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Tag: Vietnam

  • Bamboo Airways cleared to take to the skies

    Bamboo Airways cleared to take to the skies

    Vietnam’s newest airline, Bamboo Airways, has received a certificate that allows it to operate aircraft for commercial purposes. The Vietnam Civil Aviation Authority Tuesday granted the Aircraft Operator Certificate (AOC) to Bamboo Airways. The AOC is a certificate approved by a regulatory authority that allows a carrier to operate aircraft for commercial purposes within a specified scope of activities. As such, the FLC Group’s startup airline has completed all necessary regulatory procedures for commencing commercial operations in Vietnam’s aviation market.

    “This AOC certification is a result of 4 years of effort, I believe it is an important first step for Bamboo Airways to serve passengers and devote themselves to the Vietnam aviation industry,” said Dang Tat Thang, CEO Bamboo Airways.

    After many delays, Bamboo Airways expects to start operating domestic flights with Airbus A321 NEO aircraft by mid-January. Bamboo Airways will prepare 20 planes for flight in the first quarter of 2019 and increase their fleet size to 40-50 aircraft by the end of the year.

    Thang said that at the moment, Bamboo Airways has fully prepared their personnel, technical and material assets and affirmed its fitness for operation through many activities including test runs, maintenance, engineering and other commercial transport activities.

    Bamboo Airways will operate 37 routes connecting all major cities and popular tourist destinations in Vietnam, as well as some international routes in 2019.

    The first routes of the country’s fifth carrier would connect Hanoi and HCMC, and from Hanoi and HCMC to central provinces of Quy Nhon and Quang Binh, and northern Quang Ninh Province.

    The new carrier plans start off with 60 domestic flights a day. Later this year, the company also plans to open international flights to Japan, Korea and Singapore.

    Bamboo Airways was founded in mid-2017 with a charter capital of VND700 billion ($30 million), which it increased to VND1.3 trillion ($55.68 million) recently.

    The airline has signed deals to buy 24 Airbus A320neo and 20 Boeing B787-9 Dreamliner aircraft worth a total of about $8.6 billion.

    The other four carriers in Vietnam currently are Vietnam Airlines, Vietjet Air, Jetstar Pacific and VASCO.

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  • F&B procurement startup lures Japanese investor

    F&B procurement startup lures Japanese investor

    Kamereo, a Vietnamese sourcing platform for restaurants, has raised $500,000 in seed funding from Japan’s Genesia Ventures and Velocity Ventures Vietnam. Japanese Taku Tanaka, founder of Kamereo, said the newly acquired money would be used to upgrade the platform’s service offerings and strengthen the customer care team. “We use technology to solve the buying and sourcing problem, and restaurants can focus on their core business to bring the best culinary experience to customers. In future we will expand our services to other sectors and regions.”

    From his experience, Tanaka, who moved to Vietnam in 2015 as CEO of a pizza chain, found that procurement operations were mainly labor-intensive and inefficient.

    “We believe that technology can solve this problem, providing solutions to reduce the cost of personnel in a transparent and accurate manner,” he said.

    The Ho Chi Minh City-headquartered business-to-business procurement platform, established last June, now has more than 4,000 product categories, 120 partner suppliers and 200 registered restaurants.

    While Kamereo will focus its resources on Vietnam for now, it is planning a series A round of funding involving a few million U.S. dollars in late 2019 or 2020 to expand in Southeast Asia.

    The funding came amid a technology startup boom in Vietnam’s F&B market where delivery platforms such as GoViet and Grab battle for market share down the supply chain.

    A report published last October by Vietnam Research said Vietnamese spend more than a third of their income on food and beverages ahead of education and utilities.

    Global research firm Nielsen also considered F&B one of the most attractive industries, with the potential to become a major player in the Vietnamese economy, citing findings from one of its studies which found food and beverages were two of the 10 most bought products online in 2017.

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  • Vietnam targets credit growth of 14 pct in 2019

    Vietnam targets credit growth of 14 pct in 2019

    The State Bank of Vietnam targets credit growth of 14 percent this year, the same as last year. The focus of new loans would be priority sectors such as manufacturing, agriculture and small and medium enterprises, Nguyen Thi Hong, Deputy Governor of the central bank, said. Credit growth in the Vietnamese banking sector last year was 14 percent, the lowest rate since 2014.

    The figure announced by the State Bank of Vietnam (SBV) Monday was well short of the 17 percent targeted for the year.

    According to officials from the SBV’s Department of Credit for Economic Sectors, lending grew sharply in the early months of the year before tapering off. It was primarily targeted at priority sectors such as manufacturing and processing.

    Credit to the commercial and services sectors saw the highest growth rate, 16 percent. Lending to industry and construction grew by 12.1 percent and to agriculture, by 8.8 percent.

    Overall, interest rates remained steady despite rising interest rates in global markets. In Vietnam, interest rates are commonly around 6-9 percent a year for short-term and 9-11 percent a year for medium and long-term.

    The non-performing loans ratio was down to 1.89 percent from 1.99 percent in 2017 and 2.46 percent in 2016.

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  • Inglot Vietnam makes debut in Vietnam

    Inglot Vietnam makes debut in Vietnam

    Polish cosmetics brand Inglot has opened its first Vietnam store, inside Vincom Lieu Giai in Hanoi. Located on the first floor of the shopping centre, the Inglot Vietnam store offers a free makeup area for customers to try its products before purchasing. Makeup artists are available to help customers find the right tones and ‘look’. Inglot Vietnam says the first store is something of a trial by the company before it opens a flagship shop in the nation’s commercial capital, Ho Chi Minh City, by the end of next month.

    Inglot is well known for its bolt shades and its Freedom System, which allows users and makeup artists to arrange eyeshadows, blush and lipsticks into on-the-go palettes. The brand has more than 900 stores in 75 countries.

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  • Vietcombank to sell 3 percent stake to foreign investors

    Vietcombank to sell 3 percent stake to foreign investors

    Vietcombank, Vietnam’s largest bank by market cap, has received permission from the securities watchdog to sell a 3 percent stake to foreign investors. The green light from the State Securities Commission (SSC) will allow the lender to make a private placement of 3 percent as part of its plan to ultimately sell 10 percent. The 3 percent could fetch around $270 million based on its current stock price.

    Vietcombank last month received approval from the State Bank of Vietnam (SBV) to increase its charter capital by selling 10 percent to the Government of Singapore Investment Corporation (GIC) and existing strategic partner, Japanese bank Mizuho.

    Now GIC will buy 2.55 percent while Mizuho Bank will buy the remaining 0.45 percent to keep its current 15 percent stake unchanged.

    Last September the SBV approved Vietcombank’s proposal to increase its charter capital from VND35.98 trillion ($1.55 billion) to VND39.57 trillion ($1.7 billion). The capital has remained unchanged since 2016.

    Vietcombank is one of many Vietnamese lenders that have been seeking to increase capital to meet international capital adequacy norms.

    The country’s banks need to increase their charter capital to meet the Basel II capital adequacy ratio (CAR).

    The accords prescribe capital of 8 percent of risk-weighted assets for all financial institutions, including in Vietnam, to cover operational risks.

    State-owned BIDV, the second biggest bank by market capitalization, said last October it wanted to sell new shares to South Korea’s KEB Hana Bank, giving it a 15 percent stake in the company. The sale would be worth $735 million.

    Vietnam caps foreign ownership of banks at 30 percent. The country has nine wholly-owned foreign banks, four state-owned banks and 31 domestic joint-stock banks.

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  • Singapore company seeks to increase stake in Vietnam’s largest dairy firm

    Singapore company seeks to increase stake in Vietnam’s largest dairy firm

    A Singaporean shareholder in Vinamilk is seeking to increase its stake in Vietnam’s largest dairy firm. Jardine Cycle & Carriage Ltd has registered to buy 17.41 million shares between January 9 and February 7 through its wholly-owned local subsidiary, Platinum Victory, which will enable it to increase its ownership in Vinamilk from over 10 percent to 11.62 percent.

    At a proposed price of VND125,000 ($5.38) per share, the transaction will be worth VND2.17 trillion ($94.42 million).

    Last year Jardine, Vinamilk’s third largest shareholder, had registered on six different occasions to buy 14-17 million shares to increase its stake to above 11 percent, but was unsuccessful due to unfavorable market conditions.

    It first bought a 3.3 percent stake in Vinamilk in November 2017. Within a month it raised its ownership to over 10 percent.

    In April last year a representative of Jardine’s parent company, Jardine Matheson, became a Vinamilk board member.

    Hong Kong-based Jardine Matheson is one of Asia’s biggest conglomerates with interests in luxury hotels, motor vehicles, property, food retail, transport financial services, and agribusiness and revenues of almost $16 billion in 2017.

    F&N Dairy Investments, a subsidiary of Singapore-based Fraser & Neave Ltd, which is backed by Thai tycoon Charoen Sirivadhanabhakdi, owns a 17.31 percent stake in Vinamilk.

    Vietnam’s dairy industry reported revenues of more than VND100 trillion ($4.4 billion) in 2017, with Vinamilk commanding more than a 50 percent market share.

    According to a report by the EU-Vietnam Business Network, the market is expected to double in size by 2020 as the country’s population, personal incomes and dairy consumption increase.

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  • Vietnam’s PV Power to list with billion-dollar market cap

    Vietnam’s PV Power to list with billion-dollar market cap

    PV Power, the country’s second largest power producer, will list on the Ho Chi Minh bourse this month with a market capitalization of $1.5 billion. The Ho Chi Minh Stock Exchange (HoSE) has approved that the firm lists 2.34 billion shares (trading code POW) on January 14 at VND14,900 (64 cents) per share. This would bring the market capitalization of PV Power to VND34.9 trillion ($1.5 billion).

    PV Power finished its last transaction on UPCoM, the market for unlisted public companies, on December 27 at VND16,000 (69 cents) per share.

    PV Power was established in 2007 with 100 percent capital from the state. The company finished equitization in the middle of last year with a charter capital of VND23.42 trillion ($1 billion).

    State-owned oil and gas giant PetroVietnam remains PV Power’s largest stakeholder, with 79.94 percent of its charter capital. Foreign investors currently own 14.3 percent. The company is subject to a foreign ownership cap of 49 percent.

    PV Power produces and sells electricity. It also imports and distributes coal and operates five electricity plants. It is the second largest power producer in the country after national utility Vietnam Electricity.

    In the 2016-2018 period, PV Power’s revenues were VND28-30 trillion ($1.2-1.29 billion), 96 percent of which came from selling electricity.

    As of September 30, 2018, its total asset value was VND61.4 trillion ($2.64 billion) and its equity was VND26.55 trillion ($1.14 billion).

    Its dividend rate for last year is expected to be 3 percent and is set at 6 percent this year.

  • Vietnam to see slower growth in 2019

    Vietnam to see slower growth in 2019

    Vietnam’s economic growth is expected to slow down this year though it will remain a regional outperformer, according to leading global analysts. Fitch Solutions, an arm of Fitch Ratings, said in a report released Wednesday it expects Vietnam’s GDP growth to slow to 6.5 percent in 2019 in line with a wider trend of slowing global growth, but added the country would remain one of the fastest growing economies in Southeast Asia.

    The economy grew by 7.1 percent last year, the fastest rate of expansion in 11 years, according to official data. This was well above the 6.5-6.7 percent target set by the National Assembly.

    “Its increasing openness and reliance on foreign investment suggests that it is unlikely to be spared from the global growth slowdown arising from rising trade protectionism and tighter financial conditions.

    “Although we believe that Vietnam’s manufacturing sector and economy will continue to outperform the region over the coming quarters, growth is likely to face headwinds stemming from rising global trade disruptions and tightening financial conditions, which will negatively impact global economic growth and risk sentiment,” Fitch Solutions stated.

    The World Bank Group in its bi-annual report on Vietnam issued last month said the country’s GDP growth is likely to slow from 6.8 percent in 2018 to 6.6 percent this year as the global economy weakens.

    Weaker global demand for exports and reduced investment and trade flows as the U.S. Federal Reserve raises interest rates are other risks for Vietnam’s economy, Sebastian Eckardt, the World Bank’s lead economist for Vietnam, said.

    The Asian Development Bank (ADB) in a forecast released last month for the East Asia and Pacific region projected Vietnam’s growth at 6.8 percent for 2019, slightly lower than the 6.9 percent it expected for 2018. These rates are the second highest in the forecast behind only India’s.

    Disbursed foreign direct investment (FDI) in Vietnam reached a record $19.1 billion in 2018, up 9.1 percent year-on-year. With exports rising by 13.8 percent to $244.72 billion and imports at $237.51 billion, the country achieved its highest ever trade surplus of $7.21 billion last year.

    Fitch Solutions said in 2019 the manufacturing sector would remain a key economic growth driver and outperform the region.

    Vietnam has grown to become a manufacturing powerhouse, particularly in electronics, due to its relatively cheap and large workforce, geographical advantages, attractive tax breaks, stable political environment, and open trade policies.

    The opening up of the Vietnamese economy also came at an opportune time as China began to shift away from lower-end and export-oriented manufacturing to focus on the domestic economy.

    Vietnam’s continued commitment to economic liberalisation will also attract foreign manufacturers seeking to leverage its preferential trade deals.

    The country is a signatory to 10 bilateral and multilateral free trade agreements (FTAs), with six more trade pacts in the offing, including the highly touted Vietnam-EU FTA.

    Fitch Solutions added that trade tensions between China and the US would continue to drive up costs for manufacturers operating in China, pushing companies to outsource to its neighbor Vietnam, which is more competitive in terms of wages.

  • Experts express cautious optimism for Vietnam stock market

    Experts express cautious optimism for Vietnam stock market

    Last year’s uncertainties and unclear future scenarios are reflected in more cautious assessments than number crunching for 2019. Nguyen Duy Hung, chairman of SSI, a leading Saigon broker, said that with a drop of over 20 percent from its peak, when the VN-Index climbed to 1,204 points on April 9, 2018, Vietnam’s stock exchanges have entered a bear market.

    The benchmark VN-Index on the Ho Chi Minh Stock Exchange lost 1.52 per cent to end Thursday at 878.22 points. On Friday afternoon, it rose to 880.9 points.

    Perhaps it will take between 8 to 11 months for the market to recover, Hung said. “Historical data suggests that it would take 21 months for a bear market to recover its old peak after hitting bottom.”

    But the SSI chairman said the main challenges facing the stock market in 2019 include worries posed by the escalation of the U.S.-China trade war, and increasing geopolitical risks.

    “At this point, no one can say how this war will unfold or predict how widespread the impact will be. Along with the decline in oil prices signaling difficulties of the world economy, the rise in geopolitical risks paint a picture of uncertainties for 2019,” Hung said.

    Also mentioning key challenges for 2019, Securities Commission chairman Vu Bang named the slowdown of Chinese and global economies, the escalating trade war and risks from expanding global debt.

    However, these challenges come with opportunities to be seized. The trade war, according to the SSI chairman, is a chance for Vietnam to increase its exports. This does not mean market share growth will happen immediately, he said, explaining that it was an opportunity to build a medium to long term strategy, innovating the country’s economic growth model based on production and commercial activities.

    Vu Bang also emphasized the advantages of macro factors, saying the continuous high growth rate in recent years was a factor that would increase the attractiveness of Vietnam’s market in the region.

    Vietnam’s GDP growth of 7.08 percent in 2018 retained its status as one of the best performing economies in the world. It was the highest growth the country has experienced since 2008 and compared with the median estimate of 6.9 percent in a Bloomberg survey of 12 economists.

    Offering a more optimistic view, Tran Le Minh, deputy general director of VietFund Management, said that the market in 2019 still holds several favorable factors, including the fact that the decline in VN-Index was relatively slower than in other parts of the world.

    “Why is the market declining more slowly? The reality must be seen in macro factors, growth and the fact that foreign institutional investors continue to invest in the market. Cash flow from foreign investors will continue to be a highlight this year,” said Minh, who predicted that the VN-Index will not fall below its current level by the end of 2019.

    Foreign direct investment disbursement in Vietnam reached a record $19.1 billion in 2018, a year-on-year increase of 9.1 percent, according to the Ministry of Planning and Investment.

    For the market players’ perspective, 2019 is not going to be an easy year, experts say.

    “With many unpredictable factors caused by geopolitical and commercial tensions, most analysts agree that the global economy is entering the end of a growth cycle and 2019 will be a difficult year for the stock market,” said an analyst team with Rong Viet Securities (VDSC).

    It will be difficult for Vietnam to buck the global trend, they felt.

    Bernard Lapointe, head of research of Rong Viet Securities said recently that he was optimistic but not too optimistic about the market this year. He expects the VN-Index to stay within the 900-1,000 points range until the end of 2019.

    Meanwhile, Michel Tosto, head of Institutional Sales and Brokerage of Viet Capital Securities, predicted that the VN-Index could reach 1,060 points at the end of 2019.

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  • Vietnam’s largest brewer is now a foreign owned business

    Vietnam’s largest brewer is now a foreign owned business

    After a $4.78 million debt restructuring, Vietnam’s largest brewer Sabeco is now owned by a Thai company. In December 2017, Thai Beverage (ThaiBev) acquired a 53.59 percent stake in Sabeco from Vietnam’s Ministry of Industry and Trade for $4.78 billion through a local entity, Viet Beverage (VietBev). VietBev, which had 100-percent Vietnamese ownership at the time with VND682 billion ($29.33 million) in charter capital, was loaned VND111.21 trillion ($4.78 billion) by ThaiBev to complete the transaction.

    VietBev was used as a financial vehicle to get around a 49 percent foreign ownership cap in place at the time.

    The $4.78 billion loan was then converted to shares under a debt-to-equity conversion agreement between VietBev and ThaiBev. As a result, VietBev now has a chartered capital of VND111.89 trillion ($4.81 billion), increasing ThaiBev’s ownership in VietBev to 99.39 percent.

    The adjustment in capital was approved by local authorities, and made possible after authorities raised Sabeco’s foreign ownership cap to 100 percent at the end of 2018. The conversion was completed a few days ago.

    ThaiBev has since announced it is committed to ensuring shareholders’ benefits on share prices and annual dividends after this restructure.

    With a charter capital of VND111.89 trillion, VietBev is among a few businesses in the country with chartered capital of hundreds of trillions of dongs, along with state-run oil & gas giant PVN (VND285 trillion or about $12.26 billion); Vietnam’s sole power distributor and biggest producer EVN (VND163.8 trillion or $7.04 billion); and telecoms provider Viettel (VND121.52 trillion or $5.23 billion).

    Recently, Sabeco was caught up in legal trouble with tax authorities, who blocked its bank accounts in order to withdraw VND3.1 trillion ($135.73 million) to collect overdue special sales tax from 2007 to 2015 and penalties for administrative violations. However, this enforcement action proved futile as accounts handed over to the tax authorities were empty.

    After the recent share conversion, the Prime Minister has directed the tax agencies to suspend their enforcement, in order to carefully consider regulations as it involves “foreign factors.”

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  • Vietnam’s Viettel seeks to double Myanmar customer base: CEO

    Vietnam’s Viettel seeks to double Myanmar customer base: CEO

    Vietnam’s largest telecommunication company, Viettel, is seeking to double its five million subscribers in Myanmar by the end of the year. Viettel, whose $1.22 billion unit Viettel Global Investment is trading on the Unlisted Public Company Market, has also shown interest in investing in North Korea and Cuba. “The growth seen in Myanmar is rare in the telecom market,” Viettel’s president and chief executive officer Le Dang Dung said on Friday. “We still have room to grow there.”

    Myanmar, where Viettel and its local partners launched a $1.5 billion 4G network in June last year has emerged as one of the most promising markets for the company, Dung said.

    The Mytel network, jointly developed by Myanmar National Holding Public Ltd and Star High Public Co Ltd, has amassed around five million subscribers, a figure which Dung said he expects to double by the end of this year.

    Viettel is also in talks to buy stakes in existing telecommunication firms in Malaysia and Indonesia, Dung said, without giving further details due to the sensitivity of the deals.

    The company will be the first to develop a 5G network in Vietnam, Dung said, in anticipation of rapid development of data services.

    He said Viettel had earmarked $40 million for the development of its own 5G chipset, but was also considering using technology from Ericsson and Nokia.

    The military-run firm, formally known as Viettel Group, has around 60 million subscribers in Vietnam and over 30 million users across 10 other countries – predominantly in Asia and Africa.

    The company is also in talks to buy a 20 percent stake in a European mobile carrier, Dung said, without elaborating.

    Dung said Viettel plans to stop expanding its investment in the African market, however, where the company has struggled to make a profit due to poor economic growth.

    Closer to home, Viettel is looking to invest in North Korea, said Dung, where Koryolink – a joint venture between the North Korean state and Egypt’s Orascom Investment Holdings – has amassed millions of subscribers since its 2008 launch.

    “We first sought permission from North Korea to build a mobile network there in 2010,” he said. “But we’re still waiting for sanctions to be lifted and for the country to open its market to foreign investors.”

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  • Vietnam eyes top 15 agriculture spot in 10 years

    Vietnam eyes top 15 agriculture spot in 10 years

    “Vietnam must strive to become a top 15 country in agriculture development in 10 years,” says PM Nguyen Xuan Phuc. “In particular, the agriculture processing sector should be in the top 10,” Phuc said at a conference held by the Ministry of Agriculture and Rural Development (MARD) on Thursday. “Vietnam must strive to become a global centre for wood processing and shrimp production,” he added.

    The PM also set a 3 percent growth target for the whole sector (agriculture, forestry and fisheries), and a $42-43 billion export target for 2019.

    Phuc asked the agriculture ministry to deploy the best measures and promote innovation to achieve targets set.

    “This is a difficult and challenging task but it must be done, a political duty, if we do not do it, our people’s lives will still remain difficult,” he emphasized.

    In order to achieve the goals, the ministry should develop good legal institutions and remove obsolete ones, the PM said.

    The ministry needs to step up efforts to restructure agricultural and rural development systems, including the creation of key national and provincial products, he added.

    It should also perform well its marketing functions, namely, forecasting, assessing supply and demand, developing new markets, and brand building for Vietnamese agricultural products like rice, shrimp and wheat, in which Vietnam is “a little slow compared to Thailand and Cambodia,” Phuc noted.

    He called for enhanced application of science and technology, hi-tech, biotech, artificial intelligence and other technological breakthroughs of Industry 4.0.

    Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that the sector will maintain its good form while undertaking comprehensive and synchronous reforms.

    He said the sector still has several limitations that need to be addressed, including uneven development of different segments, limited innovation of existing processes, and inadequate managerial manpower for market regulation.

    The sector would aim to build a smart industry in 2019, foster international integration, adapt to climate change, increase value additions for products and services and ensure sustainable development through building better rural areas, he noted.

    Vietnam’s agricultural growth had reached 3.65 percent year-on-year in 2018, the highest since 2012, according to the General Statistics Office.

    Last year, the country earned $22 billion from agricultural and forestry product export, and $8.8 billion from fishery shipment, respectively increasing 10 percent and 6.3 percent over the previous year, said the office.

  • Vietnam Van Don’s big obsession

    Vietnam Van Don’s big obsession

    Vietnam aims to have northern Van Don economic zone be a financial center for the Asia Pacific region by 2030. A plan just approved by the Prime Minister aims at the zone, located near Ha Long Bay in the northern Quang Ninh Province, having a total production value of $5.6 billion by 2030. The zone will contribute over 10 percent of Vietnam’s total export value by 2030, when it will create about 89,000 jobs, the plan says.

    It will develop tourism in the area by exploiting the potential of its natural heritage and traditional culture, welcoming 2.5 million tourists by 2030.

    The plan also says the zone will be one of the most livable places in the Asia Pacific region.

    Van Don will become a gateway to transfer goods into Southeast Asia, developing its aviation and logistics industries.

    The economic zone will have a free trade area, resorts, a hi-tech industrial park, a biotech zone, a manufacturing zone, an airport and a financial center.

    By 2050, Van Don will become one of Vietnam’s driving forces of economic development, a dynamic economic center providing premium products and services, according to the plan.

    On December 30, the Van Don International Airport was opened, marking the first private airport in Vietnam, costing VND7.7 trillion ($330 million).

    Late last year, the Ha Long – Van Don expressway and the Hon Gai International Habour were also opened.

    Quang Ninh has recently proposed the government to approve an premium entertainment plan in Van Don, including a casino.

    The province welcomed 10.7 million travelers in the first 10 months of 2018, up 25 percent from a year ago. Tourism revenues for the period rose 28 percent year-on-year to VND19 trillion ($818 million), according to official figures.

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  • Vietnam wants urban residents to pay bills without cash

    Vietnam wants urban residents to pay bills without cash

    The Vietnamese government wants cashless transactions made viable for all household bill payments by the end of this year. A recent government resolution on changing the business environment to improve competitiveness and labor productivity contains a push to accelerate use of cashless transactions. Provincial and municipal leaders have accordingly been tasked with instructing all schools and hospitals, as well as electricity, water, sanitation, telecommunications and postal companies in urban areas to coordinate with banks and intermediary payment service providers in collecting bills and fees via cashless transactions.

    The government has recommended that establishments prioritize mobile payments and payment via card readers, and requested that the task be completed before December this year.

    Vietnam Electricity, the national utility, has been asked to ensure power companies work with banks and intermediary payment service providers to collect electricity bills via cashless methods and promote the use of electronic and mobile payments. The target for the year is to double the number of customers using e-payments to pay their electricity bills.

    The State Bank of Vietnam has been asked to come up with solutions that would promote the use of electronic wallets, wherein users can deposit cash into their e-wallets without the need for a bank account. The central bank has also been asked to find ways to remove imitations on e-transactions before the third quarter of this year.

    The State Bank must also require commercial banks and intermediary payment service providers to implement the QR code standard, and work with the Ministry of Finance to come up with a list of types of transactions that have to be done through banks, as well as make amendments to existing regulations to promote cashless payments for real estate transactions.

    According to the World Bank’s statistics released last July, Vietnam was the country with the lowest percentage of cashless transactions in the region with only 4.9 percent, while this value for China and Thailand were 26.1 percent and 59.7 percent respectively.

    While Vietnam rolled out an e-payment system for taxes in 2014 with 95 percent of companies registered, currently only 70 percent of tax money is collected via this method and many businesses still prefer paying their tax directly with cash.

    Similarly, while Vietnam has had policies to encourage consumers to pay electricity bills through banks and intermediary payment service providers, currently only 4.5 million people, or 20 percent of electricity consumers, pay their bills through these channels.

    The government’s resolution does not include rural and remote areas as the majority of Vietnamese living in such areas still lack access to modern payment methods.

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  • Vietnam tops Southeast Asia in IPOs

    Vietnam tops Southeast Asia in IPOs

    Vietnam surpassed Singapore and Thailand to top Southeast Asia in initial public offerings (IPOs) last year, raising $2.6 billion. This figure was 3.7 times that of 2017, according to consultancy Ernst & Young. Two of three largest IPOs in Southeast Asia last year were launched by Vietnamese companies: $1.34 billion from Vinhomes, a real estate developer of Vietnam’s biggest private firm Vingroup; $923 million from Techcombank, the country’s largest private sector lender.

    However, an opposite trend was seen in Southeast Asia as a whole, with the money raised from IPOs dropping 34 percent over 2017 to $7.1 billion.

    The number of IPO deals in the region also decreased by 7 percent to 115, with 56 of them raising less than $10 million.

    Ernst & Young economist Max Loh said that the reason for this drop was U.S-China trade tensions, which affected the capital market in the region, as Southeast Asian countries have close trade relationships with China.

    Experts feel Vietnam has the potential to attract more foreign investments in the future. A report by law firm Baker McKenzie and consultancy Oxford Economics said that Vietnam will top the region in the amount of money raised via IPOs by 2021.

    The rise of Vietnam and other developing countries in Southeast Asia could intensify competition for new listings among the region’s exchanges, said Tham Tuck Seng, PwC Singapore’s capital markets leader.

    This will increase the pressure on Singapore to differentiate itself even more in order to stand out, CNBC quoted Tham as saying.

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