Prime Minister Pham Minh Chinh has requested the Minister of Finance to submit measures ensuring the healthy, transparent, safe and effective operations of corporate bond market to him before December 20.

Signed by the PM on December 13, the dispatch said in accordance with the Resolution No.156/NQ-CP dated December 6, 2022 on the November Government meeting, the Finance Minister must promptly take timely and effective solutions to stabilise and promote the development of corporate bond market, thus ensuring legitimate rights and interests of investors in line with regulations.

The Finance Ministry is tasked with promptly reviewing solvency and payment capacity of corporate bond issuers, especially bonds due for payment in 2022 and 2023; proactively take specific and effective measures to handle issues within its authority to ensure the absolute safety and security of financial and monetary markets.

It must direct issuers to fulfil the obligation to repay principal and interest as committed. In case of difficulties, they must actively negotiate with investors to restructure bond debts, interest rates and payment terms via harmonious, reasonable and effective measures in the spirit of harmonising benefits and sharing risks in accordance with existing laws.

The ministry was assigned to further enhance its State management authority on the issuance of corporate bonds, especially fighting negative behaviours, policy profiteering and other unhealthy activities to ensure the healthy, safe, open, transparent and sustainable operations of the market.

It must promptly propose amendments and supplements to legal documents related to the issuance of corporate bonds, particularly private placement at home and offering of corporate bonds to international market.

Over US$288 mln component project of Bien Hoa – Vung Tau expressway approved

The Ministry of Transport has just approved the investment of more than VND6,850 billion (US$288 million) into the second component project under the Bien Hoa – Vung Tau expressway project in the first period with a total length of 18.2 kilometers.

The project is designed with a speed of 100 kilometers per hour. The project’s starting point shall be from Tan Hiep intersection with its scale of five lanes and when the project is completely finished, there will be eight lanes. 

The section from the Tan Hiep intersection to the ending point is designed with four lanes in the first period and six lanes when the project is fully completed.

As for sections in the intersections of Long Thanh and Tan Hiep, they will be entirely invested with six lanes and the airport intersection with eight lanes in the first period.

According to the calculation of the Ministry of Transport, the total investment of the second component project of the Bien Hoa – Vung Tau expressway shall cost VND6,852 billion (US$288 million) from the state budget.

Of which, the site clearance cost will be VND2,179 billion (nearly US$92 million) and the construction cost shall be VND3,871 billion (US$163 million) and so on. It is expected that the project will be put into exploitation in 2026.

The Project 85 Management Board was assigned as the main investor of the second component project of the Bien Hoa – Vung Tau expressway in the first period, thereby, the unit is responsible for appraising, approving the design and selecting the contractors to implement the project and so on.

Previously, in June of 2022, the National Assembly approved a resolution on the investment policy for Bien Hoa – Vung Tau expressway in the first period. Accordingly, the project has a total length of around 53.7 kilometers which is divided into three component projects under public investment form. 

The whole project investment will be VND17,837 billion (US$751 million) from the Central budget, VND2,600 billion (US$109 million) from the budget of Dong Nai Province and VND670 billion (US$28 million) from the budget of Ba Ria – Vung Tau Province.

The People’s Committee of Dong Nai Province is authorized to invest in the first component project while the Ministry of Transport and the People’s Committee of Ba Ria – Vung Tau Provinces are authorized to invest in the second and third component projects, respectively.

Taking advantage of EVFTA for imports

Thanks to the EVFTA, Vietnamese enterprises have opportunities to increase exports to the EU market and promote imported goods and raw materials from the EU with lower prices.

After the European Union–Vietnam Free Trade Agreement (EVFTA) has come into effect for more than two years (from August 1, 2020), the machinery, equipment, and materials imported by DKNEC Group JSC from some EU member markets have an advantage of slightly reduced import duties.

Dinh Van Hien, president of the Board of Directors and general director of DKNEC Group, said that the import tax on components and assembled equipment was reduced slightly thanks to the EVFTA coming into effect. Before that, this tax was very high, about 5 - 15 per cent, depending on the type of components.

Tax rates continue to drop sharply, especially from the third year after the EVFTA. From 2022 to 2027, the special preferential import tax will be reduced from 10.2 per cent to about 1 per cent.

Data from the Ministry of Industry and Trade shows that the goods with sharp import growth from the EU in the first two years of EVFTA implementation are machinery, equipment, electronic components, and raw materials.

Do Huu Hung at European-American Market Department said that the EU's tariff incentives in the EVFTA have significantly contributed to helping Vietnam enterprises improve their competitiveness and expand their market share in the EU. Enterprises also have opportunities to access high-quality EU goods.

From the results of surveys and discussions about the EVFTA, Hung said that businesses had taken advantage of the EVFTA's relatively effective advantages in importing equipment, machinery, and raw materials from the European countries serving to produce export goods.

According to the report "Vietnam after two years of EVFTA implementation from a business perspective" published by the Vietnam Chamber of Commerce and Industry and FNF Institute in November, 41 per cent of more than 500 surveyed enterprises in the country benefit from the EVFTA. The most common benefits were preferential tariffs for import-export goods, and positive effects in increasing orders, revenues, and profits.

Efficiency of Hanoi’s second metro line reaches 99.65%

After the first five consecutive days of a test run, the Nhon-Hanoi Station metro line showed a feasibility rate of up to 99.65%, according to the Hanoi Metropolitan Railway Management Board.

The test run, starting on December 5, was conducted in two phases, with the first lasting from five days to six weeks in order to evaluate the line's RAM efficiency.

If the efficiency recorded during the first five consecutive days failed to reach 98%, the trial run will be extended until the goal is achieved, to the maximum of six weeks.

The second phase of the trial run was conducted on December 13 and 14 right after the RAM efficiency evaluation was completed, with several scenarios simulated, such as blackouts and fires.

The 12-kilometre Nhon-Hanoi Station metro line, the second of its kind in the capital city, starts from Nhon in Nam Tu Liem district and ends at the Hanoi Station in Dong Da district, and includes eight elevated stations and four underground.

Once fully operational, eight trains will be officially in service, with one used to ease overloading at peak hours.

Each train is designed to carry between 944 and 1,124 passengers. The trains are designed and manufactured by France's Alstom company.

The project's investment of about 30.1 trillion VND (1.29 billion USD) comes from official development assistance of the French Development Agency and loans from the French Government. The elevated section is slated for commercial operation by the end of this year, while the remaining part which is underground will be put into use next year.

Vietnam seeks opportunities to promote handicrafts in Italy

Vietnamese handicraft producers were among more than 2,300 companies from nearly 100 countries participating in the 26th International Crafts Selling Exhibition "Artigiano in Fiera" in Milan, Italy from December 3 to 11.

On this occasion, Vietnamese Ambassador to Italy Duong Hai Hung had a working session with Antonio Intiglietta, President and CEO of Gestione Fiere (Ge.Fi. S.p.A), the organiser of this event, to discuss cooperation to strengthen the participation of Vietnamese companies in the fair in the coming time, especially in 2023 when Vietnam and Italy will celebrate the 50th anniversary of their diplomatic relations.

Hung affirmed that the Vietnamese Embassy in Italy will coordinate with relevant ministries, sectors, and businesses to increase the presence of Vietnamese companies at this fair.

He said that the event not only connects companies in the market but also promotes the image of the Vietnamese country, culture, and people to Italian friends and international ones.

Vietnamese firms have joined the fair since the 2000s to introduce international friends to Vietnam's products such as textiles, handicrafts, and agricultural products.

Intiglietta said that Vietnamese handicraft stalls have been present at the fair for many years, drawing the attention of Italian people.

He added that they discussed an initiative to open an area featuring Vietnamese crafts and culture to promote the country's tourism.

VinFast delivers nearly 600 EVs in November

First Vietnamese electric vehicle (EV) manufacturer VinFast announced on December 13 that it handed over 594 EVs of VF e34 and VF 8 models to its customers in November.

The company, a member of private conglomerate Vingroup, is planning the delivery of thousands of units of the two models for pre-order customers when the supply chain is stable and production is no longer interrupted, as well as the first VF 9 ones at the beginning of the first quarter next year.

On December 10, VinFast officially received orders for its VF 5 Plus model, with a total of 3,293 orders made in the first nine hours. Customers may receive the first cars in April 2023.

On November 25, it exported the first batch of 999 EVs of VF8 model to the US market. They are scheduled to arrive in California in the next few days and be handed over to the first consumers by the end of this year.

Enterprises overcome challenges to gain impressive results: Experts

Despite many difficulties, import and export activities continued to be a bright spot in economic recovery of Ho Chi Minh City in particular and Vietnam in general, according to experts.

This year, HCM City’s economy coped with impacts of the COVID-19 pandemic, the Russia-Ukraine conflict, rising interest rates, falling demand for goods, high raw material prices and input costs and a disruption in the supply chain. However, the city has gained impressive results thanks to flexible policies of the State and efforts of enterprises in expanding export markets.

HCM City’s export turnover reached 49.5 billion USD in 2022, up 10.3% year-on-year, and its imports hit 66.2 billion USD, up 10% against last year.

Main export markets are the United States, China, the European Union (EU), Japan, the Republic of Korea (RoK) and the Association of Southeast Asian Nations (ASEAN).

Mizushima Kozo, Chairman of the Japan Business Association in HCM City, said that compared with Southeast Asian countries, Vietnam's economic recovery speed is extremely impressive.

A survey conducted by the association showed that by September 2022, about 60% of Japanese enterprises had resumed their operations and 63% of surveyed businesses planned to expand investment in the next two years, he said. This reflects that investors have great expectations for Vietnam's economic growth.

Tran Phu Lu, deputy director of the HCM City Investment and Trade Promotion Centre, said that the difficulties of the world economy and global trade are forecast to last until early next year and Vietnam's exports will depend on developments in the Russia-Ukraine conflict as well as inflation control in large export markets. However, he said, it also provides an opportunity for enterprises to overcome challenges and maintain the growth of commodity exports.

Export enterprises can take advantage of tariff reduction of free trade agreements (FTAs) that Vietnam has signed, especially new-generation FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), European Union-Vietnam Free Trade Agreement (EVFTA) and Regional Comprehensive Economic Partnership Agreement (RCEP), he said, adding that the country has signed more than 90 bilateral trade agreements, 12 multilateral trade agreements, nearly 60 investment promotion and protection agreements and 54 agreements on double taxation avoidance.

Local airlines to add seats for upcoming Tet holiday
 
Soaring travel demand during the upcoming Lunar New Year holiday, or Tet, has prompted local airlines to increase the number of seats between January 6 and February 5 next year.

The Vietnam Airlines Group, including Vietnam Airlines, Pacific Airlines and VASCO, has announced its plan to add 224,000 seats, or 1,500 flights, for Tet, the local media reported.

The air tickets will be put on sale on the busiest routes from Hanoi, Danang and Ho Chi Minh City to Haiphong, Vinh, Thanh Hoa, Hue and Quang Nam.

In mid-August, the Vietnam Airlines Group announced that it would offer millions of domestic and international air tickets during Tet.

Bamboo Airways has also announced the carrier will raise the number of seats for Tet by 15%, offering one million tickets on domestic and international flights during the national holiday.

As for domestic routes, Bamboo Airways will offer more seats on flights linking major cities such as Hanoi, HCM City, Danang, Haiphong and Can Tho with other provinces, including Nghe An, Thanh Hoa, Quang Binh, Quang Nam, Khanh Hoa, Binh Dinh, Lam Dong and Kien Giang.

The carrier will also increase the number of seats on international flights to Germany, England, Australia, Japan, the Republic of Korea, Taiwan (China), Singapore and Thailand.

Besides, the airline will add more flights at night and in the early morning on the routes between HCM City and Hanoi, Haiphong, Vinh, Thanh Hoa and Quang Binh to meet the surging travel demand before and during Tet, the nation’s biggest and longest holiday.

Asian countries benefit from China+ manufacturing trend
     
Many Asian countries including Viet Nam have benefited from the China+ approach, which has seen companies looking to improve supply chain resilience by diversifying their production bases beyond China, according to the Cushman & Wakefield’s 2022 Manufacturing Risk Index.

The report says that trends are benefiting Viet Nam, which has seen a rapid expansion of its industrial sector over recent years.

The Vietnamese market also benefits from geographical connectivity both within the region and with markets outside of the region.

As a result of burgeoning demand for new manufacturing facilities in Viet Nam, major shipping lines such as MSC, Maersk and CMA CGM are investing in new capacity in the country to expand their operations.

The report admits that Asian markets have dominated the annual study that ranks the top manufacturing destinations according to baseline, cost and risk scenarios.

The report assesses the most suitable locations for manufacturing among 45 countries in Europe, the Middle East, the Americas, and the Asia Pacific region based on variables grouped by cost, risk and general business conditions.

Steel producers' profit to hit bottom soon
     
Most steel companies recorded gloomy business results in the third quarter of 2022, according to a recent report on the construction and building materials industry by VNDirect Securities Corporation.

Revenues of the three largest listed steel companies, including Hoa Phat Group (HoSE: HPG), Hoa Sen Group (HSG), and Nam Kim Group (NKG), fell 25 per cent year-on-year and 18 per cent compared to the previous quarter due to weak steel demand resulting in reductions in both output and selling prices.

Moreover, high input prices, rising interest rates and a weakening dong have caused many businesses in the industry to record net losses in the third quarter of 2022. Viet Nam's largest steel producer with the advantage of large-scale production, HPG, also posted a net loss of VND1.8 trillion (US$74.9 million) in the last quarter, which is the company's first loss since the fourth quarter of 2008.

VNDirect also said that the domestic steel industry is being affected by difficulties such as high input material prices, including coke and scrap steel prices, and a decline in global steel demand, causing challenges for export activities of Vietnamese steel enterprises. Although disbursement of public investment is expected to accelerate in the coming quarters, VNDirect forecasts that consumption of construction steel and galvanised steel will both decrease by 3 per cent year-on-year in 2023.

At the end of this year’s third quarter, all steel companies are in net debt. As a result, interest expenses will increase amid a higher interest rate environment. However, the net debt to equity ratio of steel companies is still significantly better than in the 2010-2019 period.

VNDirect noted that some signals may be a premise for the steel industry to improve. For example, the price of coking coal is forecast to drop from $420/tonne in 2022 to $258 and $220/tonne in 2023 and 2024, respectively, as the coke mines return to normal operation, while iron ore prices are also forecast to gradually decrease in the long-term from an average of $110 a tonne in 2022 to $90 and $70 tonne in 2023 and 2024, respectively, as the loosening of China’s COVID-19 restrictions will stimulate global steel demand and accelerating infrastructure development in Viet Nam will partly offset the stagnant real estate market.

Therefore, despite the fact that steel prices continue to decline in October and November, VNDirect still expects that the gross profit margin of steel companies will recover from the fourth quarter of 2022 when most of the high-priced inventories have been recorded in cost of goods sold in the previous quarter.

Vietnam imports nearly 23,000 CBU cars in November

Vietnam spent approximately US$468 million importing 22,736 completely built unit (CBU) cars in November, an increase of 58.8% in volume and 46.7% in value over the previous month, according to statistics released by the General Department of Vietnam Customs.

The number of CBU cars imported in November also represents an all-time high, while November was also the first month ever to see the number of imported cars exceed 20,000 units.

During the past 11 months of the year, the country imported 151,590 CBU cars worth US$3.4 billion, an increase of 4.7% in volume and 5.7% in turnover against the same period from last year.

The import results over the reviewed period are roughly equivalent to the entire year's record number. In 2021, the country spent US$3.65 billion on importing nearly 160,000 CBU cars.

With regard to the automobile import market, Indonesia represents the largest supplier of automobiles to the Vietnamese market with 63,987 vehicles worth US$934.4 million.

Thailand still leads the way among regional countries in turnover with US$1.2 billion, equivalent to 61,101 vehicles, followed by China with US$670 million, mainly trucks and specialized cars.

Most notably, Vietnam imported 141,328 vehicles from the three markets, accounting for 93.23% of the total number of imported CBU cars of the entire nation.

VNA resumes air service to Hong Kong

Vietnam Airlines (VNA) has reopened regular flights between the capital city of Hanoi and Hong Kong to meet the high travel demand.

The national flag carrier will operate two weekly flights on the Hanoi-Hong Kong route on Wednesdays and Sundays. The frequency will be increased to three flights per week on Mondays, Wednesdays and Sundays from December 26.

More flights would be operated on the route if Hong Kong’s Covid-19 restrictions are relaxed further, a VNA representative said.

The resumption of the air service to Hong Kong is expected to help facilitate trade between Vietnam and Hong Kong. Hong Kong remained Vietnam’s fifth largest foreign direct investor, with two-way trade seeing double-digit growth in recent years. Hong Kong is also among the world’s top financial and aviation hubs, the VNA representative added.

VNA resumed international air services linking Vietnam and neighboring China from December 9, raising the airline’s total number of international flights to over 600 weekly, equal to 70% of the pre-pandemic frequency.

Initial margin for derivatives to rise to 17%

The Vietnam Securities Depository (VSD) has revised the cap for the initial margin for the VN30 index futures contracts to align with developments on the derivatives market.

The VSD on December 12, raised the initial margin for futures contracts of the VND30 blue-chip index to 17% from 13%. The adjustment will take effect from December 15.

It posted the announcement about the revision on its portal and notified clearing members and the Hanoi Stock Exchange.

The increase was in line with the consensus reached by the State Securities Commission of Vietnam and calculation results of the initial margin for futures contracts of the VN30 basket determined periodically by the VSD as prescribed in its guidelines on securities clearing and settlement, the agency reported.

According to VSD, the new initial margin would help clearing activities and securities transactions become safer.

Contractors for North-South Expy’s second phase to be chosen before December 25

The North-South Expressway project’s second phase has entered the final stage of the contractor selection process, so the contractors for the first 12 bidding packages will be chosen before December 25, according to the Ministry of Transport.

The bid openings for those 12 packages with a total length of 331 kilometers will be held on December 16 to evaluate and select suitable contractors. Work on the 12 packages will start before the end of 2022.

Regarding the rest of the 13 packages, the transport ministry has asked project management boards to complete the preparation of documents before December 25 and to open the bids before January 10, 2023.

Work on those packages was required to get off the ground before January 15, 2023.

The 729-kilometer North-South Expressway project’s second phase will pass through 12 localities, comprising 267 kilometers of the Ha Tinh-Quang Tri section, 353 kilometers of the Quang Ngai–Nha Trang section, and 109 kilometers of the Can Tho–Ca Mau section.

The project has been divided into 12 subprojects with 25 bidding packages, of which the largest is worth up to VND8 trillion. It is expected to be completed in 2025 and put into service in 2026.

Finance Ministry proposes delaying Decree 65 until 2024

The Ministry of Finance has released a draft decree amending Decree 65 on bond trading, proposing a one-year delay of putting the said decree into force.

In its proposal, the ministry suggested that Decree 65 should take effect from January 1, 2024, as the bond market is in a liquidity crisis. The delay would give the market more time to adapt to the new regulations and, at the same time, enable professional individual investors to maintain their trading.

It also asked the Government to postpone requirements on credit rating as prescribed by the decree until early 2024 as it would take time and money to carry out compulsory credit rating, especially after a market crash, the ministry explained.

Meanwhile, it added a new regulation, which allows debt-issuing organizations to revise the tenor up to two years compared to the original term written in the plan for issuing bonds to the public and using proceeds from bond sales.

The ministry said such a regulation would help bond issuers obtain funding for business and production activities and refinancing debts under the current bond market situation, thereby relieving the financial burden on them as a huge volume of bonds will fall due in the next two years.

In addition, the draft decree allows bond issuers and buyers to negotiate and convert the principal and coupons into borrowing or other types of assets.

This year, corporate bond issues ground to a halt due to recent upheavals on the market and scandals dampening investor confidence.

Bonds offered to the public stood at VND134,800 billion in the first quarter of the year and then halved in the third quarter, at VND65,900 billion. From mid-September, when Decree 65 took effect, to late November, new bond issues plunged to some VND7,000 billion.

Meanwhile, premature bond redemption in the year through October had soared by 50% year-on-year to VND122,500 billion.

Decree 65 tightened control over bond sales by requiring professional individual investors to hold an investment portfolio worth at least VND2 billion for 180 days or longer and debt-issuing organizations to report on their credit rating results.

Lao Cai border gates to be fully reopened early next month

The Vietnam-China border gates in the northern province of Lao Cai will be fully reopened on January 1 next year, as China has eased its Covid-19 restrictions, according to a local official.

Hoang Dang Khoa, chairman of the People’s Committee of Lao Cai City, was quoted by the local media as saying that the Hekou side had invited the Vietnamese city’s delegation to visit Hekou on December 23 to work on the border gate reopening plan.

At a recent conference introducing the 2023 socioeconomic development and public investment plan of Lao Cai Province, Dang Xuan Phong, secretary of the provincial Party Committee, said the full reopening of the border gates would bring about significant opportunities in terms of trade and travel for the province.

Lao Cai City has three border gates serving the import-export and daily commutes of the people of the two countries. Besides, there are two other international border gates in other parts of the province, Ban Vuoc and Muong Khuong.

This year, trade revenue through the border gates in Lao Cai reached an estimated US$2 billion. The northern province set a target turnover of US$5 billion for 2023.

HOSE lifts restriction on OGC stock

The Hochiminh Stock Exchange (HOSE) will switch the OGC shares of Ocean Group Joint Stock Company from being under trading restriction to being under supervision from December 14, as the firm managed to address issues leading to the trading restriction earlier.

HOSE kept the OGC stock on the warning list since Ocean Group’s parent company was performing poorly, incurring a loss of VND33.53 billion after tax in the first half of 2022. Its undistributed after-tax profit as of June 30 had been minus VND2,759 billion.

As for its business performance in the year to September, Ocean Group had seen its revenue up 1.7 times year-on-year at some VND850 billion and its after-tax profit down 18% at VND121 billion.

In the third quarter alone, Ocean Group obtained more than VND592 billion in its consolidated revenue, much higher than the year-ago figure of VND85 billion. Its after-tax profit during the given period reached over VND127 billion, soaring a whopping 353% year-on-year, while it suffered the respective losses of VND21.25 billion and VND14.39 billion in the first and second quarters.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes