A garment factory in Lào Cai Province. — VNA/VNS Photo Quốc Khánh

Việt Nam’s index of industrial production (IIP) in January edged up 18.3 per cent compared to the same period last year, according to the General Statistics Office (GSO).

The IIP, however, decreased by 4.4 per cent compared to the previous month. The GSO said this development was quite similar to 2023 with a continuous decline at the beginning of the year and a return to growth in the last months of the year. This result could also be considered a basis for IIP to leap forward in the upcoming period.

According to TTJ Company in Thái Nguyên Province, the firm had orders to export agricultural machinery to Canada until the end of this year.

The company's director Nguyễn Trung Thành told baothainguyen.vn that his company aimed to achieve revenue of about VNĐ50 billion in 2024, an increase of 20 per cent compared to the previous year.

The GSO said the manufacturing and processing sector grew by 19.3 per cent year-on-year, contributing the most to the overall growth (15.1 percentage points); electricity production and distribution surged by 21.6 per cent, contributing 1.9 percentage points; water supply, management of waste, and wastewater treatment rose by 5.7 per cent, contributing 0.1 percentage point; and the mining sector edged up by 7.3 per cent, contributing 1.2 percentage points.

Some key industries registering significant increases in IIP in the first month of this year included furniture (up 67 per cent); textile and garment (46 per cent); electrical equipment (43 per cent); metal production (39 per cent); chemicals and chemical products (38 per cent); leather and leather-made goods (35 per cent) and food processing (17 per cent).

Several goods that saw positive IIP growth such as sugar (up 66 per cent); rolled steel (60 per cent); textiles made from natural fibres (57 per cent); powdered milk (47 per cent); chemical paint (45 per cent); and NPK fertiliser (41 per cent). 

The national statistical agency also outlined products recording IIP declines in January, such as phone components (down 15 per cent), television (11 per cent), handsets (4 per cent), and crude oil (2 per cent). 

It added that compared to the same period last year, 60 localities posted increases in their IIP while only three localities saw decreases. Some localities witnessed a fairly high increase in the IIP due to a sharp increase in the processing and manufacturing industry, electricity production and distribution industry, including Quảng Ninh (160 per cent), Bắc Giang (58 per cent), Nam Định (156 per cent), Vĩnh Long (51 per cent), Kiên Giang (48 per cent) and Phú Thọ (40 per cent).

The number of workers in industrial enterprises as of January 1, 2024, increased by 0.5 per cent month-on-month and by 0.1 per cent year-on-year. 

Particularly, the number of workers in the State-owned enterprise sector remained unchanged compared to the same time last month and declined by 0.9 per cent year on year. However, the number of workers in non-State enterprises increased by 0.1 per cent on month and decreased by one per cent on year; while the number in foreign-invested enterprises increased by 0.7 per cent on month and decreased by 0.8 per cent on year. 

Changing home buyer tastes push developers toward affordable segment

There is a visible change in the taste of home seekers which is pushing developers to switch focus to more affordable segment housing.

A recent report by Finance – Economics – Real Estate Institute of Đat Xanh Services showed greater attention is placed on the amount of money they have to pay to own an apartment.

About 78 per cent of buyers pay attention to the total price of the apartments, while only 22 per cent care about the price per sq.m, a full reversal from the previous period.

Realtor Thu Hương said that previously the market preference was for 3-bedroom apartments of around 100sq.m. Now, apartments of one or two bedrooms are more common.

The increasing price per sq.m makes buyers interested in small apartments because the total sum they have to spend will be affordable.

Experts predict that small apartments may become a trend in the next five years in a difficult economic context.

In fact, projects with small apartments of around 45sq.m and prices of less than VNĐ2 billion in the outskirts often have higher liquidity.

Trần Xuân Lương from the National Economics University said small apartments can meet the demand of young buyers or nuclear families. Besides, leasing this type of apartment is easy.

A survey by Property Guru which owns batdongsan.com.vn found that home buyers today are younger.

Young people aged 26-42 dominate the real estate assets market in 2023.

Specifically, the group of home seekers aged 27-30 increased from 39 per cent in 2021 to 42 per cent in 2023. Aged 32-40 accounted for 24 per cent while aged 42 or higher saw a drop from 22.3 per cent in 2021 to 15.3 per cent in 2023.

Specially, Gen Z home seekers aged 22-26 increased from 13 per cent in 2023 to 18.7 per cent last year.

Lê Bảo Long, strategy director of batdongsan.com.vn, said that unlike middle-aged people, young home seekers prioritise flexibility in accommodation to have better experiences. They are not afraid to travel long distances to work every day, or even change living and working environments regularly.

This group of buyers prefer projects with high living standards and modern amenities, he said.

Giang Huỳnh, deputy director of market research department of Savills HCM City, said that young buyers often eye apartments with areas from 50-70sq.m in the outskirt areas.

According to the International Monetary Fund, in 2025-27, Việt Nam’s GDP per capita is forecast to reach US$5,000 in 2024. The major workforce ages around 22-35.

Ngô Đình Đức from Việt Nam Institute of Directors said that the young generation is quickly taking advantage of the development of technology and innovation to increase incomes compared to the previous generations. Thus, the ability of the young to afford a home is increasing.

It can be seen that reducing housing price is an important solution to solve liquidity problems and improve cash flow.

However, the input costs of housing projects keep increasing, plus the prolonged implementation, making it difficult to lower prices.

Lê Đình Chung, general director of SGO Homes, said that while lowering housing prices is difficult, developing small-sized apartments might be reasonable.

Nguyễn Văn Đính, President of the Việt Nam Association of Realtors, said that besides rising input costs, the shortage of supply is also a cause of skyrocketing housing prices.

He said that the Government asked the Ministry of Construction to instruct developers to restructure their products and lower costs, and raise appropriate and prompt measures to promote the development of affordable homes, social housing projects and housing projects for workers and low-income earners.

This demonstrates the determination of the Government in removing difficulties for the real estate market and promote its safe, healthy and sustainable development, Đính said.

Restructuring housing projects and lowering prices are difficult problems which require coordination from all stakes, including the Government, management agencies, local authorities to banks, developers and home buyers.

First, it is necessary to simplify administrative procedures to speed up the implementation of housing projects, together with appropriate mechanisms for site clearance, he said.

Economist Cấn Văn Lực said that developers need to be determined in restructuring their products, lowering prices and diversifying funding sources to reduce risks and increase liquidity.

The Golden Group faces steep fine for failure to disclose information

The Golden Group Joint Stock Company has recently been fined more than VNĐ90 million (US$3,700) by the State Securities Commission for failing to disclose information as required by regulations, including financial reports and annual reports.

Specifically, on January 25, the State Securities Commission's Inspectorate issued Decision 40/QD-XPHC imposing an administrative fine on the Golden Group Joint Stock Company, located at the 7th floor, 45 Võ Thị Sáu Street, Đa Kao Ward, District 1, HCM City, in the amount of VNĐ92.5 million, for failing to disclose information according to law.

The company failed to disclose information on the State Securities Commission's Information Disclosure System, the HCM City Stock Exchange's electronic information portal, and the company's electronic information portal for its separately audited and consolidated financial reports for 2022, as well as its semi-annual separately audited and consolidated financial reports for 2023.

The Golden Group Joint Stock Company (TGG), formerly known as Louis Capital Joint Stock Company, was established in 2012. In 2018, TGG began trading on the Ho Chi Minh City Stock Exchange (HoSE).

The Golden Group operates in various investment sectors, including real estate, securities, debt trading, aquaculture, agriculture and livestock farming.

In terms of business results, in the first nine months of 2023, the Golden Group reported net revenue of VNĐ2.7 billion, a decrease of over 99 per cent compared to the same period last year (VNĐ575.7 billion).

After deducting costs and expenses, the Golden Group recorded a post-tax loss of VNĐ21.1 billion, compared to a loss of VNĐ24.9 billion in the same period last year.

Future of digital banking hinges on data security: experts

Data security and privacy play a pivotal role in the digital transformation of the finance and banking sector, according to experts.

As the Government advances the national digital transformation agenda, the banking industry as a whole and individual lenders are speeding up the transformation of all their operations, they said.

Nguyễn Viết Hòa, head of community information, Vietnam Blockchain Union (part of the Vietnam Digital Communications Association), said the finance and banking industry has always been associated with the construction, management and operation of data systems – going from basic means such as physical books and records to core banking systems storing billions of digital records every day.

“Throughout that evolution, data security has played a key role in protecting the entire system so that it can operate safely, transparently and effectively. Organisations inside and outside the finance-banking sector have been developing a plethora of solutions to minimise vulnerabilities and the risks of attacks that result in data breaches."

He said data security solutions deployed by banks in Việt Nam could be divided into five common categories: fraud prevention, data risk control, network infrastructure security, phishing attack prevention, and preventing loss and unlawful interference of data.

There are international standards that Vietnamese banks could adopt to improve risk control and information security, he said.

"Nevertheless, more inputs from real-life situations are always needed to ensure that actual practices are updated and effective as technology advances and transforms all the time."

An equally important task is ensuring data privacy.

Dr Huy Phạm, founder of RMIT Fintech-Crypto Hub, said though Decree 13/2023/ND-CP (effective from July 1, 2023) has created a legal framework for personal data protection, its implementation in the finance and banking sector would take some time.

“To be able to fully comply with the regulations in Decree 13, financial institutions and banks need to strengthen their control over the processing and storage of personal data from the employee level up because they often interact and communicate directly with customers, possibly through their personal phones. So, serious violations of personal data protection can easily occur.

"For example, a customer's personal information might be transmitted from one securities company to another via their respective employees without the customer's consent."

Concurrently the advancement of artificial intelligence (AI), generative AI and their applications in the finance and banking sector causes growing concern as to whether customers' personal information could be legally used in AI training.

“Will data subjects have full control over their personal information if financial institutions and banks apply AI in their systems? If these organisations unlawfully use customer data in AI training, how can the data subjects track such activities and potentially initiate a lawsuit?”

Data subjects could request that organisations not use or remove their personal information when training AI models, he said.

A notable example is OpenAI's ChatGPT, which was briefly banned in Italy until the company provided solutions that enabled data subjects in Italy to allow or refuse the use of their personal data in AI training.

But unlike Google and other search engines, generative AI models such as large language models could not easily fulfil such requests since they are often unable to retrieve or remove specific pieces of information on command, he pointed out.

Moreover, he said, popular large language models are also not transparent – they are essentially “black boxes” and users do not clearly know how the answers are formed.

“Therefore, the Government and relevant authorities need to provide specific instructions and regulations on the use of personal data for AI training in the finance and banking sector.

“At the same time they should encourage financial organisations and banks to use responsible and explainable AI models.”

HoREA against lending restriction on future home purchases

In a bid to address potential setbacks to the real estate market, the HCM City Real Estate Association (HoREA) is advocating for changes, particularly to the restriction on banks from using future commercially developed houses as collateral for individual home purchases.

Set to be effective from July 1, 2024, Circular 22/2023/TT-NHNN of the State Bank of Vietnam (SBV) introduces a significant change in credit risk management in the country's financial system.

Under the proposed amendments, credit risk coefficients for loans tied to social housing, home purchases and construction within government-backed initiatives will be capped at 50 per cent. The loan-to-value ratio (LTV) will see an upward adjustment from 100 per cent, and the debt-service coverage ratio (DSC) is set to exceed 35 per cent. The minimum credit risk coefficient stands at 20 per cent, aligning with a guarantee ratio below 40 per cent and an income ratio below 35 per cent.

In addition, Circular 22 also revises the credit risk coefficient for assets in the form of specialised credit for real estate business projects in industrial zones, reducing it from 200 per cent to 160 per cent.

These proposed amendments encourage credit institutions to actively extend loans for social housing projects, homes covered by various programs, and government-supported projects. Simultaneously, they must address challenges and foster a secure and sustainable real estate market.

Regarding these proposed changes, HoREA voiced concerns that certain provisions in Circular 22 could have adverse implications for the real estate market's short-term and long-term recovery and development.

In particular, HoREA raised concerns about regulations in Circular 22 related to loans secured by real estate for individuals looking to purchase commercial houses, including those still under development. According to the circular, commercial banks and foreign bank branches are restricted to lending for houses that are "completed and ready for handover," signifying "existing houses."

HoREA chairman Lê Hoàng Châu said: "Circular 22/2023/TT-NHNN does not permit commercial banks and foreign bank branches to lend to individuals for the purchase of commercially developed houses that are not yet completed for handover (meaning commercially developed houses formed in the future) to be secured (mortgaged) by the house itself.

"Therefore, individuals wishing to obtain credit to purchase commercially developed houses in the future must explore alternative security measures or secure them with other assets."

HoREA emphasised the need for immediate amendments to avoid potential adverse consequences when Circular 22 takes effect on July 1, 2024. The association said the prohibition on credit institutions from lending to individuals for the purchase of commercially developed houses in the future, secured by the house itself, is inconsistent with related legal regulations. HoREA, in turn, proposed amendments to permit credit institutions to lend to individuals for credit to purchase "commercial houses formed in the future," with the house itself serving as collateral.

In response to HoREA's concerns, an SBV representative said home mortgage loans, designed for individuals purchasing houses, are contingent upon specific conditions. These include the source of repayment not being rental income from the loan, the completion of the house following the purchase contract, and the legal authority of the bank or foreign bank branch to handle mortgaged property if the customer fails to repay the debt under secured transaction laws.

The SBV outlined that home mortgage loans cover purchases meeting specified conditions, encompassing completion requirements for handover. This includes loans for social housing and government-supported housing programs. Risk factors for these loans vary between 20 per cent and 100 per cent, depending on the loan-to-value ratio (LTV) and debt service coverage ratio (DSC).

For loans related to social housing and government programs, where the completion condition for handover is not met and the risk factor is lower than other home mortgage loans, it stands between 20-50 per cent, in line with the government's policy to promote the social housing sector. The central bank emphasised that the completion condition in the house purchase contract applies exclusively to home mortgage loans, and this condition carries a lower risk factor compared to loans secured by other property estates.

Khanh Hoa lobster farmers worry about unstable market
 
Lobster farmers in the southern province of Khanh Hoa are currently earning good profits as prices have sharply risen, but worries remain about an unstable market.

According to the economic department of Van Ninh District which is among the biggest lobster hubs in the province with over 35,000 cages, lobster prices reached VND1.60 million per kilo on February 1.

Vo Van Thai, director of the Van Phong Tourism Aquaculture Cooperative said lobster prices had suddenly risen over the past few days, from VND1 million to over VND1.5 million per kilo.

"Our collective has 32 members who have raised lobsters for many years," Thai said. "We had faced losses when the prices fell to VND 1 million since last September. Luckily prices have gone up now as demand has risen."

Thai said that although they're happy to see rising prices after many months facing losses last year, local farmers are still worried about unstable prices.

The Vietnam Seafood Company previously sent an urgent document calling on local farmers to help sell Khanh Hoa lobsters after China stopped imports, leaving hundreds of tonnes of products being without a market.

Vietnamese businesses face many obstacles relating to innovation

Vietnam's innovation ecosystem has gone through a year of ups and downs and to be able to exist sustainably, businesses need to prioritise adapting to the global trends as well as ensure their intellectual property, according to the freshly released "Vietnam Open Innovation Ecosystem Report 2023”.

The report, which was conducted by Vietnam open innovation platform (BambuUP), under the auspices of the National Agency of Technology Entrepreneurship and Commercialisation Development (NATEC) and the National Startup Support Centre (NSSC), pointed out that 2023 was a challenge year for the global economy.

Reports from StartupBlink, Crunchbase and CBInsights showed that by August 2023, total venture investment capital for global startups was 187.6 billion USD, a drop of 46.4% compared to the same period in 2022. On average, 23.4 billion USD was injected into startups each month, a considerable decrease from 37 billion USD in 2022.

2023 also witnessed the decline of leading startup ecosystems. The number of newly appeared unicorns was also at the lowest level in the last four years.

The figures showed that 2023 was a tough year for Vietnam’s businesses. The number of newly-established enterprises in Vietnam grew by 2.3% to 103,658 in the first nine months of 2023, while the number of those leaving the market rose more sharply, by 20.6% to 72,634.

Vietnamese enterprises still face many obstacles relating to innovation, the report said.

About 75% of surveyed businesses said that they were not fully aware of the role of open innovation which resulted in unclear motivation in the implementation.

However, Vietnamese businesses seemed to pay more attention to open innovation as 73% of surveyed enterprises plan to do so in the field of marketing and sales in the future, an increase of 48% compared to 2022. Meanwhile, the research and development (R&D) sector continued to play an important role in innovation plans.

Vietnam ranks 46th among the 132 economies featured in the Global Innovation Index (GII) 2023 rankings, up two positions from last year, according to the World Intellectual Property Organisation (WIPO). Particularly, the country maintained second position among lower middle-income countries in the overall GII after India (40th). Among the Association of Southeast Asia Nations (ASEAN) countries, Vietnam was behind Singapore, Malaysia, and Thailand.

According to WIPO, Vietnam is one of seven middle-income countries that have made the greatest strides in terms of innovation in the last decade. It continues to be one of the three record holders by being innovation overperformers for a 13th consecutive year, along with India and the Republic of Moldova.

However, the organisation pointed out that spending on science-technology and innovation in Vietnam did not see improvement in 2023. The ratio of Vietnam’s investment in R&D to GDP was still low and it is on the decrease.

The Vietnam Open Innovation Ecosystem Report 2023 showed that the ratio was 0.4%, lower than the average level in Southeast Asia, ranking 66th globally, a decline of seven grades from the year before.

Tran Bang Viet - CEO of Dong A Solutions, one of the consultants in the report, suggested that business leaders can change their approaches to facilitate a smooth entry into the new year.

It is essential for businesses to invest in innovation to increase their resilience and they should change their mindset before adopting digital transformation, he said.

He also underlined the need to have customer data, saying it is essential to assist businesses innovate smartly based on connecting existing data values.

Pham Quang Chien, Deputy General Director of Citek Technology JSC, said enterprises need to be more flexible when applying technology, adding that core technology will be the solution to free businesses from the constraints of small-scale and fragmented innovation.

Phu Quoc welcomes nearly 1,100 international cruise guests

The Italian-flagged passenger cruise vessel Costa Serena brought approximately 1,100 foreign passengers to Phu Quoc, a popular island destination in the southern province of Kien Giang, on February 2. 

The cruise ship departed from Laem Chabang port in Thailand, bringing nearly 1,100 tourists, including 500 Thai visitors, to Phu Quoc island.

During their one-day stay on the island, the group toured popular scenic spots such as Hon Thom cable car, Sao beach, Ho Quoc pagoda, the Grand World Phu Quoc entertainment area, and Kiss Bridge.

The foreign visitors also went shopping and tasted seafood on Phu Quoc island. At 6 p.m. on the same day they then left Phu Quoc to continue their journey.

Phu Quoc is scheduled to welcome Aida Bella cruise ship of Germany on February 9 with around 2,100 passengers on board.

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