News on 1 July 2016
1) Formosa admits link to Vietnam’s fish deaths in memo
The Formosa steel mill is seen in Ha Tinh Province, located in north-central Vietnam - Tuoi Tre
The Vietnamese steel business of Taiwan’s Formosa Plastics Group has told all employees in a memo on Thursday (June 30) that its mistakes are behind the mass fish deaths along the country’s central coast. In the memo, obtained by Tuoi Tre (Youth) newspaper, Tran Nguyen Thanh, chairman of the Hung Nghiep Formosa Ha Tinh Steel Co. Ltd., asserted that “mistakes caused by some sub-contractors” during the trial run of the steel mill have led to the fish kill. The link between the plant, located at Vung Ang Economic Zone in Ha Tinh, one of the four affected provinces, and the mass fish deaths has been confirmed by a multi-ministerial inspection led by the Ministry of Natural Resources and Environment, according to the document. “Even though this is an outcome we dids not expect, the company respects the inspection result of the government,” Thanh said. The memo said Hung Nghiep Formosa is closely cooperating with competent agencies to resolve the issue. “On behalf of the company, we vow to try our best to ensure a stable and lawful working environment, where the environmental protection responsibility is prioritized,” Thanh promised.
2) Brexit to make no impact on Vietnam-EU FTA: ambassador
Ambassador Bruno Angelet, head of the Delegation of the European Union to Vietnam, speaks to reporters in Hanoi on June 28, 2016 - Tuoi Tre
The roadmap to realize free trade between Vietnam and the European Union is unaffected by Britain’s vote to leave the bloc, a top EU diplomat in Vietnam said on Tuesday (June 28). The EU-Vietnam Free Trade Agreement was signed in Brussels on December 2, 2015, after nearly three years and 14 rounds of negotiation, with both sides given two years to prepare before the deal officially comes into force. The trade pact is in the process of legal review and translation, and will be implemented by 2018 as planned, Ambassador Bruno Angelet, head of the Delegation of the European Union to Vietnam, told reporters in Hanoi. Ambassador Angelet underlined that the investment flow from the EU to Vietnam is developing positively, and the free trade agreement will still attract interest from the European investment and business community, who wish to do business with the Southeast Asian country. The EU’s top diplomat in Vietnam was speaking at a press conference held in the wake of Brexit, when Britain voted to leave the EU in the June 24 referendum.
While Angelet did not deny the huge impact Brexit has been having on global and Asian financial markets, he believed it is too early to have a full and accurate comment on what he said is an unprecedented event in the history of the EU.
3) Asia gains as risk appetite recovers, pound under fresh pressure
A woman holding an umbrella looks at an electronic stock quotation board outside a brokerage in Tokyo September 8, 2015 - Reuters
Asian stocks rose on Friday (July 1) as global riskier assets continued to recover from last week's Brexit shock, while the pound came under renewed pressure after the Bank of England's governor hinted of an interest rate cut ahead. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.2 percent. The index has recovered nearly all the losses suffered last Friday when it plunged in response to Britain's decision to leave the European Union. Japan's Nikkei .N225 rose 0.8 percent after the yen gave back more territory seen during flight-to-quality moves earlier in the week. South Korea's Kospi .KS11 added 0.3 percent. The Dow .DJI climbed 1.3 percent on Thursday (June 30), posting its third straight days of gains and erasing a bulk of its losses after Brexit. Some of the overnight gains on Wall Street were attributed to hopes for more monetary easing after BOE Governor Mark Carney said on Thursday (June 30) the central bank would probably need to pump more stimulus into Britain's economy over the summer in wake of the Brexit shock. A number of Asian central banks, including those in Japan and China, are also expected to ease policy further later this year. Carney's comments, however, also forced the pound to head south again and cut short the currency's recovery from a 31-year low plumbed on Monday (June 27).
4) EU leaders tell Britain to exit swiftly, markets steadier
Marine Le Pen, France's far-right National Front political party leader, arrives in the plenary room prior to a plenary session at the European Parliament on the outcome of the "Brexit" in Brussels, Belgium, June 28, 2016 - Reuters
European leaders told Britain on Tuesday (June 28) to act quickly to resolve the political and economic confusion unleashed by its vote to leave the European Union last week, after the IMF said the uncertainty could put pressure on global economic growth. Sterling and world stock markets recovered slightly on Tuesday (June 28) but investor confidence remains fragile despite policymakers saying they will take all necessary measures to protect their economies. Last week's referendum wiped a record $3 trillion off the value of global shares and sterling fell to its lowest level in 31 years against the U.S. dollar. British Finance Minister George Osborne, whose attempt to calm markets on Monday went unheard, said on Tuesday (June 28) the government would have to cut spending and raise taxes to stabilise the economy after credit rating agency Fitch became the agency to downgrade UK debt. Businesses have announced hiring freezes and possible job cuts, despite voters' hopes the economy would thrive outside the EU.
5) Turkish Airlines launches new non-stop Vietnam service
A Turkish Airlines plane takes off at Ataturk International Airport in Istanbul November 30, 2012 - Reuters
Turkish Airlines have begun running non-stop flights from Ho Chi Minh City and Hanoi to Istanbul in Turkey, and vice versa. The new routes are operating five non-stop flights per week every Monday, Tuesday, Wednesday, Thursday, and Saturday, according to the carrier. Flights from Istanbul are scheduled to depart at 2:20 am and touch down in Ho Chi Minh City at 4:20 pm, while those leaving for Hanoi land at 3:20 pm. Flights from Ho Chi Minh City will take off at 8:25 pm and arrive in Istanbul at 4:15 am, while departures from Hanoi are at 9:25 pm and landings in Istanbul are scheduled for 4:05 am, the airline states on its website. The round-trip fares start from US$865, but the airline is offering flights from $709 to those departing from Istanbul and bound for Hanoi, with all taxes, fees and surcharges included.