E-commerce revenue tops VND53 trillion in 2017

Advertisements

E-commerce revenue topped VND53,870 billion (US$2.37 billion) in Ho Chi Minh City last year, increasing about 20 percent over 2016 and accounting for 5.9 percent of the total retail sales of goods and services.

That has recently been revealed by  Mr. Nguyen Nguyen Phuong, head of Commercial Management Division under the HCMC Department of Industry and Trade.

At present, there are 61,000 e-commerce websites operating stably according to Government Decree 52 including online sale websites.

Mr. Phuong said that the city’s e-commerce market has been expanding with many new models. Businesses have developed their websites professionally with versions for mobile devices such as smart phones and tablets.
Global information and measurement company Nielsen forecast that e-commerce sales of fast-moving consumer goods will top that of retail stores in the next five years.
Source: Thuy Tho

Ho Chi Minh City to pilot safe-food markets

Advertisements

Authorities in Ho Chi Minh City have approved a pilot project to adopt a market model that sells clean food, in a bid to enhance food safety.

The safe-food market model will be first applied to Ben Thanh Market in District 1 and Hoc Mon Produce Wholesale Market, located in the namesake district, and is expected to be implemeted at other markets by 2020.

According to a representative of the Food Safety Management Authority of Ho Chi Minh City (FSMA), merchants at the two marketplaces will first need to meet three basic requirements to be able to run their businesses.

Similar to most markets across the city, sellers must have a legitimate business license, food safety certificate, and ensure that their products have a clear origin.

At the Hoc Mon Produce Wholesale Market, which is the city’s prominent supplier of pork and vegetables, a team of 14 food safety officials will be tasked with managing the quality of food sold at the venue.

They will assist merchants in the supervision of pork products via a QR-coded label, which is part of a plan by the municipal Department of Industry and Trade.

Thanks to this, customers are able to access information regarding where the pigs were raised, when and where they were slaughtered, and from which wholesale market their meat was distributed, through a mobile phone app.

For fruit and vegetables, merchants will be instructed on noting down the origin of their produce.

Meanwhile, managers of Ben Thanh Market will be in charge of ensuring product quality instead of a team of food safety officials.

The market managers, in coordination with the FSMA and district-level bureaus of health, will show sellers how to monitor the origin of their merchandise.

The FSMA will carry out regular inspections of the two markets and impose stern punishments upon those violating the regulations on food safety.

Lan Hue, a food vendor at Ben Thanh Market, expressed her excitement at the food-safety model, stating that mangers of the venue should list the necessary criteria for sellers to prepare for the plan.

However, many small-scale traders are worried that they would be unable to meet all the requirements due to limited financial capacity.

Some vendors stated they have been fetching products from various sources, thus keeping track of their origin would be really difficult.

Nguyen Thi Lan, a pork seller at Hoc Mon Market, said she does not have enough money to afford proper tables to display the meat as required.

Meeting other equipments for food safety is out of her reach as well, Lan admitted.

Many agreed that local authorities should support merchants in terms of finance to help them adapt to the new model, thus maximizing the efficiency of the project.

Source: Tuoitrenews

Real estate and stock markets to rise above market in 2018?

Advertisements

Forecast to be in a finer state than in 2017, the Vietnamese economy in 2018 is expected to provide even more favourable conditions for foreign direct investment (FDI) inflows and domestic market are promising to become stronger, resulting in more investment opportunities—especially in the stock and real estate markets.

Particularly, various commercial banks were praised for their efficient handling of bad debts, which provided momentum for the further growth of the stock market.

Besides, a significant number of enterprises plan to increase charter capital as well as list on the stock market, which would in turn raise the supply of securities.

To boot, blue-chip stocks continue to be the primary choice of investment funds, particularly overseas funds, because enterprises running effective operations are more likely to be trusted by foreign investors.

Blue-chip stocks will remain the  most popular in 2018

Due to determinants such as the substantial investment demand and the appearance of FDI inflows into project development, the real estate market would potentially preserve the price stability enjoyed throughout 2018.

The increasing supply in the real estate market remained unchanged during 2016-2017, leading led to excess supply by the end of 2017. This was particularly apparent in the high-end apartment segment.

In addition, propelled by the steady demand for low-end and mid-end apartments, the competition among developers to offer improved quality and promote affordable housing amplified the on-going heat of the housing market. Meanwhile, medium- and long-term investors stayed heavily immersed in the development of infrastructure in coastal areas.

On the contrary, despite the positive performance of the stock and real estate markets over the course of 2017, these markets were initially advised against by a considerable number of market research analysts due to the high-risk factor identified during 2015-2016.

Source: The Hien

Saigonese turn to homegrown veggies for meals, Tet gifts

Advertisements

Spooked by unsafe greens sold at markets and supermarkets, more Saigonese are now growing their own vegetables at home for meals and giving as Tet presents.

As tainted veggies posing serious health hazards to consumers are rife on the local market, including those imported from China, a rising number of residents in the southern metropolis have removed vegetables available there from their daily menus.

They come up with a more cost-effective, fail-safe approach: growing their own veggies or getting agricultural specialists to tend to them in their rented areas or in their own gardens or terraces.

The practice also serves as an eco-friendly, rewarding pastime, provides opportunities for family get-togethers and helps growers as well as their families, particularly children, better appreciate the fruits of their labor.

More companies have thus begun to offer ‘package’ services, supplying their clients with high quality saplings, as well as counseling and training in applying various affordable cultivation technologies such as aeroponics, or a process of growing plants in an air or mist environment without the use of soil or an aggregate medium.

After a night rain, the veggie beds on the rooftop of a house in Binh Tan District owned by Bui Thi Thuong look as verdant as those grown on silt-laden soil.

She began using her entire rooftop space to cultivate over 20 varieties of vegetable and set up a frame of perennial climbing squash two years ago.

Thuong revealed she started germinating seedlings of net melons, cauliflowers, and cabbages two months ago, in time for this Tet harvest.

This year’s Tet (Lunar New Year) will begin on February 16 and linger for one week or so.

Her yield last year was big enough to sustain her family’s meals while also providing gifts for her relatives and friends for the festive occasion.

Short of time to tend to vegetables, Tran Van Thao, director of a construction company, took to growing his greens on vertical aeroponic towers, which would allow him access to hygienically ensured, nourishing produce.

In his home in Binh Tri Dong B Ward, Binh Tan District, Thao has turned his 50m² rooftop into a green space with a fish pond and five vertical aeroponic towers watered by an automatically operated irrigation system.

After two months, all his five towers have begun yielding verdant lettuce and morning glory.

He divulged that he had sowed his second batch of morning glory in time for Tet consumption.

Similarly, despite living a stone’s throw from An Dong Market, District 5, one of the city’s major conventional markets, Chan Duc and his family have put veggies grown aeroponically in 1,600 holes on his rooftop on their daily menu.

The entire system cost over VND20 million (US$879) and the automatically operated watering towers require around 9m² space.

“We can rest absolutely assured about our access to hygienically guaranteed vegetables,” Duc noted.

Bui Thi Thuong, a resident in Binh Tan District, Ho Chi Minh City, tends to her clean veggies and has germinated a wide variety of seedlings for this Tet harvest. Photo: Tuoi Tre

Thriving business

More growers have also adopted hydroponics, a method of growing plants without soil, using mineral nutrient solutions in a water solvent; or aquaponics, which refers to any system that combines conventional aquaculture (raising aquatic animals such as snails, fish, crayfish or prawns in tanks) with hydroponics in a symbiotic environment.

Over recent years, companies specializing in gardening tools and techniques have mushroomed and offered various packages at different prices.

Realizing the benefits he had reaped by growing his own veggies, Truong Binh Son has established a firm which offers vegetable-growing services.

Towers manufactured at his company fetch VND1.5-2 million ($66-88) apiece.

Many families have opted for the aeroponic model for its limited space required, automatically operated watering system and diversity of greens on each tower, Son explained.

Apart from vegetables, Son’s company is also germinating breeds of flowers on vertical aeroponic towers to cater to booming Tet demand.

Likewise, Pham Thanh Loc, director of a hi-tech agricultural service company based in Cu Chi District, supplies a nine-tube aeroponic system with 400 holes, which takes up a floor area of a mere 1.5m², for VND6.5 million ($286).

His products have been in good demand and fervently embraced by consumers across the country.

As the service is thriving, his staff have their hands full catering to a soaring demand as Tet is two months away.

According to Vo Thi Thu Ha, who runs a company specializing in hydroponic veggie-growing services in Ho Chi Minh City, families need only a 2m² space on their terrace or balcony to set up a 100-pot veggie garden.

Her systems are priced at VND3.6 million ($158) to VND8 million ($351) apiece.

Ha’s company also offers packages including saplings, tending, nutrition and harvesting at clients’ homes.

“We normally germinate 10,000 saplings. The number triples to cater to Tet demand, but we still run out of stock,” she said.

Many businesses sell aquaponic models installed on terraces for VND8 ($351) million to VND25 million ($1,099).

Le Phuong Vy, representative of a local hydroponic veggie-growing business, disclosed there were only a few firms offering home growing services five years ago with a handful of clients each month.

His current number of rivals has surged to dozens, with sales also rising dramatically.

According to statistics released by five major businesses in Ho Chi Minh City, each installs 20-30 aeroponic and hydroponic systems at local households monthly.

Around 70 percent of these households continue to use the companies’ accompanying services including hydroponic nutrition, seeds and seedlings.

Source: Tuoitrenews

Bitcoin and the part Vietnam can play

Advertisements

Blockchain technology has brought a considerable amount of opportunity to Vietnam, enabling it to grow into one of Southeast Asia’s blockchain hubs.

Yet cryptocurrencies, enabled by blockchain technology like Bitcoin, are facing a massive speculative bubble that puts investments at high risk. Tran Huu Duc, director of FPT Ventures and  Vietnam Innovative Startup Accelerator (VIISA) company and a board member of Fintech Vietnam Club, gives VIR some insight into the issue.

“In code we trust”

Bitcoin is no longer a trend. It was a burning story when it reached a new record, just short of $20,000, in mid-December 2017. In fact, 2014 saw a similar price wave when it briefly peaked at $1,000. Now Bitcoin’s current popularity is complicated with speculative hoardings and continuous value fluctuations.

Blockchain technology is one of the most viral trends of the internet era. Online websites and social media allow users to conveniently share information, but such data can just as easily be stolen. Bitcoin is making history by making possible the safe and effective transfer of not only information, but value too. Bitcoin has been proven to be the first blockchain application to ensure security and safety for transfers.

To ensure the transfer of value, blockchain technology focuses on assuring security and safety of transfers, building a strong enough network effect, and involving the system in the currency. The internet became powerful as it was accepted worldwide. Blockchain is a similar case. The more mining users carry out, the more value blockchain can create, thus handing power to the network. This is how blockchains have so far kept a close connection to cryptocurrencies.

In 2009, the world faced a serious financial crisis and central banks raised arguments surrounding a second bailout. At the time, the younger generation blamed central banks for diluting thousands of US dollars from their savings as the banks continued to issue more money, forcing monetary units into swelling inflation. It was in this context that Bitcoin turned up, with a limited quantity of 21 million, and the hope of better controlling inflation.

Now the bitcoin inflation rate trends steadily downwards.  The number of bitcoins mined per block is set to decrease geometrically, with a 50 per cent reduction every 210,000 blocks, or approximately every four years.  The mining will be completed by 2140 with a strong assertion of a zero-inflation regime. While the US dollar, the most powerful monetary unit in international transactions, proposes that it is “In God we trust”, the Bitcoin community embraces the slogan “In code we trust”.

Prominent opportunities

Opportunities for developing blockchain technology in Vietnam are huge. The younger generation, with their quick access to technology, can now earn money by starting business projects – mining cryptocurrencies or developing other blockchain-based applications. The development of blockchain can bring in decent job prospects for IT programmers. In fact, several startups have dedicated money towards installing supercomputers specifically for mining cryptocurrencies. Even outside of the urban hubs of Hanoi and Ho Chi Minh City, many new supercomputer farms are cropping up, and spreading as far as Laos and Cambodia. The recent prices of Bitcoin still enable its ‘miners’ to gain profits.

Many domestic and regional capital ventures have asserted three key advantages Vietnam has in developing this kind of technology, and growing into a blockchain hub.

Firstly, Vietnam has a large population of computer programmers, most of whom are young and have quick access to computer technology. For example, we opened a Facebook page on blockchains that quickly surpassed 500 IT-worker members, all eager to exchange knowledge on this technology. Many in Vietnam’s younger generations are also eager to approach this industry. Remarkably, there is a Vietnamese student currently nurturing the idea of building a decentralised exchange for cryptocurrencies. Elsewhere, a group of overseas Vietnamese have created a cryptocurrency used to buy virtual items.

Secondly, blockchain is closely associated with algorithm, protocol, and code – and Vietnam already possesses a qualified, mathematical research workforce. The country has earned a name for itself amongst the top regional countries specialising in mathematical theory.

Last but not least, blockchain has gone beyond its technology to become a platform for storing and transferring value. Precisely, blockchain can be used to trace the origin of goods, keep healthcare profiles, or store valuable documents such as the land ownership certificates that several countries are currently piloting.

At the Singapore Fintech Festival 2017, many tech firms presented distinct blockchain-based applications. Of note, a blockchain application could allow a company’s board of directors to make a voting decision from anywhere around the world. The IBM Corporation debuted a blockchain-based auditing system under which internal auditors can log in, inspect, and collect data on all the transactions of each unit.

Coming back to Vietnam, efforts could be raised to build blockchain-based applications for domestic use, and bring them to regional and international markets if they prove effective. For instance, blockchain tech turns even more useful when applied to assets management, banking and finance, and data storage. Up until now, there have been no specific projects for building blockchain applications for the aforementioned fields, but the idea of creating a blockchain-based data consortium in the field of banking is under consideration.

The fate of Bitcoin

There have been rising worries about the possibility of hard forks in cryptocurrencies (when a single cryptocurrency splits in two), but the hard fork needs the consensus of cryptocurrency communities.

Bitcoin exemplifies the case. Bitcoin was created in a limited quantity of 21 million. Issuing more than this set limit is possible but there would be little probability of success. It is difficult enough to gain the consensus of three separate people, so one can imagine the difficulties in attempting to persuade a whole Bitcoin community.

It might be possible if the hard fork justification is to repair and overcome technical and systematic errors, or to upgrade the system for future demand. This has been true for Bitcoin Cash, where the volume of Bitcoin blocks is increased to store more transactions and speed them up.

It is difficult to predict the prices of cryptocurrencies, especially Bitcoin, because the market is manipulated by a large number of speculators. 2018 and 2019 are heavily anticipated years with various developments in cryptocurrencies expected.

The market will be pulled by two opposition forces. One side is represented by management agencies, who will spare no efforts to try to control and restrict the risks emerging from cryptocurrencies, while the other side gathers disruptors, who usually are out to seek new applications operating on the blockchain technology.

If management agencies gain the upper hand, the price of Bitcoin will drop to zero. Another outcome sees governments worldwide declaring that Bitcoin is valueless, leaving Bitcoin players empty-handed. A glimpse into this possibility was seen when China made a statement like this six months ago and the price of Bitcoin plummeted.

On the other hand, if disruptors are able to build a strong enough network effect with no one to counter it, Bitcoin could retain a long-term growth. In short, the fate of Bitcoin completely depends on the forces of the market.

Source: VIR

Why Vinhomes Central Park attracts foreigners

Advertisements

Officially welcoming residents since late 2016, Vinhomes Central Park is rapidly becoming a desirable urban space through owning the largest and most modern riverside park in Ho Chi Minh City.

This is also the place where the expatriate community from America or Europe chooses to live when coming to Vietnam due to its many advantages.

Time saving for moving

Located at the intersection of District 1 and Binh Thanh District, it takes just five minutes to reach companies and corporations in the central area.

Vinhomes Central Park is popular with the expatriate community because it is very convenient for transportation, and is especially suitable for those interested in getting to the workplace quickly. The ideal location not only helps customers reduce the cost of travel significantly every month but also saves a lot of their precious time.

A variety of life experiences

The highlight of Vinhomes Central Park is the city’s biggest riverside park, inspired by a design from Central Park (New York), which was completed and opened at the end of 2016. The park is designed with green lawns, nature trails, modern amusement parks, mixed with oriental items such as Koi fish ponds, pedestrian walkways, bonsai gardens, and bonsai apart from landscapes, colourful fountains, which all provide myriad experiences for foreign customers.

David Thompson, a 48–year–old man from the United States who currently lives with his wife and two children in Vinhomes Central Park, said, “My family often takes a walk every afternoon at Central Park because of the spacious and cool space, which is good for exercising, or having a picnic over the weekend.”

Ideal healthcare

Many foreigners living in Vinhomes Central Park shared that one of the things they liked most in this area is the Vinmec International Hospital – a Vietnamese hospital with a certificate from Joint Commission International (JCI), the world’s leading certificate on quality medical services, which is recognized in more than 90 countries and is the “gold standard” for well-known hospitals around the world.

Most foreigners pay particular attention to health issues and need regular visits to hospitals or clinics. Therefore, the appearance of a five-star international hospital, with modern equipment, a team of highly qualified doctors and a customer care department with language proficiency, helps to give customers the convenience and feeling of absolute peace of mind.

Privilege to enjoy the perfect utility system

With integrated planning and full facilities, Vinhomes Central Park is fully equipped with convenient facilities such as K-Mart Korean supermarket, VinMart convenience store, Vincom shopping center, Vinschool system, gymnasium, tennis court, swimming pool, etc. All of these facilities are designed so as to bring a comfortable and peaceful life to customers coming to live here.

In addition, living in the urban area of Vinhomes Central Park, foreign guests find it easier to get the absolute support from the “host” Vinhomes.

Here, the customer care and reception staff are proficient in foreign languages and can assist and provide services to foreigners quickly and efficiently.

It can be said that Vinhomes Central Park has completely conquered most foreign customers with the experience just “strange” enough to help them enjoy life as indigenous people, and familiar enough for them to enjoy a modern life with comfort and safety the same way as in their countries.

Vinhomes Central Park consists of three subdivisions, The Central, The Park and The Landmark, and 88 luxurious villas, of which the 81-storey Landmark building has set a record for being the tallest building in Vienam. The luxury apartments have 1 to 3 bedrooms each.

In addition, the project also has the largest riverside park in Ho Chi Minh City, with an area of 14 hectares, together with hospital facilities, supermarkets and schools. From December 2017, Vingroup started offering serviced apartments for rent – Vinhomes Serviced Residence – at Landmark 4, Landmark 5 and Landmark Plus in the Vinhomes Central Park complex.

Address: 208 Nguyen Huu Canh, Ward 22, Binh Thanh District, Ho Chi Minh City

Hotline: 0947003773

Email: reservation@vinhomes.vn

Source: Tuoi Tre News

​Vietnam spends $2.1bn importing 94,000 cars in 2017

Advertisements

Vietnam’s completely built-up (CBU) car imports dropped in both volume and value in 2017 compared to a year earlier, as local importers had anticipated a major tax cut that kicked in at the start of 2018.

The Southeast Asian country spent US$2.154 billion importing 94,000 CBU units – vehicles manufactured and assembled in their country of origin – last year, according to the General Statistics Office.

This presents a 16.8 percent decrease in volume and 9.6 percent drop in value.

December witnessed the largest import volume, with 10,000 CBU units, worth $273 million, shipped to the country.

In the last months of 2017, car importers in Vietnam carefully adjusted their business plans against the January 1, 2018 deadline, when a new decree applying stricter requirements to car importers and a massive cut on import duty both started taking effect.

Decree 116 dictates that businesses obtain a permit for car importation from the Ministry of Industry and Trade to be allowed to operate as a car importer.

In the meantime, several kinds of CBU car imported from ASEAN countries now enjoy a zero percent import duty, compared to the previous 30 percent tariff.

ASEAN is short for the Association of Southeast Asian Nations, which is a political and economic organization whose members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Car importers, however, were in a dilemma as they had to speed up imports before the decree entered into effect to avoid permit paperwork, while at the same time wanting to delay imports to enjoy the zero-percent duty.

In December, many businesses intentionally kept their car imports at Ho Chi Minh City seaports upon shipment instead of completing paperwork to clear customs for them, waiting for the new import duty to take effect.

This ‘strategy’ has upset the city’s customs department, which was under pressure to meet its tax collection target for 2017. The customs department eventually forced businesses to clear customs for cars that were not imported from ASEAN countries to ensure its tax collection.

As part of the ASEAN Free Trade Agreement (AFT) commitments, a zero percent tax began to be applied to cars shipped from the bloc on January 1, 2018.

Vehicles eligible for the new tax are those with an ASEAN content ratio of 40 percent or more.

In Vietnam, the most popular vehicles falling in this category are pickup trucks, Toyota Fortuner, pickup Honda CR-V, Ford Everest and Toyota Yaris imported from Thailand, Indonesia and Malaysia, according to the Vietnam News Agency.

With import duty cut by 30 percent, people in Vietnam have been anticipating that imported cars will cost less and have therefore delayed their car buying plan until this year.

Source: Tuoi Tre News

Expats feel like home at Saigon’s Christmas and New Year parties

Advertisements

Foreigners working in Saigon share sweet moments at a cozy Christmas party at Ruby Home Viet Nam.

Ruby Home Viet Nam, a serviced apartment chain developed by Phu Vinh Group in Saigon, has been considered the second home of 500 expats who have lived in the southern city for the past five years.

A cozy Christmas party was held last week to celebrate this international family.

It was a multicultural party with stockings holding candy canes, gingerbread, Yule log cake, apple cider, Vietnamese food and Vietnamese traditional games.

This Christmas party is the occasion for all people staying at Ruby Home to meet each other and have longer conversations than just an everyday hello. At this cozy party, they had the opportunity to chat, to share their memories of the past year, to understand each other’s lives and cultures and to honor the diversity of this world.

The foreigners at Ruby Home come from Australia, Canada, India, France, Japan, Singapore, South Korea, Spain and the U.S. They are working as teachers, software engineers, professors and banking consultants.

But whoever they are and wherever they come from, the most important thing is they are happy members in Ruby Home family.

“I have stayed here for three years and have no plan to move. Besides having the best location, Ruby Home also has a team who is very friendly and hospitable and they give me another reason to stay,” said Mr. Lim from Australia.

“I think Ruby Home is like my second home. Every morning, the team greets me with ‘Have a good day,’ and when I come back, they say ‘Welcome home,’ which is very sweet and makes me feel warm,” said Mr. Raj, a two-year tenant.

Many people also choose Ruby Home for other reasons: full equipment, elegant western style design, the sense of harmony, good service, close distance to shopping places, and affordable prices.

To make Ruby Home a place “where house becomes home,” the team has always improved and upgraded their service as best as possible.

Come and enjoy your second home at Ruby Home serviced apartment.

It is a promising place for guests who are looking for a perfect home. Truly good serviced apartment brought by Ruby Home.

Source: Staff Reporters

HCMC court drops Uber’s lawsuit against tax demand

Advertisements

The Netherlands firm will have to continue paying the tax.

A court in Ho Chi Minh City has dismissed a lawsuit against the city’s tax department by Uber after the ride-hailing firm asked the court to stop the department from charging it with a million-dollar sum of tax.

The HCMC’s tax department earlier asked five local commercial banks to help collect more than VND53 billion ($2.34 million) of what it believed was back taxes from Uber between January 1 and 10 of 2017.

Instead, Uber Vietnam, a subsidiary of Uber International Services Holding B.V. based in the Netherlands, then filed a lawsuit against the department.

On December 29, the department received an emergency notice from the court, saying that its collection of tax from Uber would be put on hold.

The court has since dropped the lawsuit because Uber Vietnam “does not have the required legal status for such a case.”

At the same time, it has also removed the suspension on tax collection, a source from the department told VnExpress on Wednesday.

“With this new decision from the court, the HCMC’s Tax Department will continue to force Uber to pay tax by asking for help from commercial banks,” said an official from the department who wished to remain anonymous.

Specifically, Uber will have to transfer its income into the bank accounts of the tax department instead of handing it over to its headquarters in the Netherlands as it has been doing so far.

This process will last until the tax authorities collect enough $2.34 million in tax from the company.

In September, the department ordered Uber to pay VND66.7 billion of back taxes and tax evasion penalties by December 23.

But the company has only paid VND13.3 billion. It has complained to Vietnam’s Ministry of Finance that it is not subject to paying taxes according to Vietnam’s agreement on double taxation avoidance with the Netherlands, where it is based.

Uber International Services Holding B.V. has been repeatedly accused of tax evasion since bringing its ride-hailing business to Vietnam in mid-2014.

Yet Vietnam’s finance ministry said the company has to pay taxes for the income it generates in Vietnam.

Traditional taxi companies in Vietnam have used the tax issues to accuse Uber and Grab for putting up unhealthy competition.

Source: Le Chi

Investing in Vietnam Property: The Ultimate Guide

Advertisements

Vietnam has come a long way over the past few decades, averaging over 7% annual GDP growth throughout the 1990s. The country remains one of Asia’s more promising markets as it opens to foreign investment – and Vietnam property is arguably the best way to gain from their economic rise.

One area which Vietnam has become competitive in is manufacturing. This is especially true since China has become less popular for international firms. Businesses now prefer setting up shop in Southeast Asia.

This is probably caused by rising costs, more regulations, weaker growth, and a strong “home-bias” in the Chinese market. But whatever the case may be, East Asia is experiencing a downturn and Southeast Asia is on the rise.

As such, many investors are looking toward Vietnam – Southeast Asia’s third most populous nation and one of the fastest growing ones in the region. But foreigners have, at least up until recently, had few options when investing in Vietnam.

This is quickly changing. During the summer of 2015, the Vietnamese government relaxed property ownership rules for foreign investors.

Anyone with either a 3-month tourist or residence visa may now own land on a renewable, 50-year lease. Foreign companies have even less restrictions when buying property. It’s not quite as easy as that and there are other rules (which are discussed further below) to consider.

However, there’s no doubt Vietnam is going in the right direction. Places like Cambodia and Malaysia still make it easier to buy real estate as a foreigner. But with that said, the government has made clear which way they’re moving toward by gradually lifting restrictions on both foreign ownership of companies and properties.

Until things are made easy for investors, there’s still a few ways to get your feet wet and begin investing in Vietnam property. It’s bureaucratic – but once you’ve figured everything out, it’s possible to (at least de-facto) own both apartments and houses in Vietnam.

 

Ho Chi Minh City, often referred to as Saigon by the locals, is Vietnam’s largest city and one of Asia’s fastest-growing.

There are a few reasons to invest in Vietnam now rather than waiting until it’s easy – apart from the fact that the barriers to entry are keeping prices low at the moment.

First off, demographics are in Vietnam’s favor. While nearby countries such China and Thailand are about to suffer from population decline, Vietnam is expected to grow from its current population of around 95 million today to almost 120 million by 2040.

Because of this, property prices in the center of all major cities should be driven up by urbanization.

Second, Vietnam is one of the fastest growing countries in the world. Its economy expanded by over 6% in 2016 – and even from there, the current trends are pointing upward as the government makes things easier for businesses.

Pioneers reap the greatest rewards. Vietnam is not easy or straightforward to invest in, but that’s not necessarily a bad thing.

Can Foreigners Invest in Vietnam Real Estate?

In a word, yes. But it’s more complicated than that. Vietnam’s foreign property ownership laws limit the number of foreign owners there can be in any particular neighborhood. Also, freehold ownership of land is not permitted.

For starters, land may only be leased in Vietnam. Whether you’re a local or a foreigner, all plots are collectively owned by the state and can only be leased on a 50 year basis. It’s possible to own houses and structures. Just not the land which they are built on.

With that said, there’s an option to extend these leases once they expire. Not many people expect the government to decline those who wish to renew – if anything, real estate ownership should be easier in 50 years.

The other two restrictions are that foreign buyers may only own up to 30% of units in a single condominium building. Furthermore, only up to 250 houses in any one administrative ward may be owned by foreigners. Neither of these limits apply to overseas Vietnamese.

Obviously, these two rules are more of a concern in dense cities such as Hanoi and Saigon than out in the country.

These current laws are relatively new and there used to be more restrictions. Until foreign ownership was liberalized back in July of 2015, you needed to have a residence visa before buying property.

I mention this not to dwell on the past but to show the positive direction Vietnam is, slowly but surely, moving toward.

How Much Are Property Taxes in Vietnam?

When transferring real estate in Vietnam, fees are payable by the buyer. There’s a 5% VAT (Value Added Tax) in addition to a registration fee worth 0.05% of the property’s value.

If any profit is made, there’s also a small capital gains tax of 0.15% on that amount.

Rental income is paid at Vietnam’s normal flat income tax rate of 20%. However, if you ask local landlords, you’ll find that few people ever bother to pay it and are left alone.

Technically, there’s also a land tax paid at 0.03% to 0.15% of its value with the exact rate depending on the land’s size. But this tax is also rarely paid by anyone in practice.

Is Buying Property in Vietnam Safe?

Vietnam has a well-documented land registry and the government keeps good track of plots in all major cities. So unless you’re buying land in a very rural area, you’re unlikely to have any problems on that end.

Any issues when buying property in Vietnam will come from the sellers rather than the government. Just like most other countries in Southeast Asia, it’s worth looking into the reputation of any developer you buy from.

There are some well-established companies with lots of projects to show. But if you buy from a small firm with few (if any) complete developments, you have a larger risk of construction either not moving ahead on schedule… or stopping altogether in the worst case.

For those buying from a reseller rather than a developer, it’s just as important to have an inspection done instead. Sellers have been known to hide structural issues and other problems such as water damage. Make sure you know what you’re getting into.

Places to Invest in Vietnam

Vietnam is the third most populous country in Southeast Asia with over 95 million people. Despite regulations, this means foreign buyers are able to consider towns, cities, and neighborhoods of all different sizes and flavors.

Many investors choose property in Ho Chi Minh City (Saigon) or Hanoi. Most of the rest choose beachfront cities and resorts such as Nha Trang or Da Nang.

Foreigners can often buy in smaller, less populous areas – at least in some form. But Vietnam has dozens of cities with at least a few hundred thousand people living in them.

As such, we’ll focus on the larger cities and resort areas for the purposes of this guide.

Ho Chi Minh City

Vietnam’s largest urban area and commercial hub is one of Asia’s fastest growing cities. New shops and businesses open by the month, while practically every street is filled with construction and people at work.

Referred to by the locals as Saigon, most things of any business importance in Vietnam has to go through Ho Chi Minh City. This makes its real estate market popular with expats, entrepreneurs, investors and retirees alike.

Unlike some major cities in the region, such as Bangkok or Jakarta, Ho Chi Minh City has a well-defined core. Usually people consider this to be District 1 and District 3 on the west side of the river.

Saigon officially has 19 inner-districts and 4 suburban districts. But for all intents and purposes, districts 1 and 3 are the city center and the corporate hub of Vietnam.

With that said, Saigon is going through rapid urbanization. District 2 on the east side of the river is being heavily developed. Suburbs to the west and north of the city center are continuously expanding.

Skip the Next Western Recession

The Bitexco Financial Tower is Vietnam’s tallest building and can be seen from practically all of central Saigon.

District 1

The very center of Ho Chi Minh City, District 1 is Vietnam’s focal point for business, commerce, and finance. It follows that rent and property values are the highest in the city.

Hotels, offices and other skyscrapers take up some of the country’s most prime real estate. Of course, several apartment buildings and condominiums are sitting not far from them.

None of that means that the entirety of District 1 is glitzy, or that there’s no apartment buildings in need of renovation. There’s actually plenty of fixer-uppers.

But keep in mind that you’re going to be paying way more for property in District 1 than you would elsewhere. In fact, prices are higher than even those in some other, more developed Asian capitals like Kuala Lumpur.

As you move westward, away from the Bitexco Tower and the river, more property is available and prices become manageable. There’s some investment potential on the west side of District 1 for those with a larger-than-average budget.

District 2

Located on the other side of the river from downtown Saigon, District 2 is geographically close to the city center yet separated by a large bridge – and often tons of traffic.

However, District 2 also provides a high-standard of living. Owning a large house in a gated community is possible here which makes the neighborhood ideal for those with families and some spare cash.

Some of Vietnam’s best international facilities are also in District 2. That combined with a plethora of top restaurants and stores make this area one of Ho Chi Minh City’s most desirable for expats and upper-class locals.

District 5, while not being different enough to warrant its own section, has a similar vibe to District 2. But instead of being located across a river from central Saigon, it’s several kilometers south of it.

District 3

Still in the center of Saigon but outside its main commercial area, District 3 is considered to be the city’s “hippest” and most upscale residential neighborhood.

Many expats prefer living in District 3 because it’s near the restaurants, bars, and other amenities of District 1 – yet further away from all of its chaos.

For comparison, it’s similar to Thong Lor in Bangkok. If you’re less familiar with Southeast Asia, it’s Ho Chi Minh City’s answer to Fifth Avenue if District 1 were Times Square.

Prices are still high in this area – but not quite as much as in District 1. There’s also more options for property investors since District 3 isn’t as packed with skyscrapers.

Districts 5 & 10

Both Districts 5 & 10 share many things. These two neighborhoods are small compared to most other districts and are located within walking distance of one another.

While not far from District 1, these two areas replace the pricey restaurants and stores found in the city center. Plenty of street-food can be found instead, while traffic clogs the road throughout most of the day.

This isn’t to say that Districts 5 & 10 are dumps. In fact, some of Saigon’s best universities and most famous temples can be found here. But we’re no longer looking at expat areas.

That’s probably a good thing. I personally expect these two areas, as dense as they already are, to benefit from urbanization and see a respectable rise in property values.

Construction is booming in Hanoi with an elevated railway even in the works.

Hanoi

The nation’s capital and second largest city, Hanoi provides a very different feel than Ho Chi Minh City. There shouldn’t be a surprise that it also has a very different property market.

Hanoi is much more low-rise than its larger neighbor to the south. Because it’s Vietnam’s political center rather than its financial hub, they lose out to many expats and businessmen who are sent to Ho Chi Minh City instead.

As such, a strategy of focusing on the high-end expat market is not quite as viable in Hanoi. The numerous embassies, NGOs, and start-ups do help though – so there’s still some potential.

But if you’re coming to Hanoi rather than Saigon in the first place, it may be better to target the local market instead.

Tay Ho

Translated into English as “West Lake”, Tay Ho is perhaps Hanoi’s most desirable residential area. Many of Vietnam’s political elite and foreign ambassadors choose to live here while large, guarded houses line the streets.

Built around a large lake with the same name, Tay Ho district is peaceful and serene. Yet it’s just a short drive away from Hanoi’s downtown and the nation’s political center.

With all of these things said, it should be no surprise that land prices in Tay Ho are among the most expensive in Hanoi. The sheer size of the district is probably the only reason why plots of land in the district are even still available.

Just to the south of here, Ba Ding district is where most of Vietnam’s embassies and government buildings are. There’s also property available in Ba Ding, but it’s different enough from Tay Ho to not warrant its own section.

Hoan Kiem

Also named after a lake which the district is built around, Hoan Kiem is best known as Hanoi’s old quarter. It’s also one of Vietnam’s most popular tourist neighborhoods.

People often love Hoan Kiem’s vibe, but properties in this small and centrally-located area are owned by local Hanoians who have lived here for generations. As such, real estate isn’t usually for sale here – and it’s prohibitively expensive when it is.

Hai Ba Trung

Hai Ba Trung’s location just to the south of Hoan Kiem gives it easy access to Hanoi’s commercial core, along with its restaurants, shopping and other facilities.

But property in Ha Ba Trung, sometimes referred to as HBT by the locals, is much more readily available. Prices are still more expensive here than in most of Vietnam’s capital – but not prohibitively so.

Meanwhile, new cafes and restaurants are opening up every month. Hai Ba Trung is one of Hanoi’s fastest growing areas in its central core and investors may wish to take note.

Dong Da

This is the densest area in Hanoi and one of the most crowded in all of Vietnam. You won’t find many expats in Dong Da which is almost purely a local neighborhood.

With that said, things are truly happening in Dong Da. The mere fact that there’s practically a total absence of foreigners could mean it’s worth a closer look for property buyers.

More development is happening in this working-class neighborhood than anywhere else in Hanoi and construction can be seen on every corner.

I wouldn’t recommend living in Dong Da, but as is the case in most of Asia, higher returns come from going to the “gritty” areas where most foreign investors don’t go.

Da Nang isn’t just a tourist destination, it’s an actual city with an actual economy.

Da Nang

A bustling beachside city of over a million people, Da Nang is the third largest city in Vietnam – though it’s not nearly on the same scale as Hanoi or Ho Chi Minh City.

Da Nang is one of the nation’s more popular cities for wealthy foreign buyers and retirees. Even with its smaller size, there are more branded residences here than in either Hanoi or HCMC.

Sheraton, Hyatt and other international brands have set up condotels in Da Nang. They remain some of the most expensive properties in Vietnam.

Like most other beachside cities, luxury property in Da Nang can be found on the coast where sea views can be had. The Han River, which runs through the middle of the city, also boasts prime real estate. Things become much more local once you’re further inland.

Hoi An is around 25 kilometers south of Da Nang and they both share some of the same traits. But Hoi An is smaller, more secluded, and feels like a resort rather than a city.

Some people prefer living in Hoi An. With that said, foreigners have fewer options when buying real estate down here and it’s aimed at tourists more than residents.

Nha Trang

Nha Trang is much closer to Ho Chi Minh City than Vietnam’s other beachside resort areas. It’s still a lengthy 8-hour drive, but is becoming more popular among second-home owners and those seeking a weekend getaway.

Just like Vietnam’s middle class, Nha Trang’s skyline is starting to rise as locals become more financially capable of taking vacations. Those familiar with other parts of Asia might say it resembles Pattaya in Thailand – both in its feel and its proximity to the nation’s largest city.

Real estate prices are noticeably less than in either Hoi An or Nha Trang. But the demographics are also lower quality.

That’s not to say that wealthy buyers from HCMC aren’t present in the market. But you’re more likely to run into backpackers and cheap retirees than in Da Nang. For landlords, this leaves you with either the local market or a less-than-ideal segment of the foreign market.

Most investors would probably be better off in Da Nang than Nha Trang if they insist on buying beachfront property in Vietnam. For all others, Ho Chi Minh City and Hanoi both have better potential and yields than either.

Real Estate Agents in Vietnam

You’ll find that the local Vietnamese don’t really use property agents. In fact, there’s little concept of a realtor throughout Southeast Asia in general unless you’re a foreigner.

Real estate agents in Vietnam mostly exist to take a commission while making things easier for foreign buyers who aren’t fluent in Vietnamese. Locals will typically find properties through friends, family, and co-workers.

If you value the service of a realtor and it makes things easier for you, that’s fine. But remember that you’re losing a few percentage points worth of profit by using a realtor. If you just need help with the transfer process, talk to a lawyer who charges a fixed fee. Not a realtor.

Properties are Bought in Gold or Dollars

One of the most unique aspects about Vietnam’s real estate market is the fact that purchases are often made in gold rather than cash.

This is done for practical reasons as well as historical reasons. If you ask a local why purchases are made in gold, the answer is likely to be “that’s just the way we do it”.

From an economic standpoint, the Vietnamese Dong is one of the region’s worst performing currencies and has suffered from inflation for quite awhile.

The country’s economy has done well since the early 2000s… but its currency hasn’t.

As such, people are a bit wary of using the Dong for large transactions. You’d need several wheelbarrows full of bank notes to buy a property if done so in Dong.

Is Vietnam Property a Good Investment?

Vietnam has great potential, but perhaps even more caveats. Restrictions on foreign investment combined with one of the worst performing currencies in Asia make things rougher than they seem on the surface.

Investing in Vietnam property isn’t necessarily a bad idea and you’d likely turn a profit. But there’s just better options in the region. Vietnam has a lot of bureaucracy and nothing unique to lure investors over the competition.

Buyers in Malaysia are able to own land and get a permanent visa. Investors in Thailand benefit from one of the region’s most stable currencies. Those in Cambodia reap the rewards of one of the fastest-growing economies on the planet. Foreigners can own freehold properties in all three of these markets.

In contrast, Vietnam just doesn’t have the right incentives. No matter who you are and what you’re looking for in a property purchase, you’d likely do better elsewhere – at least until Vietnam opens up more.

Returns are often easier to make in places not yet overrun by foreign investment. But if the government makes you jump through hoops in order to do so, it may be worth looking into alternatives. The best of both worlds can be found.

Source: investasian

Intense competition awaits in 2018: real-estate experts

Advertisements

Next year is likely to be a fiercely competitive one for real-estate companies in HCM City since scores of new projects are set to hit the market, analysts said.

Following a successful 2017, many developers have already announced plans for next year.

Nguyen Dinh Trung, general director of HungThinh Corp, said 2018 plans were discussed and finalised in the middle of the previous year.

He told the Vietnam Investment Review that the plans had acquired dynamism after the company’s 10 mergers and acquisitions in 2017.

The company’s plans include expanding to the north and starting to sell its products in 2018. It opened a representative office in Ha Noi this year.

Vietcomreal said it considered 2018 an important year for its business.

According to the Vietnam Investment Review, the company will increase its land holdings by bidding for properties sold by privatised companies, especially in HCM City.

Phat Dat Company will sell units in two apartment projects in District 7 and develop the River City.

Singaporean-owned Keppel Land will develop Palm City and The View.

Talking about the market next year Le Hoang Chau, chairman of the HCM City Real Estate Association, said next year the market would change to balance demand and supply in the various segments, and become stable, he said.

He predicted there would be intensive investment at the low end, where there is plenty of actual demand for housing.

The city is considering converting one third of all agriculture lands into urban lands to use for industry and services and build the smart urban area, he said.

The market would continue to develop next year thanks to foreign investors and overseas Vietnamese, he added.

Economist Can Van Luc said many new companies in property development and trading were incorporated this year.

Many real estate projects are waiting for licences, and so 2018 could be a tough year for the companies in the sector, he said.

Nguyen Nam Hien, general director of HungThinh Land said next year there would also be intense competition between transaction centres because many new ones were established this year.

Source: VNA

Banks’ profit skyrockets due to credit growth

Advertisements

Due to the recovery of the credit market throughout the year 2017, plenty of banks announced positive business performance with increased profits whilst fostering asset trading, risk management, and control over non-performing loans.

In particular, for the first nine months of 2017, Asia Commercial Bank (ACB) was recorded to achieve total pre-tax profits worth about VND2 trillion ($88.37 million) and total after-tax profits worth VND1.5 trillion ($67.29 million), respectively 61 and 53 per cent up against the same period in 2016.

Based on these statistics, ACB’s profit for 2017 is forecast to exceed the original expectation of VND2.2 trillion ($97.24 million).

In addition, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) also reported surpassing its expectation of VND585 billion ($25.79 million) in pre-tax profit for 2017, with a profit of VND1 trillion ($45.2 million) during the first nine months, a five-fold increase over the same category in 2016 and almost doubling the planned profit for 2017.

Likewise, a significant number of Vietnam-based commercial banks, including Vietcombank, BIDV, Viettinbank, Techcombank, MB, HDBank, LienvietpostBank, OCB, and TPBank also expected their profits to be worth trillions of dongs by the end of 2017.

Financial specialists attributed banks’ increased profit to positive credit growth. With the credit growth level anticipated at around 19 per cent, a raise in banks’ returns was expected. In addition, improved non-performing loan management also added to banks’ profitability.

Dr. Bui Quang Tin, a lecturer at Banking University of Ho Chi Minh City, explained that banks had a major restructuring progress, especially in the area of risk management.

Judging the current state of Vietnam-based banks, Le Anh Tuan, deputy general director of Dragon Capital’s investment and economy division, noted that the accelerated restructuring process played an important factor in enhancing the overall performance of the industry. During the year 2017, commercial banks profit performance drew substantial attention, while the slowly warming real estate market also had a positive impact on bank credit.

“However, it is of paramount importance that Vietnam-based banks should pay more attention to risk management and credit quality in order to obtain higher returns, leading to highly distributed profits,” Tuan added.

To date, a remarkable number of bank managers expected that the positive credit growth would support commercial banks to strengthen control over non-performing loans and reduce reserve funds with the intent to increase their profits.

Vietnam attracts record tourist numbers in 2017 but can’t escape bad reputation

Advertisements

Robbery, petty crimes, traffic accidents and service quality continue to scar the country’s image.

2017 has been another record breaking year for tourism as foreign visitors to Vietnam surged 29.1 percent over the previous year, reaching an all-time high of 12.9 million, according to the General Statistics Office.

The country consistently makes it into “world’s top 10 lists” by reputable travel sites and newspapers like The Guardian, CNN, Lonely Planet, TripAdvisor and Rough Guides.

But just as it is famous for pristine beaches, misty mountains, buzzing cities, mouth watering food and friendly people, the “rough side” of the country hasn’t escaped its global image either.

Visa issues aside, robbery, petty crimes, traffic accidents and service quality continue to put visitors off one year after Deputy Prime Minister Vuong Dinh Hue asked tourism agencies to solve them.

There have been some improvements but Vietnam still has a long way to go, said Nguyen Quoc Ky, CEO of travel company Vietravel.

Many hotlines set up to resolve tourism incidents don’t operate outside working hours while that’s the time when they’re most likely to be needed, Ky said. He added that most hotline staff don’t actually know how to respond to issues like food poisoning.

Echoing Ky, head of the Vietnam National Administration of Tourism Nguyen Van Tuan said the issues have been frequent, and could not be fully eliminated.

In September, an officer from the U.S. Consulate in Ho Chi Minh City was pinned down and robbed in a taxi, according to police reports.

Earlier this year, police in Ho Chi Minh City also detained a man for fatally stabbing an American tourist, allegedly over an argument about the poor quality of drugs the foreigner had bought from him.

Foreign tourists have also faced hassling in Vietnam. The UNESCO World Heritage Site Ha Long Bay has earned a reputation for being one of the country’s biggest tourist traps as vendors follow foreigners as soon as they leave buses, often refusing to give up until they finally sell something.

In Da Lat, a resort town in the Central Highlands, groups of gangsters have reportedly forced tourists to pay for unwanted products and services. The situation got so bad that Prime Minister Nguyen Xuan Phuc had to step in, asking local authorities to end this practice, which has threatened security in Da Lat and tainted its image as a favorite travel destination.

But in a country where on average 24 people die from traffic accidents per day, it is lack of road safety that taints Vietnam’s image the most, according to tourism companies.

Even though Vietnam is generally classed as safe overall due to “low” terror threat according to a report issued in January this year by The Telegraph, Vietnam is listed among the more dangerous countries in terms of road deaths.

“It is very, very dangerous,” said Kasia Tomaszewska, a visitor from Poland. “Local people don’t have the culture of respecting pedestrians. You have to cross the street, knowing that nobody will stop.”

The governments of the U.K., U.S., Canada, France, Switzerland and Australia all warn their citizens of potential dangers awaiting them in Vietnam.

“Compliance with local road regulations is poor….There are frequent road traffic accidents and fatal crashes,” according to a U.K. government website.

‘Bittersweet’

At a bar in Ta Hien, a backpacker street in Hanoi, Elena Dalaeva, 30, from Russia shrugged off the risks. “Nowhere in the world is quite safe. Most of foreign tourists don’t have a problem here. Respect laws, learn the basics and use common sense, you will be fine.”

Traffic in Vietnam seems to either puzzle, impress or annoy outsiders, and even locals sometimes. The seemingly chaotic streets have even inspired Enomoto Kaori, a 30-year-old Japanese woman and game designer who arrived in Vietnam in July 2015, to create a mobile game called Vietnamese Road that trains people how to cross the streets.

The game has become so popular that last October it received a $40,000 grant in the form of tools and services from a Facebook start-up fund.

ABC News quoted Mark Bowyer, who edits the popular Southeast Asian travel website Rusty Compass, as saying that Vietnam was paradoxically “both a very safe and very unsafe travel environment” and tourists needed to be proactive about their safety.

Sometimes, it boils down to how visitors choose to see Vietnam’s tourism vices. They could be part of a wild adventure, or a reason to never return.

Official data published in August show that the latter is the majority as 80 percent of foreign visitors to Vietnam don’t actually return.

In order to resolve these issues, Tuan said the Vietnam National Administration of Tourism cannot simply act alone but has to coordinate with the transport sector, the police and local governments.

Ken Atkinson, chairman of Grant Thornton and vice chairman of the Vietnam Tourism Advisory Board, said he “personally believes the actual return rate for tourists is actually lower than the quoted 20 percent, as some reports record return tourists at less than 10 percent.”

The main reason for the low return rate is that Vietnam has yet to really establish itself as a destination for family holidays, as Thailand and Indonesia have managed to do. It is believed that the return rate for tourists in Thailand is closer to 50 percent, he told VnExpress International.

In order to establish itself as a family destination, he suggested that Vietnam should have a more friendly visa regime, more activities for family recreations and better infrastructure, as well as higher quality services and safer roads.

“Nevertheless, our tourism numbers continue to boom but we need to start to look at the quality of those tourists and their average spend in country,” he said.

After all, the country aims to welcome 17-20 million foreign visitors in 2020, and reach tourism revenue of $35 billion by the year.

Source: Vnexpress

 

Trio of manufacturers assist in ‘made-in-Vietnam auto dream’

Advertisements

Vietnam once put high hopes on automobile joint ventures, believing that foreign technologies would help develop the automobile industry. However, it now believes that it would be better not to rely on outsiders.

In the early 2000s, two Vietnamese companies had strength in the truck and passenger vehicle market segments. However, Vinaxuki went downhill and had no opportunity to recover. As for Thaco, Tran Ba Duong, its CEO, chose the correct path to development.

Starting business as a used car dealer, Thaco later began making trucks, buses and now assembles Mazda, Kia and Peugeot.

Do Huu Hao, former deputy minister of the Ministry of Industry and Trade (MOIT), commented that Thaco started with simple jobs (assembling trucks and buses) and then undertook more complicated work (sedans).

The manufacturing of buses and trucks helped Thaco accumulate experience and money to make sedans. Thaco is now a big power in the market and its sale promotion campaigns always have an impact on the market.

Thaco said Vietnam cannot compete with other countries which have been making cars for hundreds of years.

However, this is quite different for buses and trucks. In 2011, Thaco began building a factory for making buses, the first in Vietnam which has 80 percent of equipment designed by Thaco’s engineers.

Most recently, Thaco inaugurated the largest and most modern bus factory in South East Asia and signed a contract on exporting 1,150 businesses to four countries.

Meanwhile, Thanh Cong Group’s success was a surprise to many people. In 2009, Thanh Cong became the distributor of Hyundai cars. Even when Hyundai fell into Thanh Cong’s hands, few people thought Hyundai sedans would be assembled in Vietnam and exported.

The rapid growth has placed Hyundai Thanh Cong (HTC) in the top five manufacturers with the largest market share in Vietnam. Most of HTC’s models are now made at HTC’s factory in Ninh Binh province.

The third name in the ‘trio’ is Vinfast, an ambitious investor. Unlike Thaco, Vinfast, from the beginning, stated that it would make sedans with Vietnamese brand.

The manufacturer, belonging to VIngroup, a powerful conglomerate with investments in many business fields, has hired famous design centers in the world to design models ‘with a Vietnamese soul and for the Vietnamese market’.

VinFast promised that Vietnamese will have opportunities to own cars at reasonable prices and the project will help generate 25,000 workers, thus indirectly feeding 25,000 families.

Source: VietNamNet

What’s behind the strong performance of the stock market in 2017?

Advertisements

The Vietnamese stock market in 2017 saw stock prices escalating, but not all investors could make money.

Tuan, a 27-year-old investor, spends most of his time watching electronic boards on securities and trading floors and calling brokers. He was surprised that the CMG share price had dropped so dramatically despite the upward trend of the market.

Two weeks ago, Tuan bought 5,000 CMG at VND37,000 per share. One week later, the price escalated to VND52,300 per share. However, it unexpectedly dropped late last week to VND34,000,

Tuan was not the only investor who took a loss even though the VN Index climbed to new highs.

“When the VN Index increases by 50 percent, this doesn’t mean that all the investors who inject VND1 billion into the market will receive VND1.5 billion,” an analyst said. “If someone can receive VND1.5 billion from the initial investment capital of VND1 billion, this means that another investor injects VND1 billion but receives VND500 million only.”

‘Too strong’, ‘crazy’ and ‘incredible’ are the words investors use to describe the rise of the stock market in 2017.

The VN Index increased by only 40 points in 2015 and by 80 points in 2016. But it has soared by 300 points so far this year and exceeded the 10-year high 950 point threshold.

In 2016, the average trading value was VND3 trillion per session and there were only a few sessions with the trading value of over VND5 trillion.

Meanwhile, VND5 trillion sessions were commonly seen in 2017.

With the growth rate of over 40 percent, Vietnam has become one of the fastest-growing markets in the world.

SSC’s (State Securities Commission) chair Tran Van Dung said the high GDP growth rate, the government’s actions, and foreign capital flow are the three factors behind the strong rise of the stock market in 2017.

Unlike 2007, when the stock market’s growth depended on domestic investors, in 2017, foreign investors have joined both the stock and bond markets.

The shift of the global capital flow which is now heading for emerging markets and the upgrade in credit ratings given by Fitch have made Vietnam a brilliant market.

One report shows that foreign investors have bought more than sold by $1.8 billion. This figure is only about secondary transactions in the stock market. In addition, there are many deals issuing shares specifically to groups of investors by Vietjet, Vincom Retail, HD Bank, VP Bank, Vinamilk and Sabeco.

Finance Asia in late November chose Vincom Retail’s stock sale as Asia Pacific’s most successful private equity investment deal in 2017, with record trading value of $741 million.

Source: VietNamNet

Exit mobile version