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» Business Confidence Index enjoy 4-point rise in Quarter II of 2013

On July 31st , 2013, the Vietnam WVB Financial Intelligence Services Company Limited (WVB FISL) announced the survey results of the WVB Business Confidence Index in the second quarter of 2013.
This survey is conducted quarterly by WVB Vietnam. The respondents are national leading businesses of trademarks, total assets, total sales, and number of employees. The survey lasted from July 1st , 2013 to last July, 2013, attracting participation of 139 businesses in 11 key industry sectors in Vietnam. Among the businesses participating in this survey, over 78% represents small and medium business sector.

The Business Confidence Index (BCI) in the second quarter of 2013 stood at 118 points, rose 4 points from the first quarter of 2013, and 35 points from Quarter IV of 2012 (83 points). This quarter BCI slightly increased in comparison with the strong growth in Quarter I of 2013, which shows that Vietnamese businesses have been more optimistic about the economic growth in 2013. This result partially reflects the improvement in business confidence of domestic business owners in the first few months of the year.
Summary results of 6 components contributing to the Business Confidence Index in the second quarter of 2013 are as follows:

• Current economic conditions in Vietnam: 58% of surveyed businesses said that the current general economy in Vietnam was better than in the last 12 months, 34% said that the economic conditions in Vietnam remained unchanged, and 8% said that the economic conditions were somewhat worse than in the last 12 months

• Predictions of Vietnamese economic situation in the next 12 months: 58% of businesses believed that within the next 12 months, Vietnamese economy would be better. 33% of businesses rated the situation as unchanged. Only 9% worried that the Vietnamese economy would be worse in 2013.

These are 2 out of 3 components that contributed to a slight increase in the BCI this quarter compared to the first quarter of 2013. In the first component, the survey of the general economic situation in Vietnam (150.36%) increased by 34.86% from the first quarter of 2013 (115.50%). This positive reading shows that Vietnamese Businesses are gradually regaining confidence in the prospects for the macro-economy.

• Expected revenue growth: 52% of surveyed businesses were confident that their sales would increase higher in the next 12 months, 32% of businesses said that their revenue would remain unchanged, and only 16% were concerned about their sales figures in the next 12 months.

• Fixed assets investment plan: 53% of surveyed businesses planned to keep the current investment costs for fixed assets, 39% of businesses planned to invest more in fixed assets, and 8% of businesses planned to decrease fixed assets investment in the next 12 months.

• Employee usage plan: There are 37% of businesses planned to increase workforce, 55% of businesses planned to remain unchanged, and 7% of businesses planned to reduce workforce in the future.

Although the Business Confidence Index in the second quarter of 2013 significantly increased compared to the third quarter of 2012, but these three main components have not greatly varied in comparison with Quarter I in 2013. This proves that 2013 is considered as a difficult year for Vietnamese businesses. Economy recovery is still a long way off. Thus, reducing investment costs for fixed assets (accounts for 39%) and in order to reduce costs up to 62% of businesses have no plans to increase their workforce in the future, reinvesting in production are necessary for businesses during this period of time.

• Confidence in profits growth: 68% of businesses believed that profits would rise in  the coming year. 27% of businesses thought that profit would remain the same, and 5% were concerned about profits decline in the next 12 months.

            This is the most volatile main component (162.59%) compared to the first quarter of 2013 (132.20%). More than ¾ of surveyed businesses (68%) said that their profit growth would increase, while in prior quarter, businesses with the same response are 36%. This survey also shows that, despite many difficulties, local businesses are gradually finding the way out of the crisis and the governmental support methods begin to prove to be effective.

            The business survey team of WVB FISL also surveyed on other current issues such as whether the reduction of PIT, VAT, and land use tax will remove difficulties for businesses in the future. Up to 50% of businesses thought that Circular No. 16/2013/TT-BTC dated 02.08.2013 of the Ministry of Finance will help businesses overcome difficulties at present and in the future. However, 28% of businesses rated it as not thoroughly and effectively solve problems for businesses. About the issue of how the regulation on the control of advertising and promotion costs will affect businesses, 38% of businesses said that the advertising costs control will make it hard to build and develop their trademarks, 28% said consumers would be difficult to access products information. The businesses generally assessed that the control of advertising and promotion costs would result in difficulty to promote their goods pictures to consumers and reduction of competition among businesses. Also, according to the survey on how to improve competitive advantage and quality of Vietnamese goods over imported goods, the businesses should choose to strengthen and renovate their products, further develop distribution channels, as well as tighten market management and product quality.

            Generally, the slight increase in the BCI this quarter shows the optimism and confidence among businesses that the economic recovery might begin in the second half of 2013.

Survey Result

WVB Business Confidence Index Score - QII/2013:         118
WVB Business Confidence Index Score - QI/2013:          114
WVB Business Confidence Index Score - QIV/2012:        83
WVB Business Confidence Index Score - QIII/2012:       107
WVB Business Confidence Index Score - QII/2012:        120
WVB Business Confidence Index Score - QI/2012:         113

Component Score

Respondent breakdown by Sector/Industry

About World Vest Base:
Established in 1985 in Chicago, USA, World'Vest Base (WVB) has becomes the world’s leading global provider of financial fundamentals serving the research and analytic needs of thousands of top companies in the financial services, media and corporate markets. The WVB global database is the financial industry’s premier source of detailed and transparent financial statement data on public companies. The database universe spans over 50,000 public companies over 130 countries from Asia, Africa, Australia, Europe, Latin America and North America. WVB Regional databases also cover hundreds of thousands of private companies in Thailand, Vietnam, Laos, Cambodia, Malaysia and Egypt. WVB also provides databases with Insider & Major Shareholders Transactions, specialized End-of-Day pricing for emerging markets and worldwide credit risk and business risk scoring.
Further information can be reached at the company’s official website: http://www.wvb.com

For media enquiries:
Ms. Dao Phuong Thao                                          
WVB FISL 
thaodp@wvb.com
+84 (4) 3762 4811