VIETNAM BUSINESS NEWS MARCH 14

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Gov’t approves draft resolution on environmental protection tax on petrol

Gov’t approves draft resolution on environmental protection tax on petrol hinh anh 1

The Government has passed a draft resolution on the environmental protection tax rates on gasoline, oil and lubricants, which will be submitted to the the National Assembly Standing Committee for approval on March 14.

Under the draft, the Ministry of Finance proposes to cut the tax rates for gasoline by 2,000 VND (0.088 USD) per litre; diesel, fuel oil, and lubricant by 1,000 VND per litre; grease by 1,000 VND per kg; and kerosene by 700 VND per litre.

The ministry recommended that the resolution should take effect from April 1 to December 31, 2022.

With the adjustments, the estimated amount of environmental tax on the products will reduce by over 29 trillion VND (1.26 million USD) per year, leading to a fall in the State budget collection.

Shares to continue downward trend amid Ukraine conflict

Vietnamese shares are forecast to follow a falling price trend amid weak market sentiment this week pressured by uncertainty about the conflict in Ukraine.

The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) declined 0.85 per cent to close Friday at 1,466.54 points. The index had declined 2.58 per cent last week.

An average of 896 million shares were traded on the southern exchange during each session last week, worth VND29 trillion (US$1.3 billion).

According to Vietcombank Securities Limited Company (VCBS), the sharp drop in Viet Nam’s stock market last week was also in line with the general trend of stock markets in the world, as it was mainly affected by the Russia-Ukraine conflict.

The liquidity of each session last week and the whole week’s liquidity decreased, showing that the cash flow is still choosing to stay out of sight. In general, the market still witnesses divergence, with stocks benefiting from the escalation of commodity prices on the international market, going against the movement of the general index and large-cap group.

VCBS recommends that investors can take advantage of the downward correction to disburse with a small proportion, in order to gradually accumulate target stocks that are being traded at discounted price ranges for the medium and long-term portfolio.

According to SSI Securities Joint Stock Company (SSI), at the end of last week, the VN-Index broke through the support level of 1,470 points. With the above developments, the VN-Index is likely to continue correcting to the first support zone at 1,445 – 1,450 points and the next strong support zone at 1,425 – 1,400 points.

However, SHS is still optimistic about the market’s prospects in the long term as Viet Nam’s macroeconomy is still stable compared to other countries in the world.

Prime Minister requests PPP facilitation for Van Phong EZ development

Prime Minister Pham Minh Chinh on March 12 demanded favourable mechanisms be issued to facilitate public – private partnership (PPP) in infrastructure building, so as to boost the development of the Van Phong Economic Zone (EZ).

Established in 2006, the Van Phong EZ is located in Van Ninh district and Ninh Hoa town of central Khanh Hoa province.

It is a multi-sectoral EZ with an international container port, an oil refinery industry, and a point of transit for petroleum and petroleum products playing the key role. It also includes tourism, services, industry, aquaculture, and other economic sectors. Van Phong serves as the economic centre of Khanh Hoa, an investment magnet, and a driving force for economic development in neighbouring areas.

As of 2021, it attracted more than 150 investment projects with registered capital totaling over 4 billion USD, including over 120 domestic projects and 30 foreign ones. Most of the nearly 100 projects already operational are small ones.

Improving business environment, the key to economic growth

Continuing to improve the country’s business environment and viewing it as the “key” to economic recovery and growth in the new normal are strong messages given by organizations and the business community at the recent Vietnam Business Forum (VBF).

Acknowledging the nation’s efforts in improving the local business environment in recent times, Amy Luinstra, acting country director of the International Finance Corporation (IFC), said that despite facing complicated developments relating to the COVID-19 pandemic, Vietnam still recorded remarkable achievements. These can be seen through its improvements of the business environment and the overall competitiveness of enterprises.

Alain Cany, chairman of the European Chamber of Commerce in Vietnam (EuroCham), emphasised that more than 1,200 EuroCham members all gave optimistic signals for the nation’s “new normal”, as shown through the business climate index of EuroCham (BCI) which increased from 42 points to 61 points in January.

John Rockhold, chairman of the American Chamber of Commerce in Vietnam (AmCham Vietnam), said the most important factor in creating a favourable business environment, as well as maintaining the supply chain is that the legal environment that must be fair, transparent, and requires innovation.

According to Pham Tan Cong, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), as a means of contributing to realising the goals and effectively implementing the tasks and solutions set out by the Government, the VCCI has proposed that the Government facilitate enterprises’ access to information, policies, and regulations. This can serve as a way of helping them to access capital in order to restore production and business activities.

This is forecast to be an important premise for the Vietnamese economy to recover and make further breakthroughs moving forward.

Vietnam seeks US investment in renewable energy

Energy is among potential fields for investment cooperation between Vietnamese and US firms, with Prime Minister Pham Minh Chinh announcing that Vietnam gives high priority to sustainable energy development to maintain national energy security and reduce greenhouse gas emissions.

At a recent Vietnam-US Business Summit in Hanoi, the VCCI leader said following the orientation, the Vietnam Chamber of Commerce and Industry (VCCI) has introduced its Green Index initiative with support from the United States Agency for International Development (USAID), aiming to promote environmental institutional reform and sustainable investment activities.

Director of the Ministry of Industry and Trade’s Department of Electricity and Renewable Energy Hoang Tien Dung noted Vietnam has set a target that by 2030, renewable electricity will account for 45 percent of the national power generation capacity, reflecting its orientation towards renewable energy.

The implementation of the power source and grid development programme will cost an estimated 14 billion USD, so Vietnam needs the participation of businesses, especially those from the US, in resources and technology sharing.

Ken Haig, Head of Energy and Environment Policy for Asia-Pacific & Japan at Amazon Web Services (AWS), suggested to boost investment attraction in the sector, Vietnam needs a long-term strategy.

Kris Karafa, Chief Operating Officer at Gen X Energy, said the firm is willing and ready to pour capital into wind power projects, particularly offshore ones. Gen X Energy has partnered with Binh Thuan province in many renewable energy projects.

Up to 83.3 percent of FAST500 firms optimistic about 2022 outlook

Some 83.3 percent of the 500 fastest-growing companies in Vietnam (FAST500) are optimistic about the outlook and growth opportunities of the domestic market this year, given that the economy is on course to recover to the pre-pandemic level, according a recent survey conducted by Vietnam Report.

Some 89.2 percent of them are planning to expand business while 86.5 percent said they have contingents of highly-qualified, experienced and disciplined personnel, the survey shows.

About 67.6 percent of the survey companies are confident about their competitive edge as they boast good relations with partners and customers, and high-quality and competitive-priced products.

Around 62.2 percent show changes in their awareness of the strong wave of digital transformation in all areas, and that they must have clear visions and business strategies to catch up with the market trends.

The survey also reveals that FAST500 expects this year, the government will continue stabilising the macro-economy, keeping inflation under control, expanding trade promotion, launching more support packages and accelerating public administrative reforms, so as to facilitate their business activities.

They also hope that government will build a better business environment and help unleash more potential resources to provide momentum for sustainable growth.

Hanoi supports human resources development serving tourism

The Hanoi Department of Tourism will support human resources development to meet tourism recovery requirements in the capital city, according to director of the department Dang Huong Giang.

The issue is considered one of the key tasks of the municipal tourism sector now that local travel agencies are seeking to resume their activities.

Due to the COVID-19 pandemic, many firms had to stop operating. Most of the workers in the industry, especially at travel and transportation businesses, have temporarily quit and changed jobs, causing a sharp decrease in the number of labourers. Over 95 percent of travel businesses and agents have closed or suspended their operations.

For accommodation establishments, about 1,550 establishments temporarily halted their operation or changed occupations, causing nearly 21,500 labourers to lose their job temporarily

FPT Group gains permission to build education complex in Ha Nam

The People’s Committee of Ha Nam province on March 13 handed over an investment registration certificate to FPT Education of the technology service company FPT Group to invest in Nam Cao University Area in Phu Ly city.

Chairman of the provincial People’s Committee Truong Quoc Huy said that an area of 400ha was earmarked at the 1,000-ha Nam Cao University Area to attract investment from universities.

He pledged that local authorities will create the best conditions for the prompt implementation of the project, asking relevant agencies to work with the FPT Group to soon complete administrative procedures.

Construction of the 10-ha FPT UniSchool Ha Nam education complex is set to begin this year and finish one year later.

Upon its completion, the complex is projected to create about 1,000 jobs in Ha Nam and surrounding localities, and welcome up to 10,000 students per year.

Banks cooperate with securities firms for expansion

The strong development of the stock market, with rising retail investors and financial investment demand, has prompted many banks to cooperate with securities firms and fund management companies to add more cross-selling products.

Saigon Commercial Joint Stock Bank (SCB) has just signed a cooperation agreement with Tan Viet Fund Management JSC (TVFM) in the field of providing product services, based on the principle of priority commitment to using each other’s products and services, ensuring effective competition in terms of quality and cost.

Meanwhile, TVFM also signed a cooperation agreement with Tan Viet Securities JSC (TVSI) to cross-sell traditional products. In the next stage, the parties will proceed to develop specialised products in line with the business orientations of TVSI, SCB, and TVFM.

Previously, HSBC Viet Nam also confirmed the strategic cooperation relationship with VinaCapital Fund Management SJC in connecting retail investors with VinaCapital’s fund certificates. Initially, the cooperation is aimed at supporting HSBC Premier customers, opening up many opportunities for HSBC’s customers to access investment products.

In February, SSI Securities Corporation (SSI) also announced that it had successfully signed a loan contract with a limit of VND10 trillion (US$437.1 million) with the Ha Noi branch of Vietinbank.

This is the largest credit line contract of SSI to date with a joint-stock commercial bank in Viet Nam, promising to open up a more comprehensive cooperation direction in the future between the two financial institutions.

Another deal attracting attention recently is the return to the securities sector of VPBank through the acquisition of more than 97 per cent of stakes in ASC Securities Corporation and changed its name to VPBank Securities Company.

MUFG, Mizuho, SMFG, and Grab vying to acquire Home Credit

Japanese financial behemoths and Grab have allegedly shown their appetite to acquire Home Credit in Southeast Asian countries, including Vietnam and India.

The three Japanese megabanks Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group are reportedly among the eligible candidates for Home Credit’s assets in Southeast Asia and India, cited Bloomberg.

Furthermore, according to industry insiders, the Southeast Asian ride-hailing and delivery giant Grab has proceeded to the next step of a potential acquisition deal.

Home Credit expects its subsidiaries in Indonesia, Vietnam, the Philippines, and India to be worth between $2 billion and $2.5 billion when they are fully operational.

Freight rates to go up 10-30 percent due to surge in price of petroleum

The Saigon Newport Corporation yesterday said that the continuous rise in petroleum price has led to a surge in the input costs on fuel, freight, loading and unloading at the ports and Inland Container Depot (ICD). Therefore, the unit would be forced to increase the container freight rates from ten to 30 percent over the current price from April 1.

Accordingly, the Saigon Newport Corporation will increase container freight rate by ten percent to the shipping route from Dong Nai Port to Cat Lai Port, and 30 percent to the shipping route from IDC to Saigon Newport.

In the Mien Dong (Eastern) coach station, dozens of transport businesses announced to adjust the fee up by 20 percent from the end of March. The enterprises recorded that the number of passengers recently reduced 50 percent along with the continuous rise in fuel would spell trouble for the business.

Besides, transport businesses at the Mien Tay (Western) coach station will also perform the price adjustment.

A representative of the Ho Chi Minh City Cargo Transport Association said that its transport units will have to increase freight rates in the next few days amid the rise in petroleum prices.

Credit growth in HCMC nearly double national average

The State Bank of Vietnam (SBV) Ho Chi Minh City Branch informed that by the end of February 2022, the total credit balance of city-based credit institutions was estimated at over VND2.93 quadrillion, up 1 percent compared to the end of January and 3.54 percent compared to the end of 2021. This growth shows that HCMC’s economy has a quite strong recovery because it is nearly twice as high as the national average.

According to the SBV- HCMC Branch, the above growth rate is reasonable when production and business activities have returned to normalcy after the pandemic is under control. At the same time, policies to support businesses have come into play, bringing positive signals about socio-economic recovery and growth. Priority credit flows have been poured into production and business sectors to support business recovery.

In addition, commercial banks in HCMC also focused on supporting businesses with two main groups, including reducing interest rates and restructuring debts, keeping the debt group unchanged. By early February 2022, outstanding loans that HCMC-based banks supported businesses exceeded VND3.2 quadrillion.

According to the SBV, the credit of the whole industry by the end of February 2022 increased by 1.82 percent compared to the end of 2021, lower than the level of 2.74 percent recorded at the end of January 2022. Thus, the credit balance in February decreased by about VND96 trillion compared to January.

Online tourism fair to advertise attractions of Da Nang, Central region

An online tourism fair, Da Nang FantastiCity 2022 promoting destinations and tourist attractions of Da Nang City and Central region will be held on March 17-23.

Travelers can visit the website at danangfantasticity.com or travelbook.vn/danang to learn about tourist products that will be offered by domestic travel companies and more than 60 others from countries of Japan, South Korea, China, India and Southeast Asian nations at over 150 stalls.

The event will include many activities, such as exhibition of online display booths, connection among businesses, Fantastic Hour promotional program, virtual sightseeing tours and more.

HCMC ready for int’l tourists post-Covid-19

From March 15, 2022, Vietnam allows the tourism industry to reopen for international visitors after two years of lockdown due to Covid-19.

The reopening is carried out in accordance with the direction of the Government and the Prime Minister on “flexibly and safely adapting, effectively keeping Covid-19 under control.”

Up to this point, tourist companies in HCMC including travel agencies, hotels, or tourist attractions are prepared to welcome visitors from abroad.

HCMC has inspected and allowed 13 hotels from 3 to 5 stars to open for international guests again. The accommodation sectors have prepared their welcoming scripts and ensured Covid safety for their guests.

HCMC is one of the seven localities across the country allowed to pilot the welcoming of international visitors to Vietnam. Currently, another six hotels, 45 attractions and 10 international tourism businesses have registered for this pilot program.

Vietnam’s power output up 6% in Jan-Feb

Up to 40% of the electricity generation in the two-month period was sourced from EVN.

Vietnam’s electricity output in the first two months of this year rose 6.1% to 39.59 billion kWh.

In February, the volume increased by 14.9% to 18.6 billion kWh, according to the country’s sole power distributor Vietnam Electricity (EVN).

Of the Jan-Feb volume, 43.6% was from coal, the highest portion, followed by hydropower with 27.4%, renewables (16.8%), gas-fired power (11.1%), and 0.8% imported.

As many as 40% of the electricity generation in the two-month period came from EVN.

As estimated by EVN, the power consumed in March will increase largely due to warm weather. Accordingly, the average electricity consumption volume will be 752.8 million kWh/day while the load capacity reached 39,729 megawatts (MW).

Source: VNA/SGT/VNS/VOV/VGP/SGGP/Dtinews

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