[Round-up] Construction of Mega Airport Set to Start by 2019, SBV to Keep Rates Stable

Tuan Minh

17:49 22/02/2016

BizLIVE - The construction of Long Thanh International Airport needs to be initiated by the end of 2018. The State Bank of Vietnam will keep interest rates steady this year.

[Round-up] Construction of Mega Airport Set to Start by 2019, SBV to Keep Rates Stable

The State Bank of Vietnam will keep interest rates steady this year.

Vietnam Bond Yields May Rise on Higher CDS
Sovereign credit default swap (CDS) spreads for Vietnam and three other Southeast Asian countries bounced back in the second half of 2015, after dropping significantly in 2014 and remaining low during the first quarters of last year, according to a report of VPBank Securities Company (VPBS).
The CDS of these countries increased mainly due to the interest rate hike by the U.S.’s Fed, China’s economic slowdown, and the tumble of global crude oil prices. Higher CDS spreads mean that investing in the country is rated as riskier.
Vietnam’s overseas bond issuance plan in 2016 might be hindered by a recent rise in CDS spreads compared with 2014, which makes Vietnam’s bonds less attractive to global investors, according to the brokerage house.
Investors Urged to Choose Nghe An Province
Domestic and foreign investors were urged to invest more in the central province of Nghe An for its geographic advantages, improved infrastructure and open investment policies, the Vietnam News Agency (VNA) reported, citing a recent meeting.
The province has met investors’ expectations in term of policies, infrastructure facilities and services and many of them have been operating effectively in the locality, said National Assembly Chairman Nguyen Sinh Hung.
Meanwhile, Deputy Prime Minister Nguyen Xuan Phuc suggested the province take full advantage of its potential while perfecting its investment climate to attract more investors.
Vietnam Needs to Boost Production Technologies
Vietnam must act quickly to improving production technologies in all industries to ensure the competitiveness of its goods and services in the international market, experts said at a seminar in HCM City last Friday.
Vietnam would face massive challenges from the Trans-Pacific Partnership (TPP) since it is the least developed among TPP members, said Don Nang, former head of the Ministry of Science and Technology's Department of Legal Affairs.
Productivity, quality and competitiveness of Vietnamese goods and services are far behind that of other TPP member countries. Technological skills and competence of Vietnamese firms are also inferior to their counterparts in other countries, he said.
FTAs to Encourage Innovation in Vietnam
Existing and future free trade agreements are expected to promote innovations in the business community to enable firms to compete not only at home, but also on international markets, said Tran Du Lich, member of the National Assembly's Economic Committee
Businesses need to operate in a climate in which innovations were encouraged and the state played a role in ensuring the market remains operating on the right track, the economist said.
Vietnam, having great opportunities to increase its economic growth in the coming decades, will help Southeast Asia expand the industrialization process and avoid risks of lower middle income traps, he added.
Taxi Firms to Cut Rates as Petrol Prices Plunge
Taxi firms in the capital are likely to slash fares after domestic petrol prices plunged to a seven-year low on Thursday, but any cut would take time to implement, according to the VNA.
Hanoi Taxi Association Chairman Do Quoc Binh said the fares would be slashed by about 300 dong (a U.S. cent) per kilometer, and it would take some 10 days for the companies to complete long procedures for the cut.
Vietnam Steel Producers Seek Higher Import Tax
Some steel companies want the Ministry of Industry and Trade to put up temporary barriers like higher import tax on steel billet and other products until an ongoing investigation into dumping is completed, while other producers who use imported billets are opposed to it, according to the VNA.
The ministry recently began the investigation following a demand from many domestic companies who themselves make billets and are affected by the cheap imports.
Since 2012 imports have more than tripled to 1.5 million tones, hitting domestic producers, whose inventories soared by 70% last year from a year earlier.
Central Bank to Keep Interest Rates Stable in 2016
Though experts forecast a rise in lending interest rates in 2016, a central bank official believes it is feasible to keep the rates stable and reduce it slightly this year.
Though admitting that keeping the rate stable this year is a challenge for the banking regulator, Director of the State Bank of Vietnam’s Monetary Policy Department Bui Quoc Dung said that the SBV could take more measures to bring down medium- and long-term rates this year.
Vietnam Needs to Start Building Mega Airport by End-2018
Deputy Minister of Transport Nguyen Hong Truong last week urged Airports Corporation of Vietnam and relevant agencies to quicken preparations for the kick-off of the Long Thanh International Airport project, the would-be largest of its kind in the country.
The consultant needs to be contracted to map out a schedule for the construction of the facility. “The building of the airport must be started before the end of 2018,” Deputy Minister Truong said.
Total assets of banks in Vietnam reached 7,319.32 trillion dong ($325.3 billion) in December 2015, increasing 13.25% from the end of 2014 and 4.24% from a month earlier, according to data of the State Bank of Vietnam (SBV), the country’s banking regulator.
Assets of state-controlled banks increased 16.57% to 3,304 trillion dong ($146.84 billion). Banks where the government holds majority stakes include Agribank, Vietcombank, VietinBank, Bank for Investment and Development of Vietnam (BIDV), Vietnam Construction Bank, GPBank, and OceanBank.
The consumer price index (CPI) of Vietnam’s capital city of Hanoi has climbed an estimated 0.47% month-on-month and 1.73% year-on-year in February when the Lunar New Year holiday fell in, the municipal statistics office said.
During the month, prices of the restaurant and catering group posted an increase of 2.45% month-on-month, followed by the culture, recreation and tourism group with a 1.12% month-on-month rise in prices, pulled by high travel demand in the long Tet holiday, the official added.
Nghi Son Refinery and Petrochemical complex (NSRP complex), the second and the biggest of its kind in Vietnam so far, is set to finish its mechanical installation in the coming November and start commercial operation in July 2017.
NSRP has an estimated investment of $9 billion, sponsored by four corporations. Vietnam Oil and Gas Group (PetroVietnam) holds a 25.1% stake, Kuwait Petroleum International Ltd 35.1%, Idemitsu Kosan Co., Ltd 35.1% and Mitsui Chemical, Inc. 4.7%.