FINANCE. finance & business news. Reference exchange rate up by 7 VND

finance & business news 27 October 2017............................... 1 Reference exchange rate up by 7 VND 1 SBV's seven years of tightening foreign currency lending 2 Credit growth room in Q4 remains large 3 Credit of lower-level banks soars 3 Credit growth to reach 18pct at year's end 4 How should Vietnam treat overseas remittances? 5 Bad debt continues to surround banks 6 Tertiary training offered to bankers 7 Vietnam, Italy bolster financial supervisory cooperation 7 PGBank sees profit of 136 billion dong in first 9 months, bad debt rises to 2.69pct 8 Government set socioeconomic goals for 2018 9 More transparent, favourable business climate improves Vietnam' competitiveness 9 Ten-month FDI grows 37pct to 28 billion USD 10 Agro-forestry-fishery exports to hit nearly 30 billion USD in 10 months 10 VN's export goods have competitive advantage: Korean firms 11 EU checks of all seafood imports from Vietnam likely 11 VN vows to combat IUU fishing 12 E-invoice use may be postponed until 2019 13 Firms wary of switch to e-invoices 13 HCM City to hike water resource tax 14 HCM City enhances PPP model 14 Inspection overlap rampant in agriculture sector 15 Becoming a smart city will fix HCM City's problems: official 16 Food and beverage sector expected to grow further 17 Vietnam's capital market increasingly attractive 17 Foreign investors seek more shares in infrastructure company 19 Hanoi promotes hi-tech agricultural development 19 Cultivating technology 20 JLL: Momentum continues in real estate M&A 22 HCM City promotes trade, investment in Australia 23 Japan invests big in Binh Duong 23 RoK's businesses explore investment in Binh Duong province 24 Can Tho, Brazil's Maranhao state partner in aquaculture 25 Reference exchange rate up by 7 VND BIZ NEWS.............................. 25 Business Briefs 27 October, 2017 25 VN Index leaps over 830 points 26 VN Index dips after two-day rise 27 ETF SSIAM VNX50 listed on HoSE 27 Phu Quoc seeks to lure more tourists 28 Mekong Delta tourism in dire need of investors 29 Ha Tinh province boosts tourism cooperation 29 Rainfall could affect coffee harvest in Vietnam 30 HCM City ready to cooperate with Airbus in smart transport development 31 COECCO signs mining contract with Lao government 31 Monorail is no solution to congestion in airport areaexperts 32 BOT road toll collections problematic 32 HCM City asks Uber, Grab to stop taking on new cars 33 Ministry of Public Security in charge of assessing Internet firms 33 FIA, INCHAM cooperate in investment promotion 34 Kuehne + Nagel promote seamless digital supply chains 34 DQS hands over gas tanker to domestic firm 35 Two high-tech farm projects approved in Da Nang 35 Expansion of major bridge in HCM City complete next month 35 Nestle Vietnam to hike prices of certain weaning foods 36 TUV Rheinland Vietnam expands training in textiles industry 36 Jica supports HCM City in greenhouse gas monitoring 37 Saigontourist, VNPT cooperate to build smart travel solutions 37 CBRE to manage Agrexim Building 38 Khanh Hoa Salanganes Nest picks up international award 38 MoIT initiates probe into fraudulent silk scandal 39 Hanoi market watchdog seizes Khaisilk products following ' Made-in-China' scandal 40 New transport minister and chief inspector appointed 41 Big C launches 'same price' promotion 42 Lam Dong solicits green investment at conference 42 Canon EXPO 2017 opens in HCM City 43 Vietnam Medi Pharm Expo to run in Hanoi 44 VN aquaculture trade show opens new doors 44 Motor show opens in town 45 27/OCT/2017 INTELLASIA VNA The State Bank of Vietnam set its reference VND/USD exchange rate at 22,474 VND/USD on the morning of October 27, up by 7 VND from the day ago. With the current +/- 3 percent VND/USD trading band, the ceiling exchange rate is 23,141 VND per USD and the floor rate is 21,793 VND per USD. Major commercial banks kept their rates stable. Vietcombank and Vietinbank set 22,685 VND (buying) and 22,755 VND (selling), per USD, unchanged from October 26. BIDV kept their rates unchanged from the previous day at 22,690 VND (selling) and 22,760 VND (buying), per USD https://en.vietnamplus.vn/reference-exchange-rate-up-by-7-vnd/120143.vnp Intellasia No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi All Rights Reserved Tel: +844 2213 2244 Fax: +844 3759 2034 Email: Office@intellasia.com Websites: www.intellasia.net www.tritueachau.com

Vietnam finance & business 27 October 2017 SBV's seven years of tightening foreign currency lending 27/OCT/2017 INTELLASIA VNECONOMY Since the boom period, the State Bank of Vietnam (SBV) has spent seven years gradually withdrawing foreign currency credit a low-cost source of capital to support enterprises in many periods. Specifically, according to Circular 31/2016/TT-NHNN, there are only two months left for commercial banks to terminate foreign currency lending activity. If there is no adjustment in terms of time, the foreign currency lending and mobilisation in the banking system will be transformed into normal selling and buying activities after December 31st 2017. In the past seven years, SBV has repeatedly wanted to terminate foreign currency lending but the extension of the deadline has been made over the years until now, due to actual requirements. On one hand, the boom of foreign currency lending in the past, was referred by many experts as the cause of foreign exchange rate instability and complicated dollarisation situation in the economy. On the other hand, since foreign currency loans are often offered at much lower interest rates compared to loans in dong (VND), it became a valuable source that supports enterprises when their business and production activities faced many difficulties, especially from the impacts of the global financial crisis in 2008, as well as the pressure of VND interest rate escalation (to 18-25 percent per annum) in the period of 2010 2012. With the value of this source of capital, in the context of stimulating and increasing support to enterprises, by late 2009, SBV issued circular supplementing two additional objects eligible to borrow foreign currency, of which the notable points are the needs for implementing investment projects, production plans and trading of goods and services for export. In early 2010, the operator continued its stimulus policy by deciding to significantly lower the required reserve ratio from 7 percent to 4 percent for terms of less than 12 month, from 3 percent to 2 percent for terms of over 12 months. At that time, there was an estimate that about 500 million USD were "returned" to banks for increasing lending under this decision. With the opening of this policy, in 2010, foreign currency boomed. According to report of SBV, the credit growth of the entire system in 2010 reached up to 29.81 percent, in which credit in VND rose by 25.3 percent and in foreign currency rose by 49.3 percent. If excluding the abstract number due to the increase of exchange rate and gold price, the total outstanding credit in that year developed by 27.6 percent, in which lending in VND rose by 25.3 percent and lending in foreign currency rose by 37.7 percent. In such situation, many experts, at that time, gave warning about the potential risks of foreign currency for the foreign exchange rate and dollarisation situation. SBV started to tighten the lending in foreign currency. At the same time, in the later ears, the mechanism of ceiling interest rate have been implemented, and so far the 0 percent per annum deposit interest rate in USD. As a general direction, SBV has implemented the policy to gradually shift foreign currency mobilisation and lending activities in the system to normal buying and selling activities. This direction continued to be affirmed by a representative of SBV in a seminar last week. Before the above deadline (December 31st 2017), with the prolonged stability of the USD/VND exchange rate (the cost risk is stabilised), many enterprises have increased their foreign currency loans to take advantage of the lower-interest rate source. The periodically updated report of the National Financial Supervisory Commission (NFSC) showed that the foreign loans have sharply increased from the beginning of the year, much higher than the same period of 2016. Specifically, in the first nine months of the year, foreign currency lending was estimated to rise by 12.9 percent, much higher than the 5.4 percent recorded in the same period of last year and accounting for 8.4 percent of the total lending. As mentioned in the above, with about 5-7 percent per annum lower than lending interest rates in VND, foreign currency loans have become a valuable "buoy" for enterprises in the difficult period. Nevertheless, with the orientation of SBV as well as the reduction of VND interest rates to low levels compared to the period of 2010-2012, the foreign currency lending policy has been determined to terminate in the next two months. The possibility that it will be extended, or the possibility that the value of foreign currency loans will continue to be further exploited, are left open, besides trade-offs and options. Intellasia 27 October 2017 2 / 45

Credit growth room in Q4 remains large 27/OCT/2017 INTELLASIA BAO DAU TU As per information from the State Bank of Vietnam (SBV), as of the end of September 2017, credit of the entire banking system increased 12.16 percent from the end of 2016, a relatively high growth compared to some recent years. Of which, agricultural and rural credit rose about 17.6 percent compared to 17.75 percent for industrial credit, 19 percent for construction, 18.1 percent for trade and service sector from the end of 2016. Outstanding loans to small and medium businesses as of the end of August 2017 accounted for 21 percent of the economy's outstanding loans, up 7.5 percent from December 31, 2016. Credit growth has positively supported for the GDP in the first nine months to improve 6.41 percent, much higher than the 5.99 percent in the first nine months of 2016. With such credit, many people said the credit growth target of 21 percent is not difficult to be achieved. However, Dr Tran Du Lich, member of the Economic Advisory Board of the prime minister said the credit growth room in Q4 is still quite large, because in the first three quarters of this year, the banking sector has just used more than 12 percent of the credit room. It would be good with the growth of 18 percent that the banking sector set at the beginning of this year, not to mention the further increase of two percent in credit room. For example, in HCM City, if the credit growth rate is 18 percent, then from now till the end of the year, about 100 trillion dong will be available to lend. The remaining issue is whether the economy can absorb capital or not. Nguyen Hoang Minh, deputy director of the State Bank's HCM City branch said the outstanding loans in the city as of the end of September 2017 reached more than 1,670 trillion dong, up 13.5 percent from the end of 2016 and 19.58 percent from the same period of 2017. This credit growth is nearly three percent higher than the national average. However, the remaining room for the last quarter of the year still remains large, especially when credit room is further loosened by two percent. Many people said that as of the end of September 2017, though the credit growth of the entire sector was higher than the same period last year, compared to the credit growth target of 21 percent set by the government, there is still a long way to go. The report by Vietnam Institute for Economic and Policy Research (VEPR) shows that it is difficult to achieve the credit growth target of 21 percent in 2017. The lack of supply of loans (through mobilisation) may continue creating barriers for the monetary policy of the State Bank in the last quarter of 2017. Specifically, the policy on interest rate reduction may increase credit but is difficult to mobilise deposits. The credit expansion target by two percent creates favourable condition for the bank to have more room for lending, especially when outstanding loans gradually improve. Dr Tran Du Lich said in fact, many businesses are still difficult to assess bank capital, high interest rate leads to limited investment in the medium and long term as the bank has not felt secured to lend. On the other hand, boosting credit target is hard to prevent capital to flow into real estate, causing risks to increase and if not tightly controlled, high bad debt will reoccur. Meanwhile, as per the assessment of Pham Hong Hai, CEO of HSBC Vietnam, it is not difficult to attain the credit growth target of 21 percent but it should be noted that fast credit growth may create new risks for the banking sector, especially if new credit is allocated to inefficient and non-productive economic sectors. Credit of lower-level banks soars 27/OCT/2017 INTELLASIA VIETNAM Commercial banks are in the peak period to announce Q3/2017's financial statements. The financial picture of banks has had a certain shape especially the sharp increase in outstanding credit in lower level banks. As at Vietnam International Commercial Joint Stock Bank (VIB), the outstanding credit as of September 30 reached 72.348 trillion dong, up 20 percent from the beginning of the year. Another bank that is also present on Upcom i.e. Kien Long Commercial Joint Stock Bank (KienLongBank) also recorded impressive credit growth of 19.3 percent after Intellasia 27 October 2017 3 / 45

nine months, hitting 23.590 trillion dong. Tien Phong Commercial Joint Stock Bank (TPBank) even recorded the credit growth of 21.6 percent, touching 56.708 trillion dong. As per information from the Orient Commercial Joint Stock Bank (OCB), the outstanding credit as of the end of Q3 was 46.843 trillion dong, completing 99 percent of the plan. Compared to the outstanding loan of 39.607 trillion dong at the beginning of the year, the credit growth was 18.3 percent. For Hochiminh City Housing Development Bank (HDBank), the outstanding loans are currently 104.233 trillion dong. Compared to 82.224 trillion dong at the beginning of the year, HDBank's credit growth over the last nine months amounted to 26.8 percent. More than 20 percent is a very high credit growth level. Statistics from the State Bank show that the credit growth of the entire banking sector after the first nine months of the year was just more than 12 percent. The fact that credit soars means that banks really want to boost profits. In January-September, the profitability of lower level banks was rather positive. For example, VIB recorded the profit increase of more than 1.53 times over the same period, reaching 623 billion dong or KienlongBank's profit has improved markedly when increasing nearly 10 times in this period, to 153 billion dong. TPBank recorded the pre-tax profit of 806 billion dong, 2.3 times higher than the same period last year, which is quite easy for the bank to attain trillion-dong profit at the end of the year. OCB impressed with the pre-tax profit of 789 billion dong after nine months, completing the whole year plan, up as much as 63 percent compared to the whole year profit. HDBank was most impressive when reporting as much as 1.912 trillion dong profit, a sharp increase of 279 percent from the same period last year. Boosting credit growth towards high profit is a good thing for banks, especially lower level ones. Achievements were also partly reflected in the 9-month business results. Boosting credit growth was also an immediate measure to lower bad debt ratio, creating another bright spot in the financial situation of banks. The period before 2012 when credit soared in banks was also the period that accumulates a large amount of bad debt for the following period. With the old lesson, banks will surely be more rational. However, the credit quality control has always been a difficult math. Liquidity risk is also an issue. Lower level banks are fairly uncertain in the capital mobilisation. TPBank is a typical example. The bank's outstanding loan is currently 56.708 trillion dong, while customers' deposit which is core and sustainable is currently 58.903 trillion dong, which means nearly all deposits from customers (58.903 trillion dong) have been financed for credit activity, and other activities of TPBank depend mostly on borrowed capital from other banks. The situation in VIB was also quite similar. Customers' deposits at VIB currently stand at 66.491 trillion dong while outstanding credit amounts to 72.348 trillion dong, which means customers' deposits are not even sufficient to cover outstanding loans. The ambition of lower-level banks obviously does not lie in lower level group. To advance to higher level group, strong growth in credit is required because this increases asset scale, market share and profits. The concern is whether the risk control in each bank is good or not and can management agency quickly foresee risks to take timely measures or not. Credit growth to reach 18pct at year's end 27/OCT/2017 INTELLASIA TIEN PHONG As of September 20th, the credit growth of the entire system reached 11.02 percent compared to late 2016, according to a report recently released by the State Bank of Vietnam (SBV). Specifically, the report mentioned that credit for the economy has continued to rise right from the beginning of 2017, steadily increasing over the months at higher level in the same period of 2016 (10.46 percent) and 2015 (10.78). Intellasia 27 October 2017 4 / 45

In particular, the credit structure has focused mainly on production and business areas, with higher credit growth for key economic sectors and priority areas compared to the overall growth of the entire system. Lending to priority areas increased compared to late 2016, such as agriculture and rural development areas with 1,222,267 billion dong, up by 17 percent compared to late 2016, accounting for about 20.2 percent of the total outstanding loans to the economy. The lending to four remaining priority areas (as of late August 2017) such as export reached 207.001 trillion dong, up by 8.14 percent, high-tech application areas reached 35012 trillion dong, up by 25.12 percent; industrial sectors prioritised for development reached 153.837 trillion dong, up by 18.9 percent; and small and medium enterprises reached over 1.292 trillion dong, up by 7.40 percent. In the context when the lending in the last months of the year often develops sharply, it is likely that the credit growth in 2017 will exceed the 18 percent target set in the beginning of the year, and the 21-22 percent goal directed by the government. According to SBV, since the total means of payment (M2) increased by 9.59 percent compared to late 2016 (15.36 percent higher than the same period of 2016), it has supported the inflation control, ensuring inflation at low level and controlling CPI in the context when the prices of some state-managed commodities have been adjusted. The liquidity of credit institutions has been ensured at a reasonable surplus to support credit growth from the beginning of the year, thus, contributing to stabilise the mobilisation interest rate level, stimulating the cut of lending interest rates, at the same time supporting the Ministry of Finance to successfully issued long-term and low-yield government bonds. Overall, the report of SBV sent a favourable signal for the policy easing orientation in the last months of the year, which is also a strong support for the stock market. How should Vietnam treat overseas remittances? 27/OCT/2017 INTELLASIA VIETNAMNET The newly released World Bank's "Migrating to Opportunity" report shows that in 2015, Asean countries received a total $62 billion worth of overseas remittances. The remittances, called kieu hoi in Vietnamese, accounted for 7 percent of GDP in Vietnam. Economist Dinh The Hien said that kieu hoi has been an important resource for Vietnam and that remittances are on the rise in recent years. "Seven percent of GDP is not a big amount of money, but it is net money Vietnam has, no need to pay interest," Hien explained. "The money provides more capital to the national economy and is valuable also because it is in foreign currency." Economists have argued about how to encourage recipients to put remittances into business instead of keeping it in coffers, because this is the best way to mobilise resources for economic development. A report from the State Bank of Vietnam HCM City Branch released in early 2016 showed that 70 percent of the remittances go to production and business projects, while 21.6 percent go to the real estate market and 7 percent on families' daily lives, healthcare and education services. The decrease in dollar deposit interest rates has also prompted people to pour money into the property market. Unlike other analysts, who believe that remittances can bring benefits to the economy only if they are put into production, Hien thinks it would be good even if recipients use the money to spend on their needs or to buy houses. "The activities will create demand, what Vietnam wants," he explained. "Once the total domestic demand increases, it will facilitate the development of production and business, and help generate more jobs." Hien said that while overseas remittances are important, they are treated differently compared with FDI (foreign direct investment). Policy makers think that kieu hoi, like water or air, will stay in Vietnam unconditionally. But if Vietnam doesn't offer attractive investment incentives, FDI won't flow to Vietnam. Overseas remittances to Vietnam are from two sources, from Vietnamese export work- Intellasia 27 October 2017 5 / 45

Bad debt continues to surround banks ers and from overseas Vietnamese who live in other countries. The remittances from the latter source account for the larger proportion. "What Vietnam needs to do is to simplify remittance procedures and provide services at reasonable fees to encourage remittances through official channels," Hien said. An SBV's report showed that in the first eight months of 2017, remittance flows into HCM City through official channels was $3 billion, a growth of 5 percent on year. The figure was $2.1 billion in the first half of the year. http://english.vietnamnet.vn/fms/business/188675/how-should-vietnam-treat-overseas-remittances-.html 27/OCT/2017 INTELLASIA DIEN DAN DOANH NGHIEP This week, the market continues to welcome many more commercial banks to announce business results in the first nine months of 2017. Besides the impressive growth that exceeds the whole year profit plan, and decreased bad debt at some banks, some other banks still have bad debt to increase. The debt trading that has been implemented following the market price and mechanism since the Resolution No.42 took effect has created rather favourable condition for both the Vietnam Asset Management Company (VAMC) and banks to deal with bad debts, especially those relating to real estate sector. Many banks said they are making a list and inform borrowers before seizing collaterals as prescribed. This is a step in the collateral recovery process under the new regulation. Currently, some banks, after seizing collaterals, proposed auction price. However, most of these debts when offering for sale are lower than the value (including both capital and interest rate to the time of sale), many banks are forced to accept a partial reduction of penalty interest, even reduce almost all penalty interest for customers to quickly complete procedures and recover the debt. For a series of banks that have announced Q3/2017's business results, besides the impressive growth exceeding the whole year profit target, some banks still have rather high level of bad debt. Among the list of banks having increased non-performing loan (NPL) ratio are Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank), An Binh Commercial Joint Stock Bank (ABBank), Saigon Bank for Industry and Trade (Saigonbank), Viet A Commercial Joint Stock Bank (VietABank), etc. Specifically, as of September 30, 2017, VietABank's total assets reached 59.5 trillion dong, down more than three percent. Loans to customers and customers' deposits grew at modest level, reaching 31.162 trillion dong and 33.860 trillion dong respectively. The bank's total outstanding bad debt soared nearly 73 percent with 1.124 trillion dong, raising the NPL ratio to 3.49 percent (exceeding the prescribed level of the State Bank at three percent). The value of VAMC bonds held by the bank also rose approximately eight percent to 2.7 trillion dong, including the provision of 513 billion dong. As per LienVietPostBank's consolidated financial statement in Q3/2017, the after-tax profit increased 28 percent to 419.3 billion dong. The bank's NPL ratio was 1.19 percent. Although this NPL ratio is lower than the prescribed level by the State Bank, it increased nearly 28 percent to 1.132 trillion dong. Of which, the VAMC bond value held by the bank slightly decreased to 600 billion dong compared to the provision having been put at 277 billion dong. ABBank has just released Q3/2017's consolidated financial statement with the after-tax profit of more than 156 billion dong, up 78 percent year-on-year. The bank's NPL ratio increased 28.2 percent or 1.308 trillion dong. The NPL ratio at the end of September was 2.96 percent, close to the regulation of the State Bank compared to just 2.56 percent at the beginning of the year. SaigonBank's 9-month accumulated after-tax profit reached nearly 184 billion dong, up 25.7 percent year-on-year. The bank's NPL ratio still continued to increase with 369 billion dong, up nearly 12 percent. The NPL ratio was 2.77 percent, quite close to the prescribed ceiling level. The value of VAMC bonds slightly decreased to 669 billion Intellasia 27 October 2017 6 / 45

Tertiary training offered to bankers dong, of which 325 billion dong was put for provision. Assessing the increased bad debt of some banks, financial expert Dr Nguyen Tri Hieu said if banks still continued lending as strongly as the first nine months of the year, it is very likely that the NPL ratio at the end of the year will be higher than the previous year. To avoid this situation, the State Bank needs to assess credit for this year, and reconsider the credit growth target of 21-22 percent for 2017. To overcome bad debt situation at banks, Dr Hieu said banks themselves need to have strict credit risk management policy and define their risk appetite. Currently, banks are boosting too much credit into real estate and security sectors, which further increases the risks they will face. The United Overseas Bank (UOB) has partnered with the Foreign Trade University (FTU) in Vietnam to launch the finance industry's first tertiary education programme designed for bankers that serve small businesses. Speaking at a press conference held yesterday in the city, Harry Loh, country manager of UOB's HCM City branch, said that small- and medium-sized enterprises (SMEs) formed the backbone of Vietnam's economy, accounting for 97 per cent of the country's businesses. "SMEs are among the most optimistic about their growth prospects within Asia Pacific," he added. In addition, four out of five of SMEs sought external finance last year to help them take advantage of business opportunities, according to the CPA Australia Asia-Pacific Small Business Survey 2016 Market Summary: Vietnam. As SMEs manage and grow their business, they need to navigate complex areas such as business planning, cash-flow management and international trade risks. The UOB-FTU Banker's Executive Certificate Programme combines classroom-based study in credit and risk management, trade financing and regional regulatory frameworks, with practical skills training such as best practices for customer onboarding. Upon completion of the programme, UOB bankers will be better equipped to help SMEs with their business needs and to overcome the challenges they may face. Loh also said that UOB was committed to ensuring its bankers have in-depth knowledge and skills required to support the business growth ambitions of its customers. "We expect that more Vietnamese SMEs will pursue business opportunities within the region as they tap the economic benefits arising from the Asean Economic Community," he said. "As such, their needs will have to be supported by bankers who possess specialist skills and who understand what it takes to succeed in doing business across borders, whether it is in managing foreign exchange risks or navigating the regulatory landscape in different markets," he added. Associate Prof Nguyen Xuan Minh, director of the FTU HCM City Campus, said the joint training programme would address the increasing demand for skilled professionals in the banking sector. The programme is specifically designed to improve the skills of bankers as they support Vietnam's SMEs to seize regional growth opportunities, he said. Headquartered in Singapore, UOB has a global network of more than 500 offices in 19 countries and territories in Asia Pacific, Europe and North America. http://bizhub.vn/banking/tertiary-training-offered-to-bankers_289730.html Vietnam, Italy bolster financial supervisory cooperation 27/OCT/2017 INTELLASIA VNA A Vietnamese delegation led by Acting Chair of the National Financial Supervisory Commission (NFSC) Truong Van Phuoc has paid a working visit to Italy, aiming to strengthen bilateral cooperation in financial supervision. During the visit from October 22-26, the delegation met with Senior deputy Governor of the Bank of Italy Salvatore Rossi, along with officials of agencies under the Italian Securities and Exchange Commission, and the Ministry of Economy and Finances. Intellasia 27 October 2017 7 / 45

It also paid a courtesy visit to Senator Pier Ferdinando Casini, Chair of the Italian Senate Foreign Affairs Committee. The two sides shared experiences in financial institutions in the scope of each country's supervisory agencies, supervisory measures and co-ordinating mechanisms in internal agencies and with others in financial security networks. They also agreed to enhance ties in activities of both financial supervision and financial institutions while increasing information exchange about bank and stock market supervision. Additionally, the two sides decided to boost human resources training and technical support in financial supervisory activities and research on issues of mutual concern. Italian officials also shared experiences in public debts management and public budget balance with their Vietnamese counterparts, along with measures to stabilise financial and currency markets in crisis and fiscal policies of the European Union, among others. For his part, Casini stressed that the bilateral relationship has been thriving, vowing to enhance cooperation of the two countries' agencies in various fields. http://english.vov.vn/economy/vietnam-italy-bolster-financial-supervisory-cooperation-361152.vov PGBank sees profit of 136 billion dong in first 9 months, bad debt rises to 2.69pct 27/OCT/2017 INTELLASIA BIZLIVE The Petrolimex Joint Stock Commercial Bank (PGBank) has announced its financial statement for the third quarter of 2017. Accordingly, as of September 30th, the total assets of the bank reached 26.5 trillion dong, up by 6.8 percent compared to the beginning of the year. Lending to customers was 19.5 trillion dong, up by 11.3 percent while the deposits of customers were 20/8 trillion dong, up by 13.7 percent. Lending remains the main activity that brings the most profit to PGBank with a net interest income of over 209 billion dong, up by 18.8 percent compared to the same period of 2016. The net income from service activities of the bank reached 3.7 billion dong, while the foreign exchange trading saw an income of 11.4 billion dong. The operational costs in the period of PGBank reached nearly 120 billion dong, up by 16.5 percent while the risk provisioning costs slightly increased by 2.4 percent to 65 billion dong. Closing the third quarter of 2017, PGBank recorded a pre-tax profit of 67.7 billion dong, 2.3 times higher than the same period of 2016. In the first nine months of the year, the bank's pre-tax profit reached nearly 136 billion dong, doubled the number recorded in the first nine months of 2016. With this result, the bank has completed up to 90.6 percent of its 2017 annual profit target. As of September 30th, PGBank had 525 billion dong of bad debts, up by 21.3 percent compared to the beginning of the year, in which irrecoverable debts rose by 24.8 percent to 339 billion dong, accounting for 65 percent of the total lending. The bank's bad debt ratio is currently 2.69 percent of the total outstanding credit, higher than the 2.47 percent in the beginning of the year. Recently, PGBank's Shareholders committee has approved the plan to raise charter capital from three trillion dong to 3.165 trillion dong, via the issuance of shares for dividend payment. Accordingly, the bank will pay dividend at a ratio of 5.5 percent, which means that shareholders holding 1,000 shares will receive 55 new shares. The source for the issuance will be taken from the accumulated undistributed profit of the bank. This plan is scheduled to complete in 2017. With the increase in charter capital PGBank expects to reach total assets of 28.982 trillion dong, up by 17 percent compared to 2016. In particular, the total outstanding loans of the bank will reach 21.391 trillion dong, and total mobilisation will reach 25.011 trillion dong. The pre-tax profit of PGBank in 2017 is forecasted at 155 billion dong. In 2018, the bank plans to double the pre-tax profit to over 315 billion dong. Intellasia 27 October 2017 8 / 45

Government set socioeconomic goals for 2018 27/OCT/2017 INTELLASIA VGP NEWS The Vietnamese government sets growth goal of 6.5 6.7 percent for 2018 amid encouraging socio-economic signals in 2017, according to a report presented by PM Nguyen Xuan Phuc at the opening ceremony of the Legislature's ongoing 4th session. Total export value is expected to increase by 78 percent and trade deficit is projected to be below 3 percent of the country's total export revenues, PM Phuc told legislators. The government expects to lower the rate of poverty households by on multidimensional standard by 1-1.3 percent and keep urban unemployment rate under 4 percent. Other targets include trained labour of (5860 percent), ratio of hospital beds per 10,000 people (26), and healthcare insurance coverage (85.2 percent). The government expects to raise centralised waste water treatment rate at industrial and processing zones to 88 percent and forest coverage to 41.6 percent. PM Phuc affirmed the government will continue efforts to stabilise macroeconomy, create substantial changes in restructuring the economy and improving quality and competitiveness of the economy. It will also focus developing private economic sector into a key driving force of the economy, considering it one of the central task of all authority levels. In terms of infrastructure development, the government will mobilise nonstate capital to speed up key projects in order to increase connectivity. The government will also improve the quality of evaluation and control of investment projects' impacts on the environment, PM Phuc said. More transparent, favourable business climate improves Vietnam' competitiveness 27/OCT/2017 INTELLASIA VOV According to the World Economic Forum (WEF)'s Global Competitiveness Report for the 2017-2018 period, Vietnam ranked 55th out of 137 countries worldwide and 6th in the Asean region. The report said Vietnam's higher ranking is due to its improved business environment. The General Statistical Office says Vietnam saw significant socio-economic growth in the past 9 months. GDP in the third quarter grew 7.46 percent, a record for the past 10 years. If the current growth continues, economists say the GDP target of 6.7 percent set for this year is achievable. Economist Vu Kim Chi said "Vietnam's economic growth for this year is projected to remain robust thanks to the government resolution 19 on improving the business environment. Closer coordination among provinces and cities is a key to making the business environment more transparent and favourable. This is an important factor in improving Vietnam's economic competitiveness." Vietnam jumped to 55th, up five places from last year and up 20 places from five years ago on the Global Competitiveness Index (GCI). The report acknowledged Vietnam's remarkable improvements in technological readiness and labour market efficiency. Trade is another factor propelling Vietnam upward. Vietnam has also benefited from its international economic integration policies. "Changes in the world are forcing Vietnam to change, promulgate more appropriate policies, develop reform plans, restructure its economy, renovate its growth model, and carry out international economic integration more efficiently. They are the prerequisites to keep the economy growing sustainably," said Nguyen Anh Duong, an economist of the Central Institute for Economic Management. Vietnam's signing of Free Trade Agreements is extremely important to increasing the competitiveness of its goods. By reducing or eliminating tariffs and non-tariff barriers, Vietnamese goods can more easily penetrate the markets of FTA partners, helping Vietnam to expand its import-export markets and avoid dependence on a single market. The government has managed its financial and monetary policies flexibly, contributing to stabilising the monetary market, boosting growth, controlling inflation, reducing lending interest rates, and speeding up the disbursement of public investment. The government is also stimulating domestic demand, increasing the competitiveness of domestic goods, maintaining the growth of manufacturing, and boosting trade promotion and export growth. Intellasia 27 October 2017 9 / 45

Ten-month FDI grows 37pct to 28 billion USD 27/OCT/2017 INTELLASIA VNA About 28.24 billion USD in foreign direct investment (FDI) was poured into Vietnam between January and October, up 37.4 percent year-on-year, said the Foreign Investment Agency under the Ministry of Planning and Investment. The sum included capital registered for new and existing projects and capital for buying stakes and contributing to charter capital of existing companies. As of October 20, FDI projects had disbursed 14.2 billion USD, 11.8 percent more than in the same period last year. [Infographics: Sectors attract the most FDI in the first 9 months of 2017] With 7.62 billion USD, the Republic of Korea is the biggest among the 112 countries and territories investing in Vietnam, making up 27 percent of total FDI. It is followed by Japan, which invested 6.07 billion USD, or 21.5 percent of total FDI, according to the Foreign Investment Agency. https://en.vietnamplus.vn/tenmonth-fdi-grows-37-percent-to-28 billion-usd/ 120102.vnp Agro-forestry-fishery exports to hit nearly 30 billion USD in 10 months VN's export goods have competitive advantage: Korean firms 27/OCT/2017 INTELLASIA VNA Export turnover of agro-forestry-aquatic products is expected to reach 2.74 billion USD in October, bringing the ten-month figure to nearly 29.76 billion USD, up 12.7 percent year-on-year. According to the Ministry of Agriculture and Rural Development, export earnings from farm produce in the January-October period are estimated at 15.62 billion USD, up 15.2 percent year-on-year. Meanwhile, the shipment of aquatic and forestry products are expected to hit 6.73 billion USD and 6.44 billion USD, representing respective year-on-year increases of 17.6 percent and 9.9 percent. Vietnam's rice exports in October are expected to reach 430,000 tonnes worth 206 million USD, raising the ten-month volume and value to 5.05 million tonnes and 2.25 billion USD, up 22.3 percent and 21.1 percent, respectively. The average rice export prices of the nine months were 442.3 USD per tonnes, falling 1.6 percent from the same period of 2016. Strong export price increases were seen in coffee, cashew, and rubber. The country hopes to earn 1.77 billion USD from shipping abroad 1.05 million tonnes of rubber in the 10-month period, up 5.7 percent in volume and 40.6 percent in value year-on-year. Cashew exports hit 289,000 tonnes worth 2.87 billion USD, falling 0.4 percent in volume, yet raising 23.1 percent in value. Meanwhile, shipment of coffee is estimated at 1.17 million tonnes to pocket 2.69 billion USD, dropping 2.5 percent. The exports of pepper is estimated at 192,000 tonnes, worth 1.02 billion USD in the reviewed time, up 20.7 percent in volume, yet reducing by 21 percent in value year-onyear. Vietnam shipped 209 million USD worth of vegetables and fruits in October, raising the figure of the first ten months to 2.84 billion USD, up 41.2 percent year-on-year. China, Japan, the US and the Republic of Korea were the four leading importers of Vietnamese vegetables and fruits. The ministry also reported that Vietnam spent around 1.86 billion USD importing agro-forestry-aquatic products in October, raising the total Jan-October import value to 22.93 billion USD, up 14.3 percent from the same period last year. https://en.vietnamplus.vn/agroforestryfishery-exports-to-hit-nearly-30 billion-usd-in- 10-months/120135.vnp Vietnam's export goods can compete with products of other countries in the South Korean market, local enterprises in South Korea said at a meeting between a delegation of Vietnamese enterprises and their partners in Seoul, South Korea, on Tuesday. The South Korean enterprises said Vietnamese export goods have better packaging de- Intellasia 27 October 2017 10 / 45

sign, meeting the demand of the South Korean market and offer a competitive selling price compared with similar products from the Philippines, China, Indonesia and Thailand. These are among the key factors to promote Vietnam's export goods to South Korea in the future, contributing to achieving the Vietnam-South Korea trade value target of $70 billion in 2020, according to the Department of Asian and African Markets under Vietnam's Ministry of Industry and Trade. The growth in exports from Vietnam to South Korea will reduce Vietnam's trade deficit with South Korea and increase exports of processed seafood and agricultural products to the North Asian country. During the meeting, Tran Anh Vu, counsellor at the Vietnam Embassy in South Korea, and Kim Hyun-myung, vice chair of the Korean Importers Association (KOIMA), highlighted the importance of the South Korean market for Vietnamese goods and opportunities in business cooperation among enterprises of the two countries. The Vietnam-South Korea strategic cooperation partnership with various cooperation frameworks in the economic sector has been an important tool to support the recent growth in bilateral trade, including the Vietnam-Korea Free Trade Agreement. At the meeting, Le An Hai, deputy director of the Department of Asia and Africa Markets, said bilateral trade value between Vietnam and South Korea in the first nine months reached over $45 billion, a year-on-year increase of 52 per cent. This nine month figure was higher than the total trade value of $43.4 billion between the two countries earned in the whole of last year. This result was due to business meetings among enterprises of the two countries and authorities' support in trading activities of the two countries' enterprises, Hai said. The meeting was organised by the Department of Asia and Africa Markets under Vietnam's Ministry of Industry and Trade, the Vietnam Trade Office in South Korea and KOIMA. The meeting was expected to introduce more Vietnamese goods, mainly agricultural products, food items and household goods in the South Korean market. -- http://bizhub.vn/news/vns-export-goods-have-competitive-advantage-koreanfirms_289747.html EU checks of all seafood imports from Vietnam likely 27/OCT/2017 INTELLASIA THE SAIGON TIMES The European Commission's (EC) decision to book Vietnam a "yellow card" over its inadequate action to deal with illegal fishing activities of Vietnamese vessels in waters of neighbouring countries could lead to all seafood imports from Vietnam to the European Union (EU) being inspected. According to Nguyen Thi Trang Nhung, deputy director of the Scientific and Technological and International Cooperation Department under the directorate of Fisheries, the warning applies to wild-caught fish only. This means farm-raised fish will not be affected. "Although the EC's decision does not, at this stage, entail any measures affecting trade, Vietnamese seafood shipments to the EU market may be inspected to verify the origin and legality of products, resulting in a longer storage time. Vietnamese exporters would certainly shoulder storage and inspection fees," Trang said. This would have a knock-on effect on other importers, especially those buying Vietnamese seafood for re-export to the countries that also object to illegal, unreported and unregulated (IUU) fishing. According to the directorate of Fisheries, the EU makes up more than 29 percent of Vietnam's total seafood exports, with annual revenue amounting to about $350 million. At a conference in HCM City in late September, Vu Quang Vinh, deputy general director of CJ Cau Tre Food JSC, said an EU yellow card meant all seafood containers from Vietnam would be checked within a period of three or four weeks. If they are cleared, exporters would incur an extra cost of 600-700 euros each container at ports. But the cost would surge to 4,000-5000 euros per container if their products are returned. The Vietnam Association of Seafood Exporters and Producers (VASEP) said the EC's warning mars the reputation of Vietnamese seafood. However, this is also a chance for Intellasia 27 October 2017 11 / 45

the country to do something to the fishery sector to ensure the sustainable use of marine resources. Vietnam will have time until April 23, 2018, or six months from the date of the yellow card being issued, to take measures to rectify the situation and improve its legal and administrative frameworks. By the deadline, if Vietnam fails to take adequate action to ensure its fishing activities are legal, the EC would issue a "red card" and all fishery products caught by Vietnamese vessels would be banned from the EU market. If issues are solved and significant progress is observed, the EC will end the dialogue by issuing a "green card". The EC has issued 25 warning cards against countries and territories failing to meet its requirements for addressing IUU fishing, including six red cards. Nguyen Ngoc Oai, deputy head of the directorate of Fisheries, said the directorate is preparing to approve a national action plan for addressing illegal, unreported and unregulated fishing until 2025. By the time the amended Fishery Law is approved by the National Assembly, the directorate will craft documents to ensure Vietnam's legal and administrative frameworks will meet the EU's requirements. The government has asked coastal localities to take stronger measures to deter IUU fishing activities conducted by Vietnamese vessels in waters of neighbouring countries. http://english.thesaigontimes.vn/56764/eu-checks-of-all-seafood-imports-from-vietnam-likely.html VN vows to combat IUU fishing After Vietnam received a "yellow card" from the European Commission because of its failure to meet standards against illegal, unreported and unregulated (IUU) fishing, stakeholders are preparing a national action plan to prevent, minimise and eliminate illegal, IUU fishing by 2025. Speaking at the a press conference held in Hanoi on Wednesday, Acting director general of directorate of Fisheries Nguyen Ngoc Oai said the draft plan was submitted to the prime minister on October 10. It will be implemented as soon as it is approved. Oai said the Ministry of Agriculture and Rural Development (MARD) had established an inter-sectoral working group to direct and co-ordinate actions to satisfy the EC's strict regulations against IUU fishing. Oai said the "yellow card", which is technically considered a warning applied to seafood products exploited at sea, not to aquaculture products, and offers Vietnam the opportunity to take measures to rectify the situation within six months. "During this time, seafood export activities will be still in place. However, there will be some impacts such as: increased inspection on imported products from Vietnam (up to 100 per cent of Vietnamese exports may be inspected), leading to prolonged storage, increased cost of inspection and storage costs for Vietnamese enterprises," said Oai. "We will organise delegations to negotiate with EU representatives to help them further understand and acknowledge the efforts of Vietnam in implementing and responding to EU recommendations," he added. Oai said Vietnam would quickly complete procedures for accession to the UN Fish Stocks Agreement and the FAO Port State Measures Agreement. As soon as the revised Fisheries Law is passed by the National Assembly this year, the government will issue regulations to create a legal framework for fisheries management as required by the EU. On the sidelines of the 14th National Assembly in Hanoi on Thursday, delegate Nguyen Viet Thang from the southern province of Ben Tre said the EC's yellow card to Vietnamese seafood had already heavily affected the country's seafood exports as well as its reputation. "The income of fishermen is directly affected. Therefore, to overcome the "yellow card" and avoid the status of "red card", all levels of government, from central to local, and Intellasia 27 October 2017 12 / 45

E-invoice use may be postponed until 2019 fishermen must drastically adhere to the expectations of importing countries," said Thang. Seafood processing and exporting enterprises must strictly comply with these regulations as well. Fishermen need to be more self-aware in fishing, he added, and take responsibility to avoid IUU fishing. http://bizhub.vn/news/vn-vows-to-combat-iuu-fishing_289751.html 27/OCT/2017 INTELLASIA THE SAIGON TIMES The general Department of Taxation has proposed the Ministry of Finance put off a rule requiring enterprises to shift to using electronic invoices until mid-2019, one year and a half later than originally planned, said Nguyen Dat Tri, deputy director of the department. Speaking at a teleconference on the government portal, Tri said that after two seminars on a draft decree on invoices held by the Vietnam Chamber of Commerce and Industry (VCCI), the department found many enterprises were still concerned over the new regulation slated to go into force early next year. Therefore, the department has come up with solutions to minimise the impact of the new rule, so the shift to e-invoices should be rescheduled until July 2019. The department earlier proposed newly-established enterprises and those likely to evade tax use e-invoices with verification codes issued by tax authorities by last month. However, these entities found it difficult to carry out the plan as they did not have enough time to prepare and the draft decree on invoices had not been approved at the time. Tri said 2,700 enterprises using e-invoices and 239 others using e-invoices with verification codes issued by tax offices should maintain the status quo. Paper-based invoices that are already printed can be used but tax data must be sent to tax authorities. Most businesses are ready to use electronic invoices as they have been familiar with online tax registration, declaration, payment and refund, Tri said. The tax agency has made e-invoicing apps available for computers and smartphones. http://english.thesaigontimes.vn/56754/e-invoice-use-may-be-postponed-until- 2019.html Firms wary of switch to e-invoices The Ministry of Finance is drafting regulations on e-bills and will ask the government to set a deadline of July 2018 for businesses to switch over from paper. But local businesses say they don't have the information technology resources to meet the proposed deadline. Their concerns were heard at an online discussion on e-invoices held on Tuesday. The government is seeking to promote e-invoices because statistics from the general Department of Taxation showed that while paper invoices cost a total of VND4 trillion (US$177.8 million) a year, universal e-invoice use would cost only VND1 trillion. E-invoices also make it more difficult for businesses to evade taxes while ensuring they receive all the tax refunds to which they are entitled. "The application of e-invoices could create transparency for all transactions. When the use of e-invoice becomes popular, transactions of even less than VND200,000 will result in a tax refund. This could bring big profits to companies," said Dau Anh Tuan, head of the Vietnam Chamber of Commerce and Industry's Legal Department. The number of businesses using e-invoices has increased steadily. By the end of June, there were some 2,700 firms using 300 million e-invoices, up from 800 firms at the end of last year. Nearly 2,400 businesses used e-invoices verified by tax agencies in the pilot implementation of the general Department of Taxation in 2014. However, Tuan expressed doubts about the implementation timeline proposed, as the department has received many complaints from firms about the short amount of time they would have to replace paper bills. He said many small and micro companies are particularly worried about meeting the Intellasia 27 October 2017 13 / 45