Digital marketing and communication made positive contributions to the recovery of Vietnam’s tourism in 2022.

Vietnam’s tourism gradually recovered in 2022, especially domestic tourism. The number of domestic tourists was estimated at over 101 million, exceeding the figure of 85 million in 2019, when the pandemic was something in the future. Total revenue from tourism reached about 495 trillion VND (21.01 million USD), 23% higher than planned and 66% higher than that of 2019. 

Meanwhile, the country received 3.66 million foreign arrivals last year, equivalent to 73% of the target.

The tourism communication activities were deployed on a variety of digital platforms. 

Specifically, the website vietnamtourism.gov.vn serves state management and tourism promotion while vietnam.travel specialises in promoting the images of Vietnam's tourism abroad.

The website vietnam.travel has had views increase sharply, which shows the great interest of international tourists in Vietnam's tourism as well as proves the role of digital communication in tourism promotion.

Tourism authorities in Vietnam also created pages on social networks like Facebook, Zalo, Youtube, and Instagram to further spread information about Vietnam tourism.

With these digital platforms, attractive destinations, quality tourism products and services have been promoted and introduced to domestic and foreign tourists through video clips, articles, and beautiful images. 

Moreover, information about the guidelines and policies of the Party and State on tourism development, especially that on Vietnam's tourism reopening on March 15, 2022, was updated quickly and accurately.

Communication activities towards the international markets closely followed the theme "Live fully in Vietnam" while those towards the domestic market were taken under the theme "Safe travel, full experience".

Notably, Vietnam launched communication programme "Vietnam: Travel to love!" on Youtube with many video clips featuring Vietnam’s beautiful landscapes, people, and tourism services that expectedly inspire people to travel to Vietnam. They have attracted millions of views. 

Many of the clips were launched at times of great significance to the tourism industry. Typically, the clip "Spring Reunion" was launched on the occasion of the Lunar New Year. The clip "Complete experience" was launched when Vietnam reopened its tourism on March 15, 2022, and welcomed the Visit Vietnam Year 2022 - Quang Nam. 

The clip "Let's shine and live fully" promoted Vietnam’s tourism on the occasion of SEA GAMES 31 in May 2022 while the clip "Wonders of Vietnam" was released on the occasion of the 62nd anniversary of Vietnam's tourism industry (July 9, 1960 - July 9, 2022).

VinFast delivers 358 electric cars in January

The VinFast Trading Service Limited Liability Company, a subsidiary automaker of Vietnamese conglomerate Vingroup, delivered 358 electric vehicles (EVs) to its customers in January.

Of the sum, there were 204 VF 8, and 154 VF e34 units.

VinFast VF8 model is equipped with a wide range of advanced technologies such as Smart Services package and the advanced driver-assistance system (ADAS) with abundant safety feature include highway driving assist, auto lance-changing assist, onramp and offramp assist, cruise assist, collision warning, among others.

In the first month of 2023, VF 8 was honoured as outstanding equipped car in the trending car category at the Car Choice Awards 2022.

Previously, the model was also honoured as the new star of the Vietnamese automobile market at the Car Awards 2022 held by VnExpress electronic newspaper, and was voted by the Tinh Te Community as the electric car of the year.

Meanwhile, VinFast VF e34- the green car model of the Car Choice Awards 2022 is also equipped with outstanding technologies The most special among them is the ability to control detailed information about the vehicle through an application on smartphone and artificial intelligence (AI) technology to bring interesting experiences, personalised to each owner.

VinFast electric car models are regularly updated with software, thereby optimising the vehicle's operation, making the car smarter and bringing a better experience to customers.

Telecom companies pledge to better international Internet connections

Telecommunication firms have pledged to ensure smooth Vietnam’s international Internet connections from February 10 night.

They said they will utilise different methods to open up more data flows on land at a meeting with telecom firms held by the Ministry of Information and Communications on the same day to solve the submarine cable incident and ensure Vietnam’s international Internet connections.

Four submarine cables Asia-America Gateway (AAG), Asia Africa Europe 1 (AAE-1), Asia Pacific Gateway (APG) and Intra Asia (IA) that connect the country to the world are experiencing issues, seriously affecting performance and reliability.

This is the first time the Vietnamese telecommunication firms experienced a loss of service when a number of submarine fiber optic cables got troubles. The trouble affected both Vietnam and Asia region.

At the meeting, Minister of Information and Communications Nguyen Manh Hung asked the firms to apply technical measures to ensure connections and the quality of the service.

Southeast region gears towards green, sustainable economic development

The Southeast region, with its role as an economic locomotive of the country, has accelerated the implementation of green economic development plans and strategies. The aim is to promote economic restructuring associated with changing growth models and integrating green growth into the socio-economic development plan.  

A green economy has become an inevitable trend in countries toward achieving economic growth and maintaining environmental sustainability. 

In the process of socio-economic recovery and development after the COVID-19 pandemic, economic activities of Vietnam in general, and the Southeast region in particular are gradually becoming vibrant again. Many localities and businesses have developed and issued strategies and action plans to promote green and sustainable product innovation models.

According to Secretary of the Party Committee of Ho Chi Minh City Nguyen Van Nen, despite facing many difficulties and challenges, the city recorded a rapid rebound of socio-economic development. The city’s gross regional domestic product (GRDP) grew by over 9% in 2022, accounting for about 48.4% of the Southeast region’s GRDP. 

For HCM City, the idea of a green economy, which both satisfies the needs of economic growth and solves environmental challenges, has been discussed by researchers. Most of the studies agree on the view that green economic development focuses on three main pillars of industry, agriculture and services. 

According to Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc, promoting eco-industrial park development will help mobilise great resources from the private sector for green industrial solutions. It will also ensure energy security, thus significantly contributing to Vietnam's efforts to respond to climate change, promoting green growth and circular economy, demonstrating Vietnam’s political determination in implementing its commitments on sustainable development.

Vice Chairman of the People’s Committee of HCM City Vo Van Hoan said, HCM City is expected to develop into a smart city by 2030. Therefore developing a green economy is an inevitable requirement to ensure the goal of economic modernisation and environmentally sustainable development, and improve the city’s ability in response to climate change.

The municipal authority will closely coordinate with the Ministry of Planning and Investment and UNIDO in implementing the project “Eco-industrial parks intervention in Vietnam - Perspective from the Global Eco-Industrial Park Programme" funded by the Swiss State Secretariat for Economic Affairs (SECO), Hoan said.

Results of the project will be a premise to replicate the conversion of existing industrial parks into eco-industrial park models in the city and across the country, he added.

HCM City will also invest more resources in, and sketch out more specific and professional plans for the process of green and digital transformation, he noted. 
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Dong Nai province has also focused on green and environmentally friendly economic development through attracting high-quality projects, aiming to ensure sustainable economic development. 

According to Deputy Head of the Dong Nai Industrial Zones Management Authority Pham Van Cuong, companies providing industrial park infrastructure services in the locality have agreements that bind investors to strictly monitor wastewater quality.

Le Xuan Huy, Deputy General Director of the CP Vietnam Livestock JSC in Dong Nai province, said his firm’s production also pays attention to meeting world standards related food quality, safety, and environmental friendliness.

Vietjet offers tickets from 0 VND on HCM City – Melbourne route

Vietjet has opened for sale hundreds of thousands of tickets from only 0 VND for direct flights connecting Ho Chi Minh City and Melbourne (Australia), marking a milestone on the journey of expanding its international flight network, conquering all five continents this year.

During the golden week from February 14 to 20, Vietjet will open for sales tickets priced from only 0 VND, excluding taxes, fees, on www.vietjetair.com and Vietjet Air mobile app, with a flexible flight period from now to October 29, 2023.

The first direct flights connecting Ho Chi Minh City to Melbourne (Australia), Tullamarine airport will operate from April 8 with six flights per week. The flights from Ho Chi Minh City to Melbourne on every Tuesday, Thursday and Saturday take off at 10:55 am and land at 10:35 pm (local time), while the flights on Melbourne to Ho Chi Minh City route on every Sunday, Wednesday and Friday take off at 12:30 am and land at 6:30 am (local time).

Work starts on Aeon Mall Hue

Work on Aeon Mall Hue, the seventh mall of Aeon in Vietnam and the first of its kind in the central region, began on February 11 in Thua Thien-Hue province.

Covering over 8.6ha, including 2,500 sq.m for vehicle parking, the shopping mall has areas for food, fashion, entertainment and supermarket.

Located in the An Van Duong new urban area in Hue city's An Dong ward, the project, which has total investment of more than 169 million USD, is expected to be put into operation in 2025.

The Japanese retail AEON Group currently has about 200 stores in Vietnam, including six shopping centres and supermarkets. Most the supermarkets are concentrated in Ho Chi Minh City and Hanoi. The group plans to pour investment into an additional 16 projects in Vietnam by 2025, including 3-4 more projects in Hanoi.

Da Nang attends South Asia’s Travel & Tourism Exchange

Da Nang has for the first time participated in the 30th South Asia’s Travel & Tourism Exchange (SATTE) in India from February 9-11 to promote its destinations and connect with potential partners.

Its stall, named Danang FantastiCity, gathered travel firms from the central coastal city and its neighbouring province Quang Nam, including the Furama Danang Resort, Sunworld, Vinpearl, Hoian Express, Indochina Unique Tourist, Wink Hotels and Vedana Lagoon Resort and Spa.

While in India for the fair that boasted more than 1,400 stalls, representatives of the Da Nang Tourism Department met with a series of organisations, including the Indian Association of Tour Operators, Network of Indian MICE Agents, and India Golf Tourism Association.

Currently, there are three direct flight routes linking New Delhi, Mumbai and Ahmedabad of India with Da Nang, operated by Vietjet Air from October 18 last year.

In 2022, India was ranked fifth among the top ten tourist markets of the central Vietnamese city.

SMEs show limited engagement in circular economy

Vietnamese small- and medium-sized enterprises (SMEs) have showed their limited participation in circular economy for both subjective and objective reasons, mostly related to resources, awareness, capacity and vision for benefits of circular economy, said Director of the Institute for Circular Economy Development (ICED) Asso. Prof. Dr. Nguyen Hong Quan.

From an efficiency perspective, the impact of circular economy comes more slowly and is not as strong as expected, he said, adding that financial, sci-tech, education and training, and communication support policies for circular economy remain limited while there is a lack of coordination between policy-making agencies, businesses and sci-tech institutions.

Resident Representative of the United Nations Development Programme (UNDP) in Vietnam Ramla Khalidi remarked that circular economy is an economic opportunity for Vietnamese enterprises.

Studies showed that the switch to circular economy brings in economic opportunities worth 4.5 trillion USD globally via reducing wastefulness, stimulating innovation and generating jobs. Therefore, the Vietnamese business community, particularly SMEs, should have a new perspective to join this process.

At present, Vietnamese SMEs account for nearly 96% of the total firms, using 47% of workforce and contributing 36% to the added value of the national economy.

"We need to ensure that businesses are provided with the technical and financial support needed to transform the production and consumption model, align with national policies on CE, and reap the benefits of the trade agreements between Vietnam and other countries," said Khalidi.

To this end, a recent UNDP-initiated capacity-building programme, in partnership with the Netherlands Embassy, has trained over 100 Vietnamese enterprises in various sectors to scale up CE models, adopt low-carbon technologies, and shift production and consumption models to greener ones.

Becamex IDC, Sembcorp clinch deal to develop sustainable IPs in Vietnam

Vietnam’s Becamex IDC Corporation and Singapore’s Sembcorp Development Ltd today, February 10, signed a Memorandum of Understanding (MOU) to jointly establish five sustainable industrial parks (IP) in Vietnam in the next three years, with a total investment of US$1 billion.

The signing ceremony, which took place in Singapore, was attended by Vietnamese Prime Minister Pham Minh Chinh during his first official visit to Singapore. His visit marks the 50th anniversary of diplomatic ties and the 10th anniversary of the strategic partnership between the two countries.

The MOU signing demonstrates the desire from both sides toward long-term cooperation and the further development of IPs in Vietnam. The IPs will be smart and sustainable, using low-carbon solutions and internet of things technology in infrastructure development and management to run businesses more efficiently.

On this occasion, Kelvin Teo, co-chairman of Vietnam Singapore Industrial Park (VSIP) Group, and CEO of Sembcorp Development, and Nguyen Van Hung, co-chairman of VSIP Group and board chairman of Becamex IDC Corporation, received an investment certificate to develop the VSIP Nghe An II project.

The project would cover 500 hectares of land in Dien Tho, Dien Phu and Dien Loc communes of Dien Chau District, under the management of the Dong Nam Economic Zone in the north-central province of Nghe An. The VSIP Nghe An II will be the second project of VSIP in Nghe An. Earlier, the first VSIP Nghe An was established in 2015 in the province’s Hung Nguyen District.

Derivatives trade plummets in January

The derivatives market remained gloomy in January, with the VN30 index futures contract trading volume and value slipping.

Though the VN30 index registered 1,125.07 points in January, up 11.3% against December 2022, the average trading value of the VN30 index futures slid nearly 34% over the previous month to around VND28.2 trillion per session.

The average trading volume of VN30 index futures contract products dropped to over 262,700 contracts per session, down 35.7% compared to December 2022.

According to the Hanoi Stock Exchange, the slump may result from the Vietnam Securities Depository’s (VSD) revision of the initial margin limit.

The VSD raised the cap for the initial margin for futures contracts of the VND30 blue-chip index to 17% from 13% in December 2022.

However, the market saw more traders, with derivative trading accounts edging up 1.24% month-on-month to nearly 1.2 million.

Masan Group licensed to invest in Singapore

The Sherpa Company Limited, a subsidiary of Masan Group Corporation (Masan), received a licence to invest in Singapore at a ceremony on February 10.

The investment is worth up to 105 million USD for 25% of share ownership of Trust IQ Pte. Ltd. (TS), a Singapore-based tech company, equivalent to 9,388,756 shares.

The project is part of Masan's strategic goal by 2025 to create a Consumer - Retail - Technology ecosystem.

TS operates primarily in software development, technology and applications on a global scale, which includes the development of comprehensive, accurate credit risk assessment methods based on AI technology and computer science.

Therefore, the investment in TS will accelerate Masan's application of artificial intelligence in retail (Retail AI), and in consumption (Consumer AI).

Specifically, the two sides will work together to build a platform of Retail AI, and Consumer AI; apply and develop AI and machine learning (ML) technologies into the consumer sector, integrate offline to online contributing to an optimal O2O experience and minimise consumption costs for the Vietnamese.

They will also issue credit cards for mass consumers without requiring proof of income. WinCommerce (the operator of WinMart/WinMart /WIN retail chain) with a high-tech platform from TS will cooperate with domestic financial partners to drive new credit cards usage, towards the goal of universalization of credit access for Vietnamese people.

With the integration of technology pieces from TS into its consumer-retail platform, Masan Group aims to become the leading enterprise meeting daily consumer needs of nearly 100 million Vietnamese consumers on both offline and online platforms.

Additional capital of over VND31 trillion provided for major projects

Deputy Prime Minister Le Minh Khai signed Decision No. 51/QD-TTg on supplementing the estimate of foreign capital expenditure on investment and development from the central budget in 2022 for the Ministry of Transport.

The capital allocation of VND31,392 billion (US$1.33 billion) will be for five projects approved by the National Assembly, including the Hanoi – Hai Phong expressway project invested by the Vietnam Infrastructure Development and Finance Investment Joint Stock Company (VIDIFI); and four others invested by Vietnam Expressway Corporation (VEC), consisting of Noi Bai-Lao Cai, Da Nang- Quang Ngai, HCMC-Long Thanh-Dau Giay and Ben Luc-Long Thanh expressways.

The Prime Minister delegated the Ministry of Planning and Investment to submit the project on supplementing the estimate of foreign capital expenditure on investment and development from the central budget in 2022 for the Ministry of Transport.

The Government also asked the ministries of Finance, Planning and Investment, and Transport to take responsibility for financial and State budget management, accuracy in reporting, organization, management, and use of the estimated settlement amount.

Vietnam to host IPU Forum of Young Parliamentarians in September

The National Assembly (NA) of Vietnam is scheduled to host the ninth Inter-Parliamentary Union (IPU) Forum of Young Parliamentarians in Hanoi this September.

NA Chairman Vuong Dinh Hue presided over a working session with the NA Committee for External Relations, the NA Office, and relevant agencies on February 10 to discuss the event organisation.

Vu Hai Ha, Chairman of the committee, said the IPU Secretariat highly valued the Vietnamese parliament hosting this forum. Agencies of Vietnam also shared the view that it holds great importance to the implementation of a directive on the enhancement and elevation of multilateral diplomacy, issued by the Party Central Committee’s Secretariat.

Chairman Hue noted the forum is a focal event of multilateral diplomacy of the Vietnamese parliament in 2023.

Following the organisation of the 132nd IPU Assembly and the 41st General Assembly of the ASEAN Inter-Parliamentary Assembly (AIPA), the coming forum will be a chance for Vietnam to promote its image among international friends, he went on, asking the committee to make the best preparations for the three-day function.

The forum aims to boost the role of young parliamentarians and youth engagement in parliamentary activities, put forth recommendations based on youth perspectives about the IPU’s activities and agenda, build capacity, and expand the youth’s approach to issues of common concern.

This will also be an occasion to introduce youth movements in Vietnam and the important role of the Ho Chi Minh Communist Youth Union to international friends, the top legislator noted.

The Forum of Young Parliamentarians, founded in 2013, is steered by a board composed of 12 young parliamentarians, one man and one woman from each of the six geopolitical groups. Those from India and Thailand are representing Asia-Pacific in the board.

The forum, held annually since 2014, is represented at the Global Conference of Young Parliamentarians.

Car prices fall sharply in the first months of the year

A number of large manufacturers slashed car prices early this year, signaling fierce competition in the Vietnamese auto market.

Sales agents are offering attractive preferences such as paying 100% of the registration fee and also giving extra packages of accessories to attract people who want to buy cars.

Many Hyundai sales agents in HCM City are offering a price discount from 20 million VND to 103 million VND (855- 4,400 USD) for popular Hyundai models such as Grand i10, Accent, Elantra, Tucson, Stargazer and Santa Fe.

Meanwhile, Honda Vietnam has just announced to pay 100% of the registration fee for customers buying Honda CR-V and Honda City cars from February 4 to 28.

In addition, the company's dealers are also offering car body insurance and dozens of accessories for car buyers.

Many other car manufacturers such as Mazda, Mitsubishi, Kia, Subaru, Nissan, and Suzuki are also launching discount programmes for many models from several tens of millions of dong as well as offering to pay 50 to 100% of registration fees.

According to car dealers in the city, the reason why car prices are falling is due to weak consumption in the first months of the year while the inventory of cars is quite large, forcing dealers to reduce prices in order to reduce inventory and then import new car models.

Measures sought to promote farm produce exports through northern border gates

The Ministry of Agriculture and Rural Development (MARD) and the People’s Committee of the northern border province of Lao Cai on February 10 jointly held an agricultural product connection forum, which focused on seeking ways to promote farm produce trade between Vietnam and China.

The virtual forum, which connected more than 400 members inside and outside the country, drew a large number of State agencies and farm produce exporters.

It was held in the context that China is loosening COVID-19 prevention and control measures and will resume entry-exit and import-export activities with northern localities of Vietnam.

Speaking at the event, Deputy Director of the Asia-Africa Market Department under the Ministry of Industry and Trade (MoIT) To Ngoc Son said that last year, trade between Vietnam and China reached 175.5 billion USD. With a population of over 1.41 billion, China is a very important export market for the Vietnamese agricultural sector, consuming 53.7% of total vegetable and fruit exports of Vietnam.

Particularly, China is the third largest importer of Vietnamese aquatic products only after the US and Japan.

Son said that in order to promote exports to China, domestic firms should pay greater attention to building and protecting trademarks, while understanding market demand and strengthening the application of technology to trade activities. He advised exporters to optimise the Vietnam-China railway and e-commerce activities.

Meanwhile, Huynh Tan Dat, Deputy Director of the MARD’s Plant Protection Department, said that China is applying higher trade barriers and requirements for imported farm produce.

He underlined that it is necessary to include discussions on the removal of technical barriers and the opening of market for farm produce to high-level meetings between the two countries. Meanwhile, it is crucial to diversify export markets for different kinds of agricultural products, he said.

Vice Chairwoman of the Lao Cai Business Association Nguyen Thi Nguyet said that in order to deal with congestion at the border gates, it is necessary to extend customs clearance at the gates to 10pm every day.

Vice Chairman of the People’s Committee of Lao Cai province Hoang Quoc Khanh proposed that the MARD support businesses in production and trademark building, while signing a protocol with the Chinese side on plant quarantine for Vietnamese agricultural products to reduce the time and procedures for inspection and control at border gates.

Work starts on Prenn Pass upgrade, expansion project in Da Lat

The People’s Committee of the Central Highlands province of Lam Dong on February 10 began the upgrade and expansion of the Prenn Pass, the entrance way to Da Lat city from localities in southern Vietnam.

The project has a total investment of 553 billion VND (23.4 million USD) and a length of 7.4 kilometres. Construction is expected to be completed before December 31, 2023.

It connects Da Lat – the most famous destination of Lam Dong province – with the province’s Lien Khuong International Airport and the Dau Giay – Lien Khuong Expressway linking the southeastern province of Dong Nai with Lam Dong.

Tran Van Hiep, Chairman of the Lam Dong People's Committee, said that the current rapid economic development will inevitably lead to an increasing demand for transportation and travel, especially at weekends and on holidays.

Therefore, in order to solve traffic congestion problems, ensure traffic safety, increase the pace of socio-economic development of Da Lat city in particular and Lam Dong province in general, the pass upgrade and expansion is essential.

Prenn Pass, built by France in 1943, sees the highest level of traffic out of all roads leading into the city. There are many dangerous curves along the pass that will be improved with the new upgrades.

Wood sector urged to step up trade promotion

Vietnam’s wood industry is strong at manufacturing but has yet to master markets, so it’s time for businesses and associations to hold large-scale trade promotion events to attract buyers in the long term, insiders have said.

For many years, the industry has posted double-digit growth rates thanks to the fast-expanding global market and the attractiveness of its production capacity, especially products requiring skillful workers to be made.

However, because of that advantage, most businesses in the sector have focused only on manufacturing and building big factories while lacking attention to trade promotion to strongly connect with markets, Do Xuan Lap, President of the Vietnam Timber and Forest Product Association (VIFOREST), told a press briefing on the Ho Chi Minh City Export Furniture Fair (HawaExpo) 2023 on February 9.

This has pushed wood firms into a passive situation when market demand declined, he said, elaborating that since the latter half of 2022, surging inflation around the world has led to a nosedive in the number of orders placed on Vietnamese manufacturers while FDI firms have still sustained stable production.

Therefore, to develop sustainably, businesses and associations should invest properly in promoting trade, popularising brands, staying updated with information, and improving production capacity to meet international buyers’ demand, Lap added.

Le Hoang Tai, Deputy Director of the Trade Promotion Agency at the Ministry of Industry and Trade, said 2022 was full of difficulties for Vietnam’s trading activities. Though the situation is forecast to improve in 2023, wood businesses will still face unpredictable challenges due to global uncertainties, strategic competition among powers, economic recession, and soaring inflation in many countries.

He recommended businesses and associations work with ministries, central agencies, and localities to organise world-class fairs and exhibitions in Vietnam to raise the sector’s standing. They should also open Vietnamese pavilions at international and reputable events in key and potential markets like the US, the EU, Russia, Japan, the Republic of Korea, China, and Canada.

In addition, it is necessary to promote the capacity of developing products and researching markets to grasp consumer tastes and importing markets’ standards, thereby improving the competitiveness of their products and build national brands for wood and forestry products of Vietnam, Tai added.

Two more bridges connecting HCM City and Dong Nai proposed

The Transport Department of Ho Chi Minh City has proposed building two more bridges to enhance transport connectivity between the southern economic hub and its neighbour Dong Nai province.

The bridges include Phu My 2 that links the southern part of HCM City with Dong Nai’s Nhon Trach district; and Dong Nai 2, connecting Thu Duc city in HCM City with Long Thanh district in Dong Nai.

According to the Road Network Development Plan for 2021-2030, with a vision to 2050, there will be five bridges across a 40-kilometer river section between the two localities, namely Dong Nai, Long Thanh, Nhon Trach, Cat Lai and Phuoc Khanh, across a 40-kilometer section of the river.

Of them, only two bridges, Dong Nai and Long Thanh, have been opened to traffic while Nhon Trach and Phuoc Khanh will not be completed until 2025 and work on Cat Lai bridge remains unknown given differences over where the bridge should be located.

Foreign investment funds plan to pour money into Vietnamese stocks

Many billion-dollar investment funds have the intention to pour money into the Vietnamese stock market, an event held by VIR has heard.

Quan Duc Hoang, chairman of A+ Fund, made the comments about foreign capital at the roundtable 'New Investments amid New Volatility' hosted by VIR at its headquarters in Hanoi on February 7.

In the framework of the roundtable, the business community and individual investors had opportunities to listen to specific analyses about the fresh environment from experts and lawyers in banking, finance, real estate, and blockchain, and from there have more of a basis for their investment decisions.

A study by BIDV Securities Company analysing over $50 billion owned by foreign investors on the Vietnamese stock market showed that more than half of foreign ownership is owned by strategic investors. This group usually holds stocks for the long term.

Foreign investors also expect Vietnam’s market to be upgraded to an emerging market. According to JPMorgan's CEO in the Asia-Pacific region, if it is upgraded to emerging market status, the market will receive approximately $5 billion from ETFs. Therefore, the fact that the market is in a period of low valuation is a very good opportunity to invest and hold.

Bad debts continue to soar at commercial banks

The rate of bad debt is rising at commercial banks and is expected to increase further amid real estate market woes.

Deputy governor of the State Bank of Vietnam (SBV) Dao Minh Tu has said that bad debts are climbing for both credit organisations and the wider economy.

He said that the woes would be revealed more clearly as the ratio of on-balance-sheet bad debt continues to grow due to inflation and interest rate rises. At the end of 2022, bad debts were classified based on the groups of borrowers and economic issues like recovery and inflation curbing.

Can Van Luc, a member of the National Monetary and Financial Policy Advisory Council, said that on-balance-sheet bad debt could reach 2.3-2.5 per cent and gross bad debt could hit 6 per cent in 2023, rising into 2024. As the regulations on unchanged debt groups in Circular No.14/2021/TT-NHNN expire, economic recovery could suffer.

According to the SBV, at the end of 2022, the ratio of on-balance-sheet bad debt was 1.92 per cent. However, numerous banks have just released their business results for the last quarter and 2022 as a whole, showing that bad debts are increasing.

At NCB (National Citizen Commercial Joint Stock Bank), total outstanding loans to customers rose by 14.6 per cent compared to early 2022 because the bank classified bad and overdue debts.

Despite high profits, VPBank reported high bad debts (including FE Credit) at 4.73 per cent. While that of the parent bank was only 2.19 per cent, debts in group 4 (suspected) and group 5 (able to lose) both rose on-year.

Bad debts will increase in 2023 with the real estate market facing issues as the industry debts make up 30 per cent of total borrowing at most banks. Moreover, the collateral for the loans is usually real estate, which is either frozen, reduced in price, or less liquid. In addition, factories and machinery are harder for banks to liquidate to recover capital.

Experts take stock of factors involved in market prospects

Vietnam’s markets are likely to be choppy, gold to remain strong, stocks expected to rebound after a tough first quarter, and corporate bonds to encounter new challenges, according to analysts.

As per the World Gold Council (WGC), in Vietnam, consumer demand for gold in Q4/2022 increased 58 per cent on-year to 13.5 tonnes, from 8.5 tonnes in Q4/2021. The rise was supported by a 48 per cent on-year increase in bar and coin demand over the same time frame from 6.1 tonnes to nine tonnes, and an 80 per cent on-year increase in jewellery demand from 2.5 tonnes to 4.5 tonnes.

Globally, annual central bank gold demand more than doubled to 1,136 tonnes in 2022, up from 450 tonnes the year before and to a new 55-year record high. Purchases in the last quarter of 2022 alone reached 417 tonnes, bringing the total for the second half of 2022 to more than 800 tonnes.

Louise Street, senior markets analyst at the WGC, said, “Economic forecasts are pointing to a challenging environment and a likely global recession, which could lead to a role reversal in gold investment trends. If inflation comes down, this could be a headwind for gold bar and coin investment. Conversely, continued weakening of the US dollar and the moderating pace of interest rate hikes could have positive implications for gold-backed exchange-traded fund demand.”

Regarding the markets generally, analysts at KB Securities Vietnam believe there are several main drivers in Vietnam in 2023, including China’s production and business activities returning to normal in Q2, which should benefit Vietnam’s economy but not put too much pressure on global inflation.

Secondly, the US Federal Reserve may only have two more 25 basis point rate-hikes in the first quarter of 2023 and start lowering interest rates in Q4 when the US economy falls into a slight recession. It is also expected that money supply growth will be close to pre-pandemic levels, and domestic interest rates are starting to cool despite being high.

The brokerage also assessed that this year’s second quarter will see concerns about economic recession weigh on the global stock market as the business activities of enterprises show more obvious signs of weakening.

In addition, the pressure of corporate bond maturity is high, leading to an increase in market risks, and the VNIndex is facing the risk of falling again. In the latter half of 2023, the market’s attention will focus on the possibility of policy easing of major central banks and the level of recession in the US and EU economies.

During the base case scenario, a mild recession would be enough for central banks to change their policies while not causing too much damage to the global economy. Vietnam’s stock market could recover given the central banks’ easing policy and stable domestic macro conditions.

In the negative case, when the above four factors are not favourable, the VNIndex could drop to 880 points by the end of 2023, KB Securities said.

Meanwhile, Dinh Quang Hinh, senior analyst at VNDIRECT Securities, said that there are a few signs pointing to the next down cycle in the domestic property market, including developers having limited refinance opportunity due to tighter regulations on corporate bond issuance and credit exposure; rising mortgage rates dragging on housing demand; and a drop in supply as project approval processes are delayed while waiting on an amendment to the land law.

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