Viet Nam’s stock market continued to recover last week with improved liquidity and strong inflows from foreign investments. However, as the benchmark VN-Index struggled at the resistance level of 1,350 points and fell in the last session, many securities firms have to take a more cautious view on the market this week.

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,341.45 points, marking the first fall in two weeks. Meanwhile, the HNX-Index on the Ha Noi Stock Exchange (HNX) was stable at 325.46 points.

For the week, the VN-Index still gained 2.1 per cent, while the HNX-Index rose by 3.3 per cent.

The market liquidity on both exchanges was higher than the week before, but still lower than the 20-day moving average. The average liquidity was VND23.8 trillion (US$1.03 billion) per session.

Trading value on HOSE climbed by 21 per cent to VND102.7 trillion, equivalent to an increase of 25.7 per cent in volume to over 3.2 billion shares, while the trading value on HNX inched 53.6 per cent higher to VND16.7 trillion, equivalent to an increase of 50.2 per cent in volume to 668 million shares.

According to Viet Dragon Securities Corporation (VDSC), the market benchmark still couldn’t break over the resistance level of ​​1,350 points in the last trading session of the week and dropped slightly. The liquidity in this session increased compared to previous sessions and was higher than the average of the last 50 sessions, showing that investors were taking advantage of the rapid recovery to take profits in the short-term.

The VN-Index is expected to continue to struggle at the resistance level and may correct. However, the correction, if any, is only for rebalancing the market after completing the recovery, the securities firm added.

Therefore, investors should temporarily rebalance their portfolios and take profits on stocks that are under great resistance. At the same time, investors should seek investment opportunities to disburse when the market is balanced and stable again, VDSC recommended.

Meanwhile, Mirae Asset Securities Viet Nam said that investors' bullish sentiment was reflected in a series of four consecutive gaining sessions at the beginning of last week.

In the last session, the VN-Index touched the threshold of 1,350 points in the early session with the positive market breadth. However, selling pressure, which suddenly surged in the afternoon session, dragged the benchmark away from this important resistance level.

During the week, foreign investors flocked back to the market as they net bought in all five sessions with a total value of more than VND2.4 trillion. Of which, Vinhomes JSC (VHM) was in first place in the net buying list with a value of nearly VND1 trillion, far ahead of the second and third positions of Sacombank (STB) and SSI Securities Corporation (SSI) with a value of VND602 billion and VND522 billion, respectively.

On the net selling front, Vingroup JSC (VIC) witnessed the largest net sell value of VND340 billion.

Mirae Asset said that after recovery of nearly 120 points in three weeks, the VN-Index is facing short-term resistance at 1,350 points. Next week, the market is likely to be under short-term correcting pressure and the nearest support level is 1,300 - 1,310 points.

According to Vietcombank Securities Company (VCBS), the benchmark has recovered significantly from the short-term bottom of 1,250 points, even amid the uncertainties of the international financial market and complicated developments of the fourth COVID-19 outbreak in Viet Nam.

“The index will continue to move in a range of 1,300 - 1,350 points in the next few weeks. And the closest resistance level in the near future is 1,350 points,” VCBS said.

The securities firm recommends short-term investors can consider taking profits of some stocks that have achieved expected profits, and at the same time switch to holding mid-cap stocks that not yet jumped strongly in the previous period.

Meanwhile, long-term investors can take advantage of the corrections to continue to accumulate target stocks with positive growth outlooks and healthy financial foundations in 2021.

Taking a more optimistic view, Bank for Investment & Development of Vietnam Securities Company said that the correction of last week will not affect the market’s rally trend to 1,350 - 1,380 points this week.

Last week, the market’s recovery helped all stock groups gain points.

Data compiled by Saigon - Hanoi Securities JSC (SHS) showed that real estate stocks rose strongly with pillar stocks such as Novaland (VNL), Vinhomes JSC (VHM) and Vingroup JSC (VIC) up more than 3 per cent.

Stocks of securities companies, aviation stocks and information technology stocks also recorded big gains in a range of 0.9 - 9.2 per cent.

Government always accompanies businesses amid COVID-19: PM

The Government always accompanies businesses and strives to seek solutions to remove difficulties facing the business community amid the COVID-19 pandemic, Prime Minister Pham Minh Chinh has said.

PM Chinh made the affirmation while chairing an online conference on August 8 between the Government and representatives from enterprises, business associations and localities nationwide on solutions to remove difficulties and promote production and business activities of enterprises in the context of the pandemic.

The Government leader mentioned difficulties facing production and business activities of a large number of enterprises in many localities across the country where social distancing measures are being imposed to prevent the spread of COVID-19.

With the unity and determination of the entire political system and support of businesses and the people, the fight against the pandemic has initially achieved positive results, PM Chinh said.

He stressed that the Government and the Prime Minister have issued many drastic and flexible solutions, and mobilised resources to repel the pandemic and maintain production, contributing to maintaining stable socio-economic development in the last seven months.

The PM asked participants to give practical, objective and comprehensive assessments of difficulties and challenges facing enterprises, causes and lessons, and propose specific, practical and effective solutions to those problems.

Participants pointed out a number of difficulties such as shortages of production materials; increasing transport costs; disruption of production, consumption and supply chains and export; difficult circulation of goods, shortages of local and foreign experts, and difficulties in accessing support policies of the State.

They suggested the Government, the Prime Minister, ministries, sectors and localities pay attention to solving issues related to regulations on COVID-19 prevention and control such as transport control, goods circulation, vaccinations, entry of experts, policies to support businesses affected by the pandemic, and digital transformation in enterprises.

PM Chinh acknowledged and highly valued enthusiastic and realistic comments at the meeting, saying that those will be assessed, then the Government will issue a resolution on supporting and developing businesses in the time to come.

According to the PM, despite complicated developments of the pandemic, the country's economic growth still expanded by 5.64 percent in the Jan-July period, with export-import turnover and FDI attraction increasing stably.

He emphasised the need to continue persistently implementing set measures and goals, especially giving priority to preventing the spread of COVID-19, and maintaining production in safe areas.

“We set the highest goal is to prevent health and socio-economic crises from happening, ensure the health and life of the people first, and strive to bring life back to normal in the shortest time, no later than the end of 2021 or early 2022”, he said.

The government leader asked for more strictly implementation of social distancing measures in the time to come.

Regarding the vaccination strategy, he underlined the necessity to promote the imports of vaccines, technology transfer for research and production of vaccines in the country, and accelerate COVID-19 vaccination programmes across the country.

All three issues are being directed by the Government to implement drastically by all channels and mechanisms, he noted.

The PM assigned the Ministry of Health to coordinate with relevant ministries and sectors to effectively implement the vaccine strategy, including promoting public-private cooperation and speeding up vaccinations in line with the order of priority.

The Ministry of Planning and Investment will be responsible for giving advice to the Government and the PM to come up with timely solutions to socio-economic development.

The Ministry of Finance must urgently implement tax and fee exemption and reduction solutions in order to quickly support people and businesses.
Meanwhile, the Ministry of Transport was asked to taken measures to ensure the circulation of goods./.

Rubber companies enjoy rising earnings despite higher costs of materials

Many Vietnamese rubber companies have reported positive second-quarter profits despite the rising price of materials needed to produce the popular commodity.

The price of natural rubber has increased sharply since the end of last year and stayed high for the first half of this year. Rubber futures prices on the Tokyo exchange also maintained a high of around 230 JPY per kilogram. This has cooled since the end of June to 211 JPY per kilogram, but still up 32 percent over the same period last year.

This development could be detrimental to the rubber tire business as rubber raw materials account for 70 percent of the product’s cost. However, businesses in this industry still recorded very positive business results in Q2 thanks to an increase in consumption volume in both domestic and export markets.

According to the statistics of the Vietnam Automobile Manufacturers Association (VAMA), automobile sales reached 150,481 units, up 40 percent over the same period last year. Passenger cars, in particular, increased by 37 percent, commercial vehicles rose by 48 percent and specialised-purposes vehicles climbed by 68 percent. In the second quarter alone, car sales reached 79,237 units, up 11 percent compared to the previous quarter and up 58.4 percent over the same period last year.

Da Nang Rubber Co (DRC) – a blue-chip on the HCM City Stock Exchange – has announced Q2 revenue up 52 percent to 1.2 trillion VND (52.2 million USD). Its post-tax profit was 2.2 times higher than the same period last year, reaching 106 billion VND. In six months, its revenue increased 31.3 percent to 2.1 trillion VND and post-tax profit was 170 billion VND, double the same period last year. The gross profit margins increased from 14.8 percent to 18.8 percent in the second quarter and increased from 14.8 percent to 18.6 percent over six months.

According to SSI Research, DRC suffered from high raw material costs in the second quarter as natural rubber, synthetic rubber, chemicals, and black coal respectively increased by 26 percent, 15 percent, 8 percent and 25 percent, compared to the previous quarter. However, sale volumes of bias tires still rose by 34 percent and radial tires rose by 67 percent. Corporate profit margins improved partly thanks to higher radial plant operating capacity and reduced depreciation expenses.

The export activities of the enterprise also prospered with a turnover of 27 million USD in Q2, up 95 percent over the same period last year and up 43 percent compared to the previous quarter thanks to the strong recovery of orders from the US and Brazil.

In the same period last year, the COVID-19 pandemic broke out strongly in these two markets, causing orders to decrease. Export volume of radial tires reached 128,000 units, up 90 percent and bias tires reached 78,000 units, up 160 percent.

Similarly, thanks to the expansion of consumption and export markets, the Southern Rubber Industry Joint Stock Company (CSM) recorded Q2 revenue of 1.39 trillion VND, up 12 percent over the same period last year. The cost of goods sold increased to 18.5 percent as consumption volume and input material prices both rose. However, thanks to cost reductions, profit after tax still rose by nearly 21 percent to 23 billion VND. In six months, the company achieved revenue of 2.47 trillion VND, up 13 percent. Profit after tax totalled 36 billion VND, up 14 percent over the same period last year.

This year, CSM aims to export to a number of new markets such as South America and Eastern Europe, on top of current markets including Brazil, India and the US. Export revenue in 2020 increased by 12 percent compared to the previous year thanks to the output of radial tires, which accounted for 60 percent.

Sao Vang Rubber JSC (SRC) revenue in the second quarter also increased by 16.5 percent to 240 billion VND and pre-tax profit increased slightly from 49.8 billion VND to 50.6 billion VND.

In the first half of the year, its revenue reached 497 billion VND, up 24 percent. In which, export revenue rose by 31 percent to 101 billion VND. Its domestic revenue increased 22 percent to 395 billion VND while profit after tax was the equivalent to the same period last year reaching 24 billion VND./.

AI plays key role in national digital transformation

Artificial intelligence (AI) has become one of the key technologies serving the national digital transformation process, which involves in all stages from data digitalisation, professional activities to operational model transforming in Vietnam.

Under a national strategy on AI research, development and application to 2030, Vietnam aims to make AI a spearhead technology in the fourth Industrial Revolution.

Vietnam has various advantages for innovative startups and technological development, especially breakthrough technologies in the field of AI thanks to an open business environment and abundant young human resources.

AI has been applied in many sectors such as health care, education, agriculture, transport, and e-commerce. AI technologies have helped Vietnam gain breakthrough development steps recently.

According to Deputy Minister of Science and Technology Bui The Duy, Vietnam is one of the first countries in the world to design national programmes and strategies on digital transformation.

This is a good condition for the country to actively grasp opportunities brought about by the fourth Industrial Revolution to rise and change its rankings in the field, he said.

Currently, AI solutions and practice in Vietnam are in the first stage of the automation and predictive analysing process, while more complex AI applications are to be adopted in the public sector.

The fourth Industrial Revolution, with the core being digital transformation and digital economy, has created an equal opportunity for Vietnam to rise to the same level with the rest of the world. A national digital transformation programme until 2025 with a vision to 2030 has been approved by the Prime Minister under Decision No. 749/QD-TTg issued on June 3, 2020.

As part of efforts to implement the programme, ministries, sectors and localities have designed their own programmes and plans in digital transformation.

Many domestic firms have mastered key technologies and developed platforms serving the process, with more than 40 “Make-in-Vietnam” platforms introduced so far.

The portal in support of small and medium-sized enterprises has assisted thousands of businesses in applying digital platforms serving their digital transformation.

Besides, activities to step up the application of AI and digital platforms in trade promotion and trademark popularization with the combination of direct and online formats have helped enterprises access partners and markets effectively./.

Germany – a potential market for Vietnamese businesses

With a large network of Asian food distributors, Germany represents a potential market for Vietnamese products to penetrate and gain a firm foothold there in the long run, according to Bui Vuong Anh, Vietnamese Trade Counsellor to Germany.

Vietnamese products are on display at a supermarket in Germany
Anh says Germany is a big but untapped potential market in Europe. Last year it imported US$196.6 million worth of fresh and processed meat and fish products from Vietnam, accounting for less than 1% of its import demand.

Similarly Germany spent US$303 million on purchasing fresh fruit, processed fruit and nuts from Vietnam, or just 2.7% of its import demand, and US$429 million on tea, coffee and spices, or 10% of its import demand.

Currently Vietnam is Germany’s largest trading partner among ASEAN countries and its fourth largest trading partner in Asia, only after China, Japan and the Republic of Korea.

The enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) in August 2020 has opened up a wealth of opportunity for Vietnamese businesses to expand their exports in this demanding market, Anh stresses.

In addition, he says Germany has a large Vietnamese community who are living, working and doing business in their host country. It possesses a large network of distributors of Asian products, mostly originating from Vietnam, which are considered potential consumption and transit hubs of Vietnamese exports in not only Germany but the European Union.

To boost exports the Trade Counsellor suggests businesses should modernize production technology, diversify product patterns, and improve product quality to cater to German consumer tastes, while at the same time better utilizing the EVFTA.

The Vietnamese Trade Office in Germany as well as the Vietnamese Trade Offices in Europe always attach great importance to trade promotion to support domestic exporters in quest of bringing Vietnamese products to the German market, Anh says.

According to the Trade Counsellor, his Trade Office is working closely with the Trade Promotion Agency under the Ministry of Industry and Trade to implement a distribution and logistics scheme, aimed at establishing large distribution channels to help Vietnamese exports penetrate deeper and gain a firm foothold in Germany as well as in the EU.

Online trade event to connect VN, South Korea firms next month

The South Korea Trade-Investment Promotion Agency (KOTRA) in Ha Noi plans to organise an online meeting to connect Vietnamese businesses and South Korean companies from Nonsan City, South Chungcheong Province next month.

The event is expected to feature representatives of seven South Korean businesses and will last from September 13 to 17.

It aims to promote bilateral trade between Vietnamese buyers and South Korean suppliers from Nonsan, facilitating trade between the two sides.

Nonsan City, two hours drive from Seoul city by car, is dubbed as a "Health City" because its land is useful for cultivating crops with a high nutrient content that is good for a person's health such as rice, ginseng, strawberries and watermelons. The city also has many industrial parks specialising in food and beverage processing, metal fabrication, electronic components, mechanical engineering and industrial equipment.

In the first six months of this year, KOTRA helped connected Vietnamese businesses with more than 18 South Korean business delegations, the equivalent of 300 enterprises via online exchange events. Among them, nearly 100 new Korean exporters were connected for the first time.

The number of online transactions have been increasing month by month despite travel restrictions between the two countries due to the COVID-19 pandemic, KOTRA said. 

The impact on tightening cross-border online advertising rules in Vietnam

To enforce more rigorous control of cross-border advertising activities, the Vietnamese government issued Decree No.70/2021/ND-CP dated July 20, amending and supplementing provisions of Decree No.181/2013/ND-CP dated 2013, elaborating on some articles of the Law on Advertising. Decree 70 will take effect on September 15, 2021.

According to the Authority of Broadcasting and Electronic Information, Decree 70 will help news media agencies have better control over cross-border advertisements on platforms such as Facebook, YouTube, and Google. To that end, Decree 70 stipulates new obligations for these providers while also consolidating executive authority over cross-border advertising activities under the Ministry of Information and Communications (MIC).

The most significant revision by Decree 70 is the overhaul of Article 13, which provides the definitions and obligations for cross-border advertising service providers. Article 13 redefines cross-border advertising service as the utilisation of websites hosted outside Vietnam to provide ads targeted at Vietnamese consumers and profit from activities in this country.

Notably, Article 13 defines such websites as a “single or multi-website system, providing users with services for storage, provision, use, search, or exchange of information, sound or image sharing, forum creation, or live chat to supply advertising services”. This would effectively encompass many types of online environments, specifically social network sites such as Facebook.

In addition, more entities will be taxed on cross-border advertising revenue under Article 13, including not only service providers but also both domestic and overseas advertisers.

Similar to offshore social network providers, cross-border advertising services must comply with the country’s cybersecurity and intellectual property laws in addition to the Law on Advertising. Decree 70 also requires service providers to provide the MIC with direct contact information 15 days before commencing cross-border advertising activities in Vietnam as well as annual or ad-hoc reports.

Service providers must also block and remove illegal or infringing content from their advertising platforms upon the MIC’s request, as well as supply information on organisations or individuals suspected of illegal online advertising activities. Decree 70 also grants advertisers the right to demand that service providers supply the means for monitoring and removing illegal advertising content.

In the past, cross-border advertising services were under the supervisory authority of the Ministry of Culture, Sports and Tourism. Decree 70 revises this and consolidates all supervisory authority under the MIC. Departments and agencies of all levels must vigilantly detect illegal cross-border advertising activities and report to the MIC.

Within a five-day window, the MIC will conduct investigations and notify service providers of the illegal ad content or activities that must be addressed or removed in 24 hours. If service providers fail to adhere to the MIC’s request, the ministry will take any appropriate legal measures to block the illegal advertisement.

This authority is also extended to other competent agencies should the offence threaten Vietnam’s national security. It is unclear what the blocking measures would entail under Decree 70, and it remains to be seen how this mechanism will work in practice.

Textile and apparel sector yearning for government support to curtail COVID-19 impacts

Textile and apparel businesses in South Vietnam are facing critical levels of disruption due to severe social distancing measures to combat the COVID-19 pandemic and are requesting urgent support from the government and other industries to reboot operations.

Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS) said that the sector is facing unprecedented times as businesses accounting for 62 per cent of the textile and apparel sector’s total export value has to suspend production to prevent the spread of COVID-19.

After a while of exercising the "stay at work" scheme, many of these firms could no offset the escalating costs of maintaining business through much-reduced productivity.

“Several firms with dozens of production plants had to stop production. Only fibre and textile dyeing firms which use less workers and more machinery could maintain effective operations through the scheme, while the more labour-intensive apparel industry found itself quickly out of its depth,” said Giang.

Supply disruption in southern locations have been posing mounting challenges to the entire textile and apparel industry, particularly due to intense pressure to deliver orders on time to foreign partners.

Giang noted that in the fashion industry if products are not delivered at the right time, they can quickly lose their value. If local firms failed to deliver their products in time they could suffer significant damage as they would incur contractual fines and lose customer trust.

“Maintaining production in August is extremely hard for the textile and apparel sector as Ho Chi Minh City and 18 other southern localities continue to apply stringent measures under Directive No.16/CT-TTg to contain the pandemic. This will certainly impacts delivery timlines,” said a VITAS source.

The latest figures from the Ministry of Industry and Trade (MoIT) showed that the impact of many southern production plants suspending production due to COVID-19 were instantly seen in the July industrial production index. Accordingly, the index dropped 19.4 per cent for Ho Chi Minh City, 14.6 per cent for Long An province, and 13.7 per cent for Ca Mau.

While many production plants in southern industrial parks had to suspend production, those in Bac Giang and Bac Ninh in the north – the epicentre of the COVID-19 outbreak this late April – have resumed production but are drastically short on hands. These plants are also facing a shortage of production materials.

Luong Van Thu, chairman and general director of Dap Cau Garment JSC, a big player in the northern region, said that after resuming production at three plants in late June, they have been unable to man all production lines while expenditures have been skyrocketing due to periodical COVID-19 testing and rising logistics costs.

The textile and apparel sector raked in nearly $19 billion in total export value in the first half, roughly half of the full-year target of $39-39.5 billion outlined in the best-case scenario. However, Giang from VITAS shared that if the pandemic situation would last for several months, the sector could achieve around $32.5-33 billion in total export value for the full year.

More critically, if supply chains remain disrupted and the Vietnamese market remains unstable, foreign customers would shift orders elsewhere, damaging medium-term development prospects.

Additionally, VITAS forecast lasting damage from the pandemic, with only about 60-65 per cent of workers returning after the pandemic. The ensuing labour deficiency would badly impact labour productivity.

Recently, four professional associations – VITAS, Vietnam Leather, Footwear and Handbag Association (LEFASO), Vietnam Electronic Industries Association (VEIA), and Ho Chi Minh City Handicraft and Wood Industry Association (HAWA) – said that they have found vaccine sources and requested government support in completing import procedures to vaccinate their labourers.

The American Apparel and Footwear Association (AAFA) has also called for the US administration to donate more vaccines to Vietnam, helping to preserve apparel and footwear supply chains, avoiding the devasting impacts of current complex COVID-19 situation in Vietnam’s southern locations.

However, Giang from VITAS noted that the current pace of vaccination in the textile and apparel sector is still slow. Only a few businesses based in Ho Chi Minh City reported that their workforce have got their shots while workers in the remaining 18 southern localities were still waiting.

“Textile and apparel, footwear, and seafood are making great contributions to Vietnam’s export performance and creating jobs for dozens of millions. The government, should consider giving priority in vaccination for the sectors making large contributions, helping them reboot production at the soonest,” said Giang.

Prompt measures needed to prevent disruption to rice supply chains

The Ministry of Agriculture and Rural Development (MARD) held a conference on August 7 to discuss measures aimed at removing certain obstacles facing the rice industry due to the coronavirus pandemic.

Reports suggest that rice purchases in the Mekong Delta have dropped by 20-30% during the summer-autumn crop as rice traders are facing movement restrictions imposed to prevent the spread of COVID-19.

At the same time, rice enterprises are unable to maintain their workforce for purchasing and processing rice due to the inability to afford the living conditions needed for their workers at the factories.

Rice drying and grinding facilities have also been forced to close as negative coronavirus tests are required.

Speaking at the conference, MARD Minister Le Minh Hoan stated that it is the inconsistency in the rice industry has made a difficult situation worse and the parties concerned need to sit down together to discuss solutions.

He noted that the rice industry in the Mekong Delta is not subject to administrative division as rice traders usually move between provinces and cities to purchase the grain, so any hiccup cany result in large backlogs.

Minister Hoan said all provinces pledge to facilitate the circulation of goods but such a policy is not being implemented by authorities at lower levels.

As such he suggested provincial governments need to keep abreast of the actual situation in order to promptly address the difficulties facing enterprises and farmers.

Solutions devised to promote agricultural and aquatic products in South and Central Highlands

A video conference on connecting the consumption and promoting exports of agricultural and aquatic products in the South and Central Highlands opened on August 6.

The event, jointly held by the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development, is taking place over 3 days, August 6, 9, and 10, and is one of the activities within the framework of the National Programme on Trade Promotion in 2021.

One of the most interesting contents at the conference is practical support solutions and activities among ministries, localities and businesses in the South and Central Highlands in order to promote domestic and foreign consumption flows for agricultural and aquatic products.

Speeches at the conference also proposed solutions to remove difficulties related to the consumption of agricultural products in the South and Central Highlands in the coming time, including promoting the development of the domestic market, identifying the domestic market as the focus and foundation for the development of consumption of agricultural, aquatic and seafood products.

In addition, more attention will be paid to building the consumption habit for Vietnamese goods in general, agricultural and aquatic products, and seafood in particular, thereby improving the reputation of domestically produced goods.

Priority should also be given to the agro-food processing industry to create products with high added value and strong brands, with domestic input materials, to reduce the load on the consumption of fresh agricultural products, helping serve both domestic and international markets.

Modern distribution channels such as e-commerce should be facilitated in addition to applying information technology and digital transformation in export activities.

Vietnam’s resort market makes timely preparation for post-COVID-19 period

Despite complicated development of COVID-19 epidemic in the world and Vietnam, with the accelerated speed of vaccination against COVID-19, the tourism sector is likely to soon develop again; therefore, experts have said that the resort market in the country should make timely preparation for the post-COVID-19 period.

Commenting on investment prospects for resorts in Vietnam, the Director of Savills Hanoi Matthew Powell said that talking to Savills, many international investors expressed their interest in high-luxury resort and hotel property segment, for both operating projects and those in the development process.

He also noted that reason for this wave of investment in the market was the investors’ long-term view of the recovery potential of the resort market in Vietnam after the epidemic is controlled and activities serving domestic and international tourists are reopened.

According to Savills’s market report, the post-pandemic outlook of Vietnam's hotel industry in the first 6 months remains promising. In Hanoi and Ho Chi Minh City, the wave of investment in the resort and hotel market will draw the involvement of famous international operating brands. Accordingly, by the end of 2023, Ho Chi Minh City will have 2,500 more hotel rooms, 70% of which will come from well-known brands such as Fusion, Hilton and InterContinental. In Hanoi, it is expected that 14 projects with nearly 2,600 rooms will be put on the market from the second half of this year until 2023, including big brands such as Eastin, Grand Mercure, Fairmont, Four Seasons, Lotte, Dusit and Wink.

Savills experts have emphasised the importance of vaccination against COVID-19 because it is a factor that helps increase confidence of the tourism sector in its preparation for the reopening of inbound and outbound tourisms. This statement has once again reaffirmed the view on the relationship between COVID-19 vaccination and the speed of reopening tourism that was previously made by international organisations.

On July 5, Senior Vice President of the World Travel and Tourism Council (WTTC) Virginia Messina shared that WTTC believes that the governments around the world should take advantage of its implementation of vaccination against COVID-19, which can significantly ease travel restrictions and spur a broader global economic recovery.

In a report at the end of July, the United Nations’ World Tourism Organisation (UNWTO) pointed out the close relations between the reopening of tourism and the rate of vaccination against COVID-19. The destinations with the most stringent restrictions have low vaccination rates. In contrast, tourism has been gradually recovering in destinations with higher vaccination rates, where the countries can reach agreements on travelling such as Schengen region in Europe.

Vietnam is currently launching the largest vaccination campaign in its history to quickly achieve herd immunity. According to the Ministry of Health's report, 263,272 doses of COVID-19 vaccine were injected on August 4. So far, Vietnam has administered 7.553.318 million vaccine doses across the country, including 6.774.332 million first doses and 778,986 second doses.

With the efforts to control the epidemic and the current Covid-19 vaccination campaign, it is necessary to make good preparations for the resort and hotel market to avoid a shortfall resulting from increased demand when the tourism reopens.

Matthew Powell cited that in the US, hotels are facing certain difficulties following their reopening due to the shortages of staff and supply chain. In addition, the room rates have increased due to the customers’ expectations and large demand for tourism after a long period of travel restrictions.

Tourism in European countries have been improved and many experimental models and processes have been calculated and implemented. Many hotels which had opened previously and maintained only a third of the number of employees or rotated staff had faced shortages in human resources when tourism was reopened. “These are some notable points of the previous market, which requires careful preparation for the domestic market, because otherwise, Vietnam could experience similar difficulties,” said the Director of Savills Hanoi.

Food processing businesses must receive best protection in Covid-19 fight
 
Along with medical equipment manufacturers, food processing companies and commodities distributors must be in the top priority list to receive protection during this Covid-19 fight, said Deputy Prime Minister Vu Duc Dam in his visits yesterday with Vice Chairwoman of Ho Chi Minh City People’s Committee Phan Thi Thang to food processing enterprises which are applying the ‘3 on-site’ model in the city.

Deputy Prime Minister Vu Duc Dam and Vice Chairwoman of HCMC People’s Committee Phan Thi Thang paid a visit to Vissan to check Covid-19 prevention methods here. (Photo: SGGP)
General Director of Vissan Nguyen Ngoc An informed Deputy Prime Minister Vu Duc Dam that his company has tried to achieve the dual target set by HCMC. Despite having some Covid-19 infected employees, with the full support of the localities, manufacturing activities have been resumed here. The output now is 80 percent of the regular one; and from August 15 it will turn back to normal.

Vissan proposed that all its staff be vaccinated at least one dose, and that it be allowed to actively monitor its F1 employees once they have finished their quarantined time (under the supervision of the local medical agency). Due to the special characteristic of processing fresh meat, Vissan hopes that HCMC People’s Committee allow its slaughtering and meat transport staff to travel in curfew time.

Deputy Prime Minister Vu Duc Dam is delivering a speech at the visit to Vifon. (Photo: SGGP)
As stated by Bui Phuong Mai, Chairwoman of Vifon’s Director Board, after implementing the ‘3 on-site’ model for one month with four regular Covid-19 tests for all current employees, her company has seen a significant rise in overhead cost while the productivity now is only 45 percent of the normal one. Therefore, many orders are still on hold.

She wishes to have a better solution than this ‘3 on-site’ model so that the working activity can be 100 percent resumed, and thus processing all orders on time. Otherwise, Vifon and other similar businesses will be penalized because of not being able to fulfill their orders as stated in the contracts, leading to a market share loss in the future.

Chairwoman of HCMC Food and Foodstuff Association Ly Kim Chi stated that many businesses in the city find it difficult to access vaccine and let their staff vaccinated even though they have submitted the vaccination list already. This might create more pressure on the food supply chain since these enterprises can no longer maintain the ‘3 on-site’ model.

"The Association has suggested that HCMC urgently allocate 1,949 vaccine doses to the districts where 11 essential commodities manufacturers are sited. In addition, all staff of the same company should be vaccinated together at one round so that they can design upcoming manufacturing activities accordingly”, said Ms. Ly Kim Chi.

Deputy Prime Minister Vu Duc Dam commented that HCMC right now is the fiercest battlefield in this Covid-19 fight. The application of Directive 16 has brought about various difficulties to the public as well as manufacturers.

Besides Vissan and Vifon, he has received feedbacks from many other food processing companies regarding the performance reduction and abnormally high demands. Therefore, he proposed that the municipal authorities give top priority in the vaccination campaign to employees of key enterprises. It is possible that the healthcare agency of the city delivers the requested vaccine doses to specific businesses in need, with the commitment that they will use these doses to the correct subjects.

Furthermore, businesses can actively sign contracts with medical organizations for daily health status monitoring task to timely discover and treat infected cases.

The HCMC Department of Health received the direction of the Deputy Prime Minister and promised to create favorable conditions for enterprises to cooperate with local state or private medical agencies to vaccinate employees on site, ensuring transparency and safety.

The Department also suggested that businesses collaborate with local healthcare units to monitor the health of their workers in the last 14 days of the quarantine time.

Regarding inadequacies in inter-district goods delivery, in distribution to medical lockdown areas, and in limited warehouse space in districts of small surface area as reported by Tikinow Smart Logistics Ltd., Deputy Prime Minister Vu Duc Dam suggested that the business establish temporary storage sites in districts and let the local voluntary force in medical lockdown areas to receive goods at regulated points before delivering these goods to buyers.

Vice Chairwoman of HCMC People’s Committee Phan Thi Thang informed that on August 3, HCMC People’s Committee hosted a meeting to listen and then address current trouble reported by businesses in HCMC Food and Foodstuff Association.

Other unaddressed problems like vaccine access, employees coming back to work after medical quarantine time, traveling in curfew time will be handled by flexible solutions so that the food and foodstuff supply chain can be maintained successfully in HCMC, especially during this social distance period.

“Since HCMC needs to fight for a long time, certain short-term methods prove impractical. One solution sometimes cannot apply to all businesses and all pandemic prevention forces. The city needs to be more flexible. No matter what solutions are chosen, it is of top priority to maintain production and distribution of essential goods such as medical equipment, food and foodstuff. Therefore, manufacturers of these merchandise kinds must receive the best protection via special behavior criteria, making them more at ease in working activities”, said Mr. Dam.

One possible method as suggested by the Deputy Prime Minister is to schedule shifts for employees according to accommodation and the green / red area status. Finding suitable temporary hostels or dormitories for workers and organizing safe pickups for workers are also highly recommended.

Ministry proposes solutions to remove difficulties in rice consumption

Although the growing area of rice this year decreased compared to last year, paddy prices in the Mekong Delta still plunged sharply, with some rice varieties falling by VND1,300 per kg because enterprises could not export after purchasing paddy.

On the morning of August 7, Minister of Agriculture and Rural Development Le Minh Hoan chaired an online conference on the situation of rice production and consumption in the Mekong Delta after a special task force of the Ministry of Agriculture and Rural Development (MARD) proposed the Government to organize the purchase and reserve of rice for farmers.

According to a report at the conference on the progress of summer-autumn rice production this year in the Mekong Delta, farmers sowed 1,509,600 hectares of rice compared to a plan of 1,520,000 hectares, achieving 99.32 percent, down about 14,454 ha year-on-year.

At present, farmers have harvested 702,000 hectares of summer-autumn rice, nearly 123,300 hectares lower than the same period last year. Rice productivity reaches 57.86 quintals per ha, 0.97 quintals per ha lower than the same period last year. Rice production touches 4,059,000 tons, down 793,000 tons year-on-year.

Around 420,000 hectares of rice are at the ripening stage, 370,000 hectares are at flowering, and 18,700 hectares are at tillering.

About 680,000 ha of rice are estimated to be harvested in August, so the accumulated harvest by August is 1,382,000 ha. With a rice output of 3,808,000 tons in August, cumulative production reaches 7,867,000 tons.

It is expected that the harvest of the remaining rice area of 128,000 ha will end by September 15, and the rice output in the month is estimated at 651,000 tons.

The MARD informed that the Mekong Delta provinces had sowed 365,239 hectares of autumn-winter rice this year, reaching 53.32 percent of the plan, 15,557 hectares lower than the same period last year. The autumn-winter rice was sowed later than the same period last year due to the impact of the Covid-19 pandemic. Moreover, the delayed harvest of summer-autumn rice also affected the sowing progress of the autumn-winter rice crop. On the other hand, trucks carrying seeds cannot circulate through the provinces due to social distancing following Directive No.16, thus affecting the sowing progress.

According to reports of the MARD and the Ministry of Industry and Trade, the prices of rice and other agricultural products in the South have fallen sharply, not because of supply and demand but severe disruption of the supply chain. Although import partners in other countries still need to import Vietnamese rice, enterprises cannot deliver goods.

Due to serious container congestion at Cat Lai Port in HCMC in the past 2-3 weeks, rice was delivered extremely slowly from warehouses to the port. Or it was transported to the port, but there were no stevedores to load it onto the vessels. Stevedores have to carry out three-on-site production, so they face difficulties with the conditions on board.

Saigon Newport is the main container port, but it has stopped receiving rice for export from July. It is unknown when the port can resume operation to normalcy. The number of containers jammed at Cat Lai port is high because only 50 percent of the direct staff are left.

Due to congestion in circulation, transportation, and export, according to the estimate of Vietnam Food and Foodstuff Association, the price of regular rice at fields in the Mekong Delta slid by an average of VND133 to only about VND5,000 per kg in the past week. Of which, IR50404 rice variety dropped by VND900-VND1,300 per kg compared to the same period last year.

According to the MARD, currently, the purchase of rice has decreased by 20-30 percent due to difficulties in exporting. Many enterprises cannot afford to implement three-on-site production, so they cannot maintain production. The rice drying system, milling plants, and boats could not operate due to the requirement to have a certificate of quick test for Covid-19.

To resolve the deadlock, the MARD proposed to prioritize vaccination for the workforce in the supply chain, including truck drivers, boat crew, factory workers, port workers, goods inspectors and fumigators, employees of export companies, who have to visit many places, such as ports, and officers of customs, C/O, and quarantine offices.

Besides, the Government should have policies to support taxes and fees for businesses during the pandemic because, at present, enterprises have to pay for the costs of rapid and PCR testing, food, and accommodation for live-in workers.

"New regulations of the authorities must follow the roadmap, avoid suddenness because enterprises cannot adopt promptly, especially shipments on the way to the port," the MARD proposed.

According to the Department of Import and Export under the MoIT, rice exports in the first seven months of this year reached nearly 3.6 million tons, with a value of roughly US$1.94 billion, down 10.6 percent in volume and 0.6 percent in value compared to the same period last year.

Associations propose urgent vaccination for workers of export industries

The Government needs to create the fastest favorable conditions and the largest volume of vaccines to vaccinate workers at factories and industrial parks.

Recently, four associations, namely Vietnam Leather, Footwear, and Handbag Association (LEFASO), Vietnam Textile and Apparel Association (VITAS), Vietnam Electronic Industries Association (VEIA), Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), has sent a proposal to the Prime Minister to speed up the vaccination schedule against Covid-19 or facilitate businesses to buy vaccines urgently and legally to give free injections to employees of export industries.

According to these four associations, as the Covid-19 pandemic recurred and became more serious in factories and industrial parks, especially in the Southern region, the Government needs to create the fastest favorable conditions and the largest volume of vaccines to vaccinate workers at factories and industrial parks of four export industries to maintain production and fight the pandemic. At the same time, the four associations also asked the Government to support them to buy vaccines from suppliers, who they seek on their own, to give free vaccination to workers.

Especially, the associations also said that they had proactively found vaccine supply from a corporation in the United Arab Emirates and proposed the Government and the Ministry of Health to lead negotiations with this partner or designate Vietnamese importers eligible to carry out import procedures so as to give priority to supporting associations to vaccinate workers. All costs to deploy the above activities will be directly carried by enterprises of these associations.

Upon the recommendations of the four associations, PM Pham Minh Chinh assigned the Minister of Health to immediately organize negotiations with the Emiratis partner to purchase and license Covid-19 vaccines, preserve and organize the Covid-19 vaccination as the four associations had proposed.

Hanoi continues to lure international brands 

Despite the impacts of the fourth wave of Covid-19, Hanoi hotel occupancy rate was up 6 percentage points year-on-year as the social distancing policy was not as strict as the previous year.

Hanoi's hotel market will continue to lure international brands with an estimated volume of nearly 1,300 rooms or 48% of future supply by 2023. Major brands are Eastin, Grand Mercure, Fairmont, Four Seasons, Lotte, Dusit, and Wink Hotels.

Four Seasons Hotel Hanoi at Hoan Kiem Lake, the heart of the city, is currently slated for opening in 2023, providing 100 high-class hotel rooms once it becomes operational to meet the needs of businessmen and tourists domestically and internationally. 

Rainer Stampfer, President of Hotel Operations - Asia Pacific, Four Seasons Hotels and Resorts told The Hanoi Times: “We see continued interest in Vietnam in general and Hanoi specifically. The significant supply growth from both, local and international brands is a clear sign of ongoing confidence in the future of travel and tourism in this beautiful and dynamic country.” 

Matthew Powell, Director of Savills Hanoi said the Hanoi's hotel sector is presently surviving with an occupancy across the city of only 27%. "There are high hopes for ‘revenge hospitality’ as progressive vaccine roll-out would soon allow borders re-opening," he added. 

Hanoi's hotel average room rate was US$77 per room night in the first quarter of this year, up 1% quarter-on-quarter but down 9% year-on-year, according to the latest report conducted by Savills Hanoi.

The total stock was stable quarter on quarter at 10,120 rooms, coming from 17 five-star, 17 four-star, and 32 three-star hotels. Five-star lodgings accounted for 54% with the highest revenue per available room of US$28 per room night.  

By the end of Q2 2021, among 66 three to five-star hotels in the capital, five three-star ones with 315 rooms remained closed due to Covid-19, and for renovation. Ten hotels continued as quarantine facilities, comprising one of five stars, five of four stars, and two of three stars.  

In the first half of this year, occupancy was 25%, down 8 percentage points year-on-year, average room rate was down 16% year-on-year. Visitors to Hanoi in H1 were mostly domestic at 2.9 million, down 25% year-on-year.  

Although the city's hotel market recovered in April, the fourth wave of Covid-19 hit from late April that dragged the quarter’s market occupancy down to 27%. However, it was up 6 ppts year-on-year as the social distancing policy was not as strict as the previous year.  

From the last half of 2021-2023, approximately 2,600 rooms from 14 projects are scheduled to launch. In 2021, one five-star, one four-star, and one three-star hotels are expected to provide over 500 rooms. The secondary areas will deliver the largest future supply with approximately 1,200 rooms from seven hotels, followed by the West with 36%, according to Savills Hanoi. 

Powell said there has been a lot of interest from international investors for Vietnam's hospitality sectors. “The reasons for this are that there is still confident about the recovery of this market after the pandemic when the situation is under control and international visitors are back to the country,” he told The Hanoi Times. 

He recommended that hoteliers should carefully prepare to avoid human resource and supply chain shortages when the market reopened. 

Stampfer is confident that international travelers will return to Vietnam once cross-border travel becomes feasible again. “Vietnam has a strong destination allure, and we already know from locations where travel is possible that there is tremendous pent-up demand”, he said. 

Four Seasons Hotel Hanoi at Hoan Kiem Lake will surely be ready to welcome visitors to the city when it opens its doors. In the past 18 months, Four Seasons properties worldwide have swiftly evolved their service to respond to quick-changing Covid-19 conditions.  

“Even in the midst of a pandemic, we have continued to successfully open new hotels in Tokyo, Bangkok, and a number of other locations around the globe,” Stampfer added. 

“Our systems are in place to train new team members, and we have sufficient flexibility to respond to changes in the market. We are fully prepared to respond to increased demand for travel and dining from international visitors and local residents - we are very much looking forward to providing Four Seasons hospitality in Hanoi,” he affirmed.

Almost all enterprises in pandemic-hit Bac Giang resume operation

As many as 5,775 COVID-19 patients in the northern province of Bac Giang, which was the country's biggest coronavirus hotspot in May, have been cleared of the virus, accounting for 99.9 percent.
According to the locality's Center for Disease Control, only eight COVID-19 patients with mild illness or showing no symptoms are being treated.

The locality has gone 27 days without community infection.

To date, as many as 322,577 vaccine doses were administered in the province, accounting for 17.9 percent of the local population.

Currently, 100 percent of local enterprises have resumed operation. A total number of 146,912 laborers in the province, making up 97 percent, have returned to work at 369 enterprises located at six industrial parks.

Since July 29, the local authorities has figured out COVID-19 prevention measures in the new normal situation.

Accordingly, local residents are asked to continue to wear masks, practice physical distancing, and avoid closed and crowded settings while business establishments must strictly implement the pandemic prevention and control measures.   

Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes 

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