The corporate bond market is "warming up" and recovering thanks to effective support policies, according to insiders.

After several businesses violating bond issuance were prosecuted in 2022, this market almost froze in the fourth quarter of 2022 and the first quarter of 2023, and only started to become active again from June.

According to VNDIRECT Securities Joint Stock Company, private corporate bond issuance activities remain quite busy in December.

Data released on December 22 showed that there had been 25 successful private corporate bond issuances in the month, with a total value of more than 16.48 trillion VND (677.6 million USD). This is down 54.1% month-on-month, but up 3.1 times compared to that in the same period last year.

From the beginning of this year to December 22, the total value of private corporate bond issuance reached 249.21 trillion VND, equivalent to that in the same period last year.

In December, the banking sector has posted the largest private corporate bond issuance value, with 13.2 trillion VND, accounting for nearly 81% of the total issuance value, followed by the real estate sector with a total issuance value of about 2 trillion VND, or 12.1%.

Nguyen Hoang Duong, deputy director of the Banking and Financial Institutions Department under the Ministry of Finance, said that the market started to see positive signs from June, after the Government issued Decree 08/2023 suspending the implementation of a number of regulations of Decree 65/2022 on private corporate bond offering and trading.

The Government and the Prime Minister have also made drastic instructions in areas related to this market. These include perfecting the legal framework and maintaining macro-economic stability, as well as markets related to the bond market such as real estate and credit, he added.

Gold prices sharply decline after hitting historic record in one day

After reaching the historic record of VND80.22 million per tael on Tuesday morning, gold prices slowed down significantly in the evening.

At 4 pm on December 26, Saigon Gold and Jewelry Company (SJC) announced the buying price of a tael of gold at VND77.2 million, and the selling price was VND79 million, down VND1.8 million a tael in HCMC.

At the same time in Hanoi, Phu Nhuan Jewelry Joint Stock Company (PNJ)’s gold price dropped by VND1.8 million to VND77.3 million per tael for purchases and VND1.3 million to VND79 million per tael for selling.

Bao Tin Minh Chau Company bought 9999 gold rings at VND63.33 million per tael and sold them at VND64.38 million per tael.

Gold spot price from the international gold market of Kitco was traded at US$2,061per ounce, slightly down US$2 compared to the price this afternoon, equivalent to VND60.6 million per tael at Vietcombank and about VND18.4 million- VND19.6 million per tael lower than SJC gold price.

FDI disbursement reaches new record

Foreign direct investment (FDI) registered in Vietnam neared US$36.61 billion as of December 20, 2023, up 32.1 percent over the same period in 2022, announced the Foreign Investment Agency under the Ministry of Planning and Investment.

The disbursement of FDI capital hit a new record of around US$23.18 billion as of December 20, 2023, up 3.5 percent over the year 2022.

According to data from the Foreign Investment Agency, there were 3,188 newly registered projects, an increase of 56.6 percent, with the total value of nearly US$20.19 billion, up 62.2 percent over the same period last year.

Thus, both the number of new projects and newly-registered capital increased sharply.

Apart from newly registered capital, Vietnam had 1,262 projects registering to adjust investment capital, up 14 percent over the same period in 2022. However, total additional capital was more than US$7.88 billion, down to 22.1 percent over the same period.

As for the form of capital contribution and share purchase, investment capital reached more than US$8.5 billion, increasing 65.7 percent over the same period last year.

Shrimp exports likely to hit US$3.4 billion this year

Vietnamese shrimp exports are expected to reach about US$3.4 billion this year, suffering a fall of 21% compared to the same period from last year, according to figures released by the Vietnam Association of Seafood Exporters and Producers (VASEP).

November alone witnessed the nation’s shrimp export turnover drop by 5% to US$284 million on-year, marking the lowest decrease since the beginning of the year until now.

During the 11-month period, shrimp export turnover declined by 23% to US$3.1 billion against the same period from last year.

Five local exporters posting the largest export turnover include Stapimex, Minh Phu Seafood Corp, Minh Phu - Hau Giang, Cases, and Fimex VN.

The United States remains the country's largest single shrimp export market with US$51 million in November, representing an increase of 24% on-year. This is also the fifth consecutive month which Vietnamese shrimp has recorded positive export growth in the market this year.

From January to November, Vietnamese shrimp exports to this market endured a decrease of 17% to US$640 million on-year.

VASEP cited statistics from the National Oceanic and Atmospheric Administration (NOAA) that the US’ imports of shrimp from Vietnam recorded the strongest growth in both volume and value with respective rises of 30% and 17%.

The average price of shrimp imports from the country dropped by 10% to US$10.6 per kilo compared to last year’s corresponding period.

In terms of the EU market, with the growing demand during the year-end period and cooling inflation, Vietnamese shrimp exports to the EU in November declined slightly by 3% to US$36 million against the same period from last year.

Due to the unstable demand for shrimp in China and Hong Kong (China), Vietnamese shrimp export turnover to these markets dropped by 8% to US$569 million compared with the same period from last year.

VASEP forecasts that during the final months of this year Vietnamese shrimp exports to this market will continue to fall and are likely to recover slightly ahead in early 2024.

Numerous export products escape trade remedy cases

Facing plenty of difficulties with an increasingly diverse range of products being investigated and the scope of investigation expanding, many Vietnamese export products have escaped from trade remedy cases through appeals.

This year has seen Vietnamese export goods subject to 16 new initiated cases for solar cells, wooden cabinets, some steel products, and chemicals in addition to annual review cases and end-of-term review cases, alongside many other cases which continued to be investigated.

There have so far been roughly 240 trade remedy investigations against Vietnamese exports.

Due to the growing production and export capacity of the national economy, Vietnamese export items are also increasingly facing investigations and an application of trade remedy measures imposed by foreign countries.

By the end of the year, merchandise exports are estimated to reach US$354.5 billion, of which 33 items had an export turnover of over US$1 billion during the past 11 months, with seven items recording an export turnover of more than US$10 billion, accounting for 66% of total export turnover.

The trade balance continued to enjoy a trade surplus for the eighth consecutive year with an estimated surplus of US$26 billion, a two-fold increase over last year.

Despite facing many difficulties and challenges, the appeal work this year has also achieved positive results.

The Ministry of Industry and Trade has updated monitoring of over 170 products, including an early warning list for 18 items at risk of being investigated and subject to trade remedy measures, thereby helping ministries, sectors, localities, and businesses to proactively respond to foreign defence remedy measures and proactively devise relevant production and export strategies.

Moving ahead to 2024, the Trade Remedies Authority will continue to improve and intensify early warning of foreign trade remedy cases against Vietnamese export goods This will be done whilst proactively monitoring and protecting the legitimate interests of domestic manufacturing industries through investigation and application of remedy measures on the principles of openness, transparency, and compliance with legal regulations in accordance with Vietnamese international commitments.

Binh Dinh greenlights substantial investment ventures

The People’s Committee of the south central province of Binh Dinh has granted approval and investment licences to 22 projects worth over 12.7 trillion VND (529.1 million USD) this year, showing the province's attractiveness to investors.

Furthermore, 23 domestic and international investors have come to the province to explore opportunities in manufacturing, industrial processing, real estate, trade and services.

Some of them signalled readiness to sign memoranda of understanding with the province, committing to invest in major projects. These include onshore, nearshore, and offshore wind farms with a planned capacity of 2,000 MW and an estimated capital outlay of around 4.8 billion USD. Other notable ventures comprise an offshore wind power plant valued at roughly 4.6 billion USD in Phu My district and a paper and pulp processing plant worth nearly 21.7 trillion VND in the same district.

At present, Binh Dinh province is prioritising projects aimed at bolstering key pillars of economic growth in the foreseeable future, including industries, tourism services, seaports-logistics, hi-tech agriculture and urbanisation.

Chairman of the provincial People’s Committee Pham Anh Tuan has pledged unwavering support to facilitate a robust transformation in the business environment, thereby enhancing local competitiveness.

According to the provincial Department of Planning and Investment, the entire province has attracted 76 domestic projects valued at more than 15.2 trillion VND, and six foreign-invested ventures valued at 46.2 million USD since the beginning of this year. The province is now home to a total of 91 FDI projects, with total registered capital surpassing 1.187 billion USD.

Productivity – decisive factor in boosting economic growth: GSO

Vietnam needs to adopt various solutions, particularly those to improve the quality of human resources to increase productivity, in order to achieve the 2024 growth target set by the National Assembly, said Nguyen Thi Huong, head of the General Statistics Office (GSO).

The legislature sets the goals that the national GDP would grow 6-6.5% in the year, and GDP per capita would stand at between 4,700 USD and 4,730 USD. The processing and manufacturing industry is also projected to account for 24.1% - 24.2% of the GDP.

To boost the domestic processing and manufacturing industry, the workforce must satisfy requirements, Huong explained, elaborating that the rate of trained workers should stay at about 69%, of whom those with degrees and certificates range between 28% and 28.5%.

The official viewed productivity as a decisive factor in improving the competitiveness of the national economy and each enterprise, saying it plays a crucial role in boosting long-term economic growth.

It becomes even more important given the crunch of capital, land, and natural resources, and workforce affected by population aging, she continued.

According to the GSO, increasing productivity depends on different factors like consumption demand, production capital, wage, bonuses, science-technology, innovation, institutions, policies, and production structure, along with the factors associated with natural conditions and personnel quality with the latter playing a key role.

Besides, scientific and technological advances require labourers to have higher qualifications in order to optimise production, Huong said, stressing the need to improve training quality to meet requirements of businesses.

Stricter rules for local businesses to boost farm produce to China

Local businesses have exerted great efforts to meet the high standards set by Chinese importers as part of efforts to boost agricultural products to the highly lucrative market, according to industry insiders.

Tran Van Ut, director of a seafood import-export company based in Mong Cai city in the northern province of Quang Ninh, revealed that the firm has proactively deployed the planning of raw material areas in order to meet China’s stricter regulations on packaging, logistic services, and preservation to make further inroads into the demanding market.

The company has three products which have been exclusively exported to the Chinese market, including Ben Tre white clams, flower clams, and paper clams, he added.

The company is currently co-operating alongside Chinese partners which are allowed to import exclusively in the northern neighbour to bring more local products to the market, thereby raising higher revenue for the firm.

According to Quan Hue Van, director of Duc Vu Logistics Co., Ltd. in Dongxing city, despite huge potential, Vietnamese farm produce and aquatic products have not yet penetrated deeply into the Chinese market as businesses have not linked to major corporations, modern distribution channels, or online networks, as well as big supermarkets in China.

Van emphasized that there is ample room for Vietnamese farm produce in China, adding that the company has paid close attention to farming areas and meet stringent requirements set in terms of packaging, origin traceability, and other rules as a means of further boosting exports to the fastidious market.

Recently, three types of products, namely frozen seafood, aquatic animals used for food, and some types of plant varieties, have just been approved by the Chinese quarantine agency to enter China through Bac Luan II Bridge.

The move has opened up plenty of opportunities for Vietnamese businesses to gain entry to the market, as well as other countries around the world.

Market liquidity falls to two-month low, concerning investors

Investors are becoming increasingly concerned and hesitant in making investment decisions due to the current low level of market liquidity, which is at its lowest point in the past two months.

The average liquidity level in the market has declined to around VNĐ13 trillion, compared to the average transaction values of VNĐ16.56 trillion in November, VNĐ14.28 trillion in October, and VNĐ22.12 trillion in September.

During the trading session on December 21, the matched volume on HoSE reached nearly 455 million shares, experiencing a significant decrease compared to the previous average level and marking the lowest level in the past two months since October 24, 2023. The matched order value on HoSE amounted to approximately VNĐ9.7 trillion, marking the second consecutive session with liquidity dropping below VNĐ10 trillion.

Both domestic and foreign investors are exhibiting hesitancy in investing, with foreign investors gradually withdrawing capital over an extended period. The cumulative net selling value on HoSE by foreign investors has exceeded VNĐ24.2 trillion since the beginning of 2023.

On the other hand, the price of SJC gold bars in the gold market continues to rise, reaching record prices and is expected to keep increasing. Some investors believe that money is shifting from stocks to gold amid this context. However, financial experts note that the gold market has a significantly smaller scale in terms of transaction value compared to stocks. The prioritisation of gold over stocks by some individuals does not necessarily indicate a complete conversion of cash flow from stocks to gold.

Analysts attribute the decline in liquidity to the market's continuous fluctuations within a narrow range. The struggle of the index to decisively surpass the familiar mark of 1,100 points has contributed to a sense of investor pessimism.

Furthermore, the market's frequent pattern of minor recoveries followed by further declines has resulted in losses for many investors. The repetitive "bull trap" occurrences have diminished interest in chasing cash flow.

Regarding the return of money into the market, analysts view the shrinking cash flow as a typical phenomenon towards the end of the year due to the psychological effect of the approaching holidays. This period often witnesses a profit-taking mentality among short-term investors to secure profits before the Lunar New Year festivities.

Moreover, the weak fluctuations in stock prices indicate limited selling pressure. The low liquidity effect becomes concerning only if stock prices experience significant declines, indicating a clear shortage of buyers.

Investors are currently adopting a strategy of waiting for sellers' impatience to lower prices before actively engaging in buying at lower prices. If sellers continue to hold firm without selling at discounted rates, the supply and demand dynamics cannot align, resulting in low liquidity that can be considered normal, as said by Nguyễn Thế Minh, Director of Yuanta Vietnam Securities.

Many opinions suggest that cash flow is temporarily "waiting for time." It is customary for the stock market to experience a gloomy period at the end of the year, followed by excitement at the beginning of the new year. Therefore, it is expected that after the Lunar New Year, stocks will once again witness abundant cash flow.

Huỳnh Hoàng Phương, Director of FIDT Analysis, explained that investors were awaiting clearer signals regarding economic recovery expectations and a gradual decrease in foreign selling pressure before taking action.

Therefore, Phương suggested that in the near future, if the selling pressure from foreign investors subsides and the stories surrounding the fourth-quarter business results of companies unfold, it is likely that cash flows will strengthen in future trading.

In the immediate future, at the end of 2023, the most anticipated development is whether the new KRX system will be operational as planned. This new system is expected to play a crucial role in helping the market meet the criteria for upgrading from marginal to emerging status. It is also anticipated to be a key factor in attracting foreign investors in the future, Phương said.

MB Securities (MBS) recently proposed two scenarios for the market in 2024. In the base scenario, MBS forecasts that the VN-Index will target the range of 1,240 - 1,250 points, which corresponds to a resistance level in that range. This projection considers the falling price channel that connects the peak in July 2021 with the peak in September 2023. In the optimistic scenario, characterised by more positive macro factors and market liquidity surpassing VNĐ25 trillion per session, the VN-Index is expected to aim for the range of 1,290 - 1,310 points.

Hoàng Anh Tuấn, senior individual customer investment consultant at MBS, advises investors to take advantage of sharp market declines to buy and to sell during strong upward sessions.

"At the most uneventful times, when trading volume is depleted, it often signifies the bottom of the market. Investors can start gradually disbursing funds while waiting for the January Effect," he said.

The January Effect refers to a phenomenon observed in the stock market where there tends to be an upswing in stock prices during the month of January. Investors may consider this as a potential opportune time to enter or adjust their investment positions. 

MoIT to start reviewing anti-dumping measures on Chinese steel

The Ministry of Industry and Trade (MoIT) has started a review process on anti-dumping measures for H-shaped steel products originating from China.

H-shaped steel products imported into Việt Nam, classified under HS codes 7216.33.11, 7216.33.19, 7216.33.90, 7228.70.10, and 7228.70.90 are subject to tax rates, ranging from 22.09 per cent to 33.51 per cent.

The review process was initiated after the Trade Remedies Authority of Vietnam under the MoIT received a request from a group of China-based companies, led by by Jinxi, with the main manufacturer being Hebei Jinxi Section Steel Co., Ltd.

To ensure the interests of all organisations and individuals involved in the case, the authority recommends that relevant organisations and individuals register as interested parties in the review process to access publicly available information during the review and submit opinions, comments, information, and relevant evidence regarding the review content. Additionally, they should cooperate with the investigating agency during the review process.

The anti-dumping measures have been in effect since 2017. 

Ha Long Shipyard to hand another cruise ship next year
 
Ha Long Shipyard is scheduled to hand over a second Essence Grand twin cruise ship next year.

The Essence Grand 1 and Essence Grand 2 are invested in by the Viet Thuan Group and built by Ha Long Shipyard with total investment of USD35 million.

Cruise Essence Grand 1 was completed in October. Essence Grand 2 is slated to be transferred to the firm in March next year.  

The cruise ship is 109.9 metres long and 18.68 metres wide. It has six floors each covering 2,000 square metres. The vessel has 55 luxury rooms with each covering 33-100 square metres and a restaurant which can accommodate up to 250 people. It also has a swimming pool, a library and an entertainment area for children.

Trinh Trung Uy, chairman of Viet Thuan Group, said that after cruise Essence Grand 2 is put into operation, the firm will invest in building a third vessel valued at VND1 trillion.

Work on the third cruise ship is slated to start next year and finish in 2026. The ship will serve both domestic and international trips. 

Transport sector faces mixed outlook for 2024

With a mixed outlook for 2024, transportation businesses are bracing for potential cost increases, while others are expecting stability.
 
According to the World Bank, Vietnam's Logistics Performance Index (LPI) ranking decreased by four places to 43rd in 2023. Despite this drop, Vietnam's LPI score increased to 3.3 points from 3.27 points in 2018, indicating gradual improvements, particularly in customs efficiency and infrastructure quality.

This ranking reflects the impact of the pandemic on the logistics sector, with disruptions in the supply chain and transportation. In Vietnam, trucking plays a vital role in the national economy, responsible for 77 per cent of the country's freight movement amounting to a volume of over 1.5 billion MT.

However, it confronts challenges like high logistics costs (21 per cent of GDP) and environmental impacts due to older, smaller trucks contributing to greenhouse gas emissions and traffic congestion.

In mid-December, CEL Consulting released a survey of 143 trucking businesses in Vietnam highlighting critical operational issues like route optimisation inefficiencies, high vehicle maintenance costs, and driver shortages coupled with wage increases.

Rising fuel prices, driver shortages with associated wage hikes, and inefficiencies in route optimisation are primary challenges impacting operational costs. Additionally, vehicle maintenance, and regulatory compliance costs add to the financial strain.

These challenges underscore the dynamic nature of the logistics sector, influenced by economic shifts and market trends. Companies are focusing on innovative strategies and efficient planning to navigate these complexities and capitalise on growth opportunities in the evolving industry landscape.

To address these challenges, policy recommendations include fleet modernisation, enhanced driver training, and infrastructure improvements for diverse transport modes. The integration of digital technology, such as automated toll collection, is seen as key to enhancing operational efficiency and cost-effectiveness, according to CEL Consulting.

Despite the challenges, Vietnam's freight and logistics market is expected to reach $45.19 billion in 2023 and grow at a compound annual growth rate (CAGR) of 6.34 per cent to reach $65.34 billion by 2029. Vietnam's trucking sector experienced significant growth in early 2023, with a 16 per cent increase in freight transport volume and a near 22 per cent increase in turnover, on-year.

Looking forward, the sector is aiming to diversify transportation methods, reducing reliance on road transport and exploring water, air, and sea alternatives. This shift is mirrored in the broader Asia-Pacific logistics market, known for its diverse range of services.

Vietnam explores renewable energy export strategy

On December 23, Vietnam's Deputy Prime Minister Tran Hong Ha tasked the Ministry of Industry and Trade (MoIT) with developing a framework to explore wind and solar energy.
 
This directive taps into the country's substantial renewable energy potential, particularly in terms of offshore wind power, where capacity is estimated at 600GW. Investors have shown keen interest in exporting it to markets like Singapore and Thailand, though they face obstacles due to the absence of a coherent policy on licencing and project investment.

Following a recent session discussing the draft plan for Vietnam's Power Development Planning VIII (PDP8), DPM Ha highlighted the importance of harnessing the nation's renewable resources.

"This initiative is not just about tapping into our potential. It is about creating added value and laying a foundation for the renewable energy sector's future expansion," he said.

Meanwhile, in a meeting with investors on December 3, Prime Minister Pham Minh Chinh indicated that Vietnam Oil and Gas Group has been instructed to explore the development of offshore power transmission lines and to promote offshore wind energy.

Seven months after the approval of the PDP8, an actionable plan remains unformulated, primarily due to local ambitions to exceed the outlined renewable energy limits. The proposed capacities for renewable energy, biomass, and waste-to-energy are significantly higher than those in the original plan.

As a result, DPM Ha has called for a thorough review of the specifications of renewable energy projects slated for implementation up to 2025. These include onshore wind, solar, biomass, waste-to-energy, and small hydropower projects.

In addition to finalising project lists up to 2030, the MoIT has been urged to prepare a reserve list to pre-empt any reactive adjustments in planning and ensure a consistent power supply in the event of project delays.

Under the PDP8, Vietnam aims to achieve a solar power capacity of just over 12,800MW by 2030. This includes over 10,000MW from centralised and 2,600MW from self-consumption installations.

The MoIT is also examining mechanisms to integrate renewable energy with storage and self-consumption rooftop solar power, prioritising system safety and competitive pricing.

The government has further directed the MoIT to propose an authority for adjusting the capacities of renewable energy sources among various localities, or within a single province or city.

The draft of the PDP8 estimates that nearly $120 billion in capital is required for developing the various power sources.

Of this, approximately 76 per cent is expected from private investments (around $91 billion), with the remainder coming from the state. Public investment, earmarked at about $50 billion, will primarily focus on policy development and enhancing the electrical sector's capacity. Rural, mountainous, and island electrification programmes are allocated around $1.3 billion, with about 30 per cent currently funded.

Answers sought for offshore wind gains

Vietnamese authorities are being urged to contemplate strategies to advance offshore wind energy development.

Vietnam Electricity (EVN), PetroVietnam, and affiliated entities presented a detailed strategy for advancing offshore wind energy to the prime minister and the Ministry of Industry and Trade (MoIT) this month.

If the corporations’ strategies are granted approval, the MoIT will utilise this information for a report to the government and a proposal to the National Assembly on the precise framework for executing offshore wind and gas power projects.

Hoang Dang Khoa, an official at the Electricity and Renewable Energy Authority under the MoIT, told VIR that approval of the strategy is uncertain as the current development of offshore wind energy in accordance with Power Development Plan VIII (PDP8) faces numerous obstacles.

“If there is no compelling plan of action, it will be extremely challenging to accomplish a facility scale of 6,000MW by 2030,” he said.

Khoa added that the execution of offshore wind power projects in Vietnam was being hindered by the absence of a marine spatial plan, unsuitable licencing processes and assessment standards, and regulations governing surveying, measuring, and monitoring.

“Offshore wind energy development is governed by approximately eight laws, numerous by-laws, and over a dozen competent management agencies and organisations. The duration to overcome such procedures can be up to three years,” he said.

In 2015, the government approved the country’s renewable energy development strategy towards 2030 and beyond. The strategy aimed to increase the share of electricity generated from renewable sources in the overall national electricity output from about 35 per cent in 2015 to 32 per cent in 2030, and finally to 43 per cent in 2050.

As a result of technological advancements, offshore wind energy investment costs are now comparable to those of conventional energy sources, having decreased by almost 70 per cent over time. An additional 30 per cent reduction in investment costs is anticipated for developed offshore wind power markets in 2023 as the downward trend in prices continues.

Dr. Nguyen Duc Cuong, deputy director of the Industrial Management Department at T&T Group, has spent three decades executing numerous investment initiatives in renewable energy. He said that a long-term perspective is necessary when constructing a new industry such as offshore wind power.

“Synchronous coordination among ministries and subdivisions is essential during the formulation of policies for the development of offshore wind power in Vietnam. Policy recognition and encouragement of investment and development in offshore wind power should align with the government’s green growth strategy, given its status as a nascent industry,” Cuong said.

Robust strategies are being deemed vital for attempts to entice major groups to invest in Vietnam in this area. A joint venture between T&T and Danish renewables giant Ørsted aimed to invest billions of US dollars to develop offshore wind power facilities in Vietnam. However, Ørsted earlier this year decided to cease all offshore wind power development activities in Vietnam.

Nguyen Quoc Thap, chairperson of the Vietnam Petroleum Association, said, “There is a significant risk of planning failure if a timely solution is not found. The end of the decade is only six years away but the typical duration for offshore wind power project implementation is 7-10 years.”

Thap stated that international and domestic investors continue to have a significant interest in offshore wind energy in Vietnam, despite obstacles pertaining to capital arrangement, investment efficiency, and policy.

“Several investors anticipate that in the aftermath of concluding the legal framework, officials may consider launching test and pilot projects, thereby gathering experience,” he said.

Policymakers, nevertheless, are opposed to experimental solutions. The MoIT posed a number of concerns in a document submitted to the prime minister regarding implementation of the PDP8 in October. One concern was that if EVN and enterprises are designated to pilot offshore wind power projects, many complications may arise. The legal pathway for the development of this particular power source also remains ambiguous.

The investment law does not specify the competent authority responsible for determining investment policy for offshore wind power, as stated by the MoIT. As a result, the delegation of project implementation to EVN and domestic enterprises lacks a legal foundation.

The MoIT has therefore recommended development of a revised electricity law, and for EVN to determine investment policies for offshore wind power projects to be stipulated in the investment law.

The ministry suggested that the prime minister immediately appoint EVN and domestic firms to conduct research and survey conditions for offshore wind power development.

Critical juncture set for real estate prospects in 2024

Despite fluctuations expecting to continue in the Vietnamese real estate market for some months, industry analysts are quietly optimistic that 2024 will mark a turning point for a new cycle of recovery and development.
 
Analysts say that real estate products that meet actual needs are more vital than ever to ensure the market’s positive trajectory,

Currently, both supply and absorption rates continue to decrease sharply compared to 2022, down about 66 per cent. According to Hoang Hai, director of the Department of Housing and Real Estate Market Management under the Ministry of Construction, the biggest issues have involved large gaps in product structure, the short supply of affordable housing, and oversupply in the high-end segment.

“Around 75 per cent of real estate businesses have difficulty accessing capital due to banks tightening lending conditions. Together with a reduced confidence from investors in the market, new capital injections are harder to mobilise,” Hai said.

He added that although the government has approved the new laws on housing and real estate, they will not be fully in operation until 2025. The new land law, meanwhile, is still being considered.

This year the government has implemented a range of solutions to support the market, such as reducing lending interest rates, stabilising the foreign exchange market, promoting disbursement of public investment capital, and implementing stimulus packages.

Especially for the real estate market, a range of solutions were taken such as tax and fee exemptions and reductions, as well as extensions for corporate bond payments.

“Some of these solutions to promote the market have had certain effectiveness. But we have to keep a closer monitor on those difficulties in order to create more suitable solutions to support the market,” Hai said.

Currently, banks are adjusting lending interest rates to create more motivation for investors to participate in the market.

Vo Hong Thang, director of Project Development and Consulting Services under DKRA Group, said that now could be considered appropriate for investors to return.

“One of the most important factors is that in 2023, a series of key public ventures such as urban belt roads, highways, and airports have started construction. The macroeconomy remains stable and inflation is controlled. All of those have a positive impact on helping the real estate market recover and grow again,” Thang said.

Subsequent changes in laws and investments focusing on the actual needs of customers will be the key to sustainable market development in the coming time, said Thang.

“Products that serve real housing needs will recover better. In particular, the affordable apartment segment for the needs of people in the city centre and outskirts areas will recover well, and the land segment will also focus on densely populated areas, with enough amenities and infrastructure,” Thang added.

Experience desired for banking reform

Vietnam’s banking sector, amid urgent restructuring led by key players and government efforts, is confronting unique challenges due to limited restructuring experience and the complexity of securing investors.
 
Vietnamese Prime Minister Pham Minh Chinh last week engaged with Masahiko Kato, chairman of Japan’s Mizuho Bank, along with other top regional executives of the bank. The agenda centred on Mizuho’s proposed involvement in Vietcombank’s upcoming private equity offering and its broader strategic intentions in Vietnam.

“Our participation in Vietcombank’s share issuance and the mandated takeover of a financial institution in need signifies our confidence in Vietnam’s economic stability and growth potential,” Kato said,

This move underscores Mizuho’s strategy to deepen its footprint in the Vietnamese banking sector. Mizuho also expressed an eagerness to finance key national projects, particularly in green energy transition.

“We are looking forward to contributing to Vietnam’s journey towards sustainable development, particularly through green bond and carbon credit market initiatives,” added Kato.

PM Chinh stated, “The Vietnamese government recognises Mizuho’s proposals as valuable contributions to our nation’s financial and economic landscape, and we will facilitate the necessary processes promptly.”

He also encouraged Mizuho’s involvement in restructuring local banks and in supporting the government’s objective to develop social housing for the underprivileged.

Mizuho’s significant investment in Vietcombank, initiated in 2011 with the purchase of a 15 per cent stake valued at $567.3 million, is reinforcing its commitment to Vietnam’s financial sector.

Also last week, the government commissioned Deputy Prime Minister Le Minh Khai to oversee the restructuring of at least two struggling banks.

This initiative, part of the government’s latest resolution from its regular November meeting, aims to invigorate key economic drivers such as investment, consumption, and exports, aligning with the nation’s strategic development objectives.

“The government’s focus is on revitalising these critical financial institutions to ensure robust economic growth and stability,” stated DPM Khai.

Under his guidance, the State Bank of Vietnam (SBV), along with the Committee for Management of State Capital at Enterprises, will expedite the restructuring processes.

This intervention comes at a crucial time, as banks currently under special regulatory scrutiny include Construction Bank, OceanBank, GPBank, DongA Bank, and Saigon Commercial Bank.

Earlier in May, the SBV received approval for the compulsory acquisition of four of these banks, indicating a decisive approach towards financial stability. However, the State Audit Office of Vietnam has flagged concerns over the slow pace of these reforms, noting that the issue has been unresolved since 2015.

Nguyen Thi Hong, Governor of the SBV, also shed light on the significant challenges involved in restructuring the nation’s weak banks, particularly against the backdrop of the pandemic and global economic fluctuations.

“The task of bank restructuring, always complex, is now compounded by the current economic context influenced by the pandemic and international instabilities,” she said. “We are navigating uncharted waters here. The limited experience in handling complex bank restructuring within our teams adds layers of complexity.”

Securing voluntary investors for the restructuring process has been a particularly strenuous endeavour.

“Navigating the multi-tiered approval process necessary for restructuring these institutions adds to the complexity of the task at hand,” Hong explained.

She disclosed that the central bank is close to finalising a comprehensive restructuring plan, which will subsequently be presented for the necessary approvals.

Some commercial banks are also indicating their readiness to engage in the banking restructuring process. In mid-October, Pham Thi Nhung, deputy CEO of VPBank, articulated the bank’s strategic readiness to participate in the restructuring of Vietnam’s banking system.

“VPBank is set to assume responsibility for a credit institution designated for compulsory transfer. We have meticulously prepared the resources required for this significant undertaking,” she said. “Our primary objective after the transfer will be the swift and efficient restructuring of the acquired institution. We are fully committed to ensuring a seamless integration process.”

Meanwhile, MB is spearheading the compulsory transfer of a weak bank, a process initiated in 2022 and set for completion by early 2024. “After obtaining shareholder approval in 2022, we’re engaged in valuing the bank for transfer, expecting to conclude by late 2023 or early 2024,” Pham Nhu Anh, CEO of MB, stated at its AGM in May.

Securities firms see more account closures than openings

In November 2023, individual investors opened close to 150,000 securities accounts, but more than 340,000 accounts were closed due to their inactivity for a long period of time.
 
As of the end of November, stock accounts held by individual Vietnamese investors totalled around 7.2 million, but the number of accounts closed reached 341,393.

In October, the total number of accounts closed was 545,386. Among them, 545,326 accounts were closed by individual investors, and 39 accounts were closed by institutions.

The number of investors' securities trading accounts decreased from 7.8 million to 7.25 million. According to the Vietnam Securities Depository and Clearing Corporation, the accounts closed were mainly held by individual investors. They have been inactive accounts for a long time, so securities firms need to filter to remove 'virtual' accounts. In addition, the decrease in the number of securities trading accounts is also attributed to the State Securities Commission's activities to clean up securities' data.

Among the 148,592 newly opened securities accounts in November, major securities firms account for a large proportion. VNDIRECT made up over 10 per cent of the total newly opened securities accounts, with 15,000 accounts.

JB Securities Vietnam (JBSV) recorded 12,000 new securities accounts in November, making up 8.1 per cent of the newly opened accounts.

This surge in the number of newly opened accounts followed the official launch of JBSV's Finavi application in October, which had many new features and attractive incentives.

Domestic organisations opened 160 new accounts last month, bringing the total number of accounts to 16,045. Meanwhile, the number of newly opened accounts by domestic individual investors was 148,000.

Among them, securities firms recorded a slight increase in new securities accounts. Foreign investors registered 274 new accounts last month. Individual investors and organisations registered 244 and 30 new accounts, respectively. At the end of November, foreign investors had 45,196 accounts in total.

In November, the VN-Index climbed 6.41 per cent from a month earlier and 8.64 per cent against late 2022.

Market liquidity gradually recovered as the average trading value of the three bourses jumped 17 per cent on-month, with over VND19 billion ($782,699) per session.

The average trading value on the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange reached $682.6 million and $82.4 million per session in November, up 19.3 per cent and 9.8 per cent on-month, respectively.

Meanwhile, the value of each session on the Unlisted Public Company Market reached $24.14 million, down almost 12 per cent from the previous month.

Prime Minister urges stable power supply

Prime Minister Pham Minh Chinh has issued a directive instructing relevant ministries and agencies to ensure stable power supply for 2024 and beyond, according to VGP News.

The directive calls on the Ministry of Industry and Trade to take proactive measures to secure power supply for 2024, with a specific emphasis on stabilizing electricity generation in the dry season.

In particular, the ministry is tasked with finalizing mechanisms and policies for direct electricity trading between renewable energy producers and major electricity consumers.

It should also promote incentives for the development of solar systems on the rooftops of houses, offices and facilities at industrial zones. The details of these mechanisms and policies must be submitted to the Government by December 31, 2023.

The Ministry of Industry and Trade, along with relevant agencies, is required to enhance inspection, supervision, monitoring, and management of the nation’s power grid. They will also have to review and develop plans to ensure adequate electricity supply for northern Vietnam following the severe power shortfalls in the north in the second quarter of this year.

The directive underscores the importance of preventing power shortages that could adversely affect production, business and daily life.

The ministry’s leadership is responsible for expediting critical projects in the electricity sector and providing guidance for the implementation of the 500 kV Line 3 which runs from Quang Binh to Hung Yen provinces, with the goal of ensuring its completion by June 2024.

Banks redeem bonds worth VND26 trillion in Jan-Nov

Vietnamese banks bought back their bonds totaling VND26 trillion in the January-November period.

VND247.6 trillion worth of corporate bonds was issued in the 11-month period, with 89.1% of it issued through private placement. The banking sector emerged as the largest issuer, accounting for a total of VND120 trillion.

Data from the Hanoi Stock Exchange showed that in mid-December, Orient Commercial Joint Stock Bank bought back VND500 billion of its OCBL2124011 bonds, which were issued two years ago with a fixed coupon rate of 3.2% per year for a three-year term. Earlier this year, the bank repurchased 14 bond lots valued at VND12.4 trillion, which were issued in 2021 and 2022.

Lien Viet Post Joint Stock Commercial Bank (LPBank) also conducted bond buybacks, acquiring two bond lots worth VND2 trillion. In July, LPBank already redeemed four bond lots of over VND4.1 trillion.

Vietnam International Commercial Joint Stock Bank bought back VND6 trillion worth of bonds, while Bank for Foreign Trade of Vietnam redeemed VND1.3 trillion.

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