The State Bank of Vietnam has issued a circular guiding certain provisions of the Law on Money Laundering Prevention and Control.

The document provides regulations on criteria and methods for assessing money laundering risks of reporting entities; the process of managing money laundering risks and classifying customers in accordance with their level of money laundering risk; and internal regulations on anti-money laundering.

It also stipulates the reporting of high-value transactions and suspicious transactions, electronic money transfer transactions; and forms and  fix deadlines for electronic data reporting.

Particularly, reporting entities must submit a report to agencies responsible for anti-money laundering activities, which includes personal information of individuals involved in electronic transfer transactions if the transaction is equal to or exceeds 500 million VND (21,097 USD), the circular said.

The circular also states clearly cases where individuals conduct transactions exceeding 500 million VND but are not required to report to the state agency. 

Vietjet launches super promotion on August 8

Vietjet is launching a super sale on August 8 from 0:00 to 23:59, offering millions of tickets at up to 88% off, applying to all routes throughout Vietnam and internationally to Australia, India, Japan, the Republic of Korea, Taiwan, Hong Kong (China) and Southeast Asia.

The tickets are available on only August 8 at website www.vietjetair.com and Vietjet Air mobile app. Apply the promotion code SUMMER88 and comfortably schedule your flight with flexible flight times from August 21, 2023 to March 31, 2024.

Additionally, customers will receive an additional E-Voucher 100,000 VND on https://evoucher.vietjetair.com, accumulate points for SkyJoy loyalty programme to enjoy many attractive benefits at SkyJoy mobile app or https://skyjoy.vietjetair.com/.

Especially, this August, Vietjet launches two new routes including Ho Chi Minh City - Jakarta (Indonesia) route from August 5, 2023 and Ho Chi Minh City - Kochi (India) route from August 12, increasing the opportunities to experience exciting unlimited flying across to the area.

Inter-regional traffic connections driving force for south-eastern region’s growth

Localities in the south-eastern region are mobilising all resources to speed up the progress of major transport projects that will enhance inter-regional connectivity, reduce traffic jams, and create a driving force for socio-economic development in the region.

The south-eastern region, including Ho Chi Minh City and the five provinces of Dong Nai, Binh Duong, Ba Ria-Vung Tau, Binh Phuoc, and Tay Ninh, have played a major role in the country’s economic growth.

The region contributes more than 30% of the country’s GDP and 45% of state revenue though it has only 23% of the population.

However, it is facing problems related to traffic infrastructure, which has not been developed, causing high freight costs, affecting businesses.

Under a plan to 2030, the region will have 970km of highways, but now has only 10% of that due to a lack of public investment and land acquisition challenges.

Experts have called for continued efforts to improve the traffic infrastructure and implementation of reforms needed to make the south-eastern region a leading economic engine of the country.

A number of large inter-regional transport projects in the region have begun to be implemented, which are expected to form a complete transport network and synchronous connection among modes of transport.

This also helps improve the efficiency of logistics activities of large economic and industrial zones in the southern key economic region.

Authorities of the localities in the south-eastern region are strengthening comprehensive cooperation in all fields, including speeding up key transport projects to meet development requirements.

Ring Road No. 3 project, running 90km and costing nearly 75.4 trillion VND (3.2 billion USD), passes through HCM City and the three provinces of Binh Duong, Dong Nai and Long An.

It will have six lanes designed for speeds of 80-100km per hour for commuting and two lanes for emergency stops.

The first phase of the project will stretch 76 km long with four lanes and each locality is in charge of clearing the site and building the section in their territory. It is expected to open to traffic in late 2025 and be fully complete in 2026.

Ring Road No. 3 is a strategic traffic axis, removing traffic bottlenecks, connecting many seaports, reducing travel time and logistics costs, as well as opening up new directions for urban, industrial, commercial, and service development.

Therefore, the four localities are focusing on speeding up the progress of the project to soon complete the construction of the ring road.

The construction of Ring Road No. 3 started on June 18 after HCM City handed over more than 81% of the land needed for the section of the project that crosses the city.

Besides the project’s site requirements being guaranteed, organising bidding to select contractors and consultants has been implemented basically on schedule, according to Luong Minh Phuc, head of the HCM City Management Board for Traffic Works Construction and Investment.

Work on other sections of the road running through Dong Nai, Binh Duong, and Long An also began on June 18, 29 and 30, respectively.

Construction of the Bien Hoa-Vung Tau Expressway project passing through Dong Nai and Ba Ria-Vung Tau provinces also started on June 18.

As a key national expressway project, the project is expected to ease traffic congestion on National Highway No. 51, which is becoming overcrowded and causing more and more serious traffic problems.

It will help facilitate travel between Dong Nai and Ba Ria-Vung Tau provinces and HCM City in the southern key economic zone.

It will run parallel to the National Highway No. 51 and cut through the HCM City-Long Thanh-Dau Giay expressway and Ben Luc-Long Thanh expressway.

The first phase of the project will have a length of 53.7km, including a 34.2km section in Dong Nai, with an estimated investment of nearly 18 trillion VND (755 million USD).

The new expressway will be carried out under three component projects and is scheduled to be completed by 2025 and open to traffic in 2026.

It will have four to six lanes in the first phase and six to eight lanes in the second phase.

In addition, Ba Ria-Vung Tau started work on the Phuoc An bridge project on June 18, and it is expected to be completed in five years.

Spanning over the Thi Vai River, the bridge costs a total of 4.8 trillion VND (205 million USD), with a total length of 4.3km.

Once completed, the bridge will link Phu My town of Ba Ria-Vung Tau with Nhon Trach district in neighbouring Dong Nai province.

Vo Van Minh, Chairman of the Binh Duong Provincial People’s Committee, said the province is focusing on researching and investing in key traffic axes and arteries to create motivation to attract more investment, including sections of Ring Road No.3 and No. 4, and the HCM City-Thu Dau Mot-Chon Thanh Expressway.

The Ring Road No. 4 section in Binh Duong has a length of about 48.3km.

Once fully completed by 2026, the under-construction Long Thanh International Airport project in Dong Nai, together with the existing Tan Son Nhat International Airport in HCM City, will help accelerate development of the south-eastern region.

Besides the seaport systems in HCM City and Ba Ria-Vung Tau, Dong Nai will have new Phuoc An sea port in 2024, which will contribute to enhancing the competitiveness of the logistics sector, and promoting socio-economic development in the southern region.

Recently, leaders of HCM City and the provinces of Dong Nai, Binh Duong and Ba Ria-Vung Tau had a meeting to strengthen cooperation in the implementation of inter-provincial transport projects.

Dong Nai and Binh Duong provinces have agreed to build four new bridges connecting the two provinces, namely Hieu Liem 2, Tan An-An Lac, Tan Hien-Thuong Tan and Thạnh Hoi 2.

They also plan to build more roads to enhance connectivity between Binh Duong’s Di An city and Dong Nai’s Bien Hoa city.

Chairman of the HMC City People's Committee Phan Van Mai said the city would discuss with Dong Nai province to propose the Ministry of Transport study and expand the 1A component project of the Ring Road No.3’s Tan Van-Nhon Trach section, which consists of a 1.92km segment in HCM City, and a 6.3km segment spanning across Dong Nai, ensuring synchronous operation of the entire Ring Road No. 3 project.

Leaders of Binh Duong and Tay Ninh provinces have committed to boosting comprehensive cooperation in all fields, focusing on inter-provincial transport projects that enhance regional connectivity.

They have agreed to the planning of two roads and bridges connecting provincial road No. 789 in Tay Ninh and provincial road No. 744 in Binh Duong in the period 2021-2030, with a vision to 2050.

Luong Anh Dung, Deputy Director of Ba Ria-Vung Tau province's Department of Transport, said the province planned to develop a modern, highly connected transport system.

At first it would focus on completing the Bien Hoa-Vung Tau Expressway project by the end of 2025.

Construction of the first phase of Ring Road No. 4 through five southern localities, including HCM City, Binh Duong, Dong Nai, Long An, and Ba Ria-Vung Tau, and generally the Southern Key Economic Region, was expected to start next year and be completed in 2030.

It would begin at the planned Bien Hoa - Vung Tau Expressway in Ba Ria-Vung Tau province’s Phu My town and end at Tan Cang - Hiep Phuoc Port in HCM City’s Nha Be district.

PM orders more efforts to ensure food security, sustainable rice production, exports

Prime Minister Pham Minh Chinh has signed a directive requesting greater efforts to ensure national food security and promote sustainable rice production and exports in the current period.

In the directive, the PM pointed out that in recent times, the global food trade situation has been developing complicatedly with rice prices tending to increase because of some countries’ export bans and reduction in the amount of rice sold, some others' growing purchases for rice reserves, the expired Black Sea Grain Deal, and extreme weather phenomena, natural disasters and droughts.

In Vietnam, massive trading of rice occurs in some localities, causing local supply-demand imbalance, and pushing up domestic rice prices unreasonably.

Therefore, to firmly ensure national food security in all situations, while promoting the potential and advantages in rice production and avoiding the situation of speculating and taking illegal profits, the Government leader asked ministers, heads of ministry-level agencies, chairpersons of People's Committees of provinces and centrally-run cities, the President of the Vietnam Food Association and rice exporters to take more drastic measures.

The Minister of Agriculture and Rural Development was requested to coordinate with the Minister of Natural Resources and Environment in directing localities to review planning orientations of large-scale and high-quality rice production areas to ensure the target output of over 43 million tonnes of paddy a year in the following years.

It is necessary to keep a close watch on developments in the regional and global rice markets, production situation, rice output of each variety and season in the year to balance the source of rice to serve domestic demand and exports; and at the same time, promote negotiations, and remove technical barriers to expand Vietnam's rice export markets; and promptly guide localities, businesses and farmers to strictly comply with regulations of Vietnam and importing countries.

The Minister of Industry and Trade should coordinate with the heads of relevant agencies in implementing programmes and activities to promote Vietnamese rice products and brands, making the most of incentives offered by signed free trade agreements (FTAs) in order to diversify and occupy new and potential markets and improve the competitiveness of Vietnam's rice industry.

The Prime Minister also requested the Minister of Finance and the Governor of the State Bank of Vietnam to proactively and promptly direct the implementation of price stabilisation and support measures for rice producers, exporters and traders in accordance with laws.

Attention should be paid to calculating and balancing the appropriate and effective rice reserves so as to ensure no one lack food when disasters or epidemics occur.

Vietjet launches HCM City - Jakarta direct service

Vietjet on August 5 launched the direct route connecting Ho Chi Minh City of Vietnam to Jakarta, Indonesia, making it the third direct service in Vietjet's flight network between the two countries.

The launching ceremony was attended by Vietnamese National Assembly Chairman Vuong Dinh Hue and Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) Arsjad Rasjid, together with leaders and enterprises of the two nations. 

With seven flights per week via just three-hour flights, Vietjet’s new flights provides an ideal travel option between HCM City and Jakarta, two leading urban centres of Vietnam and Indonesia with distinctive cultural characteristics and serve as the gateway for tourism and economy of the two countries.

The daily flight departs from HCM City at 09.35 and arrives at 12.30 in Jakarta. The return flight takes off from Soekarno-Hatta International Airport (CGK) in Jakarta at 13.30 and arrives at Tan Son Nhat International Airport (SGN) in HCM City at 16.40 (all local time).

Vietnam's rice export prices reach 15-year high

Prices of Vietnam’s rice exports have reached the highest level in 15 years following export restrictions in some countries.

The price of 5% broken rice has increased to 590-600 USD per tonne, higher than the 550-575 USD per tonne of the previous week.

Vietnam’s average price of exported rice in the first six months of 2023 reached 539 USD per tonne, a 10.2% increase over the same period in the previous year, according to the General Department of Vietnam Customs.

Exporters expect prices of the grain to rise further after India's move to restrict rice exports.

On July 20, India issued a ban on rice exports, aiming to ensure adequate domestic availability at reasonable prices.

Following this ban, rice prices have continued to increase sharply in other leading rice export centres in Asia.

Thailand’s 5% broken rice price also rose to 627-630 USD per tonne, the highest in the last 15 years, much higher than the price of 545 USD per tonne recorded in the previous week.

Vietnam’s auto industry needs deeper involvement in global supply: experts

Vietnamese enterprises in the auto industry are not deeply involved in the global supply chain. To become global suppliers, domestic enterprises must be consistent with the management culture and business philosophy of global manufacturers, experts have said. 

This is a long-term accumulation process with no shortcuts that Vietnamese businesses must overcome if they want to join deeply in the global supply chain, said experts.

Phan Dang Tuat, Chairman of the Vietnam Association of Supporting Industries (VASI), said before the fourth industrial revolution, people paid significant attention to the industrial development level of a country involving in automotive, electronics and chemical industries.

A recent study by Toyota Motor Vietnam (TMV) showed that more than 75% of Vietnamese enterprises frequently encountered problems in production methods, standardisation of operations, and product quality control.

Most of them did not have managerial tools to control product processes or delivery schedules causing waste and large inventory.

Tuat said the automobile industry combined all quintessence of technologies, production methods and modern management methods.

He noted the learning experience of production and corporate governance from developed countries and global leading auto manufacturers was very important for Vietnamese enterprises in international integration.

In early July, the Industry Agency under the Ministry of Industry and Trade and Toyota Motor Vietnam (TMV) signed a memorandum of understanding on a cooperation project to help domestic businesses in the automobile supporting industry improve their capacity and enhance the connectivity between them and car assemblers.

This is the fourth year the two sides have inked a cooperation deal to assist domestic firms to raise the rate of locally made components in automobiles.

After three years of cooperation, TMV has recruited one official supplier and selected seven potential suppliers as well as conducted training for 60 Vietnamese suppliers.

The total number of localised products in the automobile supporting industry has reached nearly 1,000 products of all kinds.

Tuat said manufacturing a car with tens of thousands of components needed scientific production and management systems.

He said only through cooperation and continuous learning could Vietnamese enterprises improve their product quality to grasp the opportunity to become a part supplier for global automobile manufacturers.

On July 18, TMV and VASI just signed a Memorandum of Understanding (MoU) to support VASI members in building their capabilities and linkages to automobile assemblers. This project will be implemented from 2023 to 2024. Specifically, Toyota Vietnam and VASI will implement two main activities, screening and making a list of potential auto part suppliers to connect with automobile assemblers in Vietnam, and implementing an operational improvement support program for a number of domestic suppliers to improve the production process.

Pham Thanh Tung, Deputy General Director of TMV, said related enterprises had not yet become main suppliers for Toyota, but they had been able to cut production costs, increase labour productivity, and create a better working environment.

In addition, TMV had worked with suppliers to develop a closed green cycle, in an effort to reduce CO2 emissions in all stages of the product life cycle at the supplier. As a result, Toyota’s suppliers reduced their emissions by 6,462 tonnes of CO2 in 2022.

Tran Thi Kim Que, General Director of Phong Nam Co., Ltd. said “When we are offered this support, we will be able to stand on our own two feet, with our own knowledge. The most difficult thing is how to convey those positive energies to all middle-level managers and continue to transmit them to employees.

"We should take workers and employees as the centre of operations and support them because they are the ones who make the final product.”

Sharing the view with Que, many small- and medium-sized enterprises have the desire to become professional suppliers for Foreign Direct Investment (FDI) enterprises in Vietnam.

They also wish to have a production management system that can meet the strict requirements of fastidious markets such as Japan, the US, and Europe.

Personal finance planning vital yet neglected in VN: forum

Viet Nam’s personal finance market is facing challenges, primarily stemming from a lack of financial literacy and limited access to educational resources, experts said.

Dr Lê Minh Nghĩa, chairman of Việt Nam Financial Consultants Association (VFCA), highlighted the challenges during a forum on developing the personal finance market in Việt Nam organised late last week in HCM City.

The problems faced by individuals in securing their financial future and achieving their financial goals have been exacerbated by unreliable and shallow resources on personal finance available on the Internet, he said.

Findings from a survey conducted recently in Hà Nội further supported these concerns, with over 80 per cent of respondents admitting to having little interest and knowledge in personal finance.

As a result, individuals are ill-equipped to make informed financial decisions, lacking essential knowledge in budgeting, saving, investing, and managing debt, he added.

Consequently, people fail to set aside funds for emergencies, secure effective retirement plans, or accumulate wealth sustainably, according to Nghĩa.

The lack of financial literacy also leaves individuals vulnerable to financial fraud and misconduct, he warned.

Cấn Văn Lực, a member of the National Financial and Monetary Policy Advisory Council, said personal finance planning remains limited as debt management ability, understanding, and knowledge of personal financial planning need improvement.

Lực proposed enhancing financial education such as to include financial education in school curricula and develop targeted programmes for adults, such as workshops, seminars, and online platforms.

These initiatives would provide individuals with practical knowledge and skills to effectively manage their personal finances, he said.

In addition, the Government should play an active role in promoting financial literacy and consumer protection by implementing policies and regulations that ensure ethical practices and protect the interests of consumers, he added.

Dr Nghĩa said regulatory bodies should strengthen their oversight and review the practices of financial advisors and institutions regularly to ensure compliance with ethical standards.

Experts also recommended incentives and tax benefits be introduced to encourage a savings culture and long-term financial planning.

For instance, tax breaks can be offered to individuals who contribute to retirement plans or dedicate a portion of their income to savings, they noted.

These incentives would motivate individuals to prioritise their financial future and develop healthy saving habits.

Collaboration with employers can also play a significant role in promoting personal financial planning.

Companies can partner with financial institutions to provide financial wellness programmes and education to their employees.

By incorporating financial wellness into the workplace, employers can empower their employees to make informed financial decisions, alleviate financial stress, and foster a more financially secure workforce.

The forum was co-organised by VFCA in cooperation with the HCM City-based Văn Lang University. 

Shares to go up amid soaring liquidity

VN stocks are forecast to continue to prosper this week while liquidity will likely increase dramatically, with VN-Index surpassing the 2018 price peak, equivalent to 1,200-1,211 points.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index ended last week at 1,225.98 points, a gain of 15.03 points, or 1.24 per cent.

The index had gained 1.52 per cent last week.

“Liquidity increased, showing that cash flow is trying to absorb supply after being cautious in the previous sessions. With the gain being maintained, despite the structuring activities of ETFs, cash flow may continue to be active at the beginning of this week and help the market return to the 1,230 to 1,235 point area,” said Việt Dragon Securities Co.

“Disputes and exploration of supply and demand may appear in this area. Therefore, investors need to observe the state of supply and demand at the resistance zone. Currently, it is still possible to hold or exploit short-term opportunities in stocks that are showing good signals from cash flow.”

“However, it is still necessary to consider the possibility of a recovery to take profits or reduce the weight in stocks that are at resistance areas or are showing distribution signals to minimise risks for the portfolio.”

The market received supportive information on Thursday last week when the Government held a conference to discuss and remove difficulties for the real estate market, said Đinh Quang Hinh, head of Macro and Market Strategy Division, VNDIRECT Securities Joint Stock Company (VNDIRECT).

“After the conference, with the expectation that the Government and localities would step to support real estate businesses, the cash flow has poured into real estate stocks - the second largest market capitalisation group, thereby promoting the recovery of stock indexes,” he said.

Positive momentum may spread to the beginning of this week and the VN-INDEX may penetrate deep into the 1.235-point resistance area. In this area, the market may see strong fluctuation due to profit-taking by investors.

Therefore, investors should limit buying at high prices and carefully observe market movements around this resistance area to make appropriate decisions. If the VN-INDEX fails to break through the above resistance area and turns down, investors should consider lowering the margin ratio.

“If the market continues to break through the above resistance area, investors can continue to hold stocks to move towards higher milestones,” he said.

Cash flow may continue to be active at the beginning of this week and help the market return to the 1,230 to 1,235 point zone, said Việt Dragon Securities Co.

According to data from the Việt Nam Securities Depository (VSD), domestic investors opened 150,407 new securities accounts in July, an increase of nearly 5,000 new accounts compared to the previous month.

The number of new securities accounts opened in July was the highest in 11 months since last August. Thus, by the end of July, the total number of individual investor accounts in the country had exceeded 7.4 million accounts, equivalent to more than 7.4 per cent of the population.

Last week, real estate stocks continued to have the most outstanding performance, with many stocks attracting cash flow. Vingroup (VIC) increased by 20.78 per cent, and Novaland (NVL) increased by 7.90 per cent.

Banking stocks also had a very positive performance, with Asia Commercial Bank (ACB) up 9.91 per cent, Liên Việt Post Bank (LPB) up 5.83 per cent, Saigon-Hanoi Bank (SHB) up 5.56 per cent.

Two seaport rail links to be built

The government has approved two railway routes linking seaports in the southern province of Ba Ria-Vung Tau and the northern city of Haiphong with a total investment of around USD17 billion.

The information was given by Deputy Prime Minister Le Minh Khai at a Q&A session with National Assembly delegates on Friday.

According to Khai, the feasible study of Lao Cai-Hanoi-Haiphong and Bien Hoa-Vung Tau railway projects is scheduled to be completed by 2025 for construction before 2030.

The two projects have a track gauge of 1,435mm. Bien Hoa-Vung Tau railway route is 128 kilometres long and has a total investment of USD6.2 billion. Meanwhile, Lao Cai-Hanoi-Haiphong route is 380 kilometres long and has a total investment of USD10-11 billion.

The two have been added to the country’s list of projects seeking foreign investment in the 2021-2025 phase.

Deputy PM Le Minh Khai agreed on speeding up the implementation of the two routes, saying that this would help to reduce logistics costs for Vietnamese firms.

Khai cited a report from Agility, one of the world’s top freight forwarding and contract logistics providers, as saying that Vietnam has been ranked in the top 10 places in the 2023 Agility Emerging Markets Logistics Index. However, logistics costs accounted for up to 16.8-17 percent of the country’s GDP compared to the global average of 10.6 percent.

The cost to transport a 20ft container from Haiphong to HCM City is around VND9.2-9.5 million, while the figure for a 40ft container is some VND12 million.

So building more railway routes connecting seaports would help ease logistics cost pressure for businesses.

Agricultural businesses in dire need of workers

ifficulty in recruiting workers, including both unskilled and trained workers, has led to labour shortages and major headaches for many agricultural enterprises.

Thach Nguyen is a recruitment specialist at Japfa Vietnam, a supplier of animal feed products from Indonesia with a network of livestock and poultry facilities situated throughout the country.

Nguyen is constantly hunting for new workers, even though Japfa's average salary is around VND10.2 million ($430) per month, considered above the norm compared to other employers in the area.

“For every 100 new hires, 100 people quit. The most difficult farms to recruit for are in Hanoi, Bac Giang, and Nam Dinh because workers prefer to work in industrial zones rather than as livestock workers," said Nguyen.

According to Nguyen Tam Trang, chief people officer at GREENFEED Vietnam, the company is seeking as many as 2,000 employees in addition to the 4,000 currently working at the group's subsidiaries. “Positions related to animal husbandry and veterinary medicine are always in high demand,” Trang said.

This shortage in human resources is a difficulty shared by many other firms in the agricultural sector, leaving many in the industry unable to meet demand and fulfill contracts on time.

“Most of the talent pool is untrained, with little experience of the latest technical and economic models," added Trang.

Meanwhile, the number of people studying majors in agriculture is decreasing. According to statistics from the Ministry of Education and Training, there were only 7,100 students enrolled in agriculture, forestry, fisheries, and veterinary medicine in 2022, accounting for 1.4 per cent of the total number of students enrolled across 25 training fields.

At a conference on cooperation in training and human resource development in agriculture, organised by the Ministry of Agriculture and Rural Development (MARD) two weeks ago, Ngo Hong Giang, director of the ministry's Organisation and Personnel Department, said that the primary and short-term vocational training system for the sector has fallen short, with some schools reaching only half of the registered target.

"Several traditional industries, such as agricultural extension, fishing, and forest resource management have little to no registered students," said Giang.

According to MARD, the cause of the situation is that the income of agricultural workers remains low, about half of what is available to workers in the industrial, construction, and service sectors.

“Sadly, the desire for jobs in agriculture among graduates is very low. They are simply better opportunities in other industries,” said Nguyen Trung Anh, director of Research and Sustainable Development of The PAN Group.

The challenges of building a sustainable agricultural labour force have led businesses to spend significant resources on an effective cooperation model with universities and training institutions in the hope of creating a new pipeline of high-quality human resources for the future.

GREENFEED is actively cooperating with more than 40 universities and colleges to implement programmes to award scholarships, sponsor scientific research activities, and create internship opportunities for more than 400 interns each year. The initiative also organises factory tours, soft skills training, and sharing sessions between GREENFEED leaders and students.

Another enterprise, Asia Ingredients Group (AIG), signed a strategic cooperation agreement with Can Tho University last year to cooperate in training high-quality human resources and create opportunities for students to experience on the job training at AIG member companies.

According to the MARD, by 2025, the market will need 10,000 agricultural managers, 80,000 agricultural cooperative staff, 100,000 trained farmers, and 60,000 technicians.

Sugar firms eye sweet outcomes

The current time is ‘sweet’ for sugar companies with rosy business prospects as well as a spike in both price and share value.
In the second quarter (Q2) of this year, Quang Ngai Sugar JSC, counted $137 million in revenue and $43.3 million in accrued profit, up 43 per cent and 52 per cent on-year, respectively.

During the period, its net profit approximated $30.9 million, nearly double compared to similar period last year.

In the first half of this year, QNS posted $229.6 million in revenue and $44.6 million in net profit, up 32 per cent and 90 per cent on-year, respectively. With such figures, the company has fulfilled full-year profit target.

Similarly, Son La Sugar JSC raked in $23.9 million in revenue and $9.78 million in post-tax profit in the fourth quarter of 2022-2023 season, up 152 per cent in revenue and nearly four-fold on profit on-year.

SLS posted $72.8 million in revenue and $22.7 million in post-tax profit, up 93 per cent and 178 per cent compared to the previous season, setting a record profit in the company’s development and surpassing 597 per cent over the projection.

At Kon Tum Sugar JSC (KTS), the company counted $12.5 million in revenue and $1.03 million in post-tax profit in Q4 of the 2022-2023 season, up six to seven times on-year.

For the whole season, KTS counted $23.8 million in revenue and $1.6 million in post-tax profit, up 210 per cent in revenue and $375 per cent in post-tax profit compared to the previous season.

Nguyen Trong Dinh Tam, senior stock expert, said that as QNS or SLS were production firms in the sugar sector value chain, a spiking sugar price was beneficial to these firms.

Other sugar firms, such as Lam Son Sugar JSC (LSS) or Thanh Thanh Cong-Bien Hoa Sugar JSC, which are also strong sugar traders, have seen their businesses inevitably bears the brunt of the anti-dumping tax policy.

“In the second half of this year, I believe the positive trend will prevail for sugar firm groups, particularly sugar producers. The global sugar price in H2 might stall after a spike early in the year, yet impacts from soaring prices could bring positive results to sugar firm profit pictures in H2,” said Tam.

Attuned to upbeat performance of sugar firms, their respective share prices have boomed, with better cash flow at the companies.

Tam said that the sugar sector was affected by the upward trend in prices earlier than other sectors. These tickers resumed the growth trend from early April, meanwhile the stock market resumed an upward trend from late May.

After the recent price upward wave, QNS and SLS reached their new historic peak in prices, while those of KTS and LSS also eyed growth from 20 to 40 per cent in price.

The price boom of sugar firms amid upbeat performances has been largely attributable to positive sugar price movement.

The sugar price averaged VND26,000 ($1.13) per kg in June compared to just VND18,000 (78 US cents) in Q1 of this year, up more than 40 per cent.

Barriers remain for BNPL to be top tool

The buy now, pay later fintech segment is still in a feeling-out stage in Vietnam as it attracts both foreign and local players that must take on tough competition in order to survive.

Pham Nguyen Anh Huy, a founder of the RMIT FinTech-Crypto Center, said the buy now, pay later (BNPL) model is almost exclusively focused on the lending market, so it may face greater competition from traditional financial institutions as this is one of their main businesses.

“This will become more evident as competition in the BNPL market becomes more intense and the market gradually becomes saturated. At that time, companies may have to look for other sources of revenue such as short-term loans,” he explained.

He warned that in the current economic situation with inflation and high-interest rates, investors tend to switch portfolios away from risky investments and many technology companies have to cut staff. As a result, BNPL companies are likely to suffer a wave of liquidity shortages, which could negatively affect the growth of the segment.

Le Van Duong, partner of Indochine Counsel, pointed out that there are presently no clear laws on payment operations via BNPL for e-commerce businesses in Vietnam, and that in e-commerce transactions involving clients and operators, BNPL lenders function as a third-party actor.

“The State Bank of Vietnam must require the creation of a technological infrastructure to assure BNPL payment security for buyers, sellers, and service providers,” Duong said. “Simultaneously, the central bank or service providers must evaluate purchasers’ credit ratings.”

According to Research and Markets, the BNPL industry in Vietnam is predicted to develop gradually over the next several years, with a compound annual growth rate of 45.2 per cent between 2022 and 2028. This leads to an increase in BNPL-related purchases from $496 million in 2021 to more than $4.7 billion in 2028.

However, escalating competitiveness between startups is merely the beginning of BNPL’s continuous issues. Banking institutions, financial companies, and e-wallets in Vietnam are attempting to capitalise on the expanding trend.

For instance, some e-wallets with large market share such as ZaloPay or MoMo have joined with banking partners to develop BNPL in the consumer segment.

Other outstanding BNPL players in the Vietnam market include Kredivo, Kaypay, Ree-Pay, and Fundiin.

However, Singapore-based fintech company Atome Financial early this month withdrew from the Vietnam market after entering just last year. Atome was able to successfully penetrate Singapore, Indonesia, Malaysia, Hong Kong, and China in recent times.

Nguyen Anh Cuong, CEO of Fundiin, said in Vietnam, BNPL still faces licensing barriers, leading to difficulties in raising capital. When raising capital is difficult, startups don’t have the potential to accelerate expansion. However, BNPL in Vietnam is progressing slowly but steadily.

“To consumers, it is a strong tool to help them manage budgets effectively. As a result, Fundiin has observed a strong transition to BNPL from other pay-now methods. Particularly, we have earned a higher growth rate in payment value than traditional pay-now methods by 44 per cent points in the first 5 months of 2023,” said Cuong.

In October 2022, Fundiin raised over $5 million in the Series A funding round co-led by Trihill Capital and Thinkzone Ventures after getting $1.8 million investment in the Seed round led by Japanese funds Genesia Ventures and JAFCO Asia in 2021.

Elsewhere, Kredivo launched its Vietnam operations in 2021 as part of its ambition to build Southeast Asia’s leading BNPL model. In just six months it reached 100 merchants, and today boasts up to 300.

Citi forecasts positive growth trajectory for Vietnam in H2

Citi forecasts Vietnam's economy is expected to sail through the challenges and maintain a positive growth trajectory in the second half of 2023.
 
Vietnam's economy has shown progress in the second quarter of 2023, with GDP growth accelerating to 4.1 per cent on-year, highlighting the nation's resilience.

The services sector and tourism have played vital roles in this recovery, contributing significantly to two-thirds of the on-year GDP growth. Encouragingly, there are signs of improvement in the manufacturing sector, potentially fuelled by fiscal measures, and the construction industry is also showing signs of life.

The countercyclical fiscal stimulus continues to gain traction, paving the way for a robust economic recovery. Government spending is on the rise, with the potential to bolster banking sector liquidity and strengthen monetary policy transmission.

Notably, the government's efforts to address capital spending bottlenecks have borne fruit, as realised by investment capital from the state budget saw significant growth. This bodes well for future capital spending, creating opportunities for further economic expansion.

The gradual revival of Vietnam's tourism industry has been a driving force behind the nation's economic recovery, with international tourist arrivals steadily increasing. Flight seat capacity is also picking up, bolstering the tourism sector's resurgence.

Though some challenges persist, such as a decline in final consumption and export growth, it is anticipated that the drag from merchandise exports will ease in the second half of 2023, as external demand stabilises for key exports.

While the real estate sector faces headwinds, Vietnam's resilient economy has the potential to overcome these challenges over time. Heatwaves caused by El-Nino brought additional difficulties, including power shortages, which affected industrial operations. However, policymakers are proactively addressing these challenges to ensure a positive economic outlook.

Despite adjustments to GDP growth forecasts for fiscal year 2023 due to uncertainties like power shortages, the outlook for 2024 remains relatively positive, with GDP growth projected between 5.5 per cent and 6 per cent.

As the second half of 2023 unfolds, Vietnam's economic performance will be influenced by various factors. Continuing the recovery of the tourism industry, stabilising the manufacturing sector, and addressing real estate challenges will be crucial for maintaining growth.

Policymakers and businesses are committed to fostering an environment conducive to economic recovery and growth. Vietnam's resilient economy holds the potential to navigate hurdles and continue on a positive growth trajectory.

Vingroup’s revenues see a soar in the second quarter of 2023

Vingroup reported a revenue increase in the first half of 2023 thanks to the contribution from the sale of electric vehicle products.

According to its second-quarter financial report, in the first six months of the year, Vingroup recorded a consolidated pre-tax profit of VND7.93 trillion ($344.78 million), an increase of 128 per cent compared to the same period in 2022.

As of June 30, Vingroup reports an asset worth $26.4 billion, a light increase on-year. In the second quarter, the group mobilised and disbursed a total of $973.9 million, including loans worth $430 million from overseas.

In the first half of the year, Vingroup's total consolidated net revenue converted, including revenue from real estate transfer recorded in financial income, reached $4.45 billion, up 112 per cent over the same period last year, mainly thanks to the strong handover speed of low-rise real estate units at Vinhomes Ocean Park 2 project.

Production revenue increased by 55 per cent, thanks to a strong increase in electric vehicle sales in the first six months, five-fold higher than the same period, possibly due to the sale of electric cars to Green Taxi. Between January and June, VinFast sold 11,638 electric cars, including 5,072 units of VF e34 model-electric compact crossover SUV and 4,555 units of VF8- electric SUV model.

The reason for the breakthrough in electric car sales was the debut of the electric taxi service. Notably, in April, Green and Smart Mobility JSC (GSM) began operating the first pure electric taxi service in Vietnam - Green SM Taxi.

The sale of this segment is expected to continue to increase thanks to the GSM’s plan for a nationwide expansion to at least five provinces and cities this year.

In the second quarter, Vingroup mobilised and disbursed more than $973.9 million, including syndicated loans totalling $430 million from the international market.

Ninh Thuan looks to become renewable energy hub

Ninh Thuan Province aims to become a renewable energy hub of the country with an ambitious target of achieving a total capacity of 26,500MW of renewable energy by 2030.

The south-central province has already attracted significant local and international investment in renewable energy projects, making it one of the top localities in the country with a total installed capacity of nearly 3,500MW.

To achieve its goal, Ninh Thuan is transitioning its strategy to focus on developing models of solar and wind farms to create green energy and contribute to the nation’s power security.

From 2021 to 2030, the province will concentrate on developing solar, wind, hydroelectric, and liquefied natural gas energies. The target is to achieve 26,500MW in capacity, which is expected to account for 16% of the province’s gross regional domestic product by 2030.

To date, the provincial authorities have approved investment policy for 37 solar power projects with a combined capacity of over 2,500MW. These projects covering 3,500 hectares of land have total pledged capital of nearly VND68,700 billion.

Research by the World Bank showed that Ninh Thuan benefits from favorable wind speeds, making it an ideal location for wind power generation. The province has five areas planned for generating wind power with a total capacity of nearly 2,500MW, and offshore wind farms with an estimated capacity of 5,000MW are also under development.

Till now, the province has 17 wind farms approved by the competent authorities to be included in the national power plan and 14 projects have been put into commercial operation. An additional 10 projects have received provincial approval for preparing survey documents.

Real estate developers voice issue with new loan conditions

Contents in a new circular to take effect in September have raised concerns from real estate developers over potential added difficulties for businesses to access loans.

Circular No.06/2023/TT-NHNN, which amends and supplements a number of articles of a 2016 circular that provided operations for loans from credit institutions and foreign bank branches to customers, has new regulations on restrictions on real estate lending.

From six cases which do not allow loans from banks, Circular 06 adds another three cases to the ban.

Banks are not allowed to lend money to pay for capital contribution, purchase or transfer contributed capital or shares of limited liability companies, partnerships, and joint-stock companies which are not yet listed on the stock market or not registered for trading.

Furthermore, banks are not allowed to lend money to pay for capital contributions under the capital contribution or investment cooperation contracts for implementing a project that is not eligible to be put into business under the current law at the time the credit institution decides to lend.

Thirdly, banks are not allowed to lend for financial compensation, unless the loan fully meets the conditions specified in this circular.

According to the State Bank of Vietnam (SBV), the circular aims to control the use of capital for the right purposes and reduce the risks of handling collateral.

“The contributing capital by buying shares or pouring into projects that do not meet legal requirements brings more difficult and high risk for controlling the use of the loan and banks will be unable to give a regular assessment of the lenders’ ability to give back the debt,” the SBV said in a statement.

Pham Duc Toan, general director of EZ Property, said that the additions will further tighten capital flow into the real estate market, especially that businesses which want to cooperate in investment must be a listed company on the stock exchange.

“The number of businesses operating on the stock exchange is minimal compared to the volume operating outside and unlisted,” said Toan, who added that the SBV should reconsider the changes.

Nguyen Quoc Hiep, chairman of the Vietnam Association of Construction Contractors, said that real estate development will promote other sectors to develop and vice versa. “The market is difficult due to weak absorption. It is familiar for enterprises to experience a lack of cash flow, a decrease in liquidity, or even a loss of liquidity. In that context, this tightening would be much more difficult for them,” Hiep said.

The financial results for the year so far of a number of real estate enterprises indicate the difficulties that the industry is facing.

Eximland lost an accumulation of $260,000 in the first half of the year, reducing its total asset value from $31.9 million to $31.2 million compared to the previous half.

The An Duong Thao Dien Real Estate Investment and Trade JSC achieved a turnover of $191,000 only in the second quarter of the year, reducing 59 per cent compared to the same period of last year.

Figures from the Housing and Real Estate Market Management Division under the Ministry of Construction said that in 2022, the number of real estate businesses declaring bankruptcy and dissolution increased by 38.7 per cent over the same period last year, hitting nearly 1,200 companies.

Startups ponder moves during fundraising scarcity

Difficulties are encircling many tech startups, with capital flows into the field congested and sharply decreasing over the past few months.

Hoang Bao Long, CEO of tech development startup LacBird, admitted that the economic downturn has affected investors, partners, and customers of businesses.

“Three investment funds have committed to support LacBird up to $500,000, but we have not received any disbursement so far this year,” Long said.

This is in contrast from 2022 when the company quickly received disbursement from three investors as well as a venture capital fund.

Vietnam’s technology startup ecosystem ranks third in Southeast Asia in terms of attracting investment, but it is moving in a downward direction.

According to data tracking platform Tracxn in mid-July, total investment in tech startups in Vietnam in the first half of 2023 fell by 82 per cent on-year, from $372 million to $66 million.

Funding for tech startups at seed level saw the biggest decline when they raised only $7.3 million over the course of six months, down 81 per cent on-year. Most of the successful fundraising deals took place in the first quarter, with only $8.5 million successfully raised in Q2.

According to Tracxn, the decline stems from fluctuations in the global economy and rising inflation rates, which has made many investors more cautious.

“It is not easy to maintain a team of 500 engineers in this difficult context,” said CEO of ZSolution, Tran Quang Chau. ZSolution has been providing solutions to increase sales revenue and business administration since 2020, and is aiming to become a unicorn within the next two years.

Bui Diep, co-founder of the eJoy startup project in educational technology and the champion of Startup Vietnam 2022, said, “It is very difficult to convince people to invest in this period, especially for projects that do not yet have a product because customers are no longer willing to pay for things that are unclear like previously.”

Nevertheless, some investors are still willing to make a move if they can see the attractiveness and long-term development potential of a project.

“I can invest in a scalable startup that demonstrates the founder’s vision for the next decade. Startups need to verify the suitability of their products to the market and find a growth model that can generate sustainable profits,” said Hoang Thi Kim Dung, country director at Genesia Ventures Vietnam.

According to Tracxn, venture capital flows in the first half of this year tended to pour into healthtech, fintech, and enterprise applications. Healthtech successfully raised $53.5 million, up 118 per cent on-year, while fintech and enterprise applications successfully attracted $6.2 million and $5.1 million, respectively.

Blockchain infrastructure, meanwhile, remains a high-potential area as it continues to lead in terms of venture capital, with 20 private transactions and over $493 million in funding. This was followed by DeFi with $144 million and Web3 with $107 million, according to global statistics from CoinTelegraph Research Venture Capital.

In this country, the Vietnam Blockchain Association (VBA) in July launched the SwitchUp accelerator programme with the goal of solving the problem of interaction between investment funds and startups.

VBA vice president Phan Duc Trung said, “We are a non-profit professional social organisation, but we remain committed to promoting the development of the tech market by incubating capital sources to promote venture activities through connection with financial institutions.”

The main feature of the project is an investment committee that combines traditional financial investors and international investment funds with digital assets, Trung added.

With investment from more than 50 funds and international organisations, SwitchUp is committed to supporting startup projects throughout Vietnam and the wider region to raise capital and develop sustainably in the blockchain ecosystem.

Agribank to recover debt from Tan Hoang Minh’s Phu Quoc projects

The Vietnam Bank for Agriculture and Rural Development (Agribank) is set to auction properties from two projects on Phu Quoc Island owned by Tan Hoang Minh Group in order to recover VND500 billion in debt.

The auction, scheduled for August 16, will include assets from the Thien Bao Phuc Quoc and Hoang Hai tourism projects, with a reserve price set at around VND25.5 trillion.

These tourism and resort complexes, with a total investment of VND24 trillion and covering a combined area of 34 hectares, comprise hotel apartment towers, resorts, shophouses and villas.

Thien Bao Phu Quoc’s land use rights were pledged as collateral for loans by companies affiliated with Tan Hoang Minh Group, sharing the same legal representative as Ha Phuong Investment and Construction Services Trading Company.

Agribank’s auction portfolio also includes several other properties related to loans provided to companies within the Tan Hoang Minh ecosystem. These include over 11,400 square meters of commercial and service land worth over VND127 billion secured by Thanh Xuan Design and Interior Consulting JSC.

Various plots of land linked to Hanoi Import-Export and Investment Business and Service Company, Xuan Nam Construction Services Company, Manh Loan Construction and Trading Company, Mivi Vietnam Trading and Service Company, and Green-Art Landscape Infrastructure JSC are also set to go under the hammer.

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