FINANCE. finance & business news. Reference exchange rate kept unchanged

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1 finance & business news 8 August Reference exchange rate kept unchanged 1 Bank liquidity remains plentiful 2 Will there be another cut in lending rates? 3 Solutions sought to further pour over a half tril VND to the economy 4 Total assets of banks surge in H1 5 Profits of 7 listed banks may grow 32.16pct if credit is loosen to 20pct 5 10 commercial banks sprint to enter bourse by end of the year 6 Bitcoin trading floor collapse causes panic among investors 7 Mizuho Bank, VIB have additional foreign exchange services 8 AMM 50: Asean Plus Three to boost financial cooperation 8 Asean enters a new era, Vietnam staying in step 9 VN to improve competitiveness of major export products by Vietnam pushes up fruit exports 11 Glutinous rice exports to China slowing down 12 Bangladeshi Embassy informs invitation of tenders for rice import 12 MoIT to impose temporary safeguard measures on imported fertiliser 13 Dong Nai records 700 million USD in trade surplus 13 Minimum wage may rise 6.5pct in Blow to workers' union as Vietnam set for 11-year-low minimum wage bump 14 Challenges for VN with Industry PM calls for credit and investment expansion to fuel growth 16 Lack of coordination affects industrial development plans in southern Vietnam 17 Just five months left to switch to 'Single Window' system 18 PM issues ultimatum to speed up ODA projects 18 Fuel price stabilisation fund tapped but retail prices still up 19 No more self-printed invoices 19 City seeks more funding sources for infrastructure projects 20 Government vows to help businesses cut costs 20 VietCham helps Vietnamese firms reach out to global markets 21 E-commerce platform targets double-digit growth in Vietnam 22 Experts: Vietnam footwear firms need to step forward 24 Postal and logistics companies push into Vietnam 25 Saigon Securities optimistic about casino industry in Vietnam 25 Reference exchange rate kept unchanged Intellasia No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi All Rights Reserved Savills: Foreign housing ownership stimulates market 26 Businesses in southern Vietnam slow in innovation 27 Southern industry to bolster links to maintain strong growth 27 $44 million investment in Tien Yen District 28 Ba Ria-Vung Tau houses new industrial park 29 Singapore FDI keen to expand 29 Singapore property moguls move in 30 BIZ NEWS Business Briefs August 08, Brokerages, finance-banking firms lift stock market 32 Market booms, value of securities firms shoots up 32 Correction possible of overvalued shares 33 HCM City tourism dept proposes permitting casinos on board foreign cruise vessels 34 Construction violations in HCM City rise in Jan-Jul 34 Abandoned construction sites raise Hanoi debt 35 Nation's airports serve over 55 million passengers in seven month 36 Rural areas surpass urban areas in consumer goods consumption 36 OK for coal trans-shipment port 36 HCM City to set limit on light trucks 37 Leading brewers' ad spending meets diminishing returns 38 MobiFone cooperates with iflix in online movie service 38 Siam City Cement to invest in Dong Nai 39 PetroVietnam oil production exceeds target 39 Vinamilk hoped to expand investment in Laos 40 FPT Telecom continues to avoid public telecommunications fees 41 PJICO first-half yield shows a firm on rise 42 Vinpearl Land to launch botanical park 42 FLC wins auction to buy land worth $40m 43 Shopee aims to expand its footprint in Vietnam's e-commerce market 43 Intel Products Vietnam supports manpower training for smart city project 45 Viejet offers 200,000 free tickets 45 Premium life at spacious condominiums in Brilliant Tower 46 HCM City to host international medical expo 46 Vietnam Online Marketing Forums on way 47 08/AUG/2017 INTELLASIA VNA The State Bank of Vietnam kept the daily reference exchange rate for VND/USD on August 8 unchanged from the previous day at 22,440 VND. With the current +/- 3 percent VND/USD trading band, the ceiling exchange rate is 23,113 VND per USD and the floor rate is 21,767 VND per USD. Major commercial banks' opening hour rates saw slight fluctuations. Vietcombank raised its buying rate by 20 VND to 22,715 VND and the selling rate by 30 to 22,795 VND. [Suitable financial, monetary policies needed to promote growth] BIDV offered 22,700 VND (buying) and 22,770 VND (selling), per USD, up 5 VND. Tel: Fax: Office@intellasia.com Websites:

2 Techcombank kept its buying and selling rates unchanged from August 7 at 22,680 VND and 22,780 VND, per USD. Bank liquidity remains plentiful 08/AUG/2017 INTELLASIA DTCK Given the positive credit growth of banks in this year, many market participants are concerned about whether banks' liquidity is plentiful enough to meet credit growth rate. In fact, at present, the liquidity of commercial banks is still positive. However, there should have serious preparation for the second half of the year. *Money from government bonds goes back to banks As per information from the State Bank of Vietnam (SBV), as of June 30, 2017, the total means of payment increased 6.82%, the capital mobilisation swelled 7.43%, the credit growth hiked 9.06 percent from the end of Though credit growth was higher than deposit growth, the liquidity in dong of credit organisations still remained stable. The reality shows that credit growth of banks since the beginning of the year till now has been very positive. For example, at VPBank, the total capital mobilisation from the market increased sharply from 172 trillion dong at the end of 2016 to 195 trillion dong at the end of June 2017, equal to the growth rate of 13%. The outstanding loans to customers swelled 12 percent in the past six months, from 144 trillion dong at the end of 2016 to 162 trillion dong at the end of June Or VIB's operating results in the first six months of 2017 showed that customers' deposits rose 15%; the outstanding loans hit trillion dong, up 15.7 percent from the end of Of which, outstanding loans to customers were trillion dong. Credit growth mostly comes from lending to individual customers with more than 30 percent from the end of Similarly, at OCB, the 2017 credit growth plan was 14 percent but over the past six months, the total outstanding loans from the people and economic organisations grew 13.5 percent from 2016 and nearly 25 percent year-on-year, reaching more than trillion dong, or 100 percent of cumulative plan. MB also achieved the credit growth of 15 percent while the total outstanding loans swelled 16 percent in the entire year At Kienlongbank, outstanding loans also improved 15.8%, completing percent of the year plan. Dr Le Xuan Nghia, an economist said the liquidity of the banking system is still good, especially when looking at interbank market. Even, some banks wanted to lend but there were no borrowers, many sessions did not have transactions despite very low interest rates. One of the reasons for good liquidity, as said by Dr Nghia, was banks purchase government bonds but could not disburse, so money returned to banks. Despite higher credit growth rate than deposit growth rate, liquidity was not a problem as a large amount of money from government bonds has returned to banks. With the same point of view, a senior leader of the National Financial Supervisory Commission said in more detail "The State Treasury has abundant amount of money and deposit 143 trillion dong in the banking system, up 50.2 percent from the beginning of the year. This amount of money is allocated to public investment but due to procedural obstacles, it was unable to disburse on schedule". In this context, many banks have moved to require the State Bank of Vietnam (SBV) to raise the credit growth limit. For example, with the initial target assigned by the State Bank at 16 percent for the whole year, VIB has used up most of the room. Han Ngoc Vu, CEO of VIB said the bank will ask the State Bank to loosen credit room to fit the market reality and the industry's general trend as well as the macro economic situation. *Will liquidity be abundant in H2? Though the survey results on business trend by the Department of Forecasting and Statistics of the State Bank of Vietnam (SBV) show that the liquidity of credit organisations is expected to be abundant in 2017 for both dong and foreign currencies, Moody's earlier estimates showed that at the end of 2016, Vietnam's banking system had had the capital shortfall of about $9.5 billion, equal to 4.6 percent GDP. Moody's scenario about the capital situation of Vietnamese banks concluded that the system will lack $5.1 billion to $6.1 billion at the end of 2017, reckoning for percent GDP. Moody's analysis is based on the assumptions that firstly, the non-performing loan (NPL) ratio of banks will still be stable. Secondly, there will have no growth in the debt selling transaction to Vietnam Asset Management Company (VAMC). Thirdly, the Intellasia 8 August / 47

3 core income of banks will still be stable. Fourthly, banks will distribute the current VAMC securities following the regulation of the state bank in five years or 10 years (stock value will return to zero upon maturing). Besides, survey of Dau Tu Chung Khoan shows that though the entire system's abundant liquidity, banks still quietly raised interest rates, focusing on long terms. Specifically, on July 25, CB's Hao Nam transaction office (Hanoi) raised 12-month interest rate to 8.2 percent per year. In case the deposit is one billion dong or more, interest rates is 8.25%/year. The highest level is 36-month term with the interest rate of 8.3%/year. At BacA Bank on Nguyen Chi Thanh Street (Hanoi), interest rates have risen by at least 0.1 percent for 6-month term and above. Specifically, the 6-month term was 7.0%/year (compared with the previous time of 6.9%/year); the 9-month term was 7.15%/year (compared with the previous time of seven percent/year); the 12-month term was 7.5%/year (compared with the previous time of 7.4%/year); the 18-month to 26-month terms were 7.75%/year (compared to the previous time of 7.65%/year). Many joint stock banks also apply high interest rate policy such as NamABank at 7.6%/ year, OceanBank at 7.5%/year, MBB at 7.5%/year, and HDB at 7.5%/year. PVcomBank has the highest interest rate transaction point at eight percent per year. Dr Le Xuan Nghia said "Many banks raised interest rates because of concerning that they will suffer from the shortage of deposits if other banks raise interest rates. In addition, observing the structure of deposit rate growth, we can realise that interest rates mainly increase in medium and long terms, showing that banks start preparing money for the last six months". General director of a joint stock commercial bank said credit grew strongly at the beginning of the year and at the same time, bad debt also tends to increase, so banks must consider putting for risk provisioning. Therefore, we cannot be too optimistic about the liquidity situation in the last months of the year. Especially, at the end of the year when customers' capital demand increase, banks will continue "racing" to attract capital to "protect" themselves. Will there be another cut in lending rates? 08/AUG/2017 INTELLASIA DIEN DAN DOANH NGHIEP KIS Vietnam, in the report on macro situation and stock market of Vietnam in August 2017, assessed that there is likely to be another lending rate cut. According to KIS Vietnam, the highlight in July was the issuance of Decision 1424/QD- NHNN on lowering operating interest rates by 0.25 percent and ceiling lending rate to priority areas by 0.5 percent per annum. Specifically, from July 10th, the refinancing interest rate fell from 6.5 percent to 6.25 percent per annum, rediscount rate fell from 4.5 percent to 5.25 percent per annum, and overnight lending rate in interbank electronic payments and lending to cover capital shortage in clearing payments between SBV and banks fell from 7.5 percent to 7.25 percent per annum. The cornerstone of this decision is that the inflation is under control within continuously narrowed amplitude (from 5.22 percent in January to 2.52 percent in July). Especially, the core inflation is just 1.3%. In addition, the favourable developments on foreign exchange market, positive liquidity of the banking system and reduction of government bond yields have also facilitated this interest rate cut. Regarding policy impact, this decision to cut interest rates aimed to explore market reaction due to the cautious psychology of SBV. Thus, it takes time to evaluate the impact of this policy. In the negative case, there may be another reduction of interest rates by about 0.25%, lasting until mid Currently, numerous banks have lowered lending rates. Specifically, four major stateowned banks have simultaneously reduced lending rates for priority areas. Vietinbank and Agribank cut short-term lending rates in dong to a maximum of 6.5 percent per annum. Meanwhile, BIDV cut lending rates for priority areas by 0.5%-1 percent per annum while Vietcombank reduced them by 0.5 percent per annum. Some other joint stock banks such as LienVietPostBank, VPBank, SHB, and Sacombank, etc. have also made similar moves. In the context when the Net Interest Margin (NIM) of the banking system of Vietnam Intellasia 8 August / 47

4 continuously has dropped like in the recent time from 3.07 percent in 2013 to 2.69 percent in 2016, some banks have taken steps cut mobilisation rates. For example, Eximbank cut deposit rates by percent per annum, and VPBank also lowered onemonth deposit rate to just 4.8 percent per annum. According to statistics, the onemonth deposit rate has fallen by about 0.25%-0.5 percent per annum. The familiar indicator overnight interest rate on the interbank market has continuously fallen throughout the last month after it approached the bottom zone in September As of July 31st 2017, this rate has declined by 0.99 basis points to 0.48 percent per annum, followed by one-week rate (0.635 per annum), and two-week rate (0.77 percent per annum). The difference in the ability to mobilise capital via government bonds of banks is one of the main causes leading to this situation. Banks that own a large amount of government bonds can use this asset as secured assets to borrow cheap capital from SBV. Meanwhile, joint stock banks with limited fund will find it difficult to access such capital source. Thereby, the interbank market recorded a shift in short-term capital in the system. KIS Vietnam expects that the overnight rate will fall to the bottom (0.36 percent per annum) in mid-september 2017, before rebounding again in the last months of the year. Solutions sought to further pour over a half tril VND to the economy 08/AUG/2017 INTELLASIA BAO DAU TU At the recent government's meeting, the prime minister asked to continue operating monetary policy in the direction of lowering lending interest rates, while striving for higher credit growth of 20 percent or higher. In the first six months of 2017 (H1), the credit activity of the entire banking system rose by 9.06%, the highest level in the past six years, completing 50 percent of the annual credit growth target (18%). To realise the direction of the prime minister, lending must increase by nearly 11 percent in the last six months of the year (H2). With the current lending scale of 5,800 trillion dong, if this goal is achieved, the banking system must inject to the economy more than 600 trillion dong from now until the end of the year. According to many commercial banks, the credit growth is fairly steady in the months of 2017, but the possibility of further increase in H2 is very feasible, if the State Bank of Vietnam (SBV) expands credit growth limits for banks. In H1 alone, many banks have almost run out of their credit growth room assigned for the entire year, such as Vietcombank, MB, and BIDV, etc. Specifically, according to Chair of Vietcombank Nghiem Xuan Thanh, in 2017, SBV allows the bank to develop lending at 16%, and it has used up 13%. Thus, Vietcombank is proposing SBV for an expansion on credit growth limit. Similarly, many other banks have sent proposal to SBV for loosening the credit growth limit since July However, many banks are also concerned because the current demand of the economy is not large while production recovers slowly. For example, VietinBank has only been able to develop lending by 4 percent in more than half of 2017, although it really expects to pour capital into the market. General director of VietinBank Le Duc Tho said that stimulating lending growth also largely depends on market demand, not only banks' efforts. Meanwhile, experts suggested that in order to increase credit growth in the last months of the year, administrative procedures should be further reduced; and there should be measures to stimulate enterprise to make investment and do business, promote the policy credit packages, and accelerate bad debt settlement, etc. However, in addition to boosting lending, experts also gave warning about controlling the hot capital flows into risky areas and large enterprises. Moreover, according to economic expert Dr Can Van Luc, since the 18 percent credit growth is fairly hot, further increase of lending must be considered carefully, especially when lending is growing faster than mobilisation. Concerning the direction to further cut interest rates to remove difficulties and support enterprises of the prime minister, SBV's governor has recently directed the entire sys- Intellasia 8 August / 47

5 tem to cut costs and enhance operational efficiency to lower lending rates. According to the governor, the banking system has the basis to reduce lending rates while the government has keened on the target to maintain macroeconomic stability and SBV has reduced a number of operating interest rates. Nevertheless, many enterprises and banks acknowledged that interest rate is not the biggest problem at the present time. Ha Quyet Thang, general director of Kim Long Production and Trading Services shared that his company is able to borrow loans from BIDV at interest rates of 7-9 percent per annum. "Enterprises certainly want lower interest rates, but the currently lending rates are reasonable. Banks always offer us to borrow more, but we only borrow at a certain level because we have to consider the consumption market and ability to repay debts", said Thang. After the moves to cut operating rates by SBV, many banks in the recent time have lowered lending rates for priority areas by about percent per annum. According to economic experts, the current low inflation rate and stable exchange rate are the opportunities to decrease interest rates and increase the capital absorption ability of the economy. However, it is very difficult to massively cut lending rates because the deposit rates are not yet cut. In fact, although the current liquidity of banks is fairly abundant, Dr Luc warned that if lending continues to grow fast while mobilisation develops slowly at a smaller growth rate than lending, the liquidity risks may appear again. Total assets of banks surge in H1 Profits of 7 listed banks may grow 32.16pct if credit is loosen to 20pct 08/AUG/2017 INTELLASIA TRI THUC TRE Total assets of credit organisations reached 9,000 trillion dong as of May 31, 2017, as per the recent updated statistics of the State Bank of Vietnam (SBV). Specifically, the system's total assets at the aforementioned time reached more than 8,970 trillion dong, up 5.45 percent from the beginning of the year. Of which, as of May 31, the total assets of state-owned commercial banks were 4,070 trillion dong (up 5.54%) compared to 3,600 trillion dong for joint stock commercial banks (up 5.49%); 858 trillion dong (up 3.6%) for joint venture, foreign banks (up 3.6%) and 126 trillion dong for financial, financial leasing companies (up 10.2%). Thus, it can be seen that the total assets of state-owned commercial banks increased most sharply in absolute value while the group of financial, financial leasing companies had the strongest growth by percentage. As per the data from Q2/2017's consolidated financial statement of commercial banks, the total asset scale of banks unexpectedly increased. As of June 30, 2017, the total assets of Vietinbank exceeded 1,000 trillion dong, reaching 1,035 trillion dong, up 9.1%. Currently, Vietnam has three banks having the total assets of more than 1,000 trillion dong including BIDV, Agribank, and VietinBank. Regarding the growth rate of total asset scale, ACB and SCB had the highest growth rate with 14%, followed by HDBank, KienlongBank with 13%. Out of 17 banks that have released financial statements, Techcombank had slight decrease in total asset scale. 08/AUG/2017 INTELLASIA NDH As reported earlier, at the regular government meeting in July 2017, the prime minister asked for interest rate reduction and credit growth rate of at least 20%. The prime minister requested the State Bank to keep interest rates at low level and considered raising credit growth target to at least 20 percent in this year. As per the assessment of HCM City Securities JSC (HSC), this is probably the move to help the government achieve this year's GDP growth rate of 6.7%. GDP in the first six months only grew 5.73%, so to achieve the set target, GDP in the last six months must grow 7.4 percent which is a high level since Meanwhile, credit at the end of June improved about nine percent from the beginning of the year (compared to 8.16 percent in the same period last year). Credit in the first six month swelled 19 percent compared to the same period last year. As per HSC, with Intellasia 8 August / 47

6 just slight acceleration in the last six months, credit may also reach 20%. "Due to low inflation pressure, it is still safe to boost credit growth a bit more", said HSC's report. There are not many macro risks when boosting credit growth as CPI in the first six months only increased 2.52 percent year-on-year while exchange rate stabilised after rising only 1.2 percent from the beginning of the year". The prime minister also demanded a reduction in interest rate and this is a difficult task because the current interest rates are already low. If the State Bank of Vietnam (SBV) allows commercial banks to boost credit growth in the last six months to achieve the target of 20%, this will be positive news for bank shares. The Net Interest Income (NIM) contributes 80 percent to banks' total operating income and depends on the credit growth and the NIM. The NIM in many banks only increases slightly as lending to individual customers at high interest rates has offset the decline in bond yields. As per HSC's estimates, seven listed banks earned 18 trillion dong pre-tax profits in the first six months of the year, up 22.7 percent year-on-year. In case credit room follows the plan at the beginning of the year, HSC assumes that credit growth of these seven banks was 17.2 percent and forecasts that these seven banks will earn 36.2 trillion dong pre-tax profit for the whole year 2017, growing 18%. If credit growth is loosen to 20 percent while other variables remain constant, the pretax profit of these seven listed banks may be 12 percent higher than the estimate, or equal to trillion dong, up percent from the beginning of the year. It should be noted that this assumption is based on the maintenance of variables. However, the output factor does not exclude the possibility of decreasing as required by the prime minister in order to support the economic growth. Raising the credit growth target to higher level or equal to 20 percent is just the requirement of the prime minister while the State Bank of Vietnam (SBV) still has not had any move. Along with that, credit growth must go along with credit quality and macro stability. As per the Governor of the State Bank, since the beginning of this year, credit has been flowing into business and production. Risky areas such as real estate, BOT are controlled. In order for credit to grow 20%, apart from the government and the State Bank, it also depends on the absorption ability of the economy as well as the CAR of each bank. With about 5,500 trillion dong outstanding loans, the increased credit amount will reach 1,100 trillion dong if the credit growth is 20%. 10 commercial banks sprint to enter bourse by end of the year 08/AUG/2017 INTELLASIA VIETNAMNET Banks are rushing to list shares on the stock market by the end of the year. VPBank, for example, is completing procedures to enter the bourse in the third quarter of the year. The bank now has charter capital of VND trillion. On July 28, VPBank wrapped up a list of shareholders to prepare for the deposit 1.33 billion shares at VSD and listing shares at the HCM City Stock Exchange (HOSE). On the OTC market, VPBank share prices soared to VND49,000 per share from VND20,000 earlier this year. Sources said the managers of the bank and their family members are collecting the shares of the bank. On July 25August 28, the total amounts that Ngo Chi Dung, the bank's chair, his mother and wife want to collect are 10.5 million shares, 66.6 million and 65 million, respectively. If the transactions succeed, the ownership ratio of Dung and his family members would increase to percent of charter capital. The wife of VPBank's deputy chair Bui Hai Quan has also registered to buy 5 million VPBank shares under negotiation to increase her ownership ratio to 4.72 percent. A relative of vice chair Lo Bang Giang registered to collect 112 million VPBank shares, or 8.4 percent of charter capital, on July 7 August 7. Under MOF's Circular 180, public companies whose shares are still not listed at stock exchanges, must register to put their shares into transaction on them UpCom market prior to December 31, Intellasia 8 August / 47

7 The 10 joint stock banks which must enter the bourses by the end of 2017 include OCB, AnBinh Bank, Techcombank, NamA Bank, Maritime Bank, VietA Bank, TienPhong Bank, SeAbank, HDBank and LienViet Post Bank. The banks have announced plans to list shares on the bourse, but have delayed them because of unfavourable market conditions. Only two banks, namely VIB and KienLong Bank, have entered UpCom market this year and only 11 out of 35 banks have listed shares to date. VIB listed 564 million shares with the starting price of VND17,000 per share on January 9 and plans to list shares on HOSE by VIB share price soared to VND22,400 per share on July 27. KienLong Bank listed 300 million shares on UpCom on June 29. The shares are now traded at around VND10,200 per share. While state management agencies repeatedly urge banks to list shares, the banks still have not issued new announcements. The shareholders of Techcombank, ABBank, OCB and LienVietPostBank have agreed on the listing plan. Meanwhile, only 3 percent of Maritime Bank's shareholders accept the listing. of the year.html Bitcoin trading floor collapse causes panic among investors 08/AUG/2017 INTELLASIA VIETNAMNET BTC-E, a large virtual currency trading floor sudden 'closure for maintenance' has caused anxiety among many Vietnamese investors about the fate of their billions of dong stuck at the floor. The longest lasting and best known virtual currency trading floor suddenly closed on July 25. The appearance of a bitcoin wallet with the transaction value of 66,000 BTC, suspected as hacked, had bitcoin traders in a panic. One day later the administrator of the website was arrested by the Greek Police on a money laundering charge amounting to $4 billion. A notice was shown on the website that the trading floor would return to normal operation in the next 5-10 days. Duc Nguyen, an investor from Dak Lak province, said the risk of the trading floor collapse is high. "It is very difficult to open up the trading floor again. If the authorities decide to prosecute, the floor will be forced to shut down," he said. "Even if the floor resumes operation, traders will withdraw money as the floor's prestige has decreased. This will result in a collapse," he explained. Small investors injected tens of millions of dong on the floor, while bigger investors spent up to VND1 billion. A virtual currency trading website in Vietnam which has relations with BTC-E also halted its operation because of the problem. Meanwhile, some investors are calm, saying that it happened because of the intervention of the authority, which means that the closure of the trading floor is different from the collapse of Mt.Gox floor caused by a hacker attack. "If this case is related to the law, appropriate agencies will have measures to allow traders to withdraw money before closing the floor," D.V.Thang, an investor said. Regarding the arrest of the website's administrator, N.V.Quan, also an investor, said the floor would be blocked for a long time to serve the investigation. Meanwhile, an account called Tin Nguyen asserted that only accounts in suspicion for money laundering would be closed for investigation, while other accounts must not be affected. According to Nguyen Anh Tu in Dong Nai province, coded currency creates value itself, and does not depend on political regime or laws like banknotes. Therefore, investors will only lose money if trading floors deliberately bilk investors. In fact, Vietnamese investors cannot do anything now except wait. According to Alexa, Vietnam ranks second after the US in the number of visitors to the floor. Intellasia 8 August / 47

8 Mizuho Bank, VIB have additional foreign exchange services 08/AUG/2017 INTELLASIA NDH At the beginning of August 2017, the State Bank of Vietnam (SBV) issued Decision No.1639/QD-NHNN on the amendment and supplementation of the license of Vietnam International Joint Stock Bank (coded VIB) and foreign bank branch of Mizuho Bank Ltd, Hanoi branch. Accordingly, these two banks are supplemented with the following content in the operating license: "Trading and providing foreign exchange service on domestic and international markets within the scope prescribed by SBV. VIB and Mizuho Bank Ltd's Hanoi branch are responsible for carrying out the aforementioned activities, ensuring the compliance with legal regulations on foreign exchange and other relevant regulations; implementing procedures following Clause 3, Article 18b of Circular No.40/2011/TT-NHNN dated December 12, 2011 by the Governor on the licensing and organisation, operation of commercial banks, foreign bank's branch, representative office of foreign credit organisations and other foreign organisations having bank operations in Vietnam (supplemented by Circular No.08/2015/TT- NHNN dated June 30, 2015 by the State Bank Governor) for the aforementioned supplemented operation. The banking inspection and supervision agency is responsible for supervising VIB's implementation of the aforementioned content. Cumulatively, the bank's pre-tax profit at the beginning of the year reached 380 billion dong, up 25 percent year-on-year, fulfilling 51 percent of the 750 billion dong plan set at the beginning of the year. Foreign exchange and gold trading operations are not VIB's business strengths and the bank has suffered from losses in many recent quarters. Outstanding loans reached trillion dong, up 15.7%, of which outstanding loans touched trillion dong. Credit growth mainly comes from loans to individual customers with the growth of more than 30 percent from the end of It should be added that in 2017, VIB plans to increase credit following two scenarios of 32 percent or 16%, depending on the growth limit issued by the State Bank. There has not had information on this bank's credit limit expansion. However, with the rapid completion of percent of the growth plan, the remaining credit "room" for VIB is quite little. AMM 50: Asean Plus Three to boost financial cooperation 08/AUG/2017 INTELLASIA VNA Foreign ministers of 10 Asean countries and three partners Japan, China and the Republic of Korea (RoK) have agreed to enhance financial cooperation to strengthen economic stability in the region. At the Asean Plus Three Foreign ministers Meeting held in Manila, the Philippines, on August 7, Japanese FM Taro Kono affirmed that Tokyo is ready to work closely with Asean members, China and the RoK to enhance the capacity of forecasting economic crisis, both regional and international. He added that Japan will make efforts to fight increasing trade protectionism. The foreign ministers shared viewpoints on a free trade deal involving the 10 Asean members and the three partners along with Australia, New Zealand and India, as well as on infrastructure and marine security in the region. The situation on the Korean Peninsula was high on the meeting's agenda, with the Japanese minister calling for collaboration to increase pressure on the Democratic People's Republic of Korea to give up its missile and nuclear programmes, and to address the past kidnappings of Japanese citizens. The conference also discussed orientations for their cooperation in the time ahead, compared viewpoints on regional and international issues, and looked into preparations for the 20th Asean + 3 Summit in November. A plan of actions for is slated to be approved at the conference. Intellasia 8 August / 47

9 Asean enters a new era, Vietnam staying in step 08/AUG/2017 INTELLASIA VIR As the Asean bloc celebrates 50 years since its establishment on August 8, 1967 with Vietnam present for 22 of those years now seems an opportune time to look back on the successes of this bloc. Deputy prime minister and minister of Foreign Affairs Pham Binh Minh talks VIR's Thanh Tung about the positive effects that Asean membership has had on Vietnam in these years, and vice versa. What impacts has the Asean Community had on Vietnam's expanding trade and in attracting foreign direct investment (FDI)? The Asean Economic Community (AEC), which is one of the Asean Community's three major pillars, is the realisation of the end goal of regional economic integration of the 10 Asean economies. It facilitates the free flow of goods, capital, services, investment, and skilled labour. AEC has created a single market home to a population of over 600 million people, with a GDP of about $3 trillion. Asean is now the world's seventh-largest market. In terms of investment, Vietnam has received strong investments from Asean member states. This was seen not only after Asean became a community, but also before the community was born, thanks to the bloc's agreements on fostering trade and investment. Regarding trade, since the community was established, the trade volume among Asean member states has soared. But this has not been the case for Vietnam, which has seen its trade with other Asean markets reduced by 7-8 per cent. This reflects the fact that Vietnam has yet to pay much attention to trading with these markets, and we must seriously consider this issue. Do you think the main reason is that made-in-vietnam goods are less competitive than those produced in other Asean markets? Yes, there are many reasons, including the competitiveness of Vietnam's goods. We should pay more attention to these markets, which have great potential, and also to improving the quality of our goods. At a more macro angle, what is your comment on the role and contributions of Vietnam to Asean's cooperation and development since its accession in July 1995? Over the past 22 years, as a member state of Asean, Vietnam has been making positive and responsible contributions to the bloc's development. First, Vietnam contributed to the expansion of Asean, from a five-member bloc to its current 10 members. Second, Vietnam also contributed to the official formation of the Asean Community on December 31, Though this community was established by the efforts and contributions of all the member states, Vietnam has had positive initiatives for the community, such as the Hanoi Action Plan, which is the first in a series of plans of action building up to the realisation of the goals of Asean's broad vision for the year This sees Asean as a concert of Southeast Asian nations, outward looking, living in peace, stability, and prosperity, bonded together in a partnership for dynamic development and in a community of caring societies. We have built up and implemented many goals for the Asean Community. So far, Vietnam is one of the pioneers in realising the community's goals, with 95 per cent of the lines of actions having been successfully fulfilled by Vietnam. Third, in the country's role as a co-ordinator of cooperation mechanisms between Asean and its partners, such as China, the EU, and India, Vietnam has helped connect and expand relationships between Asean and these partners. Fourth, Vietnam has taken the initiative to broaden the membership of the East Asia Summit (EAS) by boosting the admission of Russia and the US. In 2010, when it acted as Asean chair, Vietnam organised the Asean Defence ministers' Meeting Plus (AD- MM+) for the first time. These mechanisms are very important to connecting intra-asean cooperation and cooperation between Asean and other nations. This has enhanced Asean's position in the international arena. Fifth, Vietnam twice acted as Asean chair in 1998 and 2010, helming many contribu- Intellasia 8 August / 47

10 tions and initiatives highly commended by its member states. In addition, in response to Asean's challenges, Vietnam has also made concrete contributions to the compilation of the Declaration on Conduct of the Parties in the South China Sea (DOC), in a bid to maintain peace and stability. These are the important contributions of Vietnam as a responsible Asean member. What are you expecting from the future of Asean, with Vietnam's ongoing contributions? Asean has built up its vision until 2025, under which Asean's goal is to continue to further cement its intra-political links, economic connectivity, and the sharing of social responsibilities. This means that Asean takes people's benefit as a base for its development policies, and takes the law as firm groundwork for its activities. Asean has its own charter, which will continue to serve as a firm foundation for its future activities. One of the most important things is that in the future, Vietnam will, together with other member states, further cement the bloc's solidarity. This is vital to Asean's existence. If solidarity is maintained, Asean's central role will continue. Over the past 50 years of cooperation and development, the biggest successes of Asean have been to create its own prestige and position in the international arena, despite differing development levels and political systems among its members. What about challenges for Vietnam, and Asean as a whole? Over the past 50 years, Asean has been faced with numerous challenges. One of which is the different levels in economic development among the member states. Also, Asean is being faced with strategic competition from powerful countries. Besides, Asean has also had to cope with traditional challenges, and non-traditional challenges like terrorism. Additionally, though the Asean Community has been established, the awareness about the community's benefits of people and enterprises in general remains limited. Thus, all the member states including Vietnam must be responsible for raising their awareness about the benefits that the community has and will bring about, otherwise the community will be significant on paper only. For example, when people well understand the benefits, they can enjoy convenient travel, exchange, and employment within the community, while enterprises can enjoy more tariff cuts and removal of trade barriers thanks to a shared production base created by the community. Asean is strategically important to Vietnam, and is a priority in the foreign policy of our Party and state. A more people-oriented, closely-linked, affluent, and strong Asean, with greater solidarity, will contribute to ensuring the long-term benefit of all of its member states, and for the people in the region. VN to improve competitiveness of major export products by /AUG/2017 INTELLASIA VNS Vietnam will improve the competitiveness of major export products to boost export value in line with the country's economic restructuring and renovation of the growth model, according to a decision recently issued by the prime minister. Under Decision 1137/QD-TTg to approve the project of improving competitiveness of Vietnamese export products by 2020 with a vision to 2030, Vietnam plans to increase export value in 2020 to triple that of 2010, gain a trade balance in 2020 and achieve trade surplus in the period. Accordingly, by 2020, the project would focus on increasing the quality and value of productsthat are advantageous for export to reach an average export revenue growth of 8 per cent per year during the period. Exports of major agriculture and fishery products are planned to increase on average by 20 per cent and would be promoted in developed countries such as the European Union, Japan and Korea. The project also targets to enable Vietnamese firms to participate in the global supply chain in several stages of high added value. Intellasia 8 August / 47

11 From 2021 to 2030, export growth is expected to reach 9-10 per cent per year. In addition, Vietnam will have highly-competitive firms in each export product category. The project will focus on two product categories with advantages for export, including agriculture and fishery, and processing industry products. Products which will be in focus by 2020 include rice, coffee, rubber and fishery, as well as pepper, cashew, cassava, fruits and vegetables, along with garment and textile, footwear, wood products and handbags, in addition to umbrella, phones and components, computers and parts, cameras, transportation means, machinery and electric wires. During the period, products to be improved in terms of competitiveness include tea, honey, raw materials of the garment and footwear sector, and plastics, as well as fertilisers and chemicals. To achieve the goals, transforming production methods towards increasing the proportion of high value-added products is critical. In addition, the export markets must be expanded together with developing national brands, products brands and business brands, while enhancing national competitiveness to create favourable conditions for firms _ html Vietnam pushes up fruit exports 08/AUG/2017 INTELLASIA VNS Vina T&T Import Export Service Trading Co Ltd last week exported its first batch of fresh coconuts to the US, which is considered to be a difficult market. The coconut is a special fruit of the Cuu Long (Mekong) Delta province of Ben Tre, which is known to be the country's premier coconut growing region. General director of Vina T&T Nguyen Dinh Tung said that the fruit had been checked and radiated, as per the international standards in Vietnam, before they were shipped to the US. "The company's partner will check it again in the US. After that, we will export five containers of fresh coconuts to this market, which is known to set high standards in terms of the quality of fresh fruit imports," Tung told Vietnam News. The company successfully negotiated with its partner to export coconut to the US, which mainly imported the fruit from Thailand, he said. "A disadvantage for the Vietnamese coconut is the price, which is about 20 per cent higher than that of Thailand, making it difficult to negotiate. We finally overcame it," Tung said. Vina T&T occupies 40 per cent of the Vietnam's export market share in the US. The company has exported longan, dragon fruit, durian, rambutan and coconut to the US. It has received the licence to export star apple to the US and is awaiting the fruit harvest season. "We buy fruits from the areas that grow them in bulk. We then radiate and package them before exporting. Each variety of fruit has a unique manner of radiation and package. We have to strictly follow the standards given by our US partners," he said. "I have recently signed a contract to buy 60 tonnes of longan, a specialty of the northern province of Hung Yen, for export to the US. I will transfer the packaging technology to the local growers, and then ship the fruit to HCM City for radiation," he added. Vietnam last year earned $2.4 billion from the export of fruits and vegetables, of which $6 million came from Vina T&T. With the market showing positive signs last year, the company has set the target to earn $12 million, doubling last year's figures. In the first seven months of this year, the company earned $8 million. Export value up According to the latest figure from the Ministry of Agriculture and Rural Development, Vietnam made $360 million through the export of fruits and vegetables in July, taking it to $2.03 billion in the first seven months of this year, while marking an increase of 48.9 per cent, compared with the same period last year. Meanwhile, the country spent $216 million to import fruits and vegetables in July, taking the total value since early this year to $852 million, doubling the figure in the same Intellasia 8 August / 47

12 Glutinous rice exports to China slowing down period last year. The country's largest export markets were Thailand and China, with a market share of 57 per cent and 16.8 per cent, respectively. To reach the target of $3 billion from the export of fruits and vegetable this year or a higher target next year, Tung said it was necessary to have the businesses consulting and participating in the country's trade promotion programmes. "In addition to this, we should choose fruits that can be harvested throughout the year, such as pomelo, soursop, mandarin and orange, for export. The businesses need the government's support on storage technology," Tung added. 08/AUG/2017 INTELLASIA VNA Exports of glutinous rice to China, Vietnam's biggest rice importer, are stagnating, despite overseas shipments of the commodity soaring 34 percent in the first half of Statistics from the Vietnam Food Association show that 2.65 million tonnes of rice were shipped abroad with free-on-board value of 1.65 billion USD in the first six months of 2017, an increase 0.25 percent in volume and 1.85 percent in value from the same period last year. More than 1.16 million tonnes or 43.8 percent of the volume was shipped to China between January and June. Meanwhile, more than 660,000 tonnes of the total exported rice was glutinous rice, surging 34 percent from a year earlier. Overseas shipments of glutinous rice have sold well for the last three years as China began to purchase more of this product. Glutinous rice has made up 25 percent of exported rice volume, compared to percent and 6.65 percent in the respective first halves of 2016 and Most of Vietnam's glutinous rice was destined for China, with a little for Indonesia. The demand for glutinous rice in China has been relatively high in recent years, boosting both domestic and export prices. Businesses even exported glutinous rice at USD per tonne at the end of this year's winter-spring crop. However, glutinous rice exports to China have slowed down over the last week, causing a drop in export prices, from USD per tonne a week ago to USD per tonne at present. Domestic prices also fell from 10,800-11,200 VND per kilogram to 10,400 VND per kilogram, said Dang Thi Lien director of the Long An Foodstuff Co. Ltd Many companies blamed the slowdown on changes in China's glutinous rice import policy, forcing Chinese importers to offer lower bids to Vietnamese sellers to make up for higher import expenses. Vietnamese firms will struggle to make a profit if they sell glutinous rice at USD per tonne to China while purchasing it at 9,000-10,000 VND per kilogram from local farmers, explaining why the exports have slowed down. Some enterprises said although China is a good market where Vietnam's glutinous rice has few rivals, once supply surpasses demand, Vietnam's dependence on the market poses great risks. Experts said the agriculture ministry's Department of Crop Production and localities should control the structure of planted rice varieties and avoid expanding the glutinous rice area. Rice exporters also need to expand markets, especially in the Middle East and Southeast Asia, to avoid excessive dependence on China. Bangladeshi Embassy informs invitation of tenders for rice import 08/AUG/2017 INTELLASIA VNA The Bangladeshi Embassy in Vietnam has sent a diplomatic note to the Ministry of Industry and Trade of Vietnam announcing the invitation to both domestic and foreign tenders for its country's rice import. Accordingly, the directorate of Food under Bangladesh's Ministry of Food has invited tenders for the import of 50,000 tonnes of non-basmati parboiled rice. Intellasia 8 August / 47

13 MoIT to impose temporary safeguard measures on imported fertiliser This creates an excellent opportunity for Vietnamese businesses to boost rice export to the market. The announcement stated that the imported rice will be shipped to Chittagong and Mongla ports within 40 days since the days of signing deals. Rice could be imported from any countries, except for Israel, and harvested from 2016 to present. The deadline for selling tender documents is 5:00 pm on August 7, 2017 (Bangladesh's time) and that for submitting tender dossiers is 1:00 pm on August 8, 2017 (Bangladesh's time). The auction will be open at 2:30 pm the same day. 08/AUG/2017 INTELLASIA VNS The Ministry of Industry and Trade (MoIT) last week issued Decision No. 3044/QD- BCT to apply safeguard measures on some DAP and MAP fertiliser products imported into Vietnam. The fertiliser products under the measures have the codes: , , and , as well as , , and On May 12, MoIT issued Decision No. 1682A/QD-BCT on initiating a fertiliser dumping investigation and considering the application of safeguard measures on some imported fertiliser products into Vit Nam. The decision was issued after the Vietnam Competition Authority under the ministry received a request from Company Limited DAPVinachem and DAP No 2 -Vinachem Joint Stock Company to apply global safeguard measures on the products, alleging that the increase of imported goods has damaged the domestic industry. The goods being investigated are all types of inorganic or complex inorganic fertilisers mixed with nitrogen and phosphorus, in which nitrogen content is at least 7 per cent and phosphorus content is at least 30 per cent. According to this decision, the applied temporary safeguard tax is VND1,855,790 (US$82) per tonne and is effective from August 19, The temporary measures will be applied for a period not exceeding 200 days from the date of coming into effect. This measure will end on March 6, 2018, or when MoIT brings out a decision to impose an official measure. Last year, Vietnam spent $1.1 million to import 4.15 million tonnes of fertiliser, the general Department of Vietnam Customs reported. MoIT estimated that fertiliser import spending in 2017 is similar to 2016 at $1.1 billion and the main import market is China. Dong Nai records 700 million USD in trade surplus 08/AUG/2017 INTELLASIA VNA The southern province of Dong Nai posted a trade surplus of 700 million USD in the first seven months of 2017, reported the provincial People's Committee. Dong Nai's total export turnover in the January-July period reached 9.5 billion USD, a year-on-year rise of 13 percent. Meanwhile, the province imported 8.8 billion USD worth of goods in the reviewed period. Dong Nai mainly exported footwear, garments-textiles, wood and wooden products, electronic products, and farm produce. Its key markets included China, the Republic of Korea, Japan, the US and the European Union. The province's exports in the remaining months of this year are expected to continuously grow since businesses have signed deals until million-usd-in-trade-surplus/ vnp Intellasia 8 August / 47