BUSINESS IN BRIEF 1/4
Poor internal controls mask abuses of company funds
The possible bankruptcy of construction company Hanic (SHN) has revealed possible misuses of company funds by staff and drawn attention to the inadequacy of many companies' internal control systems.
According to the deputy director of the Ministry of Finance's Debt and Asset Trading Corporation, Pham Manh Thuong, the rising misuse of shareholder capital for individual purposes reflects a failure of internal control systems.
"It could be caused by the collusion of major shareholders or the concentration of power into a group of individuals," Thuong told the newspaper Dau tu Chung khoan (Securities Investment).
In Viet Nam, the positions of chairman and chief executive officer were often held by one person, he noted. Independent audits, meanwhile, were post-transaction procedures and could not prevent the abuses.
"Once company leaders aim to hide their true operations, auditors can't do much," he said. Thuong suggested the use of independent monitoring systems such as supervising banks, as well as directors and officers liability insurance.
"Liability insurance would not only help limit the damage of capital misuse, but also strengthens control over company leaders by an independent third party," he said.
If an enterprise received loans, the lender could also monitor the use of the loan proceeds. "This helps companies use the money soundly and increases the trust of the financing entity."
Shareholders must also be aware of their rights within companies, Thuong said. The problem of small shareholders ignoring their rights to monitor business operations has led to the collusion of major shareholders and management boards.
Cases like Hanic have also been due to legal loopholes, said an analyst for the financial information website vietstock.vn, Nguyen Dinh Dung. "Under the Law on Enterprises, the board of management is given too much power," Dung said.
The State Securities Commission, which has the authority to directly monitor the securities market, has not functioned fully in that capacity, he said. "It does not have a professional analysis system to detect hidden risks and alert investors."
In his latest dispatch to the Ha Noi Stock Exchange, Hanic chairman and CEO Dinh Hong Long admitted his company was about to go bankrupt. If Hanic goes bankrupt, about 6,000 shareholders face the loss of their investment.
Hanic sought to be the exclusive distributor of the Thanh Ha-Cienco 5 project, so it worked with the Ministry of Defense's Beta Co and let Beta VND238 billion ($11.3 million), unaware that Beta was not the owner of the project and that Beta's charter capital was a mere VND20 billion ($952,380).
Local firm cuts deals with GE, Microsoft
Quang Dung Technology Distribution Company on Tuesday signed two agreements with GE Energy - Industrial Solutions and Microsoft Corporation to distribute products of the two U.S.-based companies in Vietnam.
Under the deal signed with GE Energy - Industrial Solutions, a business subsidiary of General Electric (GE), the local firm becomes the authorized distributor of industrial and commercial electrical products in Vietnam for GE.
Quang Dung, also known as QD.TEK, is a distributor in the residential and commercial sectors in Vietnam which aims not only to distribute high quality products but also to offer a wide range of support services, including consulting, design, monitoring, project management and system evaluation on completion. The deal clinched with GE is expected to enable the company to ensure the most reliable, effective and eco-friendly power infrastructure for all kinds of office and residential buildings.
Both sides agree to place emphasis on making it easy for customers to approach products in a greener way, helping them save on operating costs, minimize negative impact on the environment and stabilize the system operation.
“Officially becoming the master distributor in Vietnam for the entire electrical products of GE is an important development of QD.TEK, completing our products portfolio offered to our customers while penetrating new market segments,” said Dang Thach Quan, director of QD.TEK
Meanwhile, the other deal allows Quang Dung to provide Microsoft Dynamics enterprise management solutions in Vietnam. The solutions are said to help enterprises easily manage business, make decisions quickly, as well as saving the human resource.
Speaking of this deal, Quan said that the partnership with Microsoft helps the company deliver additional solutions and services to customers.
Foreign firms drive export growth
Exports by foreign firms topped US$15.54 billion in the first quarter, an increase of 43 per cent year-on-year, according to the Ministry of Industry and Trade.
With their deep pockets, technologies, and stable markets, FDI firms, especially in the processing, electronics, and mobile-phone industries, enjoyed particularly strong growth, Deputy Minister of Industry and Trade Nguyen Thanh Bien told a review conference on exports in HCM City on Tuesday.
For instance, Samsung, whose exports last year were worth $6 billion, has earned $1 billion a month this year, he said.
However, domestic firms failed to show any dynamism, achieving only $8.98 billion in exports, or the same as last year.
Despite unfavourable internal and external factors, overall the country saw good growth in exports, which rose 23.6 per cent to $24.5 billion, Bien said.
Eight items topped the $1 billion mark, including seafood, coffee, crude oil, garment and textile, computer and electronic products, and telephones and components.
He said many sectors achieved high export growth: 39 per cent by the processing industry, 180 per cent by telephones and components, 98 per cent by electronic products and components, 40.3 per cent by rubber products, and 58.7 per cent by steel products.
On the other hand, items like rice, coffee, and cassava saw sharp falls in terms of both volume and value due to falling global demand, he said.
The world economic downturn and public debt crisis in Europe have badly affected Viet Nam's key export markets. Besides, the prices of many goods have fallen from earlier this year.
But the greatest difficulty faced by businesses was the lack of funds, conference participants agreed.
The interest rates on bank loans remained too high despite the recent fall. Export firms, especially small and medium-sized ones, also complained about their inability to get bank loans.
Many business groupings called on the Government to reschedule their loans to help them tide over the current difficulty.
Nguyen Thai Hoc, chairman of the Viet Nam Cashew Association, said agro-forestry and fisheries products are very price sensitive.
"Interest rates on bank loan should be around 12 per cent, and businesses find it very difficult at the current 16-17 per cent rate, especially at a time of falling prices and high inventory," he said.
About 40 per cent of cashew firms are facing liquidity problems, with some not having enough funds to even repay their old loans, he said.
This year the industry needs about VND6 trillion ($287 million) to buy 350,000 tonnes of raw cashew from farmers and another VND6 trillion to import 300,000 tonnes for processing for export, he said.
He urged the trade ministry to help the industry with regard to interest rates and the cash crunch.
Many participants called on the ministry to set rules for export of goods like cashew and rubber to control quality and safeguard the prestige of Vietnamese goods.
Bien called on business groupings to chalk out measures to resolve the difficulties faced by their members.
Garment sector faces rough road ahead
Viet Nam's textile and garment sector is likely to face challenges this year to reach its target of US$18.5-19 billion export turnover, according to the vice-chairman of the Viet Nam Textile and Apparel Association (VITAS), who spoke at a seminar held yesterday in HCM City.
Dang Phuong Dung, vice chairman and secretary general of VITAS, said global economic woes still plagued major markets as the US, EU and Japan.
Organised by VITAS and Dun & Bradstreet Co (D&B), the seminar heard opinions and suggestions on the sectors' future growth and plans.
"The public debt crisis and EU consumers have tightened their spending, leading to lower export orders," she said.
In addition, production costs and the prices of electricity, water and fuel as well as salaries and bank-loan interest are all on the rise.
"One of the biggest challenges is the lack of human resources, especially for high quality workers," she said.
Many companies cannot fulfill orders on contract because they do not have enough workers, affecting product quality.
She said that businesses should improve their sense of social responsibility, guarantee reasonable incomes for workers, build a healthy working environment, and create good promotion opportunities for workers.
She also noted that heavy reliance on imported materials and outsourcing orders that see a low return rate would not increase added value for export items or the competitiveness of the sector.
Production, technology and productivity management are all still weak, according to Dung.
Most small- and medium-sized enterprises (SMEs) lack marketing skill, and design capacity for producing unique products was poor. In addition, trademarks are not developed well.
Moreover, exporters have faced difficulties in accessing bank loans, and lack capital to import materials. As a result, exporters must restrict their operations and only take outsourcing orders. That has lowered the competitiveness of the sector.
Foreign-currency loans in Viet Nam have a high interest rate of 6-8 per cent per year, but foreign- currency loans in many other countries are being offered at an interest rate of 0.5-2 per cent.
Dung said the nine-member Trans-Pacific Partnership (TPP), which is still in the negotiations stage, is seen as a great opportunity for the Vietnamese textile and garment sector.
With TPP, the tariffs imposed on the goods that Viet Nam and TPP-member countries export to the US would decrease gradually before they are removed.
This means that when Viet Nam's textile and garment products can be exempted from tax, it would be more competitive in the US market with other rivals.
"However, exporters will face a new challenge with regard to origin. It is critical to take into account all the steps in making finished products from sourcing materials to finishing products, as Viet Nam is known as lacking professionalism in terms of weaving, dyeing and finishing fabrics," she said.
Because most Viet Nam garment factories have to import fabrics for production, Dung said it was necessary to develop supplementary factories so that Viet Nam garment exporters could take the initiative during the entire process.
Two promising markets are Russia and South Korea. Russia's entry into the World Trade Organisation is expected to bring lower tariffs and even zero tariffs on Vietnamese exports.
In addition, many companies make good use of preferential tariff agreements, especially incentives from South Korea, where Vietnamese exports jumped in turnover from $4.6 billion in 2010 to $6.5 billion last year.
She suggested that the Government also promote negotiations and sign Free Trade Agreements to create meaningful growth for the textile and garment industry.
Bill Gadd, chief executive officer of US-based Viet Nam B2B Direct-International Trade Solutions Co, said Viet Nam was favoured by US companies and they were eager to do business with the textile and garment sector.
To be successful with American companies, they should learn business fundamentals and have thorough preparations such as a company profile, English website, brochures in English and samples available.
Quality and timely delivery are also important to this market, as well as prompt responses to transactions and answers to emails.
Nguyen Ngoc Hung, country director of Dun & Bradstreet Viet Nam (D&B), said in global markets, the lack of transparency in online commerce was a serious barrier to growth.
Global businesses wanting to establish relationships with booming economies like Viet Nam, China, Brazil and India need to know more about whom they can trust.
Exporters should build a solid alliance with a relevant and reputable global brand. Through Dun & Bradstreet, Vietnamese exporters could seek information about potential business partners.
Dung said the textile and garment industry had contributed 10 per cent of industrial manufacturing value. The sector uses more than 2 million labourers, making up 5 per cent of the national workforce.
The industry's exports rank first in the country's exports, making up 16 per cent of Viet Nam's total export revenue.
Viet Nam is in the top 10 of 153 textile-export countries worldwide, after China, Hong Kong, India, Taiwan and Pakistan.
Banks unable to save insolvent businesses
The number of small- and medium-sized businesses to dissolve and cease operation has increased rapidly due to economic difficulties.
The problem was discussed during a briefing of the Ministry of Planning and Investment (MPI) yesterday.
A State Bank of Viet Nam representative acknowledged the importance of businesses to the country's economic development and their link to the health of banks.
The bank could do little to help ailing businesses however.
Lam Nguyen Khoi, deputy director of the HCM City Department of Planning and Investment, told participants that in the Ciy alone, 931 enterprises had asked to stop operations, 529 of which already completed administrative procedures for dissolution, 23.8 per cent up over the same period last year.
In addition, some 5,012 firms sent in notices to cease operations to the HCM City Taxation Department, with 462 asking to have dealings suspended only temporarily, a 4.6-time increase.
It is reported that dissolved businesses are mostly involved in the trade, construction, tourism and transport sectors.
Deputy Director of the Ha Noi Department of Planning and Investment Nguyen Van Tu said the department had not yet compiled final statistics on the number of companies to be dissolved, but that the number asking to be dissolved would continue to increase.
It is reported that the number of newly established businesses reached 15,994 with total register capital of over VND91 trillion (US$4.3 billion) or a 7 per cent decrease in quantity and a 10 per cent decline in capital against the same period last year, Tu said.
The number of businesses dissolved rose by 6 per cent against the same period last year while the number of businesses having already completed administrative procedures increased by 57 per cent.
Bui Ha, an MPI official, said inflation and the marcoeconomy in March had remained unstable. With the interest rate still high, few businesses were able to borrow capital. Ha asked commercial banks to continue reducing their lending interest rates to create market confidence.
Deputy director of the Monetary Policy Department Do Thi Nhung said the bank acknowledged economic difficulties facing businesses.
Therefore, many policies related to interest rates and ceilings have been adjusted with a 1 per cent decrease. By the year end, for inflation to go down and bank liquidity to become better, the central bank would cut the deposit interest rate by 1 per cent every quarter this year while the target would be between 10-11 per cent, she said.
Regarding the suggestion to reschedule debt and offer new loans for businesses, she said the State Bank already issued new regulations on this issue and that commercial banks were permitted to do it.
However, Nhung attributed the difficulty in borrowing capital from banks to businesses themselves, adding that the number of ailing businesses asking to cease operations and stop paying taxes had rapidly increased and that banks should refuse lending to them.
She noted that the central bank and relevant agencies were trying their best to help address the country's economic difficulties.
Shipping costs to decrease
The Viet Nam Association of Seafood Exporters and Producers (VASEP) early this week proposed the Ministry of Industry and Trade and relevant bodies to reduce freight costs to ease the burden on seafood exporters.
The proposal, which was also sent to the Viet Nam Seaport Association and the Viet Nam Shipping Council, was made in the wake of a recent acceleration in freight fees, especially for shipments to the EU and US.
VASEP said Viet Nam's ocean freight costs had increased by US$240-800 per foreign port since early this month. The hikes would continue in the next two months as shipping companies announced that from April 1, they would begin charging containers shipped to European ports with a general rate increase (GRI) of $400 per 20-foot container. On May 1, the same GRI will be applied on goods shipped to the US.
Therefore, ocean freight costs will skyrocket by $640-1,200 per 20-foot container in the three months from March to May, VASEP said.
Shipping costs in Viet Nam are currently 10-15 per cent higher than those in other regional countries including Thailand and the Philippines.
VASEP general secretary Truong Dinh Hoe said the freight hike would have a significant negative impact on the competitiveness of Viet Nam's exports, especially to the EU and US, its two largest seafood importers. Export value to the markets accounted for 42 per cent of total export revenue last year.
Exporters said the new charges would have a significant impact on their export performance and may even result in losses.
General director of the Hung Vuong Seafood Co Duong Ngoc Minh said that his company had been required to pay an additional $1,000 per container since early this month. It exports 450 containers of goods to the EU, US and South America monthly.
Domestic exporters who signed export contracts prior to application of the new charges would suffer much higher losses, Minh said.
Deputy director of the Kim Anh Seafood Import Export Co Do Ngoc Tai said the competitiveness of Vietnamese seafood exports would be restricted as domestic exporters would be forced to raise export prices.
Sectors with a high volume of exports to the EU and US such as footwear, garments and agricultural products were also concerned about the fee hike.
Chairman of the Viet Nam Cashew Association Nguyen Thai Hoc said the new freight charges would have a significant impact on domestic cashew exporters who shipped roughly 41,500 containers to foreign markets yearly.
Shipping companies said they had to raise the freight fees due to rising input costs, including petrol and oil price hikes, adding that they would suffer big losses or even bankruptcy if freight fees remained steady.
In response, domestic exporters said that both exporters and shipping companies were facing difficulties so the latter should develop suitable fee increase schedules to make the transition more reasonable.
Centre promotes technology products
A centre for exchanging technology and scientific products which aims to bring scientific studies and application closer to users officially opened in HCM City by the city's Science and Technology Department on Tuesday.
The department's director Phan Minh Tan said the centre would not only meet demand for technology products in HCM City, but the whole southern region.
The majority demand would be for agricultural technology, he predicted.
The centre should have had been opened earlier to meet the country's demand for technology renovation, he added.
Besides connecting sellers and purchasers, the centre will also provide price and technology appraisal services free of charge.
Authors of scientific studies will have access to loans from the national fund for science and technology development to complete their work. After that, the centre will commercialise their products.
For purchasers, the centre also promises advice regarding how to take advantage of favourable policies on new technology investment and transfer.
Many agriculture firms in the red
Problems in accessing funds and leasing land have forced many Vietnamese agricultural firms into "the red". This prevents them from competing in international markets and maintaining the quality of their products.
These concerns were voiced at a forum for northern agricultural businesses on Tuesday by the Ministry of Agriculture and Rural Development.
According to statistics released at the forum, 90 per cent of agricultural firms have less than VND10 billion (US$470,000) in capital. Only 1 per cent have more than VND200 billion ($9.5 million).
Pham Xuan Hoan, deputy head of the committee for enterprise reform under the Ministry of Agriculture and Rural Development (MARD), said lack of funds at low interest rates prevented many firms from expanding production and finding new markets.
This also prevented them from being able to borrow funds from banks at low interest rates, accessing international markets and meeting international regulations and standards.
Many firms complained about land-leasing policies even though the Government has many regulations aimed at providing preferential conditions for agricultural companies.
Doan Trong Ly, general director of Aprocimex, a feed production company, said many Government policies did not reach those who deserved to benefit. While farm production was considered a priority sector, most agricultural firms had to pay ceiling interest rates of at least 16.5 per cent and even 25 to 27 per cent.
Pham Ngoc Thao, a representative from the Viet Nam Sugar and Sugarcane Association, said not one single business in the sector had been able to borrow funds at low rates. The association predicted that one-third of farm businesses would incur losses this year.
Thao requested that MARD and the Trade Ministry consider buying the current 200,000 tonnes of sugar in stock so that farmers would not be forced to sell at low prices.
Tran Le, general director of Agro-Forest Technology Muong Phang, said companies that invested in agriculture in mountainous and remote areas were even more prone to lose.
"Our company invested in flower and vegetable growing areas in Hoa Binh, but it has cost much more for electricity and training workers," he said.
Le added that his company found it difficult to borrow funds since it was located in Da Lat, the Central Highland province of Lam Dong, and could not use the property as collateral for borrowing funds in Hoa Binh.
There are nearly 9,000 agricultural businesses registered nationwide, 98 per cent of them small to medium in size.
A similar forum will be held in southern Viet Nam today.
Overwhelming debts of Bianfishco may require government help
The Can Tho municipal government will act as an arbitrator in the settlement of debts owed by the seafood processing company, Binh An SeaFood Joint Stock Company (Bianfishco), an official said.
On March 27, Vo Thanh Thong, Vice Chairman of the city's People's Committee, said that Bianfisco is in desperate need of assistance to avoid going bankrupt amid their current financial situation, adding that, it this occurs, the farmers would be the ones to be hit hardest.
He also said that the city government plans to hold a press conference on the firm’s situation within the week.
“One of the obstacles to settling these debts is the lack of any legal entity attached to Tran Van Tri, the husband of Bianfisco’s CEO, Pham Thi Dieu Hien. To date she has made no comments or started any legal proceedings that would allow him to take over leadership of the company,” he emphasised.
He also said that Bianfishco has three options on the table to deal with their problems. The first would be in coordination with local authorities. In this case, some investors and banks have already agreed to pay off the debts owed to farmers in April, as well as provide funds the continuation of their operations.
The second solution would be for the company to sell off its assets, including their real estate holdings in HCM City, Can Tho and Soc Trang. This would also include Hien to sell off her shares in order to settle the company's debt.
Currently Bianfisco owes approximately VND61 billion (USD2.92 million) to ACB Bank, and has put up a collateral valued at more than VND500 billion (USD23.96 million). The second option would require the company to a portion of the money from the sell-off to repay ACB, which would, in turn, be used as guarantees for business loans.
The third choice would be for the banks to extend their loan deadlines by three years, to March 2015, while forgiving the principal interest for two years, until April 1, 2014. These loans would then be restructured into new ones upon resumption of production.
Huynh Van Tuan, Chairman of Can Tho Industrial Parks and Export Processing Zones’ Trade Union, said Bianfisco workers are 'on leave' until April 2.
According to the investigative agency, as of March 23, Bianfisco owed a combined VND1.56 trillion (USD74.78 million). The figure includes its debts to nine banks, one other financial institution and to farmers. Hien's personal debts are included in the sum.
The firm paid off VND16 billion (USD767,018) of VND261 billion (USD12.51 million) worth of its debts to farmers, however unpaid packing, transportation and equipment fees continue to mount.
Low service fees force company out of landmark building
Chestnut Vina, the operator of Vietnam's highest building, Hanoi’s Keangnam Landmark Tower, has proposed that Hanoi authorities take over the management of the building from April 1 due to low service fees.
Ha Jong Suk, Chairman of Keangnam-Vina Limited Company said that its subsidiary, Chestnust Vina, has incurred losses since the first resident came to live in the building in March 2011.
The company had not collected any service fees from residents between April and July 2011.
After applying a service fee of VND18,800 (USD0.9) per square metre per month and a parking fee of VND850,000 (USD40.74) on 500 households from August to October 2011, they faced strong opposition from residents. They were then compelled to reduce the service charge to only VND4,000 per square metre per month based on regulations set by the Hanoi People’s Committee.
Keangnam-Vina claimed that the fees were too low for such a high-end building. This modest fees are just enough for it to operate 20 elevators in the building and the company is suffering increasing losses.
The company have proposed that the Hanoi municipal government take over operation of the building. They will transfer technology for free-of-charge to any successor appointed by the authorities for two months.
Currently, residents who had lived abroad or lived in high-end apartments pay a service fee of VND18,800 per square metre per month, while another group pay the low fee applied by the municipal government. A small number of residents don’t pay any fee at all.
Mini-apartment owners face legal hurdles
Owners of mini-apartments in Hanoi are finding it difficult to gain land use certificates also known as a pink book as the landlords of their homes have not completed the necessary procedures.
Many average earners are choosing to buy mini-apartments. But several home-owners remain concerned that they do not have the legal documents that prove their ownership. The only proof they have is a contract stamped by local authorities, while they continue to lack proof of their land-use rights, and the red book, proving property ownership remains in the hands of the investor.
Before signing the contracts, buyers were warned that they would have to wait several months before receiving their pink book.
One of the main causes for the delay in apartment owners not receiving their pink books is that investors have not obeyed building regulations. When asking for the building permit, many investors only applied for a 'private house' permit rather than a business permit in order to avoid taxes. Many buildings lack lifts, emergency exits or fire alarms as the building developers want to cut costs.
"Pink books are hard to get because investors commonly flout basic building restrictions, such as the number of storeys in their block. Those who live in these unregistered floors have no hope of getting a pink book." Nguyen Van Son, a lawyer in Hanoi said.
Authorities have also been blamed for the problem. They have been unnecessarily restrictive in granting land-use rights for these micro-sized apartment block developments.
Some investors let buyers keep VND10-20 million (USD478-957) in return for them not having to process the pink book application. While other landlords deposits the red book proving property ownership with a bank, assure their buyers that it can only be withdrawn if every household within the block agrees.
In addition, because of the cheap price, the apartments are mostly located in small buildings with small stairways and no management to ensure the property is maintained.
A homeowner said, "Currently, we don't have any rights over this property. We even have to pay higher prices for electricity and water because there's only one meter for the whole building."
The rash of small-scale apartment blocks was encouraged by the Ministry of Construction’s request to the Government Office to help boost the low-income property market in the capital.
The 'red book’ indicates the right to use land and the 'pink book’ is a certificate that indicates both land use rights and ownership of house and assets on the land.
Buyers of a house in an urban area or an apartment in an apartment block are provided with a ‘pink book’.
Without a red book, land owners cannot sell their land and nor allowed to build houses with two or more storeys.
Having no pink book, house owners cannot sell or lease their house legally.
They find it hard to get access bank loans without a red or a pink book as security.
Vietnam sees rise in bankruptcies
Cities and provinces across the country reported that over 2,200 enterprises had filed for bankruptcy from the start of the year until March 21, a report said.
The Ministry of Planning and Investment (MPI) announced the news at a recent meeting with the prime minister’s consultancy group, elaborating that over 9,700 firms had applied to halt operations or defer tax duties during the period.
According to the ministry, the number of enterprises that have fallen into bankruptcy or had to halt operations in the first quarter of this year had increased 6% compared to the same period last year. The number of bankrupted companies has soared by 57%.
At the ministry’s regular meeting for the first quarter on March 28, Lam Khoi Nguyen, Deputy Director of HCM City Department of Planning and Investment said as of March 19 the city recorded 931 enterprises filing for bankruptcy.
A total of 526 companies had completed procedures to declare bankruptcy during the period, up 23.8% from a year earlier, he noted.
While 5,012 enterprises had sent announcements to halt operations to the municipal Department of Tax, a total of 462 others had made declarations to the city’s Department of Planning and Investment during the period, a 4.6-fold increase compared to the same period last year.
He said that as many as 1,725 companies were completing procedures for bankruptcy, while another 1,198 firms have closed their offices and fled and 463 others had undergone restructuring.
Most of troubled companies operate in the fields of trading, construction, transportation and tourism, he added.
Bui Ha, Director of the ministry’s Department of General Affairs, explained that high interest rates had prevented enterprises from accessing bank loans to maintain their businesses, resulting in the gloomy situation.
In order to improve the situation, further interest rate cuts are a desperate need, he emphasised.
Do Thi Nhung, Director of the State Bank of Vietnam’s Department of Monetary Policy, said interest rates may decline by 1% per quarter in line with a fall in inflation, a more stabilised macroeconomic situation and improved banking liquidity. If this occurs, deposit interest rates may fall to around 10%-11% per year and loans may be lowered to 15% per annum.
The possible bankruptcy of construction company Hanic (SHN) has revealed possible misuses of company funds by staff and drawn attention to the inadequacy of many companies' internal control systems.
According to the deputy director of the Ministry of Finance's Debt and Asset Trading Corporation, Pham Manh Thuong, the rising misuse of shareholder capital for individual purposes reflects a failure of internal control systems.
"It could be caused by the collusion of major shareholders or the concentration of power into a group of individuals," Thuong told the newspaper Dau tu Chung khoan (Securities Investment).
In Viet Nam, the positions of chairman and chief executive officer were often held by one person, he noted. Independent audits, meanwhile, were post-transaction procedures and could not prevent the abuses.
"Once company leaders aim to hide their true operations, auditors can't do much," he said. Thuong suggested the use of independent monitoring systems such as supervising banks, as well as directors and officers liability insurance.
"Liability insurance would not only help limit the damage of capital misuse, but also strengthens control over company leaders by an independent third party," he said.
If an enterprise received loans, the lender could also monitor the use of the loan proceeds. "This helps companies use the money soundly and increases the trust of the financing entity."
Shareholders must also be aware of their rights within companies, Thuong said. The problem of small shareholders ignoring their rights to monitor business operations has led to the collusion of major shareholders and management boards.
Cases like Hanic have also been due to legal loopholes, said an analyst for the financial information website vietstock.vn, Nguyen Dinh Dung. "Under the Law on Enterprises, the board of management is given too much power," Dung said.
The State Securities Commission, which has the authority to directly monitor the securities market, has not functioned fully in that capacity, he said. "It does not have a professional analysis system to detect hidden risks and alert investors."
In his latest dispatch to the Ha Noi Stock Exchange, Hanic chairman and CEO Dinh Hong Long admitted his company was about to go bankrupt. If Hanic goes bankrupt, about 6,000 shareholders face the loss of their investment.
Hanic sought to be the exclusive distributor of the Thanh Ha-Cienco 5 project, so it worked with the Ministry of Defense's Beta Co and let Beta VND238 billion ($11.3 million), unaware that Beta was not the owner of the project and that Beta's charter capital was a mere VND20 billion ($952,380).
Local firm cuts deals with GE, Microsoft
Quang Dung Technology Distribution Company on Tuesday signed two agreements with GE Energy - Industrial Solutions and Microsoft Corporation to distribute products of the two U.S.-based companies in Vietnam.
Under the deal signed with GE Energy - Industrial Solutions, a business subsidiary of General Electric (GE), the local firm becomes the authorized distributor of industrial and commercial electrical products in Vietnam for GE.
Quang Dung, also known as QD.TEK, is a distributor in the residential and commercial sectors in Vietnam which aims not only to distribute high quality products but also to offer a wide range of support services, including consulting, design, monitoring, project management and system evaluation on completion. The deal clinched with GE is expected to enable the company to ensure the most reliable, effective and eco-friendly power infrastructure for all kinds of office and residential buildings.
Both sides agree to place emphasis on making it easy for customers to approach products in a greener way, helping them save on operating costs, minimize negative impact on the environment and stabilize the system operation.
“Officially becoming the master distributor in Vietnam for the entire electrical products of GE is an important development of QD.TEK, completing our products portfolio offered to our customers while penetrating new market segments,” said Dang Thach Quan, director of QD.TEK
Meanwhile, the other deal allows Quang Dung to provide Microsoft Dynamics enterprise management solutions in Vietnam. The solutions are said to help enterprises easily manage business, make decisions quickly, as well as saving the human resource.
Speaking of this deal, Quan said that the partnership with Microsoft helps the company deliver additional solutions and services to customers.
Foreign firms drive export growth
Exports by foreign firms topped US$15.54 billion in the first quarter, an increase of 43 per cent year-on-year, according to the Ministry of Industry and Trade.
With their deep pockets, technologies, and stable markets, FDI firms, especially in the processing, electronics, and mobile-phone industries, enjoyed particularly strong growth, Deputy Minister of Industry and Trade Nguyen Thanh Bien told a review conference on exports in HCM City on Tuesday.
For instance, Samsung, whose exports last year were worth $6 billion, has earned $1 billion a month this year, he said.
However, domestic firms failed to show any dynamism, achieving only $8.98 billion in exports, or the same as last year.
Despite unfavourable internal and external factors, overall the country saw good growth in exports, which rose 23.6 per cent to $24.5 billion, Bien said.
Eight items topped the $1 billion mark, including seafood, coffee, crude oil, garment and textile, computer and electronic products, and telephones and components.
He said many sectors achieved high export growth: 39 per cent by the processing industry, 180 per cent by telephones and components, 98 per cent by electronic products and components, 40.3 per cent by rubber products, and 58.7 per cent by steel products.
On the other hand, items like rice, coffee, and cassava saw sharp falls in terms of both volume and value due to falling global demand, he said.
The world economic downturn and public debt crisis in Europe have badly affected Viet Nam's key export markets. Besides, the prices of many goods have fallen from earlier this year.
But the greatest difficulty faced by businesses was the lack of funds, conference participants agreed.
The interest rates on bank loans remained too high despite the recent fall. Export firms, especially small and medium-sized ones, also complained about their inability to get bank loans.
Many business groupings called on the Government to reschedule their loans to help them tide over the current difficulty.
Nguyen Thai Hoc, chairman of the Viet Nam Cashew Association, said agro-forestry and fisheries products are very price sensitive.
"Interest rates on bank loan should be around 12 per cent, and businesses find it very difficult at the current 16-17 per cent rate, especially at a time of falling prices and high inventory," he said.
About 40 per cent of cashew firms are facing liquidity problems, with some not having enough funds to even repay their old loans, he said.
This year the industry needs about VND6 trillion ($287 million) to buy 350,000 tonnes of raw cashew from farmers and another VND6 trillion to import 300,000 tonnes for processing for export, he said.
He urged the trade ministry to help the industry with regard to interest rates and the cash crunch.
Many participants called on the ministry to set rules for export of goods like cashew and rubber to control quality and safeguard the prestige of Vietnamese goods.
Bien called on business groupings to chalk out measures to resolve the difficulties faced by their members.
Garment sector faces rough road ahead
Viet Nam's textile and garment sector is likely to face challenges this year to reach its target of US$18.5-19 billion export turnover, according to the vice-chairman of the Viet Nam Textile and Apparel Association (VITAS), who spoke at a seminar held yesterday in HCM City.
Dang Phuong Dung, vice chairman and secretary general of VITAS, said global economic woes still plagued major markets as the US, EU and Japan.
Organised by VITAS and Dun & Bradstreet Co (D&B), the seminar heard opinions and suggestions on the sectors' future growth and plans.
"The public debt crisis and EU consumers have tightened their spending, leading to lower export orders," she said.
In addition, production costs and the prices of electricity, water and fuel as well as salaries and bank-loan interest are all on the rise.
"One of the biggest challenges is the lack of human resources, especially for high quality workers," she said.
Many companies cannot fulfill orders on contract because they do not have enough workers, affecting product quality.
She said that businesses should improve their sense of social responsibility, guarantee reasonable incomes for workers, build a healthy working environment, and create good promotion opportunities for workers.
She also noted that heavy reliance on imported materials and outsourcing orders that see a low return rate would not increase added value for export items or the competitiveness of the sector.
Production, technology and productivity management are all still weak, according to Dung.
Most small- and medium-sized enterprises (SMEs) lack marketing skill, and design capacity for producing unique products was poor. In addition, trademarks are not developed well.
Moreover, exporters have faced difficulties in accessing bank loans, and lack capital to import materials. As a result, exporters must restrict their operations and only take outsourcing orders. That has lowered the competitiveness of the sector.
Foreign-currency loans in Viet Nam have a high interest rate of 6-8 per cent per year, but foreign- currency loans in many other countries are being offered at an interest rate of 0.5-2 per cent.
Dung said the nine-member Trans-Pacific Partnership (TPP), which is still in the negotiations stage, is seen as a great opportunity for the Vietnamese textile and garment sector.
With TPP, the tariffs imposed on the goods that Viet Nam and TPP-member countries export to the US would decrease gradually before they are removed.
This means that when Viet Nam's textile and garment products can be exempted from tax, it would be more competitive in the US market with other rivals.
"However, exporters will face a new challenge with regard to origin. It is critical to take into account all the steps in making finished products from sourcing materials to finishing products, as Viet Nam is known as lacking professionalism in terms of weaving, dyeing and finishing fabrics," she said.
Because most Viet Nam garment factories have to import fabrics for production, Dung said it was necessary to develop supplementary factories so that Viet Nam garment exporters could take the initiative during the entire process.
Two promising markets are Russia and South Korea. Russia's entry into the World Trade Organisation is expected to bring lower tariffs and even zero tariffs on Vietnamese exports.
In addition, many companies make good use of preferential tariff agreements, especially incentives from South Korea, where Vietnamese exports jumped in turnover from $4.6 billion in 2010 to $6.5 billion last year.
She suggested that the Government also promote negotiations and sign Free Trade Agreements to create meaningful growth for the textile and garment industry.
Bill Gadd, chief executive officer of US-based Viet Nam B2B Direct-International Trade Solutions Co, said Viet Nam was favoured by US companies and they were eager to do business with the textile and garment sector.
To be successful with American companies, they should learn business fundamentals and have thorough preparations such as a company profile, English website, brochures in English and samples available.
Quality and timely delivery are also important to this market, as well as prompt responses to transactions and answers to emails.
Nguyen Ngoc Hung, country director of Dun & Bradstreet Viet Nam (D&B), said in global markets, the lack of transparency in online commerce was a serious barrier to growth.
Global businesses wanting to establish relationships with booming economies like Viet Nam, China, Brazil and India need to know more about whom they can trust.
Exporters should build a solid alliance with a relevant and reputable global brand. Through Dun & Bradstreet, Vietnamese exporters could seek information about potential business partners.
Dung said the textile and garment industry had contributed 10 per cent of industrial manufacturing value. The sector uses more than 2 million labourers, making up 5 per cent of the national workforce.
The industry's exports rank first in the country's exports, making up 16 per cent of Viet Nam's total export revenue.
Viet Nam is in the top 10 of 153 textile-export countries worldwide, after China, Hong Kong, India, Taiwan and Pakistan.
Banks unable to save insolvent businesses
The number of small- and medium-sized businesses to dissolve and cease operation has increased rapidly due to economic difficulties.
The problem was discussed during a briefing of the Ministry of Planning and Investment (MPI) yesterday.
A State Bank of Viet Nam representative acknowledged the importance of businesses to the country's economic development and their link to the health of banks.
The bank could do little to help ailing businesses however.
Lam Nguyen Khoi, deputy director of the HCM City Department of Planning and Investment, told participants that in the Ciy alone, 931 enterprises had asked to stop operations, 529 of which already completed administrative procedures for dissolution, 23.8 per cent up over the same period last year.
In addition, some 5,012 firms sent in notices to cease operations to the HCM City Taxation Department, with 462 asking to have dealings suspended only temporarily, a 4.6-time increase.
It is reported that dissolved businesses are mostly involved in the trade, construction, tourism and transport sectors.
Deputy Director of the Ha Noi Department of Planning and Investment Nguyen Van Tu said the department had not yet compiled final statistics on the number of companies to be dissolved, but that the number asking to be dissolved would continue to increase.
It is reported that the number of newly established businesses reached 15,994 with total register capital of over VND91 trillion (US$4.3 billion) or a 7 per cent decrease in quantity and a 10 per cent decline in capital against the same period last year, Tu said.
The number of businesses dissolved rose by 6 per cent against the same period last year while the number of businesses having already completed administrative procedures increased by 57 per cent.
Bui Ha, an MPI official, said inflation and the marcoeconomy in March had remained unstable. With the interest rate still high, few businesses were able to borrow capital. Ha asked commercial banks to continue reducing their lending interest rates to create market confidence.
Deputy director of the Monetary Policy Department Do Thi Nhung said the bank acknowledged economic difficulties facing businesses.
Therefore, many policies related to interest rates and ceilings have been adjusted with a 1 per cent decrease. By the year end, for inflation to go down and bank liquidity to become better, the central bank would cut the deposit interest rate by 1 per cent every quarter this year while the target would be between 10-11 per cent, she said.
Regarding the suggestion to reschedule debt and offer new loans for businesses, she said the State Bank already issued new regulations on this issue and that commercial banks were permitted to do it.
However, Nhung attributed the difficulty in borrowing capital from banks to businesses themselves, adding that the number of ailing businesses asking to cease operations and stop paying taxes had rapidly increased and that banks should refuse lending to them.
She noted that the central bank and relevant agencies were trying their best to help address the country's economic difficulties.
Shipping costs to decrease
The Viet Nam Association of Seafood Exporters and Producers (VASEP) early this week proposed the Ministry of Industry and Trade and relevant bodies to reduce freight costs to ease the burden on seafood exporters.
The proposal, which was also sent to the Viet Nam Seaport Association and the Viet Nam Shipping Council, was made in the wake of a recent acceleration in freight fees, especially for shipments to the EU and US.
VASEP said Viet Nam's ocean freight costs had increased by US$240-800 per foreign port since early this month. The hikes would continue in the next two months as shipping companies announced that from April 1, they would begin charging containers shipped to European ports with a general rate increase (GRI) of $400 per 20-foot container. On May 1, the same GRI will be applied on goods shipped to the US.
Therefore, ocean freight costs will skyrocket by $640-1,200 per 20-foot container in the three months from March to May, VASEP said.
Shipping costs in Viet Nam are currently 10-15 per cent higher than those in other regional countries including Thailand and the Philippines.
VASEP general secretary Truong Dinh Hoe said the freight hike would have a significant negative impact on the competitiveness of Viet Nam's exports, especially to the EU and US, its two largest seafood importers. Export value to the markets accounted for 42 per cent of total export revenue last year.
Exporters said the new charges would have a significant impact on their export performance and may even result in losses.
General director of the Hung Vuong Seafood Co Duong Ngoc Minh said that his company had been required to pay an additional $1,000 per container since early this month. It exports 450 containers of goods to the EU, US and South America monthly.
Domestic exporters who signed export contracts prior to application of the new charges would suffer much higher losses, Minh said.
Deputy director of the Kim Anh Seafood Import Export Co Do Ngoc Tai said the competitiveness of Vietnamese seafood exports would be restricted as domestic exporters would be forced to raise export prices.
Sectors with a high volume of exports to the EU and US such as footwear, garments and agricultural products were also concerned about the fee hike.
Chairman of the Viet Nam Cashew Association Nguyen Thai Hoc said the new freight charges would have a significant impact on domestic cashew exporters who shipped roughly 41,500 containers to foreign markets yearly.
Shipping companies said they had to raise the freight fees due to rising input costs, including petrol and oil price hikes, adding that they would suffer big losses or even bankruptcy if freight fees remained steady.
In response, domestic exporters said that both exporters and shipping companies were facing difficulties so the latter should develop suitable fee increase schedules to make the transition more reasonable.
Centre promotes technology products
A centre for exchanging technology and scientific products which aims to bring scientific studies and application closer to users officially opened in HCM City by the city's Science and Technology Department on Tuesday.
The department's director Phan Minh Tan said the centre would not only meet demand for technology products in HCM City, but the whole southern region.
The majority demand would be for agricultural technology, he predicted.
The centre should have had been opened earlier to meet the country's demand for technology renovation, he added.
Besides connecting sellers and purchasers, the centre will also provide price and technology appraisal services free of charge.
Authors of scientific studies will have access to loans from the national fund for science and technology development to complete their work. After that, the centre will commercialise their products.
For purchasers, the centre also promises advice regarding how to take advantage of favourable policies on new technology investment and transfer.
Many agriculture firms in the red
Problems in accessing funds and leasing land have forced many Vietnamese agricultural firms into "the red". This prevents them from competing in international markets and maintaining the quality of their products.
These concerns were voiced at a forum for northern agricultural businesses on Tuesday by the Ministry of Agriculture and Rural Development.
According to statistics released at the forum, 90 per cent of agricultural firms have less than VND10 billion (US$470,000) in capital. Only 1 per cent have more than VND200 billion ($9.5 million).
Pham Xuan Hoan, deputy head of the committee for enterprise reform under the Ministry of Agriculture and Rural Development (MARD), said lack of funds at low interest rates prevented many firms from expanding production and finding new markets.
This also prevented them from being able to borrow funds from banks at low interest rates, accessing international markets and meeting international regulations and standards.
Many firms complained about land-leasing policies even though the Government has many regulations aimed at providing preferential conditions for agricultural companies.
Doan Trong Ly, general director of Aprocimex, a feed production company, said many Government policies did not reach those who deserved to benefit. While farm production was considered a priority sector, most agricultural firms had to pay ceiling interest rates of at least 16.5 per cent and even 25 to 27 per cent.
Pham Ngoc Thao, a representative from the Viet Nam Sugar and Sugarcane Association, said not one single business in the sector had been able to borrow funds at low rates. The association predicted that one-third of farm businesses would incur losses this year.
Thao requested that MARD and the Trade Ministry consider buying the current 200,000 tonnes of sugar in stock so that farmers would not be forced to sell at low prices.
Tran Le, general director of Agro-Forest Technology Muong Phang, said companies that invested in agriculture in mountainous and remote areas were even more prone to lose.
"Our company invested in flower and vegetable growing areas in Hoa Binh, but it has cost much more for electricity and training workers," he said.
Le added that his company found it difficult to borrow funds since it was located in Da Lat, the Central Highland province of Lam Dong, and could not use the property as collateral for borrowing funds in Hoa Binh.
There are nearly 9,000 agricultural businesses registered nationwide, 98 per cent of them small to medium in size.
A similar forum will be held in southern Viet Nam today.
Overwhelming debts of Bianfishco may require government help
The Can Tho municipal government will act as an arbitrator in the settlement of debts owed by the seafood processing company, Binh An SeaFood Joint Stock Company (Bianfishco), an official said.
On March 27, Vo Thanh Thong, Vice Chairman of the city's People's Committee, said that Bianfisco is in desperate need of assistance to avoid going bankrupt amid their current financial situation, adding that, it this occurs, the farmers would be the ones to be hit hardest.
He also said that the city government plans to hold a press conference on the firm’s situation within the week.
“One of the obstacles to settling these debts is the lack of any legal entity attached to Tran Van Tri, the husband of Bianfisco’s CEO, Pham Thi Dieu Hien. To date she has made no comments or started any legal proceedings that would allow him to take over leadership of the company,” he emphasised.
He also said that Bianfishco has three options on the table to deal with their problems. The first would be in coordination with local authorities. In this case, some investors and banks have already agreed to pay off the debts owed to farmers in April, as well as provide funds the continuation of their operations.
The second solution would be for the company to sell off its assets, including their real estate holdings in HCM City, Can Tho and Soc Trang. This would also include Hien to sell off her shares in order to settle the company's debt.
Currently Bianfisco owes approximately VND61 billion (USD2.92 million) to ACB Bank, and has put up a collateral valued at more than VND500 billion (USD23.96 million). The second option would require the company to a portion of the money from the sell-off to repay ACB, which would, in turn, be used as guarantees for business loans.
The third choice would be for the banks to extend their loan deadlines by three years, to March 2015, while forgiving the principal interest for two years, until April 1, 2014. These loans would then be restructured into new ones upon resumption of production.
Huynh Van Tuan, Chairman of Can Tho Industrial Parks and Export Processing Zones’ Trade Union, said Bianfisco workers are 'on leave' until April 2.
According to the investigative agency, as of March 23, Bianfisco owed a combined VND1.56 trillion (USD74.78 million). The figure includes its debts to nine banks, one other financial institution and to farmers. Hien's personal debts are included in the sum.
The firm paid off VND16 billion (USD767,018) of VND261 billion (USD12.51 million) worth of its debts to farmers, however unpaid packing, transportation and equipment fees continue to mount.
Low service fees force company out of landmark building
Chestnut Vina, the operator of Vietnam's highest building, Hanoi’s Keangnam Landmark Tower, has proposed that Hanoi authorities take over the management of the building from April 1 due to low service fees.
Ha Jong Suk, Chairman of Keangnam-Vina Limited Company said that its subsidiary, Chestnust Vina, has incurred losses since the first resident came to live in the building in March 2011.
The company had not collected any service fees from residents between April and July 2011.
After applying a service fee of VND18,800 (USD0.9) per square metre per month and a parking fee of VND850,000 (USD40.74) on 500 households from August to October 2011, they faced strong opposition from residents. They were then compelled to reduce the service charge to only VND4,000 per square metre per month based on regulations set by the Hanoi People’s Committee.
Keangnam-Vina claimed that the fees were too low for such a high-end building. This modest fees are just enough for it to operate 20 elevators in the building and the company is suffering increasing losses.
The company have proposed that the Hanoi municipal government take over operation of the building. They will transfer technology for free-of-charge to any successor appointed by the authorities for two months.
Currently, residents who had lived abroad or lived in high-end apartments pay a service fee of VND18,800 per square metre per month, while another group pay the low fee applied by the municipal government. A small number of residents don’t pay any fee at all.
Mini-apartment owners face legal hurdles
Owners of mini-apartments in Hanoi are finding it difficult to gain land use certificates also known as a pink book as the landlords of their homes have not completed the necessary procedures.
Many average earners are choosing to buy mini-apartments. But several home-owners remain concerned that they do not have the legal documents that prove their ownership. The only proof they have is a contract stamped by local authorities, while they continue to lack proof of their land-use rights, and the red book, proving property ownership remains in the hands of the investor.
Before signing the contracts, buyers were warned that they would have to wait several months before receiving their pink book.
One of the main causes for the delay in apartment owners not receiving their pink books is that investors have not obeyed building regulations. When asking for the building permit, many investors only applied for a 'private house' permit rather than a business permit in order to avoid taxes. Many buildings lack lifts, emergency exits or fire alarms as the building developers want to cut costs.
"Pink books are hard to get because investors commonly flout basic building restrictions, such as the number of storeys in their block. Those who live in these unregistered floors have no hope of getting a pink book." Nguyen Van Son, a lawyer in Hanoi said.
Authorities have also been blamed for the problem. They have been unnecessarily restrictive in granting land-use rights for these micro-sized apartment block developments.
Some investors let buyers keep VND10-20 million (USD478-957) in return for them not having to process the pink book application. While other landlords deposits the red book proving property ownership with a bank, assure their buyers that it can only be withdrawn if every household within the block agrees.
In addition, because of the cheap price, the apartments are mostly located in small buildings with small stairways and no management to ensure the property is maintained.
A homeowner said, "Currently, we don't have any rights over this property. We even have to pay higher prices for electricity and water because there's only one meter for the whole building."
The rash of small-scale apartment blocks was encouraged by the Ministry of Construction’s request to the Government Office to help boost the low-income property market in the capital.
The 'red book’ indicates the right to use land and the 'pink book’ is a certificate that indicates both land use rights and ownership of house and assets on the land.
Buyers of a house in an urban area or an apartment in an apartment block are provided with a ‘pink book’.
Without a red book, land owners cannot sell their land and nor allowed to build houses with two or more storeys.
Having no pink book, house owners cannot sell or lease their house legally.
They find it hard to get access bank loans without a red or a pink book as security.
Vietnam sees rise in bankruptcies
Cities and provinces across the country reported that over 2,200 enterprises had filed for bankruptcy from the start of the year until March 21, a report said.
The Ministry of Planning and Investment (MPI) announced the news at a recent meeting with the prime minister’s consultancy group, elaborating that over 9,700 firms had applied to halt operations or defer tax duties during the period.
According to the ministry, the number of enterprises that have fallen into bankruptcy or had to halt operations in the first quarter of this year had increased 6% compared to the same period last year. The number of bankrupted companies has soared by 57%.
At the ministry’s regular meeting for the first quarter on March 28, Lam Khoi Nguyen, Deputy Director of HCM City Department of Planning and Investment said as of March 19 the city recorded 931 enterprises filing for bankruptcy.
A total of 526 companies had completed procedures to declare bankruptcy during the period, up 23.8% from a year earlier, he noted.
While 5,012 enterprises had sent announcements to halt operations to the municipal Department of Tax, a total of 462 others had made declarations to the city’s Department of Planning and Investment during the period, a 4.6-fold increase compared to the same period last year.
He said that as many as 1,725 companies were completing procedures for bankruptcy, while another 1,198 firms have closed their offices and fled and 463 others had undergone restructuring.
Most of troubled companies operate in the fields of trading, construction, transportation and tourism, he added.
Bui Ha, Director of the ministry’s Department of General Affairs, explained that high interest rates had prevented enterprises from accessing bank loans to maintain their businesses, resulting in the gloomy situation.
In order to improve the situation, further interest rate cuts are a desperate need, he emphasised.
Do Thi Nhung, Director of the State Bank of Vietnam’s Department of Monetary Policy, said interest rates may decline by 1% per quarter in line with a fall in inflation, a more stabilised macroeconomic situation and improved banking liquidity. If this occurs, deposit interest rates may fall to around 10%-11% per year and loans may be lowered to 15% per annum.
