FINANCE. finance & business news. Reference exchange rate kept unchanged on March 6

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1 finance & business news 6 March Reference exchange rate kept unchanged on March 6 1 Commercial banks quietly raising interests rates after Tet Holiday 2 Vietnam's outbound investment in Jan-February mostly in finance-banking 2 Deposit security to seize top spot on upcoming bank AGM agendas 3 Customers concern about bank' fee raise 3 Banks' AGM season: each bank has different story 4 Banks need to recruit more employees to expand 5 Purchasers of insurance products increase after Tet 6 Deputy PM hosts Sumitomo Mitsui Bank's senior official 7 Techcombank to sell treasury shares to foreign investors 8 Investment from state budget exceeds 29 trillion VND in two months 8 Vietnam's inflation in first two months higher than other regional countries 9 Vietnam expects to export 6.5 million tonnes of rice in Fruit, vegetable exports continue growth trend in two months 10 Rice export to China unaffected despite ban against three traders 10 China remains biggest buyer of Vietnam tra fish 11 Vietnamese pangasius exports pass first US test 11 An Giang earns million USD from exports in two months 12 Vietnam resolves to make EU lift 'yellow card' on seafood 12 Indonesia and Thailand to resume car exports following Decree Developing domestic automobile industry to counter imports 14 Mine declines: Good news for sustainability 15 Retail market forecast to grow fast 17 Housing sector targets this year's growth of beyond 8pct 17 Room rental rates in HCM City increase 18 HCM City real estate: eastern, western parts of city are 'hot spots' 19 Vietnamese logistics cost high, uncompetitive 19 Sharing services thrive amid criticism 20 Vietnamese businesses open the door to foreign investors 22 MoIT assists SMEs in linking supply with demand 23 Parkson's demise and the rise of competitors 24 Now the right time for solar developers & suppliers to Reference exchange rate kept unchanged on March 6 seize opportunities 25 Quy Nhon and Quang Nam take the baton 26 Vietnam, Bangladesh agree to double current trade value by BIZ NEWS Business Briefs 06 March, Vietnam stocks lose on last-minute selling 29 Shares slide on large-cap stocks 29 Market expected to be volatile this week 30 Foreign investment funds continue making profits in Vietnam's stock market 30 Securities companies mobilise capital through bonds 31 VRG to complete equitisation in Q2 33 Thai firm eyes more stake in Binh Minh Plastics 34 PV Power awaits listing on UpCOM and strategic investor 34 Mobile carriers to benefit from call connection rate cut 35 Ministry warns of pollution risks at bauxite projects 35 Trade ministry begins $158m energy efficiency project 36 South or north? Expanding Tan Son Nhat International Airport 36 Quang Tri to build 600 billion VND hydropower plant 38 Honda Vietnam announces prices of imported cars from Thailand 38 Govt hails Vingroup for its Vietnamese-made auto ambition 39 VNG incurs big losses from Tiki investment 40 Vinacafe seeks restructuring plan 40 Cathay Pacific unveils promotion 41 Vietjet announces direct route from Vietnam to India 41 Vietnam Airlines to introduce flights to Singapore, Taiwan 42 Flight safety takes the top priority at VATM 42 Pouchen VN gets custom priority card 43 Thanh Hoa hands over expanded site for Nghi Son refinery plant 44 TTC energy segment inks EPC contract with JGC Vietnam Co., Ltd 45 A year of triumph for CapitaLand Vietnam 45 Tisco may take Chinese contractor to court 46 'Meet The USA 2018' conference- good opportunity for development links 47 Latest trends on agenda at Vietnam Online Business Forum 48 Hanoi to host Vietnam Expo 2018 in April 48 HCM City set to host international livestock, aquaculture expo 49 06/MAR/2018 INTELLASIA VNA The State Bank of Vietnam set the daily reference exchange rate at 22,458 VND/USD on March 6, unchanged from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is 23,131 VND/USD and the floor rate 21,787 VND/USD. The opening hour rates at major commercial banks saw little change, with BIDV and Vi- Intellasia No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi All Rights Reserved Tel: Fax: Office@intellasia.com Websites:

2 Commercial banks quietly raising interests rates after Tet Holiday etinbank maintaining the same rates as on March 5. BIDV listed the buying rate at 22,725 VND/USD and the selling rate at 22,795 VND/ USD. The rates listed at Vietinbank were 22,676 VND/USD (buying) and 22,746 VND/USD (selling). Vietcombank added 5 VND to both rates, buying the greenback at 22,725 VND/USD and selling at 22,795 VND/USD vnp 06/MAR/2018 INTELLASIA VIR A few days after the Tet Holiday, numerous commercial banks silently raised interest rates due to liquidity-related issues, the whopping demand for capital, and the great competition among Vietnam-based commercial banks. Specifically, the majority of small-scale commercial banks, including Capital Bank, GP- Bank, BacA Bank, NCB, and DongA Bank, that are currently restructuring reported unusually high deposit interest rates at 7 per cent per year for the term of six months, whereas the same type of interest at large-scale commercial banks like BIDV, VietinBank, VCB, and Agribank are around per cent. In contrast, medium-scale commercial banks offer six-month deposit interest rates of 6.8 per cent. According to a number of market analysts, the per cent difference in the interest rate offered by leading, small-scale, and restructured commercial banks for the term of six months was triggered by the liquidity ratio, the level of the demand for capital, and the financial performance of each commercial bank. numerous market analysts also pointed out that the main reason behind small-scale commercial banks' scheme of raising interest rates was to prepare for surging credit growth in 2018, as previously forecast. As concluded by the National Financial Supervision Commission (NFSC), the liquidity of the overall financial system was "healthy," yet only a modest number of commercial banks, especially large-scale commercial banks, could reach this threshold. Additionally, small-scale commercial banks keep struggling with appealing the low-interestrate stream of capital, thereby they were pressed to at least maintain the current or keep raising the deposit interest rate. Furthermore, numerous market analysts also pointed out that the main reason behind small-scale commercial banks' scheme of raising interest rates was to prepare for surging credit growth in 2018, as previously forecast. Nghiem Xuan Thanh, chair of the Board of directors of Vietcombank, noted that in 2017, the bank's interest rate was among the lowest in the entire financial system, yet the bank secured the highest growth rate thanks to its reputation and strong brand name. Vietcombank's low interest rate enabled the bank's lending rate to be relatively lower than other large-scale commercial banks. Vietnam's outbound investment in Jan- February mostly in finance-banking 06/MAR/2018 INTELLASIA THE SAIGON TIMES Most of Vietnamese outbound investments in the first two months of this year focused on the finance and banking sector, data of the Foreign Investment Agency under the Ministry of Planning and Investment shows. Vietnamese enterprisesregistered a combined $115 million in their overseas projects in the first two months of the year.in particular, 13 fresh projects worth $89.89 million were awarded with foreign investment certificates while three existing projects had their capital rise by $25.06 million. Vietnamese enterprises heavily invested in the finance and banking sector in the period. Total newly registered capital in this sector, including from operational projects, reached $105 million, accounting for a whopping 91.3 percent of the total investment. The wholesale and retail sector came second with seven projects capitalised at $7.25 Intellasia 6 March / 49

3 Deposit security to seize top spot on upcoming bank AGM agendas million, making up 6.3 percent of the total. The other projects were in accommodation and catering services, scientific and technological activities, and information and communications. Vietnamese enterprises set up shop in Laos, Canada, Japan, Germany, Cambodia, New Zealand, Thailand, China, Belise, and Myanmar in the period, according to the agency. percente2 percent80 percent99s-outbound-investment-in-jan-feb-mostly-in-finance-banking.html 06/MAR/2018 INTELLASIA VIR Following the incident of "vanished" savings at Eximbank, deposit security will likely be in the limelight at Vietnam-based banks' upcoming annual general shareholders' meetings (AGM), rather than the previous issues, such as dividend payment and nonperforming loans. On February 23, the State Bank of Vietnam (SBV) officially issued Document No.1126/ NHNN-TTGSNH directing domestic credit institutions (CIs) and branches of foreignowned banks to enhance security throughout transactions, especially ones relevant to savings accounts at local branches. Dr Le Xuan Nghia, a Vietnamese economist, pointed out that in case Basel II was properly applied, the overall operations at Vietnam-based banks would be carried out more efficiently, eliminating clients and shareholders' concerns over deposit security. Economist Nguyen Tri Hieu asserted that the fact that banks failed to enhance deposit security alerted the public to the rather loose restrictions on the current financial system. Previously in June 2016, the West Lake branch of BIDV failed to trace a client's savings' which mounted up to roughly VND32 billion ($1.4 million). The current scandal was caused by the loss of VND245 billion ($10.8 million) in the savings of a client named Chu Thi Binh earlier deposited at Eximbank. Resolution No.42/2017/QH14 on the pilot implementation of measures to tackle nonperforming loans at credit institutions issued by SBV allowed Vietnam Asset Management Company (VAMC) to further improve its debt trading activities as well as banks to flexibly allocate the accrued interests. A representative of SBV noted that by November 30, 2017, the entire system handled a total of VND39.9 trillion ($1.75 billion) worth of non-performing loans and by the end of December 30, 2017, the total volume of non-performing loans being resolved rounded up to VND50 trillion ($2.19 billion). Customers concern about bank' fee raise 06/MAR/2018 INTELLASIA BAO DAU TU As having more than 10 million individual customers, the adjustment of a number of service fees by Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) in early March has created a heated debate among the public, forums, and social networks. In the trading groups on Facebook, many users are demanding to boycott Vietcombank's services and urging users to switch to another bank account. Although representative of Vietcombank affirmed that the service fee adjustment is associated with the launch of dozens of new services with cooperation with hundreds of suppliers, etc., it still seems to be a very urgent matter. From the perspective of experts, the increase of bank fees is understandable as banks want to raise revenue from services instead of relying only on lending. This is in line with the policy to restructure the banking sector in order to help banks develop sustainably, said Dr Nguyen Tri Hieu, a banking expert. Meanwhile, talking to reporter of Bao Dau Tu, lawyer Bui Quang Tin, founding director of Bizlight Business School said that the fee increase of Vietcombank is reasonable. "At present, the demand of people for banking services is increasingly high and requirements on security investment are also growing. Thus, banks' fee raise is understandable", said Tin. Intellasia 6 March / 49

4 Tin also hopes that with the increase in fees, banks will enhance the quality of service, especially to ensure better security in order to avoid incidents such as loss of capital. Too many types of fees The recent increase in fees of Vietcombank mainly targets electronic banking transactions (Internet Banking and Mobile Banking). This shows that the bank has been well in advance as its number of payment transactions and online transfer are increasing rapidly. However, in the context when electronic payment is still in an early stage, the government is introducing a number of policies and measures to promote non-cash payment, the increase of bank fees may cause negative effects. Currently, most banks are offering dozens of fees to cardholders. If the fees continue to rise and more types of fees for Internet Banking services, the objectives of the Noncash Payment Development Scheme in Vietnam in period will be affected by 2020, because the fees for using bank accounts and bank cards have reached hundreds of thousands of dong a year. Therefore, despite agreeing the service fee increase to reduce dependence on lending, Dr Hieu said that bank charges in Vietnam are too high. The disadvantage of bank charge raise will put a negative impact on the non-cash payment policy. Moreover, objectively speaking, Vietnamese banks are charging too much, including many unreasonable charges that banks in other countries and even in the US are not applying. According to Dr Hieu, it is unreasonable if banks use customer deposits and non-term capital in customers' accounts to make profit but still collect many types of fees such as account maintenance fee, account information lookup fee, etc. Vietcombank is currently the most profitable bank in the system, partly thanks to the huge non-term deposits in the mobilisation structure. However, with the adjustment of fees, Vietcombank perhaps will lose a large number of individual customers. This will be the opportunity for many other banks in the context when retail competition is very fierce. At present, there are many medium-sized banks with good services and technologies and reasonable fees such as VPBank, VIB, TPBank, and Techcombank, etc. Banks' AGM season: each bank has different story 06/MAR/2018 INTELLASIA VNECONOMY On March 3rd, the Vietnam Technological and Commercial Joint Stock Bank (Techcombank) opened the Annual general Meeting (AGM) season of the banking sector. Like most other members, the atmosphere was warmer than before. Despite not paying dividends in eight consecutive years, Techcombank's shareholders committee continued to approve the non-dividend payment fir the common good of the bank to strengthen its capital resource. Over the eight years of not paying dividends, Techcombank's profit has been retained for strengthening resources, which is an attraction for new shareholders and investors. Thus, the bank plans to list its share on the stock exchange. Techcombank is the first case in the group of joint stock banks have so far set this year annual profit target at 10 trillion dong. The bank's profit is expected to strongly rise. Thus, although dividends are not paid, most shareholders must have been satisfied (at high voting rate). In contrast, the upcoming AGM of Hochiminh city Development Commercial Joint Stock Bank (HDBank) is somewhat different. Initial information from HDBank shows that after obtaining high profit results which far exceeded the target, the bank continued to pay high dividends and bonus shares to shareholders. As expected, the payment may reach 30 percent, and the details will be presented at the AGM. HDBank has the tradition of paying dividends big and fast. In some years, when many banks did not pay dividends or paid at less than 5 percent mainly in shares, HDBank's dividend payment was 10 percent in cash and was transferred to shareholders' accounts when they were at the meeting. Like HDBank, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) took the lead in the group of Vietnamese private banks (in absolute number). The bank has the Intellasia 6 March / 49

5 basis to submit a high dividend rate at the AGM, which is said to be a rare high dividends in the history of domestic credit institutions. HDBank, VPBank and Vietnam International Commercial Joint Stock Bank (VIB) in recent year have often led the system in terms of dividend payment. Since they are private banks with high self-control, they are more flexible in terms of paying dividends. Meanwhile, the dividend payment remains unknown in group of state-owned banks (Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), and Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank)). Since the State holds dominant ownership, the dividends involve state budget and paying dividends in cash or in shares is not easy to resolve. If these banks could selfdecide to pay dividends in shares in order to raise capital and retain profits for strengthening financial capacity, they would have not faced many difficulties in the last two years. Even Vietcombank attained record high profit last year, it is uneasy for the bank to significantly raise the dividend payment rate or bonus for shareholders. Thus, it is expected to pay dividends at reasonable ratio. This year, some banks are said to continue not paying dividends for their own stories. Prior to this AGM season, shareholders of Export Import Commercial Joint Stock Bank (Eximbank) are expecting that they will again receive dividend payment after four years, even at a low ratio. However, the incidends occurred such as the loss of a huge deposits of a customer, have brought more concerns to shareholders. Meanwhile, for Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), after the first year restructuring under the new scheme, the bank's profit has far exceeded the target and a large volume of bad debts have been settled. However, paying dividends or not remains an unknown question. However, if looking at the current financial situation and the accounting is made under normal regulations, it is not unexpected if Sacombank is not approved to pay dividends in the next few years, except its impressive settlement of bad debts and assets and outstanding profits. Although Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) recorded limited profit in the fourth quarter, its growth was strong and far exceeded the targets. Accordingly, the bank has announced to raise the dividend payment rate to 12 percent this year. However, at the AGM which is scheduled in the end of March, as well as the celebration of its 10-year presence in the market, many shareholders perhaps are sharing similar thought when the bank's Chair of the Board of directors Nguyen Duc Huong resigned for health reason, etc. Each bank has its own story but overall, this year's AGM season will have a warmer atmosphere because most of the members have achieved better results than last year, and are seeing the prospect of speeding up in Banks need to recruit more employees to expand 06/MAR/2018 INTELLASIA VNA Many banks throughout the country need to recruit more employees for their newly opened branches this year or to replace staff members who quit their jobs before the Lunar New Year (Tet) holiday. On the website of Nam A Bank, for instance, the bank is seeking to recruit 1,000 employees for many different positions, such as directors, deputy directors, managers and others because it wants to expand its operations this year and next. It also provides many internship programmes for students of majors including economics, finance, and business administration. Nguyen Luong Hieu, head of the Nam A Bank's Human Resources and Training Division, said that the bank is focusing on recruiting more human resources for lending and telephone sales. IT engineers also are needed for the bank's digital banking this year, Hieu said. Others banks, including Indovina Bank Ltd and Tien Phong Commercial Joint Stock Intellasia 6 March / 49

6 Bank, have published their recruitment needs on an online recruitment portal, VietnamWorks, with more than 680 jobs on March 2. According to experts in the banking sector, its positive results last year and strong forecast for this year have fostered the heavy recruitment. VnEconomy cited a statistic of the State Bank of Vietnam released in the beginning of this year showing that 25.3 percent of credit organisations nationwide are facing a shortage of employees. A bank's employee in HCM City said that many of her colleagues have quit their jobs because of heavy workloads and pressure to reach high sales targets. They also thought that the industry had many legal risks. More than 52 percent of these organisations plan to increase their staff in the first quarter and 68.7 percent will recruit more employees for the whole year, the SBV statistics say. A banking workforce report on February 26 released by Navigos Group, a recruitment company in Vietnam, shows that 56 percent of 15 surveyed banks could enhance their policies to attract employees although they already had basic and reasonable policies for employees. According to the report, up to 89 percent of the surveyed banks have an average salary ranging from 10 million VND to 30 million VND (440-1,321 USD) per month. Twenty six percent of employers said that uncompetitive wages and remuneration are the biggest recruitment obstacle. Thirty seven percent of employers also said that in order to increase the efficiency of recruitment, banks should consider offering financial incentives to attract candidates. According to the survey, 62 percent of 237 candidates received a bonus of one to three months of salary on average; 18 percent received 3 to 5 months of salary; 7 percent received 5 to 7 months of salary and 5 percent received over 7 months of salary. Moreover, the average annual salary increase of the surveyed candidates is quite high. Forty percent of them have an annual salary increase of over 10 percent. According to the report, 50 percent of candidates said they would like to work at a foreign bank or branch of a foreign bank in Vietnam; 31 percent of them want to work for joint stock commercial banks; 11 percent select state-owned commercial banks and 3 percent select joint venture commercial banks. The candidates said that some main reasons why they want to work in foreign banks including expecting to be treated fairly and work in a healthy environment; expecting high salaries and more promotion opportunities; expecting to use English and work with expat colleagues and managers and expecting to have training opportunities vnp Purchasers of insurance products increase after Tet 06/MAR/2018 INTELLASIA DTCK After the Lunar New Year (Tet), the number of people asking for consultation to purchase health insurance products for themselves and their relatives tends to increase. The reason comes from the wish to use lucky money, idle sources of money at the beginning of the year for more significant purposes. With increasing demand for purchasing insurance products after Tet, insurers have quickly applied customer appreciation programmes, stimulating demand for purchase of insurance products to increase attractiveness. Quang Hung, consultant of generali said right on the sixth of the Lunar New Year, he received an offer to buy life insurance product from a 49-year-old female customer. Her desire is to protect health while investment value is just secondary and he designed two options including VITA Comprehensive security and VITA Natural living. "With good benefits and equivalent fees, even a bit lower than some other products in the market, I quickly fixed two contracts because customers are having outstanding money available after Tet", said Hung. Meanwhile, Huong, insurance consultant of VCLI said after the Lunar New Year as well as on the Wealth God day, the company offered promotional programmes, mak- Intellasia 6 March / 49

7 ing it easier for consultants to sell insurance products more easily than previous years. Thanks to the attractiveness from different levels of gifts, Huong fixed five insurance contracts with the fee ranging around 20 million dong per year, while customers receive the gift i.e. half a tael of gold. "Though the programme on the God of Wealth day does not have many particular figures but at the time that customers have available money after Tet, the finalisation of contracts and sale of products was faster than normal. Instead of thinking for months, our team was able to fix contracts within three days", said Huong. A new development in the insurance market in several recent years was the increased demand to purchase products for children after Tet. Nguyen Thanh Nga, consultant of Manulife said after Tet, she usually receives the request to buy insurance for children though she advised customers to purchase insurance for parents first. The reason was because customers want to use lucky money of their children in a more reasonable and significant way. "Instead of depositing in banks, customers who are parents often ask to purchase the product namely "Gift for your beloved children" due to the similarity with a bank savings book while the money is not much, just about 10 million dong, of which, the majority is to purchase a major product with the fee of six million dong per year the suitable level for the total amount of lucky money. Families with better condition may purchase supplementary products with serious disease benefits, effective till 75 years old, with the fee of about six million dong per year also", said Nga. CEO of a life insurer based in HCM City said according to reports from the lower level, it is easy to realise that the demand for insurance this year is higher than the previous one. Apart from the available source of money, another important reason is that consumers' perceptions of insurance services are increasingly improving. "There must wait till the end of Q1/2018 to have official data about the number of contracts finalised as well as the premium collected. Only by doing so, can we calculate how specific increase in purchase. However, the original signal is very positive. Currently, each insurer offers products with different values. The important thing is customers choose products based on their demand which is suitable to their needs and their pocket, avoiding the mid-way contract termination because of having no money and financial situation is not stable every year", said the aforementioned CEO. Deputy PM hosts Sumitomo Mitsui Bank's senior official 06/MAR/2018 INTELLASIA VNA Deputy prime minister Vuong Dinh Hue received in Hanoi on March 5 Shosuke Mori, head of the Sumitomo Mitsui Banking Corporation (SMBC)'s Asia Pacific Division, describing the bank as an effective credit channel and a gateway for foreign investors, including those from Japan, to enter Vietnam. The SMBC, one of the largest and oldest banks in Japan, is pursuing the new "Asia-centric" strategy which seeks to strengthen its business in Asia and Vietnam is an important part of the strategy, Mori told the deputy PM. As the government of Vietnam has been restructuring the local banking system, the SMBC wants to take part in that process by sustainably developing Eximbank and supporting other local banks' reforms in the near future, he said. As a global bank, the SMBC expects its clients worldwide will invest in Vietnam and the bank hopes to contribute to the development of Vietnam's banking industry with its new banking management system, he added. Deputy PM Hue welcomed the presence of SMBC in Vietnam and the role it is playing to restructure Eximbank. He noted that a new scheme for restructuring credit institutions was adopted to improve capacity of commercial banks and accelerate the resolution of non-performing loans. Though the restructuring process has harvested some positive outcomes but many challenges are waiting ahead, Hue said. The government is committed to continue improving local business climate and providing favourable conditions for both domestic and foreign investors, he stated, add- Intellasia 6 March / 49

8 Techcombank to sell treasury shares to foreign investors ing that it will do it best to support SMBC in Vietnam. The SMBC has made present in Vietnam since 1994 with two branches in Hanoi and HCM City. Last year, both of its branches posted no non-performing loans and a total of billion VND (over 12.8 million USD) in net profit. It is also Eximbank's strategic investor who currently holds 15 percent of the Vietnambased bank's charter capital vnp 06/MAR/2018 INTELLASIA VNS Vietnam Technological and Commercial Joint Stock Bank (Techcombank) plans to sell more than 158 treasury shares to foreign investors. At the bank's Annual general Meeting of shareholders on Saturday, Chair Ho Hung Anh said the price of the shares must be at a minimum of VND23,445 (US$1.03), the price at which the bank had bought back the shares from HSBC last year. Anh said Techcombank would prioritise investors from the United States and Europe for the sale. The bank will also sell 14 million preferred shares from the treasury stock, equal to 1.5 per cent of the bank's charter capital, to its employees in the second quarter of the year. The proceeds from the treasury share sale will be used to increase the bank's assets, expand its network and credit operations and for investments in government bonds. Anh said Techcombank would also list its shares on HCM Stock Exchange (HoSE) this year, adding that the bank had planned to list its shares on HoSE last year but felt the timing was not right. Explaining about the sale of its consumer finance firm TechcomFinance in mid-january this year, Anh said Techcombank had not selected the high-risk business model to not pursue the operation. Techcombank plans a profit of VND10 trillion this year. This appears to be a tough target given that only Vietcombank in the entire banking system had met its target last year. To meet the target, Techcombank has set a 17 per cent total assets increase, a 40 per cent rise in capital mobilisation and an 18 per cent credit growth this year, while keeping bad debts to below 2 per cent. Last year, the bank had posted a pre-tax profit of nearly VND8.04 trillion. It took the fifth position in terms of highest profit in the banking sector. bizhub.vn/banking/techcombank-to-sell-treasury-shares-to-foreigninvestors_ html Investment from state budget exceeds 29 trillion VND in two months 06/MAR/2018 INTELLASIA VNA Total investment capital from the State budget was estimated at more than 29 trillion VND (1.27 billion USD) in the first two months of 2018, equivalent to 8.6 percent of the yearly plan. Of the figure, which was 6 percent higher than the same time last year, 5.6 trillion VND (247.8 million USD) came from the central budget, up 0.5 percent year-on year, and the remaining was managed by localities. In February, total investment from the State budget was calculated at trillion VND ( million USD). The Ministry of Planning and Investment (MPI) said most of the capital has been spent on construction works that began in 2017 and brand new projects. According to the MPI, the total investment capital from the State budget, excluding government bonds, planned for 2017 was trillion VND (13.5 billion USD). By the end of June 2017, more than trillion VND (13.3 billion USD) or 98.7 percent of the sum was allocated. The remaining trillion VND was capital intended for the national target programme on climate change response and green growth, two new projects of the Ministry of Agriculture and Rural Development and the northern mountainous province of Ha Giang, and capital allocated by ministries, agencies and Intellasia 6 March / 49

9 Vietnam's inflation in first two months higher than other regional countries local administrations in violation of rules. trillion-vnd-intwo-months/ vnp 06/MAR/2018 INTELLASIA TRI THUC TRE In the first two months of 2018, Vietnam's inflation increased 1.24 percent from the end of This level is the highest within four years and is also exceptionally higher than other regional countries such as China. According to SSI Retail Research, many factors have attributed to high inflation in the country. First is seasonal factor. Accordingly, the time before Tet always witnesses high food prices. This year there is no crisis in raising pigs, so meat prices are rising quite high. In particular, pork prices rose 2.64 percent, live poultry prices swelled 2.46 percent, live seafood improved 3.62 percent in February. Prices of other commodities also went up such as fresh fruits with 5.24 percent, confectionary, butter, coffee, dried tea with the growth of 0.2 percent to four percent. The price of fresh vegetables alone decreased 1.27 percent as favourable weather increased supply to the market. The second thing is the demand to purchase rice to export continued to push up rice price, leading to the increase in CPI for food item. The price of dried rice in the Mekong River Delta on February 8, 2018 was 6,200-6,300 dong per kilogramme, up 400 dong per kilogramme (about seven percent) compared to the end of The average rice export price in two months swelled 4.9 percent from December The third thing is the influence of world commodity price, specifically oil price. The world oil price has continuously increased from mid-december 2017 till the end of January 2018, thereby influencing on domestic price before Tet. Specifically, the domestic gasoline prices edged up twice on January 4 and January 19, 2018 with 1,100 dong per litter (for Ron 95-III). CPI for traffic group in the first two months inched up 1.96 percent, the second highest increase in CPI only after food. The fourth thing is the price increase following administrative decisions, including the decision to raise electricity and health service prices. SSI Retail Research said despite high inflation in the first two months, it is highly likely that inflation in the next few months will be low and may be negative. The reason is the world oil price decreased from the peak of more than $65/barrel at the beginning of January to $60-61/tael. The domestic oil price lessened 400 dong per litre for Ron 95-III and will be reflected in the inflation in March. Seasonal factor no longer causes food price to stabilise again. The pork price in China is on the downward trend and may affect meat and poultry price trend in Vietnam. Besides, 54/63 provinces and cities have adjusted up the price of medical services, while in nine remaining provinces, the influence of price increase following Circular 02 will not be much. However, the unit that issues the report also said that it is impossible to be subjective with inflation fluctuations in 2018 because apart from such factors as pushing costs, the recovery of the world economy and Vietnam economy will lead to the increase in demand, thereby leading to inflation. The door opening for export of such items as rice, tra fish is an example showing the impact of external demand on prices of domestic goods. Vietnam expects to export 6.5 million tonnes of rice in /MAR/2018 INTELLASIA VNS The Ministry of Agriculture and Rural Development expects Vietnam to export 6.5 million tonnes of rice in 2018, deputy minister of Agriculture and Rural Development Ha Cong Tuan said at the ministry's monthly meeting on Friday in Hanoi. To get high export value, high-quality rice will still account for a large proportion of the total export volume, while normal rice makes up less than 20 per cent, Tuan said. He also said the export prices of Vietnamese rice had increased as their quality had improved. The export price of Vietnamese rice rose from $435 per tonne in 2016 to $450 per tonne Intellasia 6 March / 49

10 in 2017 and $475 per tonne during the January-February period. This was achieved by restructuring efficiently the production of rice to improve its quality and value. At the same time, in the past two years, more local private enterprises have joined the global export market. Businesses have also invested more into the processing of rice but the percentage of processed rice is still low. Vietnam is doing well to improve its rice quality, he said, suggesting the country focus on improving the brand name of its rice. According to the Ministry of Agriculture and Rural Development, Vietnam shipped 861,000 tonnes of rice abroad in the first two months of this year, earning $419 million, up 17 per cent in volume and 34 per cent in value, compared with the same period last year. The Philippines was the biggest importer of Vietnamese rice, accounting for 26.9 per cent of the market share. It was followed by China with 23.5 per cent. Last year, Vietnam earned $2.6 billion by exporting 5.8 million tonnes of rice. milliontonnes-of-rice-in-2018.html#cwhmhsii9bbhjpsi.97 Fruit, vegetable exports continue growth trend in two months Rice export to China unaffected despite ban against three traders 06/MAR/2018 INTELLASIA VNA Vietnam exported 293,960 tonnes of fruits and vegetables worth 620 million USD in the first two months of 2018, a year-on-year rise of 47 percent and 47.6 percent, respectively. Fruits made up 87 percent of the total value, according to general Department of Customs. China topped the list of importers with percent of Vietnam's fruit-vegetable market share, followed by the US (3 percent), Japan (2.9 percent), Thailand (1.4 percent) and Malaysia (1.2 percent). Most exported fruits and vegetables were crude products, accounting for more than 93 percent of the total export value. Meanwhile processed products comprised only 6.6 percent. According to the Ministry of Agriculture and Rural Development, Vietnam earned a record 3.45 billion USD from fruit and vegetable exports in 2017, up 40.5 percent from the previous year. China, Japan, the US and the Republic of Korea were the biggest importers of Vietnamese fruits and vegetables last year. Markets saw high growth were Japan (70.6 percent), the United Arab Emirates (57.4 percent) and China (54.9 percent). The ministry said 2017 was a "bumper" year for Vietnamese fruits, with surging export turnover and entrance into many demanding markets. There is still potential for Vietnamese fruits and vegetables in the global market, which requires the country to focus on to processing and exploring new markets instead of traditional ones. 06/MAR/2018 INTELLASIA THE SAIGON TIMES China's suspension of rice imports from three Vietnamese traders will not affect Vietnam's rice export to the northern neighbour in the near future, according to the Plant Protection Department under the Ministry of Agriculture and Rural Development. China had earlier issued a ban against three Vietnamese enterprises among 22 allowed to ship rice to this country by China's Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). The three companies reportedly include Tan Dong Tien JSC, Thuan Minh Import-Export Corporation and Intimex Group. China made the decision as broken rice products of the three companies were mixed with a higher-than-allowed amount of weed seeds. However, defective rice shipments have been still cleared to enter the Chinese market. Intellasia 6 March / 49

11 Pham Thai Binh, director of Trung An Hi-Tech Agriculture JSC, said Chinese buyers as customers of the banned exporters might shift to import rice from the 19 other Vietnamese enterprises allowed to export rice to China. Strict requirements of the Chinese market will help improve the quality of domestic rice products, Binh said. China is a potential but risky market, so Vietnam should diversify markets such as Africa and the Middle East. According to statistics of the Vietnam Food Association (VFA), Vietnam exported more than 2.3 million tonnes of rice to China last year, accounting for 40 percent of Vietnam's total rice export volume and up percent against Over 247,000 tonnes of Vietnam's broken rice was shipped to China last year, making up 4.29 percent of the total export rice volume and growing percent over the previous year. The US Department of Agriculture (USDA) last month forecast China would import 5.5 million tonnes of rice this year, 250,000 tonnes higher than the estimate in January. english.thesaigontimes.vn/58593/rice-export-to-china-unaffected-despite-banagainst-three-traders.html China remains biggest buyer of Vietnam tra fish Vietnamese pangasius exports pass first US test 06/MAR/2018 INTELLASIA THE SAIGON TIMES After successfully tapping the Chinese market last year, the Vietnam Association of Seafood Exporters and Producers (VASEP) has forecast China will remain the biggest importer of Vietnamese tra fish this year. According to a report by VASEP, Vietnam exported more than $410 million worth of tra fish to China and Hong Kong last year, up 34.8 percent over 2016 and accounting for 23 percent of the country's total tra fish export. Meanwhile, last year saw outbound sales of tra fish to the US and the European Union (EU) falling around 11 percent and 22.3 percent respectively due to Farm Bill, an antidumping duty imposed by the US and media bias against Vietnam's tra fish in the EU. Despite falls in the US and the EU, the growth of the Chinese market helped the export turnover from tra fish hit $1.78 billion last year, increasing 4.3 percent against the previous year. VASEP general secretary Truong Dinh Hoe said the northern neighbour's demand for tra fish would increase as the product is becoming more popular among Chinese consumers. China may import an equivalent of 400,000 tonnes of live tra fish from the Mekong Delta region valued at $ million this year. However, the region has annual output of million tonnes of live tra fish for export, so it is necessary to seek buyers for the remaining 600, ,000 tonnes. In addition to Asean, Brazil and some other markets, the consumption of the remaining 600, ,000 tonnes of tra fish will depend on the EU and the US Meanwhile, the tra fish price has risen to an all-time high. Two-kilogram tra fish is sold at VND30,000-32,000 per kilogram while one-kilo fish sell for VND29,000-30,000 per kilogram, said Nguyen Huu Nguyen, manager of a fish farming cooperative in Chau Phu District, An Giang Province. Vietnam is facing the scarcity of material tra fish while tra fish exporters have high demand for the product, resulting in higher tra fish price, Nguyen explained. 06/MAR/2018 INTELLASIA VN ECONOMIC TIMES Vietnam satisfies US Department of Agriculture's first test for continuing to export pangasius to the country. Vietnam has satisfied the US Department of Agriculture's first test for continuing to export pangasius (catfish) to the US, according to an announcement from the USDA's Food Safety and Inspection Service (FSIS) on February 23. There were previously concerns over the disruption of seafood exports to the US if Vi- Intellasia 6 March / 49

12 etnam failed to satisfy USDA's first test. Now the result is out, according to the FSIS's Equivalence Status Chart, Vietnam is the only country to reach Step 3B in the equivalence process, which consists of six steps: 1. Country submits a formal written request to FSIS, identifying the species and products they intend to export. 2. Country submits a Self-Reporting Tool (SRT) and supporting documentation. 3A. FSIS sends a request to the country to provide additional information in order to consider the SRT complete. 3B. FSIS receives additional information, determines the SRT is complete, and conducts a technical review of provided information. 4. On-site verification audit. 5. Public notification in the Federal Register for commentingproposed Rule 6. Determination of Equivalence-Final Rule The FSIS has completed the review of Vietnam's SRTs and additional information supplied to FSIS and determined that the country's documented inspection system of controls appears to provide an equivalent level of public health protection as that applied domestically in the US. In the next step, the FSIS will propose dates for on-site audits to verify that Vietnam's system of controls is implemented as described in the SRTs submission. The FSIS will work closely with Vietnam's National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) in organising the audits "within the next three months, and probably sooner than that," Carmen Rottenberg, the USDA deputy Undersecretary for Food Safety, told Undercurrent News. It seems unlikely that Vietnam passing the first of USDA's three tests will have any impact on the consultation request it recently filed with the WTO, claiming the US government's recent changes in its inspection regime from US Food and Drug Administration (FDA) to USDA is an unfair trade practice. The US has not replied to Vietnam in this matter, however in the fiscal year 2019 discretionary budget proposal, President Donald Trump proposed returning the siluriformes inspection programme back to FDA in an attempt to trim the costs at USDA. Under WTO rules, Vietnam could ask for adjudication of the dispute if the US does not settle it within 60 days. An Giang earns million USD from exports in two months 06/MAR/2018 INTELLASIA VNA Export turnover of the Mekong Delta province of An Giang in February was estimated at million USD, up 2.12 percent year-on-year. According to Vo Nguyen Nam, director of the provincial Department of Industry and Trade, with the figure, the locality's export revenue in the first two months of this year reached million USD, a rise of 5.62 percent against the same period last year. The province's main export items like rice, seafood and garments-textiles saw higher export revenue as compared with the corresponding time last year. During the period, An Giang shipped abroad 61,390 tonnes of rice, pocketing million USD, up 53.2 percent in volume and 72.8 percent in value. Meanwhile, 22,120 tonnes of seafood worth million USD were delivered overseas, increases of percent in volume and 52 percent in value. Other exports like garments-textiles, footwear, fertilisers and pesticides recorded revenue equivalent to that of the same period last year. The department has partnered with relevant units to remove difficulties in production and export facing frozen vegetables whose export turnover slightly decreased against the corresponding time last year. The sector has also frequently got updated information about export-import markets, especially China. million-usd-from-exports-in-twomonths/ vnp Intellasia 6 March / 49

13 Vietnam resolves to make EU lift 'yellow card' on seafood 06/MAR/2018 INTELLASIA TUOITRENEWS The Vietnamese agency assigned to the oversight of the food industry has been implementing various stringent measures in an effort to have the 'yellow card' by the European Commission (EC) rescinded. The 'yellow card' corresponds with a warning issued by the EC to any country refusing to cooperate in the international fight against illegal, unreported and unregulated fishing. Vietnam received card in October 2017, which stipulates that after a six-month period, if the country can enable considerable progress in grappling with illegal fishing, the sanction will be lifted, and a 'green card' an eligible status for export will take its place; otherwise, a 'red card,' a total ban, will be enforced. Vietnam's Ministry of Agriculture and Rural Development and provincial authorities have been striving for the removal scheduled for April 2018, Ha Cong Tuan, the body's deputy minister, said on March 2. A number of coastal areas have equipped themselves with offshore fishing boats and preemptively taken actions against illegal fishing in the waters of neighbouring countries. In Quang Ngai Province, located in central Vietnam, those boats found with a repeat of forbidden fishing are indefinitely prohibited from operations, according to Tran Ngoc Cang, chair of the local People's Committee. The owners of two boats coded QNg and QNg 90945, for instance, have forfeited the right to be granted loans for their profession and to carry out fish-catching activities for good. In addition, before fishing boats depart from docks, coastal police require their owners and captains to sign a commitment document against illegal fishing. In Ba Ria-Vung Tau Province, in southern Vietnam, the local Department of Agriculture and Rural Development has formulated an action plan to stop fishers from continuing catching fish in foreign waters, according to Tran Van Cuong, director of the body. "The programme was designed in accordance with the [said] ministry's guidelines and will be presented to the provincial People's Committee for approval over the next few days," Cuong said on March 2. He added that since October 2017 the spirit of this effort has also been seen in an official order from the committee, thwarting any attempts by Vietnamese boats to fish outside the nation's maritime areas. Punitive measures accordingly include rendering invalid from six to twelve months the fishing licenses of boats transgressing the national sea borders for the first time, and revoking the fish-catching right permanently for ships with a recurrence of illegal fishing. The Vung Tau administration has also required fishing boats with large power machines to be retrofitted with cameras and stay connected around the clock with relevant authorities on land. Boats which belong to that type but fail to feature the devices are not granted or ineligible to renew operation licenses, Cuong, the director, said. Indonesia and Thailand to resume car exports following Decree /MAR/2018 INTELLASIA VIR Indonesia and Thailand, Vietnam's two major car exporters, are trying to change the Vehicle Type Approval (VTA) certificates to reopen car exports to the country after Decree 116 tightened quality checks. International trade director general of the Indonesian Ministry of Trade Oke Nuwan said in a statement on last Thursday that, "With the VTA adjustment, Indonesian automobile exports are expected to return to the country." Under the decree, car importers in Vietnam are required to obtain a VTA certification, which details the imported vehicles' quality, safety and environmental protection. The Intellasia 6 March / 49