Vietnam’s economic recovery to accelerate remarkably in H2: Standard Chartered

Vietnam’s economic recovery will be stronger in the second half of 2022, particularly as the country resumed its tourism activities after a two-year closure, according to Standard Chartered’s latest Vietnam report.

The report said the Vietnamese economy will continue recovering in August as the recovery has shown signs of broadening.

The bank maintained its forecast for Vietnam’s GDP growth at 10.8% and 3.9% in the third and fourth quarters of this year, respectively, taking the full-year growth to 6.7%.

Tim Leelahaphan, Standard Chartered Economist for Thailand and Vietnam, anticipated that the recovery will accelerate remarkably. However, he also warned that high global oil prices may have negative impacts on the Vietnamese economy.

Retail sales are estimated to grow strongly, at 60.2% in August, from 42.6% in the previous month, the report added.

Industrial production, export and import are expected to increase by 15.2%, 15% and 15.2%, respectively, this month compared to 9.8%, 3.4% and 11.2% in July.

Vietnam may record a trade deficit this month which is likely to stand at around 1.4 billion USD. Electronic products remained the country’s biggest currency earner.

Inflation is projected to stand at 3% in August, compared to 3.2% in July, which is within a manageable level. Price pressure may increase in the second half of 2022 and in 2023.

The bank recommended the State Bank of Vietnam to be wary of financial instability risks.

Experts from HSBC have also predicted that despite a less rosy external picture, Vietnam’s economy continued to gain traction.

Textile, garment and footwear exports rose by 30% from a year earlier. Retail sales posted a record growth rate of over 55% last month compared to the same period last year. In particular, revenue of tourism-related sectors was considerable, witnessing a double-digit expansion for four straight months.

Also in July, Vietnam attracted more than 350,000 foreign tourist arrivals, tripling the monthly average in H1, and bringing total visitors to the country so far to over 1 million. Those from the Republic of Korea, Europe and the US accounted for nearly half of the total figure./.

Market likely to continue bullish trend
     
Shares are forecast to continue their uptrend but the short-term selling pressure is increasing after seven weeks of gaining.

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index lost 0.49 per cent to close last week at 1,282.57 points.

For the week, the index gained a total 1.06 per cent.

An average of 616 million shares were traded on the southern exchange during each session last week, worth VND15 trillion.

"The market returned to a cautious state on Friday after three gaining sessions, as the high price demand was still cautious in general despite the signal of surpassing the 1,284 points resistance level. Liquidity increased compared to the previous session, showing that the supply pressure is rising when VN-Index is approaching the important resistance level of 1,300 points," said Viet Dragon Securities Co.

"Currently, the area of 1,280 points of VN-Index may have a supportive move for the market and the market will recover to test supply and demand. However, it’s expected that the supply pressure at 1,290 - 1,300 points is still strong.

"Therefore, investors should still be careful and limit buying positions. It’s advisable to consider continuing to restructure the portfolio in the direction of reducing risk, as the pressure from the resistance area on the market is still there.

"The impact of selling pressure is showing more clearly when the VN-Index approaches the resistance zone of 1,300 points. The market is expected to be supported and recover in the short term from 1,280 points of VN-Index and 1,300 points of VN30-Index.

"However, it should be noted that selling pressure will increase when the index continues to enter the resistance zone, due to the continued weakening of demand at high prices. Therefore, investors should still prioritise taking advantage of the upward momentum to restructure their portfolio in the direction of minimising risk. Opening long positions will need to be observed and selected more carefully," the company said.

The strongest gaining sector last week was the consumer services group with an increase of 5.3 per cent in market capitalisation, mainly thanks to the increase of retail stocks, such as Mobile World Group (MWG) up 12.6 per cent, FPT Retail (FRT) up 3.4 per cent, Phu Nhuan Jewelry (PNJ) up 3.3 per cent, and Digital World (DGW) up 3 per cent.

They were followed by chemical stocks such as PetroVietnam Ca Mau Fertiliser JSC (DCM) up 10.8 per cent, PetroVietnam Fertiliser & Chemicals Corp (DPM) up 9.8 per cent, and Lam Thao Fertilisers and Chemicals JSC (LAS) up 7.6 per cent.

The remaining industries increased slightly such as oil and gas, industry, information technology and banking.

Foreign investors turned to be net sellers on both exchanges last week with a net value of VND452.38 billion. In terms of net volume, Kinh Bac Group (KBC) was the stock that was sold the most, reaching 4 million shares. It was followed by SSI Securities Inc (SSI) with 3.7 million shares sold and Hoa Phat Group (HPG) with 3.5 million shares.

On the other side, The PetroVietnam Drilling & Well Service Corporation (PVD) was the stock that was bought the most, reaching 6.4 million shares.

Market liquidity had a direct impact on brokerage revenue, with liquidity recovering, margin lending will be boosted and the business results of securities companies are forecast to grow in the third quarter, said financial news site cafef.vn.

Techfest HaiPhong 2022 is slated for late September

The innovation week and startup festival of Hai Phong (Techfest Haiphong 2022) will take place from September 27 to October 4, according to Tran Quang Tuan, head of the northern port city's Department of Science and Technology.

Themed Hai Phong- innovation city - destination of success, the event comprises ten activities in a series.

The opening ceremony on September 27 expects to see an exhibition of 300 technologies and innovative products, which will be on display until the end of September 28.

Meanwhile, an online exhibition will be held with the participation of 150 firms, along with a booth introducing hi-tech products of Israel. The exhibition will be available at website http://techfesthaiphong.isel.vn. Businesses at the event will also have a chance to seek partnership and exchange.

During the week, a number of activities on technology, innovation development and startup support will also be organised.

Guests to Techfest Haiphong 2022 will include representatives from the embassies of some leading countries in innovation, the Ministry of Science and Technology, as well as central science-technology agencies, localities, universities, research institutes and businesses.

Vietnam International Aviation Expo 2022 to take place in September

The Vietnam International Aviation Expo 2022 (VIAE 2022) will take place at the National Convention Centre in Hanoi on September 15 -17, according to the Vietnam Aviation Expo JSC.

The US group Boeing will be the “First Class” sponsor for the event. 

According to the organisers, VIAE 2022 will feature vivid images of the Vietnamese aviation ecosystem.  It will bring together leading local and foreign airlines.

Symposiums will be also arranged in the framework of the event  which will see the participation of experts and entrepreneurs working in aerospace and related fields.

This is the first time that Boeing has become a sponsor of an international aviation event in Vietnam. Aviation experts said that Boeing’s move will contribute to bringing its image closer to Vietnamese airlines in the context that the aviation industry has witnessed a strong rebound after the COVID-19 pandemic.

Ha Noi to develop supporting industries
     
The capital city of Ha Noi has set up many solutions to develop other supporting industries, aiming to increase the municipal supporting industry development index.

Accordingly, Ha Noi’s authorities will connect and support enterprises of the supporting industries to become component suppliers of domestic and foreign enterprises.

The city will attract foreign investment in this field and support the enterprises in applying management systems under the requirements of global production chains.

It will also support them in the research, development, application, transfer and innovation of technology in producing components, spare parts and materials.

In addition, the city will build an information system and disclose information about the annual development of supporting industries.

Over the years, Ha Noi has recorded encouraging outcomes after years of implementing many programmes, plans, mechanisms and policies for supporting industry development.

Ha Noi organised a supporting industry fair on August 24 for local businesses, provinces, cities, and foreign businesses to enhance advertising and connection among enterprises of the supporting industries and other industries.

According to a representative from the municipal Department of Industry and Trade, Ha Noi has seen a continuous increase in the quantity, scale and quality of the enterprises in the supporting industries.

Most of them operate to produce components and spare parts, products serving garment-textile and footwear manufacturing, and those in the high-tech industry.

Many firms boast production systems and products meeting international standards, making them join the global supply chains of multinational conglomerates.

However, because the capital’s supporting industries in the country were formed and developed later than other nations in the region, their growth process requires the right orientations, mechanisms, policies and solutions that are strong enough to keep pace with other countries.

At the workshop, the delegates discussed three main topics: localisation needs and the adaptation of domestic enterprises, digital transformation in production, and innovation trends that participated in the global supply chain.

Legal basis for corporate bond issuance important for real estate sector
     
Building a solid and long-term legal basis for corporate bond issuance is an urgent solution to build a capital market for the real estate sector.

Nguyen Trong Dieu, President of the Viet Nam Private Business Association, said that the real estate market was falling into stagnation with the slow implementation of property projects and high pressure from interest rates on enterprises.

He added that most capital channels for real estate enterprises, including banking credit, and bond issuance, had been almost blocked since the second quarter of this year, putting significant pressure on construction enterprises and real estate developers.

Le Xuan Nghia, a member of the National Advisory Council on Finance and Monetary Policy, said that about VND112 trillion worth of bonds would mature by the end of this year. Of VND1.4 quadrillion outstanding bonds, more than half were of real estate enterprises, around VND700-800 trillion.

The sluggish corporate bond market had made many enterprises unable to repay bonds that were about to mature, Nghia said, adding that, in other words, a large part of real estate enterprises faced the risk of corporate bond default.

According to a recent corporate bond insight report of FiinRatings / FiinGroup, the issuance of the real estate and construction industry declined significantly in the first half of this year.

“Especially in the second quarter, there were no enterprises in the construction industry to issue corporate bonds,” it said.

FiinGroup observed that new issuances in recent months were solely from large and listed developers, while most companies had difficulties mobilising capital from this channel.

In addition, corporate bond redemption increased significantly in the first half of this year to VND72.29 trillion, up 22 per cent over the same period in 2021, the report wrote, adding that concerns over the Tan Hoang Minh event in April also forced some real estate businesses to redeem bonds ahead of time at the request of bondholders.

According to the report, the redemption activities made it difficult for many businesses to continue implementing projects.

The report pointed out that the maturity value of real estate bonds at the end of 2022 would reach about VND37 trillion, of which unlisted companies accounted for the majority, with 84 per cent of the total value compared to 16 per cent of listed companies.

Southwestern localities propose VND22.6-trillion road

Can Tho City and the provinces of Dong Thap and Kien Giang have proposed the construction of a VND22.6 trillion (USD974.13 million) road.

The 80-kilometre road project across the Tien and Hau River, would start at the An Huu-Cao Lanh Highway in Dong Thap and end at Ha Tien-Rach Gia-Bac Lieu Highway in Kien Giang. It will also run through national roads 54 and 91, and Chau Doc-Can Tho-Soc Trang Expressway.

The first stage of the project will build 62 kilometres and cost an estimated VND11.3 trillion. It will run between National Road 80 in Dong Thap and Road 963 in Kien Giang between 2024 and 2028.

The route is expected to boost the economic development of Can Tho, Dong Thap and Kien Giang. It is already on the list of roads planned for the Mekong Delta by 2030.

Vietnamese agricultural products seek a firm position in the EU market

Agricultural products are still considered as one of the potential commodity groups for export to the EU market, in the context that world demand gradually recovers after the pandemic.

In addition, the EU-Vietnam Free Trade Agreement (EVFTA) is also one of the “leverage” factors for Vietnamese agricultural products to enter this market.

The EU is one of the potential markets, but a few years ago, it was not easy for Vietnamese rice to enter this market when rice was taxed up to 40%. However, since the EVFTA took effect in August 2022, Vietnamese rice has had a “passport” to this market.

According to the General Director of Trung An Hi-tech Agriculture Joint Stock Company Pham Thai Binh, in the first six months of 2022, the rice export revenue of the company increased by 68%. Which, high-quality rice is the company's main product, exported to this market.

Meanwhile, the Communications Director of the Vietnam Association of Seafood Exporters and Producers (VASEP) said that in 2020, despite the impact of the COVID-19 epidemic, seafood exports have recovered significantly, increasing 8% over the same period. That trend continued in 2021 when seafood export revenue reached over 1 billion USD, up 12%. The EU is one of the key markets for Vietnamese seafood.

By the end of the second quarter of 2022, the EU will be one of the three largest markets for Vietnamese seafood. Along with seafood and rice, in general, other commodities exported to the EU have a stable growth rate.

The EU is one of the key markets for Vietnamese seafood.

According to statistics from the General Department of Customs, over the past two years, Vietnam's export revenue to the EU also reached about 83 billion USD, with a growth rate of approximately 15%.

In addition to high export revenue, goods exported to the EU market, as well as other markets are facing some problems, due to regulations related to rules of origin.

The big challenge for seafood when exporting to the EU is to ensure the rules of origin. Although VASEP and the Ministry of Industry and Trade have coordinated many programmes to train enterprises on certification of origin, inevitably, they will not learn carefully, Hang said, adding that because each market has its controls, leading to misunderstandings about the issue of certificates of origin, which is considered an obstacle for seafood when exporting to the EU.

Pangasius export reaches over US$1.52 billion in first seven months

The Ministry of Agriculture and Rural Development yesterday announced that pangasius export turnover in the first seven months of 2022 reached more than US$1.52 billion, up 79.8 percent over the same period in 2021.

According to the report, Vietnam’s export turnover is forecast to exceed US$2.26 billion. Pangasius export is one of the export areas that brings home over one billion US dollars.

According to seafood processing enterprises in the Mekong Delta, the average export price of frozen pangasius fillets to the Chinese market in the first seven months of the year fluctuated around $2.45 per kilogram, up 37 percent over the same period last year while it is being sold to the US market at about $4.66 per kilogram, up 66 percent over the same period last year.

Thanks to high export, from February to May 2022, businesses purchased pangasius in the Mekong Delta at a relatively high price, averaging more than VND30,000 per kilogram; accordingly, fish breeders can enjoy a profit of about VND5,000 per kilogram. From June to now, the price of pangasius fluctuates around VND27,500-VND28,500 per kilogram, VND7,000-VND8,000 higher than that in the same period in 2021.

In the last months of 2022 and early 2023, the demand for pangasius is forecast not to be as high as in the first months of 2022. However, fish sale is still promising in some large markets such as the United States, the EU, China, and Russia.

It is forecast that the EU market is likely to lack raw white fish in the context of complicated geopolitics in Eastern Europe and rising inflation, creating opportunities for Vietnamese pangasius exports by the end of 2022.

Vietnam’s wood, wood product exports slow down in two consecutive months

From April 2022, the export of Vietnam’s wood and wood products showed signs of slowing down, to June and July 2022, the growth was negative compared to the same period last year when it decreased by 11 percent and 5.5 percent respectively after a long period of growth above double-digit average per year.

That is information at the conference of the Vietnam International Furniture & Home Accessories Fair (VIFA-EXPO), the biggest international furniture fair in Vietnam and one of the biggest furniture fairs in South-East Asia, which will take place from August 31 to September 3 in Saigon Exhibition & Convention Center (SECC) in Ho Chi Minh City’s District 7.

Mr. Nguyen Chanh Phuong, Vice Chairman of Ho Chi Minh City Handicraft and Wood Industry Association (HAWA) pointed out the main reason that the key export markets such as the US and Europe are facing many difficulties due to the impact of the conflict between Russia and Ukraine. Plus, high inflation in many countries has made consumers tighten their spending, leading to a decrease in demand for unnecessary products including wood products and furniture.

According to Mr. Phuong, another reason is that the world's importers have not calculated correctly, so, over the past time, commodity congestion with a large amount is at warehouses and ports abroad and in Vietnam. It takes three or four months even 12 months to tackle the inventory of commodities.

Prior, the Ministry of Agriculture and Rural Development announced that China - one of the three largest importers of wooden furniture products in Vietnam - still thoroughly applied the Zero Covid policy. These factors interacting with each other reasons have led to supply chain disruptions, increased production costs due to increased raw materials, and transportation costs.

In particular, the decline in the export of wood and wood products to the United States - the largest export market of Vietnam's wood and wood products – affects the industry’s export turnover. In addition, the wood industry also faces the initiation of an investigation by the US Department of Commerce (DOC) with wooden cabinets and dressing tables resulting in a decrease in orders and high inventory.

According to HAWA, however, the market also has positive signals. Many domestic construction projects are starting well. Furthermore, Japan, Korea, and Australia have still placed stable orders in the luxury segment. In addition, from next September, there will be new orders for the year-end shopping season around the world.

The Ministry of Agriculture and Rural Development forecasts that this year’s export turnover of wood and wood products may reach $16.3 billion and it was $10.3 billion as of July.

Many Vietnamese businesses join supporting industry chain

Ms. Le Nguyen Duy Oanh, Deputy Director of the Center for Supporting Industry Development of Ho Chi Minh City, yesterday said that it is a positive signal nearly 5,000 domestic enterprises operating in processing and manufacturing have been so far participating in the production of supporting industry products.

From 2020 to now, foreign-invested enterprises which have produced end products have sought the domestic supply of supporting industry products, said Ms. Le Nguyen Duy Oanh.

She revealed that the center alone is receiving a list of more than 400 industrial products which foreign-invested enterprises need. For example, Techtronic Industries Group (TTI) is looking for suppliers in Vietnam in four areas including plastic injection molding, molds, electricity, and metal for a $650 million investment plant in Ho Chi Minh City's Hi-Tech Park.

Vietnam, South Africa seek to promote cooperation

Leaders and the business community of South Africa’s KwaZulu-Natal province expressed their readiness to welcome Vietnamese enterprises to explore cooperation opportunities as well as strengthen relations between the countries, during a recent reception for Vietnamese Ambassador to South Africa Hoang Van Loi.

In his visit to the province from August 23-26, the diplomat briefed the host on Vietnam’s socio-economic achievements in the first six months of this year, stressing there is still room for bringing Vietnam - South Africa relations into depth and extensively and pledging the Vietnamese Embassy in South Africa is making efforts and carrying out activities to connect the two countries’ businesses and localities.

Loi said that a Vietnamese business delegation is scheduled to visit South Africa in the first half of September to explore investment and export opportunities in the country in such fields as textiles, footwear, seafood, food processing, construction materials and furniture, as part of a series of activities under the initiative of the Association of Southeast Nations (ASEAN) Committee in Pretoria.

In Loi's working sessions, the premier of KwaZulu-Natal province emphasised that the South African government in general and the provincial government in particular attach special importance to the market of more than 650 million people of Southeast Asian countries, saying the relations with ASEAN countries should be promoted.

It is necessary to strengthen bilateral trade and investment relations in specific fields, including production of high-value wood products, agriculture, telecommunications, Halal food and higher education, among others, she added.

Meanwhile, the mayor of Durban city said he is willing to cooperate with businesses and localities of ASEAN countries in all fields, considering this a good condition for economic development and job creation for local people.

Record rise seen in number of new, resuming firms in 8 months

Record rise was seen in the number of newly-established firms and those returning to the market in the first eight months of this year thanks to a surge in August’s figures, according to the Business Registration Agency under the Ministry of Planning and Investment.

The agency reported that in the month, 11,918 new enterprises were set up with combined registered capital topping 130.19 trillion VND (5.56 billion USD), a year-on-year rise of 106.9% and 91.6%, respectively.

It explained that as August 2021 saw complicated developments of COVID-19 with social distancing measures imposed in many localities, production and business activities were interrupted.

A year later, the number of businesses returning to the market increased 67.1% over the same period last year to 6,458, the highest for a month to date.

The results pushed the number of newly-established firms and enterprises returning to the market in the first eight months of this year to 149,451, up 31.1% year on year. Of the total, the number of new firms was 101,325, a rise of 24.2% year on year.

Total capital added to the economy in the first eight months of this year also rose 36.1% year on year to 3.63 quadrillion VND, including 1.13 quadrillion VND poured into new firms and 2.5 quadrillion into operating businesses.

According to the agency, 15 out of the 17 sectors saw an increase in the number of new firms, led by accommodation and catering service at 51.7%.

Meanwhile, in the January-August period, 104,317 businesses left the market, including 59,609 firms halting their operations in a short term.

Exports to the Netherlands edge up 31.6% over seven months

Vietnamese exports to the Netherlands during the opening seven months of the year surged by 31.6% year on year to US$5.95 billion, according to the General Department of Vietnam Customs.

July alone witnessed exports to the Netherlands soar by nearly 39% year on year to US$881.6 million, reported the department.

The strongest export growth was recorded in the group of computers, electronic products and components with a turnover of US$1.56 billion, up 58.9% over the same period from last year.

Other groups of commodities also enjoyed robust growth, including machinery, equipment, tools and spare parts (US$1 billion, up 34.4%), footwear (US$601.9 million, up 22.8%), and textile and garments (nearly US$590 million, up 47.6%). By contrast, phone and component exports 16.57% year on year to nearly US$446 million.

By the end of July Vietnam continued to rack up a huge trade surplus of US$5.6 billion in trade exchange with the Netherlands. The Netherlands is also Vietnam’s largest export market in the EU and Europe in general.

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