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

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

According to the National Committee for Overseas Vietnamese under the Ministry of Foreign Affairs said that some 500,000 Viet Kieu are expected to come to Vietnam to celebrate Tet this year. In 2009, ki?u h?i (remittances by overseas Vietnamese) to Vietnam is estimated to reach about 6.3 billion dollars, only 87 percent of 2008 remittances.

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

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 VND 2 trillion plant covers an area of 22.7 hectares.

The main source of material for the plant is the assorted coal of poor quality in Thai Nguyen province and the Khanh Hoa coal mine with a total demand of around 420,000 tonnes a year.

It is planned that the plant will have generated electricity by 2012.

Once operational, the plant will create jobs for 400 workers and contribute around VND 100 billion to the State budget every year.

This is the biggest ever project in Thai Nguyen province, with an enterprise in the province as its investor.

Quy Nhon city is located in the southeast of the central coastal province of Binh Dinh, covering a total area of 284.28 km2.

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 Silver Shores joint venture opened an international tourism centre in Da Nang’s Ngu Hanh Son (five marble mountains) district on January 26.

It consists of a five-star hotel chain and an entertainment area, including the biggest international casino in Vietnam.

In addition, there are 52 upmarket villas and a 1,000-seat national conference building.

The entertainment area alone covers 15,000 sq.m, capable of providing baccarat, blackjack, Sic bo, Roulette, Caribbean Stud Poker and other games for hundreds of foreigners at the same time.

The whole project is estimated at US$160 million in total.