Bilateral trade between Vietnam and Australia is growing strongly, reaching 1.38 billion USD in the first quarter of 2022, a surge of 32.36 percent against the same period last year, according to the General Department of Vietnam Customs.

A sharp increase was seen in Vietnam’s export of various agricultural and industrial products to Australia, for example coffee (84 percent), aquatic products (51 percent), rubber (41 percent), and electric cable (26 percent). Notably, the shipments of iron and steel skyrocketed by more than 500 percent year on year.

Australia is emerging as a supplier of much-needed materials for Vietnam, including coal, iron ore, metal, cotton, wheat and cattle feed, enabling the latter to boost production.

The Vietnamese Trade Office in Australia has regularly updated information on Australian importers and products’ current prices on its own e-commerce mobile app Viet-Aus to help Vietnamese firms seek partnership more easily.

Last year, the two-way trade hit a record high of 12.4 billion USD, up over 49 percent year-on-year. The same year, the two countries finalised the signing of the Australia-Vietnam Enhanced Economic Engagement Strategy to support their ambition of becoming each other’s top trade partner and doubling bilateral investment.

Shrimp exports predicted to sustain growth in April

Shrimp exports are projected to increase by 20 percent on-year in April, the Vietnam Association of Seafood Exporters and Producers (VASEP) has said.

The prediction is based on strong growth recorded in March which brought the total export value of the product in the first quarter to more than 900 million USD, a yearly rise of 37 percent.

Also, the current period is the time for European and US markets to prepare food supply for consumers during the summer holiday as well as stockpiles for the fall.Statistics of the Ministry of Agriculture and Rural Development show Vietnam’s shrimp farming area is currently over 740,000 hectares, with output topping 900,000 tonnes per year. Although the area only increased by about 1.5 percent annually, the yield grew sharply by 10 percent a year.

Vietnam seeks to increase coal import from South Africa

A trade forum has been held online for Vietnamese and South African coal businesses to seek stronger coal trading cooperation between the two sides to meet coal demand for production and electricity generation in Vietnam. 

Addressing the event, Le Hoang Oanh, head of the Asian Market under the Ministry of Industry and Trade said that Vietnam’s demand for coal is increasing for electricity generation and industrial production. The country would need about 46.5 million tonnes of coal in 2025 and 123.7 million tonnes in 2045, she noted.

South Africa has long been a coal supply source of Vietnam. Vietnam was one of the five largest coal importers of South Africa in 2029 and 2020.

Statistics from the UN Comtrade showed that Vietnam imported about 126,000 tonnes of coal, worth 7.6 million USD from South Africa in 2019, 2.6 million tonnes worth 123.4 million USD in 2020 and about 7.5 million tonnes worth 360 million USD in 2021.

Tan Hoang Minh would sell 2-3 properties to pay back to bondholders

Do Hoang Minh, the newly-minted chairman of property group Tan Hoang Minh, revealed that the corporation would offload at least two or three projects to ensure bondholders’ rights and obligations.

"We are dedicated to doing so, given Tan Hoang Minh's potential and the existing projects. The corporation is selling projects to compensate investors and avoid arising problems as quickly as possible," said Minh at a recent meeting on April 13.

“An appropriate way out to address the lingering issues,” he said, "is still subject to the further direction of local authorities.”

Following the meeting with the client, Tan Hoang Minh also issued a notification stating that it is "making tremendous efforts to resume operations" while at the same time taking the best possible means to repay money owed to bondholders.

As Tan Hoang Minh explains, the matter is still under investigation. The companies promise to shortly offer a payment plan that works for their customers.

The group has agreed to find a way to reimburse investors for the full purchase price of their principal bonds. However, relevant parties would negotiate later on how to reach a mutual agreement on bonds yield.

Numerous bondholders said that, despite the fact that the bond is due for payment, the funds have not yet been obtained.

Tan Hoang Minh has completed three projects in Hanoi, including D'Capitale, D'Palais Louis, and D'El Dorado II, in addition to the three buildings now under development.

Last week, nine of Tan Hoang Minh's private bond transactions have been cancelled, which has caused quite a stir in the local financial system.

Louis Capital plans to acquire Nguyen Kim’s property company

Louis Capital JSC (TGG) is planning to spend VND350 billion acquiring a 90% stake in Louis Mega Mall, a real estate company whose 99.45% of charter capital is owned by Nguyen Kim Group.

Louis Mega Mall, which was established two months ago, is managing Nguyen Kim trade centers. It has charter capital of VND181 billion. Besides the 99.45% held by Nguyen Kim, the remainder is being held by two individuals.

Speaking at a meeting on April 15, Nguyen Mai Long, chairman of Louis Capital, said the company would set aside VND1 trillion to fund a plan to develop the firm into a diversified business with acquisitions, mergers and financial investment being still its core operations.

The company has been in talks with Nguyen Kim Group to acquire its real estate products in prime locations in Dong Thap, Bac Lieu, Tra Vinh and Gia Lai provinces, Long added.

Explaining the decision to acquire shares of a real estate company and expand business to the trade center sector while many retail spaces have found it hard to find tenants after the pandemic, Long said he saw opportunities in such a difficult situation.

If the deal is successful, Louis Capital will rename Nguyen Kim’s trade centers. These properties can be exploited for different purposes, not only for leasing retail spaces.

Khanh Hoa’s economic zone to become high-end tourism, entertainment center

The Government has approved a plan to develop the Van Phong economic zone in Khanh Hoa Province into a high-end tourism and recreation center until 2040, with a vision toward 2050.

The Van Phong economic zone is expected to feature various distinctive, unique and modern products that will be able to compete internationally.

For the development of Van Phong, seminars, exhibitions, fairs, tourism services and recreational activities will be prioritized, while airport, seaport, finance, e-commerce and customer support services will be improved and aligned to tourism activities.

The Van Phong economic zone is set to develop in an eco-friendly manner, promote its potential, gather creative resources and strongly attract investment, boosting the growth of the province and its neighboring cities and provinces.

Under the plan, tourism service and biological tourism areas will be located on the Hon Gom Peninsula and the Hon Lon Island and comprise the Diep Son Island tourism area, the Tuan Le-Hon Ngang urban and tourism area, among others.

The center of the Hon Gom Peninsula will be aligned with the international transhipment port and equipped with tourism and logistics services.

Besides, Van Phong will consist of several multi-functional urban areas such as Vinh Yen, Nam Tu Bong, Doc Let and Xom Quan, while Van Thang, Doc Da Trang, Ninh Thuy and Van Luong will be turned into industrial hubs and zones.

Founded in 2006, the Van Phong economic zone covers an area of 150,000 hectares of land and water surface in Van Ninh District and Ninh Hoa Town.

VND154 trillion proposed for new cross-country expressway

The Ministry of Transport is planning to develop a new North-South expressway in western Vietnam by 2030 with a total length of 911 kilometers and an estimated investment of VND154.21 trillion sourced from the State budget.

According to the road system planning for the 2021-2030 period with a vision to 2050, some sections of the expressway would be prioritized for construction, the local media reported.

The Doan Hung-Hoa Lac-Khe Co section passing through the northern provinces of Tuyen Quang and Phu Tho and Hanoi City will have a length of 152 kilometers and cost VND24.85 trillion.

Of them, the section from Tuyen Quang to Phu Tho will be 40 kilometers long, have four lanes and require an investment of VND5.83 trillion. Meanwhile, the 55-kilometer Phu Tho-Ba Vi (Hanoi) section and the 57-kilometer Ba Vi-Ben Market (Hoa Binh) section will have six lanes each and need VND9.9 trillion and VND9.12 trillion, respectively.

In addition, the six-lane Ngoc Hoi-Chon Thanh-Rach Gia section will be 759 kilometers long and require VND129.36 trillion. The section will include segments from Kon Tum Province’s Ngoc Hoi District to Gia Lai Province’s Pleiku City, from Pleiku to Daklak Province’s Buon Ma Thuot City, from Buon Ma Thuot to Dak Nong Province’s Gia Nghia City, from Gia Nghia to Binh Phuoc Province’s Chon Thanh District and from Chon Thanh to Long An Province’s Duc Hoa District.

They will be 90, 160, 105, 140 and 84 kilometers long and have an estimated investment of VND14.4 trillion, VND25.6 trillion, VND16.8 trillion, VND22.4 trillion and VND15.96 trillion, respectively.

VietinBank to raise VND15 trillion from bond issues

VietinBank (CTG) will conduct 20 bond issues this year to raise VND15 trillion to fund its operation, improve its capital adequacy ratio (CAR) and make loans.

The bank’s board of directors has issued a resolution approving a secondary bond sale plan for this year.

The non-convertible bonds will come with neither warrants nor mortgages.

As of the end of last year, VietinBank’s CAR was 9.14%, one of the lowest rates in the banking sector. The forthcoming fund raising is needed to improve the CAR, thus improving the bank’s credit growth.

This year, VietinBank has set an asset growth target of 5%-10%. It also looks to a pre-tax profit growth rate of 15% at nearly VND19.4 trillion, which can be adjusted by the State Bank of Vietnam.

After providing capital for funds, the remaining VND9.6 trillion will be used to pay dividends. VietinBank’s charter capital is expected to increase to nearly VND57.7 trillion by the end of this year.

Jetstar Asia reopens air link to Danang

Singapore-based low-cost airline Jetstar Asia has resumed air services to the central city of Danang, after a two-year hiatus due to the Covid pandemic.

Following the removal of travel restrictions between Vietnam and Singapore, Jetstar Asia decided to reopen two weekly flights to Danang on Tuesdays and Sundays to meet the rising travel demand from passengers.

Nguyen Thi Hoai An, director of the Center for Tourism Promotion in Danang, hailed the efforts of Jetstar Asia in restoring the Singapore-Danang route after Vietnam fully reopened its border on March 15.

To celebrate the occasion, Jetstar Asia will offer special deals with tickets priced at 95 Singaporean dollars each, or around VND1.6 million, for flights scheduled between April 19 and November 22 this year.

CAAV puts forward mechanisms to slash flight fares to/from Can Tho

The Civil Aviation Authority of Vietnam (CAAV) has recently proposed to the Ministry of Transport some special mechanisms for flights to/from Can Tho International Airport, following the latest direction of Prime Minister Pham Minh Chinh.

Specifically, the CAAV proposes to apply the aviation service price set by the State for all international and domestic flights to/from Can Tho International Airport at 30 percent of the price bracket by the end of 2025 and at 70 percent of the price bracket from 2026 to the end of 2030.

To encourage domestic passengers to travel to Can Tho, the ceiling price for regular domestic passenger transportation on domestic routes to/from Can Tho is also proposed to be reduced to 80 percent compared to the current flight length, trial from now until the end of 2022.

At the same time, Noi Bai and Tan Son Nhat international airports need to prioritize take-off and landing frequency for flights to Can Tho, Rach Gia, Ca Mau, and Phu Quoc airports, expected to apply from May 1.

The CAAV also proposed that Can Tho International Airport would increase its capacity to ensure operation 24/7 to be able to receive international flights and soon have plans to upgrade, renovate, and expand Ca Mau and Rach Gia airports to be capable of receiving A320/321 aircraft.

Previously, on April 8, Prime Minister Pham Minh Chinh directed the relevant agencies to research a preferential price policy for flights to/from Can Tho International Airport, study to increase the frequency and open new flight routes to the Mekong Delta region in general, and Can Tho International Airport, in particular, to reduce traffic congestion and facilitate travel by air for people in the Mekong Delta.

At present, all airlines have their policies and incentive programs for flights to Can Tho. Specifically, Vietnam Airlines applies lower fares on flights from Can Tho to/from other airports than similar flights from Ho Chi Minh City. The average fare on the Hanoi - Can Tho route is about 15 percent lower than that of the Hanoi – HCMC route. Vietnam Airlines has also launched a promotion program, offering a reduction of 15 percent on fares on the HCMC - Ca Mau flights for customers with permanent residence, military men, civil servants, and State officials working in Ca Mau.

Pacific Airlines also applies a range of fares from as low as VND49,000 (US$2.12) (excluding taxes and fees) for flights to/from airports in the Mekong Delta.

Similarly, Bamboo Airways applies its average fare for the Hanoi - Can Tho route down 32 percent compared to the flight fare for the Hanoi – HCMC route. At the same time, the airline runs a promotion program, offering ticket prices of only VND269,000 ($11.66) for the Hanoi - Can Tho route or VND49,000 for the Can Tho - Phu Quoc route from April 9 to May 31.

Vietjet Air also announced the application of a policy with the average fare on flights from Hanoi to Can Tho/Phu Quoc being 10-20 percent lower than those from Hanoi to HCMC. The airline has recently re-operated ten routes to and from Can Tho, with many promotions opened during the golden hour frame from 12 p.m. to 2 p.m. from April 10 to April 16.

Banks provide annual loan rate at 5.9 percent under market stabilization program

According to the branch of the State Bank of Vietnam in Ho Chi Minh City, commercial banks citywide said that short-term interest rate of loans for businesses participating in the market stabilization program in 2022-2023 will be 5.9 percent -6.4 percent a year while businesses asking for medium and long term loan will enjoy the interest rate of 6.5 percent-10 percent a year.This interest rate is lower than that in the market stabilization program in 2021-2022 when short-term interest rates ranged from 4.5 percent -8 percent a year, medium and long-term interest rates were from 6.5 percent -11.3 percent annually.In the context of the current increasing trend of deposit interest rates, banks have to drastically reduce operating costs and reduce profits in order to reduce lending rates as planned.The State Bank of Vietnam branch in Ho Chi Minh City also said that the program in 2021-2022 achieved a total revenue of VND17,381 billion (US$758 million) including revenue of food and foodstuff sector reaching VND16,298 billion.This program has contributed to curbing the consumer price index (CPI) in the city in March 2022, increasing 1.71 percent compared to December 2021 and 2.03 percent over the same period, lower than the national average with an increase of 1.91 percent compared to the end of last year and of 2.41 percent over the same period.

Vietnam has fourth mobile virtual network operator

The mobile virtual network operator market is projected to grow to $123.4 billion in 2028.

Digilife Vietnam Digital Services Co., Ltd, a fintech company member of VNPAY, was licensed to establish a mobile virtual network across the country.

This is the fourth mobile virtual network operator (MVNO) in Vietnam. Digilife must strictly comply with the terms of the method of service provision, a form of payment of charges, connection and lease of channels, telecommunications resources, charges, quality of service, deployment of licenses, and other obligations.

A mobile virtual network operator is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently.

In April 2019, Indochina Telecom is the first MVNO in Vietnam, with the name Itel. After more than two years of operation, it has reached nearly three million subscribers by December 2021. 

In June 2020, Reddi, operated by Mobicast, became the second MVNO in Vietnam, using the mobile phone infrastructure of the State-owned Vietnam Posts and Telecommunications Group (VNPT). However, last year, it was purchased by Sherpa Company Limited, a subsidiary of Masan Group Corporation, which will help the group digitalize its platforms and build unified off-to-online products and services solutions. 

The third virtual mobile network called Local, was developed by ASIM Telecom, and launched in early May 2021. It provides 4G super data SIM products from MobiFone.

Recently, FPT Digital Retail JSC also planned to deploy a mobile virtual network business model in Vietnam in the 2022 general meeting of shareholders.

According to Fortune Business Insights, the MVNO market is projected to grow from U$72.5 billion in 2021 to $123.4 billion in 2028 at a compound annual growth rate (CAGR) of 7.9% during the 2021-2028 period.

Vietnamese Gov’t to pay US$14.6 billion in debt this year

The objective is to ensure sufficient capital for the Government to carry out its socio-economic recovery packages.

The Vietnamese Government is scheduled to pay the debt of VND335.8 trillion (US$14.6 billion) this year, 89% of which is principals and the remaining are for on-lent loans.

The figure, a decline of VND30 trillion ($1.3 billion) compared to last year, was mentioned in the Government’s program for public debt management for the 2022-2024 period.

“The objective is to ensure sufficient capital for the Government to carry out its socio-economic recovery packages,” the program stated.

Under the program, the Government would borrow a maximum of VND673.5 trillion ($29.3 billion) this year, an increase of VND160 trillion ($7 billion) against 2021. Upon breaking down, 96% of the loans, or VND647 trillion, are to cover the budget deficit and nearly VND27 trillion for on-lent loans.

The program noted the amount is expected to mobilize from Government bonds, ODA, and preferential loans from abroad.

“In case of necessity, the Government may consider issuing Government bonds and selling to the State Bank of Vietnam,” it added.

In 2021, all major debt indicators continued to stay within the limit set by the National Assembly, in which the ratio of public debt to GDP stood at 43.7%, that of Government debt to GDP at 39.5%, and foreign debt to GDP at 39%.

The Government’s debt repayment accounted for 23% of budget revenue, below the 25% threshold.

This year, local provinces/cities would borrow a total of VND28.6 trillion ($1.2 billion) and pay VND6.1 trillion ($266.4 million) in debts.

The Government would guarantee a maximum loan of VND20.4 trillion ($891 million) for the Vietnam Bank for Social Policies. The disbursement of such an amount, if not fully carried out this year, could be extended for next year.

Meanwhile, the Government said it would not guarantee commercial loans, according to which enterprises are responsible for their own payments, with a maximum of $7.3 billion.

Under the plan, the Government’s total loans in the 2022-2024 period would be around VND2,000 trillion ($87.4 billion).

The Government would pay debts of over VND1.100 trillion ($48 billion) for the upcoming three years, including VND971 trillion of the direct debt payment.

Vietnamese merchandise trade balance remains in surplus in Q1

Vietnam’s merchandise trade balance recorded a surplus of US$1.4 billion in March, while FDI commitments and disbursement remained resilient amid global uncertainties over the Russian invasion of Ukraine, according to the April edition of the World Bank's monthly Vietnam March Monitoring.

In line with this, the country’s GDP grew by 5.0% on-year in Q1 thanks to the solid performance of the export-oriented manufacturing and recovering service sector.

Furthermore, the industry and construction and services sectors grew by 6.4%, and 4.6% on-year, respectively, contributing 4.3 percentage points to quarterly GDP growth. This growth of industry and construction was largely driven by strong external demand for manufactured products, while the services sector’s performance varied across various sub-sectors.

Finance, banking, insurance, and information and telecommunications were exceptionally resilient over the past two years, maintaining solid growth in the process. In contrast, accommodation and catering services were 1.8% lower compared to a year ago, well below their pre-pandemic level.

The labour market conditions also improved, although they have yet to recover fully to levels seen a year ago. Elsewhere, industrial production maintained a robust performance in March, increasing by 8.5% on-year, while retail sales growth accelerated by 9.4% from last year, one of the strongest performances over the past two years thanks to strengthening sales of goods.

Moreover, high energy prices coupled with recovering domestic demand caused annual CPI inflation to jump to 2.4% in March from 1.4% in February.

Rising fuel and commodity prices have led to a higher manufacturing producer price index, while the terms of trade continued to deteriorate in Q1. The credit to deposit ratio also increased, implying the tightening of domestic financial conditions. Overnight interbank interest rates therefore ended at 2.08% at the end of March, a figure 1.8% higher than that recorded a year ago.

The budget remained in surplus given a robust revenue collection along with the slow execution of public investment projects. Rising consumer and producer prices also warrant close monitoring of domestic price developments amid rising inflation impacting the recovery of domestic consumption and economic growth.

Most notably, higher import prices and accumulated increases in terms of intermediate and producer price index over the last three quarters could translate into higher consumer prices, especially food prices. In the short run, targeted policy intervention can alleviate the impact of price hikes on the general population, especially for the most vulnerable, a policy which is widely recommended.

The petroleum tax reduction recently introduced by authorities is one such short term measure. Over the medium-term, building a more targeted, effective, and responsive social protection system could contribute to strengthening resilience against external shocks, such as the current commodity price increase. If price increases persist, then the economy will be forced to adjust to the price changes.

Moving forward, WB experts recommend that authorities consider structural reforms to help the economy become increasingly productive and increase aggregate supply. These include tax breaks for productive and innovative investments, serving to reduce barriers in conducting business, reducing logistics cost,  and investing in the education and technical training of the local work force.

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