BUSINESS NEWS IN BRIEF 25/3 (Video)

Created 25 March 2019
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Vietnam ride-hailing app FastGo to hit Singapore streets,World city residential index pins hopes on Vietnamese market,HCM City transport authorities, firms discuss problems at dialogue

trade turnover touches us$100 billion in first quarter hinh 0

Trade turnover touches US$100 billion in first quarter

trade turnover touches us$100 billion in first quarter hinh 0

Vietnam’s total trade turnover amounted to US$100 billion between January and March 19, according to Vietnam Customs.

Recently-released statistics from the General Department of Vietnam Customs show that the country raked in US$10.95 billion during the first half of March, with many export staples enjoying a sharp increase in value.

The figure helped to lift the country’s total turnover of exports to US$47.05 billion by March 15, an on-year rise of 5.4 per cent.

A number of exports recorded a strong rise in value across the reviewed period. They include telephones and components, garments and textiles, computers, electronic items and components, wood and wooden products, and means of transport and spare parts.

Meanwhile, imports reached a total of US$21.3 billion during the first half of March, bringing the total import value to US$93.6 billion by March 15. The figure edged up to US$100 billion by March 19, a surge of 6.3 per cent on year.

With these figures, Vietnam recorded a trade surplus of US$0.5 billion between January and March 15.

Quang Tri strives to develop 6,000 MW of renewables

The central province of Quang Tri is on the track of finalizing key wind and solar power projects in a bid to raise its total renewable power generation capacity to 6,000 MW by 2025.

quang tri strives to develop 6,000 mw of renewables hinh 0

More than a year after beginning its operations, Huong Linh 2 wind farm developed by Tan Hoan Cau Corporation JSC in Dakrong district, has made annual revenues of VND240 billion (US$10.45 million) and close to VND24 billion (US$1.04 million) in tax.

Nguyen Liem, deputy general director of the Tan Hoan Cau Corporation JSC, asserted that the Huong Linh 2 wind farm, designed with a capacity of 30 MW, has reached its target of power generation as projected.

Liem further said that the project has proved entirely effective and contributed to both local socio-economic development and environment protection.

In late 2018, construction began on a 50-MW photovoltaic solar project promoted by the Licogi 13 Infrastructure Mechanical Construction JSC in Gio Linh district. The Ministry of Industry and Trade had previously granted its approval by adding the project to local power development plan.

The project has been enjoying a number of investment incentives in terms of corporate tax, import duties, land lease, and others from local authorities.

In total, Quang Tri is home to 14 hydropower plants and one wind farm. Quoc Ho Hiep Nghia, deputy head of the provincial Department of Industry and Trade, said that the province is making concerted efforts to speed up administrative reform and infrastructure expansion.

These aim to attract additional investment in local power sector, especially in renewables projects.

Many energy developers have taken active part in the execution of local projects, said Nghia, unveiling that the province has set a target of luring some VND10 trillion (US$435 million) from private investors in energy projects.

Nguyen Quan Chinh, Vice Chairman of the provincial People’s Committee, said that Quang Tri, with great potential for developing renewables projects, has received lots of interest from investors. Many financiers are eyeing wind and farm power projects in the province.

Currently, Quang Tri is looking to develop the energy sector into an economic spearhead with a long-term vision of growing into a power hub for the central region, Chinh noted.

Market trend hard to predict after difficult week

An investor watches stock movements at Bao Viet Securities Company’s trading floor in Ha Noi. 

 Investors should keep a careful watch over the market as price movements have been sensitive and showed no certain trends, analysts said.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange recouped 0.71 per cent on Friday to close the week at 988.71 points. Its weekly loss totalled 1.54 per cent.

The minor HNX-Index on the Ha Noi Stock Exchange edged up 0.26 per cent to end Friday at 108.09 points, marking a decrease of 2.13 per cent over the week.

An average of 287 million shares were traded in each session last week, worth VND6.4 trillion (US$274 million).

Liquidity recorded five consecutive declining sessions in the week, as cash flow contraction reflected investors’ caution, Nguyen Hoang Viet, head of the market research department at VietinBank Securities told tinnhanhchungkhoan.vn.

Investors should temporarily stay out of the market to monitor the indices’ movement, lower stock exposure to a safe level and reduce margin rates, Viet said.

According to Bao Viet Securities Company, the market was fluctuating and trends were uncertain.

Stock exposure, therefore, should be limited at 30-40 per cent of the portfolio. Investors with a high proportion of stocks in the portfolio may consider reducing exposure in the recovery sessions.

On the other hand, investors with high cash proportion may consider buying back, prioritising their portfolio’s existing positions in the support zone.

Markets experienced a significant decline on March 21, with the VN-Index falling 2.05 per cent during the session.

“The Vietnamese stock market always reacts very quickly to external movements, especially to negative information,” Viet said. “This was reflected in the trading session on March 21.”

On March 21, The US Fed’s March policy meeting revealed its outcomes, significantly affecting global and local markets.

The Fed downgraded the US economy’s growth from 2.3 per cent to 2.1 per cent and annual inflation from 1.9 per cent to 1.8 per cent, reflecting a marked slowing in the growth of the global and US economies.

According to Viet, the move led to caution among investors and weaker cash flow.

However, the Fed held interest rates steady and decreased the benchmark rate from 2.9 per cent to 2.4 per cent by the end of 2019 (currently at a range of 2.25-2.5 per cent), signaling there will be no more hikes this year.

According to Ngo The Hien, deputy head of analysis at Sai Gon – Ha Noi Securities Company (SHS), this news supported emerging markets in general and the Vietnamese market in particular.

Phan Dung Khanh, investment advisory director for Maybank Kim Eng Securities Company, said investors should restructure their portfolios by reducing the proportion of stocks in declining trend such as large-caps in the VN30 group and adding more stocks that were not affected by the general trend to make their list more stable.

They can shift their focus to mid-cap and penny stocks as there are many showing stable performances. Hien also said investors should move away from market-sensitive sectors such as banking and real estate.

Bao Viet Securities Company said in its report that the VN-Index’s upward momentum will encounter the considerable resistance in the 995-1,000 zone. If it fails to pass this zone, market’s short-term uptrend will end.

Foreign investors’ net buying activities, especially in domestic exchange-traded fund E1VFVN30, will possibly continue next week. Companies will also start publishing their financial reports next week. These positive factors are expected to support the market. 

NCB strengthens co-operation, expands business activities

Representatives of NCB and Quang Nam Business Association sign the co-operation agreement. — Photo courtesy of NCB

The National Citizen Commercial Joint Stock Bank (NCB) on Friday signed agreements with the Business Association of Quang Nam Province and VN Da Thanh Group to strengthen co-operation and expand business activities.

This is one of NCB’s steps in the process of expanding market share, reaching new customers, as well as bringing the lender’s products and services to meet the needs of domestic and foreign partners.

Speaking at the signing ceremony, NCB’s deputy general director Nguyen Dinh Tuan said the bank would accompany Quang Nam Business Association to promote trade connection and sponsorship activities in the central region and Da Nang City. In addition, NCB would also support customers who have production facilities in Chu Lai, Quang Nam to expand the business network in this province.

Tran Quoc Bao, chairman of the provincial Business Association affirmed this signing ceremony was an opportunity for the association’s member enterprises to expand the network of customers, access finance as well as other services of NCB in order to grow stronger in the future.

On March 13, 2019, NCB also signed co-operation agreement with the Business Association of Overseas Vietnamese in HCM City.

Under the agreement, NCB will connect loan support to businesses, access capital with reasonable interest rates and convenient banking services to meet business development requirements, contributing to promoting the development of enterprises.

Business growth results in 2018 have continued to affirm customers’ trust with NCB.

In 2018, NCB received the Vietnamese Excellent Brand Award of the online newspaper Vietnam Economic Times and achieved many other prestigious domestic and international awards, such as the bank with the best working environment in Viet Nam 2018 and bank with social responsibility presented by Global Business Outlook Magazine; Top 50 famous Vietnamese brands; Top 500 largest enterprises in Viet Nam.

Promoting business co-operation between NCB and domestic and foreign partners reflects the strategic vision of the Bank’s Board of Directors in accelerating the process of sustainable growth and affirming prestige of NCB in Viet Nam’s banking-finance market. 

HCM City transport authorities, firms discuss problems at dialogue

A dialogue was held by the HCM City Department of Transport on March 22 to discuss transport-related problems such as overloading of vehicles and drivers using narcotics

HCM City need to keep overloaded trucks and drivers high on drugs off roads and reduce road maintenance and toll fees, transport companies told city authorities at a dialogue on Saturday.

Bui Van Quan, chairman of the HCM City Goods Transportation Association, said authorities should help businesses with driver recruitment, identifying people using fake driving licences or guilty of violations in the past.

There was a lack of parking space in Districts 2, 9 and Thu Duc, and the Department of Transport and other authorities should relieve the congestion at ports, he said.

More weighbridges should be set up to tackle the issue of overloading of trucks.

Duong Huu Thang, director of the Long Phu Transportation Company, said drivers using narcotics and other stimulants while driving trucks caused serious accidents.

"Authorities need to frequently test drivers for such abuse," he added.

Dinh Nam Dinh, deputy chairman of the Viet Nam Automobile Vehicle Association, said: “Drivers using narcotics and stimulants and causing accidents is something that society has to tackle together and not leave to transportation businesses to deal with.”

Lam Dai Vinh, director of the Lam Vinh Transportation Company, said the identities of guilty drivers should be publicised so that recruiters could make more informed decisions.

Vinh added that driving training, especially for large vehicles, and licence issuing need to be more tightly managed, while awareness on traffic rules and responsibilities need to be raised.

Several businesses complained about the road maintenance fee, saying it should be reduced commensurate with vehicles’ down time to ensure fairness.

Besides, the association said to tackle a shortage of people capable of driving large trucks, the training time should be reduced and the curriculum needs to be more practical and the requirement of three years’ experience should be lowered to one.

Tran Quang Lam, deputy standing director of the department, said the department would join the association in petitioning the Ministry of Transport to tackle the problems.

Its inspectors detected 2,028 cases of overloaded vehicles last year and slapped over VND32 billion (US$1.4 million) worth of fines, he added. 

VinFast tests its first 155 Lux cars abroad

The first batch of VinFast Lux cars have shipped to 14 countries in four continents for quality and safety tests.

A total of 155 VinFast cars are scheduled for quality testing.

The transport process is divided into several phases, to 14 countries in Europe, Asia, Australia, Africa and Vietnam to ensure VinFast cars respond well to all climate and traffic conditions.

VinFast vehicles will undergo more than 100 tests on the testing system of the world’s largest automakers.

The aim is for the cars to achieve 5-star New Car Assessment Programme for Southeast Asian Countries, which is targeted to elevate vehicle safety standards, while meeting the high standards of Europe.

Da Nang moves towards food smart city

The central coastal city of Da Nang is working to turn itself into a food smart city as part of efforts to concretise its target of becoming an eco-smart urban area and a regional hub for startups and innovation until 2030 with a vision to 2045.

According to Rikolto Regional Director and Rice Programme Coordinator for Vietnam Thai Thi Minh, Vietnam National University of Agriculture, the city’s food safety management board, and Belgium-based non-governmental organisation Rikolto are working to ensure local residents’ access to high-quality food through branching out a smart food purchasing system and engaging various value chains.

Under a food smart city development strategy in Da Nang for the 2019-2025 period with a vision towards 2030 developed by the three parties, the city will promote food safety management approach reform and apply information technology as well as advancements of the Fourth Industrial Revolution in food production and distribution.

Due attention will be paid to enhancing capacity of Vietnamese food suppliers, developing sustainable business foundation for the firms, and promoting sustainable chain linkages via developing complete food business models.

Besides, a smart food environment will be developed through the upgrade of traditional markets, and promotion of street food and local specialties to attract visitors while ensuring the bread of small traders. Furthermore, wide communication campaigns will be conducted to raise consumers, suppliers’ awareness of the importance of sustainable and safe food consumption and production.

Building Da Nang city as a food smart city is part of the Rikolto’s Food Smart Cities Cluster, an initiative that brings together the cities of Ghent (Belgium), Da Nang, Solo (Indonesia), Quito (Ecuador), Tegucigalpa (Honduras) and Arusha (Tanzania).

The Food Smart Cities Cluster develops sustainable models of cooperation in multi-stakeholder partnerships on a variety of issues such as rural urban linkages, sustainable business models between actors in the food chain, sustainable catering, healthy food for school canteens and consumers’ access to safe and quality food.

Tourist arrivals to Hanoi continues to rise in Q1 2019

The number of visitors to Hanoi in the first three months of this year is estimated at more than 7.47 million visitors, a rise of 10.6 percent year-on-year, announced the municipal Department of Tourism. 

Of the figure, there are nearly 5.6 million domestic visitors and 1.88 million foreign tourists, up 9 and 15.5 percent over the previous year, respectively. 

The city’s tourism sector is projected to earn over 26.95 billion VND (1.16 million USD) in the period, representing a year-on-year surge of 32 percent.

The city’s key attractions such as Tan Da Spa Resort, Thien Son - Suoi Nga ecotourism site, Duong Lam ancient village and the Vietnam Museum of Ethnology, also saw a surge in visitors in the reviewed period.

In March alone, the capital city is estimated to welcome more than 2.64 million visitors, a rise of 12 percent year-on-year, while raking in over 10.12 billion VND (436,220 USD) from tourism, jumping 37 percent above the same period last year.

According to statistics, Hanoi is home to nearly 3,500 accommodation establishments, with about 560 of those receiving star ratings.

The average occupancy rate in the city’s hotels is likely to hit about 74.9 percent in the first quarter of the year. Meanwhile, the figure in March is expected to stand at 76.6 percent, recording an increase of 9.48 percent year-on-year but a slight decrease of 1.6 percent compared to that in the previous month.

Nghe An intensifies tourism promotion activities

Cua Lo beach in Nghe An province 

The central province of Nghe An is stepping up tourism promotion to fulfill the target of welcoming about 6.5 million tourists in 2019, including 145,000 foreigners. 

Apart from Cua Lo beach and the Kim Lien relic site, Nghe An has attracted domestic and foreign visitors to new destinations like Thanh Chuong green tea island, buckwheat flower valley, Nghia Dan sunflower field and community-based tourist sites. 

Tourism promotion has been seen as the key of the local tourism sector. Therefore, Nghe An has targeted such promising markets as Laos, China, Japan and Thailand. 

Many travel companies in the northeastern region of Thailand have come to seek cooperation opportunities with local businesses. 

Tanavit Kongsuriya, president of the travel association of Thailand’s Nongbua Lamphu province, said this is not his first trip to Nghe An to study the local tourism market.      

“Each trip offers us opportunities to explore new tourist sites in Nghe An and exchange experience with local tourism operators,” he added. 

In 2018, Nghe An served 123,000 foreign holiday-makers, mostly from France, the Netherland, Japan and Thailand, up 11 percent against the previous year. However, experts said, the province has yet to fully tap its potential and advantages. 

Thinakorn Thongphao, President of the Thai Travel Agents Association’s Northeastern Chapter, suggested Nghe An pay more attention to personnel training, infrastructure development and tourism promotion.

He underlined the need to maintain flights between Nghe An and Thailand which is home to a large number of Vietnamese. 

David, a UK tourist, said Nghe An should improve the quality of services at tourist destinations and accommodations, and special tourism products, while launching more promotion programmes. 

According to Nguyen Manh Cuong, Director of the provincial Department of Tourism, Nghe An has renewed tourism promotion methods, focusing on social networks and the application of achievements of the Fourth Industrial Revolution, along with combining local destinations with inter-provincial and inter-regional value chains. 

It has identified ASEAN member countries, China, the Republic of Korea (RoK), Japan, Russia, France, Germany and the Czech Republic as major tourism markets. Domestically, it has targeted Hanoi, Ho Chi Minh City, Da Nang, Lam Dong and localities in the north central, northwestern and Central Highlands regions.

Chu Lai to become high-quality agro-forestry processing hub: PM

Prime Minister Nguyen Xuan Phuc (middle) at the event

Prime Minister Nguyen Xuan Phuc said he wishes that Chu Lai would strive to become a high-quality agro-forestry processing hub of the country to be able to meet huge demand in ASEAN, northeastern Asia, G7 and G20 countries. 

He expects Chu Lai would help turn Vietnam into one of the world’s wooden interior production centres, while addressing a groundbreaking ceremony for Chu Lai agro-forestry industrial park at the Chu Lai Open Economic Zone in the central province of Quang Nam on March 24.

The leader suggested Chu Lai (Quang Nam) team up with Dung Quat (Quang Ngai) and Da Nang city to form growth poles and required close coordination in policymaking and pooling resources for development. 

He urged provinces to submit breakthrough mechanisms and policies to the Party Central Committee to improve competitiveness of key economic area in the central and Central Highlands, including Da Nang, Quang Nam and Dung Quat – Quang Ngai. 

The 450ha agro-forestry industrial park will develop a materials farming area for the central, Central Highlands and neighbouring Laos and Cambodia. It will be built from 2019 to 2022 at a total cost of over 8.1 trillion VND (352 million USD). 

It will also double as a research centre for seedlings, agricultural materials, biotechnology, harvest, preservation and processing. Model farms will grow grapefruit, mango, jackfruit and forestry trees using modern technology. 

Once operational, it is expected to attract domestic and foreign investors to create a value production chain, add more revenue to the local State budget and generate jobs to 20,000 workers. 

On the occasion, automaker Thaco Truong Hai began construction of an expanded automotive mechanical industrial zone on a total area of 115ha. Costing over 1.6 trillion VND, the work is expected to increase locally-made items for automobiles to more than 40 percent, thus meeting demand for export to ASEAN member states by 2020. 

The management board of Chu Lai Open Economic Zone also granted an investment license to Thadi industrial, agricultural, forestry park. Thaco Truong Hai also signed strategic contracts with domestic and foreign firms to supply clean farm produce. 

Build in 2003, the Chu Lai Open Economic Zone is the first coastal economic zone in Vietnam. It is strategically located midway between Vietnam’s northern and southern regions, and connected to National Highway 1A, national coastal routes, the trans-national railway, Ky Ha seaport, Chu Lai airport, and the Da Nang-Quang Ngai Expressway.

In the morning the same day, the PM laid wreaths at the monument dedicated to heroic Vietnamese mothers and martyrs’ cemetery in Quang Nam on the occasion of its 44th anniversary of liberation.

EVFTA to fuel Vietnam – Italy trade: workshop

Michele Fioroni, deputy mayor of Perugia, speaks at the event 

A workshop held recently in Perugia, Italy, discussed opportunities for business investments between Vietnamese and Italian firms once the EU-Vietnam Free Trade Agreement (EVFTA) come into effect.

At the event, Trade Counsellor of the Vietnamese Embassy in Italy Nguyen Duc Thanh introduced Vietnam’s current situation of high economic growth, stable politics, abundant human resources, and open investment attraction policy.

Michele Fioroni, deputy mayor of Perugia, said Vietnam’s economic scale, features and strategic location in the Association of Southeast Asian Nations and in the region is drawing attention of Italian businesses. 

Advantages brought about by the EVFTA and Italian production strengths will give local companies numerous opportunities to exploit the Vietnamese market, he said, urging the group to speed up market studies, investment promotion and product advertisement to capitalize on such benefits.

Walter Cavrenghi, General Secretary of the Italy-Vietnam chamber of commerce, considered the EVFTA a win-win deal. 

The official said Italian investors came to Vietnam late compared to other European peers, and advised Italian firms to prioritise trade-investment promotion and cooperation with Vietnam’s small- and medium-sized enterprises.  

Alessandra Cursio, who oversees external relations at the chamber, said if signed, the pact will be the most ambitious and comprehensive FTA between the EU and a developing country. 

With 99 percent of tariff lines removed, Italy will benefit from exporting machines, leather, medicines, chemicals, garment-textile and food products to Vietnam, she added.

Concluding the workshop, participants, who included Italian enterprises eyeing the Vietnamese market, agreed on the importance of the EVFTA to both the bloc and Vietnam, hoping EU member countries to soon sign and ratify the pact.

Vnews launches new programme to support SMEs

Vietnam News Agency’s Television Centre (Vnews) and the Việt Nam Association of Small and Medium Enterprises introduce a new programme to support small businesses at a ceremony on Saturday.

Vietnam News Agency’s Television Centre (Vnews), in collaboration with the Việt Nam Association of Small and Medium Enterprises (VINASME), introduced a new programme to support small- and medium-sized enterprises (SMEs) at a ceremony on Saturday.

With the first edition airing on March 24, Doanh nghiệp Ngày nay (Today’s Enterprise) will broadcast at 10:15 every Sunday morning and replayed at 10:15am on Wednesdays on the Vnews channel.

The 15-minute programme includes two parts. Business dialogue will focus on various subjects such as business laws and regulations, community enterprises and integration and development. The second part, Light up dreams, will promote corporate social responsibility and will be a bridge for businesses to contribute to the community.

Speaking at the event, Director of Vnews Nguyễn Thiện Thuật said the programme aimed to meet the demand of policy exchange and consultation for SMEs in Việt Nam.

“The programme will be a bridge between VINASME and SMEs that introduces innovative models and new start-ups and helps to multiply success models and criticise bad businesses in an effort to improve the business environment and strengthen competitiveness ability for SMEs in Việt Nam,” said Thuật.

VINASME Standing Vice President Tô Hoài Nam said the programme was an important source of information to help businesses promote production and give management authorities more information about businesses and hot issues to better perform State management and operation tasks. 

RoK asks Indonesia, Vietnam to boost financial cooperation

The Republic of Korea's Financial Supervisory Service (FSS) said on March 21 that it has asked Indonesia and Vietnam to step up cooperation in the financial sector, in line with Seoul's policy aimed at deepening ties with Southeast Asia.

 Yonhap news agency cited a FSS statement as saying that Yoo Kwang-yeol, first senior deputy governor of the FSS, is on a five-day visit to Indonesia and Vietnam from March 19 during which he discussed issues of mutual concern with his counterparts. 

In Indonesia, Yoo and Wimboh Santoso, head of the Southeast Asian country's financial regulator, agreed to bolster cooperation in the sectors of fintech and supervision of cryptocurrencies.

Meanwhile, in Vietnam, the FSS official asked his Vietnamese counterparts to lend more support to Korean financial firms doing business there. 

The RoK has sought stronger economic relations with Southeast Asian nations under President Moon Jae-in's New Southern Policy.

Meeting finds ways to remove difficulties for Japanese food firms

The import-export procedures and specialised inspections have been reformed in a positive way, making it easier for foreign businesses, including those from Japan, to invest in Vietnam.

This was the comment of Japanese firms at a food meeting held by the Japan External Trade Organisation (JETRO) in Ho Chi Minh City on March 20.

Nakagawa, lawyer at JETRO, said many difficult issues raised by Japanese enterprises at the annual event have been reviewed and addressed by Vietnamese ministries and relevant departments to offer more benefits for businesses.

For example, businesses are now able to make their product announcement and take responsibility for their published information, thus saving time and cost.

Takimoto Koji, chief representative of JETRO in HCM City, hailed the efforts of Vietnamese management agencies in administrative reforms and business environment improvement through listening to businesses’ opinions and removing their difficulties, as well as adjusting legal regulations in a more beneficial way for them.

Participants also hoped Vietnamese ministries and departments to further improve the efficiency of policy enforcement and ensure equality for businesses while investing in Vietnam.

In return, JETRO recommended Japanese business community regularly update and fully comply with Vietnam’s legal documents and regulations to ensure long-term benefits in the two countries’ economic cooperation.

World city residential index pins hopes on Vietnamese market

Vietnam’s luxury residential sector remains an attractive option to international buyers, regardless of the fact that growth is slowing for luxury home prices across the world’s major cities, as noted by a global real estate services provider.

The remark is bouyed by the fact that apartment prices in Hanoi and Ho Chi Minh City generally remain lower than regional peers like Kuala Lumpur and Bangkok, though the southern city posted much stronger growth rates in comparison with these markets.

This was also highlighted in the “Vietnam residential: Where to from here” report by real estate services provider Savills Vietnam.

According to Neil Macgregor, Managing Director of Savills Vietnam, the average price across the local market is expected to continue to grow, albeit at a somewhat slower pace. Indeed, price increases can be linked to higher development standards and continued strong residential demand driven by urbanization, the rapid growth of middle class, as well as new infrastructure.

Macgregor added that new home prices in Ho Chi Minh City’s central business district now average from US$5,500 - 6,500 per square meter, a fraction of the eye watering levels seen in Hong Kong (China) where prices are at all-time highs.

The property analyst asserted that relatively low taxation in Vietnam increasingly acts as a magnet to buyers from both home and abroad with many countries introducing cooling measures, resulting in higher taxation.

It comes as no surprise that the demand for investment properties in Vietnam has increased significantly since 2015, when new housing regulations made the domestic market open to foreign investors.

“With a distinct shortage of prime property in Vietnam’s key cities, many buyers can see the potential for significant capital gains over the longer term. Whilst in the meantime, rental yields in excess of 5 per cent, represent an attractive investment versus falling returns elsewhere in the region.”

In the luxury end sector, there is tremendous upside and opportunity for long-term investment, with buyers set to benefit from potential capital appreciation as Vietnam continues its remarkable growth story, he forecast.

Although there is still a long way to go before the Vietnamese property market reaches the dizzying heights seen in Hong Kong (China) and Singapore, Vietnam is well on the way to becoming Asia’s next tiger, with strong economic growth, a rapidly growing middle class, and, for the time being at least, relatively affordable pricing, said the Savills expert.

Latest data mentioned in the Savills World Cities Prime Residential Index points out that the index inched by just 2.3 per cent across 2018 as a whole, slowing to a marginal 0.4 per cent in the second half of the year. In 2017, the figure enjoyed a higher rise, 3.3 per cent.

Rental growth also slowed across the index, leaving the average world city yields for prime residential assets at a 10-year low of just 3.2 per cent.

Sophie Chick, head of Savills World Research entity, assumes that prime residential real estate values are settling into a pattern of slower, steadier price growth. Thus, she put no high expectations on a repeat of the double-digit annual price growth seen in the pre-global financial crisis.

Nearly half of Vietnamese shoppers buy premium products online

Forty-eight percent of Vietnamese consumers buy premium products online from local retailers, with cosmetics the top category, a report says.

Although the majority of survey respondents, 69 percent, said that they still purchase their premium products at local physical stores, the online ratio was higher than the global rate of 45 percent, says a global report by market research firm Nielsen.

Nielsen’s Changing Consumer Prosperity study also found over a quarter of Vietnamese respondents, 27 percent, were inclined to buy online from overseas e-retailers, and 23 percent even travel overseas for these premium goods.

Cosmetics are the top premium products that Vietnamese consumers spend their money on, according to 46 percent of respondents, following by clothing/shoes (44 percent), electronics (43 percent), body care (41 percent) and meat or seafood (38 percent).

What Vietnamese people care most about a premium product is its high quality, according to 65 percent of respondents, and superior performance, 58 percent.

Over half the respondents also seek premium products that contain environmentally friendly materials or natural/organic ingredients.

When it comes to trying new premium products, Vietnamese rated peer recommendations as the most influential factor.

Half of the respondents said that recommendations and encouragement by friends and family influenced their decision, followed by product research (46 percent), online advertising (42 percent), television advertising (39 percent) and in-store advertising (39 percent).

In another survey released recently, Nielsen said that Vietnamese people remain among the most optimistic consumers even as global confidence fell in Q4 2018.

Despite considerable increase in savings, Vietnamese consumers are still willing to fork out just as much or possibly even more money on big-ticket items such as new clothes, holidays or out-of-home entertainment, it said.

Vietnam’s e-commerce sector has been booming in recent years. E-commerce revenue reached $2.26 billion last year, a growth of 30 percent over 2017, according to Germany-based data portal Statista. It estimated that this figure will reach $2.7 billion this year.

Ho Chi Minh City – a bridge to Europe

Experts talked about the role of Ho Chi Minh City as a bridge connecting to European markets during a ceremony to launch the Whitebook Briefing 2019 on March 20.

Co-Chairman of the European Chamber of Commerce in Vietnam (EuroCham) Nicolas Audier said European firms will expand business in Vietnam this year with HCM City as the most favourable destination.

The National Assembly also passed a resolution on piloting special mechanisms and policies for the city’s development, he added. 

EuroCham will create opportunities for the two sides’ enterprises to develop sustainable cooperative relations in multiple arenas such as technology transfer and business skills.

The chamber will continue working with the local departments and sectors like customs and taxation to expand operations and better support businesses in the coming time.

Additionally, EuroCham will promote its role of connecting European firms to join the city’s development programmes such as smart city and transport.

Andreas Abbing, Vice President and Commercial Plant Manager of HCMC Plant of Bosch Vietnam, hailed the support of Vietnam and particularly HCM City in activities to reform policies, especially in promoting the training of human resources.

The signing of the EU-Vietnam Free Trade Agreement (EVFTA) will create favourable conditions for the two sides’ businesses, he said.

Bosch is a long-standing investor in Vietnam and will continue expanding investment in the Southeast Asian country in the time ahead, he added.

Vice Chairman of the municipal People’s Committee Le Thanh Liem said the EVFTA has opened up both opportunities and challenges for the two sides.

HCM City highly appreciated the investment and trade activities of foreign businesses, including those from the EU, he said.

The Whitebook Briefing 2019 is an important document for businesses to update information and seize opportunities to enhance cooperation, thus promoting the city’s growth in potential fields, he added. 

Seminar looks to help fisheries sector gain benefits from CPTPP

A seminar discussing opportunities for the Vietnamese fisheries sector brought by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was held in Toronto, Canada on March 21.

The event was chaired Ministry of Industry and Trade (MoIT), in cooperation with the Ministry of Agriculture and Rural Development.

Deputy head of the European-American Markets Department under the MoIT Nguyen Hong Duong said that Vietnam-Canada trade ties have recorded positive development over the years, adding that the CPTPP offers new chances for the two sides to raise bilateral relations to a new height.

Therefore, it is a crucial time for authorised agencies to seize opportunities to support businesses in taking advantage of the CPTPP. That Canadian administrators have a similar mindset with their Vietnamese peers will aid the process, he added.

Statistics showed that Canada shipped goods totalling 1.02 billion CAD (762.9 million USD) to Vietnam in 2018, while its imports from the Southeast Asian nation hit 5.38 billion CAD (more than 4.02 billion USD).

From mid-January this year, all fisheries products of Vietnam to the Canadian market have enjoyed zero tariffs. According to data of the MoIT, Canada currently spends about 240 million USD purchasing Vietnamese seafood each year.

Speaking at the event, Jessica Yang, a representative of the Canadian Food Inspection Agency, underlined the role of traceability of imported food, including aquatic products, in Canada’s new Safe Food Laws. 

Notably, seafood is viewed as a promising sector in the Vietnamese market for Canadian exporters, she added.

Vietnam ride-hailing app FastGo to hit Singapore streets

Vietnamese ride-hailing firm FastGo is set to launch Singapore operations in April as part of its regional expansion plans.

The nine-month old Vietnamese start-up has announced that drivers will be able to register on its ride hailing application from April 1, and customers can use the service from April 30.

Diep Nguyen, country manager for FastGo Singapore, said the company’s fleet size will be at least 3,000 cars.

Singapore is the third country in which FastGo will operate, after Vietnam and Myanmar. The firm is expected to face fierce competition from market incumbents including  Singapore’s Grab, Indonesia’s Go-Jek, as well as local startups Ryde and TADA.

FastGo, which is part of Vietnamese technology startup NextTech Group, has plans to launch in five other countries in the region, including Indonesia and the Philippines, by the end of 2019.

While FastGo has not yet publicised fares, but the ride-hailing app will not charge peak period surcharges, and customers can tip drivers.

FastGo aims to undercut competitors like Grab and Go-Jek, who collect 20 percent of ride fares from drivers, by charging them a fixed daily subscription fee of $5 if a driver’s income exceeds $30 a day.

However, Singaporean newspaper Today Online has quoted economist Walter Theseira, an associate professor at the Singapore University of Social Sciences, as saying "another small entrant" will not make a difference to the local ride-hailing market, unless the new player is financially backed by a strong sponsor or a well-known Singaporean firm.

"Other than GoJek and Grab, the other (existing) players have very small market share and have difficulty making much impact locally. The market is easy to enter but it’s very hard to get a substantial market share," he said.

Founded in April 2018, FastGo Vietnam JSC launched its service after Uber’s exit from Southeast Asia last June.

With almost 60,000 drivers onboard, the company claims to be the second most popular ride-hailing firm in Vietnam, following Grab.

After receiving an undisclosed sum in a Series A investment from venture capital platform VinaCapital Ventures in August last year, FastGo is aiming to raise another $50 million in its Series B investment round over the next few months.

According to the company’s statements, FastGo will diversify its services to include food delivery and financial services.

 

Source: VNP - Bridge

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