The prices of Vietnamese paddy and rice continued to increase last week, according to the the Vietnam Food Association (VFA).

Specifically, the average paddy price at fields rose by 214 VND to 8,000 VND (0.31 USD) per kilo, with the highest reported at 8,050 VND. The average price for paddy at warehouses expanded by 183 VND to 9,475 VND per kilo, the highest recorded at 9,650 VND.

Meanwhile, 5% broken rice was priced up to 14,200 VND per kilo; 15% broken rice, 13,950 VND; and 25% broken rice, 13,750 VND.

Premium white rice saw an increase of 35 VND per kilo to 14,010 VND.

For export, the price of 5% broken rice was 582 USD per tonne, higher than 579 USD of Thailand, and 581 USD of Pakistan.

Vietnam's 25% broken rice was sold at 557 USD per tonne, as compared to 530 USD of Thai rice./.

US chip giant NVIDIA keen to explore investment opportunities in Vietnam

A delegation of NVIDIA Corporation of the United States led by Keith Strier, vice president of NVIDIA, í scheduled to arrive in Vietnam from April 22 to 26 to explore investment opportunities in the country, according to Dau Tu (Investment) newspaper.

The working trip will take them to Hanoi, Da Nang, and Ho Chi Minh City that are the country’s largest economic hubs, revealed the newspaper.  

During the trip, NVIDIA leaders will to work alongside representatives of relevant businesses and institutions from these localities in an effort to establish the Artificial Intelligence Center for Research and Training, install supercomputer systems, and transfer part of the production of graphic processing units (GPUs) for supercomputers to the Vietnamese market.

Specifically, they will have four working sessions on April 25 and 26 with the Management Board of Saigon High-Tech Park (SHTP), the Vietnam National University - Ho Chi Minh City, and CMC Technology Group.

They are also scheduled to meet with the chairman of the Ho Chi Minh City People's Committee to discuss investment opportunities in the semiconductor field in the southern hub.

Late last year, Jensen Huang, president and CEO of the NVIDIA, went on a working visit to Vietnam. During his meeting with Prime Minister Pham Minh Chinh, Huang unveiled the group’s plan to establish a base in the country.

The base aims to attract talents from around the world to contribute to the development of the Vietnamese semiconductor ecosystem and artificial intelligence (AI), whilst also promoting startups, thereby further boosting the digitalisation process in the country.

Potential VN-Index technical recovery hindered by investor hesitation

The VN-Index shows signs of potential technical recovery after last week's 8 per cent decrease, which may stimulate bottom-fishing sentiment among investors in the short term. However, geopolitical tensions in the Middle East and the ongoing exchange rate fluctuations continue to impact investor psychology.

Political conflicts and disputes in the Middle East and exchange rate volatility have led to a tumultuous trading week in the Vietnamese market, marking the most significant decline for the VN-Index since October 2022.

Over the course of four consecutive trading sessions, investors witnessed a decrease in the VN-Index by more than 100 points.

By the end of last week, the VN-Index closed at 1,174.85 points, reflecting a decline of 101.75 points (7.97 per cent). This sharp decrease wiped out the gains made in the first three months of the year.

The market experienced a surge in liquidity, surpassing the 20-session average, as selling pressure intensified and spread across various sectors. Throughout the week, the average liquidity on the HCM Stock Exchange (HOSE) reached 1,070 million shares, representing a 41.23 per cent increase compared to the previous week. In terms of trading value, it amounted to VNĐ26.11 trillion, marking a 36.9 per cent rise.

Analysts from Việt Nam Kiến Thiết Securities Joint Stock Company (CSI) highlight the broad decline across all industry groups, with sectors such as securities, industrial parks and construction experiencing intense selling pressure. Meanwhile, defensive sectors like aviation, pharmaceuticals and telecommunications technology appear less affected.

According to Mirae Asset Vietnam Securities Joint Stock Company, negative macroeconomic factors, including the continuously rising USD/VND exchange rate, Middle East tensions and net selling by foreign investors, are contributing to the sharp decrease in the VN-Index. These macro factors are creating a risky environment for the index.

In the short term, the 8 per cent decline in the past week may stimulate bottom-fishing psychology among investors with ample cash positions, indicating a potential technical recovery for the VN-Index. Technical analysis suggests support levels at 1,176 points and 1,181 points, and if the index touches these levels, a recovery is expected.

Saigon-Hanoi Securities Joint Stock Company (SHS) noted the continuous net selling by foreign investors on HOSE, with large-cap stocks like VHM, FUEVFVND and CTG being heavily sold. The market's sharp decline has broken the previous support range and ended the previous upward trend, resulting in negative investor psychology.

SHS said that the VN-Index has returned to the wider accumulation channel of 1,150 - 1,250 points, losing the momentum to form an uptrend. This suggests the possibility of a swing trend over a longer period, indicating a short-term trading style. However, SHS emphasises that this is still an accumulation movement in the medium term and does not indicate a new downtrend cycle.

Experts from SHS acknowledge signs of improvement in the domestic macro situation, with GDP growth in the first quarter of 2024 reaching a five-year high of 5.66 per cent. However, weak credit growth and high exchange rates continue to pose challenges for the real estate market, and the bond market has yet to see fundamental changes.

Given the unpredictable global economic situation, with low growth and economies entering recession in the EU region, the market is facing adjustment pressure. SHS warns that the VN-Index continues to decline, increasing the risk of deeper thresholds. Short-term investors are advised to reduce their portfolio proportion to a safe level during market recovery periods.

HURC1 proposes to spend VNĐ110 billion for trial operation of Metro Line No. 1

State-run HCM City Urban Railway Company No. 1 (HURC1) proposed to spend nearly VNĐ110 billion (US$4.4 million) for a full-line trial run of Metro Line No. 1 from Bến Thành Market in District 1 to Suối Tiên Theme Park in Thủ Đức City for two months.

The cost of electricity would be more than VNĐ71 billion, salaries for workers more than VNĐ12.5 billion, the cost of operating the route during the test run VNĐ10.7 billion, while insurance and fire costs would be more than VNĐ8.1 billion.

HURC1 proposed to use funds from HCM City's budget to assign its Management Authority for Urban Railways (MAUR) to pay costs.

If the City cannot make a timely allocation, HURC1 will receive an advance from its charter capital to conduct the trial run.

Participating in the trial operation will create favourable conditions for HURC1 to receive the official handover and operation of the metro line and at the same time for the line to be put into operation on schedule.

The metro line is now about 98 per cent ready for operation.

According to the plan, testing will be completed by the end of May 2024 while safety and fire prevention audit work is expected to be completed in July 2024.

Safety certification results as well as the approval process of authorities are among the important factors to complete the project, according to the MAUR.

If everything goes smoothly, it is possible to put the project into a ticket-free trial phase from July to October 2024 and commercial use in the fourth quarter of 2024. 

Construction starts on final sub-project of North-South Expressway

Construction of the Huu Nghi-Chi Lang Expressway, the final sub-project of a mega project to build the eastern wing of the North-South Expressway, began at a ceremony in the northern border province of Lang Son on April 21, with Prime Minister Pham Minh Chinh attending.

The build-operate-transfer (BOT) sub-project runs through Chi Lang, Cao Loc and Van Lang districts, and Lang Son city with a total length of about 59.87km. Its construction is expected to cost 11.02 trillion VND (433.09 million USD), of them 5.49 trillion VND from the State coffer, and to be completed in 2026.

In his remarks, PM Chinh emphasised attention paid to the mega project, which runs from Lang Son to the southernmost province of Ca Mau, traversing 32 localities and three key economic zones.

Its Huu Nghi-Chi Lang sub-project is set to create new development space, and serve as a gateway between ASEAN countries and China, he continued, asking the Ministry of Planning and Investment, the Ministry of Transport and other ministries and agencies to continue their close coordination with Lang Son in order to ensure its progress, quality, safety and efficiency.

Lang Son needs to further closely work with investors during the construction, and give special care to residents in the project area, the leader said.

On this occasion, Chinh handed over donations to ethnic minority households in Lang Son to help them build new houses, and commended Lang Son, organisations and individuals for their response to the movement on doing away with makeshift homes, set to last until 2025, with up to 3,200 houses removed so far./.

Cooling equipment market heats up

Many electronics supermarkets in Hanoi have launched summer promotion programmes, reducing prices for cooling equipment such as air conditioners and fans, as the weather in the north of Vietnam has just begun to be hot and sunny.

Surveys at many electronics supermarket systems in Hanoi showed that businesses have updated the designs of electrical and refrigeration products along with offering preferential prices to meet the needs of customers, stimulating consumption in early summer.

In addition, electronics businesses have also been offering many attractive incentives such as free installation and gift vouchers.

Most stores and supermarkets offer incentives for installation and material costs, discount vouchers, warranty extension, instalments without interest, while focusing on developing e-commerce to increase competition in both price and design. This gives consumers more choices.

In addition to air conditioner products, many customers also look for hanging fans, standing fans and mist fans that have more affordable prices.

Besides attractive prices and incentives, consumers have gradually turned their attention to air conditioning products that save electricity, cool quickly, and are eco-friendly.

Grasping consumer demand from buyers, many electronics businesses have promoted integrated energy-saving product lines (inverters) to serve customers.

Although supermarkets have offered many incentives, the price of electrical appliances and refrigeration equipment with energy-saving functions is still much higher than conventional products.

Representatives of some electronics supermarkets noted that although sales of electronics systems were not high because the North was just entering summer, as hot weather continues, demand for refrigeration products and air conditioners would increase./.

Vietnamese furniture products introduced at Milan Design Week

mbassador to Italy Duong Hai Hung has congratulated Vietnamese enterprises - the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC) and the Handicraft and Wood Industry Association of HCM City (HAWA) - for their initial success in showcasing Vietnamese products in Milan Design Week in Italy -  a design & brand arena of furniture businesses around the world. 

While visiting the Vietnam pavilion at the event on April 18, the diplomat encouraged enterprises to focus on enhancing their competitiveness through good cooperation with design buyers in Italy and Europe, thus penetrating deeper into the European market, as well as other markets.

The Vietnamese wood industry needs substantial and systematic investment to enter and dominate higher market segments, he stressed.
The pavilion opens to visitors from April 16 - 21. Covering a total area of 360 sq.m, it is showcasing outstanding furniture and handicraft products from 35 Vietnamese enterprises.

Vietnam is renowned for its export of furniture, ranking sixth in the world. The debut at the Milan Design Week is a significant affirmation of the creative values of Vietnamese furniture and handicraft industry on the international stage, demonstrating its strength and potential for strong development./. 

Banks requested to further cut lending rates to support business production

Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam to direct banks to further lower lending rates to increase the economy’s access to capital.

The request was made in a directive on major task and solutions to spur socio-economic development, signed by the Prime Minister on April 21.

In the directive, the PM also asked the central bank to proactively take measures to manage credit growth and promote the disbursement of a VND120 trillion credit package for investors and home buyers of social housing projects.

Businesses during a recent meeting with the Prime Minister complained that they still find it hard to access bank loans as the lending interest rates stay high despite subsequent cuts.

The PM raised the question of why businesses complain bitterly of capital shortages and credit inaccessibility, while bank deposits keep rising, and asked bankers to remove bottlenecks to support business production.

Banks have recently moved to publicly disclose average lending interest rates, creating conditions for businesses to access cheaper, more transparent capital sources.

At a press briefing in Hanoi last week, Dao Minh Tu, deputy governor of the State Bank of Vietnam, reported that the average deposit and lending interest rates for new transactions were 3.2%/year and 6.5%/year, respectively, down about 0.5%. /year and 0.6%/year compared to the end of 2023.

He said the central bank would continue to encourage financial institutions to cut costs in an attempt to further lower lending rates moving forward.

He also revealed that the local credit market warmed up in March after two months of contraction in January and February, growing by 1.34% compared to late 2023.

E-records in health not yet up to scratch

Despite being an important part in the healthcare sector’s digital transformation journey, hospitals and medical businesses are still struggling in deploying electronic medical records.

Last November, Nguyen Tri Phuong Hospital was recognised by the Ministry of Health (MoH) as the first public facility in Ho Chi Minh City qualified to deploy e-medical records (EMR). The first-class general hospital started to do so in January.

“The most important mechanism needed now is to have a price list for image diagnosis on the Picture Archiving and Communication System (PACS), meaning that instead of printing images, a new system should be built for EMRs. But currently there is no such policy,” said Dr. Luong Cong Minh, deputy general director of Nguyen Tri Phuong Hospital.

“Because of this, the consequence is that Ho Chi Minh City social insurance only pays for image fees, and the remaining costs related to EMRs are paid by the hospital itself.”

To achieve the standards for implementing EMRs, the hospital has invested over $540,000.

Quang Khoi General Hospital in the central province of Nghe An is in the same boat. Chairman Dr. Nguyen Van Khoi told VIR, “EMR is still not considered as a legal system by social security, so when it is necessary to check all medical record procedures, they still have to manually print paper, sign, and stamp things, thus forcing the hospital do carry out both EMR and paper forms.”

Dr. Tran Quy Tuong, chairman of the Medical Informatics Association, said that if a hospital deploys EMR, eliminating paper medical records, it will be 70 per cent successful in digital transformation. The remaining 30 per cent comes from applying additional technologies such as AI, big data, and high technology.

“However, implementing EMR is a long way away, requiring a lot of time and resources. Unless we have the specific mechanisms for it, we will find it difficult to reach the set targets,” Tuong said.

Currently, more than 50 medical facilities (both public and private) have announced the replacement of paper records with EMRs. Vietnam has about 1,300 exam and treatment facilities nationwide, including about 135 first-class hospitals or higher, according to the MoH.

Medical expert Bao Phi said that first-class hospitals were to deploy EMRs by the end of 2023, but this has not been achieved. Before 2028, all medical treatment facilities must deploy EMRs. However, many obstacles are hindering the deployment, making hospitals hesitant to move forward.

Nguyen Francis Tuan Anh, group advisor on Technology and Solutions at VMED Group added, “We also have to confront these difficulties. For example, when deploying EMR for some hospitals, it must provide free PACS along with EMR deployment. Most hospitals in other nations in the region are equipped with IT infrastructure with appropriate hardware and health systems, such as PACS, before deploying EMR.”

Outlook for pharmaceutical stocks in 2024

At a macro level in which there is still complexity, the pharmaceutical industry is expected to continue witnessing positive business results in 2024.

According to the Asian Development Outlook (ADO) Report published on April 11, the Asian Development Bank (ADB) said that Vietnam's economy is expected to grow 6 per cent in 2024 and 6.2 per cent in 2025 despite a challenging global environment. However, global geopolitical uncertainties and domestic economic structural constraints still have great impacts on this outlook.

Considered originally as a defensive group, the pharmaceutical industry in 2023 recorded positive business results despite many market fluctuations. At the start of 2024, while the macroeconomic context remains complicated, this industry is expected to make breakthroughs and contribute significantly to GDP growth.

The IQVIA organisation said that the Vietnamese pharmaceutical market is experiencing strong development, with a compound growth rate of about 10 per cent per year from 2020 to 2023. Growth rates rose dramatically during the outbreak of the pandemic, when people spent more on respiratory and immune product groups. Growth momentum slowed in 2023 when the pandemic ended. The scale of the entire pharmaceutical industry will reach $8.5 billion, an increase of 6 per cent compared to 2022.

In addition, Vietnam has made remarkable achievements in domestic health insurance over the past two decades and is aiming for health insurance coverage with a participation rate of at least 95.15 per cent in 2025. With per capita healthcare costs expected to reach $402 by 2025, Vietnam is still less than the rates of regional countries, showing the growth potential of the pharmaceutical market.

Together with the goal of increasing health spending per citizen, pharmaceutical spending per capita in Vietnam reached $66 in 2021 and is expected to increase to $95 in 2025. A close relationship between the government and the medical/pharmaceutical industry will help narrow the gap between Vietnam and other ASEAN countries in pharmaceutical spending, realising the goal of increasing the domestic health insurance rate in Vietnam.

VinFast reports Q1 revenue of $302.6 million

VinFast Auto Ltd. (Nasdaq: VFS) announced its unaudited financial results for Q1/2024 on April 17, with total revenues of $302.6 million, representing an on-year increase of just under 270 per cent.

The growth was driven by successful new campaigns like the expansion of VinFast's dealership network and customer interest in new electric vehicle (EV) models.

Meanwhile, deliveries and revenues also soared in Q1 compared to the same period last year, with VinFast delivering around 9,700 vehicles, marking an increase of 444 per cent on-year.

Gross losses in the same period came to a little under $151 million, while the gross margin improved from a negative 173 per cent in 2023 to a negative 50 per cent.

VinFast continues to follow its global growth roadmap by launching its brand in Thailand and Indonesia, establishing a presence in the Middle East, beginning construction of its manufacturing facility in India, and ramping up its sales network globally.

The company launched its brand in Thailand at the 2024 Bangkok International Motor Show and signed letters of intent with 15 dealers, with a target of operating 22 stores in Bangkok.

In Indonesia, VinFast opened its first dealership and began selling the VF e34, a C-segment electric SUV. The company has also implemented a unique battery subscription policy there, specifically designed to incentivise Indonesian consumers to switch to EVs by offering lower initial and operating costs.

While domestic and regional sales still drove most of the company's Q1 revenue, VinFast recorded encouraging growth in the US, with several new dealers reporting encouraging sales figures.

The EV maker has secured partnerships with 10 new dealers, bringing its total US network to 16 dealers across the states of North Carolina, New York, Texas, Florida, Kansas, Connecticut, and Kentucky. These newly signed dealerships will begin operations in the second quarter.

The company also expanded its global footprint with first distribution agreements signed in Oman, Ghana, and Micronesia.

Despite the macroeconomic challenges facing the EV industry, VinFast has established clear plans and remains committed to the target of delivering 100,000 electric cars in 2024, with the majority of deliveries expected in the second half of the year. This effort will be primarily driven by the company's rapidly expanding distribution network, the introduction of new models targeting a broader customer base, and entry into new markets.

Upbeat signs on the horizon right from Q1

Following a challenging 2023, local businesses have returned upbeat results from the first quarter (Q1) of this year, heralding rosier prospects for the rest of 2024.

Thanh Cong Textile Garment Investment Trading JSC (TCM), a large exporter based in Ho Chi Minh City, revealed that the company saw an estimated $39 million in revenue and $2.5 million in profit in Q1, up 6 per cent and 9 per cent respectively, on-year.

According to Tran Nhu Tung, chairman of TCM, "We have already fulfilled 85 per cent of our order target for Q2 and 80 per cent for Q3 and if things continue this way, the company should easily fulfill its targets for the year."

At the company’s 2024 AGM on April 5, shareholders approved targets of a 12 per cent jump in revenue and 21 per cent boost in post-tax profit compared to 2023, to reach around $154 million and $6.7 million, respectively.

Following its Q1 figures, TCM has fulfilled 26 per cent of its full-year revenue and over 38 per cent of its full-year profit targets.

Garment 10 Corporation, a large textile and apparel exporter based in Hanoi, has revealed their Q1 results with a more than 24 per cent jump in total revenue, coming to $47 million, of which exports amounted to $42.5 million, up 29 per cent on-year.

Meanwhile, more favourable situations in the global market will continue to be instrumental for a stronger performance in the petroleum sector.

PetroVietnam Oil Corporation (PVOIL) raked in $1.22 billion in consolidated revenue in Q1 and $12.5 million in consolidated pre-tax profit, up 41 per cent and 5 per cent respectively.

During the same period, the company opened 33 more filling stations, pushing up its total number of filling stations to 789.

PVOIL's targets for the year include $3.45 billion in revenue and just under $31 million in pre-tax profit. The company has now achieved 41 per cent of its profit target following its Q1 performance.

Several businesses in the banking sector have also posted upbeat results for Q1.

SeABank took in a little under $63 million in pre-tax profit, showing a 41 per cent jump on-year, and VIB reported $108 million in profit, equal to last year.

Undergoing a challenging dip in demand, electronics retailer MobileWorld Group is showing positive signs following the first reporting period of the year.

In the first two months alone, the company posted $900 million in total revenue, up 14 per cent on-year.

Nguyen The Minh, head of the Research and Development Division at Yuanta Vietnam Securities, believes that businesses in the garment and textile industry, seafood exports, and transportation will continue to see more robust results this year, along with those in the food, retail and chemicals sectors.

“Furthermore, the industrial real estate sector, availing of steadily surging overseas funding, should also continue to see growth,” said Minh.

Businesses take heed of the dual transition

Combining digital transformation with the green transition has become a more urgent requirement for enterprises to ensure business goals as well as social responsibility.

At last week’s conference on the issue at the Ministry of Planning and Investment (MPI), Nguyen Thi Le Quyen, representative of the MPI’s Agency for Enterprise Development, highlighted that the dual transition trend worldwide involves increasing productivity and economic efficiency, enhancing resilience to climate change, and eliminating greenhouse gas emissions.

“In Vietnam, digital technologies are expected to be the driving force promoting the success of the green transition, realising our goals in the nation’s green growth strategy,” she said.

Specifically, these activities include reducing the intensity of emissions per GDP, transforming the growth model towards greening economic sectors, applying a circular economic model, and promoting sustainable consumption.

Many nations have also been applying this twin transition, which can offer lessons for Vietnam, according to the MPI.

Germany actively contributes worldwide by providing essential knowledge and resources to developing countries. The country has successfully become a carbon-neutral economy through enhancing the efficiency of energy use.

Switzerland offers digital technology initiatives and solutions as key to implementing commitments on sustainable development, such as creating smart agriculture and applying AI and big data. The country limits the waste of resources and renewable energy through a tracking system using blockchain tech.

Singapore applies digital technology and data to promote sustainable development goals, as well as apply sustainable thinking to the management and operation of data and IT infrastructure, for example in using AI or the Internet of Things in environmental management and building construction. Singapore also proactively researches, develops, and tests solutions of greening data centres.

In a specific case, thanks to digital transformation, food producer Eubiz has successfully exported many high-quality Vietnamese agricultural items to the American market and European countries. It has successfully registered its trademark in the US, and is listed among the top 100 best-selling cashew brands in the United States.

“To achieve good outcomes within only a few years, Eubiz has delved into digital transformation activities, promoting sales on major e-commerce platforms,” CEO Nguyen Thi Thanh Hoa told VIR. “The biggest weakness of the agricultural industry is in management and technology. So digital technologies are the best solutions for management.”

To expand suppliers, consumption areas, factories, and then expand the market, if Eubiz only moved in a traditional direction, it would take lots of time to pass through many steps. “But with digital transformation, we can create information coverage of up to thousands or millions of sellers, partners, and customers in only a few months,” Hoa explained.

Besides Eubiz, there are many successful cases on applying digital transformation in businesses. Under the USAID Improving Private Sector Competitiveness (IPSC) project, Thai Xuan Bien in the Central Highlands province of Gia Lai has already developed a traceability tracking system, business management software, and a website for sales. These have helped the company improve performance, productivity, and customer service at a lower cost.

“Thanks to optimising inventory and production management, the company has raised seed output by 15 per cent and revenue has improved significantly,” company director Thai Xuan Bien said.

At Thu Do Multimedia, with the support of the IPSC, the implementation of enterprise resource planning (ERP) is also an important move for the company’s digital transformation.

“Standardising business processes following international practices and ERP solutions in international standards has given positive signals on enhancing performance and speed of coordination among departments, thereby significantly improving labour productivity and customer service quality,” a representative of the company said.

Dai Phuc Hai Packing and Print Service Trading Co., Ltd. has already built a business management system to create quality control and production plans, calculate costs, and monitor manufacturing defect rates.

“We have corrected and cut down 30 per cent of printing errors, standardised production processes, and increased labour productivity. Eliminating waste at every stage of production minimises the environmental impact and significantly saves the production costs,” said company representative Nguyen Thi Duyen.

Australia and Vietnam to develop competitive electricity market

The Australian Embassy in Vietnam and the Electricity Regulatory Authority of Vietnam (ERAV) signed an MoU on April 17 to collaborate on the development of a competitive electricity market.

The signing ceremony was witnessed by Jenny McAllister, Australian Assistant Minister for Climate Change and Energy, and Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan .

Tan emphasised the importance of developing a competitive electricity market that can support Vietnam’s ambitious decarbonisation agenda for Power Development Plan VIII.

The agreement commits the Department of Foreign Affairs and Trade and the ERAV, the energy regulator under the MoIT, to share its experience and develop cooperation activities to facilitate the development of the electricity markets.

The MoU will build on existing activities developed under the partnerships for infrastructure and other bilateral and regional programmes and supports the development of a competitive electricity retail market; provides practical suggestions on the regulatory framework and mechanisms for regulating transmission and distribution; and implements capacity building and training, along with other activities.

In March, Australia and Vietnam elevated their relationship to a Comprehensive Strategic Partnership (CSP) with a focus on climate, energy, and the environment, which is the first of its kind for an Australian CSP.

Gold market reforms paramount to stability

Investigations of gold trading firms are to take place on possible market manipulation amid soaring domestic prices, at the same time as the central bank announced it would resume sales of gold bullion for the first time in over a decade.

Last week, the State Bank of Vietnam (SBV) requested the Ministry of Finance (MoF) to enforce strict compliance among gold trading organisations, especially those dealing in gold bullion, with the use of electronic invoicing in transactions. The SBV will mandate severe penalties for businesses that fail to adhere to this regulation.

Additionally, the SBV has asked the MoF to continue providing information on incidents of gold smuggling and illegal transportation across borders so that it can timely access market data and develop effective gold market management strategies. The MoF is urged to assist the SBV in the customs procedures for the import of gold intended for auction purposes.

A representative from the SBV noted, “We are finalising preparations for a gold bullion auction aimed at increasing market supply. This marks the first time in 11 years that the SBV has organised such an auction.”

Currently, about 15 entities are qualified to participate in the gold bullion auction, involving SJC gold bars.

Economic expert Dr. Nguyen Tri Hieu shared with VIR his concerns about the recent volatility in gold markets, saying that the recent surge in gold prices has led to unpredictable market sessions.

“The geopolitical tensions in the Middle East are prompting increased gold purchases by traders, businesses, and central banks, propelling global gold prices to sometimes exceed $2,400 per ounce, which impacts domestic prices as well,” Hieu said. “Moreover, a surge in domestic demand for gold is being fuelled by dwindling returns on traditional investment avenues such as bank deposits, and sluggish performance in real estate and stock markets.”

He also highlighted the speculative nature of the current market dynamics, noting that the domestic premium on gold transactions is high, and forthcoming regulatory changes aimed at increasing the supply of SJC gold bars could potentially depress prices.

At a recent investors’ day seminar hosted by Dragon Capital, investment director Le Anh Tuan advised against trying to time the market, suggesting a more systematic investment approach. The advice reflects a broader strategy that balances the volatisity of stocks with the stability and potential long-term gains from diverse asset classes like gold, Tuan added.

Loopholes continue to play part in rising NPL ratios

Finance leaders have highlighted the urgency for a stronger legal system to tackle rising non-performing loans and address debt collection hurdles.

Darryl Dong, principle country officer of IFC Vietnam, emphasised the critical need for a robust framework to effectively address the increasing issue of non-performing loans (NPLs) during a seminar last week in Hanoi.

The seminar, which focused on the challenges of NPLs in the consumer lending sector, highlighted the current tough period the industry is facing.

“Consumer credit growth is slowing, impacted by struggles in labour-intensive sectors such as production and exports,” Dong added, noting that adverse market conditions and tightened lending activities have led to increased NPL ratios.

Data from the Vietnam Banks Association (VBA) supports these concerns, showing that the NPL ratio for consumer credit rose from 3.8 per cent at the end of 2023 to over 4 per cent currently. Although finance companies have seen a slight reduction in NPLs, from 15 to 14.63 per cent, the levels remain concerning.

Furthermore, as of the end of February, consumer credit growth experienced a decline, decreasing by 2.5 per cent compared to last year’s December 31.

Nguyen Quoc Hung, vice chairman and secretary-general of the VBA, said, “The main reason for the negative growth in consumer credit is due to a reduction in demand driven by challenging economic conditions, which adversely affected personal and household incomes. This has led to an increased propensity to save as a precaution for the future, consequently diminishing the need for more bank-financed consumer spending.”

According to the VBA, the proliferation of app-based lending platforms, which offer lenient lending conditions, straightforward and fast procedures, easy accessibility, and do not require collateral, has diverted potential borrowers from traditional banks to these digital alternatives.

He also underscored the need for consumer finance companies and banks to enhance their standards and effectively manage NPLs, especially given the rise in borrowers who deliberately default on loans through social media platforms.

Le Quoc Ninh, board member and CEO of MCredit, said that, despite thorough reviews, there are still numerous instances where individuals exploit system loopholes to default on loans, which negatively impacts consumer lending.

“MCredit has also had to learn similar lessons. As a result, in our lending operations, we will have to conduct more rigorous audits in evaluating customers,” Ninh said. “For those who have borrowed, we continually review and provide guidance in cases where they face genuine financial hardships, facilitating debt repayment conditions in line with the State Bank of Vietnam (SBV) policies.”

Le Trung Kien of the Supervisory Inspection Agency at the SBV underscored the need for comprehensive legal guidelines to govern the consumer lending sector.

Ninh also noted that ongoing amendments to Circular No.43/2016/TT-NHNN aim to enhance communication and raise awareness about consumer finance, distinguishing it from loan sharking. In a petition to the Ministry of Public Security, Ninh suggested guidelines for prosecuting individuals deliberately evading debt repayment.

“We urge the creation of standardised procedures to address and prosecute intentional debt evasion. Furthermore, we recommend facilitating access for financial companies to the national population database to minimise identity theft and fraud,” he said.

“We urge media agencies to publish more articles that educate and reassure the public about the safety of accessing consumer finance from legitimate sources. This is crucial in our fight against the dangers of loan sharking,” he added.

At a monetary policy conference in late March, Deputy Prime Minister Le Minh Khai also urged a comprehensive review of the consumer lending landscape to address and resolve prevailing issues, facilitating more efficient operations within banks and financial companies.

“This initiative is aimed at diminishing the dependency on illegal lending,” stated DPM Khai.

He also stressed the importance of inter-ministerial cooperation to enhance credit quality and ensure the maintenance of safe bad debt ratios, in alignment with the overarching financial objectives.

RoK plans to lure more Vietnamese tourists to destinations

Several travel firms from the Republic of Korea (RoK) have unveiled plans to attract more Vietnamese tourists to many of their popular destinations at the recent Vietnam International Travel Mart (VITM) 2024, according to the Korea Tourism Organization (KTO).

Most notably, Gangwon province captured a great deal of attention from visitors at the event with a huge tourism space introducing the locality’s tourism development potential, including local cultural identities as well as new tourism products to attract Vietnamese visitors.

Choi Sung Hyun, director of Gangwon Tourism Organization, revealed that Vietnamese people are very keen on Korean culture, especially K-pop and Korean dramas, and that the number of Vietnamese visitors to the RoK ranked fifth among the total number of tourists visiting last year.

He went on to unveil that Gangwon aims to raise the number of Vietnamese travelers heading to the RoK by 10fold in comparison to last year’s figure of 76,000 people.

For his part, Wu Yong, director of Woori Global Tour Company, said that Korean tourism businesses have recently shown a keen interest in the Vietnamese market which boasts several advantages as it strives to become an industrial hub, thereby emerging as the RoK’s best cooperation partner in Southeast Asia.

Vietnam shares a lot of similarities with the RoK in terms of culture, natural resources, population, and economic growth, while many major corporations in the world are starting to shift their operations to the market, he added.

According to the KTO Office in Vietnam, as many as 420,000 Vietnamese people visited the RoK last year, making it the Southeast Asian country with the highest number of visitors heading to the RoK.

In contrast, the RoK was also Vietnam's largest source of international visitors last year with nearly 3.6 million visitors.

At present, the KTO has been promoting the introduction of the scheme “Top 100 Korean tourist destinations” in the Vietnamese market, of which Gangwon boasts 10 tourist attractions, including Nami Island, Mureung Valley, Samaksan Lake cable car, Gangneung Coffee Road, and Sangeum Mountain Suspension Bridge.

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