HCM City proposes visa exemption extension

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The HCM City Tourism Association has submitted a proposal to the Ministry of Culture, Sports and Tourism on further extension of visa exemption for tourists coming from the UK, France, Germany, Spain and Italy.

The visa waiver programme for five European countries will expire at the end of June.

It remains unclear if the Government will extend the visa waiver, causing uncertainty to the tourism industry and making it difficult for tourism agencies to develop marketing plans for these markets, the association said.

The visa waiver for tourists which began in mid-2015 has helped increase the number of foreign visitor arrivals.

The association has asked the government to approve exemptions for five years instead of renewals every year, and to increase the maximum stay to 30 days from the current 15.

The association chairwoman, Nguyễn Thị Khánh, also asked the government to exempt visas from other countries, including from key markets such as Australia, New Zealand, Canada, India, Austria, Netherlands, and Belgium.

Arrivals from these markets have risen sharply, with many people taking a long vacation and spending a lot, Khánh said.

Visa waivers for citizens from five Western European countries reportedly increased arrivals from these markets by 10.1 per cent, according to the Việt Nam Tourism Advisory Board.

Last year, the country welcomed 370,000 Australian tourists with an average spending of US$1,470 a person.

The country will receive an additional 37,000 Australia visitors and earn an extra US$54 million with a 10 per cent increase in arrivals, while visa exemptions will result in a deficit of US$9.2 million in visa fees, the tourism board said.

In the first three months of the year, the number of foreign tourists visiting Việt Nam surged by 30.9 per cent compared to the same period last year to reach 4.2 million, according to the General Statistics Office.

Over the period, HCM City welcomed nearly 2 million foreign tourists, accounting for half of the total number of foreign tourists visiting Việt Nam.

This was first published on VNS

Vietnam company found making coffee from batteries and dirt

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A family-run coffee production in Vietnam has been caught making coffee from usied batteries, dirt and rock dust.

The facility, owned by Nguyen Thi Loan, was reported to Dak Nong police after reports from locals concerned about suspicious activity on the site, Tuoi Tre News says.

On Tuesday (local time) officials discovered rejected coffee beans and shells from other facilities mixed with other materials, including dirt and rock dust. The product had then been dyed with 35kg of black powder from the batteries.

Dak Nong police are looking to prosecute those involved, according to Tuoi Tre News.

At the time of the raid, 10 tonnes of the dirty coffee was available at the facility.

The owner admitted she has already sold more than three tonnes of product this year.

Wipro Consumer Care scouts for M&As in Vietnam, Indonesia, China

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Wipro Consumer Care and Lighting is scouting for personal and home care acquisitions in the Middle East, Indonesia, Vietnam, China and India, chief executive officer Vineet Agrawal said.

The consumer care unit of Wipro Ltd making Santoor soaps and Yardley fragrances started as an oil crushing unity in the 1940s, and now earns more than half of its revenues from international operations.

“We are looking at acquisition in India and other developing markets in the spaces of home care and personal care,” Agrawal told Mint. Wipro Consumer bought Singapore’s Unza Holdings Ltd in 2007; Yardley’s India and Middle East business in 2009, and its UK and Europe business in 2012.

In 2012, it acquired Singaporean skincare company LD Waxson’s group, and in 2016, bought China-based Zhongshan Ma Er. In India, it has bought brands like Chandrika, Glucovita, Aramusk, Cleanray and North-West Switches. In November, it bought a significant minority stake in online consumer products firm Happily Unmarried Marketing Pvt. Ltd known for its Ustraa and Happily Unmarried range of products.

Agrawal said in 2017-18, Wipro Consumer crossed $1 billion in revenue for the first time. The Rs6,600 crore revenue in 2017-18 compares with Rs59,402.30 crore ($911 million) the previous fiscal year. The like-to-like growth is 13% when adjusted for the goods and service tax which was introduced during the last fiscal.

With domestic and international operations both doing well, operating profit margins too expanded by close to a percentage point, said Agrawal.

Globally, mergers and acquisitions are expected to pick up in 2018 after a slight dip in deal values in the last year, according to a 2018 consumer and retail M&A report by consulting firm ATKearney.

Volume growth, a measure used to check whether people are buying more units or even whether more people are buying the brand registered a 10% growth during the fourth quarter of the fiscal year for India. For the full year, it was higher at 12%, said Agrawal. “Overall demand is not bad across India – urban and rural. It’s not the best of times nor the worst of times,” said Agrawal. However, farmer distress is a reality in states like Maharashtra and Telangana, he added.

By

This article was first published on livemint.com

Finance Ministry proposes new housing tax

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The Ministry of Finance has proposed a tax on houses depending on their construction value as part of a draft law on property tax.

Under the proposed law, there are two options: imposing tax on houses with construction value of either more than VND700 million (US$30,400) or VND1 billion ($43,500).

The proposed tax rate is 0.3 or 0.4 per cent annually, with only the surplus construction value above the proposed threshold to be taxed.

For example, if the threshold is set at VND700 million, the owner of a VND1.7 billion ($74,000) house would have to pay tax on VND1 billion, equivalent to VND3-4 million ($132-176) per year.

The construction value of a house is determined by factors including its type, scale and how many years it has been in use since construction.

If the tax on houses worth more than VND700 million is applied, the finance ministry will be able to collect property tax of about VND23.3 trillion ($1.01 billion) to VND31 trillion ($1.4 billion) per year.

If the second option is approved, the tax collection is estimated to vary from VND22.7 trillion ($987 million) to VND 30.3 trillion ($1.3 billion).

The ministry currently favours taxing houses worth more than VND700 million at a rate of 0.4 per cent.

According to Pham Dinh Thi, director of Ministry of Finance’s Tax Policy Department, data from other countries show that the lowest property tax rate stands at 0.2 per cent. However, countries mostly apply high rates like Indonesia’s 0.5 per cent and the 1-2 per cent in the Philippines.

He said taxing houses and trade-service construction work will impact enterprises’ production and business. The draft is scheduled to be submitted to National Assembly for feedback in 2020.

The ministry is also seeking to increase land tax.

Under the same draft law, land taxes in some categories might rise by multiple times compared with those currently stated in the Law on Non-Agricultural Land Use Taxes.

For example, housing land might get a 0.3 to 0.4 per cent tax rate, ten times higher than current minimum rate of 0.03 per cent.

The draft law on property tax also proposes tax on personal vehicles such as planes, yachts and cars worth more than VND1.5 billion ($65,000).

Controversies heated

Truong Thanh Duc, chairman of the BASICO Law Firm, said a property tax law was necessary, however, “people’s incomes must be taken into consideration when studying the law enforcement,” he said.

Dang Hung Vo, former deputy minister of environment and natural resources, agrees with the land tax hike by ten times, saying that housing land tax of 0.4 per cent, 0.5 per cent-tax on business, trade and service land are reasonable. In the future, it could be increased to 0.7 to 1 per cent.

If land tax is high, land prices will fall, while if the tax is low, speculative hoarding might happen. If the tax is high, anyone who wants to buy land must consider whether they can afford the tax or not, he said.

However, he opposed the housing property tax proposal, adding that developed countries impose housing tax depending on house area (not on value).

Nguyen Anh Tu, a State officer living in Ha Noi, told Vietnam News Agency that a house in Ha Noi and HCM City can not be bought for less than VND700 million.

“I had to borrow 70 per cent of the house value from the bank to afford the payment, not to mention additional fees. Now if I have to pay an annual property tax, I don’t know when I could pay off the debt,” he said.

Finance and banking specialist Nguyen Tri Hieu told the agency that imposing tax on land and houses is crucial to create equality in owning properties. However, the property tax law should require land tax only.

“People already pay personal income tax. There will be overlapping taxes if we require people to pay tax on the money they use to buy a house,” he said.

Le Hoang Chau, president of HCM City Real Estate Association, said if the law takes effect, the real estate market will be impacted, slowing business and investment activities.

Disagreeing with the proposal, HCM City Real Estate Association proposed no tax on houses worth less than VND1 billion to support low-income and low middle-income people.

Chau also proposed a 0.4 per cent-tax on housing land, apartment building land and houses worth more than VND1 billion.

Source: VNA

Manulife Vietnam wins Best Life Insurance Service award for ninth year

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Manulife Vietnam, Vietnam’s largest insurer in terms of charter capital, was just honoured at the Golden Dragon Awards as the “The Best Life Insurance Service” by Vietnam Economics Times Group.

This is the ninth time the company receives the prestigious award for its continuous contributions to the Vietnamese economy through providing excellent insurance services, placing the customers in the centre of all operations, and enhanced community-oriented activities.

“In pursuit of our customer-centric strategy, Manulife Vietnam has intensively invested into improving service quality to improve customer experience, constantly expanding our operational network across the country, as well as teaming up with prestigious partners to boost the number of transaction offices to better serve customers and roll out new products,” said Paul George Nguyen, CEO of Manulife Vietnam.

“Early this year, Manulife has scaled up its charter capital to surpass VND5.7 trillion ($250.23 million) to focus on developing digital projects tailord to the customer services segment and our financial advisory team, to materialise our long-term and sustainable development commitment in the Vietnamese market,” he added.

Last year, Manulife has launched a raft of customer service improvement programmes, such as applying NPSystem to measure customer satisfaction on its hotline and indemnity payment services.

The system will gather and analyse all feedback from customers, helping the company to optimise customer experience.

With VND5.72 trillion ($254 million) of charter capital, the company is currently the largest life insurer in Vietnam. It also holds the No.1 position in the bancassurance segment.

The Golden Dragon Awards and Vietnam Excellent Brand Awards are the largest annual events organised by Vietnam Economics Times Group since 2001 in recognition of the outstanding achievements in production and business and the significant contributions made to the Vietnamese economy.

Sixty-two foreign enterprises were presented with a Golden Dragon Award, while 100 domestic enterprises were recognised as a Vietnam Excellent Brand at this year’s ceremony.

Source: VIR

Potato brand to fight Chinese fakes

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Lam Dong Province has approved a programme to build a Da Lat potato brand to prevent farmers from selling cheap Chinese potatoes disguised as potatoes from Da Lat, which are more expensive.

In the near future, the province plans to spend around VND1 billion (US$44,000) to print around 200,000 packages that will be provided during a pilot run to several Da Lat potato farmers and businesses.

Around 700 tonnes of potatoes will be packaged in 2 and 5 kilo packages.

The packages will feature the logos of the Da Lat brand (the provincial brand for produce and products made in Da Lat), and will be designed in ways that make it difficult to imitate. This will help customers tell the difference between the two types of potato.

Traders often import cheap potatoes from China, cover them with red dust, and sell them as Da Lat potatoes, which are four to five times more expensive, and are regarded as having higher quality than Chinese potatoes.

Nguyen Hong Phong, director of Phong Thuy Agriculture Manufacturer and Trade Ltd, said that while Da Lat’s potato output is relatively high, its supply can fall during the rainy season, so some traders import Chinese potatoes and sell them as Da Lat potatoes.

During transportation, inspections and other procedures, the fake Da Lat potatoes are registered and referred to as Chinese potatoes.

Many customers in other provinces and some in Da Lat fell for this trick, since it is hard to point out fake Da Lat potatoes without careful examination.

Tran Huu Tho, a potato farmer, said that he looks forward to be part of the branding programme because he believes customers might one day reject the Da Lat potato due to fraud.

After the programme takes effect, individuals and organisations who package Chinese potatoes as Da Lat potatoes will be disciplined and charged with fraud.

Source: VNA

War-ravaged Vietnamese province receives $10 mil from Norway for mine clearance

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The Norwegian People’s Aid has already helped remove 70,000 tons of unexploded ordnance from Quang Tri Province.

Vietnam’s central province of Quang Tri has received $10 million from a Norwegian organization to help clear unexploded ordnance.

The deal with Norwegian People’s Aid (NPA) was signed on Wednesday and will sponsor a project expected to run until 2022, Vietnam News Agency reported.

Vietnam is one of the most heavily contaminated countries in the world when it comes to explosives. Between 1945 and 1975, during two wars with French and American invaders, more than 15 million tons of explosives were dropped on Vietnam; four times higher than the amount unleashed during World War II.

With support from the international community, Vietnam is clearing an average of 40,000-50,000 hectares per year, but it still might take as long as 100 years to rid the country of the deadly legacy.

Around 800,000 tons of unexploded ordnance remains scattered across the country, contaminating 6.1 million hectares or 18.71 percent of its land area, and causing explosions that killed more than 1,500 people every year, according to official figures.

In central region, explosives still cover up to 80 percent of some provinces.

Quang Tri was the province hardest hit by bombings during the Vietnam War. It was a center for American military bases and a principle battleground during the 1968 Tet Offensive.

An estimated 400,000 pieces of unexploded ordinance, or UXOs, remain buried across 480,000 hectares (1.2 million acres) of land in Quang Tri. They have been found in rice fields, gardens and even under beds.

NPA started providing mine clearance support in Quang Tri in 2008 and has helped remove 70,000 tons of unexploded ordnance.

By Vu Minh (Vnexpress)

Hanoi breaks into top global destinations on TripAdvisor list

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Vietnam’s capital boasts long-held historical values and timeless architectural charm.

Hanoi has secured the 12th position on a new list of the world’s top 25 destinations, alongside Paris and Rome.

The biggest highlight of the Vietnamese capital lies in the Old Quarter where nostalgic visitors will be surprised when they see how the city has expanded from its original 36 streets, said TripAdvisor travelers.

“The charming Vietnamese capital has aged well, preserving the Old Quarter, monuments and colonial architecture, while making room for modern developments alongside,” said a traveler.

But Hanoi also has plenty more to offer globetrotters, according to the top travel site, suggesting the Vietnamese Women’s Museum which focused on the contribution of women to the country’s history and culture, and the Vietnam Museum of Ethnology, which is home to 15,000 exhibits, 42,000 movies and photos featuring the diversity of 54 ethnic groups.

Paris topped the TripAdvisor list, followed by London, Rome, Bali, Crete and Barcelona. Other popular destinations in Southeast Asia included Bali, Phuket and Siem Reap.

In the regional ranking, Hanoi came third while the ancient town Hoi An and the bustling southern metropolis Saigon also cracked Asia’s top 25 list.

Hanoi was ranked 8th on TripAdvisor’s global travel list in 2014, and also made into the top 10 in 2015 and 2016.

Last year it missed out, and was replaced by the ancient town of Hoi An in central Vietnam.

The list, compiled by TripAdvisor, the world’s most popular travel guide and review website, takes into account the quality and quantity of traveler reviews and ratings published on its website for hotels, restaurants and attractions in destinations worldwide, gathered over a 12-month period.

International arrivals to Hanoi in 2017 rose 23 percent to more than 4.95 million from the previous year.

Top 15 Travelers’ Choice Destinations – World

1. Paris, France

2. London, U.K.

3. Rome, Italy

4. Bali, Indonesia

5. Crete, Greece

6. Barcelona, Spain

7. Prague, Czech Republic

8. Marrakech, Morocco

9. Istanbul, Turkey

10. New York, U.S.

11. Phuket, Thailand

12. Hanoi, Vietnam

13. Siem Reap, Cambodia

14. Jamaica

15. Playa del Carmen, Mexico

Source: Vnexpress

BAA Training to open pilot training facilities in Vietnam

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Training center with four full flight simulators and an Ab Initio flight school to be launched by 2023.

BAA Training, one of the largest aviation training centers in Northern Europe, has recently announced the establishment of a new company in Vietnam – BAA Training Vietnam – which will operate a training center with four full flight simulators and an Ab Initio flight school by 2023.

According to Boeing’s projections, the Asia-Pacific region will require up to 253,000 new pilots to 2036. Looking at Southeast Asia alone, aircraft numbers will grow from 1,410 in 2016 to 4,200 by 2036, 77 per cent of which will be single-aisle aircraft, primarily from the A320 and 737 families. BAA Training Vietnam’s new training facility is in response to this growing training need in the region.

As construction of the training center is underway the first Airbus A320 full flight simulator is set to be deployed by the end of this year. To continue development and increase the training center’s capabilities, Airbus A320neo and Boeing 737 MAX full flight simulators are planned to be assembled to 2020. BAA Training Vietnam also aims to open an Ab Initio flight school in the next five years, in order to provide the region with complex pilot training solutions.

“By establishing BAA Training Vietnam, we aim to share exceptional know-how gathered through years of experience of BAA Training operations as well as offer the region transparent and high-standard aviation training for both corporate and private clients,” said Mr. Egle Vaitkeviciute, CEO of BAA Training.

BAA Training is an aviation training center oriented towards delivering individual and flexible solutions to companies worldwide. Over 750 pilots flew close to 25,000 hours in more than 85 full flight simulators in over 30 locations in Europe, North and South Americas, Africa, and Asia in 2017.

Vietnam Economic Times

VIB reports PBT of over VND518 billion, retail banking income up 101%

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Vietnam International Bank (VIB) just announced its preliminary Q1 2018 business results.

In the first quarter of the year, the bank’s profit before tax (PBT) surged strongly by nearly 230% year-on-year to more than VND518 billion, exceeding its established target for the quarter by 34%. The bank achieved a 49% hike of income due to strong increase in net interest income and other non-interest income, up 52% and 125%, respectively. The bank also improved the efficiency ratio (cost to income ratio – CIR) to 51% as the ratio has been decreasing for recent years.

Until the end of March 2018, the bank’s total credit, including corporate bonds, surged by 6.2% compared to the end of last year to nearly VND90 trillion, in which lendings was over VND84 trillion. VB is making strong movement to retail credit in line with the bank’s strategy. The accumulated deposits, including certificates, gained 6.2%.

The bank controlled non-performing loans ratio at 2.5%, unchanged compared with the end of last year. The ratio of non-performing loans in new lendings for the period of recent 4 years is quite low at 0.7%. The bank’s loan to deposit ratio (LDR) and ratio of short-term funds used for medium and long-term loans are 71.9% and 41.2%, respectively, meeting the requirements of the State Bank. The capital adequacy ratio (CAR) is 12.5%.

VIB’s retail banking income increased by 101% year-on-year in the first quarter of 2018. Accumulated individual lendings gained 12% to VND56,500 billion. VIB had its last year’s individual lendings up 83% year-on-year. The bank’s retail banking products, including mortgages, auto loans, bancassurance and cards, continued to have high growth rate in the quarter. The new mortgage loans and auto loans grew by 77% and 114% year-on-year, respectively. VIB continues to be among market leaders with new auto lending sales accounting for 18% in total auto sales reported by VAMA.

VIB has also made important changes to business model relating to bancassurance since early 2018, enabling the bank insurance income to increase by 62% year-on-year. The bank had its March’s bancassurance sales amount to the same volume of the whole first quarter of last year.

Otherwise, VIB continued to launch many card products, offering customers more choices. The bank achieved growth rate of 105% for new cards. VIB also boosts its investment in digital banking. The bank’s MyVIB continued to be named the most favorite mobile banking app in the country.

With such positive growth rate, the bank’s BOD is confident that VIB will achieve a PBT which exceeds the VND 2,005 billion profit target by 20-30%.

Previously, VIB’s shareholders approved the proposal of 36% dividend payment, including 5% and 31% payment by cash and stocks, respectively, in the AGSM 2018 held on March 29 and the proposal of offering and issuing new shares to investors in form of private placement up to 10% of charter capital.

The shareholders also approved the bank’s plan to debut on HCMC bourse within this year.

- Source: VIB

Are The Bears Winning the Power Struggle For Vinacapital Vietnam Opportunity Fund Ld (VOF.L)?

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Vinacapital Vietnam Opportunity Fund Ld (VOF.L) shares have seen the Balance of Power trend lower over the past few sessions, indicating potential price moves are ahead.

The Balance of Power (BOP), indicator was developed by Igor Livshin and it was introduced in the August 2001 issue of Stocks and Commodities Magazine. Balance of Power (BOP) measures the strength of the bulls versus the bears by assessing the ability of each to push price to extreme levels. The BOP indicator represents the strength of the buyers (bulls) vs. the sellers (bears), and oscillates between -100 and 100. The calculation of the BOP = (close – open) / (high – low). A directional change of the BOP can be interpreted as a warning signal and will generally be followed by a price change.

A commonly used tool among technical stock analysts is the moving average. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a certain period of time. Moving averages can be very helpful for identifying peaks and troughs. They may also be used to assist the trader figure out proper support and resistance levels for the stock. Currently, the 200-day MA for Vinacapital Vietnam Opportunity Fund Ld (VOF.L) is sitting at 314.32. The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of stock price movements. The RSI was developed by J. Welles Wilder, and it oscillates between 0 and 100. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. RSI can be used to detect general trends as well as finding divergences and failure swings. The 14-day RSI is presently standing at 54.16, the 7-day is 54.93, and the 3-day is resting at 55.46.

Vinacapital Vietnam Opportunity Fund Ld (VOF.L)’s Williams Percent Range or 14 day Williams %R is currently at -38.46. In general, if the reading goes above -20, the stock may be considered to be overbought. Alternately, if the indicator goes under -80, this may show the stock as being oversold. The Williams Percent Range or Williams %R is a technical indicator that was developed to measure overbought and oversold market conditions. The Williams %R indicator helps show the relative situation of the current price close to the period being observed.

We can also take a look at the Average Directional Index or ADX of Vinacapital Vietnam Opportunity Fund Ld (VOF.L). The ADX is used to measure trend strength. ADX calculations are made based on the moving average price range expansion over a specified amount of time. ADX is charted as a line with values ranging from 0 to 100. The indicator is non-directional meaning that it gauges trend strength whether the stock price is trending higher or lower. The 14-day ADX presently sits at 13.41. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would indicate a very strong trend, and a value of 75-100 would signify an extremely strong trend. At the time of writing, the 14-day Commodity Channel Index (CCI) is 81.49. Developed by Donald Lambert, the CCI is a versatile tool that may be used to help spot an emerging trend or provide warning of extreme conditions. CCI generally measures the current price relative to the average price level over a specific time period. CCI is relatively high when prices are much higher than average, and relatively low when prices are much lower than the average.

By Caller Staff Writer

Vietcombank earns $7.5m by divesting Orient Commercial Bank stake

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Vietnam’s largest lender by market value, Vietcombank (VCB), has earned approximately VND172 billion ($7.56 million) by offloading its entire stake in Ho Chi Minh City-based Orient Commercial Bank (OCB).

A Hanoi Stock Exchange announcement said 667 investors, including eight organizations, participated in the auction of 6.67 million OCB shares that saw the highest bid at VND28,500 ($1.26) per share.

VCB in March announced that it will offload the OCB shares at a starting price of VND13,000 ($0.57) apiece.

The bank had last year offered to sell 18.9 million OCB shares at a starting price of $0.57 per share. However, only 13.16 million shares were purchased then with the highest price touching VND14,500 ($0.64). That sale saw Vietcombank’s holding in OCB fall from 4.72 per cent to 3.97 per cent.

The stake sale is a part of its effort to pare its ownership in other credit institutions under a directive issued by the State Bank of Vietnam. Under the central bank’s Circular 36, commercial banks are allowed to hold stakes in a maximum of two other credit institutions, with the stake in each not exceeding 5 per cent of total equity.

Following the divestment of its stake in OCB, Vietcombank also plans to sell its stake in Military Bank (MB) and Vietnam Export and Import Bank (Eximbank) this year. However, no further details have been announced.

Vietcombank now owns more than 126 million shares in MB (equivalent to 6.97 per cent of chartered capital) and over 101 million shares of Eximbank (equivalent to 8.2 per cent of chartered capital). Vietcombank plans to sell a 10 per cent stake to foreign investors by June this year after receiving government approval. Singaporean sovereign wealth fund GIC was said to be one of the potential buyers.

Vietcombank chairman Nghiem Xuan Thanh had earlier said that Japan’s Mizuho Bank, the bank’s largest foreign shareholder with a 15 per cent stake, is entitled to buy more shares to maintain its stake in the bank.

By Quynh Nguyen, Deal Street Asia

Univergy JV to build 44.4-MW solar plant in Vietnam

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Spanish-Japanese company Univergy International has launched a joint venture with a couple of partners to develop the 44.4-MW Truc Son solar photovoltaic (PV) project in Dak Nong, Cu Jut district, Vietnam.

Univergy has teamed up with Europe Clean Energies Japan and local company Thanh Nien Media Corporation after the Popular Committee of the highland province of Dak Nong cleared the USD-48.4-million (EUR 39m) project.

The plan is to build the solar park on a surface of 51 hectares and have it up and running from June 2019. It will be generating 76 MWh of electricity per year. The project is expected to benefit from tax preference offered by the local Popular Committee.

Vietnam has set a 2030 goal of sourcing 32% of the energy consumed from renewables after cancelling its nuclear plan.

(USD 1.0 = EUR 0.808)

- Renewables Now

SK Energy to sell truck stop services in Vietnam

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South Korea’s top refiner SK Energy Co. is exporting its extracurricular skill of designing and operating truck stops to Vietnam.

The Korean company, which runs the biggest network of gas stations across the country, said Wednesday it signed an agreement to set up a joint venture with Saigon Newport Corp. (SNP), Vietnam’s leading terminal developer and operator, to build and operate rest stations exclusively for truck drivers.

SNP, a business unit under the Vietnam People’s Navy, holds the largest market share among Vietnam’s terminal operators, handling 50 percent of all local shipments and 90 percent of shipments in the southern region.

SK Energy and SNP will each own a 50 percent stake in the newly-formed joint entity. They aim to complete two truck stops near Ho Chi Minh by the end of next year, with plans to connect them with SNP’s port facilities in the future to spread the services across the country.

SK Energy opened Korea’s first truck stop in Gwangyang, South Jeolla Province in 2006. It has expanded its service network under the brand Netruck House and operates 19 rest stations for truck drivers, providing refueling, parking, food and other services.

“Vietnam is central to SK Group’s broader growth strategy in Southeast Asia,” said a SK Energy official. Last month, SK Group Chairman Chey Tae-won met with Vietnam’s Prime Minister Nguyen Xuan Phuc in a show of commitment to the partnership.

By Kang Doo-soon and Kim Hyo-jin

Vietnam Stocks Might Be Getting Too Hot to Handle

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For investors in Vietnam, discretion is increasingly the better part of valor.

You won’t see any sign of caution in the current IPO frenzy, though. Far from slowing down, Southeast Asia’s busiest market for stock offerings over the past year seems to be revving up.

GIC Pte, Singapore’s sovereign wealth fund, is spending about $850 million for a 7.1 percent stake in the listing by Vingroup JSC, Vietnam’s biggest developer, of its luxury residential arm, Bloomberg News reported Tuesday. Vinhomes JSC’s planned $2 billion initial sale would be the country’s biggest ever.

Vincom Retail JSC, the Vingroup shopping-mall operator that raised $708 million last October, currently holds the record for the nation’s biggest IPO. But it will soon be dethroned by a 21 trillion dong ($922 million) share sale by Techcombank, a Warburg Pincus-backed lender focused on serving affluent customers. Once again, GIC is a cornerstone investor.

Investors are proving more circumspect toward privatization deals. The communist government’s desire to use buoyant sentiment to hawk state-owned firms at aggressive valuations is finding few takers.

Vietnam Cable Television Corp., the country’s second-largest pay-TV provider, had to cancel its stock-market debut last week after just one investor turned up at the auction. State-owned hydroelectric contractor Song Da Corp. is trading 28 percent below its December IPO price. The sale of Power Generation Corp. 3 was an even bigger flop: The country’s second-biggest electricity generator has inflicted a 35 percent loss on investors since its February IPO.

Make no mistake, much is going right in Vietnam. The economy, which went into a tailspin after a 2012 banking crisis and a collapse in property prices, is in robust health. GDP expanded 7.4 percent in the first quarter, the most in a decade. A sizable middle-class with discretionary purchasing power is taking shape as the crude oil, coffee and footwear exporter transforms itself into a manufacturing hub for the likes of Samsung Electronics Co.

Signs of hubris are also emerging, however. Take Vingroup again: The conglomerate is now getting into autos. Just as Malaysia’s Proton wasn’t ready in 1983 to make indigenous cars, it’s possible Vinfast, too, is being a tad showy in wanting to manufacture its own sedans, sport-utility vehicles and eventually electric cars. 

Perhaps the biggest risk is that Vietnam is getting expensive. The 15-stock MSCI Vietnam Index should benefit the most if the country casts off its frontier status to storm into the emerging-markets club. Trouble is, after surging almost 70 percent over the past year, the benchmark now trades at around 30 times 12-month trailing earnings.

With U.S. President Donald Trump tentatively signaling that a 12-nation Trans Pacific Partnership may be back on the table, Vietnam might indeed be the next Asian manufacturing powerhouse. But the market is running ahead of the story. An index that’s more expensive than tech stocks in Shenzhen is priced to perfection. If investors get their timing wrong, they could get burned.

 

By Andy Mukherjee and Nisha Gopalan, First published on Bloomberg

 

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