Infrastructure vital to call for investors

Apr 02, 2015

Improving the infrastructure network in the impoverished northwestern region is
paving the way for further investment inflows in the time to come.
In 2013, Sun Group began construction of the Fansipan-Sapa cable car system in the
tourist town of Sapa in Lao Cai province. Upon completion later this year, the threewire cable car system will stretch seven kilometres from Sapa town to the peak of
Fansipan Mountain the highest mountain in Indochina.
It will be the worlds longest cable car system, and will be capable of carrying a
maximum of 2,000 people per hour. This system reduces what was once a dramatic
two-day trek to a mere 15-minute ride. This investment marked an important
milestone for Sun Group, and particularly for the northwestern region, where there
is huge untapped potential within the tourism industry.
Donaco International, an ASX-listed company, also opened a new five-star hotel and
casino in the region last year. The Aristo Hotel in Lao Cai city follows on from the
companys three-star hotel which the company has been running since 2003. The
hotel has 400 rooms, as well as a health spa and nightclub. Like Sun Group, Donaco
International is expecting the growing demand in the tourism and entertainment
sector of Vietnams northwestern region.
Joey Lim, managing director and CEO of Donaco, said the company was aiming to
capture the increasing demand for gaming and leisure entertainment from the
Chinese target market.
Home to about 30 ethnic groups and long mountain ranges, the northwestern
region is also a huge draw for tourists coming to Vietnam. Asides from its tourism
potential, the region also boasts a lucrative mining industry, with private investors
pledging at least $4 billion in committed investment capital since 2008.
The mountainous northwestern region is a place of strategic importance where a cooperative project is being implemented by both Vietnam and China. Lao Cai Cast
Iron and Steel Plant, a joint venture between Vietnam Steel Corporation, Lao Cai
Mineral Joint Stock Company and Chinas Kunming Iron and Steel Group, opened
doors of its steel factory in September. The plant can produce 500,000 tonnes of
billets per year from iron ore exploited in the region.
Also, in the regions Hoa Binh province last December, Czech BTG Holdings began
construction of its $116-million brewery, which has the capacity of 190 million litres
a year. The factory will mainly produce Budweiser Budvar beer which will be
exported to neighboring countries including Korea, Japan, and China, and will also
be available for local customers.

In addition, BTG Holdings plans to build a $136-million biomass-fired power plant

with the generation capacity of 50 megawatts, which will ensure a stable power
supply for local factories which include an electronic chip manufacturing facility, a
milk processing plant and a solar cell producer.
Although it boasts many avenues for new investment projects, the northwestern
regions poor infrastructure development has still held region back. Since 2008,
many investors have pledged billions of dollars in investment to this region.
However, because of the slow pace of infrastructure improvement, disbursement
has been modest over the years.
Until now there has been a greater hope in recent years with the Vietnam
Expressway Corporation officially opening Vietnams longest highway in September,
linking Hanoi with the northern border province of Lao Cai.
The 245-kilometre four-lane highway cost $1.2 billion, most of which was covered by
official development assistance provided by the Asia Development Bank.
The highway stretches through five cities and provinces of Hanoi, Vinh Phuc, Phu
Tho, Yen Bai and Lao Cai. This major route has shortened travel times from Hanoi to
Lao Cai down from 10 hours to 3.5 and has established a reliable transport link
between Vietnams northern provinces and the Chinese city of Kunming.
Source: Vietnam Investment Review
http://www.vir.com.vn/infrastructure-vital-to-call-for-investors.html

VN, Myanmar ink oil deal

Apr 03, 2015
HA NOI (VNS) The PetroVietnam Exploration and Production Corporation (PVEP)
has signed a production-sharing contract (PSC) for blocks MD2 and MD4, off the
coast of Myanmar, with its Myanmar partner.
Signatories in Naypyidaw, Myanmar, early this week were representatives from the
PVEP, the Myanmar Oil and Gas Enterprise and the Italian Eni Group.
Under the agreement, the PVEP will have a 20 per cent share, while the Italian Eni
Group will manage the project through the company Eni Myanmar B.V.
Covering 10,330sq. km, Block MD2 in southern Bengal Bay is the largest oil and gas
field in Myanmar. Block MD4, located in the Moattama basin, southern Andaman,
covers 5,900sq. km.
The PVEP has conducted oil and gas activities in Myanmar since 2008.

The newly signed PSC is an important move in the PVEP's strategy to boost its oil
and gas exploration and exploitation abroad and serves to further consolidate the
cooperative relations between the two nations.
The PVEP has taken part in the management of 20 oil and gas projects in 15
countries. It has conducted exploration and exploitation activities at oilfields in
Malaysia, Peru and Venezuela.
From 2007 to 2013, the corporation generated VND43.5 trillion (US$2.05 billion) in
revenue and VND23.8 trillion ($1.1 billion) in pre-tax profits. It also paid VND14
trillion ($658 million) in taxes to the state budget. VNS
Source: Vietnamnews
http://vietnamnews.vn/economy/268511/vn-myanmar-ink-oil-deal.html

HAGL group gets approval to import sugar from Laos

Apr 03, 2015
HA NOI (VNS) The Government has made a nonspecific agreement allowing the
Hoang Anh Gia Lai Group (HAGL) to import 50,000 tonnes of sugar from Laos at a
tax rate of 2.5 per cent.
The group has invested heavily in sugar production in Laos.
The Ministry of Agriculture and Rural Development and the Ministry of Industry and
Trade agreed to the quota and submitted a proposal to PM Nguyen Tan Dung for
approval.
Earlier, the HAGL Group filed a petition to allow it to import crude sugar from Laos
to then process in Viet Nam and finally export to China.
According to commitments made to the WTO, Viet Nam must allow 81,000 tonnes of
sugar to be imported as raw material this year. The import quota rises by five per
cent a year. The quota started at 50,000 tonnes in 2007 when the country joined
the WTO. VNS
Source: Vietnamnews
http://vietnamnews.vn/economy/268503/hagl-group-gets-approval-to-import-sugarfrom-laos.html

Government to improve IPO procedures

Apr 02, 2015

HA NOI (VNS) The Government and the State Securities Commission (SSC) would
have to improve the policies that had been preventing State-owned companies from
being privatised, said officials and experts yesterday.
Bui Hoang Hai, the SSC's Deputy Director of Securities Issuance Management, said
that 60 per cent of IPOs last year were successful. They had a total value of
VND11.4 trillion ($530.23 million).
Hai said that during the first three months of this year, the percentage of successful
IPOs and divestment was 44 per cent, with a total IPO value of VND1.25 trillion
($58.14 million).
He said that the reason for the lower numbers was slowness in information
disclosure, adding that State-owned enterprises had to publish their profiles for IPO
at least 20 days before they were auctioned.
However, many of them published their profiles much later, causing difficulties for
investors to prepare capital and information about the auctioned enterprises, he
said.
In addition, the auctioned enterprises only published basic information which was
not attractive to strategic investors, he said.
The SSC's representative suggested that state-owned enterprises reveal more about
their profiles and speed up the information disclosure to attract investors in a highly
competitive market with limited sources of capital.
Nguyen Thi Hoang Lan, Vice General Director of the Ha Noi Stock Exchange (HNX),
said her company had asked the SSC and the Ministry of Finance to improve the
Unlisted Public Company Market (Upcom) to attract strategic investors by dividing
the market into smaller sectors and developing specific indexes for those sectors.
She said that these recommendations would help investors get easier access to
information and reduce administrative procedures to support auctioned enterprises.
She said that HNX would work with securities companies and consulting companies
to assist the auctioned enterprises.
During the conference, participants suggested ways of improving the quality of IPO
and divestment for State-owned companies.
Hoang Nguyen Hoc, Vice General Director of the State Capital Investment
Corporation (SCIC), said that the SSC should allow State-owned companies to sell
their stakes in even lots, which was an order for a security account of 100 shares for
stocks.

He said that investors would find it cheaper, easier and more convenient to acquire
state capital in even lots, raising the efficiency of IPO and divestment.
Vu Anh Minh, the Director of the Transport Ministry's corporate management
division, said that IPOs would help State-run companies improve their performances
and make larger contribution to the state budget. VNS
Source: Vietnamnews
http://vietnamnews.vn/economy/268441/government-to-improve-ipoprocedures.html

Maritime Bank merges with Mekong Development Bank

Apr 03, 2015
The Maritime Bank (MSB) announced its plan to merge with the Mekong
Development Bank (MDB) on its website on March 31.
The announcement came after State Bank of Viet Nam (SBV) Governor Nguyen Van
Binh approved the merger earlier last month.
The new institution would be named Maritime Bank, and have a charter capital of
VND11.75 trillion (US$560 million) and total assets of VND113 trillion ($5.38 billion).
MSB has 800 million shares circulating in the market, and MDB 375 million shares.
Their stock is valued at VND10,000 (48 cents) each.
MSB will issue 375 million additional shares to carry out the merger, with every
share of MDB converted into a share of MSB. All rights and interests, as well as
responsibilities of existing shareholders of the banks will be retained.
The merger plan was approved at the two banks' shareholders meeting in 2013,
with the aim to boost financial strength and competitiveness. The banks expected
the merger would help them be counted among the largest banks nationwide in
terms of charter capital and transaction network.
This is first merger this year since SBV officials stated that they expected about six
bank merger and acquisition (M&A) deals to be implemented in 2015, as part of an
effort to clean up the banking sector.
Credit ratings agency Moody's reportedly said recently that the growing number of
M&A deals in the domestic banking sector was a positive sign that would help
reduce systematic risks. They would also enable the authorities to better manage
the area, and banks to extend loans and expand markets more advantangeously.

MSB has VND8 trillion ($380.95 million) in equity and more than VND107 trillion
($5.10 billion) in total assets, while MDB has VND3.75 trillion ($178.57 million) and
nearly VND6.44 trillion ($306.67 million) respectively.
Source: Vietnam Investment Review
http://www.vir.com.vn/maritime-bank-merges-with-mekong-development-bank.html

South Koreas Emart to open $60mn mall in Vietnam

Apr 02, 2015
Leading South Korean retailer Emart will mark its official entrance into Vietnam with
a US$60 million shopping center slated for opening in October this year.
The maiden Emart store in the Southeast Asian country will be inaugurated in Go
Vap District, Ho Chi Minh City, the retailer said during the Emart's Partners Day on
Tuesday.
The South Korean company sees Go Vap as one of the most developed and densely
populated areas in Ho Chi Minh City, and will earmark $60 million for the 30,000
square meter store, it said.
The shopping mall will also include a restaurant-entertainment complex as Emart
wants to turn its venue into a favorite destination for Vietnamese consumers.
Emart is now ready to enter Vietnams retail market after four years of seeking for a
business opportunity, the companys general director in Vietnam, Choi Kwang Ho,
said at the Emart's Partners Day.
The event attracted more than 300 guests who are manufacturers and suppliers in
Ho Chi Minh City, who Choi said could have a chance to distribute their products via
Emarts international operations.
In 2011 Emart closed a deal with U&I Investment Corporation, a multifaceted
Vietnamese company, to set up a joint venture to open retail stores across Vietnam,
according to The Saigon Times Online.
The two then targeted to open their first supermarket in Hanoi and expand the
network to 52 stores in other big cities by 2020.
But Emart has decided to open its first store on its own rather than through the joint
venture, and the mall is located in Ho Chi Minh City instead of Hanoi.
Choi did not comment on the investment chance during the Tuesday meeting,
according to The Saigon Times Online.

The South Korean director said 95 percent of the goods on sale at the Emart
shopping center will be locally manufactured.
Choi also revealed that besides the Go Vap facility, Emart plans to open the second
one in Tan Phu District, before expanding into other localities.
Emart is the largest retailer in South Korea with 140 stores across the country as of
December 2012.
It was founded on November 12, 1993 by department store franchise Shinsegae as
the first discount retailer in the East Asian country.
Emart will be the second major retailer from South Korea to operate in Vietnam,
after Lotte, which is running ten supermarkets and shopping malls in Ho Chi Minh
City and many other big cities.
Source: Vietnam Investment Review
http://www.vir.com.vn/south-koreas-emart-to-open-60mn-mall-in-vietnam.html

Foreign exchange rate approaches upper limit

Apr 03, 2015
HCMC The exchange rate between the U.S. dollar and Vietnam dong has again
risen strongly, almost touching the upper limit of VND21,672 per dollar, after
several days of decline backed by the central banks forex rate stabilization stance.
Local banks on April 1 quoted the dollar selling price at VND21,595-21,610 a dollar,
up VND5-30 from the day earlier. Vietcombank and VPBank offered the lowest price,
at VND21,595, while ACB and DongABank quoted the highest rate, at VND21,610.
From the second week of March banks repeatedly revised up dollar prices, sending
the exchange rate up to VND21,590 on March 24. Then, the rate fell to VND21,52521,540 on March 25-26.
On March 25, the central bank clarified its position to keep the exchange rate
movement within a band of 2% on either side this year as earlier targeted.
The central bank explained psychological factors were the main cause of the dollar
surge on global markets in previous days. Meanwhile, dollar supply and demand in
the country remains balanced while the balance of payments ran a surplus of
US$2.8 billion in the first quarter.
Just several days after the announcement, the exchange rate has turned sharply
volatile.

Ngo Dang Khoa, head of trading at HSBC Vietnam Bank, said the exchange rate
increase is driven mainly by expectations that the U.S. Federal Reserve could raise
interest rates this year.
Meanwhile, the greenback has been firmer against other currencies while the gap
between domestic and global gold prices in Vietnam remains wide.
However, dollar demand did increase in the last week of March as enterprises had
to finish payments at the end of the month or in the first quarter. Besides, some
foreign investors bought dollars after taking profits out of the stock market.
Vietnams foreign currency supply stays strong thanks to foreign direct investment,
incoming remittances and official development assistance (ODA) flows.
The central bank may intervene anytime to keep the market stable, Khoa said.
In a recent report updating Asian economies, HSBC said Vietnam has built up its
foreign reserves to about US$36 billion. However, the central bank does not respond
in a timely manner, squeezing domestic liquidity.
Should the central bank fail to respond in a timely fashion to either allow market
demand or supply dynamics to determine the exchange rate or inject dollars into
the system, liquidity may be thin, the report said.
The bank predicted the exchange rate at VND21,750 per dollar at the end of this
year.
Source: The Saigon Times
http://english.thesaigontimes.vn/40250/Foreign-exchange-rate-approaches-upperlimit.html