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Illegal foreign currency transactions rampant in Danang

by Daisy Nguyen

Many shops in Han Market, Danang City, have been found to be illegally offering foreign currency trading for tourists.

A seller in Han Market received Thai baht from tourists without question. After being asked whether her shop trades in foreign currency, the seller denied the accusation and said that the tourists couldn’t exchange the money. However, when a group of Chinese tourists arrived, the seller continued receiving the Chinese yuan. The shop even had a drawer full of foreign currency to give change to tourists.

Vo Minh, director of of the State Bank of Vietnam in Danang said in accordance with the regulations, only the Vietnam dong could be used for transactions inside Vietnam. Tourists must exchange their money into Vietnam dong at approved agencies and commercial banks.

“Most banks in Vietnam can exchange money for tourists. There are also 48 agencies that have been allowed to carry out foreign currencies exchanges at hotels, airports and entertainment areas,” Minh said.

Shops that carried out transactions in foreign currencies were operating illegally and would face a hefty fine if they are caught. The Department of Tourist has issued guidance for tourists on how to exchange money when arriving in Vietnam. Minh said they had also raised this problem via the media.

Source: Dtinews

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Finance

Money flows into corporate bonds

by Daisy Nguyen

Personal money appears to be shifting from stocks and bank deposits to corporate bonds.

The Vietnamese financial market is now witnessing a corporate bond issuance boom with noteworthy characteristics.

First, there are many large-scale bond issuance campaigns. VietinBank, for example, has decided to mobilize VND10 trillion worth of capital through bonds in 2019.

Second, the interest rates of bonds have been pushed up to a record high level of 14.45 percent per annum, which is much higher than medium- and long-term lending interest rates offered by commercial banks (10-12 percent).

Third, many large corporations have joined the market.

The Vietnamese financial market is now witnessing a corporate bond issuance boom with noteworthy characteristics.

APEC has successfully found VND50 billion worth of capital from the issuance of corporate bonds with an interest rate of 11 percent per annum. A senior executive of the company said the issuance serves as a ‘reagent’ to explore the market before the company launches larger issuance campaigns.

The Ministry of Finance (MOF) reported that in 2018, businesses successfully mobilized VND224 trillion worth of capital through bond issuance, an increase of 94.5 percent compared with 2017. The total value of bonds issued by the end of 2018 had reached VND474.5 trillion, or 8.6 percent of GDP in 2018.

Thoi Bao Kinh Te Sai Gon said the corporate bond issuance boom shows the high demand for capital and capital mobilization channels. The bond suppliers are commercial banks and enterprises, while the investors include commercial banks, insurance companies, investment funds and individual investors.

In general, commercial banks’ bonds have low interest rates, therefore, the investment demand will come only from other banks and insurers. This is because the risk appetite of the two groups of investors is lower than other investors.

However, as businesses’ bonds have higher bond yield, they can attract attention from all investors.

The increase in number of investment funds in Vietnam has also generated demand for the corporate bond market. The Vietcombank fund management company and VNDirect have set up two funds which specialize in making investment in corporate bonds.

Meanwhile, the increase in insurance premiums, estimated at 20 percent per annum, is a reason for insurance companies to increase investments in bonds.

However, the most noteworthy feature is the sharp rise in demand from individual investors.

Previously, individual investors mostly paid attention to stocks, real estate and bank deposits. However, professional securities companies and fund management companieshave succeeded attracting individual investors’ money into corporate bonds.

Investors can expect higher interest rates if they invest in bonds than bank deposits, even if they sell bonds before maturity.

Enterprises now issue bonds at interest rates of 11-12 percent, while market makers distribute the bonds at the interest rates of 9-10 percent per annum.

Source: VNN

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Finance

Risk of money laundering in Việt Nam assessed at ‘average level’

by Daisy Nguyen

The risk of money laundering in Việt Nam was at “an average level”, according to a State Bank of Việt Nam (SBV) report released on Wednesday.

According to the report on national risk assessment on money laundering and terrorist financing in 2012-17 period, the conclusion was made after analysing trends and money laundering scams as well as money and assets created by crime and risks involving many different industries deployed in money laundering.

The report said the risk of money laundering in the banking and real estate sector was at “a high level” as it accounted for almost 90 per cent of suspicious transactions.

“Though not all the crime money was put into the money laundering process, the results showed that compared to other sectors in the economy, there was high possibility that the criminals used the banking sector to legalise their illegal money,” the report noted.

To hide the illegal money earned, criminals tended to use the banking accounts under other people’s names to receive and send the illegal money, the report said.

Meanwhile, the report noted, real estate was often the sector that could attract sources of huge money amounts, as real estate transactions can be carried out by cash or banking transfers, not through real estate exchanges, making it very difficult for authorities to track the flow and source of money.

To carry out money laundering in real estate, criminals often used close relatives to buy then transfer real estate, the report said, adding with all those supporting facts, the risk of money laundering in the real estate sector was also high.

The report also assessed the risks of money laundering in securities, foreign exchange and casino sectors were at average level while the risks in other sectors like auditing, accounting and law were low.

Deputy Prime Minister Vương Đình Huệ recently signed a decision to issue an action plan to tackle money laundering and terrorist financing in 2019-20.

The action plan is also expected to meet international standards on prevention of money laundering and terrorist financing while serving the multi-lateral evaluation of the Asia-Pacific Group on Money Laundering (APG) and terrorism financing prevention.

Source: VNS

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Finance

Vietnam may be added to expanded U.S. list on currency manipulation: Bloomberg

by Neoma Simpson

The Trump administration will expand the number of countries it monitors for currency manipulation in an upcoming report expected this month, and Vietnam may be named a currency manipulator, Bloomberg reported on Thursday.

Citing people familiar with the matter, Bloomberg said the number of countries on the watch list will rise to about 20 from 12 in the previous report issued in October.

Vietnam may be named a currency manipulator for artificially holding down the value of its currency, the dong, while India and South Korea are expected to be dropped from the watch list, it said.

In October, the U.S. Treasury refrained from naming China or any other trade partner as a currency manipulator as it relied on import tariffs to cut a trade deficit with China.

Bloomberg said the Treasury had so far examined the United States’ 12 largest trade partners and Switzerland for the upcoming report.

“An expanded watch list could include Russia, Thailand, Indonesia, Vietnam, Ireland or Malaysia, all of which have large trade surpluses with the U.S.,” it said.

Bloomberg said the number of countries on the list would increase after the U.S. Treasury Department reduced one of the three criteria it uses to determine manipulators: a current account surplus of 2 percent of gross domestic product, instead of 3 percent.

Reporting by Tim Ahmann; writing by Mohammad Zargham; editing by Eric Beech and James Dalgleish on Reuter
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Finance

New regulations on use of foreign currencies in Vietnam

by Daisy Nguyen

The State Bank of Vietnam recently issued Circular No. 03/2019/TT-NHNN on amending and supplementing a number of articles of Circular No. 32/2013/TT-NHNN guiding the implementation of regulations on restricting the use of foreign currencies across the Vietnamese territory.

Accordingly, Circular 03 supplements regulations concerning the cases in which the use of foreign currencies is allowed in the territory of Viet Nam for non-residents. Foreign investors are allowed to pay deposit and provide collateral in foreign currency by transfer when they participate in auction in the following cases:

(i) To purchase shares in state-owned enterprises which are entitled to equitization as approved by the Prime Minister.

(ii) To purchase the state’s shares and capital contributions in state-owned enterprises and enterprises with state capital to be divested as approved by the Prime Minister.

(iii) To purchase shares and capital contributions of state-owned enterprises invested in other enterprises which conduct the withdrawal of state capital as approved by the Prime Minister.

In case of winning the auction, foreign investors shall transfer investment capital in line with the provisions of law on foreign exchange management in order to make payment for the value of purchasing shares and capital contributions. In case of the unsuccessful auction, foreign investors may transfer abroad the amount of deposit and collateral in foreign currency after subtracting the related arising expenses (if any).

This Circular takes effect from May 13, 2019.

Source: VGP

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Life

Why Spending Money on Experiences Makes You Happier Than Things

by Vietnam Insider

Why You Should Spend Your Money On Experiences, Not Things?

When you work hard every single day and there’s only so much money left after your regular expenses, you have to make certain it’s well spent. Spend your limited funds on what science says will make you happy.

The Paradox Of Possessions

A 20-year study conducted by Dr. Thomas Gilovich, a psychology professor at Cornell University, reached a powerful and straightforward conclusion: Don’t spend your money on things. The trouble with things is that the happiness they provide fades quickly. There are three critical reasons for this:

  • We get used to new possessions. What once seemed novel and exciting quickly becomes the norm.
  • We keep raising the bar. New purchases lead to new expectations. As soon as we get used to a new possession, we look for an even better one.
  • The Joneses are always lurking nearby. Possessions, by their nature, foster comparisons. We buy a new car and are thrilled with it until a friend buys a better one—and there’s always someone with a better one.

“One of the enemies of happiness is adaptation,” Gilovich said. “We buy things to make us happy, and we succeed. But only for a while. New things are exciting to us at first, but then we adapt to them.”

The paradox of possessions is that we assume that the happiness we get from buying something will last as long as the thing itself. It seems intuitive that investing in something we can see, hear, and touch on a permanent basis delivers the best value. But it’s wrong.

The Power Of Experiences

Gilovich and other researchers have found that experiences—as fleeting as they may be—deliver more-lasting happiness than things. Here’s why:

Experiences become a part of our identity. We are not our possessions, but we are the accumulation of everything we’ve seen, the things we’ve done, and the places we’ve been. Buying an Apple Watch isn’t going to change who you are; taking a break from work to hike the Appalachian Trail from start to finish most certainly will.

“Our experiences are a bigger part of ourselves than our material goods,” said Gilovich. “You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences.”

Comparisons matter little. We don’t compare experiences in the same way that we compare things. In a Harvard study, when people were asked if they’d rather have a high salary that was lower than that of their peers or a low salary that was higher than that of their peers, a lot of them weren’t sure. But when they were asked the same question about the length of a vacation, most people chose a longer vacation, even though it was shorter than that of their peers. It’s hard to quantify the relative value of any two experiences, which makes them that much more enjoyable.

Anticipation matters. Gilovich also studied anticipation and found that anticipation of an experience causes excitement and enjoyment, while anticipation of obtaining a possession causes impatience. Experiences are enjoyable from the very first moments of planning, all the way through to the memories you cherish forever.

Experiences are fleeting (which is a good thing). Have you ever bought something that wasn’t nearly as cool as you thought it would be? Once you buy it, it’s right there in your face, reminding you of your disappointment. And even if a purchase does meet your expectations, buyer’s remorse can set in: “Sure, it’s cool, but it probably wasn’t worth the money.” We don’t do that with experiences. The very fact that they last for only a short time is part of what makes us value them so much, and that value tends to increase as time passes.

Bringing It All Together

Gilovich and his colleagues aren’t the only ones who believe that experiences make us happier than things do. Dr. Elizabeth Dunn at the University of British Columbia has also studied the topic, and she attributes the temporary happiness achieved by buying things to what she calls “puddles of pleasure.” In other words, that kind of happiness evaporates quickly and leaves us wanting more. Things may last longer than experiences, but the memories that linger are what matter most.

What makes you happier, experiences or things? Please share your thoughts in the comments section below.

 

- Forbes
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Finance

Vietnamese currency falls to new low, could go lower

by Daisy Nguyen

The official exchange rate between Vietnamese dong and U.S. dollar reached its highest this year Wednesday, and experts said the dong could further.
The State Bank of Vietnam set a central exchange rate of VND22,757 on Wednesday, the sixth time the rate has gone up in the last two weeks.

The dong has fallen by VND352, or 1.57 percent, against the greenback since the beginning of the year.

The dollar’s value increased at commercial banks. At 3p.m. Wednesday, Vietcombank sold the dollar for VND23,350, VND15 higher than Tuesday.

Vietinbank also sold its dollar for VND23,350, VND17 higher than Tuesday, while BIDV sold it at VND23,355, VND25 higher.

The dollar also inched up on the free market. At 11.30 a.m. Wednesday, it was selling for VND23,360-23,410, VND10-20 higher than on Tuesday.

Economist Nguyen Tri Hieu said that the reason for the hike was high demand for dollars toward the end of the year as businesses often import large amounts of material needed for manufacturing.

The ongoing U.S.-China trade war continues to exert exchange rate pressures, despite the U.S. announcing a 90-day halt on additional tariffs on Chinese goods starting next year, as there is no certainty that tensions will decline, he said.

“There is a high possibility that the dong’s value will continue to fall this year,” Hieu told VnExpress International.

Hieu said that the government should also devaluate the dong against the Chinese yuan so that the trade deficit between Vietnam and China can be reduced.

Vietnam relies heavily on China for materials and equipment for its labor-intensive manufacturing sector.

As the yuan’s value has fallen by 9 percent to the dollar since the beginning of this year, some experts have said that the dong should be devaluated even more to avoid impacts a cheaper yuan. Cheap made-in-China goods could be imported in large quantities to Vietnam and compete with domestic products, they said.

But economist Tran Dinh Thien said that the dong should be kept at a balanced rate between the U.S. dollar and the Chinese yuan. A 2-3 percent band a year is acceptable, he added.

A stronger dollar will benefit exporters, but will also create stronger pressure on inflation and interest rates which will increase business costs in a country with high imports and public debt, Thien said at a recent conference.

He added that the fluctuation of the dong should be controlled to help local companies conduct their business with greater certainty.

The government doesn’t want businesses to suffer shocks, he said.

Prime Minister Nguyen Xuan Phuc had said in August that the devaluation of the dong needs to be kept within a 2-percent band this year compared with the end of last year.

Dat Nguyen report on Vnexpress

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Finance

Cash moving around, but not to production

by Daisy Nguyen

Investors successfully bought 5-year government bonds at a 3.45 interest rate at a bid organized on July 11 at the Hanoi Stock Exchange (HNX).

Also at the trading session, the 10-year and 15-year bonds had interest rates of 4.43 percent and 4.73 percent, respectively.

The interest rates showed an upward trend if compared with the 2.97 percent, 4.15 percent and 4.5 percent for 5-year, 10-year and 15-year bonds, respectively, fixed at the bid two months before, on May 2.

According to HNX, from the beginning of the year to July 2018, the State Treasury mobilized VND80.901 trillion worth of capital through bond bidding, just fulfilling 40 percent of the yearly plan and decreasing by 70 percent compared with the same period last year.

The disbursement still has been going slowly, but the State Treasury wants to issue a high amounts of bonds, mostly to ‘neutralize’ the short-term bonds issued previously with high interest rates.

The government’s debts in domestic bonds now have longer mature terms and lower interest rates.

However, analysts warn that cash flow is moving unreasonably, with latent risks for implementation of monetary policies.

The major buyers of government bonds are commercial banks. In principle, they only pour money into bonds if their liquidity is abundant and their capital mobilization cost is low enough to bring profits.

A question has been raised about why commercial banks are still attending bond auctions when the bond interest rates are lower than their capital mobilization costs.

The main reason is that banks now have too much money. As the disbursement for public investment has been going slowly, the State Treasury has to deposit undisbursed money at banks.

A report shows that by the end of 2017, the total deposited amount had reached VND293.5 trillion, including the VND165.082 trillion at Vietcombank as shown in the bank’s audited finance report.

As of the end of the first quarter of 2018, the deposits at the bank had fallen by VND40 trillion, but had grown immoderately at others.

The cash is ‘moving around’ but it doesn’t flow to production and business.

Experts warn that banks are bearing risks. They use the capital mobilized through short-term deposits (6-12 months) to buy long-term 10- or 15-year bonds.

The banking sector now has to arrange capital for the national economy, while the budget’s expenditure on development and investment is shrinking.

However, banks’ capabilities are limited. Meanwhile, bad debts still have not been fully settled. Banks have begun tightening credit. Four state owned banks have been instructed to reduce the credit growth rate by one percent this year compared with 2017.

Mai Chi report on VNN

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EnterpriseFinance

400 Agribank debit accounts hacked in Vietnam

by Ashley Pham

About 400 Agribank debit accounts were hacked on Wednesday night, allowing criminals to withdraw money from the compromised accounts through ATM machines without the cardholders’ consent, the Vietnamese lender confirmed on Thursday.

The bank has yet to release the total amount stolen in the heist.

According to N.T.M.H., one of the victims, the financial department of her company in Hanoi informed her that many employees discovered money missing from their debit accounts at around 11:00 pm that day.

H.’s firm also reported the money losses to Agribank, which issues the ATM cards for the staff members at her company.

The lender then put a temporary freeze on all ATM accounts belonging to the company’s employees.

Despite the freeze, H. received multiple text messages later that night indicating that some of the money in her account had been withdrawn.

“A total of eight transactions were made within six minutes, resulting in the loss of VND24 million [US$1,056] from my account,” H. recalled.

She said she was so worried that she immediately rushed to the nearest ATM to withdraw what remained in her account.

To her surprise, she was able to withdraw what remained in her account despite the bank’s assurance that it had been locked.

400 Agribank debit accounts hacked in Vietnam
An Agribank customer checks his debit account using a mobile app. Photo: Tuoi Tre

About 10 of H.’s colleagues were also affected, with their losses ranging from VND3 million ($132) to more than VND20 million ($880).

The Agribank representative told Tuoi Tre (Youth) newspaper that hackers could have installed skimming devices to steal customers’ information in order to gain access to their money.

A skimming device is a type of card reader which is often disguised to appear as part of the ATM.

The device saves the users’ card number and pin code, which are then used by counterfeiters to make a fake card.

According to Agribank, about 400 ATM accounts were hacked and the bank began working with competent authorities on Thursday morning to investigate the situation.

Many of the lender’s ATM booths have been closed and surveillance footage has been extracted to assist the investigation.

In the meantime, new ATM cards will be provided to the affected customers.

A result of the probe is expected to be announced by Friday.

The bank also promised to return the stolen money to its clients following the investigation.

Founded in 1988, Agribank, or the Bank for Agriculture and Rural Development, is the largest bank in Vietnam in terms of total assets, operating networks, and customer base

By Duy Khang (Tuoi Tre News)

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