decades, it’s a wonder anything’s working at all, frankly,” admits railway historian Tim Doling.
Sitting in a first-floor restaurant above the busy streets of Ho Chi Minh City, I am at the end of an epic 1,000-mile journey along the train line he is referring to.
“By 1973, all that was left of the south Vietnamese network was something like 47 kilometres of line running out of Saigon, so the whole thing just ground to a halt,” continues the middle-aged British expat, who chronicles the railways of his adopted home.
“Most of the rest of the network was destroyed.”
A history of Vietnamese rail
A slim country which narrows at the centre, as if cinched by a belt before bulging at either end, Vietnam appears custom-made for a north-south railway line.
From the hectic capital of Hanoi, close to the border with China, the track hugs the coast of the South China Sea before running slightly inland to leave me in the nation’s largest city, formerly known as Saigon.
A tale of construction and destruction, railways were introduced to this corner of south-east Asia by French colonists in the 1880s, after they envisaged an opportunity to capture the rice market, a project beset by poor planning and financial failures.
Photo of a train traveling through Vietnam. PA Photo/Ed Elliot
Years of fighting against occupying foreign forces during the 20th century, culminating in sustained US bombing and sabotage from local guerrilla soldiers, almost signalled the railway’s demise.
Rebuilding the ruined network quickly became a political priority in the aftermath of the Vietnam War, as a symbol of reconciliation for a nation partitioned during two decades of instability and conflict.
Remarkably, it took less than two years for a rudimentary line to become operational in 1976.
The rebirth of a route originally completed in 1936 resulted in an unofficial renaming, and it is now colloquially dubbed the Reunification Express.
The legacy of Uncle Ho in Hanoi
Revered revolutionary leader Ho Chi Minh did not live long enough to see the end to division in his country, but his legacy endures, particularly in Hanoi – where my journey begins.
Nha Trangs Po Nagar Cham Towers dating back to the 8th century. PA Photo/Ed Elliot
Affectionately known as ‘Uncle Ho’, he led the resistance movement against the French during the First Indochina War before proclaiming independence and establishing the Democratic Republic of Vietnam in 1945.
During my visit, red, rectangular posters adorn almost every lamp post to commemorate what would have been his 128th birthday, while seemingly endless lines of schoolchildren queue outside his grey, granite mausoleum, hoping to catch a glimpse of his embalmed corpse which was placed there in 1975, six years after his death.
Leaving Hanoi for Hue
I leave Hanoi in the darkness of early evening, boarding an overnight train bound for the imperial city of Hue, some 400 miles further south.
The night is spent in a private air-conditioned compartment, consisting of two bunk beds and a small table by the window, complete with vase of plastic flowers.
Walking unsteadily along a narrow corridor at one side of the carriage as we rattle along the uneven rails, I discover not everyone has it so good.
Some passengers squeeze into six-bed segments shared with strangers, while those who have purchased the cheapest tickets have to make do with simple wooden benches.
Photo of Vietnam’s railway squeezing past buildings in Hanoi. S PA Photo/Ed Elliot
Following a few bounces on the bunk during the night, sunlight streams through the glass as we chug into our destination. Situated on the banks of the Perfume River, Hue was the capital of Vietnam for almost 150 years.
The Unesco World Heritage Site is centred on a vast 19th-century citadel, fashioned after Beijing’s Forbidden City and surrounded by a moat and formidable stone walls.
It was the seat of the Nguyen Dynasty – the country’s last ruling family – from 1802 to 1945 when the final emperor, Bao Dai, abdicated.
Bowled over by beautiful scenery
Back on board, I discover the mountainous stretch between Hue and the port city of Da Nang is the line’s most scenic.
Standing next to the train door with the window pulled down, I see the partial blur of a railwayman dressed in a smart blue uniform at the side of the tracks signal us on to the winding Hai Van Pass using semaphore.
The train clings to the edge of the cliff, sweeping its way around corners, past secluded coves and deserted beaches while untamed greenery occasionally obscures the misty view of the jagged silhouettes of Da Nang’s skyline on the horizon.
As the altitude drops and we pass through the city, emerald-green rice paddies dotted with the conical hats of agricultural workers gradually take over the landscape, alongside water buffalo and palm trees.
Photo of the Perfume River in Hue. PA Photo/Ed Elliot
Relaxing on the beach in Nha Trang
Keen for a quick recharge of my batteries after visiting two cities, I alight for a brief stopover in the beach resort of Nha Trang – notable for the towers of Po Nagar, an eighth-century Cham temple – before completing the route to Ga (meaning station) Saigon.
The entire journey takes around 30 hours and I am rewarded with a mix of modern skyscrapers, French colonial buildings and more traditional architecture.
At the heart of the city are the red tiles of the Notre Dame cathedral, adjacent to the general post office, designed by Marie-Alfred Foulhoux between 1886 and 1891, though often credited to Gustave Eiffel.
A fusion of gothic, renaissance and French influences, the cavernous, barrel-vaulted hall, is a popular tourist attraction and presided over by a large portrait of the familiar, bearded man whose name the city now bears.
The sombre Cu Chi tunnels
As evening falls, a sunset cruise along the Saigon River provides a different perspective on my new surroundings, before one final stop the following morning takes me around 30 miles north-west of the city to somewhere considerably more sombre.
Successfully used as hiding spots and supply lines by the Viet Cong during the Vietnam War, a small section of the elaborate Cu Chi tunnels has been preserved to show the harsh conditions endured.
Shuffling tentatively into the darkness, the stifling heat is close to unbearable. Squatting and hunched, my shoulders span almost the entire width of the confined space, while my head is in constant danger of grazing the unforgiving stone ceiling.
Emerging back into the light above ground, I stumble across a colossal pit at the side of a series of narrow jungle paths. The large indentation in the powdery earth is a B52 bomb crater dating back to incessant American air strikes.
Decades of foreign occupation and international interference have left multiple marks on Vietnam’s landscape.
Thankfully, the remarkable railway line running down its spine remains one of them.
How to get there
Great Rail Journeys (greatrail.com; 01904 527 180) offers an escorted Vietnam, Cambodia & The Mekong Delta holiday from £2,995pp, departing Sept 25-Dec 18, 2018, Jan 8-Apr 30 and Sept 10-Dec 17, 2019. Two for one upgrade from economy to premium economy class from £375 per person on selected departures with Vietnam Airlines.
GRJ Independent (greatrail.com/grj-independent; 01904 527 181) offers tailor-made versions of the trip for independent travel.
A mid narrowing credit sources and rising lending interest rates, Vietnam property developers have been diversifying their capital mobilization channels, including calling for foreign investment.
In the first half of 2018, real estate ranked second in attracting foreign direct investment when it received $5.54 billion, accounting for 27.3% of total investment registered for this sector, VNA reported. Troy Griffiths, deputy managing director of Savills Vietnam, said stable macro-economic development has fuelled the domestic market’s growth and strongly attracted FDI. It is a relatively favorable start for 2018 with promising movements in all real estate segments.
In the stock market, while the benchmark VN-Index on the Ho Chi Minh Stock Exchange has become stagnant recently, some particularly big investments have still been poured into property projects in the near future. Good governance, improved accounting standard systems and a stable stock market have all helped persuade foreign investors to buy property stocks, he noted, adding that high profitability is also a magnet drawing investors to the Vietnamese market, compared to other markets in the region.
The Chicland Hotel (also referred to as the Chic-Land Hotel) is located on a choice spot on the coast that boasts great views of the sea. There’s just one catch: the site measures only 15 m (50 ft)-wide.
In response, Vo Trong Nghia designed a skinny 72 m (232 ft)-tall tower that contains parking in the basement, a cafe on the first floor, guest check in on the second floor lobby, and a rooftop pool and cafe. The rest is mostly given over to 129 hotel rooms.
Three sides of the building will be totally covered in plants. These have been carefully chosen, both to be aesthetically pleasing, and to filter the light pleasantly within the hotel rooms and on the balconies. If we can trust the renders, it’ll make quite the visual impression, not unlike Milan’s Bosco Verticale and Singapore’s Oasia Hotel Downtown.
Adding so much greenery to a building is naturally fraught with potential issues, such as moisture, additional weight and the like, not to mention just maintaining it, and we’ve no details on exactly how Vo Trong Nghia will handle it.
However, the firm has considerable experience integrating greenery into its projects, including the House for Trees, Binh House, and Farming Kindergarten, so it’ll no doubt have such concerns well in hand.
The Chicland Hotel is currently under construction and is expected to be completed in early 2019.
Vietnam has recently announced some changes over VAT and Corporate Income Tax. Companies operating in this country should take note of the changes and stay compliant with the regulations.
The Vietnamese government has released Circular No. 25/2018/TT-BTC, revising and supplementing the existing circulars on value added tax (VAT), corporate income tax and personal income tax. Article by Jack Nguyen, TMF Group.
If you are operating in Vietnam, below are the changes that may affect your company, effective from 1 May 2018.
Value Added Tax (VAT)
Companies importing goods for export are entitled to VAT refund
The value of the natural resources and minerals used to process export products do not include expenses for transportation from the place of exploitation to the processing plant
In the scenario where tax payers provide goods and services for both domestic sales and export, they are required to record input VAT for import activities separately. Separating records of input VAT for import sales can be a time-consuming and an expensive activity for tax payers. If they fail to record the input VAT separately, tax payers can use the percentage of import sales over total sales from the last tax refund period to determine the VAT refund amount for this period. Hence, the circular will come as a relief for many companies in Vietnam.
Nonetheless, tax payers can claim a VAT refund for any specific period, (not necessarily a full fiscal year but a quarter, a year or more than a year), provided that the amount totals at least VND300m.
For example, if the VAT claim for year 2017 is VND120m, and the percentage of the import sales revenue against total sales revenue of last tax refund period was 60%, the refundable VAT claim of year 2017 would be VND72m.
Corporate and individual income tax
When a capital transfer occurs between companies, the receiving party must review the remaining value of fixed asset to ensure it meets the requirements of fixed assets under the regulation in Vietnam.
Fixed assets must meet the following conditions:
they must guarantee or promise economic benefit in the future
the value of the asset is reliably identified, and the value before tax is at least VND30m
the durability of the asset must be longer than one year
The total deductible amount for voluntary pension funds, pension insurance, and life insurance for corporate income tax is capped at VND3m per month if:
the condition and level of the insurance is stated in one of the following documents: labour contract; collective labour agreement; finance policy; bonus policy issued by the chairman, general director, or director in accordance with the company’s finance policy.
the enterprise fulfils the compulsory insurance liability for employees
For corporate income tax, welfare expense which is capped at one month salary excludes life insurance and voluntary pension insurance for staff, it is capped at VND3m per person each month.
The Vietnamese government has recently published draft amendments to Decree No. 92/2016/ND-CP which governs the conditions for investment and business in the aviation industry (Decree 92).
According to a report John Frangos and Thomas J. Treutler on Tilleke & Gibbins, the new amendments will open up expanded opportunities for foreign investors in the burgeoning aviation industry, but will make it more difficult for new domestic entrants, due to increased capitalization requirements. It is expected that the government will continue reviewing and refining the draft for issuance in the coming time.
According to the draft, the investment ceiling for foreign investment in an air carriage business enterprise will be raised to 49% from the previous limitation in which foreign investors were limited to 30% of the share capital. The largest shareholder will be required to be a Vietnamese company or individual.
It is also proposed that there will be no longer be a distinction between international and domestic-only carriers in determining minimum capital requirements. In comparison with Decree 92, the changes to minimum capital requirements can be summarized as follows:
In addition, under the draft, an airport enterprise, whether establishing and maintaining a domestic or international airport, is only required to have minimum capital of VND 200 billion (about USD 8.7 million).
The draft amendments to Decree 92 are indicative of Vietnam’s overall revamping of its aviation regulatory framework. In addition to Decree 92, the Vietnamese Government has been considering amendments to Decree 68/2015/ND-CP governing aircraft registration and rights over aircraft. Decree 68 provides domestic enforcement of the Convention on International Interests in Mobile Equipment (known as the Cape Town Convention), providing aircraft lessors and financiers greater security rights over their assets. The new draft amendments to Vietnam’s aviation regulations show the government is seeking to encourage more foreign investment to meet the country’s rapidly growing air transportation demands.
Bank-breaking price tags on the clothing and accessories donned by Vietnam’s adolescent elite have brought the country’s rich kids to the forefront of a social media debate over how the wealthy spend their dough.
The online community was quick to memeify video interviews of teenagers disclosing how much they spent on their outfits at Sneaker Fest – Impact Con 2018, a showcase of the hottest sneaker and street fashion trends in Ho Chi Minh City.
In the interviews, teens sporting high-end T-shirts, pants, bags, purses, and shoes from BAPE, Gucci, Balenciaga, and Givenchy were not shy about how much they spent on each item, with one girl admitting that her outfit came with a VND100 million price tag (US$4,400).
Another teen proudly boasted that his face mask, normally a VND10,000 purchase, cost a whopping VND1.4 million ($61).
Some teens at the event, however, were not willing to break the bank just to look good.
None were more so than the boy in the ‘zero-dollar’ outfit.
“My T-shirt is borrowed, my pants are borrowed, and my shoes are borrowed,” he shared.
‘Rich kids’ and ‘spendthrifts’
The video was quick to become a hot topic amongst Vietnam’s online community, racking up 188,000 views and shares just 17 hours after being posted on Facebook by Sneakers Vietnam (SNKRVN). Of course, most of the criticism was directed at “the rich kids.”
Comments ranged from attacking the clothes worn by the teens, saying they looked the same as those bought in local daily markets, to direct attacks on the children’s families for letting their kids run wild with a credit card at such a tender age.
Other commentors suggested that the money would have been better spent on helping those in need.
Still, many jumped in to defend the opulence.
“Their parents are rich, so they buy expensive stuff. Your parents are not rich so you spend with a budget. You’re both the same – you all have to depend on your parents. Why condemn them?” Trinh Quynh commented.
Commentor Ho Phuoc Hiep also jumped in to add her two cents, reasoning that “60 percent of teenagers can earn a lot of money online, so they choose to reward themselves with things they like, the same way adults buy cars and houses.”
SNKRVN founder Tan Truong told Tuoi Tre (Youth) newspaper that the video was originally meant to highlight the hottest brands popular with local youth and that “SNKRVN did not anticipate such [negative] reactions from the online community, considering that the sneakerhead community is quite small,” Truong said.
Truong expressed his respect for the teenagers to choose where to spend their money, adding that “no one has the right to judge.”
“Don’t just judge them negatively because of their valuable items. Their outfits are contributing to creating a fashion culture for young Vietnamese,” said Truong.
‘Poor kids’ version
Of course, the negativity Truong was referring to was quick to spread across the Internet in the form of memes and parodies.
Pictures and videos of Vietnamese youth sharing the frugal price tags on their outfits went viral shortly after the original footage first appeared.
Now, those wealthy kids are more of a joke than a target.
“A free ‘skin’ shirt badly smelling with no bath. Shorts bought at a daily market for VND20,000 [$0.88]. Slip-ons borrowed from my younger brother who wants me to return them,” reads one witty Facebook post.
“Shirt cost VND45,000 [$2], on-sale joggers cost VND30,000 [$1.3], shoes cost VND50,000 [$2.2] and belt cost VND99,000 [$4.4],” another post reads.
