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Tag: Vietnam

  • Experts fear foreign rivals too strong for Vietnam ride-hailing firms

    Experts fear foreign rivals too strong for Vietnam ride-hailing firms

    Vietnamese ride-hailing services are struggling to compete with foreign firms Grab and Go-Viet due to a lack of resources.

    FastGo last month claimed to have 15,000 taxi and motorbike partner drivers in Hanoi and Ho Chi Minh City, but they are not a common sight on the streets unlike the ubiquitous red and green uniforms of Go-Viet and Grab drivers.

    VATO, which received funding of $100 million from local transportation firm Phuong Trang, is also having trouble expanding after launching in May, its CEO Tran Thanh Nam admitted to the media.

    Another competitor, Aber, run by a group of young Vietnamese based in Europe, had said August 10 it would “temporarily cease app operations for an upgrade.” It has not made a return so far.

    Bui Danh Lien, former chairman of the Hanoi Transport Association, said operators need to give drivers a steady income to keep them and at the same time offer customers plenty of discounts and cheap fares, and “this is a tough challenge.”

    Economist Do Hoa told local media that the ride-hailing market is “a race to spend money”, and those without deep pockets won’t be able to compete.

    Grab and Go-Viet are willing to charge their customers as low as VND1,000 (4.3 cents) for a ride, he pointed out.

    “Vietnamese ride services are not financially capable of sustaining such losses like the foreign companies.”

    Even major players like Grab and Uber report big losses in Vietnam. According to the General Department of Taxation, Grab, with a total registered capital of only VND20 billion ($881,000), has incurred losses of nearly VND1 trillion ($43.48 million) during its three years in Vietnam.

    But this cash burn strategy is how Grab and Uber are eating up traditional taxi firms’ market share. In 2014-15 they launched promotion after promotion, including free rides and discounts, to attract customers. They expanded their driver networks by offering subsidies and big rewards based on performance.

    Other options

    Though the lack of funding is a weakness of local ride-hailing firms, there are other ways for them to grow, Dr Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research said.

    “Since the lack of resources is a disadvantage for Vietnamese ride-hailing apps, they should not enter the cash burn race.”

    Going head-to-head with bigger rivals is not the right strategy to follow, he said.

    “They can enter niche markets like delivery, car rentals and long-distance ride services. Instead of trying to divide market share in the beginning, newcomers should think of a long-term strategy to build a solid foundation.”

    Nguyen Manh Hung, former chairman of the Vietnam Automobile Transport Association, was quoted by Tuoi Tre newspaper as saying local firms are unable to compete with Grab and Go-Viet because they are divided.

    If they join hands they could compete, he said.

    Go-Viet, the Vietnamese operation of Indonesia’s Go-Jek, came early last month seeking a share of the market that Grab has been dominating after the departure of Uber.

    Go-Jek founder and chief executive Nadiem Makarim said Go-Viet has grabbed a 35 percent share of the motorbike ride-hailing market in HCMC within six weeks of its launch on August 1.

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  • Mobile World reports surging sales, expands fresh-food business

    Mobile World reports surging sales, expands fresh-food business

    Mobile World says sales grew by 39 percent in the first eight months of the year to VND58.7 trillion ($2.5 billion).

    Profit after tax was up 36 per cent to VND1.97 trillion ($84.34 million) year-on-year.

    HCMC-based Mobile World Investment Corporation (MWG), established in 2004 as a seller of mobile phones, has since diversified into a host of other areas including foods, beverages, meat and seafood, and vegetables.

    Dien May Xanh, its electronics retail arm, accounts for 55 percent of sales followed by mobile phone stores The Gioi Di Dong and then department store chain Bach Hoa Xanh.

    Bach Hoa Xanh, incorporated in 2015, sells vegetables, seafood, meat and fast-moving consumer goods (FMCG). While with VND2.37 trillion ($102 million) it only accounts for 4 percent of the company’s sales, the business is growing at 251 percent.

    It has 405 outlets, with the two largest being in HCMC’s Thu Duc and Binh Tan districts.

    Bach Hoa Xanh plans to focus on the eastern and southern parts of HCMC and the neighboring provinces of Binh Duong, Long An, Dong Nai, and Ben Tre in future.

    By the end of this year it plans to have another 95 stores. A Mobile Word spokesperson said that stores that do not do well would be shut down.

    Based on the firm’s proclaimed plan of having 550 stores with average monthly revenues of VND790 million ($33,850) each by the end of this year, Ho Chi Minh City Securities Corporation (HSC) estimated Bach Hoa Xanh sales to reach VND4 trillion ($171 million) this year.

    But MWG found the department store business less attractive than the two other segments, saying at 14 percent the profit margin of Bach Hoa Xanh is lower than the 17 percent for the cellphone business and 16.7 percent for the electronics business.

    A major reason is fresh food is more difficult to manage than the others due to the short shelf life.

    Doan Van Tieu Em recently took over as CEO of MobileWorld Joint Stock Company, the subsidiary that manages the cellphone and electronics businesses.

    His predecessor, Tran Kinh Doanh, is now CEO of the department store business.

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  • Vietnam’s top banks struggle to increase capital to meet global norms

    Vietnam’s top banks struggle to increase capital to meet global norms

    Three top Vietnamese banks have been struggling to increase their capital to meet international adequacy norms.

    The second Basel Accords, or Basel II, prescribe capital of 8 percent of risk-weighted assets for all financial institutions, including in Vietnam, to cover operational risks.

    The National Financial Supervisory Commission found that Vietnamese banks need to increase their charter capital by 1.8-2 times to meet the Basel capital adequacy ratio (CAR).

    They include three of the four biggest lenders, BIDV, Vietcombank and Vietinbank.

    BIDV, Vietnam’s biggest bank by assets, currently has total assets of VND1,270 trillion ($54.3 billion) but capital of nearly VND34.19 trillion ($1.46 billion), which has remained unchanged since 2015.

    BIDV’s CAR is now only 9 percent according to leading broker VietCapital Securities, which is “close to dangerous” if compared to Basel II standard, the bank’s CEO, Phan Duc Tu, said.

    In the last three years the bank has been making three or four plans each year to increase charter capital, but none of them have been successful.

    In 2016 BIDV and Vietinbank had offered to pay its largest shareholder, the State Bank of Vietnam (SBV), the previous year’s dividends in stocks and not cash to increase its capital.

    But the central bank rejected it saying it needed the cash.

    Last year BIDV had made several plans like initiating an employee stock ownership plan (ESOP), selling shares to existing shareholders, paying dividends in stocks, and private placement of shares to strategic shareholders.

    Again all of them fell through.

    The public bank with the highest state ownership – of over 95 percent – has been looking for strategic investors it can sell stakes to but in vain.

    In 2016 Vietcombank, the third largest bank by assets, signed a deal with Singapore sovereign wealth fund GIC Private Limited to sell a 7.73 percent stake. The deal has yet to be consummated, with the bank’s chairman, Nghiem Xuan Thanh, saying they have been unable to agree on a price.

    Vietcombank’s charter capital has remained since 2016 at VND35.98 trillion ($1.54 billion).

    The SBV recently gave the lender approval to increase its charter capital by 10 percent to VND39.58 trillion ($1.69 billion).

    Vietcombank plans to make a private placement of 10 percent of its stake and has received approval from its shareholders for this.

    Should its plan succeed, Vietcombank will surpass Vietinbank as the bank with the largest charter capital.

    Vietinbank, the country’s second largest lender by assets, has seen state ownership fall to the minimum permitted level of 65 percent, and so can no longer issue more shares.

    Its charter capital has remained at VND37.23 trillion ($1.59 billion) since 2014.

    A masterplan, approved by the Prime Minister early last month, targets to have 3-5 banks listed on foreign stock exchanges.

    The plan, which covers the banking sector’s development until 2025 with a vision to 2030, also set targets to reduce the state capital ownership in three major banks: Vietcombank, BIDV and Vietinbank.

    In 2018-2020, the state will reduce its shares in those banks to at least 65 percent and in 2021-2025, the figure will be 51 percent.

    Vietnam has nine wholly-owned foreign banks, four state-owned banks and 31 joint-stock banks.

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  • Flights from Da Nang to Osaka for Vietnam Airlines

    Flights from Da Nang to Osaka for Vietnam Airlines

    The first non-stop flights from Da Nang to Japan will begin on 28 October, the national flag carrier Vietnam Airlines has confirmed. The airline will use an Airbus A321 with services meeting 4-star standards to cover the 2,114 miles (3,403 kilometers) from Da Nang to Japan’s Osaka City, with flights taking around four and a half-hour.

    The airline will operate 7 return flights each week. The non-stop flights will depart from Da Nang at 00:20 am, and from Osaka at 09:30 am local time. This will be the 11th air route to Japan operated by the Vietnam Airlines after those from Ha Noi, Ho Chi Minh City, and Da Nang to Japanese cities of Tokyo, Osaka, Nagoya, and Fukuoka.

    Mr. Nguyen Duc Quynh – Executive Vice Chairman of Danang Hotel Association, Deputy General Director of Furama Resort Danang, opined: “The Japan market recently makes up 10% of Danang tourism industry and continue to increase strongly. Thanks to this new direct air-route that we will have more opportunity to attract this potential market, as well as introduces the “fantastic-city” of Danang to Japan. We need to take advantage of this chance by providing more Japan-friendly services, promoting our venue as not only Leisure but also an ideal MICE destination. Danang tourism colleges and Hotels in Danang should provide more Japanese language training to their tour guides and staff to welcome more and more tourists from Japan to the City.”

    As reported, from 2011 – 2017, the number of visitors from Japan had increased 18 times, especially, 2016 – 2017 period eyes a rise of 23,000 tourists. Not only Japan market, overview the snapshot of Danang tourism, air travelers to Da Nang increased 40% over the same period last year. The number of international visitors to Da Nang is concentrated mainly in North East Asia (Korea, China, Japan) through direct flights to Da Nang. The number of international flights this year at Da Nang International Airport is 183, an increase of 76 flights over the same period of 2017.

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  • DHL eCommerce has rolled out a fleet of electric motorbike in Vietnam and Malaysia

    DHL eCommerce has rolled out a fleet of electric motorbike in Vietnam and Malaysia

    DHL eCommerce has rolled out a fleet of electric motorbikes as part of Deutsche Post DHL Group’s commitment to Zero Emissions by 2050.

    DPDHL announced that it will operate 70% of its own first and last mile services with clean pick-up and delivery solutions.

    “In parallel with the continued growth in e-commerce, we expect a strong demand for deliveries and we recognize the need for sustainable delivery solutions. As part of DPDHL’s commitment to Zero Emissions by 2050, our fleet of electric vehicles will provide greener deliveries and we are committed to steadily and consciously increasing our fleet of electric vehicles in our domestic delivery network.” said Kiattichai Pitpreecha, Managing Director, Southeast Asia, DHL eCommerce.

    The first fleet of electric vehicles are already in use and the plan is to increase the fleet gradually by sunsetting older vehicles and prioritizing ‘green and clean’ approaches. Delivery hubs in Puchong and Cheras in Malaysia and Ho Chi Minh and Hanoi in Vietnam will be retrofitted with electric charging points with fast charging capabilities.

    DHL eCommerce provides nationwide domestic delivery with fully-owned operations in Malaysia and Vietnam to enable e-commerce businesses to deliver to their consumers. The domestic delivery network also includes DHL ServicePoints for drop-off and pick-up with convenient locations to provide greater convenience for sellers and consumers while optimizing delivery for greater efficiency.

    “Consumers are becoming more environmentally conscious and are placing greater value on sustainable options when they shop. We are super pleased to be rolling out our electric fleet in Malaysia and Vietnam to support our customers — it is great for us, great for our customers and great for the country.” added Kiattichai Pitpreecha, Managing Director, Southeast Asia, DHL eCommerce

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  • King Power Traveler to launch inflight duty free with Vietnam Airlines

    King Power Traveler to launch inflight duty free with Vietnam Airlines

    National carrier Vietnam Airlines is set to officially establish an inflight duty free service from October in cooperation with inflight specialist King Power Traveler, the Rakhita Jayawardena-run subsidiary of Hong Kong-based travel retailer King Power Group.

    Over the next five years, the SkyTeam alliance member will cooperate with King Power Traveler to expand and upgrade its Lotushop services to meet Skytrax four-star service standards.

    Skytrax – the well-known airline and airport rating organisation – has ranked Vietnam Airlines as a four-star airline for three consecutive years.

    Vietnam Airlines Executive Vice President Le Hong Ha, said: “The partnership with King Power Traveler demonstrates our efforts to provide passengers with an enhanced duty free retail service, thereby consistently upgrading our four-star service quality through every aspect of the business. We are taking great strides to reach five-star status.”

    The enhanced duty free offer covers categories such as perfume, cosmetics, watches, suitcases and bags. Passengers will be able to shop from their seats on 30 of Vietnam Airlines’ international routes including to the UK, China, France, Germany, Japan, South Korea and Russia. The airline said that passengers would benefit from average discounts of -5% to -15% compared to domestic retail prices.

    King Power Traveler will also provide extensive training to flight attendants to enhance their sales skills and application of technology.

    Vietnam Airlines operates 90 routes to 20 domestic and 29 international destinations with an average of 400 flights per day.

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  • China might avoid Trump tariffs by exporting via Vietnam

    China might avoid Trump tariffs by exporting via Vietnam

    Vietnam could suffer collateral damage if Chinese businesses use made-in-Vietnam labels to avoid U.S. tariffs, experts warn.

    Economist Vu Dinh Anh said it is “highly possible” that Chinese businesses would seek to export their goods through Vietnam to the U.S. amid the trade war between the world’s two largest economies.

    One way they can do this is exporting their products to Vietnam and asking a Vietnamese business to label them as “made in Vietnam,” he said.

    They can also set up factories in Vietnam and manufacture products with materials imported from China, he added.

    “This will result in bad consequences for Vietnam as the U.S. might impose the same tariffs on Vietnam as it did on China.”

    Vietnam’s textile and footwear industry insiders expressed the same concern.

    Pham Xuan Hong, chairman of the HCMC Association of Garment, Textile, Embroidery and Knitting, said it is possible Chinese garment products would be labeled as made in Vietnam and exported to the U.S.

    “We propose that the government control this situation by tracing products’ origin and severely penalizing violations. Otherwise the whole industry will have to suffer consequences,” he said.

    Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said there is a “very high” possibility that Chinese bags would be exported to the U.S. through Vietnam.

    If Chinese bag makers want to export to the U.S., they can set up a factory in Vietnam to facilitate the exports, and this can be easily done with a budget of just $200,000, he said.

    If this cannot be controlled, there could be grave consequences for Vietnamese textile firms since “the U.S. might apply the same tariffs as they have done on China,” he warned.

    This has happened before with steel. In May this year the U.S. slapped anti-dumping duties of 199.76 percent and countervailing duties of 256.44 percent on imports of cold-rolled steel produced in Vietnam using Chinese-origin substrate.

    Anh said Vietnam should not repeat this mistake twice since there is a possibility that the U.S. would conduct investigations if it has any suspicion about product origin.

    A chance to thrive

    But there are opportunities for Vietnamese consumer goods exports amid the trade war.

    About 27 percent of Chinese goods set to be affected by the new tariffs are consumer goods, and Vietnam exports many similar items to the U.S., said Can Van Luc, chief economist with the Bank of Investment and Development of Vietnam (BIDV).

    “The escalating trade war will create opportunities for Vietnamese exporters of consumer goods to expand their market share in the U.S.,” Luc said.

    A recent report by Bao Viet Securities (BVSC) said footwear and textile products have a “great opportunity” to grab U.S. market share from China.

    Since the Chinese yuan has weakened against the U.S. dollar and dong, Vietnamese businesses would be able to import garment, leather and other materials cheaper, and this would result in more competitive prices in the U.S., the report said.

    Other products to benefit from the trade war are wooden furniture, electronics, sports equipment, and toys, BVSC said.

    Viet Capital Securities (VCSC) pointed out in a report, “Vietnam will benefit from the trade war if U.S. businesses look for an alternative supply chain and Americans start buying Vietnamese goods.”

    It added that foreign direct investment might shift to Vietnam from China to avoid U.S. tariffs.

    The U.S. administration said it would begin to levy new tariffs of 10 percent on about $200 billion worth of Chinese products on September 24, with the tariffs to go up to 25 percent by the end of this year.

    China retaliated immediately with 5 and 10 percent tariffs on $60 billion worth of U.S. products.

    The U.S. has been Vietnam’s largest trading partner this year, with $30.2 billion in turnover in the first eight months, according to the Ministry of Planning and Investment.

  • Viettel Global to list 2.24 billion plus shares

    Viettel Global to list 2.24 billion plus shares

    More than 2.24 billion Viettel Global shares will make their debut on Hanoi’s unlisted public company market, UPCoM, on Tuesday.

    The shares of Viettel Global Investment Joint Stock Company, with the sticker VGI, will be traded on the UPCoM at a floor price of VND15,000 ($0.65) per unit.

    Viettel Global will become the largest firm on the UPCoM with market capitalization of VND33.6 trillion ($1.44 billion).

    Established in late 2007 with chartered capital of VND960 billion ($41.18 million) as a unit of Viettel Group, Viettel Global covers the military group’s overseas investments.

    Viettel Group holds 98.68 percent of the stake in Viettel Global.

    At a general meeting in June, shareholders of Viettel Global approved a plan to increase its chartered capital to VND30.4 trillion ($1.3 billion).

    In 2017, Viettel Global served nearly 40 million international customers, a growth of 13 percent from the previous year.

    To date, Viettel Global makes profits in eight of the ten markets that it operates in. The eight markets are Cambodia, Laos, Timor Leste, Mozambique, Burundi, Haiti, Peru, and Cameroon. It entered Tanzania two years ago and Myanmar just this month.

    Viettel Global plans to enter several new markets, mainly in ASEAN.

    For this year, the company targets increasing its subscriber numbers by 10-15 per cent, bringing the cumulative population of its markets to 400 – 500 million and rank among the top 10 global telecom companies.

    Viettel Global announced consolidated revenues of over VND19 trillion ($810 million) for 2017, an increase of 24 per cent year-on-year, and a net profit of VND27 billion ($1.16 million).

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  • Vinalines to build 2 terminals at $299 mln in Lach Huyen Port

    Vinalines to build 2 terminals at $299 mln in Lach Huyen Port

    Vinalines is seeking approval from the government for building two container terminals at Lach Huyen Port in northern Hai Phong City.

    Nguyen Canh Tinh, director of the state-run Vietnam National Shipping Lines (Vinalines), said its subsidiary, Haiphong Port JSC, would build terminals No.3 and No.4 at the port.

    He said the Haiphong Port JSC used to work mainly at Hoang Dieu terminal, which has now been taken over for the construction of an urban area, and so new terminals are needed in its place.

    The two proposed terminals would have a total length of 750 meters and the capacity to handle vessels of up to 100,000 DWT (8,000 TEU), and cost around VND7 trillion ($299 million), he said.

    Vinalines and Hai Phong Port JSC, in which Vinalines owns a 65 per cent stake, also plan to develop a logistics center of around 250ha in the area to optimize the handling, storage, processing, and distribution of cereals.

    Tinh said the investment in the terminals would be a strategic step in the company achieving its plan to handle around 30 percent of cargo at ports nationwide by 2020.

    Lach Huyen is set to become a modern port complex and the only one in the north that can berth ships of up to 150,000 tons.

    It is expected to have nine terminals with a combined length of 3,000 meters by 2020.

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  • SK buys 9.5% stake in Vietnam’s Masan Group

    SK buys 9.5% stake in Vietnam’s Masan Group

    SK Group will acquire a 9.5 percent stake in Vietnamese food and beverage company Masan Group to become its largest foreign shareholder.

    The Korean conglomerate announced Wednesday that it has agreed to acquire the stake at $470 million. The two companies will jointly look for business opportunities in Vietnam through strategic investments.

    Masan Group is at the top of the Vietnamese food and beverage market. Its business portfolio expands into finance, animal breeding and mineral mining. Its yearly revenue posted 1.9 trillion won ($1.7 billion) last year.

    “The latest investment is meaningful in a way that it is part of the group’s effort to secure new business opportunity in the global markets just like Chairman Chey Tae-won emphasized in his New Year speech early this year,” said Lee Hang-soo, head of the group’s PR team in a statement Wednesday.

    “SK Group and Masan Group will cooperate to develop new businesses in Vietnam as well as elsewhere in the Southeast Asia region,” he added.

    SK Group has been showing keen interest in fortifying its global business over the past few years.

    SK has been looking for business opportunities in the United States, China and Southeast Asia. The group had established a new investment arm in Singapore based on joint investment from its five subsidiaries.

  • VN-Index claws back to four figures after two months

    VN-Index claws back to four figures after two months

    Vietnam’s benchmark VN-Index closed at 1,004.74 points Thursday, reaching four figures for the first time in two months.

    It gained 9.2 points.

    The HNX-Index on the Hanoi Stock Exchange and the UPCoM-Index for unlisted companies rose by 0.75 percent and 1.01 percent respectively.

    The VN30-Index, representing the 30 largest stocks in terms of capitalization, gained almost 8.5 points to finish the day at 971.

    Twenty one of the 30 stocks rose, including FPT by almost 1 percent. Hoa Phat steel company (HPG) gained VND1,250 (5.4 cents) and food producer Masan (MSN) by VND1,300 (5.6 cents).

    PetroVietnam Gas (GAS), PetroVietnam Oil (OIL) and Binh Son Refinery (BSR) were other prominent gainers.

    Fifteen of 17 bank stocks closed in the green. Techcombank (TCB) stock rose by VND1,400 (6 cents) and VPBank (VPB) VND850 (3.7 cents).

    Nguyen The Minh, director of analysis at Yuanta Brokerage said the market would continue to rise in the short-term despite fluctuations on the international market.

    He expected the VN-Index to touch 1,100 points in the near future.

    It started recovering on September 12 after plunging by 18.19 percent in the second quarter to become the worst-performing market in the world.

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  • US coworking space to set up shop in HCMC

    US coworking space to set up shop in HCMC

    WeWork, the third largest startup in the U.S., and the sixth largest in the world, is set to open a new office in HCMC late this year.

    In its latest report on the co-working space market in Vietnam, real estate firm Jones Lang LaSalle (JLL) said WeWork is looking to open an office on Doan Van Bo Street in District 4.

    The company recently did market research and customer surveys, JLL said.

    The office, to open in December, will be the largest co-working space in Vietnam at 5,000 square meters.

    JLL said the entry of global real estate startups is a positive sign.

    WeWork, valued at $20 billion last year, was one of the largest startups in the U.S., behind only Uber and Airbnb, and the sixth largest in the world. Founded in 2010 it has 250,000 employees.

    It had acquired Chinese coworking space firm Naked Hub for $400 million last April, expanding its reach into the Asian market.

    WeWork reported a rise in losses in the first half of this year to $723 million from $154 million a year earlier.

    But JLL estimates it would continue to expand.

    It said in its report: “We think Wework is likely to have a presence in most of the six Southeast Asia cities within the next 12 months. In addition, the company is likely to grow in terms of number of locations within each city as well.”

    Vietnam has seen the coworking space market expand in recent years.

    Major local operators like Toong, UP, Circo and Dreamplex are all expanding at an accelerated rate, and the number of smaller operators with just one venue is also increasing.

    The Hive, a coworking space maker from Hong Kong, is planning to open a new facility by the end of this year in Ho Chi Minh City. The company already has one office on Xuan Thuy road in District 2 in the same city.

    Real estate consultancy CBRE said the number of coworking offices in the country has grown by an average of 55 percent in the last five years.

    Most operators reported a very healthy 75-80 percent average occupancy rate as of last April.

  • India rice prices recover; low Thai rates dampen Vietnamese offers

    India rice prices recover; low Thai rates dampen Vietnamese offers

    Rice export prices in India recovered this week after demand improved, while rates for the Vietnamese variety eased.

    Rates for top exporter India’s 5 percent broken parboiled variety edged up by $2 per ton to $373-$377 per ton this week, from their lowest in 17 months last week.

    “Enquiries from African buyers have risen in the last few days,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

    Another exporter, based in Mumbai, said Indian rice was currently competitive due to rupee depreciation.

    The Indian rupee has lost more than 13 percent of its value so far in 2018, and plunged to a record low earlier this week, increasing exporters margins.

    Meanwhile, in neighbouring Bangladesh, rice output from the summer-sown crop ‘Boro’ hit 19.5 million tonnes, exceeding the target of 19 million tonnes, as farmers raised acreage to cash in on higher prices, data from the Bangladesh Bureau of Statistics showed.

    Last year, the country’s Boro rice crop, which accounts for more than half of the country’s typical annual rice production, fell to its lowest in seven years after floods destroyed crops.

    In Vietnam, traders offered benchmark 5 percent broken rice at $395-$405 a ton, slightly lower than last week’s $400-$405 range.

    Despite potential demand from the Philippines in the aftermath of Typhoon Mangkhut, which damaged paddy in the country, prices for the Vietnamese variety did not go up since Thai rates were lower.

    “If we increase prices further, people will just go and buy Thai rice,” a Ho Chi Minh City-based trader said.

    The south-Asian country, which has already completed the harvest of its two major crops, exported 4.5 million tons of rice in the first eight months, meeting around 70 percent of the whole-year projection of 6.5 million tons set out by the government.

    A trader estimated Vietnam’s current autumn-winter mini crop could yield around 1.8 million tons, half the volume of a major crop, with most of the rice likely to be kept for domestic consumption given the next harvest will not be until March 2019.

    In Thailand, benchmark 5 percent broken rice prices were quoted at $390-$393 per ton, free on board (FOB) Bangkok, unchanged from last week.

    While demand was flat, it would pick up in the near future due to natural disasters in the region, especially in the Philippines and Indonesia, traders said.

  • ANZ Vietnam reports 75 pct fall in profit in H1

    ANZ Vietnam reports 75 pct fall in profit in H1

    ANZ Vietnam’s profits fell 75 percent in the first half of this year following the sale of its retail arm to Shinhan Bank.

    The bank’s financial report shows its after-tax profits were VND41 billion ($1.76 million), down from VND171 billion ($7.33 million) in the same period last year.

    Net interest income and net income from its foreign exchange business saw the biggest declines: 40 percent and 15 percent.

    ANZ Vietnam was one of the few lenders in the country to report negative credit growth, with loans outstanding edging down to VND12.6 trillion ($540 million) at the end of the second quarter.

    In the first half return on equity was only 25 percent of the rate a year earlier.

    But the poor performance notwithstanding, at the end of the first half its assets increased by 16 percent against the beginning of the year as deposits with the State Bank of Vietnam went up by VND320 billion ($13.72 million) and deposits with and loans to other credit institutions increased by VND4.15 trillion ($178 million).

    South Korea’s Shinhan Bank last year acquired ANZ’s retail business in Vietnam. The latter had around 125,000 individual customers, more than $231 million in loans outstanding and more than $578 million in deposits.

    According to the General Department of Taxation, the bank was the 156th biggest taxpayer in the country last year.

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  • E-payment continues to go mainstream in globalizing Vietnam

    E-payment continues to go mainstream in globalizing Vietnam

    Electronic payments are becoming more and more common in Vietnam, according to Visa.

    Its data for the 12-month period until June 30 this year shows that the number of transactions on the Visa network increased by 45 percent from the previous year, the company said in a statement.

    E-payment is rising thanks to strong e-commerce spending. Between September 1 last year and August 30 this year, e-commerce spending rose 44 percent in terms of transactions, it said.

    The country is going through a period of “incredible economic change” and becoming more involved in the global economy, Sean Preston, Visa’s country manager for Vietnam and Laos said in the statement. “Electronic payments would play in a major part in this evolution.”

    E-payments in Vietnam grew 22 percent in 2017 from the previous year to $6.14 billion, as quoted data from Statista, a local market research firm, as saying. The figure is projected to double to $12.33 billion in 2022.

    According to economists, the potential for the e-payment sector is huge due to the expanding middle class and improved communications infrastructure.

    More than half of Vietnam’s population of nearly 92 million people are online.

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