VIETNAM BUSINESS NEWS JANUARY 9

Credit growth forecast to reach 13-14 percent this year: SSI

VIETNAM BUSINESS NEWS JANUARY 9
At Vietcombank's headquarters in Tran Quang Khai Street, Hanoi.

Credit growth in Vietnam may reach 13-14 percent this year, partly driven by progress with the COVID-19 vaccine, according to a 2021 banking outlook report released by the SSI Securities Corporation on January 6.

Vietnam beginning human trials of a COVID-19 vaccine is likely to give the domestic economy a push in 2021, the SSI said.

Its 2021 forecast is higher than the estimated 11-12 percent in credit growth last year.

The expected recovery of foreign trade, production, and consumption this year will boost the growth of lending, with retail lending likely to bounce back to pre-pandemic levels, according to the report.

The retail lending market recorded a compound annual growth rate (CAGR) of 28.5 percent between 2016 and 2019, which slowed to 8.3 percent in the first three quarters of 2020 compared to the beginning of the year.

Increases in lending demand may be supported by low interest rates and commercial banks’ expected moves to loosen lending standards to pre-pandemic levels when signs of economic recovery are more evident.

Additionally, as the government tightens control over the issuance of corporate bonds under Decree No 81/2020/ND-CP, businesses may shift to bank loans for funding. The total value of corporate bonds sold in the first nine months of last year was 245.5 trillion VND, equal to 2.8 percent of total credit.

The SSI also expects standards for consumer loans to return to roughly what they were before COVID-19 broke out in the second half of 2021, further fuelling overall credit growth. Consumer loans accounted for about 1.6 percent of total outstanding loans last year./.

Central bank targets credit growth of 12 percent in 2021

The State Bank of Vietnam (SBV) targets a credit growth rate of 12 percent in 2021, equivalent to the growth of 12.13 percent last year, according to SBV Deputy Governor Dao Minh Tu.

However, the goal is not a fixed figure, as the central bank may adjust it if necessary, Tu said at a press conference in Ho Chi Minh City on January 7.

He said that in case the COVID-19 pandemic is totally controlled, and the economy needs fast recovery, leading to an increased credit demand, the SBV will expand credit to support businesses and economic recovery.

Vice versa, if there is signs that the economy needs tighter control to curb inflation, the credit growth will be slashed, he said.

Tu added that the support for businesses during the post-pandemic period is defined as one of the major tasks of the banking sector in 2021.

The bank is submitting a proposal to the Prime Minister on the adjustments of regulations on foreign credit institutions and bank branches’ debt restructuring, interest and fee reduction and exemption and debt classification maintenance to support customers affected by COVID-19.

In 2020, the SBV exerted numerous efforts to maintain a suitable credit growth rate, while credit for risky areas was tightly controlled. Credit institutions also launched many programmes to offer soft loans to customers.

As of December 31, 2020, credit outstanding loan of the economy reached nearly 9.2 quadrillion VND, up about 12.13 percent year on year. The rise was 13.65 percent in 2019./.

SeABank increases charter capital to nearly 526 mln USD

The Southeast Asia Commercial Joint Stock Bank (SeABank) has been among 13 commercial joint stock banks in Vietnam with highest charter capital, after increasing it to 12.088 trillion VND (526 million USD) from 9.369 trillion VND.

It also gained approval to list more than 1.2 billion shares (Stock code: SSB) on the Ho Chi Minh Stock Exchange (HoSE).

The bank plans to officially list the more than 1.2 billion shares, equivalent to 12.088 trillion VND of the charter capital, in the first quarter.

The increase to charter capital is in line with SeABank’s development plan adopted at the 2020 General Shareholders’ Meeting and aims to turn it into Vietnam’s most popular retail bank, facilitating operational expansion and promoting investment in technology application and the diversification of products and services.

The listing on HoSE is an important milestone for SeABank, contributing to affirming its position and improving its brand value for investors and partners.

It reported revenue of 1.131 trillion VND in the first three quarters of 2020, a year-on-year increase of 65.6 percent. The bank’s total assets rose by 6.37 percent to 167.426 trillion VND.

SeABank is the fifth bank in Vietnam to complete all three pillars of the Basel II standards - a set of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision, before the deadline. It was also rated B1 (long-term stable) for 2020 by Moody’s./.

New Vietnam-Germany partnership to save 6.3 bln kWh of electricity in 10 years

The Ministry of Construction (MoC) and the German Cooperation Organisation (GIZ) on January 6 signed a Memorandum of Understanding (MoU) on cooperation in developing the Vietnam Green Housing Programme, expected to save about 6.3 billion kWh of electricity over the next decade.

The document was inked by Ha Quang Hung, Deputy Director General of the MoC’s Housing and Real Estate Market Administration (HREMA), and Kia Fariborz, Director of the GIZ SIPA Programme.

The VGHP, implemented under the Programme for Energy Efficiency in Buildings (PEEB) in Vietnam, aims to benefit the mid-income housing market through targeting the low-cost commercial housing segment. The MoU focuses on enabling greenhouse gas (GHG) emissions mitigation in the residential building sector.

Under the partnership, GIZ and HREMA will join hands to develop and implement the Vietnam Green Housing Programme. A particular focus of the programme is on improving energy efficiency and reducing GHG emissions in the affordable housing segment as per Vietnam’s commitment in its Nationally Determined Contribution to the Paris Agreement on Climate Change.

Through the programme, the partnership aims to motivate private housing developers to move into the market for energy-efficient and green buildings, and stimulate local commercial banks to develop green financing products for energy efficient housing and green construction materials.

According to calculations, within 10 years after reaching the target of the Green Housing Programme, the apartment buildings will save about 6.3 billion kWh of electricity, equivalent to 15.8 trillion VND.

This is a significant cost saving that will benefit the home buyers if they use energy efficiently in the apartment, Hung said. In addition, in the short term, the programme will create a plentiful supply of low-cost commercial housing, thereby facilitating the people’s access to affordable housing.

Fariborz, for his part, said, as an emerging economy, Vietnam is witnessing a sharp increase in demand for space and housing expansion as a result of the rapid growth of the middle class.

There is huge potential in reducing GHG through improving energy efficiency in the housing sector so this partnership will contribute to the fulfillment of Vietnam’s goal of GHG reduction, he added./.

Foreign expert positive about FDI to Vietnam

Vietnam has been successful in controlling COVID-19 in 2020 and is likely to keep the situation contained next year, said Joseph Incalcaterra, chief economist for ASEAN at the HSBC Global Research, on an article recently published on www.dailymirror.uk. 

Incalcaterra said Vietnam together with Singapore are two Southeast Asian countries that will be able to keep the pandemic under control and smoothly roll out vaccines.

He praised Vietnam’s handling of the virus, and said its response to the pandemic allowed the country to maintain its reputation as a “very good destination” for foreign direct investment (FDI). The country has been seen as an alternative manufacturing hub for companies, given that FDI this year remains very resilient into Vietnam.

Overall, however, Southeast Asia may not benefit from a vaccine in the near future, given the logistical difficulties in rural parts of the region.

“We really don’t have great visibility on the short-term recovery, given how deep the damage is,” he added.

According to him, until the virus is under control, it is hard to see this investment engine regain its momentum. Meanwhile, ambitious infrastructure programmes pursued by countries to make the region a “reliable manufacturing production base” have been installed, which he said, is the biggest short-term hindrance to growth in Southeast Asia./.

Prime minister approves investment planning of O Mon II thermal power plant

The prime minister has approved the investment planning of the 1,050MW O Mon II thermal power plant project with the preliminary capital of VND30.56 trillion ($1.33 billion). 

The investor of O Mon II thermal power plant (TPP) is a joint venture between Vietnam Trading Engineering Construction JSC (Vietracimex) and Marubeni Corporation from Japan.

The investor is in charge of calculating the accurate investment capital to feature in the feasibility report to ensure the effectiveness and competitiveness of the project.

Electricity of Vietnam (EVN) was assigned to check and evaluate the total investment value of the project in order to ensure a reasonable price in the power purchase agreement between the two parties.

20 per cent of the investment capital, equaling VND6.11 trillion ($265.65 million), of O Mon II TPP will come from the equity of the investor and the remaining 80 per cent, or VND24.45 trillion ($1.06 billion), will be mobilised from commercial loans.

The construction of the project is expected to come into commercial operation in 2024-2025 in order to suit the construction scheme of the Block B Gas Power Project chain.

Previously in October last year, the prime minister agreed with the proposal of the Ministry of Industry and Trade (MoIT) on adjusting the capacity of O Mon II TPP from 750MW as approved by the PM in Decision No.428/QD-TTg dated March 18, 2016, to 1,050 MW ± 10 per cent with operation time in 2022-2023.

The MoIT is assigning the joint venture to invest in the project by the public-private partnership form and ensure the investor has the requisite capacity and experience to satisfy the requirements on quality and efficiency as well as speed up project progress for the timely supply of adequate electricity for the southern region.

O Mon II TPP is one of four TPPs in O Mon power centre, which is a 660MW power station fuelled by petroleum in Can Tho province. The power station also has three proposed gas-burning combined-cycle units totalling 3,150MW, and the petrol-burning units are scheduled to be switched to natural gas, which would ultimately bring the total gas-fired capacity to 3,810MW.

Continuing the success of exports

2020 was an extremely difficult year for the domestic and global economies due to the negative impacts of Covid-19 and global trade disruption. But Vietnamese exports recorded an impressive performance, becoming a bright spot and laying the foundation for a firm economic recovery in 2021.

According to the General Statistics Office (GSO), Vietnam exported US$281.5 billion worth of goods, up 6.5%, and recorded a trade surplus of US$19.1 billion, the highest figure since 2016.

The success of Vietnam’s export in 2020 was thanks to Vietnam’s initial success in containing Covid-19, with most domestic economic activities taking place almost normally, except for the first 15 days of April when social distancing measures were in place nationwide.

At the same time, Vietnam managed to take advantage of new-generation free trade agreements such as the CPTPP and EVFTA; and diversify its markets and connect with new supply chains, among others.

But there were also dark spots in the economic picture when agricultural and seafood exports fell by 1.9% and 1.8% respectively. Exports to many major markets such as the EU, ASEAN, Japan and the Republic of Korea dropped by between 2.7% and 8.7%.

Export revenue from the domestic sector also fell by 1.1% and accounted for just 27.8% of Vietnam’s total exports. The export of services plunged by 68.4%. With goods and services combined, Vietnam’s trade surplus was only US$7.1 billion.

Despite their considerable contributions to expanding exports, trade promotion activities are exposing many drawbacks in terms of form, size, professionalism and effectiveness.

In 2021, with the EVFTA, CPTPP and other free trade agreements being implemented, Vietnam is well-positioned to make a strong recovery and exports are bound to grow sharply in line with economic recovery and an improved Covid-19 situation in Vietnam and the world. A GSO survey shows that 81% of manufacturing enterprises state that their performance in the first quarter of 2021 will be stable or better than the fourth quarter of 2020.

In order to take advantage of such opportunities, Vietnam needs to continue quickly implementing synchronous measures, promote the restructuring of export goods and enhance technological innovation and the competitiveness of export goods.

Trade promotion activities need to focus on key exports with potential for growth such as agricultural products (food, seafood, fruits, tea, coffee, cashew nuts, pepper, rubber, rice) and manufactured goods (garments, footwear, bags, timber products).

In addition, more attractive promotion programmes are needed in order to enhance the Vietnamese brand, while it is also necessary to promote e-commerce and bolster exports through distribution networks of foreign retailers. Vietnam also needs to take measures to meet the most stringent technical barriers.

The achievements of 2020 are a stepping stone for Vietnam’s export activities in 2021 to continue reaping success, making contributions to national rapid and sustainable socio-economic development.

Taxation sector asked to prevent “stagnant virus”

Permanent Deputy Prime Minister Truong Hoa Binh has asked the taxation sector to raise a high sense of responsibility in their performance to prevent “stagnant virus” at a conference held by the General Department of Taxation in Hanoi on January 5 to review its operation in 2020.

The Government official praised the achievements of nearly 40,000 taxation workers in the past year which also contributed to the overall national development.

Despite numerous difficulties in 2020, the taxation sector collected over VND1.2 quadrillion (US$52 billion), 1.7% higher than the estimate set by the National Assembly. As many as 55 out of 63 provinces and cities completed and exceeded their estimates on tax revenue while 40 out of 63 provinces and cities reported 2020 tax revenue higher than that of 2019.

In 2020, the taxation sector basically completed the strategy on tax reform in the 2011-2020 period with positive results in addition to effectively restructuring its apparatus and enhancing tax management.

However, the Deputy PM also requested the taxation sector to have solutions to its shortcomings to ensure the sustainable collection of tax aligned with ensuring equality and encouraging production and business activities.

The National Assembly assigned the taxation sector a tax estimate of over VND1.1 quadrillion in 2021, which is considered a difficult task amid the complicated developments of the COVID-19 pandemic on a global scale, the Deputy PM said.

Thus, the senior official required the taxation sector to continue to complete tax policies toward sustainable tax collection, prevent stagnancy, streamline its apparatus, and expand the tax base to fulfil its tasks in 2021.

Australia and Vietnam perfect partners for trade opportunities: report

The bilateral economic engagement between Vietnam and Australia is well established, with trade and investment flows seeing an upward trend, offering a favorable environment for businesses in both nations to engage and generate commercial outcomes, a new report produced by RMIT’s Australian APEC Study Center and Asia Society Australia indicated.

Vietnam is one of Australia’s fastest-growing trade partners. Australia's total two-way trade with Vietnam in 2019-2020 was valued at US$15.5 billion, according to the “A Path to Vietnam: Opportunities and market insights for Australian business” report.

The two countries have committed to enhancing their economic engagement and have elevated their political and strategic relationship.

Vietnam is a densely populated, developing and urbanizing country, rapidly transitioning to an industrial and market-based economy through trade and investment and making strides to position itself to thrive in the Fourth Industrial Revolution. Therefore, the country is a standout option for Australian businesses to consider as a market for goods and services and business investment.

“Vietnam has emerged as a new powerhouse of Asia. With its burgeoning economy which has doubled since 2010, a large, young and educated population and complementary industries, Vietnam is a perfect partner for Australia, and Australian businesses will be well advised to make Vietnam a cornerstone of their Asia growth strategy,” said Asia Society Australia CEO Phillip Ivanov.

There is a long and solid history of Australian aid to Vietnam, marked by large early projects such as the Telstra role in providing the country’s first satellite for HCMC television from 1991-1993.

Australian funding for major infrastructure projects such as the My Thuan and Cao Lanh Bridges are integral to the Australia-Vietnam relationship. Besides this, grants for public and private sector organizations, assistance to help water management or agricultural development and, more recently, women’s economic empowerment have built goodwill across the country.

Australia and Vietnam both seek to reduce their economic over-reliance on China as a dominant trading partner. They are equally open about their support for a rules-based security and economic order in Asia, continued trade liberalization and the centrality of ASEAN in maintaining regional stability.

Both governments have outward looking foreign policies and emphasize strengthening regional relations and multilateral coalitions of like-minded states such as Japan, India and South Korea based on shared economic and security interests.

While the report did not suggest that Vietnam would replace China as Australia’s primary trade partner in Asia, it found the two countries had complementary economic systems and that both were seeking to diversify their trading partnerships amid a weakening global economy and geopolitical tensions.

The drivers of growth in Vietnam have created attractive conditions and opportunities for Australian businesses in the post Covid-19 environment. There is scope for manufacturing, agriculture, resources and services firms to expand their engagement with Vietnam. The country’s rapid evolution will continue creating further opportunities as the economy and consumption mature.

There are opportunities to increase trade in certain goods where Australia has proven its export capacity and readiness to meet the demand in Vietnam.

Besides, there are opportunities to expand Australia’s export of services in the education, information and communications technology, insurance, environmental and health sectors. Both governments have prioritized these sectors under the expanding bilateral economic framework.

Financial sector continues to carry out policies to support enterprises

The Ministry of Finance on January 5 said that in the period from 2021 to 2023, the financial sector would strive to achieve State budget collection of about VND4.33 quadrillion, the average rate of State budget revenue mobilization at about 15.5 percent of gross domestic product (GDP), and the proportion of domestic revenue mobilization by 2023 at about 85-86 percent of total State budget revenue.

As for expenditure, it is estimated that total spending will be at about VND5.4 quadrillion; the average state budget deficit will be about 3.8 percent of GDP; public debt by 2023 will be about 48.1 percent of GDP.

The Ministry of Finance also acknowledged that the severe impact of the Covid-19 pandemic had created challenges to the mid-term State budget plan in three years from 2021 to 2023 in terms of ensuring the schedule for wage reform, adjusting standards of social welfare, and the poverty line.

Therefore, to complete the State budget revenue and expenditure tasks, especially in 2021, the financial sector will consider continuing to implement the policies of tax and fee exemption, reduction, and extension to support enterprises to overcome difficulties caused by the Covid-19 pandemic. It will strengthen collection management, prevent revenue losses, strictly manage the expenses from the stage of estimation to the implementation, thoroughly save expenditures that are not actually urgent, and minimize spending for organizing conferences and seminars, domestic and overseas business trips, and the purchase of luxury equipment. It will also review obstacles to accelerate the disbursement of public investment capital, especially key national projects, with great pervasiveness, connectivity, and motivation for interregional socio-economic development.

High rice export price benefits farmers

In 2020, the volume of Vietnamese rice exports to the world reached 6.15 million tons with a value of about US$3.07 billion, said the Ministry of Industry and Trade yesterday.

Though the volume of Vietnam's rice exports was down by 3.5 percent compared to 2019, earnings from rice export surged by 9.3 percent. Average rice export price in the whole year was estimated to hit $499 per ton, up by 13.3 percent over the prior year.

According to the Ministry, last year price was highest in recent years helping to increase farmers’ income. Vietnamese farmers have gradually switched to growing fragrant rice and high-quality rice varieties to improve the value.

Farmers and exporters also pay attention to rice quality improvement and traceability with the orientation towards meeting strict quality requirements in the US, South Korea and the EU markets.

The fruitful achievement in the agricultural sector in 2020 when the coronavirus pandemic hit the country manifested the efforts of farmers and enterprises plus good management of the Government and related ministries.

Despite the coronavirus pandemic, the country has still achieved the two goals which the government has set for rice production and export. Food security was ensured in 2020 even amid the outbreaks of the pandemic.

The Ministry expected that rice exports will continue gaining new achievements in 2021 both ensuring food security and good price for farmers. 

Vietnam's forestry export reaches over US$13 billion in 2020

Minister of Agriculture and Rural Development Nguyen Xuan Cuong yesterday hosted a summary conference for the forestry sector in 2020, setting the target of US$14 billion export turnover from wood and forest products in 2021. 

According to Vietnam Administration of Forestry, the export value of the forestry sector reached US$13.17 billion, an increase of 5.4 percent over the 2020 target and 16.4 percent over the same period in 2019 in the context of complicated and unprecedented Covid-19 pandemic.

In 2020, the whole country planted an extra of 230,288 hectares of forest, meeting 105 percent of the year plan. 

However, the Ministry of Agriculture and Rural Development admitted that deforestation has still been happening.

Vietnam still depends on materials, spare parts overseas

The number of level-1 suppliers of Samsung Vietnam raised from 35 enterprises in 2018 to 42 in 2020 while the number of level-2 suppliers surged from 157 to 170,  according to a report from the Ministry of Industry and Trade. 

At the moment, there are three enterprises meeting the requirements of becoming Toyota suppliers.

The Ministry of Industry and Trade informed that the country’s internal industrial production capacity is still limited and depends on FDI enterprises; import activities continue to increase, especially the importation of raw materials for export productions. 

Besides that, Vietnam still has to import a large amount of machinery, equipment, spare parts and raw materials to serve the production of domestic industries.

 

Hanoi hotel is one among the most exciting international hotel openings in 2021

Forbes has recently listed a hotel in Hanoi as an outstanding newly built hotel in the world.

The Capella Hanoi is going to open in January 2021. According to Forbes, the hotel is designed by Bill Bensley, the renowned hotel and resort designer for whimsical architectural concepts. His latest collaboration with Asian luxury chain Capella is this new 47-key hotel in Vietnam’s capital.

Just a stone’s throw from Hoan Kiem Lake Hanoi’s famous opera house, Bensley seems to have taken that as his inspiration, and conceived of an enclave that would have felt like a home away from home for eccentric operagoers and artists from the turn of the last century.

Each of the 47 rooms and suites are individually styled to reveal stories of opera legends. Visitors could find a curious blend of memorabilia, photographs, set displays and vibrant portraiture art with geometric prints and modernist details inspired by 1920s décor.

Impressed upon everything are striking marks of bold theatrical designs, transporting they back in time to celebrate the bygone era once more. To wit, guests will find over 1,000 musical instruments and artifacts such as set designs and production costumes, not to mention classic cocktails and small bites in the Diva’s Lounge and both international and Vietnamese fare in the main restaurant, Backstage.

The hotel’s Auriga Spa will offer treatments inspired by the celestial spheres and phases of the moon. Meanwhile the Indoor pool designed to resemble a haven for opera singers to rest their voices; the Living Room and Capella Culturist offering crafted local experiences.

Other outstanding hotels of the worlds that will open their door in 2021 are including Paradero Todos Santos, Baja California, Mexico (January 2021); Mandarin Oriental Ritz, Madrid, Spain (March 2021); Azumi Setoda, Japan (March 2021); Airelles Château de Versailles Le Grand Contrôle, France (Spring 2021), Desa Potato Head, Bali, Indonesia (Spring 2021); The Woodward, Geneva, Switzerland (Spring 2021); Rosewood São Paulo, Brazil (Mid-2021); Villa Dagmar, Stockholm, Sweden (Spring 2021); The Ritz-Carlton Maldives, Fari Islands (Mid-2021); Reykjavik EDITION, Iceland (Summer 2021); The Farmyard at the Newt, United Kingdom (Summer 2021); Soho Beach House Canouan, Grenadines (Late 2021); The Langham, Gold Coast, Australia (Late 2021) and Four Seasons Resort Tamarindo, Mexico (Late 2021).

Maximum $130,000 fine for administrative violation in securities market

For the act of abusing internal information to buy, sell stocks or manipulate the stock market, the fine is 10 times the illegal gained amount for organizations and five times such amount for individuals.

The Vietnamese Government has recently released Decree No.156/2020/ND-CP detailing penalties for administrative violations in securities market, with the maximum fine going up to VND3 billion (US$130,000) for organizations and VND1.5 billion ($65,000) for individuals.

For the act of abusing internal information to buy, sell stocks or manipulate the stock market, the fine is 10 times the illegal gained amount for organizations and five times such amount for individuals.

Regarding violations in selling stocks via private placement, the Decree stipulates the fine of VND200-300 million (US$8,600-13,000) depending on each case, including the failure to notify the State Securities Commission of Vietnam (SSC), the country’s stock market watchdog, ahead of the issuance, and receive the required approval from the authority; lack of verified and clear information related to the sale that could lead to confusion among potential buyers.

Stricter fines from VND400-500 million ($17,300-21,600) are subject to the deliberate act of providing false information related to the sale, while penalties of VND1-1.5 billion ($43,200 – 64,800) would be applied for forging legal documents for the issuance of share via private placement.

Meanwhile, unqualified share issuance via public offering will subject to fines up to VND600 million ($26,000), including having not submitted required documents to the SSC or lacking the approval from the competent authority.

Fines of VND600-700 million ($26,000-32,200) to foreign organizations selling shares via public offering but violating commitment in funds withdrawal before the agreed timeline.

A maximum fine of up to VND3 billion ($130,000) would be imposed to those forging legal documents to sell shares via public offering.

Vietnam exports of leather, footwear down 10% to $16.5 billion in 2020

Government support is needed for the local leather and footwear sectors to realize the export target of $20 billion in 2021.

Vietnam’s exports of leather and footwear products were estimated to decline by 10% year-on-year to US$16.5 billion in 2020, according to the Vietnam Leather, Footwear and Handbag Association (Lefaso).

“The local leather and footwear sectors are in need of more supporting policies from the Gvernment to realize the export target of US$20 billion in 2021,” stated the Lefaso in a report.

In 2020, Vietnam’s leather industry is under severe impacts from a disruption of input materials supplies from China, while the US and European market, account for 70% of Vietnam’s leather exports, were forced to close due to the Covid-19 pandemic.

Under this context, many leather manufacturers in Vietnam were in a dire situation of having no new orders, not to mention unexpected delays for existing orders.

Statistics from the Ministry of Industry and Trade (MoIT) revealed over 70% of leather companies in Vietnam were forced to suspend operation, in turn affecting nearly 800,000 workers.

As major markets in the US and Europe witnessed a decline of 13-14% in export revenue, a shift to Southeast Asian market such as Indonesia and Malaysia have partly offset the negative impacts and kept the export turnover of the local leather industry at a 5.7% growth in the second quarter of 2020.

Another issue that the industry is facing at the moment is the lack of working capital, for which government’s support would be essential to keep businesses running at the moment.

“Enterprises are falling short of capital to import input materials for production,” stated General Secretary of the Shoes and Leather Association of Ho Chi Minh City Nguyen Van Khanh.

While many leather companies are turning to domestic market instead of exporting abroad, locally made products are facing fierce competition from Chinese imports, especially cheap smuggled ones.

“Local companies expect stronger efforts from the government in stopping fake and low-quality products from penetrating the domestic market, a key step to expand the market share of domestic leather products,” noted Mr. Khanh. 

Lefaso’s Vice President Phan Thi Thanh Xuan suggested government agencies should continue supporting local firms accessing loans with preferential rates, restructuring schedule payment of existing debts, waiving and reducing interest rates.

MoF lists 17 market makers for debt market

As market markers, entities have the right to participate in the issuance and repurchase of government bonds and notes via bidding.

The Ministry of Finance (MoF) has released a list of 17 commercial banks and securities firms subject to join the Government bonds market this year, an increase of four new entities compared to the 2020 list.

Under the Decision No.2290/QD-BTC, set to become effect from January 1, 2021 – December 31, 2021, those in the list will act as market makers of Government debt instrument.

Market makers are required to submit reports to the MoF for evaluation between November 1 and 10, so that the latter will evaluate the condition to maintain market maker status. Unqualified market markers will receive notice with reasons on why they are excluded from the list.

As market markers, entities have the right to participate in the issuance and repurchase of Government bonds and notes via bidding, as well as playing as the main guarantee organization for the issuance of government bonds.

Market makers will also participate in discussion for drafting new policies for the bond market.

This year’s list includes four securities firms of BIDV Securities Company, Vietcombank Securities Company, Ho Chi Minh Securities Corporation, Saigon – Hanoi Securities Company, and 13 banks with major names, such as BIDV, Vietinbank, Agribank and Military Bank.

Vietnam’s Government bond segment grew 9.1% quarter-on-quarter at the end of September 2020 to reach US$54.7 billion - accounting for 83.8% of the country’s total bond stock, a report from the ADB noted.

This directly contributed to a quarterly growth of 11.6% of the local currency bond market at the end of last September – the fastest quarterly growth rate in emerging East Asia – to reach $65.3 billion.

Vietnam – economic bright spot in 2020

Vietnam has emerged as an economic bright spot with a growth rate of 2.91 percent in 2020, which is attributable to the country’s efforts in containing COVID-19 and timely support policies to people and businesses, international organisations said.

The International Monetary Fund (IMF) predicted that Vietnam’s economy will strongly recover in 2021, reaching macro stability across spheres, from growth to current account deficit and employment.

In July, the IMF said transparency is a very important factor in Vietnam’s success, and the multi-media approach has consolidated the people’s trust and ensured that the whole society abide by pandemic control measures.

In its World Economic League Table 2021, the Centre for Economics and Business Research (CEBR) said Vietnam’s economy is expected to move to the 19th position in 2035.

The country’s annual rate of GDP growth is forecast to pick up to an average of 7 percent between 2021 and 2025.

Over the subsequent ten years, the Vietnamese economy will expand by 6.6 percent on average each year, the centre said.

In an article titled “A new study shows emerging economies are catching up,” The Economist of the UK said “the most successful club spans all today’s advanced economies as well as 16 emerging markets, such as China, India, Malaysia, Thailand and Vietnam.”

The UK-based BBC News said Vietnam has minimised the economic damage from COVID-19 and is the only country in South East Asia on track for growth in 2020.

“The country has seen slower growth this year and its once-thriving tourism sector has taken a particularly bad hit, but it has avoided the worst economic effects of the pandemic.”

Professor Vladimir Mazyrin, leader of the Centre for Vietnamese and ASEAN Studies of the Far East Institute of the Russian Academy of Sciences, has described the results of economic development of Vietnam in 2020 as an extraordinary success.

In an interview with Sputnik, the leading Russian expert on Vietnamese economy said positive results were posted amid recession and general crisis.

“For example, within ASEAN, only three countries - Vietnam, Myanmar and Laos - have positive GDP growth. All other countries are red.”

Vietnam’s 2020 growth is estimated at 2.91 percent.

Prof. Maryzin said this is a great success, which will definitely help Vietnam rise to a higher position in all world rankings in the near future.

So Vietnam's success can be called a phenomenon, he added./.

Can Tho collects over 28.5 trillion VND to State budget in 2020

The Mekong Delta city of Can Tho collected over 28.5 trillion VND (1.23 billion USD) to the State budget last year, heard a conference hosted by the municipal State Treasury on January 6.

Of the figure, over 11.3 trillion VND was domestic revenue, or 102 percent of the estimate assigned by the Finance Ministry and 94 percent set by the municipal People’s Council.

Revenue from export-import reached 641 billion VND, or around 120 percent of the estimate, down 6 percent year-on-year.

As of December 31, the State expenditure surpassed 29.9 trillion VND, more than 11.4 trillion VND was from State budget and the remaining from local budget.

Vice Chairman of the municipal People’s Committee Nguyen Van Hong said the city will offer all possible support to help the municipal State Treasury fulfil assigned tasks.

Deputy Director of the Can Tho State Treasury Huynh Quang Tuan said the municipal State Treasury will manage the State budget fund closely and safely, improve its role and responsibility for financial-budget task, step up the progress of disbursing capital for basic construction this year.

Of over 191 billion VND earmarked for support to those hit by COVID-19, more than 170 billion VND was disbursed.

On the occasion, the State Treasury of Ninh Kieu district received an emulation flag from the Finance Ministry for its achievements in emulation movement of the financial sector for 2019./.

Van Phong economic zone attracts over 150 investment projects

The Van Phong Economic Zone (EZ) in the central province of Khanh Hoa has so far attracted 153 investment projects, of which 89 have become operational.

Of the total projects, there are 30 foreign-funded ones, whose registered capital amounted to approximately 4.1 billion USD.

The Van Phong electricity plant project is the biggest among them, with its investment reaching 2.58 billion USD and its construction starting in October last year. The build-operate-transfer project is expected to create 2,000 jobs and account for 4 percent of the total electricity generated nationwide once it is put into operation in 2023.

According to the management board of the zone, Van Phong has contributed more than 20.95 trillion VND (906.56 million USD) to the provincial budget and created over 6,200 jobs.

Nguyen Khac Dinh, Secretary of the provincial Party Committee, said investment projects in the EZ have created employment, supported local infrastructure building, and helped lifting people’s living standards.

Aiming to turn Van Phong into a strategic coastal EZ in the nation and the region, Khanh Hoa is focusing on infrastructure development by capitalising on all prioritised assistance from the Government.

Meanwhile, the provincial People’s Committee is working with neighbouring localities which boast great potential like Phu Yen and Dak Lak provinces to build a regional connectivity strategy./.

Phù Mỹ solar power plant goes on stream

The Phù Mỹ solar power plant in Bình Định Province began operation and was connected to the national grid on December 31 just seven months after construction began.

Built by Clean Energy Vision Development JSC, a subsidiary of BCG Energy, at a cost of over VNĐ6.2 trillion (US$268.6 million), it will have a capacity of 330 MW when the second phase is complete.

It now has a capacity of 216 MW.

The second phase is expected to go on stream before February 28 this year.

Thus, the first 216 MW will get a feed-in-tariff (FIT) of 7.09 US cents/kWh according to the Decision 13/2020/QD-TTg, which provided for that rate for plants beginning commercial operation before December 31.

When fully operational, it will generate 520 million kilowatt-hours of power annually, meeting the needs of 200,000 households and helping offset roughly 146,000 tonnes of CO2 emissions a year.

BCG Energy is a pioneer in developing clean energy in Việt Nam that successfully raises fund in the international market. In December it raised $43.6 million through convertible bonds to invest in renewable energy projects. 

HoSE stocks beat market in December

Many stocks listed on the Ho Chi Minh Stock Exchange (HoSE) continued to enjoy positive growth in December, the southern bourse said.

The benchmark VN-Index on the bourse crossed the 1,000-point threshold, topping 1,103.87 points – the highest level in the year and up 10.05 percent from the previous month. Meanwhile, VNAllshare, which consists of those in the VN100 and the VNSmallcap, rose 11.39 percent from late November and 22.09 percent from early 2020 to 1,032.41 points, and the VN30 was up 10.86 percent to 1,070.77 points.

Several sectors experienced sharp growth such as finance (VNFIN) which was up 18.53 percent, materials (VNMAT) up 14.21 percent, and utilities (VNUTI) up 11.85 percent.

Also in December, more than 13.6 billion shares were traded on the bourse at the total value of 286.27 trillion VND (12 billion USD), increasing 63.08 percent and 59.85 percent from the previous month, respectively.

The average trading value and volume soared 45.95 percent, and 48.9 percent to more than 12.44 trillion VND, and 591 million shares.

For the whole year 2020, average 335.5 million shares were traded at the value of 6.29 trillion VND per session, increasing 83.84 percent and 52.41 percent yearly.

Particularly, covered warrant became an attractive investment channel for investors since the bourse saw a surge in trading in the year. Average trading volume reached 11.5 million contracts worth 20.84 billion VND per session, a year-on-year growth of 301 percent and 190 percent, respectively.

As of December 31, 392 codes, three close ended funds, seven exchange trade funds (ETF), 118 covered warrants and 33 bonds were listed on the HoSE. More than 99.73 billion shares were listed with total listed market capitalisation of 4.08 quadrillion VND, accounting for 67.59 percent of the GDP in 2019./.

VIETNAM BUSINESS NEWS JANUARY 9

China’s investment in Thailand forecast to increase in coming years

China's foreign direct investment (FDI) in Thailand is expected to increase significantly over the next few years as Chinese investors are planning to expand their local footprint, a survey by Siam Commercial Bank (SCB) shows.

The survey is based on responses from 170 Chinese investors who are involved in FDI-related businesses. Some 61 percent of respondents are Chinese investors investing and doing business in Thailand.

According to the survey, 66 percent of the 170 respondents said they plan to increase investment in Thailand over the next two years, while 22 percent expect to maintain the existing investment portion, and 12 percent said they plan to reduce investment locally.

Local market expansion is the primary reason attracting Chinese FDI inflow into Thailand, representing 56 percent of motive variables, followed by ASEAN market expansion at 40 percent and the use of local raw materials at 37 percent.

Based on this survey, SCB expects Chinese FDI inflows to increase significantly in the post-COVID-19 period. Retained demand of Chinese investment during the pandemic will also lend support to Chinese FDI inflow moving into Southeast Asia's second largest economy in the next few years.

SCB’s chief financial officer and first executive vice president Manop Sangiambut said besides existing investment from Chinese manufacturing businesses in Thailand, new industries, such as technology, services and food and restaurant business have also expressed interest in expanding into Thailand.

Some Chinese investors are also looking for local business partners through joint venture or merger and acquisition deals in Thailand, he added.

SCB, the country's fourth largest commercial lender by total assets, has continued to increase its loan portfolio to Chinese businesses investing in Thailand. The bank currently focuses mainly on large listed companies on China's bourses and state-owned enterprises.

Chief economist at SCB Economic Intelligence Center Yunyong Thaicharoen said greater clarity of Chinese FDI inflows will transpire in the second half as investors are assessing the government's management of the new COVID-19 outbreak./.

Singapore promotes clean energy development

Singapore will harness four switches to transform and diversify energy supply, so as to achieve its vision of a clean and efficient energy future, Tan See Leng, Singaporean Second Minister for Trade and Industry, said at a parliament meeting on January 5.
VNA Thursday, January 07, 2021 16:04
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Singapore promotes clean energy development hinh anh 1
Solar panels on the rooftops in Bukit Batok, Singapore (Photo: https://www.straitstimes.com/)

Singapore (VNA) – Singapore will harness four switches to transform and diversify energy supply, so as to achieve its vision of a clean and efficient energy future, Tan See Leng, Singaporean Second Minister for Trade and Industry, said at a parliament meeting on January 5.

According to Tan, electricity demand in Singapore was expected to have fallen by between 2 percent and 4 percent last year due to the COVID-19 pandemic, but is projected to rebound as the economy recovers and grows.

Currently, 95 percent of Singapore's electricity is generated from burning natural gas, which is expected to continue to be the main source of energy in the medium term even as three other sources are under development.

In addition to most natural gas resources coming from Malaysia and Indonesia, Singapore is looking to diversify its own gas supply, including imports of liquefied natural gas from the Middle East.

Solar energy could supply around 3 percent of the country's total consumed electricity as the country quadruples its solar capacity to 1.5 GWp by 2025, and to 2 GWp by 2030, he said./. 

Source: VNA/VNN/VNS/SGGP/VOV/NDO/Dtinews/SGT/VIR   

 
 

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