Investors should buy in stocks of businesses with strong resilience in the second half of this year, amid the context that the stock market is potentially entering a growth momentum.

Enterprises with good fundamentals, digital transformation and green economic models will attract investors in the near future, said Lê Thành Nam, deputy general director of MB Securities Joint Stock Company (MBS).

MBS recommends a number of potential industries such as banking, securities, steel, retail, fisheries, textiles and sectors that benefit from public investment such as infrastructure construction and stone.

Although the stock market has increased more than 20 per cent since November 2022, the price-to-earnings ratio (P/E) of the VN-Index is still in the lowest price range in the past 10 years. If compared with regional markets, Vietnamese stocks are still about 10-15 per cent cheaper, said Đinh Đức Minh, Investment Director and Operator of VinaCapital VEOF fund and VincaCapital VIBF fund.

Regarding the market's growth momentum, Minh said that with deposit interest rates expected to continue to decrease, the market is forecast to recover in the second half of this year.

Deposit interest rates have decreased by an average of 1.5 percentage points compared to the beginning of this year, even some banks have decreased by 2-3 percentage points. Therefore, it is likely that a part of the bank deposit will be withdrawn and shifted to other investment channels with better returns, such as the stock market, said Minh.

Activities to accelerate the disbursement of public investment in the second half of 2023 will be the driving force behind the economic recovery and development plan in the period of 2023-25, according to BSC Securities.

More than VNĐ110.6 trillion (US$4.7 billion) of public investment was disbursed in the first four months of this year, equivalent to 14.6 per cent of the yearly target and lower than the 18.48 per cent in the same period last year, according to the Ministry of Finance.

BSC expects that directly affected industries such as infrastructure construction, and building materials, as well as indirectly affected groups including commercial real estate, industrial parks, and seaports, will benefit.

BSC also expects foreign investors to maintain their net buying position in the second half of 2023 when corporate profits will gradually improve compared to the first quarter and monetary and fiscal policies help the economy grow.

VinaCapital Securities Inc also recommends infrastructure investment stocks that will benefit from the acceleration of the disbursement of public investment, such as building materials, construction, and real estate.

The trend of shifting production from China will also be a growth engine for industries such as real estate, industrial zones, seaports, and logistics. The downtrend in interest rates will support business results of the banking, securities and real estate industries, Đinh Đức Minh from VinaCapital said.

"We also recommend export and consumption stocks because we expect US and EU customers to increase their orders in the near future. Therefore, the export outlook of Vietnamese businesses will recover by the end of this year. Workers will also have better incomes, thereby pushing up domestic consumption," Minh said.

Banking stocks saw good growth in June; in which joint-stock commercial banks were the leading group with an increase of 5.9 per cent. These are banks whose loan portfolios have benefited from lower interest rates and credit recovery from the real estate market.

Dragon Capital experts said that banking stocks will continue to lead in the second half of 2023 thanks to higher credit growth than in the first half of the year, and an improved net interest income (NIM) ratio.

Dragon Capital assesses the outlook for the banking industry, which currently accounts for the largest proportion of the VN-Index, remaining positive with a forecast EPS growth of about 10 per cent for 2023.

KB Securities Vietnam Joint Stock Company (KBSV) forecasts positive growth for the electricity, information technology, oil and gas, and retail sectors.

According to KBSV, the El Nino weather phenomenon will have a significant impact on some sectors.

KBSV said that there are three industry groups that are expected to benefit from the extreme weather phenomenon of El Nino. Specifically, the rice industry will benefit from the increased demand for rice in the first phase of El Nino; high sugar prices will be the growth momentum of domestic sugar producers; and coal and gas power groups will benefit from rising electricity prices.

SeABank to join VN30 basket

SeABank’s stock was included in the VN30 and VN-Finlead indices by the Hồ Chí Minh Stock Exchange (HoSE) on July 17.

The portfolio of stocks will be effective from August 7. 

The VN30-Index is a tracker for the top 30 stocks with the highest market capitalisation and liquidity on HoSE. 

SeABank (SSB), was officially listed on the HOSE on March 24, 2021, with a reference price of VNĐ16,800 per share on its first trading day. 

It has consistently experienced stable growth since then.

As of July 17, the lender’s market capitalisation reached more than VNĐ71.4 trillion (US$3 billion), doubling its value since its listing on the southern bourse. 

In the first half of the year, the bank’s average market capitalisation was nearly VNĐ65 billion and was one of the largest stocks not included in the previous VN30 basket. 

Being included in the VN30-Index shows that the bank has met the strict criteria of the HOSE, reaffirming its reputation, efficiency in operations, and financial strength in the financial market.  

In June, SeABank successfully issued shares for dividend payment and additional capital from shareholder funds (bonus shares) with a total rate of 20.3 per cent to increase its charter capital to more than VNĐ24.5 trillion. 

Previously, SSB was also added to the Morgan Stanley Capital Index (MSCI) Frontier Markets Index starting from March 1 this year. 

According to experts, stocks included in the MSCI Frontier Markets Index may be targeted by exchange-traded funds (ETFs) that track frontier market stocks. 

Some funds use this index as a reference for investment or replicate its portfolio. 

Banks may brace for impact of property market strain

Việt Nam's property market has been experiencing a downturn for nearly a year, leading to concerns about its impact on banks and the overall economy.

A recent survey conducted by S&P Global Ratings has shed light on a worrisome aspect of the Vietnamese property landscape – the heavy reliance of local developers on short-term funding. This overdependence on short-term funding renders them highly vulnerable to liquidity and default risks whenever access to funding becomes restricted.

By the end of December 2022, the short-term debt of Vietnamese developers had soared beyond their cash balance, surpassing a critical threshold of 100 per cent.

"We believe the strains will be manageable for the banks," said S&P Global Ratings analyst Ivan Tan.

Banks are more likely to suffer nonpayment from commercial real estate loans, which make up 7 per cent of loan books for Vietnamese banks. In a worst-case scenario, sector-wide nonperforming loans (NPLs) would rise to about 4.5 per cent, by our rough estimates, Tan said.

The property market's current woes can be traced back to a period of rapid growth prior to 2022, driven by rising affluence and economic development. As demand surged, real estate firms sought large amounts of capital, facing challenges in accessing bank credit. They turned to the bond market and raised funds through private placements, leading to a significant expansion in Việt Nam's corporate bond market.

In a short span, the Việt Nam corporate bond market witnessed a meteoric rise, growing to around 15 per cent of GDP by 2022 from a mere 5 per cent in 2017. However, the exponential growth of small- and mid-sized property developers that mobilised substantial capital at high interest rates raised red flags for regulators.

To address the situation, a series of reforms were implemented in September 2022, which included the introduction of "Decree 65", imposing more stringent conditions on private bond placements. This coincided with interest rate hikes, creating refinancing stress for property developers and causing the bond market to contract for the first time in nine years. Several real estate projects were delayed or put on hold, and consumer sentiment turned negative as sales dried up and prices corrected.

The banking system's exposure to the property sector is significant, with property-related loans accounting for about 25 per cent of total loans. Mortgage loans make up the majority at approximately 15 per cent, followed by commercial real estate loans at 7 per cent, and corporate bond holdings at 3 per cent.

According to data compiled by KB Vietnam Securities JSC, between the beginning of the year and June 14, late payment of principal and interest on corporate bonds amounted to an estimated VNĐ61 trillion (US$2.6 billion), accounting for 5.7 per cent of the outstanding corporate bonds' value. Real estate dominated the industry structure, representing 71 per cent of the total value of corporate bonds with late repayments, reaching VNĐ42.4 trillion.

Looking ahead, the second half of 2023 is expected to witness around VNĐ150.6 trillion worth of corporate bonds maturing, of which the real estate sector is responsible for VNĐ63.3 trillion, accounting for 42 per cent of the total maturity value.

Data on the Hà Nội Stock Exchange showed around 13 non-banking enterprises, with 12 operating in real estate, will possess bonds valued at over VNĐ3 trillion each to be matured in the second half of 2023, indicating an increased risk during this period.

Despite the challenges, there are positive factors that could contribute to the market's recovery.

"Property dynamics in emerging markets like Việt Nam are inherently volatile," said Tan. "However, we believe the fundamentals favour a recovery. This will be underpinned by supply and demand fundamentals reflecting the country's favourable demographics, a young workforce and a growing middle class."

The Vietnamese authorities have taken measures to protect financial stability. The central bank has cut interest rates multiple times and suspended certain requirements under Decree 65 to ease repayment burdens for developers. The Government has also delayed loan repayments or restructured bad debts for distressed property companies.

Industry insiders have expected the property market will gradually recover by the end of 2023 and the beginning of 2024, driven by Government policies aimed at promoting economic activities and attracting foreign investment. 

HCM City gets cracking on social housing development

The HCM City People's Committee has instructed relevant agencies to incorporate social and worker housing projects into the city’s investment stimulus programme and streamline administrative procedures to help achieve the target of building at least one million social units by 2030.

Demand for affordable and social housing in the city is constantly increasing, but supply is not enough to meet it.

As part of efforts to mitigate the situation, the city government has assigned the departments of Planning and Investment, and Finance to persuade businesses, especially large and reputed ones in the property sector, to develop social housing.

It also instructed relevant agencies to publicise the list of social housing projects seeking investment so that businesses know about and bid for them.

It has tasked the Department of Planning and Architecture and other agencies making zoning plans for new urban areas and industrial parks to include social housing in them.

Existing industrial parks with unused lands need to set aside an area for building housing for workers.

The Department of Natural Resources and Environment needs to make master plans for land use that ensure there is sufficient land for building social and worker housing, and publicise availability for businesses to study and invest.

The Department of Construction has been told to develop a plan for social housing from now through 2030.

It is also tasked with ensuring investors of commercial housing and urban area projects to build social housing on 20 per cent of their lands, failing which it has to repossess the portion and hand it over to other developers.

Economy headwinds challenges banks to promote lending

Despite decreasing interest rates and abundant credit growth quota, experts said it is difficult for commercial banks to promote lending in the context of difficult economic conditions and reduced consumption in the market.

Unlike previous years, the State Bank of Vietnam (SBV) this year allocated the credit growth quota of around 14 per cent in the whole year of 2023 for commercial banks right at the beginning of July 2023 with an aim to boost lending. Previously, the central bank only announced the quota in the last quarter of a year.

In the first half of 2023, the SBV also reduced its policy interest rate four times to promote loans. Accordingly, the refinancing and rediscount interest rates decreased by a total of 1.5 per cent while the maximum interest rate applicable to deposits with a term from one month to less than six months was reduced by 1.25 percentage points per year.

Besides directing commercial banks to review and simplify lending procedures, the SBV also issued a circular to restructure the repayment term and keep the debt group unchanged, which aimed to ease existing borrowers to continue to turn over capital and access new loans.

Despite the SBV’s move, credit growth of the economy is still too slow, with an increase of only 4.73 per cent as of June 30 this year compared to the end of 2022, the lowest level for the past ten years.

According to experts, the SBV has loosened its monetary policy this year quite strongly to fulfil the requirement to push capital for economic recovery as directed by the Government, but it is difficult for the economy to absorb this capital.

In an economic report released in July 2023, experts of the Vietnam Economic Data Joint Stock Company (Vietdata), said the capital absorption of the economy is quite weak. The main reason is due to the high number of enterprises that had to temporarily suspend business and dissolve in the first half of 2023, and the gloomy economic outlook that caused many firms not to dare to invest in expanding business and production.

Firms that really needed capital found it difficult to meet banks’ loan application standards while demand for personal loans to buy cars and real estate also dropped sharply.

Meanwhile, Vietdata’s experts said it will still be difficult for Việt Nam to have a breakthrough in economic growth in the second half of this year. Accordingly, inflation and exchange rate pressures are still present but not too ominous, and Việt Nam's economy is expected to inch up thanks to the Government's supportive policies and solutions to remove difficulties for the real estate and bond markets.

“Though interest rates are gradually decreasing, exports may increase slightly compared to the first half of this year and international tourists to Việt Nam are expected to increase in volume.

It will still be difficult for Việt Nam to have a breakthrough in economic growth in the second half of this year, as the country's economy is still heavily dependent on export,” the report said, explaining that the total import demand data of the EU, China, US, Japan and Korea markets have not shown any significant changes.

In addition, the recovery of the Chinese market was not as expected. China's economy is losing its growth momentum, so the ability to export to this market is also unlikely to break through in the second half of this year.

Under the context of the strong loosening of monetary policy, experts also warned State management agencies to have solutions to control the lending mechanism to boost up loans to productive firms and avoid the capital flow into risky areas or firms that serve as “backyards” of banks, which will further exhaust the economy. 

Vietnam-China border gates resume operation

Na Hinh border gate in Lang Son Province and Ta Lung border gate in Cao Bang Province have been reopened after suspending their operations due to the Covid-19 pandemic, facilitating immigration and cargo transport between Vietnam and China.
From July 28, freight services between Vietnam and China have been restored at the border gates of Na Hinh-Jao Ai after a two-year Covid-19 hiatus.

The re-opening of the border gates has created favorable conditions for trading activities between Lang Son Province and Guangxi of China.

The resumption of Na Hinh border gate has made it become the sixth operating border gate in Lang Son.

Earlier, the international border gate of Ta Lung connecting Cao Bang Province, Vietnam to China was back to normal operation after a three-year pause due to the pandemic. Around 500 people are now estimated to travel through this border gate every day.

Currently, authorities at Ta Lung border gate have run a software system to facilitate customs procedures, contributing to reducing clearance time and costs for imports and exports.

EVN wants higher retail electricity tariffs

Vietnam Electricity Group (EVN) has proposed hiking retail electricity tariffs in the near future to address its financial losses.
The proposal was made in a report sent to a conference titled “Mechanism, Policy and Solutions for Sustainable Energy Development” held on July 28.

Since May 4, the average retail electricity tariff has already increased by 3% to VND1,920.37 per kWh. However, this rate is only one-third of the 9.27% hike in the average electricity price for 2022. As a result, EVN’s financial situation has not improved since the latest tariff adjustment.

At present, retail electricity tariff revisions are based on Decision 24/2017, with adjustments occurring every six months in response to rising input costs. If EVN’s proposal is approved, the next electricity tariff revision may take place at the end of this year.

Persistent losses have caused cash flow difficulties for EVN, affecting its operations from this month until year-end. EVN now owes significant payments to electricity suppliers and may struggle to meet these financial obligations.

To address this cash shortage, EVN has suggested that the Government instruct the State Bank of Vietnam (SVB) to provide it with interest-free loans for debt payments.

Over the past two years, EVN has already cut its maintenance service funding by 10%-50% due to financial problems. Continued cuts to maintenance costs this year will have a detrimental impact on the security of the national power grid.

The untimely adjustment of average electricity tariffs in 2022, coupled with the high costs of electricity purchase, has resulted in EVN losing over VND36,200 billion from power generation and trading.

Recycling seen sending business costs in Vietnam soaring

Businesses in Vietnam may face additional costs exceeding VND6 trillion for recycling paper, plastic and metal packaging, raising concerns among many companies.

A seminar was held yesterday (July 28) to gather feedback on the prime minister’s draft decision, which aims to establish reasonable and valid recycling cost limits for a unit of product or packaging weight. The organizers were the Vietnam Chamber of Commerce and Industry (VCCI), the National EPR Council Office, the Vietnam Beer-Alcohol-Beverage Association (VBA), the Vietnam Plastics Association (VPA), and the Food and the Foodstuff Association of HCMC (FFA).

The decision, scheduled to take effect on January 1, 2024, aims to determine the level of involvement and financial support that manufacturers and importers must provide to strengthen and expand recycling efforts.

While the proposed recycling cost framework has received support from many businesses, concerns are mounting over its feasibility.

The recycling cost limits for a unit of product or packaging weight in the current draft still remain higher than the average rates of recycling in 14 developed Western countries, despite some changes compared to the one drafted on April 27, according to Dau Anh Tuan, deputy general secretary of VCCI.

The recycling cost for aluminum is 1.26 times higher than European average, and for glass, it is a staggering 2.12 times higher.

The estimated annual recycling fee for paper, plastic, and metal packaging alone amounts to VND6,127 billion, excluding other types of packaging and waste products. Such a substantial cost burden is expected to make life harder for businesses, potentially leading to higher product prices and exacerbating current economic difficulties.

Consumers’ livelihoods may also be affected, with the proposed recycling cost for rigid PET plastic bottles leading to an expected price increase of VND61 for a 500ml water bottle, equivalent to a 1.62% rise. Other packaging types, including drums, containers, and transport vehicles, will also be subject to recycling fees, potentially doubling the price hike.

The high recycling cost proposal is mainly attributed to the failure to accurately determine the value of reclaimed materials following circular economy principles. The associations involved called for a more scientific and practical approach to calculating recycling fees.

They proposed a change in the contribution payment system, transitioning from advance payments at the beginning of 2024 to payments based on actual quantities at the end of 2024, to alleviate the financial burden on businesses.

They also suggested implementing a hybrid responsibility approach for each type of packaging, combining self-recycling efforts with financial contributions for any remaining gaps. They recommended not imposing penalties for non-compliance with international practices during the 2024-2025 period.

PM wants bancassurance inspection done this month

Prime Minister Pham Minh Chinh has ordered the State Bank of Vietnam (SBV) and the Ministry of Finance to complete the inspection of bancassurance sales activities this month.

PM Chinh signed a directive on July 27 outlining measures to make access to loans easier for businesses, reduce loan interest rates, and rectify insurance business operations.

The inspection looks into any signs of wrongdoing in bancassurance sales activities and proposes measures against violations.

The deadline for completing the inspection has been set for July.

The SBV is responsible for coordinating with relevant units in inspecting and supervising bancassurance activities, while the Ministry of Finance will lead the inspection of bancassurance and insurers’ operations.

In recent years, bancassurance has grown rapidly, contributing significantly to boosting revenue in the insurance sector. However, this fast expansion has also raised concerns about the quality of insurance policies sold at banks.

In addition to the inspection of bancassurance, the PM instructed the banking sector to review loan conditions and lending procedures. The disbursement of VND40 trillion and VND120 trillion credit packages, aimed at supporting the economy, should also be expedited.

Vietnamese market attractive destination for foreign cosmetic brands

The Vietnamese market is currently considered an attractive destination for foreign cosmetic brands as most cosmetics and makeup products are foreign-made kinds.

The Vietbeauty & Consmobeauté Vietnam 2023 exhibition on beauty and personal care has just opened at the Saigon Exhibition and Convention Center in Ho Chi Minh City’s District 7 with the participation of more than 400 businesses from 25 countries and territories.

Germany-based market research company Statista revealed that the revenue of the beauty and personal care industry in Vietnam is expected to reach US$2.36 billion in 2023.

According to the German market research company’s report on the beauty industry in Vietnam, more and more Vietnamese consumers love natural organic products, and pursue a healthier lifestyle; thus, they prefer products and technologies from Japan, Korea and Europe. The Vietnamese market is currently considered an attractive destination for foreign cosmetic brands with 93 percent of imported personal care products.

The event will take place until July 29.

Vietnam strives to export more animal products

Vietnam strives to export more products from animals including meat and meat products, poultry products (meat and eggs), honey, dairy products (milk and cheese).

The Ministry of Agriculture and Rural Development announced the Government has just approved a national plan to deploy key tasks to strengthen the capacity to manage and control animal diseases and ensure food safety of animal origin from 2023 through 2030 with the orientation to livestock product export.

According to the national plan, by 2025, Vietnam will have 6 breeding areas in Binh Phuoc Province, one breeding area in Tay Ninh Province, and 12 other breeding areas in Binh Duong, Dong Nai, and Ho Chi Minh City that achieve disease-free status. Moreover, four other breeding areas in Binh Phuoc Province and one area in Tay Ninh Province will meet disease-free status according to the World Organization for Animal Health’s standards.

Furthermore, by 2030, provinces and cities in the Southeast region and the Central Highlands region will build epidemic-free zones according to regulations. Amongst regions, 8 breeding areas in Binh Duong, Dong Nai and Tay Ninh provinces will meet the World Organization for Animal Health’s disease safety standards.

Accordingly, Vietnam strives to export processed chicken to Japan, Korea, Singapore, the UK, Europe, and China. In addition, the Southeast Asian country will export eggs and egg products to Singapore, Japan, Australia, and the United States; export pork to Malaysia, China and honey and bee products to Japan, Thailand and other markets in the world.

Alibaba to double investment in Vietnam's emerging manufacturing hubs

The company announced a three-year expansion plan in two major cities of Danang and Haiphong, and the provinces of Binh Duong, Bac Ninh and Long An.

The company will also hire local staff to provide appropriate services and support to Vietnamese exporters in these regions.

Roger Luo, Southeast Asia regional director of Alibaba.com, told a press conference this week that the expansion will help narrow the gap between Vietnam's small and medium-sized enterprises (SMEs) and international partners, enabling them to harness the power of global e-commerce to develop beyond the domestic market.

"We believe the investment will attract more businesses to participate in global e-commerce," he said.

According to Alibaba.com statistics, the average number of buyers purchasing Vietnamese products in March 2023 jumped 55% compared to March 2022, while the number of Vietnamese products on the platform increased by 24%. The total number of buyer transactions in the first half of 2023 increased by 33% year on year.

This shows the growing demand for Vietnamese products in the global market and highlights the potential of Vietnamese enterprises in the digital export sector.

Hanh Sanh Produce - Trading - Services Single Member Co., Ltd, is a Vietnamese electric fan manufacturer. Through the use of digital tools and support from Alibaba.com, the company has expanded its business operations and reached five markets worldwide.

Economic collaboration forum to boost link between HCM City, Porto

An economic cooperation forum between Ho Chi Minh City and Portugal’s Porto city has opened in the European city to promote economic links between the two cities.

This was one of the highlights of the Vietnam-Ho Chi Minh City Festival held in Porto from July 28-30 by the HCM City's Investment and Trade Promotion Centre in collaboration with the Vietnamese Embassy in France concurrently Portugal and the administration of Porto city.

At the forum, leaders of the two cities introduced their economic overviews and policy environment to attract investment, as well as potentials for cooperation in several fields, including services, tourism and culture of each locality.

 The event is one of the highlights of the Vietnam-Ho Chi Minh City Festival held in Porto from July 28-30 (Photo: VNA)

The Vietnamese trade representative in France and Portugal also provided information on opportunities and challenges of the host country market, as well as notes for Vietnamese businesses that want to do business in Europe in general or in Portugal in particular.

José Pedro Busano de Sousa Vieira, Chairman of Portuguese Cultural Association, expressed his delight at the freshly signed Memorandum of Understanding (MoU) on cooperation between the two cities in the 2023-2025 period, thus contributing to promoting the ties of the localities.

Vice Chairman of the HCM City People’s Committee Duong Anh Duc said he believes that along with the free trade agreement between the European Union and Vietnam (EVFTA), the recently signed trade deal between the two localities will be an important premise for further improving the efficiency of cooperation between the two cities, as well as with other localities of Portugal and the EU.

He affirmed that the city administration will constantly improve its investment environment and accompany foreign enterprises in the process of effective, safe and long-term investment, production and business in the locality.

Various brands joining HCM City ‘Shopping Season’

The large number of designer brands joining Ho Chi Minh City’s promotion programme “Shopping Season” has prompted the municipal People's Committee to approve running it until September 15, instead of July 15 as initially planned, according to organisers.

The city Department of Industry and Trade has been assigned to coordinate with relevant agencies to organise promotional events for both local and international designer brands, which will mainly take place from August 25 to 27.

Deputy Director of the city Department of Industry and Trade Nguyen Nguyen Phuong said sales events of designer brands are usually organised in department stores or supermarkets, without the necessary links to bring impactful shopping results.

This year’s effort to bring the best deals from designer brands at a grand hotel is expected to attract a significant number of domestic and international tourists to come and shop while building HCM City into a modern and promising shopping centre of the region.

Tours that introduce the new shopping experiences have been prepared by the city Department of Tourism, with the participation of five tourism agencies.

The first phase of the city’s “Shopping Season”, joined by over 3,000 businesses with about 7,200 promotions, ended on July 15.

The number of participating businesses increased by 7.5% and that of promotion programmes, by about 20% over the same period in 2022.

About 30% of the promotions had discounts exceeding 50%.

Retail was a driving force of economic growth in the first six months of the year, besides finance, banking and insurance. Unlike essential goods, branded goods are seasonal and can be reduced in price substantially, Phuong said, emphasising the lasting quality of designer items.

Canned tuna exports to EU market edge up by 71%

Vietnam’s tuna exports to the European Union made significant breakthroughs during the opening five months of the year, with canned tuna products witnessing a sharp increase of 71% year on year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).      

Most notably, tuna exports to the EU bounced back in May after enduring a decline in April, up 15% compared to the same period from last year.

Germany and the Netherlands were the two largest consumers of Vietnamese tuna throughout the reviewed period with respective increases of 23% and 26%.

Until the end of May, more than 31 enterprises had bene involved in exporting tuna to the EU market. Among them, FoodTech, Bidifisco, and Yueh Chyang Canned Food made up the three leading exporters that accounted for more than 40% of total tuna export turnover.

According to VASEP, due to the impact of inflation, high inventories, and rising prices of canned tuna, EU importers tend to increase their imports from nations with preferential tariffs, including Vietnam.

Truong Dinh Hoe, general secretary of VASEP, predicted that seafood exports, especially tuna exports to the EU market, would gradually recover ahead over the coming months thanks to rising demand during the festive season, along with other positive signs in the consumption markets.

Hoe noted the rebound in seafood consumption in May was a good signal for a general hike in aquatic exports during the year-end period.

Apart from these advantages, the VASEP leader advised enterprises to devise a proper marketing strategy in a bid to further boost aquatic exports to the EU market amid the global price of skipjack tuna not cooling down, along with making use of the preferential tariff quota that the EU has granted for Vietnamese canned tuna products under the Vietnam-EU Free Trade Agreement (EVFTA).

Vietnam Airlines moves to increase flight frequency to the UK

National flag carrier Vietnam Airlines has increased the frequency of flights running between Vietnam and the UK since July to meet the increasing travel demand between the two countries.

At present, the Hanoi-London route sees three flights fly per week, with aircraft departing on Tuesdays, Thursdays, and Sundays. Meanwhile, the carrier has increased the number of flights on the Ho Chi Minh City - London route to two per weeks on Fridays and Saturdays.

From October, the airline will increase the frequency of flights between Hanoi and Ho Chi Minh City to the UK to four and three weekday flights, respectively.

Phan The Thang, head of Vietnam Airlines' branch in the UK, said that since the first regular flight between the UK and Vietnam in January 25, 2022, after a gap of almost two years caused by the COVID-19 pandemic, the airline has served 111,000 passengers on the routes.

Thang also revealed in the first six months of this year, the airline witnessed a 5.5-fold increase in passenger transport revenue compared to the same period from last year.

With the operation of every-day flights to London starting from this winter, Vietnam Airlines hopes to soon achieve its pre-pandemic operation target, said Thang.

Vietnam Airlines’ first flight to the UK landed at Gatwick Airport on November 9, 2011, before its operations switched to Heathrow in 2015.

On December 1, 2015, Vietnam Airlines began using the Boeing 787 Dreamliner for its UK flights, becoming the first carrier in Southeast Asia to fly directly to Europe on this new aircraft.

Car registration fee cut helps boost industry recovery

Government reductions in registration fees and an extension on the payment of excise tax could be the main drivers for the recovery of the auto industry in the second half of this year. 

It has been a gloomy picture for the auto industry in the first five months of this year as only 113,500 units were sold, a 36 percent year-on-year plunge.

The sales of personal cars and assembled cars decreased by 43 percent and 40 percent respectively due to weak demand and high interest rates.

This indicates ominous signs for businesses in the Vietnamese auto industry.

Starting from July 1, Vietnam halved car registration fees for locally-made or assembled cars.

Vietnam issued the same 50 percent cut for six months in 2020 and 2022 leading to a doubling in sales in both cases.

In addition, excise taxes on domestically manufactured or assembled automobiles that are payable in June, July, August and September will be suspended until November 20 under a newly-issued government decree.

The State Bank of Vietnam decided to lower interest rates on June 16 for the fourth time this year to support economic recovery. Nguyen Duc Hao, an analyst from securities brokerage company VNDirect, expected that an interest rate decrease in the second half could spur purchasing demand for luxury goods such as cars.The State Bank of Vietnam decided to lower interest rates on June 16 for the fourth time this year to support economic recovery. Nguyen Duc Hao, an analyst from securities brokerage company VNDirect, expected that an interest rate decrease in the second half could spur purchasing demand for luxury goods such as cars.

Hanoi to expand investment promotion with north-central provinces

An exhibition to promote and introduce potential and investment opportunities between Hà Nội and provinces in the north-central region is currently taking place in Đồng Hới City, Quảng Bình Province.

The exhibition, with the theme "Connecting for development together", runs until Monday and has been organised by the Hà Nội Promotion Centre on Investment, Trade and Tourism.

The event's aim is to introduce potentials, strengths, images, cooperation and investment promotions between Hà Nội and north-central provinces, especially Quảng Bình.

It also aims to support businesses to introduce products, connect and seek business cooperation opportunities, contribute to raising awareness and effectively implement the "Vietnamese people use Vietnamese products" campaign.

The exhibition introduces achievements, potentials, investment environment and tourist destinations in Hà Nội.

Typical handicraft products from traditional craft villages in Hà Nội are also on show to seek future cooperation with different provinces and cities.

Nguyễn Thị Mai Anh, deputy director of the Hà Nội Promotion Centre on Investment, Trade and Tourism, said that Hà Nội was particularly interested in calling for investment and looking for opportunities for craft village products and tourism.

The work aims to widely connect different provinces and cities across the country.

Thanks to this innovation, in the first six months this year, tourists to the capital city increased 2.5 times compared with the same period last year, she said.

The Hà Nội People's Committee hope to innovate quality and showcase a range of services to attract more and more tourists from all over the country to the capital city.

Hà Nội also simplifies procedures to call for domestic and international investors and ease enterprises’ difficulties to have more effective cooperation with partners.

Urgency to continue business condition reform: seminar

Deputy Minister of Planning and Investment Tran Duy Dong emphasised the urgency of fostering business environment reform, particularly in relation to the slowdown in recent efforts to improve business conditions at a seminar titled "Removing Barriers to Business Conditions for Business Development" held in Ha Noi on Thursday.

He highlighted the Government's unwavering commitment to improving the business environment and national competitiveness in Resolution No 01/NQ-CP, issued in 2023, with four key solutions to achieve this goal.

The first area involves reforming the list of investment sectors, conditional business activities, and business requirements. The second area focus on the continued promotion of management reforms, specialised inspections of import and export goods and the effective implementation of the National Single Window. The third area entails rectifying inspections and examinations of enterprises to ensure they do not disrupt normal business operations. The fourth area concentrates on implementing solutions to enhance the quality of business support services.

Nevertheless, Dong expressed concern that efforts to improve the business environment have slowed down since 2020, receiving insufficient attention from ministries, sectors and local authorities.

Over the past two years, barriers related to business conditions have expanded with certain ministries and departments having issued and enforced stricter regulations concerning business requirements, Dong said. He noted that if this situation is not rectified promptly, it could undermine the progress made during the previous reform period.

The Ministry of Planning and Investment has conducted a comprehensive review of business reform between 2016-19. The review showed a significant number of decrees were issued, amending multiple regulations and simplifying approximately 50 per cent of business conditions.

Regarding the list of conditional business lines, there have been revisions over the years. The initial list of 267 industries was reduced to 243 in 2016 and further to 227 according to the Investment Law of 2020.

However, Nguyen Thi Minh Thao, head of the Business Environment and Competitiveness Research Department at the Central Institute for Economic Management (CIEM), indicated that while the number of conditional business lines has decreased, the content has expanded. Many industries have regulations on business conditions in specialised laws, surpassing the number listed in the Investment Law of 2020.

Some businesses face difficulties due to excessive certificate requirements, hierarchical licensing restrictions, and frequent adjustments to sub-licences, even when there is no change in content, Thao said. She cited examples of shortcomings in the business environment including regulations on fire prevention and fighting and environmental permits.

To further reform and improve the business environment, CIEM proposed various measures to address these issues. They recommended further reductions in the list of investment and conditional business regulations, as well as simplifying business conditions. They also called for stricter control over the addition of new regulations that could create unnecessary barriers. Improving the effectiveness and efficiency of consultation and examination of legal documents was another crucial aspect emphasised by CIEM.

During the workshop, representatives from various associations and businesses expressed their expectations for the Government to reinstate the reform programme and enhance the business environment.

They emphasised the importance of continuous direction in implementing solutions to improve the business environment. These solutions include amending legal regulations on business conditions, promptly addressing enterprise difficulties and shortcomings, and strengthening monitoring and independent assessment of reform outcomes.

Deputy Minister Tran Duy Dong said the ministry is currently conducting a comprehensive review of conditional business sectors and business requirements across 15 areas of State management overseen by various ministries and sectors. This review aims to identify difficulties in the business environment, including barriers related to conditional business sectors, business requirements and related administrative procedures.

"Based on the identification of shortcomings in the business environment, industries, and business conditions, the Ministry of Planning and Investment will propose corresponding plans and solutions to the Government and the Prime Minister," Dong said. 

Firms advised to pursue opportunities while carefully managing risks amidst global recession

Selecting a suitable business strategy amidst the current global recession is crucial to Vietnamese firms, Vu Dang Vinh, General Director of Vietnam Report JSC, said, advising them to carefully manage risk while actively pursuing opportunities.

Vinh said the present slow economic growth and potential risks from new variables require businesses to work harder to raise their competitiveness and bring into full play opportunities to grow further. 

He said given not so positive signs of the economy in the first two quarters of this year, many firms have chosen to take a cautious attitude. However, in any crisis, even during the hardest time, new ideas and opportunities still exist for those who know how to seize them, he said, pointing out that firms can reposition themselves and change their business strategies to suit the situation.   

For the stock market, which is on the path of recovery following manipulation cases, Vinh stressed the need to put forward a good marketing strategy, and regarded consolidating the reputation and image of businesses in the eyes of investors and shareholders as a key to maintaining confidence in the market.

Earlier, Vietnam Report announced the list of the top 50 prestigious and effective public companies of 2023 (VIX50), which saw newcomers like Airports Corporation of Vietnam, Binh Minh Plastics JSC, Viettel Construction Joint Stock Corporation, and Vietnam Rubber Group, among others.

The businesses have been honoured for their efforts and impressive achievements given uncertainties over the past time.

Notably, there were 29 companies with market capitalisation exceeding 1 billion USD, 25 with revenue of over 1 billion USD, and 43 with profits surpassing 1 trillion VND (42.28 million USD).

The banking sector dominated the list with 15 representatives, followed by the real estate industry with six firms; construction and building materials, five; and transportation, logistics, food and chemicals, each with four.

VIX50 provides a panorama on operations of public enterprises, as well as the resilience and leading role of major ones.

European firms’ confidence in Vietnam's business climate slightly delcine

The confidence of European business stakeholders in Vietnam’s investment environment during the second quarter of the year reveals a modest decline, reflecting prevailing market conditions, according to details given by the Business Confidence Index (BCI) released by the European Chamber of Commerce in Vietnam (EuroCham).      

Accordingly, the BCI slipped by 4.5 points in terms of European business confidence towards the Vietnamese market, with the current score of 43.5.

Commenting on the BCI, Gabor Fluit, chairman of EuroCham, emphasised that the country’s economy relies heavily on manufacturing and exports, with it taking a major hit from the tough global situation. This decline occurring in exports and orders has had a major impact on European businesses and the overall business community, with the BCI clearly reflecting this current gloomy outlook.

However, he underlined the necessity for the Government to come up with long-term plans to address the recent power shortage problem, considering its cyclic nature.

The report delivers moderately reassuring news as it reveals a marginal 2% increase in the proportion of businesses anticipating economic stabilisation or improvement ahead, thereby bringing the total up to nearly one-in-three respondents. 

The BCI reveals a challenging outlook moving forward, with a significant 10% increase in negative responses regarding the current business situation. This growing sense of caution is further reflected in a 6% rise in terms of negative sentiment for the upcoming quarter.

However, amidst these challenges, there is also a glimmer through some encouraging news. The report shows a 9% increase in the number of business leaders who assess their business prospects positively for Q3 of 2023 compared to their assessment for Q2 of 2023.

Firms are prudently assessing the landscape, focusing on optimising revenue and orders, with a marginal increase of 4% in the proportion of companies anticipating a decline in these areas. Additionally, they are implementing a proactive approach as 7% more companies plan to carefully manage investments in the upcoming quarter. It is intriguing to note that despite these issues, workforce planning remains stable, duly reflecting a resolute commitment to maintaining stability regardless of the prevailing conditions. 

Amid the current cautious business climate, respondents highlighted regulatory reforms and the availability of skilled labour as crucial drivers for their companies' growth. Regulatory reforms are deemed to be the primary factor contributing to the growth of the service sector, while the manufacturing sector places significant emphasis on the availability of skilled workers.

Securing visas and work permits for foreign workers continues to pose persistent challenges, with over 80% of surveyed businesses encountering various difficulties at some level. The prolonged processing time for obtaining visas and work permits emerges as the most pressing issue. Additionally, nearly half of surveyed companies struggled with justifying the hiring of foreign workers, a factor hindering knowledge transfer to Vietnamese personnel in three-quarters of the companies surveyed.

The report highlights the pressing concern of power shortages that have significantly impacted enterprises during the reviewed period. Although there has been some relief gained due to recent rainfall, around 60% of respondents experienced repercussions of these shortages on their own operations. This manifested in reduced operational efficiency, decreased productivity, and disruptions in production and services. Ensuring long-term solutions in order to address power supply stability remains a priority for sustaining business performance and overall economic resilience.

Furthermore, the report highlights the perception among European business leaders of inadequate infrastructure development in the nation, with 53% expressing their view that it is currently "very inadequate" or "lagging behind". However, the Vietnamese Government has been taking proactive measures aimed at addressing this concern, with there being a strong focus on accelerating key infrastructure projects, particularly in the area of highways. 

Despite the challenges, the nation continues to attract foreign investors, with 48% of respondents expecting an increase in their company's foreign direct investment (FDI) in the country next quarter. However, a total of 40% of firms expressed no plans for elevated FDI, marking a 4% increase from the previous BCI. Nevertheless, the Vietnamese market remains firmly positioned among the top five investment destinations for over one-third of enterprises, underscoring its enduring appeal.

Respondents highlighted the importance of improving the regulatory environment, developing infrastructure, and ensuring access to financing as a way of enhancing the country’s overall attractiveness for further FDI. The report also emphasises that unclear regulations and onerous administrative procedures are the primary barriers which hinder FDI, with 53% and 50% of businesses, respectively, citing them as the most significant regulatory obstacles impeding their operations in the nation.

Intentions and actual relocation of operations from China to Vietnam are subdued, with the majority, 81%, of companies not having relocated any operations. Among them, only a marginal 3% are currently considering relocation, while 2% have actively planned for the move.

The report further highlights concerns expressed by close to 40% of surveyed respondents regarding the forthcoming implementation of the global minimum tax. Similarly, around 42% of businesses report inadequate understanding of Vietnam's Personal Data Protection Decree, indicating the need to delve further into this matter.

Awareness of the Carbon Border Adjustment Mechanism (CBAM) is demonstrated by 27% of respondents, with only 43% perceiving CBAM as relevant to their business activities. Compliance requirements, bureaucratic procedures, and the necessary adaptation of business processes stand among the top concerns expressed regarding CBAM.

The survey reveals that over half of the businesses surveyed have benefited from the EU-Vietnam Free Trade Agreement (EVFTA). Among these beneficiaries, 35% of business leaders have reported gains from tariff reductions. Despite these gains, firms continue to face challenges in fully capitalising on the agreement, with administrative procedures coupled with a lack of understanding remaining the main barriers to full capitalisation.

How to leverage big data to strategize digital banks in Vietnam?

Data is playing a key role in the operation of commercial banks, offering a huge resource to help the banks make timely and sound decisions.

As the use of big data is not easy for Vietnamese commercial banks, experts in the banking sector will share their recommendations to utilize big data.

The Vietnam International Bank (VIB) was among the first banks to successfully apply Big Data & AI to issue credit cards within a record of 30 minutes. VIB is among a few banks in Vietnam that have realized the urgent need to use big data as a new source to enhance the customer’s experience and engagement.

Using big data, Techcombank developed financial management solutions individualized to every customer, helping them to make plans and use support tools of the bank to realize their financial goals.

With Techcombank Mobile app, Techcombank was awarded “Most Innovative Mobile Banking App” by Global Business Outlook last year.

At a recent seminar entitled “Finovate Innovation Day: When Innovation Meets Sustainability” in Hanoi, Mukesh Pilania, Executive Vice President and Head of Digital Banking for Techcombank, affirmed that data is the new oil. Digital is the commercial engine that uses that oil to drive new customer experiences, new growth in the industry, and automation.

According to experts at the event hosted by JobHopin and the Vietnam National Innovation Center, data, especially big data, can be characterized differently depending on how you look at it.

In the banking sector, it can be characterized by the four Vs – Variety, Velocity, Volume, and Value. The question raised is what kind of data are banks in Vietnam collecting and processing?

According to Mukesh, data is actually a liability, especially for big organizations.

“We have lots and lots of data, a huge amount of data. And we have huge costs to maintain that. It will remain a liability until you use the data to realize its benefits and create value,” said Mukesh, adding, “The most important of the four Vs, to me, is value. What data we collect and how much data we collect is not as important as stronger analytics to derive insights from the data and create real value, whether in terms of identifying new growth opportunities, gaining better customer insights, or generating opportunities for cost reduction and automation.”

Over the past few years, leading banks have agreed that big data has brought many practical benefits to business and management, helping them create breakthroughs and rapid growth in a short time.

Tu Duong, Deputy Head of the Digital Banking and Retail Banking Division of SHB, says a lot of banks in Vietnam are still collecting very basic data: data about the customers, transaction data, and interaction data. Obviously all three categories of data are something banks should have, but they are not enough to create breakthroughs.

He insisted that it’s not about the volume of data, or the variety of data. It's what banks do with it.

‘What do we do with that data’ is the next question. I think there's now a fourth category. A lot of banks, who've gone through the first stage of this digital transformation, or the second stage, are going directly to the fourth category of data, which banks don't normally collect - social media data. And through these four categories of data, you start to get a clearer picture of who your customers are, and then get insights. And then you can provide a lot more value to the customer,” said Tu Duong.  

With the help of big data, banks can get enough information about customers' spending habits, behavior, sources of income, loans, and services they’re using, to offer promotions customized for each customer. That information is also a basis for assessing risk, making loan appraisals, expanding services, and cross-selling products to targeted customers, said Tu.

Once banks have the data, Tu raised a question: ‘How do I use this data to bring the most value to my customers?’

“I think the holy grail for any organization is to build a one-to-one relationship with their customers. The one-to-one relationship means ‘I understand who you are, I understand how we're changing, and I can provide you with a product or a service as and when you need it’. I think all organizations are heading towards that, and I believe, with the way data is advancing, we'll get there,” said Tu.

With collected data banks can create customer segments, provide services matched to each segment, launch effective marketing campaigns, and improve service quality by collecting and analyzing customer feedback.

To realize these goals, banks need a suitable strategy, mechanism, and tools, said Quynh Pham, Country Manager of EdgeWorks, a data center investor and services company.

She pointed out that as recently the world is talking about edge computing, decentralized data, where we bring the data processing and storage and collect towards the edge that is closer to the end-user.

“And with that kind of technology, it will support they're not only just the bank is retail, is for hospitality, is for education, so on and so forth, can process the data at the edge to collect the valuable data, not just anything. Like right now we collect anything, but then with the edge computing and edge of facility, we can process the data at the edge and just collect the valuable data for the core business or for the main application that you need to use that kind of data,” said Quynh.

With countless applications of big data and its popularity in all fields, banks in Vietnam are making the greatest efforts to put new technologies into practice in the digitalisation race, thereby enhancing competitiveness, improving profitability and service quality.

Outstanding young startup entrepreneurs honoured

Eighty-one young entrepreneurs with outstanding startup results in 2023 were honoured at a ceremony in Hanoi on July 30 evening.

Dang Hong Anh, Vice President of the Vietnam Youth Federation and President of the Vietnam Young Entrepreneurs’ Association, said that the startups run by those entrepreneurs produced a combined revenue of nearly 1.7 trillion VND (71.7 million USD), earned total profits of 104 billion VND, and paid 39 billion VND to the budget last year.

First held in 2015, this award is one of pioneering activities of the Vietnam Young Entrepreneurs’ Association in implementing the Government-launched national startup programme.

Chairman of the Party Central Committee’s Economic Commission Tran Tuan Anh spoke highly of contributions by young entrepreneurs to the nation’s development.

He expressed his hope that the awardees will exert more efforts to turn Vietnam into a strong and prosperous country.

On the same day, the Vietnam Young Entrepreneurs’ Association held a workshop themed “Learn to lead”, during which participants shared their experience in production and business as well as their startup journey.

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