Despite impacts of the COVID-19 pandemic, Vietnam is still attracting foreign investment in its electronic industry, Taiwan-based website Digitimes has reported.

According to the website, foreign electronic companies have been maintaining their factories in Vietnam's northern region despite the pandemic. Vietnam's semiconductor industry is expected to grow strongly in the next five years.

According to Fitch Solutions, amid COVID-19, Vietnam is still chosen by many foreign investors as a destination to build production bases, especially in the electronic industry.

As many as 65 percent of foreign electronic enterprises set up their production bases in northern localities of the country, while about 30 percent of them built facilities in the southern region, and a few in the central region.

According to a report by global technology research and advisory company Technavio, the Vietnamese semiconductor market is poised to grow by almost 19 percent in 2020-2024 to 6.16 billion USD.

Meanwhile, Vietnam’s smart phone shipments witnessed an 11 percent year-on-year growth in the second quarter of 2021 with Chinese original equipment manufacturers capturing around half of the market, according to Counterpoint Research’s Monthly Vietnam Channel Share Tracker./.

Shares finish lower due to profit-taking

The market edged lower yesterday as strong selling force weighed on many pillar stock groups, while foreign investors kept fleeing from the two main exchanges.

On the Ho Chi Minh Stock Exchange (HoSE), the market benchmark VN-Index closed the trading day at 1,363.09 points, down 0.57 per cent, or 7.87 points. This ended its two gaining sessions.

The market’s breadth was negative as 232 stocks fell while 148 increased. However, the liquidity remained high with more than 768.6 million shares traded on HoSE, worth more than VND25.77 trillion (US$1.13 billion).

After the sharp recovery in the first two sessions of the week, profit-taking activities were reasonable.

Analysts from Saigon - Hanoi Securities JSC (SHS) said in a daily report that technically, the benchmark still can not close above the resistance zone of 1,370 - 1,375 points. Therefore, the scenario of extending rallies to hover around the psychological level of 1,400 points has not been activated.

"We need to wait and see more to find the direction," SHS said.

Selling force increased significantly in the afternoon session, putting many large-cap stocks under pressure.

The 30 biggest stocks tracker, VN30-Index, witnessed a drop of 0.44 per cent to 1,494.12 points. Of which, 21 stocks of the VN30 basket declined while seven climbed, and two ended flat.

Vinhomes JSC (VHM) posted the biggest losses yesterday, down 4.31 per cent to VND111,000 per share. The sell-off occurred after Viking Asia Holdings II Fund, backed by KKR Group, announced that it has registered to sell 31.96 million VHM shares and is expected to no longer be a major shareholder in Vinhomes.

Real estate developers like Vincom Retail JSC (VRE), another one of the trio stocks of Vin family, and Novaland (NVL) also dropped 1.58 per cent and 0.58 per cent, respectively.

Other pillar stocks recording big losses were Saigon Beer - Alcohol - Beverage Corporation (SAB), down more than 4 per cent, and PetroVietnam Gas JSC (PVGas, GAS), down 1.91 per cent.

A group of big bank stocks including Techcombank (TCB), Vietinbank (CTG), VPBank (VPB) and JSC Bank for Investment and Development Of Vietnam (BIDV, BID) contributed to the downward trend.

However, the index pared some losses on gains in large-cap stocks, led by Hoa Phat Group (HPG), up 1.92 per cent.

It was followed by Vingroup JSC (VIC) and Vietcombank (VCB).

Similarly, on the Ha Noi Stock Exchange (HNX), the HNX-Index finished lower at 343.11 points, down 0.12 per cent.

During the session, more than VND4.8 trillion was poured into the northern market, equivalent to a trading volume of nearly 174 million shares.

Also weighing the market was the large net sell value from foreign investors. Accordingly, they continued to net sell a value of nearly VND1.4 billion on the southern bourse, and a value of VND56.29 billion on HNX.

Over 10,000 Australian consumers to taste Vietnamese rice

A promotion programme titled ‘Viet Nam, Land of World’s Best Rice’ will present 10,000 bags of Vietnam’s Ban Mai Cung Dinh rice to consumers in Australia.

Organised by the Vietnam Trade Office in Australia and a number of enterprises, the programme features a series of activities between August 18 and September 27, aiming at trademark promotion and trade connectivity.

The rice gifts will be distributed via the M-Import company and MCQ supermarket chain.

In addition, AusViet company will also offer hundreds of promotional gifts of Vietnam’s ST25 and Jasmine Vilaconic rice trademarks in Melbourne.

In Sydney, an event inviting local people to try cooked rice using different Vietnamese rice products available in Australia is scheduled to be held based on local social distancing conditions.

A virtual rice exhibition will also take place at the end of the programme.

According to the Trade Office, in July, despite the fact that Australia was cutting its rice import, Vietnamese rice exported to the market grew impressively by 37.03 percent from the same period last year. 

Viet Nam aims for top five global aquaculture producers over next decade

The Government sets goal to become one of the world’s top five aquaculture producers over the next decade, according to its recently-approved plan.

The plan also rolls out specific goals, including achieving annual growth rate of processed seafood output at more than 6 percent and raising export value of value-added process aquatic production to over 40%.

Domestic consumption of processed aquatic products is expected to reach VND40,000-45,000 billion (or US$1.7-2 billion) while export value of these products is projected to stand at US$14-16 billion.

To realize the above goals, the Government targets to attract investment into developing large aquatic processing companies, step up processing capacity of key products such as shrimp, tra fish and tuna, and diversify products.

Viet Nam’s aquatic export is forecast to hit US$9 billion in 2021 thanks to the recovery of consumption in key markets like the U.S., the European Union, and other potential markets.

The Southeast Asian country fetched US$4.1 billion from exporting aquatic products in the first six months this year, up 20 percent on year, reported Viet Nam Association of Seafood Exporters and Producers (VASEP).

By the end of June 2021, tuna export totaled US$364 million, up 24 percent against the same period last year. Meanwhile, the squid and octopus export reached US$277 million, a year-on-year rise of 15 percent.

MobiFone wins five prizes at International Business Awards 2021

Telecoms service provider MobiFone won prizes for its five products at the 18th International Business Awards (IBA) 2021.

It received Gold Stevie Winner for MobiEdu Platform, Silver Stevie Winner for telephone operator monitoring system and three Bronze Stevie Winner awards for MobiWifi, SmartData Gateway and Fintech Platform.

A representative from MobiFone said: “The five awards are recognition from the international community for Make in Vietnam and Make in MobiFone products. Following guidelines from the Government, the Ministry of Information and Communications, MobiFone has created digital platforms and services, thus helping maintain stable life in the complicated changes of the COVID-19 pandemic.”

The awards encourage MobiFone to bring new products and services with high technology to the local market, contributing to creating a digital society and economy in Vietnam.

The MobiEdu Platform helps maintain teaching for schools through an online model free of charge amid the COVID-19 pandemic. Earlier, the platform also received the Sao Khue Award from Vietnam Software and IT Services Association of (VINASA).

The IBA is one of the leading prestigious prizes in the world. The IBA this year received more than 3,700 nominations from organisations in 63 countries and territories. They competed in multiple categories including Company of the Year, Marketing Campaign of the Year, Best New Product or Service of the Year, Startup of the Year, Corporate Social Responsibility Programme of the Year. This year's contest also has some prizes to recognise the response and efforts of organisations and individuals to the COVID-19 pandemic./.

Korea Investment PE to pour $200 million into Masan Group

Vietnamese conglomerate Masan Group Corporation will be raising $200 million in a rights offering to Korea Investment Private Equity.

Korea Investment PE has recently decided to participate in the Vietnamese group's rights issues in a third-party placement and take a 2-3 per cent stake, as reported by The Korea Economic Daily.

It was not immediately known how much Masan Group is raising in total in the latest funding round. The unit of Korea Investment Holdings Co. will tap its blind pool fund to finance a portion of the stake purchase and raise the remainder through a project fund, the newswire added.

Korea Investment PE will be the latest South Korean shareholders of Masan Group along with the National Pension Service (NPS), SK Group, and Seoul-based IMM Investment Corporation. The deal will also mark Korea Investment PE's second investment in Vietnam after injecting $300 million into Vingroup in collaboration with IMM in 2019.

In 2019, Masan Group purchased a 83.7 per cent stake in Vingroup's retail division VinCommerce and then sold a 16.3 per cent stake in the retailer to SK Group for $410 million in April this year. Currently, SK Group is holding a 29.2 per cent stake in VinCommerce.

In May, a consortium led by Alibaba Group (Alibaba) and Baring Private Equity Asia (BPEA) has poured $400 million into The CrownX (TCX), which consolidates Masan Group’s interests in Masan Consumer Holdings and VinCommerce.

At that time, Masan also announced that it was in advanced discussions regarding a further strategic investment of $300-400 million into The CrownX from other investors, expected to close in 2021. In these transactions, Masan still holds the controlling stake. Masan made constant efforts to raise capital from international investors in a bid to change the façade of its modern retail platform, thereby contributing to the development of the local retail market.

FDI inflows to Ho Chi Minh City dip over COVID-19 worries in first seven months

Following the worst COVID-19 outbreak in the country this year, foreign direct investment (FDI) capital flowing into Ho Chi Minh City in the first seven months of 2021 dipped to $1.78 billion, down 25.1 per cent against last year's period.

The figures were revealed in the latest report on the socio-economic situation in July and the first seven months of the year. As of July 20, the city attracted $1.78 billion in FDI, a decline of 25.1 per cent on-year.

Around 345 new projects were granted investment registration certificates in the period with the total registered capital of over $284.5 million, down 42.3 per cent in quantity and 20.1 per cent in capital compared with the corresponding period a year prior.

Meanwhile, 98 existing projects adusted foreign investment capital with an additional $522.5 million, a decrease of 13.3 per cent on-yer in the number of projects, but nearly double the capital amount against the year prior.

In addition, there were 1,438 instances of capital contribution and share purchases by foreign investors, with $975 million, a 46.2 per cent drop on-year.

Singapore took the lead in the city's FDI rankings with the registered investment capital of nearly $612.3 million, followed by Japan ($321.9 million), South Korea ($223.4 million), and the Netherlands ($137.6 million).

The manufacturing and processing sector attracted the largest proportion of FDI in the first seven months with $440.6 million, followed by trade ($383.1 million), real estate ($349.7 million), and science-technology ($350.9 million).

Ho Chi Minh City is among the leading FDI recipients in Vietnam. In the first seven monhts, Ho Chi Minh City ranked second in Vietnam's FDI attraction with a total registered capital of nearly $1.8 billion, trailing behind Long An. Since the resurgence of the COVID-19 pandemic, the city has become the largest pandemic area of Vietnam, dampening the FDI outlook in the coming time.

Vietnam strives to keep CPI growth low by end of 2021

Vietnam looks to maintain Consumer Price Index (CPI) growth lower than 1 percent a month during the last quarter of 2021 in an effort to keep inflation under the 4 percent target for the year, heard a recent meeting between Deputy Prime Minister Le Minh Khai and the National Pricing Management Committee in Hanoi.

According to the committee, keeping the figure lower than 4 percent by the end of the year is important so the country can have a good start to 2022, especially in light of Vietnam's dual-target strategy of achieving COVID-19 containment and economic development simultaneously.

CPI, however, has always been tricky during this time of the year as the market will likely experience surges in demand for certain commodities during the end of the year. This has been made more challenging a task since the fourth outbreak of the novel coronavirus, which started in late April and until now has not been put completely under control.

The committee has asked the Ministry of Finance to implement more flexible monetary policies and make adjustments to some macroeconomics targets in response to the pandemic. Local administrations must keep an eye on the market's supply and demand of essential commodities and ensure a smooth flow of goods and services, especially for localities that have been put under lockdown.

Businesses have been advised to start preparing for the Lunar New Year by stocking up on popular goods. Market surveillance agencies across the country have been told to turn in reports to the central government as well as to ensure businesses under their watch must publicise their prices in a transparent manner.

CPI for the first seven months of 2021 has increased by 1.64 percent compared to the same period last year while inflation has increased by 0.89 percent.

Major contributing factors included rising import prices for animal feed, fertiliser, construction materials, petroleum products and Liquefied Petroleum Gas (LPG). According to a report by the Ministry of Industry and Trade, since the end of last year prices for WTI crude oil increased by 53.1 percent, Brent crude oil by 46.2 percent and steel ingots by 57-101 percent.

Prices for certain essential commodities such as rice have also seen a surge due to increased demand in the global market since the beginning of the year. On the other hand, some progress has been made in pulling down prices for pork and poultry in the domestic market./.

Vietnamese firms double overseas investment in seven months

Viet Nam invested US$570.1 million overseas over the last seven months, 2.3 times higher than the same period last year, according to the Foreign Investment Agency, under the Ministry of Planning and Investment. 

Of the total figure, Vietnamese investors poured US$145.3 million in 28 new projects, a year-on-year decrease of 29.6 in terms of investment capital; and added US$424.8 million to 11 projects, up 9.1 times against the same period last year.

Among 12 sectors attracting Viet Nam’s investment, science and technology took the lead with US$270.8 million, accounting for 47.5 percent, followed by retail sales, car repair and maintenance, agriculture, forestry and aquaculture. 

The U.S. was Viet Nam’s largest outward investment destinations among 18 countries and territories, with US$302.8 million, making up 53.1 percent. It was followed by Cambodia, Laos, France, Germany and the Netherlands. 

Weighing real estate ticker growth potential

As real estate tickers have been more appealing these days, investors are keen on which are the best bet in the forthcoming months.

Real estate tickers generally belong to two main groups (housing and industrial real estate) with divergent assessments.

According to Nguyen Viet Quang, Hanoi Branch director of Ho Chi Minh City-based Yuanta Vietnam Securities JSC, real estate tickers make up 21.39 per cent of the total capitalisation of Vietnamese stock markets, second only to bank tickers.

Quang noted that the fourth wave of the COVID-19 pandemic has dealt a heavy blow to southern key industrial zones, with production and business of IZ-based manufacturers stagnating. This will be clearly reflected in industrial real estate businesses’ third-quarter results.

As for housing stocks, supply sources are expected to jump 40 per cent on-year as many projects would launch products in the later months of this year.

As for housing stocks, supply sources are expected to jump 40 per cent on-year as many projects would launch products in the later months of this year.
In addition, as housing prices are at a high level and lending rates are at an attractive 9.2-9.5 per cent per year in the first half- the lowest level in the past decade, there is plenty of supportive factors for housing businesses.

Real estate businesses with big land funds are expected to draw investors’ attention like Vinhomes JSC (HSX: VHM), Nam Long Investment JSC (HSX: NLG), or Khang Dien House Trading and Investment JSC (HSX: KDH).

Le Ngoc Nam, Analysis and Investment Advisory director at Tan Viet Securities JSC, said that a few housing stocks saw rosy growth since the second quarter of 2021.

For instance, VHM saw its Q2 profit triple on-year, with profit mostly coming from project transfers.

Not only blue-chips and developers with large market capitalisation like VHM, tickers of average size like NTL of Tu Liem Urban Development JSC, DPG of Dat Phuong JSC, IDC of IDICO Corporation, or HDC of Ba Ria-Vung Tau Housing Development JSCalso registered impressive results. For instance, HDC on HSX raked in VND143.2 billion ($6.2 million) in after-tax profit in the first half, up 82 per cent on-year and equal to 56 per cent of the full-year profit target.

“Real estate tickers are also appealing because of the reasonable pricing. For example, the price per earning (P/E) of VHM is around 11x compared to its peak at 36x. Similarly, IDC, HDC, and DPG also have good P/E levels,” said Nam.

He added that as industrial real estate stocks have been hot in recent years, in the upcoming time they may plateau out, except for stocks with good supportive factors.

However, Tran Minh Tuan, advisor to the Board of Management at Smart Invest Securities, said the growth of real estate stocks in the past months came largely from speculation, rather than good fundaments.

He argued that when stocks in other fields like steel, banking, securities, food, and petroleum are all increasing, the money flow will tend to go to ticker groups where price often increases slower compared to other groups, like that of real estate tickers, leading to those tickers' price hike recently. "It would be hard for real estate businesses – particularly for-rent industrial real estate – to post upbeat revenue and profit figures in H2 or next year. The growth of real estate tickers is therefore unsustainable," he concluded.

Meanwhile, Nguyen Chuong, advisor to FPT Securities assumed that despite mounting hardships from COVID-19, both housing and industrial real estate tickers have their charm.

Housing projects have been maintaining stables sales, he explained, and the last two quarters are often the time when businesses finalise the cost of their projects, leading to a sharp growth in their revenue and profit. Chuong, therefore, forecast that real estate tickers may lead the market growth in the latter months of 2021.

Meanwhile, industrial real estate tickers do not much rely on a business cycle and often grow in proportion with foreign investment flows into Vietnam. Firms with large land funds have great advantages for future development, Chuong said.

Usually, players in this field will receive one-off payments of land rental for a long-term contract, so the pandemic impacts on their money flow and profit are only short-term.

Queried about what the five most promising tickers are, Chuong has named DIG and CKG for housing real estate, and LHG, GVR, and SZC for industrial real estate.

Chuong noted that each of these stocks have their own story. For instance, LHG of Long Hau Corporation is expected to soar after the 124ha first phase of the Long Hau 3 project is completed in the 2021-2023 period.

Advisor Tuan from Smart Invest Securities, however, recommended investors to pay attention to the tickers of industry-leading players like VHM as their brand and reputation would ensure effective sales activities despite the pandemic. He recommended investors to pick businesses having completed products ready for handover to customers, instead of those with new projects in the pipeline.

‘Green lane’ proposed for waterway transport of rice

The Ministry of Industry and Trade (MoIT) has proposed a “green lane” be quickly opened for waterway transport to ensure smooth trading of rice.

In its urgent proposal, the MoIT suggested the Prime Minister assign ministries, sectors, and relevant localities to promptly open a “green lane” for waterway transport, which is currently in charge of 95 percent of the rice output in the Mekong Delta - the country’s biggest agricultural hub and also home to a large river and canal network.

Keeping waterway transportation uninterrupted will substantially help rice exporters maintain supply chains, from the fields to ports for overseas shipment, the MoIT said.

It proposed the PM assign the Ministry of Transport to coordinate with the Ministry of Health and relevant ministries, sectors, and localities to soon devise a “green lane” plan for waterway transport that can both ensure COVID-19 prevention and ease the existing congestion in the flow of goods.

Strict social distancing measures under the PM’s Directive 16 are being imposed on 19 provinces and cities in the south, including the Mekong Delta, to curb the spread of COVID-19. That has reportedly led to congestion in the transportation of rice from fields to factories and ports.

According to the Vietnam Food Association, the country exported over 3.49 million tonnes of husked rice in the first seven months of 2021, down 12.7 percent year on year. This year’s total export volume is forecast at 6 million - 6.2 million tonnes worth about 3.32 billion USD./.

Vinamilk forms joint venture with Del Monte in Philippines

Vietnam Dairy Products Joint Stock Company (Vinamilk) said on August 17 that it has forged an alliance with Del Monte Philippines Inc (DMPI), a subsidiary of Del Monte Pacific Limited.

Total investment capital for the first phase is 6 million USD, in which, Vinamilk and its partners contribute 50 percent each.

The joint venture will import dairy products from Vinamilk, and market and distribute them in the Philippines through DMPI. It will use the co-brand Del Monte-Vinamilk for its products and promote the brand strength of both businesses. The joint venture will take advantage of Vinamilk’s strength in production and Del Monte in distribution.

Despite facing difficulties due to the application of social distancing, Vinamilk completed production of the first shipment for the joint venture at the end of July.

The joint venture's products are expected to officially reach Filipino consumers in September. Revenue of the joint venture in the first year is estimated at around 8.8 million USD and has the potential for double digit growth of about 50 percent a year in the medium term.

Vinamilk is among the top 40 largest dairy companies in the world. Its products have been exported to 56 countries including the United States, Japan, the Republic of Korea, and the Association of Southeast Asian Nations (ASEAN).

Vinamilk has three factories in the US, New Zealand, and Cambodia and a dairy farm complex in Laos. Overseas business currently accounts for 15 percent of Vinamilk's total revenue.

DMPI is a producer and distributor of healthy food and beverages including ready-to-drink pineapple juice. It has been operating for more than 95 years in the Philippines

Del Monte Pacific Limited is a company listed on the Singapore Stock Exchange and the Philippine Stock Exchange. It indirectly owns 87 percent of DMPI./. 

Ben Tre earmarks over 2.19 million USD for trade promotion activities

The Mekong Delta province of Ben Tre is expected to outlay more than 50 billion VND (2.19 million USD) for trade promotion activities from now to the end of 2025 under a programme recently approved by its provincial authorities, according to Nguyen Minh Canh, vice chairman of the provincial People’s Committee.

The trade promotion programme for 2021-2025 period aims to encourage and facilitate enterprises of all economic sectors that are engaged in producing commodities to invest in product development, expand the consumption market as well as support the campaign "Vietnamese people prioritise using Vietnamese goods", he said.

The province will focus on assisting One Commune One Products (OCOP), specialty and key products of the province. It will maintain and expand the distribution network, developing production, improving the products’ competitiveness, affirming their brands, and promoting exports and sustainable development in the context of international integration.

The vice chairman said Ben Tre has set the target to support more than 2,000 businesses seeking consumption markets through trade promotion activities, especially e-commerce applications.

The province will organise from five to ten exhibitions and 20 meetings to connect the province’s businesses and distributors, supermarkets, and wholesale traders from provinces and cities across the country, he said.

Communication campaigns will also be launched to raise people’s awareness about goods and services in the province. 

Every year, the provincial Department of Industry and Trade will facilitate businesses to take part in regional and international trade fairs and exhibitions where they can display and introduce OCOP products, specialty, handicrafts, and farm produce, Canh said.

According to the department, the programme will be applied to units in charge of implementing its trade promotion projects, trade promotion organisations in and outside the province. Enterprises engaged in the production and trading of products certified under the OCOP programme, typical rural industrial products at provincial and national levels, and the specialty of the province will also be included.

The province invested 31.5 billion VND (1.37 million USD) in trade promotion activities in the 2016-2020 period, resulting in a growth of 11.7 percent in the trade sector and an increase of 16.31 percent of export turnover per year./.

Product restructuring helps increase pepper export value

A dramatic shift occurring in product structure has served to boost the export value of Vietnamese peppers, with the country exporting 154,000 tonnes of peppers worth approximately US$500 million during the first half of the year.

This figure represents a decline of 7.5% in volume and an increase of 39.8% in value compared to the same period from last year.

At present, domestic pepper prices remain at a high level, with black peppers being traded at between VND76,000 and VND79,000 per kilo, while the selling price of white peppers stands at VND113,000 per kilo.

The export price of black pepper increased by 6.6% to US$4,150 per tonne, while the export price of white pepper enjoyed a surge of 6.6% to climb to US$6,050 per tonne.

According to information given by the Import-Export Department, Vietnam exported over 118,540 tonnes of black pepper worth US$366.35 million in the first half of the year, a drop of 11.2% in volume, but marking a rise of 38.3% in value over the same period from last year.

The average export price of black pepper also surged by 55.7% to US$3,090 per tonne, with notable foreign markets including the Republic of Ireland, the United Arab Emirates, and France.

The country shipped a total of 3,850 tonnes of ground white pepper abroad worth US$17.33 million throughout the reviewed period, an increase of 84.1% in volume and 114.1% in value compared to the same period from last year.

Most notably, strong export growth was recorded in a number of markets, such as the United States, the UK, Australia, Japan, the Republic of Korea, Malaysia, and South Africa.

Experts believe that the complicated nature of developments relating to the fourth wave of COVID-19 will impact the export of the local product due to high freight rates and a shortage of empty containers, thereby leading to stagnation occurring as a result of a large amount of peppers building up in southern ports.

Pepper prices within the global market are anticipated to remain stable at a high level ahead in the third quarter of the year, largely due to the supply sources of pepper from Indonesia, China, Malaysia, Brazil, and Cambodia.

With the current rise of pepper prices, Vietnamese pepper exports are set to bounce back as turnover reaches several billions of US$ in the near future.

Product restructuring helps increase pepper export value

A dramatic shift occurring in product structure has served to boost the export value of Vietnamese peppers, with the country exporting 154,000 tonnes of peppers worth approximately US$500 million during the first half of the year.

This figure represents a decline of 7.5% in volume and an increase of 39.8% in value compared to the same period from last year.

At present, domestic pepper prices remain at a high level, with black peppers being traded at between VND76,000 and VND79,000 per kilo, while the selling price of white peppers stands at VND113,000 per kilo.

The export price of black pepper increased by 6.6% to US$4,150 per tonne, while the export price of white pepper enjoyed a surge of 6.6% to climb to US$6,050 per tonne.

According to information given by the Import-Export Department, Vietnam exported over 118,540 tonnes of black pepper worth US$366.35 million in the first half of the year, a drop of 11.2% in volume, but marking a rise of 38.3% in value over the same period from last year.

The average export price of black pepper also surged by 55.7% to US$3,090 per tonne, with notable foreign markets including the Republic of Ireland, the United Arab Emirates, and France.

The country shipped a total of 3,850 tonnes of ground white pepper abroad worth US$17.33 million throughout the reviewed period, an increase of 84.1% in volume and 114.1% in value compared to the same period from last year.

Most notably, strong export growth was recorded in a number of markets, such as the United States, the UK, Australia, Japan, the Republic of Korea, Malaysia, and South Africa.

Experts believe that the complicated nature of developments relating to the fourth wave of COVID-19 will impact the export of the local product due to high freight rates and a shortage of empty containers, thereby leading to stagnation occurring as a result of a large amount of peppers building up in southern ports.

Pepper prices within the global market are anticipated to remain stable at a high level ahead in the third quarter of the year, largely due to the supply sources of pepper from Indonesia, China, Malaysia, Brazil, and Cambodia.

With the current rise of pepper prices, Vietnamese pepper exports are set to bounce back as turnover reaches several billions of US$ in the near future.

Tight but flexible regulations needed for healthy corporate bond market

Vietnam should set tight rules to diminish the negative impact of corporate bond products, while constructing flexible regulations for bond issuance to effectively manage and supervise the corporate bond market, according to insiders.

“Ensuring the healthy development of the bond market and the capital market requires the synchronous development of all components participating in the market, including State management agencies, businesses, and investors,” said Do Ngoc Quynh, secretary general of the Vietnam Bond Association, during an online seminar on corporate bonds held  on August 16.

“While developing the equity market, market regulators must ensure the effective operation and necessary management over the market. If the management is too tight, the market cannot develop, but if the regulations are too loose, a crisis can occur, thus management agencies must always observe and adjust the policy as needed.”

He noted that businesses issuing bonds publicly would have wider access to investors but also have to bear greater responsibilities, such as transparent information disclosure, and ensuring credit ratings.

If they choose to issue bonds privately, the access to investors will be narrower and the costs of capital higher.

“Market participants must fully comply with regulations. Any enterprise that publishes false information, or lacks transparency will be fined strictly,” he added.

According to banking expert Nguyen Tri Hieu, in the US, the banking system is divided into two segments, commercial banking and investment banking.

“Only investment banks are allowed in bond issuance. While in Vietnam, banks are multi-functional as some can be commercial banks and investment banks at the same time,” Hieu said.

Support of Vietnamese banks for the corporate bond market is crucial as they provide technical support for eligible businesses to issue bonds.

"They also supported the distribution of the amount of bonds. Thanks to their support, in the first 6 months of this year, despite the pandemic, the amount of corporate bonds grew strongly,” he noted.

“But bond investors should note that banks are just the distributors of bonds and do not guarantee the safety of investment in corporate bonds. They enjoy service fees from issuers without being responsible for the repayment capacity of the issuers, meaning that they do not guarantee that bond issuer will pay the interest and principal on the due date.”

He added that most of the current amount of bonds on the market were unsecured or secured by stocks, which fluctuate according to the market.

In the case of other collateral assets, investors do not have the power to seize those collateral assets, like banks do. Even when the business goes bankrupt, the collateral assets will be paid in order of priority, firstly taxes to the Government, then wages for employees and paying off bank debts and finally the buyers of the bond.

"Now the corporate bond market has many potential risks as the COVID-19 pandemic makes businesses unable to operate and have to borrow money. And those risks are endured by bondholders," Hieu stressed.

According to Tran Van The, vice chairman of the Board of Directors of Deo Ca Group, which is involved in infrastructure investment, the total investment of the group in traffic projects is currently over VND60 trillion (US$2.6 billion).

“In the period of 2021 - 2030, the Government is determined to complete 3,800km of highways, which requires enormous medium and long-term capital needs.

Therefore, Deo Ca Group must develop a long-term strategy to restructure our capital, and we have taken into account the plan to issue corporate bonds in September and October 2021.

“This helps us up capital to the transport projects under the form of public–private partnerships (PPPs), such as Cam Lam - Vinh Hao project, a component project of the North - South expressway with a total investment of VND9 trillion, or two other projects of Huu Nghi-Chi Lang project worth VND7.5 trillion, and Dong Dang-Tra Linh worth VND12 trillion," The said.

“The capital demand is very large, in the process of issuing bonds, we still encounter some obstacles in terms of policy as well as practice.

“For example, according to Article 6, Decree 28/2021/ND-CP dated March 26, 2021 stipulating the financial management mechanism of investment projects under the form of public-private partnership, PPPs project enterprises are only allowed to issue non-convertible bonds under the form of private placement. This regulation has restricted businesses,” The added.

“We recommend that businesses should be allowed to issue corporate bonds to the public, even to issue international bonds, because the sector of transport infrastructure investment requires extremely large capital, suitable for international bond issuance."

The added that there should be an infrastructure investment fund specialising in lending capital with preferential interest rates, creating confidence for investors to buy bonds of transport infrastructure enterprises.

Bamboo Capital establishes financial company with charter capital of $17.5 million

Bamboo Capital JSC, a multi-industry company operating in trade and services, has approved the establishment of a financial company with a charter capital of VND400 billion ($17.5 million).

Bamboo Capital has decided to establish BCG Financial JSC, which will specialise in providing financial services such as debt trading, as well as related consulting and brokerage.

The company has a charter capital of VND400 billion ($17.5 million), of which Bamboo Capital contributes 80 per cent, equivalent to VND320 billion ($14 million).

After the establishment of BCG Financial, the company will have seven directly-owned subsidiaries, together with 45 indirectly-owned subsidiaries and 12 affiliates.

Most of its member organisations will operate within the group's main business areas agricultural production, commerce, infrastructure, and real estate construction, and renewable energy. In which, renewable energy is a medium and long-term strategic segment that is poised to create a stable source of income in the next five years.

Thanks to its subsidiaries, in the second quarter of 2021, BCG generated revenues of more than $35.85 million, up 56 per cent over the same period. After deducting expenses, BCG's after-tax profits were $13.8 million, 17 times higher than in the same period last year.

These revenues mainly came from the handover and transfer of projects, as well as its construction and installation activities and renewable energy projects that have been energised by the end of 2020.

Accumulated in the first six months, BCG cashed in $63.5 million in revenues, an increase of 60 per cent; and more than $21 million in profits after tax, 18 times higher than in the same period last year.

Compared with the company's target of $235.6 million in revenues and $35.3 million in profits after tax for 2021, BCG achieved 27 and 59 per cent, respectively.

Ho Chi Minh City applies new support measures for enterprises affected by pandemic

Ho Chi Minh City is implementing a series of solutions to support enterprises with capital, land rent, as well as electricity and water bills, helping them overcome the difficulties amid the pandemic.

Ho Chi Minh City has a variety of support packages for enterprises affected by COVID-19. Photo: Le Toan
On August 16, Nguyen Thanh Phong, Chairman of Ho Chi Minh City People’s Committee, signed a document on support enterprises affected by the COVID-19 pandemic.

Accordingly, the city directed banks to implement business support policies such as restructuring debt repayment terms, interest exemption and reduction, as well as reducing or waiving fees for certain debt groups.

The city proposed the government to provide higher support for bank loans and tax support for businesses operating under models approved by competent authorities.

The city assigned the Ho Chi Minh City branch of Vietnam Bank for Social Policies and districts to allow businesses to borrow at zero per cent interest to pay wages for workers.

Ho Chi Minh City will also extend the time to pay value-added tax, corporate income tax, personal income tax, and land rent in 2021. It also proposed the government to reduce land rent by 50 per cent during the period of business shutdown.

In addition, the city recommended the Ministry of Industry and Trade to reduce the cost of electricity for production enterprises and exempt workers in businesses operating under models approved by competent authorities from electricity bills.

The city has also exempted water bills for concentrated isolation areas from June to the end of 2021. A 10 per cent discount on water bills will be applied for all customers in Ho Chi Minh City from September to November 2021. Also, water bills for businesses operating under models approved by competent authorities will be exempted or reduced, while the payment of arrears will also be extended until December 31.

Tra Vinh to develop VND300-billion industrial cluster

The Mekong Delta province of Tra Vinh decided to establish the Hiep My Tay industrial cluster in Cau Ngang District, with a total investment of around VND300 billion, VND50 billion more than what was originally planned, said a local official.

The industrial cluster will cover an area of 40 hectares in the district, according to Nguyen Quynh Thien, vice chairman of the provincial government, Bnews newspaper reported.

Thuan Phat Trading and Construction Company, whose general director is Lai My Thanh residing in HCMC’s District 11, is the project’s investor. The industrial cluster is expected to be put into service in the third quarter of 2023.

Once it is operational, the industrial cluster will prioritize attracting companies operating in the sectors of handicraft, wooden furniture for interior decoration, construction materials, packaging and manufacturing, footwear and textile-garment, food processing and fertilizer production, among others.

To serve the socioeconomic development of the province in the 2020-2025 period, Tra Vinh decided to establish four industrial clusters ---the Tan Ngai industrial cluster covering over 21 hectares in Chau Thanh District, the 33-hectare Sa Binh industrial cluster in Long Duc Commune of Tra Vinh City, the Phu Can industrial cluster covering 10.5 hectares in Tieu Can District and the Hiep My Tay industrial cluster in Cau Ngang.

This Mekong Delta province is home to three industrial parks, Long Duc, Cau Quan and Co Chien. Earlier, it had announced a zoning plan to establish 13 industrial clusters in the province.

Scenarios for seaport development in south in H2/2021

As port activities have been hit by the pandemic, three growth scenarios have been projected for seaports in the south by Saigon Newport Corporationfor the second half of 2021.

Vietnam's import and export activities have been growing in the past seven months as a number of free trade agreements have come into force. However, since the fourth wave of the pandemic, port activities have been disrupted by movement restrictions.

Many factories have had to scale down or halt production, creating backlogs of containers at various ports. In this context, Saigon Newport Corporationhas laid out three scenarios for seaports in the south.

In the first scenario, the COVID-19 pandemic would be brought under control by the end of the third quarter of 2021 with vaccination on a large scale and businesses starting to resume operation. This will increase the volume of freight cargo passing through Ho Chi Minh City's seaports by 5-7 per cent and 12-15 per cent through seaport in the Cai Mep area in the second half. In this scenario, shipping lines would actively move goods from Ho Chi Minh City to overseas to ensure the import and export needs of businesses.

In the second scenario, the pandemic would be contained at the beginning of Q4. Freight cargo volume through ports in Ho Chi Minh City would increase by 3-5 per cent and 15-17 per cent in the Cai Mep area. Shipping lines and businesses would increase goods transport to Cai Mep as Ho Chi Minh City will begin collecting port infrastructure charges in October.

The third scenario is that the pandemic would be brought under control by the middle of Q4. Businesses would gradually resume production in the last months of the year with slower recovery due to the long-term effects of social distancing. Freight cargo volume passing through the seaports of Ho Chi Minh City and Cai Mep would be equivalent to the first traffic seen in H1.

In H1/2021, the throughput of goods through Ho Chi Minh City's seaports reached about 3.8 million twenty-foot equivalent units (TEUs) and more than 2.6 million TEUs in the Cai Mep area.

E-commerce gives MSMEs equal opportunities to access global market

Cross-border e-commerce has changed the way firms are doing business, with micro, small and medium sized enterprises (MSMEs) given more equal opportunities to access global market, said Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI).

As the unprecedented COVID-19 crisis has forced many countries around the world to close borders and restrict travels, thousands of in-person business meetings, conferences and trade exhibitions between Vietnam and its major trade partners, such as China, the Republic of Korea, the EU and US, have been cancelled and delayed.

To tackle such challenges, the Ministry of Industry and Trade (MoIT) has cooperated with other ministries, local administrations and overseas trade offices to make use of digital platforms to promote trade and boost exports, according to Deputy Minister Do Thang Hai.

More than 1 million online trading sessions have been organized and hundreds of thousands of Vietnamese companies have engaged in virtual trade promotion events with potential partners from 55 countries and territories, including many new markets in Africa, Hai said.

Through these events, growers of seasonal farm produce in Bac Giang, Hung Yen, Son La, Ca Mau, Dak Lak, Soc Trang and others have also received support to trade their products on multiple popular online marketplaces like Sendo, Shopee, and Voso.vn. It has not only helped farmers seek buyers but also attracted more investment into agricultural production and processing.

Thanks to such efforts, Vietnamese agricultural products have gained access to more major markets, said To Hoai Nam, Standing Vice Chairman and General-Secretary of the Vietnam Association of Small and Medium Enterprises (VINASME).

“Thieu” lychee had cracked open the door to France, Japan and the Netherlands while Hung Yen’s longan had found its way to the EU, he cited, adding that plum and dragon fruits are getting similar support to go global.

Since early 2021, a number of both in-person and virtual conferences to boost sales of “thieu” lychee have been held, connecting growers with domestic and foreign traders, said Minister of Industry and Trade Nguyen Hong Dien. These have proved effective as the lychee has expanded its foothold in demanding markets such as Japan and the EU. Exports of the fruit reached over 89,000 tonnes this year, accounting for 41.4 percent of total sales.

The MoIT is making all necessary legal steps to export more Vietnamese agricultural specialties via cross-border e-commerce, with a hope that farmers can directly supply their products to foreign end-users, Dien revealed.

Vu Ba Phu, Director of the MoIT’s Vietnam Trade Promotion Agency (Vietrade), said his agency is developing a trade promotion ecosystem mobile app to help Vietnamese firms improve the effectiveness of their promotion activities.

It will also pilot a project providing support for Vietnamese producers to remotely join foreign trade expos and work with renowned global e-commerce platforms like Amazon, Alibaba and Global Sources to help the firms cut export promotional costs and introduce their products to global importers and customers, Phu noted./.

Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes 

VIETNAM BUSINESS NEWS AUGUST 17

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