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Vinhomes – Vietnamese developer raises fresh capital for affordable housing

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Newly listed Vinhomes becomes country’s second-most valuable company

According to a report by Nikkei, Vinhomes listed on Vietnam’s main stock exchange Thursday and immediately jumped to second place in value, reflecting the prospects for the affordable housing market in one of Southeast Asia’s fastest-growing economies.

With strong investor appetite, Vinhomes’ market capitalization hit 296 trillion dong ($13 billion) on the Ho Chi Minh City Stock Exchange, making it the second-most valuable listed Vietnamese company after its own parent, Vingroup, at 324 trillion dong. Vietnam Dairy Products (Vinamilk) follows at 239 trillion dong.

More than 2.68 billion Vinhomes shares were listed on the bourse Thursday, offered at 92,100 dong apiece. During the opening session, 10,800 shares changed hands at 110,500 dong, 20% higher than the offering price.

The successful listing is supported by growing demand for housing as urbanization accelerates in Vietnam.

Vingroup is the biggest shareholder in Vinhomes, with a 69.66% stake as of April 20, followed by Singapore sovereign wealth fund GIC with 5.74%. In April, Vingroup raised $1.3 billion from GIC for property investment.

Two foreign investors held more than a 7% stake at Vinhomes before the listing, leaving room for additional foreign ownership under a 49% cap.

Vinhomes offers both high-end and affordable homes. Its Vinhomes brand is geared for high- and middle-income buyers, while the new Vincity line targets lower earners. Unit sales under Vincity are scheduled to start later this year, providing 200,000 to 300,000 units to the market by 2020. Prices start at 700 million dong per unit.

Listing on the stock market will improve the company’s ability to raise funds for new projects, said Vinhomes CEO Nguyen Dieu Linh. Besides 10 projects under construction, Vinhomes will need capital to fund 26 new projects by 2021, including eight Vincity projects.

Affordable housing is the most promising segment for Vinhomes as the demand is increasing while the market currently lacks major providers, Le Anh Tuan, head of research at Vietnam-focused Dragon Capital, told the Nikkei Asian Review at the listing ceremony. Dragon Capital was one of four institutional investors in Vinhomes before the listing.

An estimated 80% of potential Vietnamese homebuyers are searching for affordable units.

In 2016, Vingroup announced it would enter the affordable housing segment after the government warned the housing industry it would tax owners of second homes in order to tackle an oversupply of high-end homes in the market.

Hanoi-based Vinhomes was founded in 2008 and reorganized by parent Vingroup in 2018. Vingroup has diversified into seven core business segments — real estate, retail, tourism, education, health care, agriculture and automobiles — becoming one of the biggest private conglomerates in Vietnam.

Vinhomes reported 15.2 trillion dong in revenue last year. This figure is expected to increase 61% to 24.6 trillion dong this year and jump 226% to 80.3 trillion dong in 2019. Net profit for 2018 is forecast at more than 5 trillion dong and expected to quadruple to 20 trillion dong next year.

Vietnam’s communist government has recognized the past to attract investors, strategist says

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The Vietnamese government has “created a foundation of stability” to attract foreign investors, one strategist told CNBC.
This encompasses the sound management of the country’s legal infrastructure, inflation and interest rates, he added.
Vietnam is among Asia’s best performing stock markets, though volatility persists. Nonetheless, the Vietnam Index in Ho Chi Minh City has risen 42 percent in the last 12 months.

According to CNBC report, Frontier market Vietnam has the right strategy to make it a foreign direct investment hotspot, according to one strategist.

The Vietnamese government has recognized that “instability isn’t going to attract foreign direct investors” Andy Ho, chief investment officer at VinaCapital Vietnam Opportunity Fund, told CNBC’s “Squawk Box Europe” Wednesday.

“Over the last five to 10 years, they have created a foundation of stability where the FX (foreign exchange), the legal infrastructure, the inflation, the interest rates — all of that is stable,” he explained.

Vietnam is among Asia’s best performing stock markets, though volatility persists. April 2018 marked both its record high and its worst month in two years. Nonetheless, the Vietnam Index in Ho Chi Minh City has risen 42 percent in the last 12 months.

The International Monetary Fund sees growth for Vietnam at 6.6 percent in 2018, well above the emerging market average of 4.9 percent.

But, emerging markets across the board are threatened by investors drawing their cash back to the U.S. in anticipation of higher yields as interest rates rise.

Vietnam’s Communist Party-led government has been in place since the mid-1970s following the country’s reunification after its brutal north/south war.

Ho highlighted the presence of technology firms Intel and Samsung in the country as examples of the government realizing that foreign direct investment is creating wealth.

The creation of jobs, crucial given the country’s youth population bulge, as well as the growth of urban areas provides an investment opportunity according to Ho. “This is where we invest, because as people move into the city, they’re going to want basic goods and services,” he added.

Opportunities lie in sectors such as banks, education and pharmaceuticals, he added.

Strong foreign capital inflows — of which direct investment is roughly $20 billion annually — stabilize the currency and enables the management of inflation and interest rates, Maarten-Jan Bakkum, a senior strategist for emerging markets at NN Investment, said in a note on Tuesday.

“The consumption boom that results from this is currently one of the strongest in the entire emerging world,” he said.

Comparison with China

“Over the last twenty years, Vietnamese exports have grown five times faster than the average growth in the emerging world and twice as fast as the export growth in China, the country known as the export champion,” Bakkum explained.

For Ho, the country’s promising export potential is boosted by its vast coastline, which pertains to the creation of ports connecting to markets including southern China.

But, the Southeast Asian country does face headwinds. While Vietnam’s current labor cost is one third that of China, “the biggest concern over the next five to 10 years is wage inflation,” Ho said.

He added that the country was a “diversification play (as) it is volatile, higher risk,” but it “delivers higher return.”

Motorists pass the Saigon Notre-Dame Basilica in Ho Chi Minh City, Vietnam. | Getty Images

To be advised about how to start a foreign direct investment business in Vietnam, contact Global Business Service (GBS) – a legal and business service company in Vietnam at:

Email: info@gbs.com.vn
iMessage | SMS | Whatsapp | Viber | Call: +84903189033 or visit the GBS’s website at: https://gbs.com.vn

By Justina Crabtree | @jlacrabtree

How is the property purchase process for foreigners in Vietnam

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Foreigners who are living in Vietnam may purchase houses for the expressed purpose of dwelling in it. By Vietnamese law, land is a national good, so you can only own the structure built on a property, not the land that it is on. You can enjoy a “land use right” for up to 50 years. This duration can be renewed. Also note that if you’re married to a Vietnamese citizen or a Việt kiều, you will have the same ownership rights as Vietnamese citizens.

Seek professional advice to ensure that all steps are properly taken to ensure a troublefree property transfer. A City Pass Guide reported

Alternatively, according to Vietnam’s Housing Law, every foreigner who has a Vietnamese visa stamp on their passport can buy a property in Vietnam. However, if you enjoy diplomatic or consular immunities and privileges, this does not apply.

Besides individuals, foreign companies, branches, representative offices of foreign companies, foreign investment funds and branches of foreign banks that are operating in Vietnam are also entitled to purchase property of residential projects.

A serviced apartment in Diamond Island Luxury Residences

What are the limits of foreigners’ rights on residential property in Vietnam?

The law states that foreign individuals and entities may only buy, receive or inherit apartments and houses in commercial projects and not in areas that limit or ban foreigners.

Although the limit of one property per foreigner has been repelled, the new Housing Law sets a limit on the proportion of foreigners who may live in a determined area: the total number of units owned by all foreign buyers must not exceed 30% of the units in one apartment building, or 250 landed property units in one ward.

The duration of the tenure is supposed to be equal to the land use right owned by the developer, most likely 50 years, with an option to extend the land use right at the end of it. The exact conditions for the extension are still unclear and will be detailed in further regulations.

An expatriate may lease his/her property for any purpose that is not banned by law, but he/she must inform the provincial house management agency before leasing the property. In this case, he/she is subject to Vietnam’s property taxes. If you are an overseas Vietnamese or if you are married to a Vietnamese citizen, you are entitled to a freehold tenure on the property.

If you bought it, you could of course decide to live in the house but also lease it or pass it through inheritance to someone else without any difficulties. To lease it, you will need an administrative authorisation from the Housing Department of the People’s Committee where your property is located.

Can foreign-invested enterprises purchase residential properties in Vietnam?
Foreign-invested enterprises that operate in Vietnam under the investment law but are not engaged in real estate, can purchase residential houses for their employees. They must possess investment certificates or written certifications of investment activities as appropriate to investment forms specified by the investment law granted by a competent Vietnamese state agency. They can buy properties to house their employees, but are not able to use them for leasing or other purposes.

Housing in Ho Chi Minh City. Photo: GettyImage

What are the steps to purchase a house in Vietnam?

1. Once you have chosen the property, you will have to sign a reservation agreement.

This legally links the buyer and seller and may include paying a deposit to the seller. Examine closely the reservation agreement before paying the deposit. It prescribes that if the buyer changes his mind, he will lose the deposit, and if the seller changes his mind, he will have to pay twice. You’re well advised to notarise this document to protect your interest.

2. Due diligence is the next step.

You will check the reliability of the seller by examining their ID or registration certificate along with the property’s certificates (for example the ownership certificate). You should also ask for a bank guarantee or insurance to ensure the seller is trustworthy.

3. Once due diligence has been satisfied by both parties, they confirm their engagement and interest by signing the housing contract.

An annex related to facilities that go with the apartment is advised. Make sure the agreement is signed by all related parties and if not, then by the representative who is mandated by the related persons. The contract on residential house purchase and sale must be in Vietnamese, so you will need a Vietnamese translator to help examine its content. Although many developers provide a bilingual version of the contract for a better understanding by all parties involved, only the Vietnamese version is valid under Vietnamese regulations. To help you with the complications involved with the contract, we list some details to look for before signing:

Is it stated that the seller has the ownership certificate of the apartment and does he give a guarantee over this ownership?
Is the apartment also a security for a loan?
What are the responsibilities of the seller in case of dispute over the apartment ownership due to his fault?
Methods used for payment?
What are the responsibilities for tax and fees?
What is the delivery time?

4. Paying taxes and fees.

Normally, if there is no other agreement between parties, the buyer pays the registration fee and the seller pays income tax. The payment shall be made at the tax department of the district where the house is located.

5. The last step is to apply for an ownership certificate.

Both parties can agree on how to handle issuance of the new certificate, although it is most likely that a buyer will have to take it up.

To be advised about how to purchase a house or land in Vietnam, contact Global Business Service (GBS) – a legal and business service company in Vietnam at:

Email: info@gbs.com.vn
iMessage | SMS | Whatsapp | Viber | Call: +84903189033 or visit the GBS’s website at: https://gbs.com.vn

Property buying costs are low in Vietnam

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How difficult is the property purchase process in Vietnam?

Foreigners are not allowed to own land. 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. Global Properties reports

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: Notary fees are around 0.06% of the property value.

Registration Fee: Registration fee is around 0.50% of the property value.

To be advised about how to purchase a house or land in Vietnam, contact Global Business Service (GBS) – a legal and business service company in Vietnam at:

Email: info@gbs.com.vn
iMessage | SMS | Whatsapp | Viber | Call: +84903189033 or visit the GBS’s website at: https://gbs.com.vn

Trung Nguyen’s $75.2-million compensation demand in the divorce dispute

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Trung Nguyen Instant Coffee JSC (Trung Nguyen IC) has requested Le Hoang Diep Thao, the wife of Trung Nguyen Group chairman Dang Le Nguyen Vu, to pay a compensation of VND1.709 trillion ($75.2 million), more than double the investment capital of the company’s factory in Bac Giang.

There is no end in sight for the nearly one-year dispute between Trung Nguyen IC and Thao as it has recently been revealed that the company took Thao to court in July 2017 for the $75.2 million compensation claim.

On May 16, Thao officially rejected Trung Nguyen IC’s accusations and the request for compensation.

In a document sent to the Supreme People’s Court on March 5, 2018 Thao argued that Trung Nguyen IC lacks the legal grounds and evidence to bring civil procedures against her, claiming she committed no special violations of the Civil Procedure Code.

Additionally, Thao has also repeatedly requested the Bac Giang People’s Court not to carry out or approve any emergency measures affecting the operations of Trung Nguyen IC’s Bac Giang branch.

Responding to Trung Nguyen IC’s accusations, Thao lodged the following arguments:

First, Dang Le Nguyen Vu was not Trung Nguyen IC’s legal representative at the time the complaint for this commercial business case was signed because Vu violated Trung Nguyen IC’s charter by using the eighth company registration certificate to replace Thao as the company’s legal representative.

According to Thao, at the time Vu was the legal representative of Trung Nguyen Group, thus him becoming the representative of Trung Nguyen IC (a subsidiary) would have led to a clash of interests and was against the company charter.

By court order, Trung Nguyen IC is a common property between Thao and Vu the division of which is currently pending court assessment (Thao filed for divorce more than two years ago), thus a claim for compensation would be unjustified.

According to nguoiduatin.vn, the $75.2-million lawsuit is among lawsuits Trung Nguyen Group has started against Thao, aiming to negate her proprietary and control rights in their common assets with Vu.

In July 2017, Trung Nguyen IC sued Thao at the Bac Giang People’s Court for illegal seizing the company’s seals and Bac Giang branch’s and requested a court order for her to fulfil six things.

1. Thao has to return the assets, including Trung Nguyen IC’s subsidiary in Bac Giang, equipment, machinery, raw materials, and goods at Lot B (B2) in Quang Chau Industrial Zone (Bac Giang’s Viet Yen district).

2. Thao has to stop “illegally operating”Trung Nguyen IC (Bac Giang branch) to manufacture King’s Coffee products.

3. Thao has to return Trung Nguyen IC’s seals, and Trung Nguyen IC (Bac Giang branch)’s documents and legal papers.

4. Thao has to stop illegally obstructing Trung Nguyen IC’s legal representatives, including the Bac Giang branch’s general director, chairman, and shareholders, from exercising their rights and obligations in accordance with the company charter and the Enterprise Law.

5. Thao has to pay compensation for Trung Nguyen IC’s losses suffered until April last year and a one-off payment of $75.2 million.

6. Thao has to pay compensation for Trung Nguyen IC’s losses from May 2017 until the time the Bac Giang branch is reassigned to Trung Nguyen IC.

Source: VIR

Investigation of transaction between Grab and Uber announced

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The Vietnam Competition and Consumer Rights Protection Agency under the Ministry of Industry and Trade has completed a preliminary investigation into Grab’s purchase of Uber’s stakes in Vietnam, said the ministry’s Office on May 16.

According to the investigation on economic concentration between Grab and Uber, the combined market share of both Grab and Uber in Vietnam exceeds 50 percent which means the transaction between Grab and Uber violates regulations on economic concentration under the country’s Law on Competition 2004.

Vietnam Competition and Consumer Rights Protection Agency under the Ministry of Industry and Trade will send documents to the Vietnam Competition Council for the handling in accordance with law.

At the end of March, Uber Technologies Inc. has agreed to sell its Southeast Asian operations, including Vietnam to regional-rival Grab. Under the agreement, Grab will take over all of Uber’s operations in Southeast Asia, including the food delivery service UberEats.

Source: SGGP

Momentum lose on low liquidity

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Profit-taking intensified during yesterday afternoon trading, dragging shares down on both national stock exchanges and making market liquidity plunge.

The benchmark VN Index on HCM Stock Exchange dropped 1.76 per cent to close at 1,054.62 points, reversing from its three-session gain of 4.3 per cent.

The HNX Index on Hà Nội Stock Exchange lost 1.75 per cent to end at 121.49 points. It had gained 2.2 per cent in the last three sessions.

Nearly 219 million shares, worth VNĐ4.9 trillion (US$214 million), were traded on the two local exchanges.

The market breadth was negative, with 291 declining stocks against 168 gaining stocks.

Large-cap stocks underperformed as the VN30 Index, tracking the performance of the 30 largest stocks by market capitalisation, tumbled 2.01 per cent to 1,034.30 points.

Twenty-four of the 30 largest stocks in the VN30 basket declined, including dairy firm Vinamilk (VNM), insurer Bảo Việt Holdings (BVH), Masan Group (MSN), Việt Nam National Petroleum Group (PLX), FLC Faros Construction Joint Stock Company (ROS) and Vincom Retail Joint Stock Company (VRE).

Among declining sectors were insurance, banking, securities, real estate, consumer products, rubber production and retail, according to vietstock.vn

The worst-performing sectors were insurance, banking and brokerage companies, whose industry indices plunged 3 per cent, 2.2 per cent and 2.8 per cent, respectively.

Vietcombank, Bank For Investment and Development of Việt Nam, Vietinbank,VPBank and Military Bank, suffered most, decreasing from 2.3 per cent to 4 per cent.

Worst performers in the insurance and brokerage sectors included Bảo Việt Holdings (BVH), PVI Holdings (PVI), Sài Gòn Securities Incorporation (SSI), Hồ Chí Minh City Securities Corporation (HCM) and Việt Capital Securities Joint Stock Company (VCI).

Meanwhile, the energy industry was boosted by a positive trading of crude. Since the beginning of May, Brent crude has increased by 4.1 per cent to trade at $78.3 per barrel.

Local large-cap energy stocks advanced between 0.9 per cent and 6.3 per cent following the news.

Also on the positive side, according to World biggest credit rating agency Fitch Ratings raised Việt Nam’s sovereign credit rating, noting the country’s improving track record on economic policy, debt and reform, according to its report released on May 15.

The rating agency said Việt Nam’s long-term foreign-currency issuer default rating has been upgraded to BB with a stable outlook, from BB-, adding that growth of 6.7 per cent is expected this year amid strong foreign direct investment (FDI), continued manufacturing expansion and a boost in private spending.

“This is good news for the stock market, which could encourage foreign investors to pour more money into Việt Nam,” BVSC said in its daily report.

Foreign investors saw a net selling of VNĐ86 billion on HOSE with VNM (VNĐ99 billion), HPG (VNĐ58 billion) and VRE (VNĐ26 billion). In contrast, they net bought VNĐ37 billion on the HNX.

Source: VNS

‘Website VS reality!’ Woman shares hilariously misleading online photos of hotel’s lavish-looking swimming pool – that turned out to be just a tiny hot tub

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A woman who thought she was booking a hotel with a large infinity pool couldn’t help but laugh when she arrived at the accommodations and realized the photo she saw was actually of a tiny hot tub.

Jenny Kershaw from Manchester, England, took to Twitter over the weekend to share the misleading image of a hotel ‘pool’ featured on Booking.com alongside her own picture of what turned out to be an abysmal-looking hot tub.

‘Our hotel pool in Vietnam…booking.com VS reality [tears of laughter emoji] we’ve been done there,’ she captioned the images.

Whoops! Jenny Kershaw from Manchester, England, took to Twitter over the weekend to share the misleading image of a hotel ‘pool’ featured on Booking.com alongside her own picture

Finessed: Because of the angle in which the photo was taken, it appears to be an infinity pool

Reality: In actuality, the hotel ‘pool’ is a small above ground hot tub

Because of the angle in which the photo was taken, it appears to be an infinity pool, but in actuality it is a small hot tub that is raised above the ground.

Unsurprisingly, people can’t stop laughing about the comical tweet, which has since gone viral. In just five days, the post has received more than 150,000 ‘likes’ and 70,000 retweets.

People have been taking to the comments section of the post to add their own two cents, and someone tweeted: ‘I’m so embarrassed for @bookingcom.’

‘Shoutout to the photographer,’ another person tweeted along with a GIF of Taraji P. Henson giving a standing ovation.

Too funny: Unsurprisingly, people can’t stop laughing about the comical tweet, which has since gone viral

Advice: People have been taking to the comments section of the post to add their own two cents

Empathy? One person said he felt ’embarrassed’ for Booking.com

Comparison: Another Twitter user compared the photos to what happens when you meet someone on Tinder

Poking fun at himself: Richie Tozier joked that the photos are like what he posts online versus what he looks like in real life

Can’t stop laughing: One Twitter user called it ‘next level clickbait’

And Richie Tozier joked: ‘Me posting vs what I look like in real life.’

Lucas Cabanettes ‏shared a similar sentiment when he commented: ‘This is what I need my friends to do when I say take a picture of me.’

Another Twitter user joked that it is ‘something similar to Tinder,’ while someone else called it ‘next level clickbait.’

Other people were quick to notice that the hot tub is so small that the mat on the stairs could couldn’t fit the full word ‘welcome’ on it.

Giving credit: ‘Shoutout to the photographer,’ another person tweeted along with a GIF of Taraji P. Henson giving a standing ovation

Not quite right: Someone else pointed out that the second photo of the ‘pool’ is almost as misleading

Just saying: Someone named Nathan joked that the original picture is accurate if you are a mouse

Yikes: Other people were quick to notice that the hot tub is so small that the mat on the stairs could couldn’t fit the full word ‘welcome’ on it

Too funny: This Twitter user was one of the people who pointed out the hilarious mistake

‘Too small to even put the E in welcome,’ one person noted, while another added: ‘The ‘welcom’ mat is my favourite part.’

After the tweet went viral, Booking.com reached out to Jenny and asked her to flag the images to the company, but she insisted she wasn’t interested in filing an official complaint.

‘It’s ok, I don’t want to file a complaint…it’s just funny and I notice the pictures conveniently been changed now anyway…,’ she responded, revealing the Booking.com photos now have the the word ‘Jacuzzi’ splashed across the front.

Trying to help: After the tweet went viral, Booking.com reached out to Jenny and asked her to flag the images to the company

‘It’s just funny’: However, Jenny insisted that she didn’t want to file an official complaint

All fixed? Jenny noted that the photos featured on Booking.com now have ‘Jacuzzi’ splashed across the front so no one else gets confused

Hilarious: Jenny’s post inspired some people to share their own similar experiences, including this ‘view’ that turned out to be a fake window

Jenny’s post inspired some people to share their own similar experiences, and someone named Chris Vernazza posted photos of the ‘view’ from his hotel in Barcelona.

‘I know that feeling,’ he tweeted along with a picture of the alleged ‘view’ and an actual photo from the room, which showed that the window was fake.

In a statement to BuzzFeed News, a rep for Booking.com said that the company has over 150 million verified reviews that customers can consult to get ‘an authentic impression of the actual experience’ at each hotel.

If customers who stayed at a property report ‘a potential disconnect with the way a property is presenting themselves,’ the rep said the company will ‘make adjustments’ so the hotel is accurately depicted.

By Erica Tempesta, Source: DailyMail

Banks tighten real estate loans amid land fever in Vietnam

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Mortgage rates have increased 1-2 percentage points over the past few months.
Many lenders have recently increased interest rates and tightened lending for real estate loans due to concerns about bad debts amid land fever in Vietnam.

They have increased mortgage rates by 1-2 percentage points over the past few months.

Viecombank and OCB, have set interest rates of around 10.5 percent and 11.5 percent respectively for real estate loans over 12-24-month terms. Meanwhile, other lenders offer rates of 12-12.5 percent.

Banks are also offering loans at no more than 70 percent of the property’s value, instead of the previous 80-90 percent. They attribute tightened lending to concerns over market risk as real estate credit risk has jumped from 150 percent to 250 percent in past few months.

Currently, State Bank of Vietnam only allows banks to lend 40 percent of short-term mobilization funds for long-term loans, instead of 60 percent in the past. However, real estate loans are usually long-term loans.

Banks have also tightened mortgage lending in some of Ho Chi Minh City’s suburban districts because of steep land price hikes compared to last year, like an 85.7 percent hike in Binh Chanh, 170 percent in Can Gio District and 140 percent in Cu Chi District.

Provinces around HCMC are also experiencing the same trend with land prices on the main streets of Bien Hoa City in Dong Nai Province now costing nearly as much as in some urban areas of HCMC. Even land prices at Trang Bom District have risen by up to seven times in the past 1-2 years.

Vietnam’s central bank has also ordered lenders to tighten control over investment loans intended for the stock and real estate markets, warning of bad debt risks.

The real estate sector reported 8.56 percent in credit growth last year, compared to 12.86 percent in 2016. However, Nguyen Thi Hong, the bank’s deputy governor, said it will maintain strict control this year as Vietnam’s economy has become more open and vulnerable to fluctuations on the global market.

Bad debt in Vietnam’s banking sector, mostly incurred due to a slowdown in the country’s real estate market in the early 2010s, had been cut to 2.34 percent by the end of September 2017, down from 2.46 percent at the end of 2016, according to the State Bank of Vietnam.

By: Dang Khoa (Vnexpress)

Traditional retail fighting to keep up with e-commerce boom

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The emergence of e-commerce websites such as Lazada, Tiki, Shopee, Sendo, and Adayroi has led to online shopping becoming popular among Vietnamese customers over recent years, in particular young customers who prefer buying and selling products on social networks like Facebook and Zalo.

These online channels have been seen as strong rivals for supermarkets, convenience stores, and traditional markets.

According to a recent CRRE Vietnam survey of 1,000 customers in Ho Chi Minh City and Hanoi, 25% of those polled plan to reduce their shopping at physical stores, while 45-50% will do regular online shopping via computers or mobile devices in the future.

President of the High Quality Vietnamese Product Business Association Vu Kim Hanh says according to the association’s survey in 2017, the percentage of the population who regularly shop online has tripled from 0.9% last year to 2.7% this year.

The survey in 2018 shows that 23% of customers used online channels as their references before buying products, up 5% over a year earlier at 18%. Also, many businesses consider online shopping as a channel to access information about market demands, she notes.

The boom in online shopping reduces the purchasing power of modern distribution channels, convenience stores, and traditional markets.

Le Huu Tinh, director of Marketing Emart Vietnam, says that many strong brands in the US like Walmart, Target, Michael Kors, and Best Buy have reduced the number of walk-in stores and increased their online trade. In Vietnam, there has not been a report on closure of shops due to fierce competition of e-commerce but the competition of this kind is clearly seen in the retail sector.

For instance, powerful businesses in the retail sector such as Mega Market, Big C, Aeon Mall, Family Mart, 7-Eleven, Lotte Mart, Emart, SG25, Satrra, and Saigon Co.op have intensified huge investment in developing their online retail presence.

‘Revenue is currently not a major target of retailers when developing e-commerce, but it is a necessary preparation for the next 5-10 years, and we are deliberating stronger investments in developing this form in the future,’ says Mr Tinh.

Doan Diep Binh, head of Lotte Mart media section, says the online shopping application “Speed Lotte” launched in November 2017 has made it easier for customers to shop for food, lunch boxes, and domestic appliances using their mobile devices. Lotte Mart plans to pour around VND1 trillion into the model to boost revenue growth in the future. Saigon Co.op have worked out plans to develop a similar model.

Source: VOV

Unregistered POS payments cause tax losses

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Using unregistered point-of-sale (POS) machines to transfer payment may result in tax losses for the local authorities, according to specialists.— Photo VietinBank

Using unregistered point-of-sale (POS) machines to transfer payment may result in tax losses for the local authorities, according to specialists.

The warning was delivered after the local government of the northern province of Quảng Ninh seized three unregistered POS machines in the province’s Hạ Long City in late April, which were suspected to have transferred about 200,000 yuan or VNĐ700 million (US$31,100) worth of purchased goods and services to China.

The three POS machines were reportedly brought from China and sellers transferred payment using a 3G internet connection, which made it easier for both customers and sellers to finalise deals without being supervised closely.

The payment transfers did not go through approval of any local commercial banks in Quảng Ninh Province, raising concerns over potential tax losses that local governments may endure if POS machines and transfers are not closely watched and monitored.

The POS machines were taken back to the State Bank of Vietnam’s branch in Quảng Ninh Province for further investigation, while the seller had already fled from the locality.

According to Nguyễn Văn Đoan, deputy director of the central bank’s Quảng Ninh branch, domestic commercial banks must register POS machines to the local authorities and the machines must be licensed before being used on the market.

“The State Bank of Việt Nam is only able to monitor POS machines that are registered to the Vietnamese authorities,” he said, adding that it was hard to take full supervision of the three unlicensed POS machines because they could have been registered in another country and could be used anywhere with 3G internet connection.

The local authorities in 2017 unveiled a similar case in which money was transferred illegally to China through POS machines registered in Vietnam, Đoan said.

Quảng Ninh Province authorities have struggled recently to manage the enormous number of Chinese visitors that are flocking into the province.

To control the situation, the local government has asked sellers to install local banks’ e-payment systems and equip their stores with surveillance cameras to keep eyes on trading activities in order to avoid potential risks to local socio-economic development.

According some banking experts, the installation of e-payment systems and surveillance cameras would be useless if sellers attempt to use unregistered POS machines as those transactions cannot be traced and watched by the local authorities.

Experts say it would be very difficult for local banks to keep monitoring unregistered POS machines as sellers can get access to 3G internet to use the machine while some of the sellers, as foreigners, are only required to deliver their passports to buy 3G phone cards.

Therefore, they demand local authorities, government agencies and banks cooperate better to monitor stores, manage the origin of goods and services, administrate foreign labourers and closely oversee the flow of money in the province.

Source: Dtinews

Vietnam warns citizens to stay away from Indonesia in wake of terrorist attacks

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Indonesia police conduct a raid on the residence where a family suspected of taking part in recent suicide bombings lived in, in Surabaya on May 15, 2018. Photo by AFP/Juni Kriswanto

Indonesian police have blamed the deadly attacks on an Islamic State-inspired group.

Vietnam’s Ministry of Foreign Affairs on Wednesday asked Vietnamese people to spare Indonesia from their planned destinations, following repeated suicide bombing attacks in the Southeast Asian neighbor.

“We recommend Vietnamese citizens to avoid Indonesia if there’s no necessary business,” the ministry said in a statement. For those who are already there, the ministry asked them to “closely follow information regarding the situation and stay away from public places until stability is recovered.”

The Vietnamese embassy in Indonesia said there has been no Vietnamese affected by the two deadly attacks in the Indonesian city of Surabaya on May 13 and 14 but the ministry still warns Vietnamese in Indonesia to stay away from public places, be cautious and follow the news closely during this period.

On Sunday, a family of six, including girls aged nine and 12, staged suicide bombings of three churches during morning services in Surabaya, killing 13.

All six bombers were killed, including the mother who was Indonesia’s first known female suicide bomber, according to AFP.

The next day, members of another family, including an eight-year-old child, blew themselves up at a police station in the city, wounding 10.

Police have blamed the bombings on the Islamic State-inspired group Jemaah Ansharut Daulah (JAD).

Indonesian government has raised terrorism alarm to the highest level and allowed police to open fire to maintain security.

On Wednesday, four men were shot and killed as they staged an attack on a police headquarters that left one officer dead and two wounded, AFP cited Indonesian authorities.

The repeated attacks have put Indonesia on edge as the world’s biggest Muslim majority country starts the holy fasting month of Ramadan from Thursday, it said.

By Minh Nga, Source: Vnexpress

The meat you eat: Raid on Vietnamese facility finds beef organs being soaked in bleaching chemicals

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A raid on an establishment in the southern Vietnamese province of Dong Nai has uncovered nearly half a tonne of beef internal organs that were being treated with chemicals to be sold as food.

According to a report by Straits Times, the raid in Dong Nai, which neighbours Ho Chi Minh City, found around 20kg of beef visceral organs being soaked in bleaching chemicals at the organ processing facility, police said on Tuesday (May 15).

After bleaching, the organs were intended for sale in the market as fresh products.

Officers involved in the raid in the provincial capital of Bien Hoa also caught six employees in the act of processing 400kg of beef internal organs – including intestines, livers and stomachs – on a dirty floor of the facility, Tuoi Tre News reported.

The facility’s owner, Trinh Quang Thai, could not provide documentation on the organs’ origin or his business license. He was subsequently slapped with a financial penalty and all of the organs were seized for examination.

Thai said the organs had been bought from slaughterhouses in Dong Nai and were expected to be sold locally after being chemically processed.

He added that around 300kg of internal organs were processed every day at the facility.

Beef organs are often made into phalau, a stew of organs that is a favourite street food in Vietnam.

A slew of food safety scandals in Vietnam over the years has dented many residents’ trust in the vegetables and meat they consume.

In 2016, a financial penalty was imposed against two facilities for immersing sprouts in chemical solutions that stimulated their growth and made them whiter than usual.

Foreign transportation apps ready to ride in Vietnam

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A Go-Jek driver rides his motorcycle through a business district street in Jakarta,Indonesia, June 9, 2015. Photo: Go-Jek

With Uber gone and the road clear for Grab to control Vietnam’s tech-based transportation market, two new players are buckling up for their entrances in the Southeast Asian country.

Go-Jek from Indonesia and MVL from Singapore are getting ready to give Grab Vietnam a run for its money.

The Indonesian tech giant is already recruiting professionals in Vietnam to serve the country’s 93 million citizens, Dealstreetasia reported.

Founded in 2010, Go-Jek quickly became a ‘unicorn’ startup after securing funding from Alphabet Inc’s Google and China’s Tencent Holdings.

From its beginnings as a ride-hailing app, Go-Jek has evolved into a one-stop shop for transportation, logistics, mobile payment, and food delivery.

Tech-based taxi drivers in Vietnam recruited to work for Go-Jek said the process for joining the company is quite simple, particularly for those with experience working for market veterans like Uber, Grab, and VATO – a domestically owned company operated by Vietnamese bus line Phuong Trang.

The company is even offering new driver incentives such as foregoing an installation fee and allowing drivers to completely retain the entirety of the 20 percent commission that would normally be taken by the company.

“This offer is quite attractive considering the 28 percent Grab takes,” Tuan, a Grab driver, said.

He also complained that current motorbike taxi services do not offer appealing promotions to customers, especially on weekends.

Apart from Go-Jek, Singapore -based transportation startup MVL has plans to launch in Vietnam by July, according to a statement given by CEO Kay Woo at an introduction session in Ho Chi Minh City earlier this month.

MVL, or Mass Vehicle Ledger, is a wholly-owned subsidiary of Easi6, a blockchain ecosystem.

The six-year-old company currently offers transport reservation services for 25,000 vehicles operating in several large markets, such as South Korea, Taiwan, Hong Kong, and Singapore,

If legal procedures are completed on schedule, the application will launch in Vietnam in July.

Uber officially ceased its service in Vietnam on April 8. The exit was part of a deal for Grab to take over Uber’s operations in Southeast Asia in exchange for a 27.5 stake in Grab.

Uber drivers found themselves faced with the decision to join Grab or seek new employment.

Following Uber’s exit, Grab was able to carve out more than 50 percent of Vietnam’s ride-hailing market share. However, consumers are upset by Grab raising its prices and applying more ‘high-demand’ time frames.

Several local apps, such as VATO, which claims to have received US$100 million from Phuong Trang, have jumped in to fill the void left by Uber.

By Bao Anh, Source: Tuoi Tre News

FPT Software floats trial of self-driving cars

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FPT Software has asked the Ministry of Transport and relevant sectors for permission to operate self-driving autos in hi-tech zones and software parks nationwide on an experimental basis.

FPT said it had studied the self-driving technology from 2016 to October 31, 2017, before announcing the first self-driving vehicle in Viet Nam. The company had been operating trams in central Da Nang City (around F-Complex, FPT Software Da Nang) and self-driving cars around FPT Software HCM City.

The self-driving vehicles have a speed of 20-25kmph on an average and can reach up to 40kmph in a straight direction. It can self-align, turn in line and avoid obstacles or tripping when needed. The vehicle has over 1,000 hours of self-steering, with no problems in different weather conditions such as sunshine, rain and low light.

FPT said it would continue to research, develop and complete the vehicle’s brake and gas controllers, integrate GPS module and navigation system, develop built-in voice response control and upgrade the centralised processor.

Le Hong Viet, FPT’s Chief Technology Officer, said the corporation had invested in self-propelled technology and set a goal to become one of the leading companies in automotive software in the world.

Source: VNS