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27Aug/14Off

Hanoi’s largest wholesale market sells mostly Chinese goods


Last update 10:00 | 27/08/2014

VietNamNet Bridge – The merchants at Dong Xuan Market, the longest-standing wholesale market in Hanoi, and domestic manufacturers are trying to come up with a solution to boost the sale of Vietnamese goods at the market.

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The Dong Xuan Market.

The Dong Xuan Market, familiar to every Hanoian, is the largest distributor of Chinese goods in the city.

A report of the market’s management board showed that 80 percent of the souvenirs available in the market are sourced from China. The figures are 60 percent for clothes and fashion products, 80 percent for children’s toys, 70 percent for leather products and handbags, and 60 percent for porcelain. No underwear products are sold.

Dinh Thi My Loan, chair of the Retailers’ Association, admitted that covering the Dong Xuan Market with 90 percent of Vietnamese products was an “impossible mission”.

“Chinese goods are very cheap, while Chinese businessmen, who understand Vietnamese consumers and merchants well, always offer high discounts and deferred payment methods,” Loan said.

In fact, a merchant at the market said that she mainly distributes Chinese products. “We also want to distribute Vietnamese goods as well, if we can receive products from the manufacturers at original prices, but we cannot,” she complained.

Big Vietnamese manufacturers like Viet Tien (garment), Tien Phong (footwear) and 8/3 Textile Factory, while having showrooms at many retail points, have not set up showrooms at Dong Xuan, a big distribution channel.

Nguyen Ngoc Phan, the owner of a sundries kiosk at Dong Xuan Market, said that Vietnamese manufacturers do not think they need to introduce their products to Dong Xuan’s merchants.

Meanwhile, according to Nguyen Thi Dung, a footwear retailer, the merchants there “have been treated with consideration” by Chinese suppliers.

“They (Chinese businessmen) come to Dong Xuan to see the market and the kiosks themselves,” Dung said. “They accept all orders from us, even if we only order two or three pairs of sandals. Meanwhile, domestic manufacturers only accept big orders with hundreds of pairs of sandals.”

Nguyen Luong Duc, chair of the Phu Yen Footwear Craft Village, confirmed that he would rather display his products at supermarkets than at Dong Xuan Market.

“The merchants there only place small orders,” he said. “Therefore, Dong Xuan is not our top priority.”

A representative of a garment company said they had once tried to sell their products at Dong Xuan, but later “gave up the game” because of low sales.

“Hanoians believe that Dong Xuan Market is a place that sells Chinese goods only. Therefore, they do not go there if they want Vietnamese products,” he said.

Vietnamese manufacturers continue to complain about slow sales. Vietnamese consumers complain they have to travel dozens of kilometers to reach Vietnamese goods’ sale points. Meanwhile, Dong Xuan Market, a big distribution channel, is ignored.

Read more: http://dongtalk.com/forums/index.php/topic/14337-hanois-largest-wholesale-market-sells-mostly-chinese-goods/#ixzz3BcQA5pEZ

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27Aug/14Off

Foreign companies taking bigger slice of retail pie


Last update 14:00 | 27/08/2014

 

VietNamNet Bridge – While Vietnamese economists have repeatedly sounded the alarm over the expansion of big foreign retail groups in Vietnam, the Ministry of Industry and Trade (MOIT) has kept calm, saying that 70 percent of the products available at the retail chains are made in Vietnam.

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Pham Chi Lan, a renowned economist, expressed her concern about the overly high investment incentives the government offers to foreign-invested retail chains, warning that investment incentives, plus foreign groups’ powerful financial capability, would block Vietnamese retailers in the home market.

“I can see a very tough period for Vietnamese retailers ahead. Foreign investors have been flocking to Vietnam,” Lan said soon after Metro Cash & Carry reportedly was sold to Thai BJC Group.

The Thai player, after taking over Metro, will be a formidable rival in Vietnam with two large distribution networks of supermarkets and convenience stores. It now has over 140 convenience stores in Vietnam.

An analyst, agreeing with Lan, noted that “the Vietnamese distribution network is being attacked in both the modern distribution channels (supermarkets) and traditional distribution channels (retail shops and traditional markets)”.

According to the analyst, Thai retail groups, like other foreign distributors, have been following a business strategy under which they establish both supermarkets and small retail shops in Vietnam.

“Their retail shops and convenience stores will be direct rivals to Vietnamese shops and supermarkets that have a small scale,” he noted.

Meanwhile, it is very difficult for Vietnamese manufacturers and suppliers to have their products displayed at big supermarket chains like Big C and Metro, because the chains always require very high discount rates.

What will happen to local shops? The analyst said that foreign distributors will step by step increase the percentage of foreign-made products sold at their supermarket chains.

“Lotte will mostly distribute South Korean products, while Metro, after falling into the hands of a Thai group, may focus on distributing Thai products,” he commented.

Responding to the warnings given by the economists, an official of MOIT noted that the the problem has been “exaggerated” and that there is no need to worry too much about the presence of foreign retail groups in Vietnam.

The official said that 70 percent of the products available at big supermarket chains are Vietnamese-made products.

Foreign distributors have to fulfill the commitments on the percentage of Vietnamese goods to be distributed through their distribution network. This means that market control is within the Vietnamese agencies’ reach, the official said.

However, Lan doubts the figures released by MOIT. She said there exists a misconception about “Vietnamese products”.

The problem is that the products made by foreign-invested enterprises in Vietnam are also counted as “Vietnamese products”.

Although Unilever and Procter & Gamble, which dominate the detergent market, are foreign-invested enterprises, their products are considered “Vietnamese” because the products are made in Vietnam.

Another problem exists as well. While foreign invested distribution chains have seen their revenue increasing rapidly in Vietnam, they still have reported losses. Metro, for example, reported losses for the last 12 years. And because of that, it did not have to pay any dong in corporate income tax.

Read more: http://dongtalk.com/forums/index.php/topic/14336-foreign-companies-taking-bigger-slice-of-retail-pie/#ixzz3BcPbY52C

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6Aug/14Off

Decree focuses on foreign exchange activities

August, 06 2014 08:17:00

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In Viet Nam, all payment and remittance money relating to current transactions of residents and non-residents is conducted freely. Residents and non-residents are permitted to purchase, remit and carry foreign currency overseas.— Photo vietstock.vn

Foreign-exchange activities by residents and non-residents have been guided under Government Decree No70/2014/ND-CP (July 17, 2014). The Decree applies to organisations and individuals undertaking foreign-exchange activities in Viet Nam and controls the inspection of and dealing with breaches of foreign exchange activities.

Remittances and currency transactions

In Viet Nam, all payment and remittance money relating to current transactions of residents and non-residents is conducted freely. Residents and non-residents are permitted to purchase, remit and carry foreign currency overseas. They are responsible for presenting supporting documents, but are not required to present certificates of tax completion to the State of Viet Nam when they purchase, remit or carry foreign currency overseas.

Imports, exports of goods and services

Residents having foreign currency revenue from the export of goods and services or from other current revenue sources overseas must remit the foreign currency amount into a foreign currency account opened at the authorised credit institution in Viet Nam. All payments and remittances relating to the import and export of goods and services must be conducted via remittances at the authorised credit institution.

One-way remittance from overseas or vice versa

1. From overseas into Viet Nam. Foreign currency of resident organisations having one-way remittance is placed in the foreign currency account at, or must be sold to, the authorised credit institution. Foreign currency of resident individuals having one-way remittance is deposited in a foreign currency account or withdrawn in cash to use in permitted cases.

2. From Viet Nam to overseas. Resident organisations are permitted to conduct one-way remittances overseas to provide financial support or aid or other purpose specified by the State Bank of Viet Nam (SBV). If the residents are Vietnamese citizens, they are permitted to buy, transfer and carry foreign currency overseas for study or have medical treatment overseas, work, tour, etc.

Non-residents and residents being foreigners having foreign currency in their accounts or other lawful foreign currency revenue sources are permitted to remit or carry foreign currency overseas. If they have lawful revenue resources in Vietnamese dong, they are permitted to purchase foreign currency to remit or carry it overseas.

Foreign direct investment capital

Residents being foreign invested enterprises (FIE) and foreign investors participating in business co-operation contracts (BCC) must open a direct investment capital foreign currency account at the authorised credit institution to implement revenue and disburse transactions. If the investment is implemented in dong, then FIEs or BCC foreign investors must open a direct investment capital dong account at the authorised credit institution where FIEs or BCC foreign investors have already opened a direct investment capital foreign currency account.

Foreign investors remitting lawful income in dong from direct investment activities in Viet Nam can purchase foreign currency and remit it overseas within 30 business days after the date of purchase of foreign currency.

Issuing securities overseas or in Viet Nam

Resident organisations are permitted to issue foreign currency securities overseas in the form of bonds. If the residents issue foreign currency securities overseas in the form of shares, investment fund certificates or other types of securities, they must open the foreign currency account at the authorised credit institution.

Non-residents being organisations are permitted to issue securities in dong in Viet Nam. They must open one dong account to conduct revenue and disbursement transactions in dong relating to the issuance of the securities.

Offshore foreign currency accounts

Resident organisations can open and use offshore foreign currency accounts when (1) economic entities have branches or representative offices overseas or need to open the offshore foreign currency account to receive loan capital - or to perform agreements with foreign parties; or (2) Vietnamese agencies operating in Viet Nam need to open the offshore foreign currency account to receive foreign financial support or aid or in cases permitted by Vietnamese competent authority.

Foreign currency cash by individuals

Residents and non-resident individuals having foreign currency cash are permitted to store or carry it personally, donate it or receive inheritances, sell it to an authorised credit institution, remit or carry it overseas, and to pay it to entities permitted to collect foreign currency cash. Residents being Vietnamese citizens are permitted to use foreign currency cash to deposit in savings accounts at authorised credit institutions, and to withdraw the principal and interest in the currency deposited.

The Decree takes effect on September 5, 2014, and replaces Government Decree No160/2006/ND-CP (28 December 2006).

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6Aug/14Off

Russia ‘ green light ‘ for investment in Vietnam to Russia

06/08/2014 10: 46

(TBTCO)-radio station voice of Russia (5 nights/8) does Russia ranked third in the world in terms of the volume of foreign investment. Only in 2013, Russia has attracted more than 94 billion dollars of foreign direct investment.

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General Director of the Vietnam national oil and gas group do van Hau exchanging text has just signed with the President of Gazprom OAO a. b. Miller of Russia. Photo: PVN

The experts said that in Russia the investment performance may be over 1.5-2 times in comparison with the similar projects in many other countries. Thus, the majority of foreign investors who have negative attitudes toward the economic sanctions of the United States of America and the European Union (EU) against Russia.

At the same time, the application of the sanctions provided more opportunities for investment from countries not to follow the directive of the United States of America. Including Vietnam.

Although the volume of Vietnam's investment into the Russian economy is not yet on the high level, but right now, Russia ranked third in a list of 68 largest country attracting investment from Vietnam, the only two neighbors Laos and Cambodia ahead of Russia in this list.

Counselling Service in Asia and Africa of the economic development Ministry of Russia Pavel Kochkin said: "Vietnam investors are very interested in the Russian market. In mid-2013, the Netherlands has implemented 16 projects with the participation of Vietnam, would have 40 companies with investment capital of Vietnam. All of the businesses that are members the Association of Vietnam business in Russia ".

The largest investment project with the participation of Vietnam's two joint venture companies in the oil sector.

First of all have to say about the company "Rusvietpetro" action in the North of the European part of Russia, to date, the company's experts have declared thá́c few million tons of oil were first frozen grounds on the eternal. In the near future, oil extraction volume in this enterprise will compare with that produced by Vietsovpetro, a joint venture company to go top in Vietnam's oil extraction industry.

One other major investment projects worth 200 million US dollars is the center of culture, Commerce and hotel "Hanoi-Moscow". The construction work was completed, the hotel began to welcome the first customers, the complete job shopping centres are at the final stage.

Says Kochkin said: "these projects clearly shows that Russia has created the most favorable conditions for the operation of the investor to Vietnam. The success of this project has attracted the attention of businesses to Vietnam to the Russian market. They are particularly interested in such sectors as trade, restaurant, producing clothing, footwear, agricultural products, and even electronic applications ".

Vietnam investors also want to develop partnerships with the mining and shipping of coal from Russia, to form the cluster of timber and fishing in the Primorsky region of the Russian Federation. According to Vietnam's initiative, the two sides are discussing the development of production technology of rubberized fabric, which uses the Silk of Vietnam.

In the opinion of the experts in Russia and Vietnam, Vietnam investment volume in Russia and Russian investment into Vietnam will continue increasing./.

Read more: http://dongtalk.com/forums/index.php/topic/14166-russia-green-light-for-investment-in-vietnam-to-russia/#ixzz39dKXeWGQ

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6Aug/14Off

More banks to take over finance companies under new decree


Last update 10:00 | 06/08/2014

VietNamNet Bridge – Analysts predict a new wave of commercial banks taking over finance companies following a new government decree.

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Decree No 39, which took effect in late June, will help finance companies become more “attractive”. They will be able to issue deposit certificates, short- and long-term bonds, treasury bills, provide guarantees, and issue credit cards.

Banks, which are expanding their retail banking market share, are anxious to buy finance companies.

In late June, the State Bank gave the go-ahead to the VP Bank to buy 100 percent of Vinacomin Finance Company’s shares.

Prior to that, at the shareholders’ meeting held in April, the Saigon-Hanoi Bank’s board of directors submitted a plan to buy a finance company.

Meanwhile, some banks takeovers of finance companies were wrapped up many months ago. These included HD Bank purchase of SGVF from the French Société Générale, and the merger of PetroVietnam Finance Company (PVFC) with Western Bank to create PVcomBank.

According to Nguyen Thien Bao, former CEO of PVFC, as soon as becoming a commercial bank, PVcomBank could begin providing many kinds of services to its potential customers, the workers of enterprises that were the subsidiaries of PetroVietnam.

In theory, commercial banks can expand their network by setting up more branches and transaction points. However, it would be less costly and less time consuming to buy operational finance companies to reach the same goal.

Under current laws, banks have to allocate at least VND300 billion to every bank branch and meet a lot of other requirements on staff and facilities to run the branches.

Meanwhile, if they buy finance companies, they can take full advantage of the companies’ existing networks and services, especially consumer lending, which is the biggest advantage of companies.

Analysts believe that it is now the right time to buy finance companies because the companies are inexpensive now.

Many finance companies, after a period of development, have fallen into decay with high bad debt ratios.

Meanwhile, their shareholders, many of which are state-owned corporations, now try to sell their shares out to withdraw capital from the companies as per the request from the government.

As there are many sellers, analysts say, commercial banks would be able to buy finance companies at low prices.

Truong Van Phuoc, deputy chair of the National Finance Supervisory Council, noted that banks now tend to develop retail banking services (they previously focused on lending money to businesses). Thus, buying finance companies is a good choice for them to implement the plan.

VIB’s retail banking director Rahn Wood also said that commercial banks are now eyeing finance companies because the companies mostly have small capital, so they are inexpensive to purchase.

Finance companies have been earning their living by lending internally. Therefore, the banks which can take over finance companies will automatically “inherit” large numbers of potential customers. Vimico, for example, is a subsidiary of Vinacomin, but it also has subsidiaries of its own, including four dependent companies, 13 subsidiaries and seven joint ventures.

Read more: http://dongtalk.com/forums/index.php/topic/14154-more-banks-to-take-over-finance-companies-under-new-decree/#ixzz39dKCKWzU

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30Jul/14Off

Vietnam asked to stabilize exchange rate to minimize risks of public/private projects

Published On: Wed, Jul 30th, 2014

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Vietnam is considering new policies on foreign exchange management in order to help minimize exchange rate fluctuation risks for PPP (private public partnership) project developers.

Hiroshi Wantanabe, general director of JBIC, the Japan international cooperation bank, said at a meeting on July 16 with the Ministry of Planning and Investment that Vietnam should apply measures to stabilize the exchange rate to attract foreign investment for infrastructure projects implemented under the mode of PPP.

He said while the Vietnam’s foreign exchange reserve has increased to $35 billion, the risks in the exchange rate fluctuations and the restrictions in foreign currency conversion remain big barriers that keep private investors away from infrastructure projects.

In principle, investors will consider the exchange rate fluctuation risks when calculating the prices of the products. However, with PPP mechanism, the risks should be allocated to the parties which can handle the problems in a best way. Therefore, he said, Vietnam needs to consider applying reasonable mechanisms to be sure that the foreign exchange risks can be minimized.

Wantanabe from JBIC also said that foreign investors want the State Bank of Vietnam to ensure the stability and the predictability of the exchange rates.

If policies change regularly without predictions in advance, investors find it difficult to calculate expected profits and figure out the measures to apply when necessary.

The current strict regulations on foreign currency conversion have also caused foreign private investors to hesitate to implement projects in Vietnam.

When developing thermal power projects in Vietnam, investors have to borrow money in foreign currencies and pay debts in the same currencies. However, under the current regulations, they can only receive VND when selling electricity to Electricity of Vietnam.

This means that investors will have to convert VND into foreign currencies to transfer profits abroad and pay bank debts. Meanwhile, they face many difficulties in converting dong into other currencies due to current strict regulations.

This is the reason why foreign institutions have been insisting that the government of Vietnam guarantee currency conversion, since international financial institutions cannot take this work as well as Vietnamese agencies.

Le Van Tang, Head of the Bidding Management Agency, said the responsibility of the government of Vietnam related to foreign investors’ currency conversion is being considered by competent agencies and will be legalized in a decree on PPP project management.

However, Tang said Vietnam will have to think carefully about ensuring exchange rate stabilization.

“We have referred to international laws and consulted with experts and found that no one can ensure the exchange rate would not fluctuate after 40 years, and that it is the job of investors to consider risks before making investment decisions,” Tang said.

An expert who asked to remain anonymous also commented that no government in the world can commit to keep the exchange rate unchanged for many years.

He said it would be better for investors to count on the exchange rate risks when calculating the contracts’ value.

VNE

Read more: http://dongtalk.com/forums/index.php/topic/14124-vietnam-asked-to-stabilize-exchange-rate-to-minimize-risks-of-publicprivate-projects/#ixzz38yudC8pR

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30Jul/14Off

Truong Hai Auto posts huge profit

July, 30 2014 08:19:00

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In the second quarter alone, Truong Hai Auto earned a pre-tax profit of VND743 billion ($35.2 million).— Photo vietpress

HA NOI (VNS) — Truong Hai Auto Corporation reported a huge net profit of VND1.245 trillion (US$59 million) in the first half of this year. This is even higher than last year's profit of nearly VND1.140 trillion ($54 million).

In the second quarter alone, Truong Hai Auto earned a pre-tax profit of VND743 billion ($35.2 million).

After six months, the company has completed more than 67 per cent of its yearly profit target, according to a report on the Tri Thuc Tre website.

Recovery of the auto market helped boost sales. According to a report by the Vietnam Automobile Manufacturers' Association, sales by members reached 54,986 vehicles in the first six months of the year, an increase of 27 per cent year-on-year.

Truong Hai Auto led the market with sales of 17,851 vehicles, a year-on-year rise of 40 per cent, which accounted for 32.5 per cent of the market shares. It even outperformed Toyota (31.8 per cent), Ford (9 per cent) and Honda (4.7 per cent) thanks to strong sales of KIA and Mazda vehicles.

Despite huge profits, annual corporate income tax filed by the company is very low and has not exceeded VND40 billion ($2 million) a year since 2009.

Most of the company's production and assembly is performed at the Chu Lai Economic Zone where it enjoys preferential investment policies on corporate income tax, personal income tax.

Ending June this year, it paid VND807 billion ($38 million) in taxes payable to the State Budget.

The corporation, Viet Nam's biggest local auto firm with a charter capital of VND3.525 trillion ($167 million), is listing shares on the Over-The-Counter market under the code of THA. Total outstanding shares on the market are 250 million.

The corporation has a plan of debuting shares on the stock exchange, but it has been delayed for several years. — VNS

Read more: http://dongtalk.com/forums/index.php/topic/14117-truong-hai-auto-posts-huge-profit/#ixzz38yuFLaGh

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29Jul/14Off

VN asked to stabilize exchange rate to minimize risks of public/private projects

Last update 13:40 | 29/07/2014

VietNamNet Bridge – Vietnam is considering new policies on foreign exchange management in order to help minimize exchange rate fluctuation risks for PPP (private public partnership) project developers.

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Hiroshi Wantanabe, general director of JBIC, the Japan international cooperation bank, said at a meeting on July 16 with the Ministry of Planning and Investment that Vietnam should apply measures to stabilize the exchange rate to attract foreign investment for infrastructure projects implemented under the mode of PPP.

He said while the Vietnam’s foreign exchange reserve has increased to $35 billion, the risks in the exchange rate fluctuations and the restrictions in foreign currency conversion remain big barriers that keep private investors away from infrastructure projects.

In principle, investors will consider the exchange rate fluctuation risks when calculating the prices of the products. However, with PPP mechanism, the risks should be allocated to the parties which can handle the problems in a best way. Therefore, he said, Vietnam needs to consider applying reasonable mechanisms to be sure that the foreign exchange risks can be minimized.

Wantanabe from JBIC also said that foreign investors want the State Bank of Vietnam to ensure the stability and the predictability of the exchange rates.

If policies change regularly without predictions in advance, investors find it difficult to calculate expected profits and figure out the measures to apply when necessary.

The current strict regulations on foreign currency conversion have also caused foreign private investors to hesitate to implement projects in Vietnam.

When developing thermal power projects in Vietnam, investors have to borrow money in foreign currencies and pay debts in the same currencies. However, under the current regulations, they can only receive VND when selling electricity to Electricity of Vietnam.

This means that investors will have to convert VND into foreign currencies to transfer profits abroad and pay bank debts. Meanwhile, they face many difficulties in converting dong into other currencies due to current strict regulations.

This is the reason why foreign institutions have been insisting that the government of Vietnam guarantee currency conversion, since international financial institutions cannot take this work as well as Vietnamese agencies.

Le Van Tang, Head of the Bidding Management Agency, said the responsibility of the government of Vietnam related to foreign investors’ currency conversion is being considered by competent agencies and will be legalized in a decree on PPP project management.

However, Tang said Vietnam will have to think carefully about ensuring exchange rate stabilization.

“We have referred to international laws and consulted with experts and found that no one can ensure the exchange rate would not fluctuate after 40 years, and that it is the job of investors to consider risks before making investment decisions,” Tang said.

An expert who asked to remain anonymous also commented that no government in the world can commit to keep the exchange rate unchanged for many years.

He said it would be better for investors to count on the exchange rate risks when calculating the contracts’ value.

Read more: http://dongtalk.com/forums/index.php/topic/14103-vn-asked-to-stabilize-exchange-rate-to-minimize-risks-of-publicprivate-projects/#ixzz38tWhAs00

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29Jul/14Off

Consumption of goods, services up

July, 29 2014 09:31:38

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Customers purchase goods at Co.op Mart Dinh Tien Hoang in HCM City. — VNA/VNS Photo Thanh Vu

HA NOI (VNS) — The General Statistics Office (GSO) yesterday reported that the total retail sale of goods and services in the first seven months achieved a year-on-year increase of 11.4 per cent to US$78.8 billion.
Excluding inflation, the growth was 6.15 per cent since early this year against the growth rate at 5.1 per cent in the first quarter, 5.5 per cent in the first four months and 6 per cent in the first five months. It was 5.7 per cent in the first half of the year.

During the first seven months of this year, the total retail sale of goods accounted for 75 per cent of the total to reach $59.15 billion, 10.1 per cent higher than the same period last year.

Sales of accommodation and restaurant services had a year-on-year increase of 12.8 per cent to $9.62 billion and other services gained $9.22 billion, 18.3 per cent higher than same period last year.

GSO economic expert Vu Manh Ha said, however, that the real purchasing power still grew slowly, as the consumer price index increased only 1.62 per cent during the first seven months – the lowest level since 2006.

The growth rate of retail sales of goods and services each month showed a downward trend during the first seven months, the office said. The rate increased 2.3 per cent in February against January, 2 per cent in March against February and 1.4 per cent in April against May. It rose 0.7 per cent in July against June.

However, the domestic retail market shows great potential in the future, according to property consulting and service provider CBRE Viet Nam.

Looking ahead, the retail market could expect more activities and new entrants in Viet Nam in general and Ha Noi in particular.

According to a recent report by CBRE, Viet Nam ranked second among ten top markets for Asian retailers in 2014. Another survey conducted by CBRE also showed that Ha Noi and HCM City are among top 10 cities in Asia Pacific where retailers intend to open stores in 2014.

On the legal side, Viet Nam will completely open the market to foreign retailers by January 2015 under WTO obligations. In addition, under the ASEAN Trade in Goods Agreement, Viet Nam has reduced import duties from ASEAN to zero on 10,000 tariff lines.

While this support is expected to serve as a good foundation for more international retailers and goods to enter Viet Nam, local retailers may struggle with competition from foreign retailers with modern, tried and tested international concepts. — VNS

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29Jul/14Off

Foreign investors pour $13 billion into VN markets

Last update 20:00 | 29/07/2014

VietNamNet Bridge – Viet Nam's stock market has attracted US$13 billion from foreign investors, both individual and institutional, according to an official.

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Viet Nam's stock market has attracted US$13 billion from foreign investors, both individual and institutional, according to an official.— Photo baodautu

Minister of Finance Dinh Tien Dung, speaking at last Saturday's ceremony celebrating the 14th anniversary of the HCM Stock Exchange (HOSE), the first securities exchange in Viet Nam, noted that the large foreign investment was a positive development, reflecting the increasing growth in the stock market.

Beginning operations in late July 2000, the exchange had only two listed companies and no participation from foreign investors.

Indeed, in 2003, foreign investors' daily trading value stood at VND41 million ($2,000), while this figure has since risen to VND250.6 billion ($10.2 million).

Currently, 700 companies are listed at HOSE and the exchange in Ha Noi. Also, almost 150 companies have registered to trade on the UPCom.

"The market capitalization of all listed shares is $52 billion, around 32 per cent of the GDP, and bonds are 17 per cent," said the minister. He added that the share trading value in the first six months went up 58 per cent, compared to the same period last year.

Currently, HOSE represents some 70 per cent of the total market trading value.

"As the first stock exchange in the country, HOSE has been increasingly improving itself in terms of trading and supervision systems, information releases, product development and upgrading its infrastructure and operation management," said Vu Bang, Chairman of the State Securities Commission.

HOSE also inaugurated its new building, the Exchange Tower, the same day. This new HOSE headquarters is located in a grade A modern building, offering more than 26,000 sq.m. of office space to enable the development of its Data Center.

Together with the older building, HOSE now occupies more than 32,000 sq.m.During the ceremony, 50 listed firms from almost 700 entries from the Annual Report Awards 2014 were honoured with best annual reports, including 38 from HOSE and 12 from HNX. Vinamilk, Bao Viet Holdings, DHG Pharma and Sai Gon Securities Inc. were among the top honourees.

Meanwhile, first prize for the Sustainability Reporting Awards went to Bao Viet Holding, and second prize to Vinamilk. Three consolation prizes were granted to DHG Pharma, Sacombank and Imexpharm.

HOSE, in coordination with Dau Tu Chung Khoan (Securities Investment), a publication of Viet Nam Investment Review and Ha Noi Stock Exchange, have organised this annual contest since 2008.

FDI sinks despite new projects

Total registered capital of foreign direct investment (FDI) projects in the first seven months this year decreased by 20 per cent year-on-year to US$9.53 billion, according to the Ministry of Planning and Investment's Foreign Investment Agency (FIA).

However, total disbursements from FDI firms were estimated at $6.8 billion, increasing 2.3 per cent against the corresponding period last year. FDI businesses generated an export turnover of $55.83 billion and incurred around $46.04 in imports, resulting in a trade surplus of $9.78 billion.

In the reviewed period, as many as 889 new FDI projects were licensed with total registered capital of $6.85 billion, representing 0.9 per cent year-on-year decrease. About 300 projects increased their investment by $2.67 billion, reducing 46 per cent in comparison with the same period last year.

The processing and manufacturing industries took the lead in attracting FDI with 448 newly-licensed projects with new registered and additional capital of $6.66 billion that accounted for 70 per cent of the total FDI. They were followed by the real estate sector with $1.13 billion, accounting for 12 per cent of the total and the construction sector with $547.58 million.

At present, 46 countries and territories have been investing in Viet Nam. South Korea took first place in terms of total registered investment of around $3.13 billion, accounting for 33 per cent of the country's total FDI inflow. Hong Kong ranked second, followed by Japan and Singapore.

The northern Bac Ninh Province led the country in FDI with $1.33 billion, accounting for 14 per cent of the country's total inflow. HCM City was second with total registered and additional capital of $1.07 billion, followed by Binh Duong, Dong Nai, Hai Phong and Ha Noi.

Some big FDI projects that were granted licences in July included South Korean investor's Samsung Display Company in Bac Ninh Province with $1 billion, Thang Long Cement Factory funded by an Indonesian investor in north-eastern Quang Ninh Province with $325.75 million and Dai An Viet Nam – Canada International Hospital Company in northern Hai Duong Province with $225 million.

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