A joint Vietnam-Slovakia business exchange was held in Hanoi on 27 January to increase economic, trade and investment cooperation between the two countries, VOV news reported. Addressing the event, Vice Chairman of the Vietnam National Assembly Nguyen Duc Kien affirmed that the Vietnamese government attaches great importance to strengthening ties with Slovakia and it’s time for the business communities of the two countries to boost investment cooperation. He hoped that businesses would discuss specific measures to seek their investment opportunities, establish partnerships and enter their huge European and ASEAN markets. Slovak National Council Speaker Pavol Paska pointed out both countries’ potential and said they can cooperate in energy, transport, health care and national defense. Slovakia supports bilateral cooperation and it believes that such cooperation will bring about good results, said speaker Paska. Representatives of 10 Slovak economic groups and businesses introduced their potential fields in transport, pharmacy and construction to nearly 40 Vietnamese businesses. The event was co-hosted by the Slovak Embassy and the Vietnam Chamber of Commerce and Industry. (neurope.eu)

Hundreds of thousands of Viet Kieu (overseas Vietnamese) return to Vietnam in January or February each year to celebrate Tet in their former homeland. Typically, that’s also a time for them to find and purchase houses in Vietnam. This year, however, reports Saigon tiep thi, it seems that the number of Viet Kieu who plan to buy houses here is rather modest.

Officially, only ten Viet Kieu bought houses here last year

According to the HCM City Committee for Overseas Vietnamese, a lot of Viet Kieu, especially Viet Kieu from the US and Western Europe, have come recently to ask about the procedures to purchase houses in Vietnam. However, the ‘open door policy’ on allowing Viet Kieu to purchase houses in Vietnam has not yet created a buying wave.

According to Tran Hoa Phuong, Deputy Chairman of the HCM City Committee for Overseas Vietnamese, since 2006, only about 140 Viet Kieu have purchased houses in Vietnam.  One hundred of these were in HCM City.

In 2009, only ten Viet Kieu are officially recorded as buying houses in Vietnam, mostly in HCM City. These numbers are clearly ‘modest’ relative to the more than four million Viet Kieu living abroad.

Pham Quang Hai, Head of the Real Estate Transaction Division from Vinaland Phu My Hung confirms that very few Viet Kieu used his company as a consultant on real estate purchases last year.

“Many people asked for information but they did not buy,” he said, adding that in previous years, many Viet Kieu purchased houses at the Phu My Hung project in South Saigon, including some who bought five or six houses as rental properties.

The director of a HCM City real estate company believes that the global economic crisis has reduced the incomes of Viet Kieu.  Therefore, they have less to spend on purchasing houses or making investments in Vietnam.

The director said problems in the policies relating to real estate trading have discouraged many potential buyers.

The case of Nguyen Hang My Hoa, now living at 224 My Kim 1 Street in Phu My Hung, typifies the complicated policies relating to Viet Kieu house purchases.

Hoa bought her villa in 2002, but in her nephew’s name. “The policy was so complicated, while I really wanted to have a house to live because I decided to return to Vietnam. I had no choice but to use my nephew’s name,” she said.

Finally, Hoa’s name was written down in the house purchase documents after she regained Vietnamese citizenship in 2003.  However, Hoa is still waiting for her house ownership certificate.

Though official statistics show that only a modest number of houses have been sold to Viet Kieu, the number of houses owned they own is in reality relatively big. Real estate brokerage offices in Phu My Hung say that almost all Viet Kieu buyers continue to purchase homes in the names of their relatives.

Still awaiting guidance

Chairman Ngo Duong Hoang Thao of Dai Dong Duong Consulting and Investment Company observes that a large number of Viet Kieu have assets of upwards of five hundred thousand to one million dollars.  For them, Vietnamese real estate is a favored investment.

“The profitability of real estate investments is really attractive. Further, if they buy houses in Vietnam, Viet Kieu will have houses to live in when they return here,” Thao explained

Thao notes that notwithstanding the expansion of the right to purchase houses in a law passed by the National Assembly last June, there are still some unclear provisions in the policies relating on Viet Kieu house ownership.

The current laws specifically allow virtually any Viet Kieu to purchase houses, but don’t mention purchasing land. “Can Viet Kieu purchase land and then build houses themselves, then? There is no guidance about this.”

Phuong, the HCM City official, points out that the Government has yet to issue concrete guidance to officials who implement the new policy on Viet Kieu house purchases, though the law went into force on July 1, 2009.

Typically, he said, Viet Kieu do not know which agencies they need to contact to obtain necessary documents to be able to purchase houses.

VietNamNe/SGTT

Although steel manufacturers saw good results in production and business last year, the steel sector would still face many difficulties in 2010, deputy minister of Trade and Industry, Do Huu Hao said at the steel sector‘s conference on Monday.

In 2009, despite the global economic crisis and difficulties due to low-priced imported steel and rising production costs, the steel industry is one of the industrial sectors that achieved high growth with an output increase of 25 per cent and consumption up 30 per cent over the previous year.

Most members of the Viet Nam Steel Association (VSA) achieved high growth compared with 2008, including the Viet Nam Steel Corporation (VNSteel) which managed an increase of 14 per cent to VND11.66 trillion (US$648 million) in industrial production value and steel output of more than 2,382 million tonnes.

However, this year, the steel sector still faces many difficulties, of which the price hike of materials for steel production such as coal, electricity, oil and iron ore is a big one. Cheap imported steel is also still a large obstacle standing in the way of sustainable development of the steel sector. As a result, the price of steel is forecast to increase in 2010.

On top of this, the competitive pressure from imorted steel has increased, especally from China and South Korea, because of tax reductions in line with WTO commitments, and the Government has ceased the stimulus packages and increased basic interest rates.

Additionally, there would be harsh competition in domestic construction steel markets in 2010 due to a surplus, predicted Pham Chi Cuong, chairman of the association.

To overcome these difficulties, the VSA has asked relevant agencies to protect the domestic market by stopping illegal steel import.

The association has also asked agencies to enforce customs regulations to avoid the import of large volumes of steel, especially products that are in a surplus and prevent trade fraud.

Meanwhile, VNSteel general director Dau Van Hung said that the sector needed the Government’s support in stimulating the domestic market, maintaining stable forex rates and offering sufficient foreign currency for the import of raw materials for production purposes.

For the corporation, it will continue the implementation of key, strategic development projects and focus on research and analysis, strengthening trade promotion, trademark development and the search for new export markets.

However, according to the association, the country’s economy will be strong this year and the steel sector will see high growth.

VNSteel is optimistic and targets an increase of 9.7 per cent to VND12.4 trillion ($689 million) in production value in 2010. — VNS

A large number of new bank shares are expected to go on sale this year as commercial banks try to raise capital for meeting higher requirements from the central bank.

Listing shares on the country’s stock market will be the main method to raise capital, bankers said.

“Small banks are rushing to list their shares, hoping they can boost capital through the stock market,” said Le Xuan Nghia, vice chairman of the National Financial Supervision Commission. “A new wave of capital raising and equitization has arrived.”

The State Bank of Vietnam requires commercial banks to raise their registered capital to at least VND3 trillion (US$162.5 million) by December this year, which is triple the current minimum level of VND1 trillion.

In an attempt to make sure all lenders meet the requirement, the central bank has ordered them to report on their plans to raise capital by the end of March. Commercial banks have also been asked to propose their own solutions in case they fail to raise enough capital by the deadline.

A government decree stipulates that if a financial institution is unable to meet the minimum capital requirement set for each period, it will face penalties or have its license revoked.

Economist Le Tham Duong of the Ho Chi Minh City Banking University said there are various methods to raise capital, including issuing shares, convertible bonds or mergers and acquisitions.

But a deputy director of a commercial bank, who wished to be unnamed, said M&A is not an option for local lenders as it’s really difficult to apply for a new license now. Listing shares, therefore, is the easiest way to raise capital.

‘Pressure’

Among Vietnam’s six listed banks, Hanoi-based Saigon-Hanoi Bank is the only lender with registered capital of less than VND3 trillion.

Some partly-private banks are seeking approval to list on the stock market, including Can Thobased Western Bank and HCMCbased Navibank.

Around 20 banks in Vietnam have registered capital of between VND1 trillion and VND2 trillion, which means they have to double or even triple their capital.

It may be a “mission impossible” for lenders, analysts said in a Vietnam Economic Times’ report last week. An expert was also quoted as saying it was hard to raise capital, but harder still to put the new capital to good use.

Economist Le Tham Duong told Thanh Nien when capital is increased two or threefold, lenders will be put under pressure to make sure their profits grow by the same extent so they can still pay high dividends to shareholders.

But with credit constricting even more than last year, it would be hard for commercial banks to expand their business and make good money in 2010, he added.

Vietnam plans to tighten bank lending and reduce credit growth this year to around 25 percent from 38 percent in 2009 as the government wants to prevent inflation.

The Mekong Delta province of Tien Giang is capturing strong attention from investors, local and foreign alike, with trillions of Vietnam dong pledged by investors at a conference there on Friday.The provincial government awarded licenses to nine projects worth VND3.2 trillion, or nearly US$180 million, and signed 15 other memorandums of understanding with investors, who pledged to pour VND10.8 trillion more. The results were announced at the first-ever investment promotion conference in Tien Giang, some 50km southwest of HCMC, which drew the participation of senior leaders and nearly 1,000 entrepreneurs.

Among the new investors are HCMC-based Khang Thong Construction, Trading, Service Joint Stock Company, which will spend VND1.1 trillion developing Binh Dong Industrial Park in the province, and Dai Ngan Co., Ltd., which will build a new urban center worth more than VND740 billion.

Hong Kong-based Golden Resources Development International Ltd. obtained an investment certificate for a tap water distribution project worth VND368 billion for the eastern part of Tien Giang Province. This company has invested in several projects in the country and Tien Giang Province over the past 20 years.

Tran The Ngoc, chairman of the province, noted that the development of industrial park infrastructure, new urban centers, tourism, ports, services and manufacturing are areas of great potential in the province.

At the conference, graced by State President Nguyen Minh Triet and Deputy Prime Minister Hoang Trung Hai, investors also showed their keen interest in these sectors, as manifested in memorandums signed at the event.

The would-be investor Hoang Quan Mekong, for example, has plans to develop infrastructure of Tan Phuoc II industrial park worth VND1.2 trillion, while Tien Giang Industrial Park Infrastructure Development Joint Stock Co. has plans to pour VND1.5 trillion to develop infrastructure of some other IPs in eastern Tien Giang Province.

There were also four memorandums in the housing development sector, with Tien Giang Construction and Investment Joint Stock Co. alone pledging to develop Tan Phuoc villa project worth 1.05 trillion.

President Nguyen Minh Triet in addressing the event called on the province to provide an open business climate, and urged investors to tap advantages of the promising land.

Meanwhile, Deputy PM Hoang Trung Hai recommended the southern province to offer more incentives for investors in terms of land allocation, services and qualified labor force.

Tien Giang is becoming a hotspot for investors given the many infrastructure projects being developed that will highly benefit the province and thus investors.

The agriculture-based locality has the HCMC – Trung Luong highway project under construction. Once opened to traffic this Wednesday, the highway will shorten the distance between HCMC and the Mekong Delta province, thus reducing transport costs while boosting trade between the two localities.

It boasts a geographical and landscape diversity, with mountains, forests, hills, rice fields, salt fields, ponds, lakes, rivers, sea, islands and peninsulas.

The city has a coastline of 42 km and a rich marine biodiversity.

Its economic sectors are industries, trade, trade, seaport services, aquaculture, and tourism.

The city targets to become a centrally-administered city by 2020 and an industrial, trade and service center which plays an important role in the central key economic region.

The DFJ VinaCapital Fund on Jan. 28 signed a contract with TS24 Company to become its strategic partner.

The fund will contribute 2 million USD to help the investors improve its data and management systems, and its human resources.

It will also help diversify services, including tax declaration and payments on its Tax Online website.

The company will be able to prepare financial reports and deal with taxes on personal and corporate income, value-added taxes, natural resources and special consumption.

TS24 general director Nguyen Phan Viet Thuy said he was confident in the potential market of more than 10 million individuals with tax codes and another 500,000 enterprises.

It has signed an agreement with the card company with the card company DongA Bank VNBC for taxpayers to use cards issued by DongA Bank and other banks who join its ATM network for online payments.

DFJ VinaCapital, a 32 million USD joint venture between the IT group Draper Fisher Jurvetson and VinaCapital, specialises in making investments in the internet, telecommunications and media businesses.

Apart from this fund, VinaCapital also manages three others, the Vietnam Opportunity Fund (VOF), VinaLand Ltd (VNL) and Vietnam Infrastructure (VNI), which are listed at the Alternative Investment Market (AIM) of the London Stock Exchange.

Genoa, Italy, this year will seek investment opportunities and strengthen trade exchanges with Vietnam through improved information channels, implement joint economic, cultural and educational projects, and join activities in celebration of the 1,000th anniversary of Thang Long – Hanoi.

Genoa City leaders made the announcement at a recent meeting with Vietnamese Ambassador to Italy Dang Khanh Thoai. They added that Italian businesses want to invest in Vietnam. However, their current investment in this potential market is still modest because they lack information.

As a developed industrial city with a big seaport, Genoa is ready to step up co-operation with Vietnam in shipbuilding, sea transport, vocational training and import and export activities.

Ambassador Thoai invited Genoa to take part in the celebrations of the 1,000th anniversary of Thang Long-Hanoi, both in Vietnam and Italy. Accordingly, a committee called “Genova City celebrates the 1,000th anniversary of Thang Long-Hanoi” has been set up to organise events such as exhibitions and music performances.

Russian investors can join in setting up oil refinery and metallurgy businesses, executing power projects, building hotels and business centres, providing machinery and equipment as well as manufacturing cars in Vietnam , Mr Petrov said.

Vietnamese Ambassador Bui Dinh Dinh applauded the organisation of the seminar, saying that similar activities will help promote traditional friendship and strategic partnership between the two countries.

Last year, two-way trade recorded a year-on-year rise of 4 percent, fetching more than US$1.7 billion in 2009, said Ambassador Dinh.

Deputy Minister of Planning and Investment Cao Viet Sinh briefed the participants on the country’s political stability and social security, a high economic growth and huge investment demand which made Vietnam a destination for foreign investors. He called for closer cooperation between Russian and Vietnamese businesses for mutual benefits.

Russian businesses discussed issues related to investment in manufacturing construction cranes, energy projects, realty market and housing, training officials, a free economic area in Vietnam and the framework of ASEAN.

Audit, Tax and Advisory services provider, KPMG has committed to closely assist the Vietnamese government to continue to improve its investment environment.

The commitment was gained during a four day working visit of Chairman of KPMG International, Mr. Tim P. Flynn in Vietnam.

Mr. Tim P. Flynn, along with the delegation of KPMG International and KPMG Vietnam had meetings with Deputy Prime Minister Nguyen Sinh Hung and some other government agencies.

KPMG exchanged opportunities, potentials and prospects of the investments into Vietnam. The two sides also discussed how KPMG will continue to contribute to the development of a healthy financial market in Vietnam, including the capital market and the securities market.

Mr. Tim P. Flynn’s visit showed the strong commitment of KPMG to Vietnam, as well as the wish that KPMG’s activities will further contribute to the development of Vietnam economy, especially in terms of promoting investment opportunities into Vietnam, developing human resources development, and improving local management competence.