As interbank interest rates have continued to cool down, the central bank has withdrawn more money from the banking system.

Baoviet Securities Company (BVSC) said in a recent report that interbank interest rates have continued decreasing. The overnight rate dropped 87 basis points and the one-week rate slid 80 basis points.

The central bank issued treasury bills amounting to VND103 trillion, with terms of one, two and four weeks, and sold U.S dollars in its foreign exchange reserves, SSI reported. The move helped the Vietnamese dong maintain stability against the U.S. dollar.

Meanwhile, the central bank pumped nearly VND1.6 trillion for a seven-day term at an interest rate of 3.5% into open market operations, in which some VND7.7 trillion of the seven-day term in the market fell due.

According to BVSC, the central bank withdrew a net total of over VND88 trillion from the open market and treasury bill issuance, the highest net withdrawal since 2019. “The strong withdrawal last week showed interbank interest rates have not fallen deeper,” BVSC analysts said. Earlier, interbank interest rates fell by over 170 basis points, as the bank net injected VND34 trillion into the market.

Over the past two months, banks’ liquidity faced lower pressure from rapid credit growth. Last week, the Vietnamese dong remained stable though the U.S dollar rose. The interbank interest yield curve flattened, with the Vietnam exchange rate against the U.S dollar standing at VND23,393.

VND1 trillion proposed for interchange of National Highway, Ben Luc-Long Thanh Expy

An interchange of National Highway 51 and Ben Luc-Long Thanh Expressway will require an estimated VND1 trillion if it gets approved by the State Capital Management Committee.

The Vietnam Expressway Development Investment Corporation has written to the committee seeking approval for the investment.

The diamond interchange is designed to connect the overall system of southern highways, including the Bien Hoa-Vung Tau Expressway and the Long Thanh International Airport. The construction investment of the interchange will be divided into two phases.

The 57-kilometer Ben Luc-Long Thanh Expressway will run from the junction with the HCMC-Trung Luong Expressway and Beltway No. 3 to the Bien Hoa-Vung Tau Expressway. In the first phase, the intersection of the expressway and National Highway 51 will be built as work on the Bien Hoa-Vung Tau Expressway project has not started. The overpass in the interchange will be designed in the second phase to allow the Ben Luc-Long Thanh Expressway to run through and connect to the Bien Hoa-Vung Tau Expressway.

The Vietnam Expressway Development Investment Corporation proposed building the National Highway 51 overpass with the same scale as the phase 1 project and two side streets connecting with the National Highway and the Bien Hoa-Vung Tau Expy.

The total investment is estimated at around VND1 trillion.

According to the plan, the construction of the interchange in the first phase of the Ben Luc-Long Thanh Expressway project will start at the beginning of 2024 and be completed 18 months after the date of commencement.

Firms urged to limit risks in foreign trade
     
The trend of international economic integration has been opening up many trade opportunities for the Vietnamese business community. However, there are also many scams that cause local firms to suffer heavy losses. This was heard at a workshop "Prevention of disputes and fraud in international trade - experiences for Vietnamese businesses from the case of cashew nut containers" held in Ha Noi on Tuesday.

In March, the business community expressed concern regarding a case in which cashew nut containers had problems with shipping documents sent to Italy and Turkey, meaning there was a risk the shipments would be lost.

With the desire to share experiences on the case with the business community as well as help improve their understanding of international commercial law, the Viet Nam Chamber of Commerce and Industry (VCCI) in collaboration with the Ministry of Industry and Trade organised the event. This also aimed to identify similar risks in commercial activities; thereby preventing and avoiding disputes and fraud when implementing import-export transactions.

Dau Anh Tuan, head of VCCI’s Legal Department, said according to the Global Association of Anti-Fraud Professionals, every year, businesses globally are scammed and lose about 5 per cent of their revenue. The average scam is worth about US$1.7 million. In 2022 alone, up to 46 per cent of global businesses said they were victims of fraud and economic crime.

In Viet Nam, 52 per cent of businesses have experienced fraud or economic crime in the two years before the survey, higher than the 46 per cent rate in the Asia-Pacific region and 49 per cent globally. Meanwhile, Vietnamese businesses have not paid attention to anti-fraud measures. Also, there are few Vietnamese enterprises reporting to the management agency for fear of information being leaked to the public.

Hai Phong looks to attract more RoK investments

The People’s Committee of Hai Phong city and the Korea Chamber of Commerce and Industry (KCCI) jointly organised a conference on investment promotion with the Republic of Korea (RoK)’s enterprises and another with supporting firms of LG Group in Seoul capital and Gyonggi province on August 23-24.

At the conference in Seoul, representatives of Hai Phong city People's Committee presented the investment registration certificate for new projects from the RoK, including Hai Phong - Nam Dinh Vu Logistics Centre Projects 1&2 with a total investment of 98 million USD, Posco Vietnam Processing Centre worth 18.5 million USD, and KREMS Project with an additional investment of 35 million USD.

Regarding foreign investment attraction, Hai Phong ranks sixth nationwide with 872 projects totaling 23.76 billion USD. Of the total, 173 projects worth 9.65 billion USD have been invested by Koreans, making the country rank first in both the number of projects and value among 42 nations and territories pouring capital in the port city.

In the first seven months of this year, the city attracted 1.1 billion USD worth of FDI, ranking fifth nationwide. In the period, Korean investors poured 71.86 million USD into the city. LG Group has to date invested 7.24 billion USD in its projects in Hai Phong, accounting for 37.13% of the total FDI capital lured by the city.

Vietnam witnesses improved mechanisation in agriculture

Mechanisation in agricultural production will help Vietnam become one of the top ten leading agricultural processing hubs in the world by 2050, Deputy Minister of Agriculture and Rural Development Tran Thanh Nam said on August 24.

The deputy minister was speaking at AGRITECHNICA ASIA Live 2022, which covers agricultural developments and technology in the region. Nam said that the Ministry of Agriculture and Rural Development was promulgating a decree which would be a legal basis for the development of mechanisation in agriculture.

Currently, the number and types of machinery and equipment for agricultural production are increasing rapidly in Vietnam. Specifically, between 2011 and 2021, the number of tractors of all kinds increased by 60%, water pumping equipment 60%, combine harvesters 80%, and tools for drying agricultural products 30%.

Machines for feed production increased 91%, aqua feed processing increased by 2.2 times and those for spraying pesticides increased by 3.5 times.

The whole country now has about 7,800 mechanical enterprises, more than 270 scientific research organisations and 538,700 mechanical workers. There are more than 4,000 agricultural co-operatives working with 1,867 enterprises in the agricultural production, processing and consumption of agricultural products.

Bond coupons outpace savings rates

The Vietnam Bond Market Association (VBMA) said in a recent report that the first half of August saw six private placements worth some VND2.2 trillion, mainly from banks.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has issued eight-year bonds worth VND1.5 trillion at a floating coupon. The coupon rate was determined as the average of four state-owned banks of 12-month interest rates plus an interest margin of 0.9%. After three years, it will be determined as the reference plus an interest margin of 2.57% annually. With the current annual deposit rate of 5.6%, Vietcombank had to keep its long-term interest rate at around 6.5% annually and then increase it to 8.1% per year.

Viet Capital Commercial Joint Stock Bank is selling bonds worth VND980 billion to the public. The debt, with terms of up to seven years, offers a yearly interest repayment of 8.6%.

According to VBMA, Masan Group Corporation has approved the plan on a public offering of five-year bonds worth VND700 billion. The bonds would pay a yearly interest of 9.5% for the first two terms and then pay variable interest rates for the remaining terms.

Over the past two years, only financial institutes, including banks, securities companies and financial companies, remained active in the corporate bond market. July witnessed 22 private placements worth over VND18.6 trillion, most of which were issued by commercial banks, VBMA reported.

According to FiinGroup, the coupon rates of corporate bonds issued last month ranged from 4.3% to 7.6%, significantly higher than the average interest rate of the first half of this year at just 4.35%. Regarding the property sector, only Ha An Real Estate Trading Investment Joint Stock Company issued bonds with an annual nominal interest rate of 11%. Earlier, FiinGroup’s statistics showed average coupon rates in the half of the year remained identical to last year, standing at 8.8% annually.

The increase in coupon rates may be a signal for market recovery after its long silence. The corporate bond market has remained quiet since the Tan Hoang Minh Group case emerged in April. Once the bond market recovers, enterprises can raise funds from the market, especially when banks have tightened control over credit growth due to inflation concern.

Viet Nam-Australia Business Champions Initiative launched
     
The Ministry of Planning and Investment (MPI) on Wednesday afternoon cooperated with the Australian Embassy in Viet Nam to organise a conference on the Viet Nam-Australia Business Champions Initiative.

The event was part of the Australia-Viet Nam Enhanced Economic Engagement Strategy (EEES), which was jointly developed and publicly released at the end of 2021.

The inaugurated Viet Nam Business Champions chosen by the MPI are senior leaders from three large corporations in Viet Nam - TH Group, Vietcombank and Hoa Phat Group.

In addition, businesses should learn more about the provisions of bilateral and multilateral agreements between the signatory countries.

With helpful information and guidance, the conference expects to attract more Vietnamese enterprises to join the initiative, expanding trade in Australia. 

Thanh Hoa to start work on three IPs in 2025

Thanh Hoa Province will break ground on three industrial park projects with a total investment of some VND800 billion in 2025.
The government of the northern province has passed a plan to develop the Hai Long-Xuan Khang industrial zone project in Nhu Thanh District, with a total area of some 49 hectares.

In July, the provincial government approved the Khe Ha and Hau Hien industrial park projects located in Thuong Xuan and Thieu Hoa districts, respectively.

The Hai Long-Xuan Khang industrial zone project will require nearly VND350 billion in investment and get off the ground in early 2025. The industrial park will mainly serve firms active in the food and woodwork processing, construction materials, animal feed processing and plastics manufacturing fields.

At the Hau Hien industrial zone project, which will cover over 17.5 hectares and cost VND125 billion, tech-based sectors and eco-friendly projects will be prioritized. Work on the project will begin in early 2025.

In addition, the Khe Ha industrial park will cover some 50 hectares of land in Luan Thanh Commune and require VND360 billion in investment. Work on the project will start in the first quarter of 2025.

The Khe Ha industrial park will attract industries such as apparel, food processing, woodwork production, farm produce processing and plastics production.

Vietnam’s Apple shipments more than doubled in Q2/2022

Apple saw its shipments more than double during the second quarter of 2022 as it expanded its reach by increasing its official distributors.

Apple, at 115 per cent on-year, saw the biggest growth among smartphone manufacturers during the quarter with Vietnamese people preferring premium smartphones. Apple is increasing its stores in Vietnam via official distributors, which is helping the brand to expand its customer reach.

Vietnam’s smartphone market is dominated by offline channels. Major Vietnamese distributors are opening mono-stores of major brands, which are driving most of the sales, with Samsung and Apple leading the chart.

Samsung’s growth was nearly flat at 3 per cent on-year as it was struggling with inventories and had to cut production at its Vietnam factory. Samsung launched low-to-mid-end devices in its A and M series, which helped the brand maintain its market share. Its high-end S series models were among the bestsellers in the premium category during the quarter, according to Counterpoint’s latest monthly Vietnam smartphone channel share tracker.

OPPO was the only Chinese player to see positive growth of 25 per cent on-year as its newly launched mid-end models fared well in the market, whereas other players like Xiaomi, Vivo, and Realme saw an on-year decline in their shipments as they were struggling with higher inventories.

Apple, at 115 per cent on-year, saw the biggest growth during the quarter with Vietnamese people preferring premium smartphones. Apple is increasing its stores in Vietnam via official distributors.
Research analyst Akash Jatwala said, “The premium price band (over $400) grew around 75 per cent on-year, driven by the iPhone 11, iPhone 13 Pro Max, and Galaxy S series. Vietnam’s people are passionate about premium smartphones. Besides this, Apple has recently reduced the prices of older iPhone models in Vietnam, making them among the cheapest in the world. Vietnam is becoming one of the major markets for Apple in Southeast Asia.”

On the smartphone manufacturing side, activities are increasing and official distributors are raising their investments in the country.

Xiaomi has started manufacturing smartphones in Vietnam in partnership with DBG Technology, while Apple’s partner Foxconn has expanded the brand’s product line in Vietnam by making AirPods and iPads at its facility in the northern province of Bac Giang.

Samsung, which makes the bulk of its smartphones in Vietnam, plans to increase its investment in the country while expanding the supply chain.

Japanese investors’ confidence in Vietnam increasing

Japanese investors’ confidence in Vietnam has still been increasing despite adverse impacts of the COVID-19 pandemic, Shigetoshi Aoyama, Executive Vice President of the Japan External Trade Organisation (JETRO), has said.

Speaking at the Vietnam-Japan trade and investment forum in Tokyo on August 24, Aoyama said the free trade policy and efforts in attracting investors and improving the business environment by the Vietnamese Government have helped to raise the confidence of Japanese firms.

According to the Vice President, after Vietnam relaxed its entry restrictions last March, JETRO had received many requests regarding trading activities in Vietnam.

Aoyama cited a recent survey by JETRO showing that over 55% of Japanese companies want to expand their business in Vietnam in this and next year, the highest among Southeast Asian nations.

Trade between Vietnam and Japan has also grown amid the pandemic, he said, adding that the bilateral trade value last year doubled that recorded 10 years ago, and Japan’s investment in the Southeast Asian nation amounted to 3.65 billion USD, tripling the figure in 2020.

E-commerce training course held for farmers in Hung Yen

The Farmers’ Association of Hung Yen city in the province of the same name, in coordination with the city’s Post Office, has organised training sessions on e-commerce and how to put agricultural products on sale on postmart.vn for 60 cadres and association members in the locality.

Participants were guided on how to download and register on the platform, and use the Postmart mobile app to create accounts, process orders and handle complaints, while promoting the benefits of selling agricultural products via e-commerce.

In the first six months of this year, Vietnam Post Corporation (VNpost) and farmers’ associations of provinces and cities held 1,564 training courses on e-commerce and digital transformation.

Airports, airlines asked to announce RoK’s latest entry regulations

The Civil Aviation Authority of Vietnam (CAAV) has asked airports and airlines to announce the Republic of Korea (RoK)’s latest regulations on compulsory COVID-19 testing before entering the East Asian country.

It said the Korea Disease Prevention and Control Agency (KDCA) recently sent a notice on the regulations to airlines operating flights between Vietnam and the RoK.

Accordingly, all passengers when entering the RoK must present certificates showing they are negative to COVID-19 (in English or Korean) that are valid within 48 hours for PCR testing and within 24 hours for rapid testing from the date of departure.

Airports and airlines must report to the CAAV before August 31 about cases that were refused for airline tickets despite having valid COVID-19 negative test result certificates, as reported by the Korean press and citizens.

According to the KDCA, the RoK recorded 139,883 new COVID-19 cases on August 24, 456 of them were imported, bringing the total caseload to 22,588,640. The number of fatalities also amounted to 26,224. The Korean authorities are maintaining high alert over the possible resurgence of the pandemic this autumn/. 

Dairy producers expect better gross profit margin in second half

Dairy producers faced lower profit in the second quarter of 2022 due to weaker demand and high materials prices.

However recent falls in raw milk prices and increases in product prices in the first half of the year are likely to help the companies improve their gross profit margin over the rest of the year.

Dairy consumption remained low, said SSI Research. After staying flat in the first quarter, dairy consumption inched up slightly in the second quarter, data from AC Nielsen showed.

In the fast moving consumer goods' structure, milk continuously grew at a slower pace compared to other commodities. Of which, consumption growth of milk was positive in the rural market, while vice versa in the urban market.

Moreover, competitiveness among dairy producers becomes more and more intense. The Executive Board of Vinamilk confirmed that it has faced rising competition from rivals, including domestic and imported brands, resulting in declines in revenues in all product categories since the beginning of the year, except for condensed milk.

The war between Russia and Ukraine also weighed on the market, causing commodities and oil prices to surge since February. According to SSI Research, the main materials of dairy companies all jumped, such as powdered milk prices were up 30-40% on-year and sugar prices rose by 30%.

Higher costs have affected their gross profit margin despite hikes to selling prices by 2-5% to pass the extra costs to consumers.

Rising selling expenses due to higher fuel prices driving up transportation fees are another pressure dairy producers face, while fierce competition significantly increases promotion costs and sales support to maintain market share.

Most businesses posted decreases in profits in the second quarter and the first half of the year. Of which, Vinamilk reported a dip of 5% in revenue to 14.93 trillion VND (637.4 million USD). Its profit after tax for shareholders of the holding company dropped by 26% to nearly 2.1 trillion VND, the lowest in 5 years due to a lower gross profit margin but higher selling expenses. For the first six months of the year, Vinamilk's revenue was flat at 28.8 trillion VND, with net profit of 4.3 trillion VND, down 20%.

Thai Vietjet to launch direct Phu Quoc - Bangkok route in October

Thai Vietjet will connect Vietnam’s famous tourism island of Phu Quoc with Thailand’s capital city of Bangkok (Suvarnabhumi), starting October 12, 2022, offering further opportunities and flexible travel choices to its passengers while boosting tourism recovery after the travel restrictions have been lifted.

In the beginning, the Phu Quoc - Bangkok route will operate four flights a week every Monday, Wednesday, Friday and Sunday, with an approximate flight duration of 1 hour 15 minutes. To celebrate the new service, the airline is also launching a special promotion with fares from just 21 USD, excluding taxes and fees, for travelling on the new service between Phu Quoc and Bangkok, available for booking from August 25 – 31, 2022 at www.vietjetair.com or Vietjet Air mobile app.

Japan’s IHI Corp. accredits Doosan Vina’s quality, sypply capacity

The Japanese heavy-industry manufacturer IHI Corporation has presented the Doosan Heavy Industries Vietnam Company (Doosan Vina) a certificate to recognise its quality and capacity in supplying equipment for the Van Phong 1 (VP1) Thermal Power Plant on schedule amid the COVID-19 pandemic.

IHI Corp. is one of Doosan Vina's major customers. Currently, the two enterprises are cooperating in building the VP1 in the central province of Khanh Hoa, with the sides signing three goods contracts for steel structure, top enclosure frame, and coal bunker.

Doosan Vina CEO Kim Hyo Tae said the company spares no effort to create quality products and deliver them to its partners on schedule.

Earlier, in November last year, Doosan Vina earned a certificate acknowledging it as the best supplier of waste-to-energy boilers by the Japan-based Mitsubishi Heavy Industries Engineering, Ltd./.

HCM City hosts fisheries int’l exhibition

The Vietnam Fisheries International Exhibition (Vietfish) 2022 kicked off at the Saigon Exhibition and Convention Centre in Ho Chi Minh City on August 24. The event attracts nearly 200 exhibitors from 15 countries, showcasing aquatic products in 362 booths.

According to Tran Dinh Luan, Director General of the Directorate of Fisheries under the Ministry of Agriculture and Rural Development, the rapid recovery of import markets after the COVID-19 pandemic along with fluctuations in the supply of white fish from Russia has paved the way for Vietnam's seafood industry to rebound in the first quarters of 2022.

Vietfish 2018, lasting through August 26, also features workshops discussing multi-dimensional view and useful information towards stabilising production and addressing challenges of sustainability in ecology and society, and measures to improve the value and competitiveness of Vietnamese seafood products in the international market./.

HCM City remains a magnet for Singaporean investment
     
HCM City will continue improving its business climate and creating the most favourable conditions for foreign investors, especially those from Singapore, to expand their investment in the city.

Nguyen Quoc Vinh, head of the centre’s Department of Investment Promotion, said with a favourable strategic location and a population of more than 10 million, HCM City has great potential to attract foreign investors, especially those from Singapore.

The country’s largest city is calling for investment in 197 projects in the fields of information and technology, finance and banking, transportation, oil and gas, infrastructure, retail, support industry, healthcare, education and others.

Amy Wee, director of the Singapore Business Federation in Viet Nam, said despite the strong headwinds brought about by the COVID-19 pandemic, Viet Nam remains an attractive destination for foreign investors, especially those from Singapore.

She attributed it to the country’s incentive policies, political stability, open and transparent business climate, large population, impressive growth and highly skilled workers.

Small- and medium-sized enterprises (SMEs) from Singapore are interested in investing in areas where Singapore has strengths and Viet Nam has demand, such as IT, banking and finance, retail, agriculture, oil and gas, construction, healthcare and transportation.

She also pointed out major challenges facing the country, such as low labour productivity, increasing labour costs, poor infrastructure and the high cost of renting premises in industrial parks. The country also still depends largely on cash payments.

She recommended Viet Nam focus on improving its legal framework and infrastructure to help keep foreign investors in the country long-term.

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