VIETNAM BUSINESS NEWS SEPTEMBER 8

Deputy PM heads State Steering Committee for Key Petroleum Projects

Prime Minister Pham Minh Chinh has assigned Deputy Prime Minister Le Van Thanh as head of the State Steering Committee for Key Petroleum Projects. 

Deputy heads of the Committee are Minister of Industry and Trade Nguyen Hong Dien (permanent), Chairma n of the Commission for the Management of State Capital at Enterprises Nguyen Hoang Anh, Deputy Minister of Industry and Trade Dang Hoang An and Deputy Minister of Construction Le Quang Hung.  

The Committee shall be responsible for directing, inspecting and speeding up the implementation of the Prime Minister’s decisions on key oil and gas investment projects; coordinate with relevant ministries, agencies and localities in addressing obstacles related to compensation, resettlement and site clearance. 

Under authorization of the Prime Minister, the Committee is tasked with making decisions to directly handle specific issues arisen in the process of implementation of key oil and gas projects./.

Growth prospect of absorption rate looks promising in Vietnam

In Vietnam's real estate market, the leasing demand also recorded positive signals, with the amount of absorption area in Ho Chi Minh City and Hanoi in the first two quarters of 2021 were close to pre-pandemic levels.

Although this was considered an improvement compared to the negative absorption rate of last year. However, experts said,  this segment still has to face challenges in the last months of this year because Vietnam is continuing to apply strict measures to control the disease. This leads to a very limited possibility of growth in rental price in the last months of the year.

The new variants of COVID-19 with restriction measures in many markets continue to be a major risk affecting the economy and real estate market of the Asia-Pacific region in the next 12 months, especially for emerging economies in Asia, CBRE said.

Therefore, experts expected the governments of Asia - Pacific countries will maintain an appropriate monetary policy to support economies in the fragile recovery stage. Accordingly, the low interest rate environment will promote continued investment in cumulative yielding assets such as real estate. 

This trend is reflected by the fact that investment volume has grown far beyond rental activity, said Dr. Henry Chin, Global Head of Investor Thought Leadership & Head of Research at CBRE Asia Pacific.

CBRE's survey in the Asia-Pacific market showed that this year, office leasing activity is gradually improving, as rental demand has been recovered compared to the previous year. The absorption rate increased by about 20% in the first half of 2021, driven by strong performance in the North Asian market.

Full-year rental demand is expected to increase by 10-15% over the same period last year, higher than the 5 percent forecast at the beginning of the year. Markets that still maintain positive performance include Singapore, Taipei (China), Seoul (the Republic of Korea). 

According to Ada Choi, head of Leasing Operations Research, Intelligence Data Management at CBRE Asia Pacific, office tenants in the Asia-Pacific region will continue to have an advantage for the remaining time of this year as 60% of the year's new supply is expected to come into operation at this time.

Thus, they should renegotiate the lease or consider moving offices to selected locations of better quality, while being able to ensure lease agreements have more flexible terms, she said.

For the owners of office buildings, this is the time to prioritise ensuring occupancy rates by offering attractive terms to attract good quality tenants, said Ada Choi.

The CBRE forecast that rental fees in the Asia-Pacific region will stabilise in 2022, in which the fees at shopping centres serving daily necessities will have a stronger recovery.

For the Vietnamese market, although retail sales have recovered from the first quarter of this year, most retail sectors, except for essential items, experienced a decrease in sales growth in the second quarter when Vietnam imposed a period of social distancing in many provinces and cities in both the north and south, it said.

Faced with that situation, many retailers have turned to online sales channels. This method is forecast to be the new retail business standard which is welcomed by both shopping centres and retailers as Vietnam gradually overcomes the pandemic. 

Notably, CBRE experts predicted that rental prices will have a strong recovery in the south. Regarding the northern region, although most investors and tenant sentiment is quite positive, the large supply in the next two years will make landlords likely to prefer a high occupancy rate rather than rent growth, they said.

COVID-19: SBV issues new document on rescheduling of debt payments

COVID-19: SBV issues new document on rescheduling of debt payments hinh anh 1

The State Bank of Vietnam (SBV) on September 7 issued a circular amending and supplementing a number of articles of Circular No. 01/2020/TT-NHNN issued by the SBV Governor directing foreign credit institutions and bank branches to reschedule debt payments, waive and reduce borrowing interest and fees, and maintain the groups in order to support customers affected by the COVID-19 pandemic.

Accordingly, Article 4 of the new Circular 14/2021/TT-NHNN requires foreign credit institutions and bank branches to reschedule debt payments for outstanding amounts of principal and/or interest of debts, including those subject to the Government's Decree No. 55/2015/ND-CP dated June 9, 2015 on credit policies for agricultural and rural development as amended and supplemented, that fully satisfy the following conditions: arising from lending activities, financial leasing before August 1, 2021; the obligation to repay the principals and/or interest arising between January 23, 2020 to June 30, 2022; and the outstanding balance of the debt is still within the payment period or is overdue for up to 10 days.

In addition, the debts eligible for rescheduling should arise before January 23, 2020 and were overdue in the period from January 23, 2020 to March 29, 2020; arise before January 23, 2020 to prior to June 10, 2020 and were overdue before May 17, 2021; and arise from June 10, 2020 to before August 1, 2021 and were overdue from July 17, 2021 to before September 7, 2021.

The circular, which took effect from September 7, stipulates that the time for debt rescheduling, including the case of debt extension, will depend on the impact of the pandemic on customers and must not exceed 12 months from the date credit institutions and foreign bank branches decide to restructure the repayment term, or from the repayment due date of debts subject to rescheduling.

Under the circular, foreign credit institutions and foreign bank branches can decide on the exemption or reduction of interest and fees in accordance with their own regulations for debts arising before August 1 where the obligation to repay principal or interest is due between January 23, 2020 to June 30, 2022, and their customers are unable to repay on schedule due to the pandemic./.

NA Chairman works with leaders of Aone Deutsland AG, Strabag

National Assembly Chairman Vuong Dinh Hue had a working session with Alexander Redeker, CEO of Aone Deutsland AG and leaders of Strabag on September 6 as part of his trip to Austria to attend the fifth World Conference of Speakers of Parliament (WCSP5).

Aone Deutsland AG is a member of Germany’s Tilia Group, one of the world leading firms in the fields of construction, real estate, waste and waste treatment, energy and resource management. In 2019, Tilia’s revenue reached 34.27 billion EUR (40.7 billion USD), with more than 500 projects worldwide.

Meanwhile, Strabag specialises in constructing houses, bridges, roads, power plants and waterworks and waste water treatment plants. It has more than 700 branches in 60 countries with 72,000 employees. Strabag is partnering with Aone Deutsland AG to implement a number of infrastructure, water and waste treatment, energy and renewable energy projects in Vietnam.

At the session, representatives of the two companies showed their interest in strengthening cooperation in carrying out more infrastructure projects in Vietnam, especially those in water and waste treatment, expressway construction and energy development, as well as projects in public-private partnership (PPP) form.

Hue underlined that projects in which Aone Deutschland AG and Strabag are interested are in areas that Vietnam is calling for investment.

In order to concretise plans to implement the projects in the time to come, the Vietnamese NA leader suggested these groups work with the Ministries of Planning and Investment, Industry and Trade, and Transport, as well as relevant agencies and localities of Vietnam.

Besides, Hue also proposed the firms and partners support the German Government’s provision of COVID-19 vaccines for Vietnam as soon as possible to help the country speed up vaccinations and reach herd immunity soon, thus bringing the life to normal./.

Investment projects create development momentum for Thai Binh

The People’s Committee of the northern province of Thai Binh recently handed over investment registration certificates to investors of projects worth nearly 600 million USD, which are hoped to create a driving force for the local socio-economic development.

At the handover ceremony, the certificates were presented to five projects in industrial, agricultural and urban development sectors. Of note, permission to invest in the Thai Binh Economic Zone was granted to Lotes Vietnam, Greenworks, and Jeanson Industrial Limited.

All the projects apply modern technologies and are expected to attract further investments in the economic zone in particular, and Thai Binh province at large.

A signing ceremony for a cooperation agreement worth nearly 100 million USD between Green I-Park company and Nam Tai Group at the Lien Ha Thai industrial park of the Thai Binh Economic Zone also took place at the event.

Chairman of the provincial People’s Committee Nguyen Khac Than affirmed that the granting of certificates to investors in Thai Binh demonstrates efforts in realising the dual targets of curbing the spread of COVID-19 and fostering economic development, amid difficulties triggered by the ongoing pandemic.

He called on investors to promptly carry out the projects to ensure progress and tasks, asking production and business operations to be in tandem with environmental protection and apply high-technology.

Local authorities are committed to mobilising all resources for the completion of technical infrastructure, improvement of investment climate and administrative reform, as well as rolling out solutions to address bottlenecks and create optimal conditions for the firms, Than stated.

Although foreign direct investment in the province stood at only 900 million USD in the past two decades, it saw improvement as three recent ones valued at 395 million USD./.

VinaCapital economist warns against irrational exuberance in stock markets

Investors should not try to play the stock market “timing” game by selling stocks now and try to re-enter later, investment fund VinaCapital has warned.

Michael Kokalari, chief economist at VinaCapital, said: “The consensus expectations for 38 per cent EPS growth in 2021 are too optimistic. That said, earnings should rebound vigorously next year, so we caution investors not to play the market timing game.”

“We are monitoring some unorthodox indicators of industrial activity at factories that produce high-value products (inspired by hedge funds use of unorthodox data, such as satellite imagery of Walmart parking lots).

“From early July we observed many buses transporting workers back and forth between hotels in central HCM City and factories located in Viet Nam’s industrial suburbs.”

He said foreign companies like Panasonic and Samsung could afford to house employees at hotels and take other COVID mitigation steps, but the profit margins of firms that produce low value-added products such as garments and furniture are much lower.

“Consequently, companies producing garments, shoes, and other low-margin products are having a hard time maintaining their production, and Viet Nam’s exports of such products plunged in August.

“This drop will act as a drag on Viet Nam’s GDP growth.”

“We are currently revising our GDP growth forecast and note that our forecasts have consistently been below and more accurate than the consensus.”

The Government is prioritising vaccinating people in the greater HCM City area, given the region’s economic importance and considering it and the industrial suburbs of Binh Duong, Dong Nai and Long An account for over one-third of the country’s GDP.

The proportion of adults who have received at least one dose of a COVID vaccine has increased from less than 5 per cent in late July to more than 15 per cent.

Kokalari said the Government’s strategy now incorporates objective criteria to assess COVID risks by neighbourhood, which should enable an orderly reopening once certain public health milestones are met.

They include a reduction in the number of daily new COVID cases and deaths, and an increase in the number of people who are vaccinated, he added.

Tran Minh Binh becomes new chairman of VetinBank

CEO Tran Minh Binh has been appointed as chairman of the bank's Board of Directors.

On September 7, 2021, VietinBank (HSX: CTG) announced resolutions on top personnel.

Accordingly, Tran Minh Binh, member of the Board of Directors and CEO of VietinBank, has been appointed as the new chairman of the board.

The decision comes two months after the bank's former chairman, Le Duc Tho, was appointed as Secretary of Ben Tre Party Committee.

Binh was born on December 7, 1974 in the central province of Quang Binh. He holds a Master's degree of Business Administration from National Economics University of Belgium.

He has more than 22 years of experience working at VietinBank, including 17 years in key professional management positions at the head office and branches and eight years in senior leadership positions.

On the same day, Vietinbank’s Board of Directors also assigned Nguyen Hoang Dung, former deputy CEO as the new CEO.

Dung, born in 1962 in the Mekong Delta province of Ca Mau, holds a Master's degree in Economics from the University of Economics - Vietnam National University, Ho Chi Minh City.

CAAV proposes measures to resume domestic flights amid COVID-19

The Civil Aviation Authority of Vietnam (CAAV) has proposed the classification of domestic airports depending on the levels of COVID-19 risks to serve the re-opening of regular domestic flights in a safe manner amid the pandemic.

In its draft proposal, 22 airports across the country should be divided into three groups with three zones – green zones, which comprise airports in cities and provinces that are not subject to social distancing measures, yellow zones (airports in localities with parts applying social distancing measures) and red zones (airports in localities imposing social distancing measures).

The CAAV proposed that flights from green zones to other green zones and yellow zones and red zones can operate without limits in the nume of passengers. However, passengers must show a negative result from a COVID-19 test conducted within 72 hours.

Passengers on busines trips and personnel serving pandemic prevention and control flying from yellow and red zones must only carry negative COVID-19 testing results within 72 hours.

Flights between red zones only serve passengers for business travel and forces serving the COVID-19 combat as well as passengers permited by authorities of localities where they come from/to. They must show negative testing results.
Meanwhile, stricter conditions will be applied on passengers of other groups, according to the proposal.

The CAAV also promosed permitting airlines to sell tickets for domestic flights with specific conditions.

According to the authority, the goal of the proposal is to build an automatic mechanism for airlines to build their operation plans, while creating favourable conditions for the transport of personnel and medical supplies serving pandemic prevention and control and helping remove difficulties facing airlines.

The proposal also aims to promote the economic recovery process in localities and businesses.

CAAV Director Dinh Viet Thang said that the authority is collecting ideas to complete the draft proposal before submitting to the Transport Ministry./.

Vietnam seeks to promote agricultural exports to Turkey

Despite facing complicated developments caused by the COVID-19 pandemic, there remains bright spots for local agricultural exports, such as cashew nuts, pepper, rubber, rice, and coffee to the Turkish market, according to the Vietnamese trade office in Turkey.

During the course of a recent online conference aimed at strengthening linkages between consumption and export of agricultural, aquatic, and livestock products in the southern and the Central Highlands regions, Minister of Industry and Trade Nguyen Hong Dien emphasised the need to promote the export of these items to emerging markets such as Turkey. This is in addition to traditional markets such as China, Japan, and the Republic of Korea.

According to data compiled by the Turkish Statistical Institute (TUIK), Vietnam took the lead in terms of cashew nut exports to Turkey, accounting for approximately 94% of the overall market share of cashew exports to this market during the first half of the year.

The country exported a total of 4,607.82 tonnes of cashew worth US$16.47 million to Turkey throughout the reviewed period, representing a rise of 52.8% in volume, despite facing high transportation costs and a shortage of containers due to the COVID-19 pandemic.

Furthermore, the country continues to retain the leading position in relation to exporting pepper to Turkey, with 2,236.3 tonnes worth more than US$4.32 million during the six-month period.

This figure represents a sharp increase of 27.6% in volume and 37.1% in value, thereby accounting for roughly 60% of the market share of export value to Turkey.

Moreover, the country currently ranks fourth in export turnover of natural rubber products, making up 11.7% of the export market share to the Turkish market.

This move indicates that Turkish rubber importers have gradually paid greater attention to Vietnamese products due to its price and quality, as opposed to the same products from regional peers such as Indonesia or Thailand.

The Vietnam Trade Office in Turkey has therefore advised domestic enterprises to participate in trade promotion schemes such as WorldFood Istanbul and Sirha Istanbul in Turkey in order to seek co-operation opportunities with Turkish businesses.

Vietnamese enterprises must also  introduce products with geographical indications for cashew products, such as Binh Phuoc cashew in order to make a difference in terms of quality compared to other products, according to the trade office. 

HAG shares continue to trade under supervision of HoSE

The Ho Chi Minh Stock Exchange (HoSE) has decided to keep Hoang Anh Gia Lai JSC (HAG) shares under its control.

Accordingly, on August 30, HoSE received Hoang Anh Gia Lai’s semi-annual reviewed consolidated financial statement for 2021. Of which, profit after tax of the holding company’s shareholders in the first six months of 2021 is VND18.21 billion (US$800,661) and the undistributed profit after tax as of June 30 is negative VND7.37 trillion.

Besides the losses, auditors also noted that the company has an accumulated loss of nearly VND7.1 trillion in its consolidated financial statement.

In addition, as of June 30, the company violated a number of commitments under the loan contract. These conditions indicate the existence of uncertainties, raising doubts on Hoang Anh Gia Lai’s working ability.

Therefore, HoSE continues to maintain its supervision over HAG shares and will consider the next course of action after receiving its audited consolidated financial statement in 2021.

Regarding the audit's exception, Hoang Anh Gia Lai explained that the company has planned for the next 12 months, including the expected cash flow to be generated from a part of financial investments liquidation, debt collection from partners and cash flow generated from ongoing projects, at the date of its financial statements for the first half of 2021.

It is also in the process of working with the lenders on correcting the breached terms of the relevant loan agreements. Accordingly, the company can repay the debts when they become due and continue operating in the next accounting period.

Under these conditions, the company’s Board of Directors prepares the interim financial statements on the basis of satisfying the ongoing concerns.

Moreover, Hoang Anh Gia Lai also approved collecting shareholders' opinions on the use of equity surplus to reduce accumulated losses with a total value of nearly VND3.3 trillion.

On the stock market, HAG shares traded lower at VND5,100 per share yesterday, down 1.93 per cent. 

Public investment capital disbursement remains slow

Only over 220.7 trillion VN D (9.7 billion USD) worth of public investment capital was disbursed by the end of August, or 40.6 percent of the plan assigned by the Prime Minister.

The figure was 5.8 percent lower than the same period last year. Of which, the disbusement of domestic capital reached 44.7 percent while that of foreign capital hit 7.94 percent compared to 21.26 percent recorded in the same period last year, said the Finance Ministry.

So far, 10 ministries and 26 localities have recorded disbursement of over 40 percent of the plan.

Meanwhile, 33 out of 50 ministries and 18 out of 63 localities disbursed below 30 percent, with 21 ministries and one locality below 10 percent. Four ministries have not yet made disbursement.

The Finance Ministry attributed the slow disbursement to COVID-19 outbreaks in many localities and the suspension of projects in areas under social distancing order in line with the Prime Minister’s Directive No.16/CT-TTg.

Other causes relate to site clearance, changes in planning in several loclaities, and import of equipment in need of foreign consultants’ approval.

Moreover, localities and several foreign sponsors have yet to reach consensus on project implementation process, including in the control of expenditures and disbursement.

Asso. Prof Dinh Trong Thinh suggested cutting down unnecessary procedures and improving the role of management agencies in planning, appraisal and bidding.

The Finance Ministry also urged centrally-run agencies and localities to seriously follow the Prime Minister’s directions in Dispatch No.1082/CD-TTg dated August 16, 2021 on stepping up disbursement of public investment capital 2021./.

Banks continue lower deposit interest rates

The deposit interest rates at major banks has continued to decrease since the beginning week of September.

With its adjustment from 5.6 percent to 5.5 percent annually for 12-36 month-term savings, the Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Bank for Agriculture and Rural Development (Agribank) are maintaining the lowest rates in the banking sector, like the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank).

Meanwhile, the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) keep its deposit interest rate at 5.6 percent for savings from 12 months. Interest rates for savings with terms from 1-3 months are varied from 3.1-3.4 percent per annum, while the rate for 6-9-month savings is 4 percent per year.

Reductions between 0.2-0.4 percent has been seen in deposit interest rates for different saving terms in joint stock commercial banks.

Statistics from the State Bank of Vietnam showed that the interest rates have been at the lowest level in many years.

However, some banks have still kept deposit interest rates at over 7 percent per annum for large savings, including the Asia Commercial Bank (7-7.3 percent), Techcombank (7.1 percent), and MSB (7 percent).

Economist Nguyen Tri Hieu held that in order to help businesses overcome COVID-19 impacts, it is necessary to set up credit complex in association with a Credit Guarantee Fund with a total loan limit of 300 trillion VND with the engagement of banks at a participation rate of about 3 percent of each bank's outstanding loans./.

MSB allowed to add $155 million to its capital

The State Bank of Viet Nam (SBV) has just allowed Maritime Bank (MSB) to raise its charter capital by more than VND3.5 trillion (US$155 million) from the current level to nearly VND15.3 billion through stock dividends.

Maritime Bank said that the rise was equivalent to 30 per cent of the bank's current capital of VND11.75 trillion. The additional capital would come from the bank’s share issuance to pay dividends.

Accordingly, the bank will issue an additional 352.5 million shares to pay dividends to existing shareholders, raising the total number of outstanding shares to nearly 1.53 billion.

The capital used to pay dividends is sourced from undistributed profit after tax after setting aside funds in 2020. The bank’s consolidated audited financial statement for 2020 showed that the undistributed profit after tax that can be used to pay dividends is up to nearly VND4.8 trillion.

The rise in charter capital is to ensure capital adequacy ratios and risk management to meet Basel II international standards, heading toward Basel III, and to improve financial capacity to meet requirements for business development, investment in strategic projects in the 2021 - 2023 period.

Maritime Bank is expected to finalise the list of shareholders entitled to receive dividends in September and complete the dividend payment this year. 

Vietnam becomes leading market of Cambodia’s cashew nuts

Vietnam was the largest market of Cambodia’s cashew nuts in the first eight months of 2021, according to Thmey Thmey newspaper of Cambodia.

Cambodia exported about 876,531 tonnes of cashew nuts in the January-August period, up 350 percent compared to the same period last year, the newspaper cited data from Cambodia's Agriculture Ministry.

Agriculture Minister Veng Sakhon said 99 percent of the total cashew exports, or nearly 870,000 tonnes, were exported to Vietnam. The rise in export was attributed to an increase in the area under cultivation and the stockpile from last year.

Currently, Cambodia has more than 500,000 hectares of cashew trees in 10 provinces. Kampong Thom province has the most land growing cashew trees with 90,959 ha, followed by Kratie with 47,858 ha and Ratanakiri with 30,459 ha, according to the Cashew Association of Cambodia./.

Over 36.2 trillion VND raised through G-bond auctions in August

The State Treasury and the Vietnam Bank for Social Policies (VBSP) mobilised more than 36.2 trillion VND (1.59 billion USD) on the primary market via 20 Government bond (G-bond) auctions on the Hanoi Stock Exchange (HNX) in August.

Of the sum, the State Treasury raised 29.7 trillion VND and the VBSP over 6.52 trillion VND.

 

Compared to the end of July, annual interest rates for all the bonds issued by the State Treasury decreased by 0.07 - 0.21 percent.

In the first eight months of 2021, the State Treasury raised over 199.25 trillion VND through G-bonds, or equivalent to 56.93 percent of the yearly target.

On the secondary market, bonds worth more than 181.46 trillion VND were sold in the month. The average trading value neared 8.25 billion VND per session, down 11.1 percent on-month.

The total volume traded via repos made up 26.8 percent of the total.

Foreign investors’ purchases accounted for 1.98 percent of the total value in August, with net purchase value hitting 769 billion VND./.

Standard Chartered, Britcham join to drive sustainable development

Standard Chartered Vietnam and the British Chamber of Commerce in Viet Nam (Britcham) have signed a partnership agreement to promote sustainable development in Viet Nam and the application of Environmental, Social & Governance (ESG) policies among businesses.

The first activity is the launch of a webinar series covering six matters related to ESG and sustainability. This will support participating businesses and organisations to devise effective strategies for sustainable development. The events will involve key stakeholders from the government, regulators and industry thought leaders.

Michele Wee, CEO for Standard Chartered Vietnam, said: "Adopting a sustainability mindset and ESG in their investments and operations will help businesses create long-term, resilient growth, which will then translate into social, environmental and economic benefits for Viet Nam. We need to accelerate investor education to achieve progress and make a difference. We are very pleased to partner with Britcham in this meaningful initiative."

"We aim to help emerging markets and here in Viet Nam to reduce carbon emissions as fast as possible, without slowing development, putting the world on a sustainable path to net zero by 2050. We want to support and mobilise finance needed to provide people with clean energy, drive carbon-free transport and facilitate the decarbonising of the manufacturing industry.”

Denzel Eades, a British Chamber of Commerce Vietnam board member, said: “The governments of Viet Nam and the UK have both recognised the strategic importance of sustainability in their development agenda. So have Britcham member businesses."

"The webinar series is a further step in our efforts to promote sustainable development in Viet Nam by providing our members the latest insights on the global practices and local environment as it comes to sustainability and ESG.”

BritCham has established the Sustainability Working Group, which aims to support the ESG initiatives of its members. Standard Chartered Vietnam is an active member of the working group. The bank’s vision is to be the world’s most sustainable and responsible bank, and the leading private sector catalyser of finance for SDGs where it matters most, across Asia, Africa and the Middle East.

In the run up to COP26 in Glasgow, the working group will be coordinating BritCham’s engagement with programmes led by the UK Department for International Trade to facilitate its member participation in the Race to Zero campaign and involvement in the SME Climate Hub.

The sustainability webinar series hosted by Britcham and Standard Chartered Vietnam will be an important component of these programmes.

The first webinar is scheduled to take place on September 28, 2021. The theme is: “Carbon markets and their role in reducing greenhouse gas emissions, perspectives from Viet Nam and Global.” 

PetroVietnam posts three-fold rise in pre-tax profits

The Vietnam Oil and Gas Group (PetroVietnam) reported that its pre-tax profit in the first eight months of the year surpassed the set plan by 177 percent and tripled the figure for the same period last year, reaching 30.2 trillion VND (1.32 billion USD).

During the period, the group’s crude oil output surpassed the plan by 12.7 percent, and the outputs of petrol, oil and fertiliser were also higher than the targets.

The group's total revenue hit over 390.7 trillion VND, exceeding the plan by 17 percent and up 24 percent on a yearly basis. Its contribution to the State budget soared by 38 percent to 56.9 trillion VND.

PetroVietnam cut costs by 2.04 trillion VND, equivalent to 75 percent of its yearly target. It also contributed 733.8 billion VND to the COVID-19 fight, of which 554.9 billion VND went to the COVID-19 vaccine fund.

However, the group’s operation was severely affected in August when the social distancing order was imposed in most of cities and provinces nationwide, including several economic hubs such as Ho Chi Minh City and the southeastern region.

Given the challenges, the group has taken drastic actions to cope with the pandemic, including imposing strict preventive measures, securing vaccination for its employees, while rolling out suitable, effective production models.

At the same times, PetroVietnam units have kept updated on market developments, adjusted production chains and boosted digital transformation to adapt to the new working environment amid COVID-19. /.

Bamboo Airways to operate first demonstration flight on Vietnam-US direct route in late September

Bamboo Airways will operate its first two-way demonstration flight on the Vietnam-US direct route on September 23.

Under a certificate granted by the US’s Transportation Security Administration to the airline, Bamboo Airways will conduct 12 two-way flights on the route between September and November this year.

The flights will take off and land in different airports of Vietnam (Noi Bai International Airport in Hanoi and Da Nang International Airport in Da Nang) and US (San Francisco and Los Angeles airports in California, and Seattle-Tacoma airport in Washington).

The operation of the first demonstration flight is the first of a series of activities of Bamboo Airways in the US, including the signing of MoUs with San Francisco International Airport and Los Angeles International Airport, the opening of a representative office in the US, and working sessions with Boeing and US partners.

According to the airline, it has so far completed all important preparations to get ready to operate regular commercial flights connecting Vietnam and the US from late 2021 or early 2022.

Earlier, Bamboo Airways officially entered into cooperation with the International Air Transport Association (IATA) to trial the IATA Travel Pass from the fourth quarter of 2021, laying a solid foundation for the airline’s reopening of international routes.

IATA Travel Pass is a digital health wallet where passengers can upload and share their COVID-19 tests and vaccinations certificates for travel. Health information is an essential factor for both governments and carriers to conduct safe flights during and after the pandemic. The IATA Travel Pass is considered a safer and more effective solution compared to current paper-based procedures, especially when it comes to a multitude of test and vaccination data needed to be secured./.

Growth prospect of absorption rate looks promising in Vietnam

The real estate market in the Asia-Pacific region will continue to recover in the second half of this year, according to CBRE property consultant experts.

In the Vietnamese market, the leasing demand also recorded positive signals, with the amount of absorption area in Ho Chi Minh City and Hanoi in the first two quarters of 2021 were close to pre-pandemic levels.

Although this was considered an improvement compared to the negative absorption rate of last year. However, experts said,  this segment still has to face challenges in the last months of this year because Vietnam is continuing to apply strict measures to control the disease. This leads to a very limited possibility of growth in rental price in the last months of the year.

The new variants of COVID-19 with restriction measures in many markets continue to be a major risk affecting the economy and real estate market of the Asia-Pacific region in the next 12 months, especially for emerging economies in Asia, CBRE said.

Therefore, experts expected the governments of Asia - Pacific countries will maintain an appropriate monetary policy to support economies in the fragile recovery stage. Accordingly, the low interest rate environment will promote continued investment in cumulative yielding assets such as real estate. 

This trend is reflected by the fact that investment volume has grown far beyond rental activity, said Dr. Henry Chin, Global Head of Investor Thought Leadership & Head of Research at CBRE Asia Pacific.

CBRE's survey in the Asia-Pacific market showed that this year, office leasing activity is gradually improving, as rental demand has been recovered compared to the previous year. The absorption rate increased by about 20 percent in the first half of 2021, driven by strong performance in the North Asian market.

Full-year rental demand is expected to increase by 10-15 percent over the same period last year, higher than the 5 percent forecast at the beginning of the year. Markets that still maintain positive performance include Singapore, Taipei (China), Seoul (the Republic of Korea). 

According to Ada Choi, head of Leasing Operations Research, Intelligence Data Management at CBRE Asia Pacific, office tenants in the Asia-Pacific region will continue to have an advantage for the remaining time of this year as 60 percent of the year's new supply is expected to come into operation at this time.

Thus, they should renegotiate the lease or consider moving offices to selected locations of better quality, while being able to ensure lease agreements have more flexible terms, she said.

For the owners of office buildings, this is the time to prioritise ensuring occupancy rates by offering attractive terms to attract good quality tenants, said Ada Choi.

The CBRE forecast that rental fees in the Asia-Pacific region will stabilise in 2022, in which the fees at shopping centres serving daily necessities will have a stronger recovery.

For the Vietnamese market, although retail sales have recovered from the first quarter of this year, most retail sectors, except for essential items, experienced a decrease in sales growth in the second quarter when Vietnam imposed a period of social distancing in many provinces and cities in both the north and south, it said.

Faced with that situation, many retailers have turned to online sales channels. This method is forecast to be the new retail business standard which is welcomed by both shopping centres and retailers as Vietnam gradually overcomes the pandemic. 

Notably, CBRE experts predicted that rental prices will have a strong recovery in the south. Regarding the northern region, although most investors and tenant sentiment is quite positive, the large supply in the next two years will make landlords likely to prefer a high occupancy rate rather than rent growth, they said./. 

PM requires efforts towards removal of EC’s “yellow card” by year’s end

Vietnam must put an end to illegal, unreported and unregulated (IUU) fishing in a bid to have the European Commission (EC)’s “yellow card” removed by the end of 2021, Prime Minister Pham Minh Chinh said at a virtual meeting on the issue on September 7.

Vietnam must put an end to illegal, unreported and unregulated (IUU) fishing in a bid to have the European Commission (EC)’s “yellow card” removed by the end of 2021, Prime Minister Pham Minh Chinh said at a virtual meeting on the issue on September 7.

Eliminating IUU fishing practice is not only for Vietnam’s interests but also for the sake of the protection of the environment and regional and international seafood resources, thereby affirming the country as a responsible member of the international community, the Government leader said at the meeting between the Government and relevant ministries and sectors, together with coastal localities. 

Reports at the meeting said the EC has spoken highly of the commitment, political determination and efforts of Vietnam in the implementation of the solutions and affirmed that progress has been made in the right orientation.  

However, the PM pointed out that after nearly four years of implementing the EC’s recommendations, the work has yet to fulfil requirements, with many limitations and problems in legal enforcement, while penalties imposed on IUU fishing practices remain light.

Ministries, agencies and local authorities shared the view that fishery infrastructure and the verification and certification of seafood origin have not met requirements, while relevant agencies and coastal localities have failed to make concerted and timely collaboration. Public awareness of law compliance is low while communication work proved ineffective.

The PM agreed with suggestions and solutions made at the meeting and assigned tasks to each ministry and sector, underscoring that relevant forces must take more drastic actions to tackle IUU fishing./.

Australia, Vietnam strive to finalise enhanced economic cooperation strategy

Officials of Australia and Vietnam are working hard to be able to finalise the Enhanced Economic Engagement Strategy, which aims to beef up the bilateral economic ties, in late September, according to Australian Minister for Trade, Tourism and Investment Dan Tehan.

Talking to international journalists during an online conference on September 6, Tehan highlighted a bright prospect for economic-trade cooperation between the two countries, saying that Australian and Vietnamese economies are complementary.

The trade bond between the two nations is constantly growing with many opportunities opening up, he said.

Australia sees great prospects for cooperation with Vietnam in the fields of traditional, renewable and clean energy, vocational education and training, and import and export of agricultural products, he went on.

People-to-people diplomacy between Australia and Vietnam has been constantly expanded and consolidated, significantly contributing to promoting their bilateral relations, the minister noted.

Australian Prime Minister Scott Morrison is very interested in and looks forward to seeing new developments in the Australia – Vietnam relationship, he added./.

Vietnam, Austria eye cooperation in renewable energy development

Vietnam wishes to promote cooperation with Austria in the field of energy, especially renewable energy and sustainable development, Minister of Industry and Trade Nguyen Hong Dien told State Secretary in the Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology Magnus Brunner on September 7.

Minister Dien is accompanying Chairman of the National Assembly (NA) Vuong Dinh Hue to attend the 5th World Conference of Speakers of Parliaments (WCSP5) in Vienna, Austria.

During a working session with the Austrian official, Minister Dien highlighted the fruitful and flourishing development of friendship and multifaceted cooperation between Vietnam and Austria in recent years, especially in political, economic and cultural fields, while affirming that the European Union (EU) - Vietnam Free Trade Agreement (EVFTA) is an opportunity to further expand economic cooperation between Vietnam and the EU in general, and Austria in particular.

He expected that Brunner will support the ratification of the EU-Vietnam Investment Protection Agreement (EVIPA) as soon as possible.

The entry into force of the EVIPA, together with the EVFTA, will create a great competitive advantage for European businesses in general and those from Austria in particular to invest in Vietnam, opening up opportunities to increase trade between the two countries, Dien said.

Austria will become a bridge to help Vietnam make inroads into the EU market, while Vietnam will help Austrian businesses access the ASEAN market with more than 650 million people, and a larger market with 800 million people when the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with 11 members, including Vietnam, has come into effect.

Energy is one of Austria's important industries and a number of Austrian companies have participated in hydropower projects in Vietnam, and they are looking forward to joining solar power projects in the Southeast Asian nation.

Vietnam is interested in and wishes to receive Austria’s support and cooperation in sharing experience, information, technology solutions and implementation plans in electricity transmission, building a comprehensive strategy on human resources development training for energy enterprises, Dien said.

For his part, Brunner agreed with Dien's proposal on cooperation contents, and affirmed his support for accelerating the ratification of the EVIPA.

Austria and Vietnam have a lot of potential for cooperation in energy, especially in electricity transmission, electricity storage and hydropower development, he said.

Dien took the occasion to suggest Brunner, as a member of the cabinet, help lobby the Austrian government to consider supplying COVID-19 vaccines and medical supplies for Vietnam to help the country effectively respond to the pandemic./.

Eight-month credit in Hanoi rises 8.3 percent

By the end of August, the total outstanding credit of the banking system in the capital city of Hanoi had reached 2.38 quadrillion VND (104 billion USD), an increase of 1 percent over the previous month and 8.3 percent compared to the same period last year.

The short-term loan balance hit 967 trillion VND while the medium and long-term debt balance was 1.4 quadrillion VND.

The lending rates of loans in Vietnamese dong was 5.5-8 percent per year for short time and 7.5-9.5 percent per year for medium and long terms.
The maximum short-term lending rate for prioritised sector was 4.5 percent per year.

Due to fluctuations in the issuance of valuable papers in Vietnamese dong, capital mobilisation increased sharply in August, at 360 trillion VND, up 38.6 percent month-on-month and 40.3 percent compared to the beginning of the year.

The total mobilised capital of credit institutions in the city was estimated at 4.09 quadrillion VND in the first eight months of the year, a hike of 3.6 percent against the past month and  9.2 percent compared to the end of last year.

The interest rates in Vietnamese dong averaged 3-4 percent per year for deposits for the term from one month to less than 6 months, 3.8-6 percent per year for the term from 6 months to 12 months, and 5-7 percent per year for the term from 12 months or more.

Credit institutions in the city are actively promoting the implementation of support measures for customers facing difficulties due to the impact of the COVID-19 pandemic. Many debts have seen payment deadlines rescheduled, and interest rates waived or reduced. As a result, customers can access more credit sources to maintain production and business activities./.

Vietcombank, BIDV, Techcombank nominated for best financial brands in Vietnam

Three Vietnamese banks, namely Vietcombank, BIDV, and Techcombank, were nominated as the best financial brands in Vietnam by UK-based market research firm YouGov on September 7.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) topped the list with 26.6 points, followed by the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Technological and Commercial Joint Stock Bank (Techcombank) with respective points of 21.6 and 20.3.

The rankings was made based on more than 45,000 responses in a survey conducted from July 2020 to July 2021 for Vietnamese consumers.

The data were taken from YouGov brand tracking tool BrandIndex, which measures consumers’ perception of Vietnamese and international financial brands. This index takes into account perceptions of a brand’s reputation and whether consumers would recommend the brand to others, as well as whether it represents good value and quality.

A number of international banks are also listed in the rankings, including the Hong Kong Shanghai Banking Corp (HSBC) and Citibank.

Thue Quist Thomasen, CEO at YouGov Vietnam, said this is the first time YouGov has released a ranking of financial brands trusted and nominated by Vietnamese consumers.

YouGov’s data showed that Vietnamese banks hold a very important position for consumers nationwide, he noted.

Building a strong brand is one of the most important factors for achieving successes and maintaining competitive advantages in financial companies in Vietnam, he said.

YouGov’s data can give brands a detailed view of how consumers perceive their brands and services, thus helping them optimize their marketing campaigns to gain more market shares, Thomasen added./. 

UK reduces coffee imports from Vietnamese market

The UK increased coffee imports from the majority of its main suppliers, with the exception of Vietnam and Honduras during the first half of the year, according to the Ministry of Industry and Trade.

The Vietnamese share of the coffee market as part of total UK imports decreased from 27.32% during the opening six months of last year to 16.35% this year.

Furthermore, the UK imported 16,400 tonnes of coffee worth US$29 million from the nation, a drop of 48.4% in volume and a decline of 49.3% in value.

Statistics released by the International Trade Center indicate that the UK's coffee imports in the first half of the year reached 100,300 tonnes worth US$424.62 million, representing a year-on-year fall of 13.8% in volume and a drop of 10.9% in value.

The fourth wave of the COVID-19 pandemic has negatively impacted the country’s coffee exports, while the local coffee industry has yet to met the stringent requirements set in terms of the quality and consumption trends of British people.

At present, the nation’s coffee exports are in the form of raw or semi-processed beans, while the UK’s coffee consumption is mainly instant coffee, accounting for 41% of the overall market share, a far higher figure compared to the average figure of 17% in Europe.

Moving forward, the UK’s coffee imports are anticipated to bounce back over the long term, especially following the signing of the UK-Vietnam FTA (UKVFTA) last year which is likely to see Vietnamese agricultural products enjoy competitive advantages in the UK market compared to similar products originating from other countries.

Last year, the UK imported coffee products worth approximately US$1 billion from the nation. However, experts have advised local businesses to meet stringent requirements set by the demanding market by applying Global GAP standards in production in order to gain access to the high-end market.

Moreover, businesses are recommended to pay close attention to products that suit British consumer tastes, while also devising proper strategies aimed at establishing long-term relationships with partners in the UK.

Bamboo Airways licensed to fly directly to US from September 23

Local carrier Bamboo Airways has been granted a license by the US Transportation Security Administration (TSA) to operate 12 direct flights to the US from September, according to its representative.

The departing locations domestically include Noi Bai International Airport in Hanoi and Da Nang International Airport in the central coastal city of Da Nang. The destinations in the US are key international airports such as San Francisco International Airport in California, Los Angeles International Airport in California, and Seattle - Tacoma International Airport in the state of Washington.

Moving forward, Bamboo Airways will conduct its first verified direct flight on September 23, thereby paving the way for a series of activities to take place in the US.

This includes the signing of a memorandum of understanding (MoU) with San Francisco and Los Angeles International Airports, along with the debut of the local airline's official representative office in the US.

The carrier is also anticipated to work alongside aircraft manufacturer Boeing and other partners in the US market.

Previously in May, Bamboo Airways was officially designated to operate charter flights to the US, with the airline being granted slots to operate regular direct flights from Ho Chi Minh City to San Francisco and Los Angeles.

The US is widely considered to be the most demanding aviation market in the world. Bamboo Airways has basically completed the most important steps to put into operation regular commercial direct flights, which will connect the nation with the US from the end of this year and early next year.

Currently, Bamboo Airways is co-operating with the International Aviation Association (IATA) in order to put the IATA Travel Pass vaccine passport into practice on a trial basis from the fourth quarter of the year. This will be part of the plan to reopen the international flight network in the coming time.

Digital health passport expected to bring tourism back from the brink

After the national flag carrier, Vietnam Airlines piloted the IATA Travel Pass on a flight from Hanoi to London on September 2, the Vietnam Tourism Advisory Board has suggested Vietnam Green Travel Pass trial to resume activities of production, business and tourism.

The travel pass is applied to those who have been fully vaccinated, recovered from the disease or get negative test result for Covid-19.

Singapore, Thailand, Hong Kong (China), and Taiwan (China) are currently countries that officially approve use of this travel pass for arriving passengers. Vietnamese travel agents have also prepared scenarios for the new state.

General Director of Vietravel Tourist Company Tran Doan The Duy said that the company is always ready to offer visitors various tours with attractive destinations under safety measures.

According to Head of the Communications and Marketing Department of TST Tourist Company, Nguyen Minh Man, 100 percent of the TST Company was fully vaccinated. On the other hand, the enterprise have maintained its operation via the Internet and prepared tourist products for the year-end period.

Meanwhile General Director of the DIC Tourism and Trading Joint Stock Company Pham Ba Phuc hoped that the tourism industry will recover as quickly as possible with the Vietnam Green Travel Pass.

He also noted that destinations that have been selected as a pilot places to welcome visitors have to inoculate their entire population in bid to revive tourism, such as Phu Quoc and Quang Ninh.

According to Chairwoman of the HCMC Tourism Association Nguyen Thi Khanh, Digital health passport have been trialed by countries around the world. Vietnam should participate in the experiment in accordance with the current situation. At first, visitors who travel to domestic destinations have to get two doses of Covid-19 vaccines while the tourist locations can control the pandemic.

The tourism sector is waiting for the the efficiency of COVID-19 prevention and control and vaccination coverage, Mr. Tran Doan The Duy added.

The Ministry of Culture, Sport and Tourism will begin trialing the Vietnam Green Travel Pass for tourists visiting Phu Quoc Island. It is expected to open a lot of opportunities for the country’s tourism industry.

Chairman of the People’s Committee of Phu Quoc City Huynh Quang Hung said that the tourism industry is expected to be recovered from the Covid-19 in the island when the travel pass is approved.

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

VIETNAM BUSINESS NEWS SEPTEMBER 7

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