Vietnam’s domestic coffee prices fell due to new harvest supplies, while the market in Indonesia remained lacklustre, traders said on Thursday.
Vietnam, the world’s second biggest coffee producer, is in its peak harvest season, supported by sunny and dry weather in the Central Highlands, the country’s coffee belt, traders said.
Vietnam’s national centre for weather forecasting said the coffee belt regions would mostly be sunny for at least another week, which could help farmers to pick and dry beans faster and keep the coffee in good condition.
Both the quality and volume of the 2017/2018 crop year, which started in October, are expected to surpass the year before, traders said, adding the ratio of mouldy coffee would be significantly lower.
Earlier this week, Rabobank forecast Vietnam would have a record crop this year of 28.7 million bags, up sharply from the International Coffee Organization’s estimate for the prior season of 25.5 million.
Traders said farmers in Daklak were offering coffee beans at 37,300-37,500 dong ($1.64-$1.65) per kg, falling from 38,800-39,400 dong a week earlier and tracking a drop in London prices.
January robusta coffee settled down $44, or 2.4 percent, on Wednesday at $1,757 per tonne, the weakest for the second position since July 2016, with dealers saying coffee was flowing from Vietnam.
Vietnam’s 5-percent black and broken grade 2 robusta was traded at a discount of $40 per tonne to the ICE March futures contract or up to a $100 discount to the January contract , traders said.
In Indonesia, the grade 4 defect 80 robusta beans traded at a premium of $50 a tonne to the January contract, tightening slightly from a $60-$70 premium a week earlier, a trader said.
“Prices are really bad today,” one trader told Reuters, adding volumes were also low.
Vietnam on Wednesday announced changes to rules to speed up the privatization of state-owned enterprises (SOEs), adding book building to a program that has been weighed down by the extent of state control and concerns about vested interests.
Privatizations up to now have been handled only by public auction, direct negotiation and underwriting.
Book building has proved a success for private share sales of firms such as Vietjet Aviation , Vietnam’s biggest private airline, and Vincom Retail at its initial public offering, Vietnam’s biggest ever. Both were oversubscribed.
Book building allows companies to identify a range of prices and estimated demand from interested investors to give them a better indication of what IPO price to offer.
“We believe that the regulation … will be a positive catalyst to spearhead the next wave of SOEs’ IPOs in the 2018-2019 period,” top brokerage Saigon Securities Incorp (SSI) said in a note to clients.
State-owned enterprises have so far mostly adopted the public auction method, which together with other restrictions have reduced appetite in even some of the more attractive state assets including dairy firm Vinamilk , Vietnam’s biggest firm by market value.
A public auction of a 9 percent sale in Vinamilk last December was under-subscribed.
Book building is subject to the approval of the prime minister, pending guidance by the finance ministry, and will not be used in a stake sale of Vietnam’s top brewer, Sabeco , expected later this year.
The government also eased restrictions on strategic partners, requiring them to have profitability in two years prior to acquisition, rather than three years, and reduced the lock-in period to three years from five years previously.
The decree, which will be effective from Jan. 1, 2018, also introduces changes to the valuation process and listing requirements.
South Korean-Vietnamese Lee Chang Kun, who traces his bloodline to 11th-century Vietnamese Emperor Ly Thai To, has been appointed Vietnam’s tourism ambassador for the 2017-20 tenure.
The appointment was made by Vietnam’s Ministry of Culture, Sports and Tourism on Tuesday, after considering Lee’s self-nomination for the vacant post.
Born in Seoul, 59-year-old Lee Chang Kun is a 31st-generation descendant of Emperor Ly Thai To, founder of the Ly dynasty and ruler of Vietnam between 1009 and 1028, according to historical records.
During an uprising in 1226 that eventually led to the overthrow of the Ly dynasty, Prince Ly Long Tuong – known in Korea as Lee Yong-sang – fled Vietnam and became a general famous for his role helping Korea defeat Mongolian invaders.
The exiled prince is believed to be the ancestor of a branch of the Lee family today in both South and North Korea.
Today, some 1,500 households in North Korea and 600 in South Korea can trace a connection to Ly Long Tuong, according to David Steinberg’s 2010 book ‘Korea’s Changing Role in Southeast Asia: Expanding Influence and Relations.’
Lee Chang Kun began making numerous visits to his ancestors’ hometown in Vietnam in 1992, and has since been deeply involved in the strengthening of ties between the two countries and peoples.
In 2010, Lee and his family were granted Vietnamese citizenship in recognition of his roots and contributions to Vietnam. He has since resettled in the Southeast Asian country.
In September, Lee nominated himself for the title of Vietnam’s tourism ambassador, citing his pride to be “a child of the Vietnam motherland” and his wish to do everything in his effort to advance the development of the country and further develop prosperous relations between Vietnam and South Korea.
“I want to be a part in Vietnam’s journey to become a world-renowned tourist hub,” Lee wrote in his open letter to the Vietnam National Administration of Tourism.
The Vingroup owner’s value has rocketed following a recent IPO of its retail unit that raised $709 million.
Pham Nhat Vuong, Vietnam’s first billionaire and owner of giant conglomerate Vingroup, has leapt 97 positions to become the 543rd richest person in the world, according to updates from Forbes released on Tuesday.
The magazine’s real-time list of the world’s billionaires showed that Vuong’s assets had expanded by more than 14 percent to $4 billion in just 13 days.
He’d already marked a milestone on November 8 by climbing 227 places in eight months to 640th on the list, with his net worth growing by more than $1 billion.
His rise came following the IPO of Vingroup’s retail unit Vincom early this month, which was hailed as the biggest IPO debut ever in the country after raising nearly $709 million and valuing the mall operator at around $3.4 billion.
Vingroup’s shares have also gained nearly 100 percent since mid-2017, closing at VND77,000 ($3.40) on Tuesday. Vuong, 49, owned more than a 27 percent stake in Vingroup as of June this year.
Vingroup is one of Vietnam’s largest real estate conglomerates, and has been expanding rapidly into retail, logistics, agriculture, education and healthcare. As of the end of September, its subsidiary Vincom Retail was managing, operating and renting 41 shopping malls with a total area of over 1.1 million square meters (272 acres). It also has 22 projects under construction and another 50 in early development.
Nguyen Thi Phuong Thao, the only other Vietnamese billionaire and owner of budget carrier Vietjet, now ranks 1,177th on the Forbes list with assets worth around $2 billion.
At the top of the list are Amazon’s founder Jeff Bezos with a net worth of $94.9 billion, followed by Microsoft co-founder Bill Gates with $89 billion and Warren Buffet with $77.9 billion.
Most other markets in Southeast Asia were subdued ahead of rate-hike news from the US Fed.
Vietnam’s stock market rose by 2.5 percent on Tuesday to a near-decade high.
Dairy giant Vinamilk and brewery firm Sabeco jumped 4.7 percent and 6.6 percent respectively to record heights.
Singapore stocks alo soared Tuesday on expectations that the economy grew at a faster pace than initially estimated in the third quarter, while most other Southeast Asian markets were subdued ahead of the release of U.S. Federal Reserve minutes.
The Fed minutes, closely watched for indications of a rate hike in December, could also provide clues on further U.S. monetary policy tightening.
Interest rate futures traders are pricing in a 92 percent chance of a December rate hike, according to the CME Group’s FedWatch Tool. The minutes are due on Wednesday.
Singapore shares surged more than 1 percent, on track for their third straight winning session, underpinned by hopes that an uptick in global demand was boosting exports.
A Reuters poll on Friday predicted quarter-on-quarter growth in Singapore at 7.4 percent in July-September, on a seasonally adjusted and annualized basis, the fastest pace since the fourth quarter of 2016. The GDP data is scheduled to be released on Thursday.
Financials climbed, with DBS Group Holdings and OCBC gaining 2.2 percent and 2 percent, respectively.
Philippine stocks inched down 0.3 percent, dragged by industrials and telecom.
Market heavyweight SM Investment fell nearly 1 percent, while PLDT Inc shed 1.2 percent.
Indonesian shares also slipped 0.3 percent, snapping a three-session gaining run, weighed by consumer discretionary and consumer staples.
Indonesia’s index of its 45 most liquid stocks fell 0.3 percent.
Blue-chip Gudang Garam shed 2 percent after having gained 3.1 percent in the previous session. Mining contractor United Tractors was down 2.7 percent.
The Malaysian share market was marginally higher, while Thai shares held steady.
Fake goods ranging from eyewear to handbags are openly available at high-end shopping malls and street-side markets across the country.
Le Thu Trang recently switched from a Gucci bag to a Prada design for a fresh look, but the decision did not put a massive dent in her bank account.
Both of her bags are counterfeits and cost 20 times less than the originals that can be found in the stores of luxury Italian brands.
“I like to carry Gucci and Prada bags, but buying luxury goods is not easy because they’re expensive and fashion trends change quickly,” Trang said. “In that respect, fake bags are very appealing. They’re nice and quite cheap.”
Trang’s case illustrates a trend among consumers, especially young people in Vietnam, who like buying fake products ranging from eyewear and shoes to garments and handbags. Their desire for cheap luxury has helped counterfeiters thrive in the country.
On the streets of Hanoi and in some of its glistening air-conditioned malls, countless fake Hermes and Louis Vuitton handbags, Rolex watches and Gucci fashion accessories are openly on sale.
Consumers who want an expensive logo or style can pick up goods for surprisingly cheap prices, even though they know the goods are illegal and might be confiscated by international customs agents who can impose heavy fines.
Wealthy businessmen, savvy importers and even enthusiastic housewives are looking to make a profit from selling fakes from bricks and mortar stores or online, despite efforts to stop intellectual property right infringements.
Retailers are also unconcerned about selling fake goods. “This is a knock-off, but no problem,” a woman said, pointing to a white polo shirt emblazoned with a Louis Vuitton logo.
“Why should I have to worry about the police? I don’t sell drugs. I didn’t steal this shirt,” she said in a store on Hanoi’s Hang Ngang Street. “Lots of people here sell fake goods like me.”
In a nearby handbag store, fake products with Chanel, Gucci and Louis Vuitton logos on them are on sale for $20-50.
“The originals cost thousands of U.S. dollars,” the dealer said, convincing customers that her handbags look like the genuine article. “Same design. Same material. This one is made in China.”
Fake products such as garments, footwear, eyewear, shampoo, body lotions and pharmaceuticals can be found all over Vietnam, from high-end shopping malls to street-side markets.
Most of the knock-offs are smuggled in from China, Phan Hoan Kiem, head of the Market Surveillance Agency in Ho Chi Minh City, said at a recent meeting.
However, some counterfeit products are made in Vietnam. Many households in Lich Dong Village, Thai Binh Province produce glasses and label them with famous international brands such as Ray-Ban, Gucci and Chanel, while Thao Noi Village in Hanoi is notorious for producing fake Chanel, Hermes and Louis Vuitton handbags.
Without drastic measures to combat fake products, Vietnam could become a major counterfeiting center in the future, an official from the Department of the Intellectual Property under the Ministry of Science and Technology warned.
Many handicraft villages that specialize in counterfeit goods have sprung up as farmland disappears as a result of the industrialization and urbanization process, he said.
Fake products such as garments, footwear, glasses, shampoo, body lotions and cosmetics can found all over Vietnam. Photo by VnExpress
Lack of enforcement
Vietnam has detected over 44,500 cases related to counterfeiting and piracy since 2014, said Truong Van Ba, a member of National Steering Committee 389, the government’s anti-smuggling body.
Experts say Vietnam is not doing enough to stop the trend. Current laws do not impose fines on people who use counterfeit goods, but in many other countries buying and using these products is considered a crime.
Hoang Van Truc, deputy director of the Investigation Bureau of Economic Crimes, said that only one in seven cases related to fake goods is prosecuted, while the rest receive administrative fines.
Truc added that there’s a lack of cooperation between authorities, especially in border provinces, to prevent fake products from entering the local market. Many laws on counterfeiting and piracy overlap, while the current penalties aren’t enough of a deterrent.
In addition, the fight against fake goods is made more difficult by the fact that some products are imported into the local market in the form of spare parts rather than finished products, making it almost impossible for authorities to identify them.
Many enterprises also offer fake items that are 90 percent genuine, posing another problem for law enforcement officers.
Even anti-counterfeiting stamps, which are used to protect trademarks, are being faked.
The growing taste among local consumers for fake products has contributed to the market’s development in Vietnam, said Phan Thi Viet Thu, vice chairwoman of the Consumer Protection Association in Ho Chi Minh City.
Her association rarely receives complaints about counterfeit products. “If consumers don’t say “no” to counterfeit goods, the trade will continue expanding.”
Despite the warning, Trang is still happy with her fake bags. “I’ll buy genuine goods when I’m rich. For now, the cheap ones are still my best option.”
People in Vietnam eat on average more packs of the fast food than any other country in the world.
Vietnamese people consumed more than 4.9 billion packs of instant noodles last year, behind China, Indonesia and Japan, new data shows.
Vienam has held fourth spot since 2012 in the rankings compiled annually by the World Instant Noodle Associations (WINA).
On a per capita level with a population of over 93 million, the average Vietnamese person gobbled 53 packs of instant noodles in 2016, higher than Indonesians at 49, Japanese at 44 and Chinese people at 38.
WINA said Vietnam’s instant noodle market recovered last year thanks to more diverse products that offer a wider range of choices for customers.
Kajiwara Junichi, CEO of noodle producer Acecook Vietnam, told VnExpress that the company’s revenue from instant noodles rose 5-20 percent during the second half of this year.
Meanwhile, Masan Consumer and Asia Foods have been suffering from falling revenue.
The three firms are the three biggest instant noodle producers in Vietnam and make up 70 percent of the domestic market share.
Last year, The Washington Post cited a South Korean study that pointed out how harmful instant noodles can be for the health.
“Although instant noodles are a convenient and delicious food, there could be an increased risk for metabolic syndrome given [the food’s] high sodium, unhealthy saturated fat and glycemic loads,” said Hyun Shin, a doctoral candidate at the Harvard School of Public Health and a co-author of the study.
Doctor Dang Huy Quoc from the Ho Chi Minh City Oncology Hospital told Tuoi Tre newspaper that no studies have concluded that instant noodles can cause cancer, but high consumption of fat and salt can cause cancer and other heart diseases.
Other experts suggest that people should only eat one or two packs of instant noodles per week.
Many Vietnamese people are well aware of the harmful effects of instant noodles, but it’s common in Vietnam for people to snack on a pack of instant noodles between breakfast, lunch and dinner.
The noodles are popular among college students, who often live far from home and lack the facilities to cook themselves a proper meal.
Aviation agencies want more money for new terminals and runways near top tourist destinations.
Vietnam’s aviation agency has proposed a plan to upgrade three international airports near popular tourist destinations Ha Long, Hoi An and Hue over the next three years.
The project is expected to cost VND23.3 trillion (more than $1 billion) and includes new passenger and cargo terminals, buildings and runway upgrades, the Civil Aviation Authority of Vietnam (CAAV) said in its proposal to the transport ministry.
It said the money would be spent at Cat Bi Airport, which is 70 kilometers (43 miles) from Ha Long Bay, Phu Bai Airport just outside the former royal capital Hue, and Chu Lai Airport, 77 kilometers south of Hoi An.
The CAAV said Phu Bai and Chu Lai were operating far above capacity last year, while Cat Bi, which offers the shortest route to Hai Phong, is likely to be overloaded next year.
Vietnam’s aviation market is growing at the third fastest pace in Asia-Pacific and the country is grappling with an acute dearth of airport capacity.
Aviation authorities estimated that the number of passengers on domestic flights soared 35 percent to 28 million in 2016, accounting for more than half of the total air travel in the country.
Airports across the country served more than 55 million passengers during the first seven months of this year, according to the CAAV. The number in July alone reached 9.1 million, up 12.2 percent against the same month last year.
In March, the Airports Corporation of Vietnam asked for VND32 trillion ($1.4 billion) from the state budget to upgrade large airports across the country.
He knocked out his Indonesian opponent in just 45 seconds to become the first Vietnamese boxer to hold a WBC title.
Vietnamese boxer Tran Van Thao won the country’s first World Boxing Council (WBC) title on Thursday in the WBC Asia Interim Super Flyweight Championship.
Thao, who is also the first Vietnamese boxer to fight for a WBC title, won the belt in stunning style against Indonesia’s George Lumoly in Bangkok.
Thao floored his opponent with a flurry of punches early in the first round, and despite getting back to his feet, Lumoly was back on the canvas and knocked out in just 45 seconds.
Thao, 25, started boxing at the age of 16. He became Vietnam’s number 1 boxer in the super flyweight class (51-52 kilograms, or 112-114 lbs) by winning the National Boxing Championship last year. Before the fight with Lumoly, Thao boasted a professional record of 6 wins, including 4 by knockout, and no losses.
Lumoly, 26, has been a professional boxer since 2013, and entered the ring on Tuesday with a record of 8 wins, 3 draws and 1 loss.
Just one more reason why globetrotters should put the two biggest cities in Vietnam on their menus.
Hanoi and Ho Chi Minh City have been named among the world’s best food destinations by Caterwings, a site that offers online food ordering service in Europe.
Saigon rode in at 80th position, while Hanoi secured 87th spot, on the list of 100 destinations ranked by 20,000 food journalists and restaurant critics.
The research began by analyzing thousands of food hubs to determine the final list of the top 100 cities based on expert opinions of their culinary scenes, quality of service, diversity of cuisine, affordability for locals and visitors, vegetarian and vegan options, the ratio of restaurants per 10,000 citizens, rating of high end restaurants, hours worked at minimum wage to afford a dinner for two, the fast food outlet to restaurant ratio, and quality of street food and food trucks.
The top 10 cities on this year’s list are San Sebastian (Spain), Tokyo, New York, Barcelona, Singapore, Paris, Madrid, Lima, London and Munich.
“Every delicious destination in this index can offer inspiration to food industry professionals such as ourselves, as well as burgeoning chefs, gastronomes and globetrotters,” said Manuel Queiroz, CEO of Caterwings.
Hanoi and Saigon have received global gourmet plaudits more than a few times.
In February, The Telegraph published a list of the world’s 17 greatest cities for food, and the Vietnamese capital grabbed second spot after Tokyo.
CNN praised Hanoi’s bun cha (noodles with grilled pork) in its food show, “Anthony Bourdain: Parts Unknown”, as well its egg coffee.
The signature coffee has also appeared in stories by NatGeo and The New York Times.
The American channel also aired a short film introducing street food in Saigon that was viewed and shared thousands of times in just two days.
Dishes that have gained international recognition such as banh mi, pho and summer roll are all easy to find in Hanoi and Saigon.
Vietnam may be familiar to the American public, thanks to a lengthy war fought in the 1960s and 1970s, but the country has only recently began to attract the attention of investors. After shifting from a highly centralized planned economy to a socialist-orientated market economy, the country has become significantly more attractive to international investors looking to diversify into frontier markets.
In this article, we will look at Vietnam’s changing economy, how investors can gain exposure, and some important benefits and risks to consider.
Vietnam’s Changing Economy
Vietnam’s economy began as a largely agricultural feudal system until French colonization in the mid-19th century. After the country’s regions developed very different economies, they became further politically divided in 1954, with the north embracing communism and the south embracing capitalism, eventually setting the stage for the Vietnam War.
Between the 1970s and 1990s, Vietnam was a member of Comecon and heavily dependent on the Soviet Union and its allies. The dissolution of Comecon led to trade liberalization, currency devaluation, and a policy of economic development. Throughout the ensuing 1990s, tens of thousands of businesses were created and the economy grew at a rapid clip.
The growth briefly came to an abrupt halt during the Asian Financial Crisis in 1997, pushing the country to focus on macroeconomic stability rather than growth.
Since then, the economy has grown to a gross domestic product (GDP) of $219.8 billion, stable credit rating, strong exports to the U.S., and modest public debt relative to its growth rates.
The country’s economy is heavily reliant on foreign direct investment to attract capital from overseas, but that capital has been producing strong economic growth.
PricewaterhouseCoopers recently estimated that the country may be the fastest growing of the world’s economies with a potential annual GDP growth rate of 5.2%, which would make it the world’s 20th largest economy by 2050.
Investing in Vietnam with GBS
The easiest way to invest in Vietnam is using company formation services of Global Business Service (GBS) – a Business and Legal Services company in Vietnam, which provides the services for hundreds of foreign investors in Vietnam annually.
Investors should be aware that, some factors may make investors overexposed to financial concerns – such as legal framework or interest rate changes.
Benefits & Risks of Investing in Vietnam
Vietnam’s economy involves a number of different benefits and risks that international investors should carefully consider. While the country’s rapid growth rates may attract investors, they should carefully consider the higher risk profile, government controls, and reliance on key industries to support that growth over the long-term. These factors may make the country too risky for some portfolios.
Benefits of investing in Vietnam include:
Rapidly Growing Economy. Vietnam’s economy has been growing at between 4% and 8% since its recovery from the Asian Financial Crisis of 1997.
Self-Powered Economy. Vietnam relies on the petroleum industry for its domestic energy consumption and for export; crude oil product is expected to gradually decline.
Risks of investing in Vietnam include:
Socialist-orientated Economy. Vietnam may have transitioned from a centrally planned economy, but the government still controls many key industries.
Early Stage Market Economy. Vietnam remains at an early and vulnerable stage of its economic development and is therefore more risky than developed markets.
Key Points to Remember
Vietnam may be familiar to the American public, after a lengthy war fought in the 1960s and 1970s, but the country is just starting to gain investor attention.
Investors should keep in mind the many benefits and risks associated with investing in Vietnam, including its economic circumstances and reliance on key industries.
For months, Mai Linh has been blaming the foreign ride-hailing firms for falling revenue.
Major Vietnamese taxi company Mai Linh on Monday launched its own motorbike hailing app in its latest attempt to claw back customers from Uber and Grab, the ride-hailing firms from the U.S. and Malaysia that have been outshining local cab firms.
The app, Taxi Mai Linh, is now available in Ho Chi Minh City, Hanoi and Da Nang, and has around 5,500 drivers.
Ho Huy, Mai Linh’s chairman, said what makes his company’s new service different from Uber and Grab is that the fare is kept constant at VND11,000 (48 cents) for the first two kilometers and then drops to VND3,800 per kilometer from the third kilometer onwards.
Uber and Grab charge their passengers similar rates but raise fares during rush hours and bad weather.
He also said the company will run a campaign to encourage traditional xe om drivers to join its team in an effort to avoid fights between them and tech-savvy drivers, something that both Grab and Uber have experienced.
So far, the strategy seems to be working, and many Uber and Grab drivers have shown up at Mai Linh’s door to switch sides.
“I applied because I heard Mai Linh is offering a better deal for its drivers,” said Cuong, who has worked as a GrabBike driver for over a year.
“My income has fallen because Grab now deducts up to 20 percent of the fares that drivers receive from passengers instead of 15 percent as before, and more and more people are working as GrabBike drivers, which means more competition,” he said.
Uber takes a cut of 25 percent from its drivers.
Mai Linh’s drivers will not have to hand over any of their earnings for the first two months, after which time the company will take a 15 percent share.
Mai Linh reported that it lost 6,000 employees in the first half of this year, or 20 percent of its total drivers.
Its business results did not read much better during the same period, with revenue falling more than 5 percent on-year to VND1.72 trillion ($75.8 million).
In all, Mai Linh suffered a loss of VND47.5 billion from its taxi business, twice as much as last year, the company said.
Its rival Vinasun, the biggest taxi firm in Vietnam, lost 10,000 employees in the first nine month, and its revenue in that period only reached 58 percent of the company’s annual target.
They have both pointed the finger at Uber and Grab, saying the two foreign firms enjoy preferential policies as they are classed as transport software providers which, unlike traditional taxis, are not accountable for passenger and traffic safety.
In its latest attempt to battle Uber and Grab, Vinasun has rolled out a hailing service via Facebook Messenger.
The World Travel Awards – the most prestigious awards program in the world’s travel industry – will take place in Vietnam’s Phu Quoc Island District next month.
World Travel Awards has confirmed that both Grand Final Gala Ceremony 2017 and World Spa Awards will take place on the evening of December 10 at the JW Marriott Phu Quoc Emerald Bay Resort & Spa on the pristine island of Phu Quoc – a lush, hidden paradise off the southern coast of Vietnam.
“Having taken the decision to combine both the World Travel Awards Grand Final Gala Ceremony and World Spa Awards Gala Ceremony, it is a pleasure to confirm they will both take place in early December at the incredible JW Marriott Phu Quoc Emerald Bay Resort & Spa,” World Travel Awards President Graham Cooke said.
The event will bring together many representatives from the top hotel chains and groups, resorts and spas in the region and in the world to attend the prestigious “24th World Travel Awards” and “3rd World Spa Awards”.
The decision to combine World Travel Awards Grand Final Gala Ceremony and World Spa Awards Gala Ceremony will give nominees and delegates a heightened exposure on the night, as well as increasing the networking opportunities on offer.
The event will be a showcase of both the best of Vietnamese hospitality and the global spa and wellness industry so that this is an opportunity not only for global travel industry activists to cooperate with each other but also for Vietnam to promote its image on a global scale and brig the beauty and friendliness of Vietnam to an even greater audience.
This is the second time Vietnam has been selected to host the important event of the world’s tourism industry.
Established in 1993 to acknowledge, reward and celebrate excellence across all sectors of the tourism industry, the World Travel Awards brand is recognized globally as the ultimate hallmark of quality, with winners setting the benchmark to which all others aspire.
Each year World Travel Awards covers the globe with a series of regional gala ceremonies staged to recognize and celebrate individual and collective successes within each key geographical region.
World Travel Awards Gala Ceremonies are widely regarded as the best networking opportunities in the travel industry, attended by government and industry leaders, luminaries, and international print and broadcast media.
World Spa Awards is a dynamic awards program, launched in 2015, and is designed to drive up standards within spa and wellness tourism by rewarding the organizations that are the leaders in the field.
The Singapore-based automotive group, Jardine Cycle and Carriage (JC&C), has made additional purchases of Vinamilk’s shares after its maiden US$616.6 million investment on November 10.
JC&C group now has an aggregate interest in nearly 145.6 million Vinamilk shares, representing approximately 10.0 per cent of Vinamilk’s issued share capital.
This has increased its ownership in Viet Nam’s largest dairy producer to 10 per cent.
According to the group’s announcement on Friday, Platinum Victory Pte Ltd, a wholly-owned subsidiary of JC&C, has made further on-market purchases to acquire an additional of nearly 16.5 million shares from Vinamilk, representing approximately 1.1 per cent of the issued share capital of Vinamilk.
Following the acquisition, the JC&C group now has an aggregate interest in nearly 145.6 million Vinamilk shares, representing approximately 10.0 per cent of Vinamilk’s issued share capital.
On November 10, JC&C beat other bidders to purchase a 3.33 per cent stake in Vinamilk from the State Capital Investment Corporation (SCIC) at an open auction on the HCM Stock Exchange. It also acquired another 2.2 per cent stake via order-matching transactions to bring its holding to up to 5.53 per cent.
Currently, JC&C is the third-largest shareholder of Vinamilk, after SCIC with 36 per cent and Singapore’s food and beverages company Fraser&Neave, with 18.74 per cent.
Foreign investors hold a combined 56.44 per cent of Vinamilk. The firm’s market capitalisation reached VNĐ265.88 trillion ($11.71 billion) on Friday morning, rising 7.45 per cent from the $10.9 billion value on November 10 when the automotive major made the first investment in Vinamilk.
JC&C, a subsidiary of Jardine Matheson, has been present in Việt Nam for over a decade. It now owns a 25.1 per cent stake in automobile producer, Thaco, and nearly 23 per cent in the Refrigeration Electrical Engineering Corporation (REE Corp).
In addition to operating in real estate, hotel and financial services, Jardine Matheson, the parent company of JC&C, also holds shares of many franchise brands in Viet Nam such as KFC and Pizza Hut.
From December 1 this year Vietnamese who can show a minimum income of VND10 million (US$440) a month can gamble in casinos.
Circular No 102/2017, issued by the Ministry of Finance in early August to guide Decree No 03/2017 on casino businesses, lifts the ban on Vietnamese entering casinos that is in place now. Only foreigners are currently allowed into the country’s casinos.
Once the ban is lifted, to enter people must also prove they are over 21 years old.
As for the income, they have to show it is taxable at level 3 or higher or have certified copies of a lease agreement showing they receive rent of at least VND10 million a month or a bank statement showing interest income of that sum.
Since 1992 the Government has been acknowledging that casinos would help attract tourists and bring revenues.
This resulted in the first casino appearing in 1994 in the beach resort of Do Son in Hai Phong.
Now there are eight casinos and more than 50 electronic gambling facilities nation-wide.
The new circular is expected to encourage the opening of casinos around the country, especially in special administrative-economic zones like Van Don in Quang Ninh Province, Bac Van Phong in Khanh Hoa and Phu Quoc in Kien Giang.
In Van Don, the province people’s committee has licensed real estate developer Sun Group to build a US$2 billion luxury resort-amusement complex with a casino on 2,500 hectares in the special economic zone.
Both Quang Ninh and Kien Giang provinces want the Government to choose casinos in their locality to trial entry for Vietnamese.
Other provinces, including those without special economic zones, also want a piece of the action.
The Thua Thien-Hue Province People’s Committee has sought permission to increase the charter capital of the Lang Co Laguna Project from US$874 million to US$2 billion and open a casino.
The new circular has attracted some public criticism, with people saying the regulations limiting entry based on income cannot be enforced since it is difficult to prove income.
To gain entry, a person has to be paying income tax at level 3 or higher, but in Vietnam 70% of payers are assessed at level 1.
Others said the daily maximum gambling limit of VND1 million is too low to attract high income earners and help the Government achieve its revenue target.
Meanwhile, the existing casinos are operating at just a third of their capacity and claim to be losing money.
The Hoang Gia International Construction Investment Joint Stock Company said its casino business made a gross loss of VND35.8 billion last year and a net loss of VND101 billion in the first nine months of this year.
Analysts blame this on the rapidly growing competition, with more and more casinos fighting for fewer gamblers from overseas, most of them from China and Taiwan.
Vietnamese gamblers usually cross the border into Cambodia, where many casinos target them.
The Government’s decision to lift the ban is expected could not have come sooner for the casinos.
Exporters fret as foreign currency loans set to dry up
The circular that allows the extension of foreign currency lending to enterprises involved in export activities will expire in a month.
Economists are concerned this could affect borrowers.
Last November the State Bank of Vietnam (SBV) issued a circular amending and supplementing some articles in an earlier circular guiding lending in foreign currencies.
This allowed enterprises with short-term foreign currency requirements for their production and export activities to continue borrowing in foreign currencies until the end of 2017.
Interest rates for foreign currency loans are only around half the on dong loans.
They are currently at 2.8%-6%.
Interest rates for non-priority đồng lending stand at 6.8%-9% for short-term loans and 9.3%-11% for long- and medium-term loans.
Exporters are understandably worried they would lose this big advantage from next month.
Analysts fear there will be a double whammy for exporters. Firstly, their costs will shoot up, hitting their bottom line. Secondly, demand for dong loans will go up sharply, pushing up loan interest rates even higher, particularly at banks that have liquidity issues.
The situation is predicted to become quite dire since growth in foreign currency lending is on an upward trend.
In the first nine months of this year credit growth was 12.9% compared to 5.4% a year earlier.
Export enterprises pointed out that if they have to borrow in dong to finance their operation costs would rise significantly, affecting the competitiveness of their goods.
They wanted the central bank not to have a one-size-fits-all policy since export enterprises’ business strategies are very different from those of other businesses.
But economists justified the SBV’s policy saying the increasing demand for credit means dollarisation of the economy is a real threat and could undermine the Government’s anti-dollarisation efforts.
To preclude this, it is necessary to switch completely from lending and borrowing the greenback to buying and selling it.
Others said, however, that to do this there should be flexibility in exchange rates and businesses must be allowed to freely buy foreign exchange when they require.
Moody’s upgrades VN banking outlook
Moody’s Investors Service has upgraded the outlook for Vietnam’s banking system to “positive” for the next 12-18 months from “stable”.
According to a statement from the credit rating agency, the Vietnamese banking system’s positive outlook reflects strong economic prospects, with the banks’ operating environment benefiting from robust economic growth, based on ongoing improvements to infrastructure, favourable demographics and the Government’s continued focus on reform to support foreign direct investment.
But it also warned Vietnam of rising asset risks as the nation boosts credit growth to drive the economy.
Rapid credit growth will continue to erode capital buffers and capitalisation will deteriorate as the banks struggle to replenish capital against rapid loan growth, it warned further.
