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A new Law on Land is needed, but it could take a good three years for a new itineration. Photo: Le Toan

According to previous proposals, the Law on Land 2013 was to be revised at some point after the 13th National Party Congress. A new law was to be considered within the year, with the National Assembly able to discuss the revised draft by the end of 2022. If all goes to plan, the revised law would then need at least three years before being approved.

Simultaneously, and with the party congress now in the rear view mirror and a new government in the process of taking the reins, a summary report of the implementation of the 2013 land law is being led by the Ministry of Natural Resources and Environment (MoNRE), involving every ministry and local authority. The summary report will be sent to the government and submitted to the National Assembly in the second quarter of 2023 the latest.

According to Dang Hung Vo, former deputy minister of Natural Resources and Environment, the current Law on Land contains conflicts with many other laws such as those on housing, real estate business, forestry, zoning, and public asset management.

“The overlap among those laws is the main reason for limiting the new supply for the real estate market as demand continuously increases. This leads to rocketing price increases and speculation which makes the market unstable,” Vo said.

Meanwhile, the weakness of the current Law on Land has also created struggles for administrative policies and implementation of land issues, especially in compensation.

Talking with VIR, Lim Hua Tiong, CEO of Frasers Property Vietnam expressed that a revised land law is necessary to enhance the flow of foreign investment to Vietnam – and that means a law with shorter processes, clearer and less complicated regulations, and elimination of conflicts with other laws that would all help investors make faster decisions and open up major chances for their success in Vietnam.

“It must offer equal opportunities for Vietnamese and foreign investors by enabling and granting overseas investors the right to directly obtain land use rights for the purposes of land bank development for new project establishment,” said Lim.

He added that any revised land law should clarify the measurement of public land, which can be directly allocated/leased to the investor without public auction. “This may shorten the time of the land allocation process and project implementation, respectively,” he added.

One official from the MoNRE noted that the revision of the land law must clarify details and remove unfairness for related parties in inheriting profits brought about by investment in land. Especially, the financial framework for land use which includes land leasing rents must be more relevant to the realities of the market.

“Moreover, the current Law on Land fails to mention many new types of real estate products such as condotels, officetels, or shophouses so a revised one is in need to deal with those products,” said the official.

According to Dang Minh Duc, director of Dong Nai Department of Natural Resources and Environment, a new law must take into account the current land status of localities.

“The revised Law on Land should clearly regulate the process of appraisal and land use right auction, and the calculation of the value for land compensation. These issues are seriously impacting the implementation of many projects in Dong Nai province,” Duc said.

The MoNRE has revealed that key issues to be considered in the revised land law include the expansion of quotas for agricultural land use of individuals and households; and management of rice land and especially land collection methods for the development of socio-economy of localities.

Also in the frame for a revamp included are taxation policies on agricultural land provided to households and enterprises that are left unused, as well as how to harmonise the rights between foreign enterprises and the government, while avoiding the impacts to the country’s security but ensuring a solid investment environment for overseas investors.

Lim Hua Tiong – CEO, Frasers Property Vietnam Under the current land law, a foreign-owned entity does not have the right to directly obtain land use rights from other land users. This prevents a foreign-owned entity from developing a land bank for new projects. Within a project area, there are several parcels managed by the state such as land with rivers, streams, canals, springs, and special-use water surface. There has not been any obvious regulation to specify the measurement of public land, which can be directly allocated/leased to the investor without public auction. This prolongs the project land allocation process and adversely affects the investor, as they cannot carry out the next investment steps without such land allocation. For project implementation, developers must go through many complicated steps which can take up two years to fully process. In a real situation, many projects take 3-5 years for legal approval. This prevents developers from market advantages because of delayed launch timelines. Also, the inconsistent application of land use fee calculation is a big trouble for real estate developing, not only for foreign investors but also Vietnamese ones which continues to create many disputes. Peter Dinning – Chairman, Colliers International Vietnam has made tremendous advances within the real estate sector including the rights of ownership and the rights to occupy, but we have seen many examples when land has been taken away at below the market value. This leaves the owner in a worse position than they were in before the land is taken away. Further advances in creating a fair system to value property are required to create a more international-standard real estate market. Real estate in Vietnam is still in its infancy and while it is a driver for the economy, real risks are still associated with owning and occupying land. International investors would like to see a system which protects land and property ownership and in the event that for whatever reason it is taken away, a true open market value is paid by compensation. In the UK we have a dedicated department called the Valuation Office whose duty is to protect the rights of the individual when a property is taken away. There is a proper right to appeal and valuation tribunals are available for anyone who disputes the compensation that a developer and or an authority wishes to pay to take over your land. Alain Cany – Chairman, European Chamber of Commerce in Vietnam European enterprises are keen to invest and expand further their business operations and new projects. To capitalise on this trend, the government could enhance the legal framework and cut administrative procedures on land to unlock the full potential of European investment. For instance, reducing the time to complete the investment registration process would be welcome, as would making the procedures for acquiring land clearer and more transparent. Enabling foreign investors to borrow from international lenders would also be a positive step, rather than limiting mortgages just to banks. We have seen some positive developments in the last few months alone. For instance, Decree No.148/2020/ND-CP – in particular its provisions on land lease for small state-owned land parcels – should help to clear one of the bottlenecks for investors whose developments have been on hold for some time. This, in turn, should restore the land fund for project development and create more opportunities for local and foreign enterprises. We encourage the government to build on this success. For instance, a definition of “foreign-invested enterprises” aligned with the new Law on Investment would be a good step, as current inconsistencies create difficulties.

By Bich Ngoc

Visiting the Dai Han broken rice shop at 113A Dang Dung Street, District 1, customers typically feel themselves transported back to the Vietnam war time (1955-1975).

Before 1975, the shop, then named Do Phu cafe, was a secret base of the People’s Army overseen by Tran Van Lai. The house had been assigned to Do Mien and his wife Su to sell broken rice and coffee, but in fact, served to store and transfer letters and confidential documents to the war zone.

The Do Phu cafe, now Dai Han broken rice shop, in Saigon. Photo by VnExpress/Huynh Nhi.

Tran Vu Binh, son of Lai and the current owner of the eatery, recalled the birth of the shop. Before opening the business, Su went with her husband to Phnom Penh, Cambodia on an undercover intelligence mission.

After a few years in Phnom Penh, Su returned to the country with her husband and started selling broken rice. The shop sold meals for workers and gradually became popular among residents in the area, including many Korean soldiers taking part in the war.

Since the cafe was located next to the house of Ngo Quang Truong, an officer of the Army of the Republic of Vietnam, the opposite side in the war, the couple had to be extra cautious.

“The postman had to wear shoes with a rotatable sole to hide secret mail. When he went into the kitchen of the shop to deliver letters, the owner had to be on guard to prevent others from following and avoid exposure,” Binh recounted.

Servings here comprise a blend of Vietnamese broken rice and kimchi, traditional Korean fermented vegetables, creating a unique flavor.

The shop’s original broken rice serving includes grilled ribs, roasted pork skin, fried eggs, pickled vegetables and sweet southern-style chili garlic fish sauce.

Since the Korean soldiers were not used to this, they had asked the owner to add kimchi .

“At the time, my mother used Vietnamese chili and garlic to make the kimchi, but after the Korean soldiers objected she switched to using Korean chili and garlic,” Binh said.

After the war ended, many Korean veterans returned to the shop to enjoy her dish.

A bowl of kimchi and a dish of broken rice served at the Dai Han shop in Saigon. Photo by VnExpress/Huynh Nhi.

The eatery now offers customers kimchi broken rice like it served in the war time.

Bao Ngan, a customer, said the dish has a name that makes visitors curious, featuring similar characters to the South Korean rice dish bibimbap.

“I was impressed after adding the kimchi and mixing in the fried egg since the taste was truly rich. VND60,000 ($2.6) for a dish is quite reasonable too,” she said.

In addition to kimchi broken rice, customers can also order Vietnamese fried churros with coffee for breakfast and take a look at the documents that show the activities of the People’s Army soldiers in Saigon.

The stop features in several tours of Saigon. It is open from 7 a.m. to 10 p.m. daily. Customers who arrive by motorbike have to pay an additional VND5,000 for parking.

In its forecast for 2021, Hanoi-based VNDIRECT Securities Corporation said banks would be among the first corporate entities to take advantage of the economic rebound. The company also anticipates a sharp jump in banks’ profit this year in the wake of improved net income margin (NIM) and higher credit growth.

Banks’ profit is forecast to be on a sharp rise in 2021

Agreeing with the forecast, the BIDV Securities Company (BSC) recently issued a report on the prospects of the banking sector, saying that commercial lenders would witness a sharp rise in profit thanks to the economic rebound and good control of asset quality post-pandemic.

The BSC report assumed that the whole sector’s pre-tax profit could soar 28 per cent, chiefly attributable to 14 per cent credit growth in 2021, plus the interest rate going sideways and reduced pressure on making loan loss provisioning.

Notably, despite their continual short-selling in Vietnam’s stock exchange since early 2021, foreign investors and investment finds are holding banking tickers, putting their trust in their upbeat growth potential. Finnish equity fund PYN Elite even forecast 50-60 per cent growth for banking tickers in the first quarter this year, compared to a year ago.

Le Duc Khanh, Investment director at VP Bank Securities Company (VPS) said that based on forecasts by several international organisations, banks’ after-tax profit could be growing at 18 per cent in 2021 in the wake of improved credit performance and higher revenue stream from services.

BSC’s report, meanwhile, says that a slew of banks are scaling up efforts to replenish their low-cost capital source (Customer Account Saving Account – CASA), striving to expand customer base through reducing transaction-transfer fees or upgrading operation system and infrastructure.

The CASA ratio in the banking sector reached 18 per cent in 2020 and is expected to further increase in the forthcoming time.

The ticker NVB offers ample space for future growth

Accordingly, with a flexible business model and low bad debts ratios post-pandemic, small- and medium-scale banks have numerous opportunities to bolster operational efficiency. By beefing up the retail segment via cutting-edge payment technology platforms to augment CASA, several banks have succeeded in enhancing their business efficiency.

For instance, in 2020 a raft of small- and medium-scale banks like NCB, ABB, or PGB posted 30 per cent-plus growth in their demand deposit (CASA) volume.

Bright prospects for bank tickers

Can Van Luc, a renowned financial expert, said that with Vietnam’s success in containing the COVID-19 pandemic and on-going economic rebound as well as positive forecasts by prestigious financial institutions like Citigroup, Goldman Sachs, and Nomura, alongside several Asian markets, Vietnam’s stock market might pick up about 15-20 per cent this year.

According to the Vietnam Financial Consulting Association (VFCA) and BSC, Vietnam’s stock market might not be growing as impressively as in 2020, but growth would be more sustainable. The VN-Index is anticipated to be hovering around 1,200-1,300 points, leveraging economic rebound, listed firms’ profitability, lower price-to-equity ratio compared to the region and the world, and well-controlled bad debts.

The CASA ratio in the banking sector reached nearly 18 per cent in 2020 and is expected to further increase in the forthcoming time

Banks would be the first group to cash in on this rebound, which explains the sharp rise in banking stock prices from the outset of this year. According to SSI Research, the price-to- book (PB) ratio of local banks averaged 1.27x in 2019 with return on equity (ROE) ratio averaging 18.6 per cent. In 2020, the PB averaged 1.4x with ROE averaging 17.2 per cent, whereas average PB ratio in 2021 is set at 1.53x.

Economic rebound is partly reflected in the ticker price. Choosing the proper tickers, therefore, would help the investors to pick higher returns.

Among the banking stock, several tickers are showing lucrative prospects. For instance, in the past year, the NVB ticker of National Citizen Bank (NCB) has been on a steady rise, growing by more than 90 per cent (up more than 70 per cent in the past three months alone). This impressive growth came about not only thanks to banking stocks’ positive growth but also from the bank’s particular performance.

Along with this, this year NCB envisages raising its charter capital to more than VND7 trillion ($304.3 million) through stock issuances to existing shareholders and issuing private placements of convertible bonds valued at a total of VND4.5 trillion ($195.6 million).

NCB’s upbeat performance and its commitment to boost financial strength has secured investors’ attention. In addition, the high growth potential of medium-sized banks, the high speed of settling bad debts, and compelling digital model are among the factors why investors have an appetite for banking tickers like NVB.

VIR