The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) continued slashing deposit interest rates on January 12, with the lowest standing at 1.7% per year.

Cutting interest rates by 0.1 - 0.2% per year, Vietcombank reduced the rate for one- and two-month deposits to 1.7% per year from 1.9% per year.

Likewise, the rate for three-month deposits was brought down to 2% per year and for six- and nine-month ones to 3% per year.

The highest interest rate, applied to 12-month and longer terms, at this bank was also cut from 4.8% per year to 4.7% per year.

The deposit interest rates at Vietcombank are currently the lowest among the Big 4, the four biggest State-owned commercial banks, as well as the banking system.

Earlier, the Vietnam Bank for Agriculture and Rural Development (Agribank), another in the Big 4, also lowered the rate for one- and two-month deposits from 2.2% per year to 2% per year.

Interest rates for all deposit terms remain unchanged at the other two, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), on January 12.

VNDIRECT Securities JSC forecast interest rates for 12-month deposits will be kept at low levels, about 5% per year from the end of 2023 until the end of 2024. Given this, it expected lending interest rates will also continue the downward trend as a result of falling capital costs recently.

Economic expert Assoc. Prof. Dr. Dinh Trong Thinh perceived that deposit rates are unlikely to go down further this year, but there remains room for lending rates to reduce more. When production and business activities get better and capital demand increases, bank interest rates may bounce back accordingly.

Work starts on Japanese-invested luxury apartment project in Binh Duong

A high-end apartment project named "Midori Park the TEN" had its work started in Binh Duong New City, the southern province of Binh Duong, on January 12.

The ground-breaking ceremony was held by the provincial People’s Committee and Becamex Tokyu Co. Ltd, a joint venture between Tokyu Group of Japan and Becamex IDC Corporation of Vietnam.

The project, covering nearly 1.4ha, is the sixth high-end apartment one of Becamex Tokyu. It will feature a 10-storey block with 300 apartments and become the first of its kind in Binh Duong to include a public onsen (hot spring) bathing area.

It is scheduled to be completed and handed over in autumn 2025.

Vice Chairman of the Binh Duong People’s Committee Nguyen Van Danh said that Binh Duong New City, as the political, economic, cultural, and financial centre of the province, have recorded considerable improvements in recent years.

He attributed such development partly to contributions by businesses, especially foreign invested ones, and expressed his hope that Midori Park the TEN will become a liveable place for residents in not only Binh Duong New City but also the province.

The official also called on Tokyu to continue sharing its over-100-year experience in urban development to help turn Binh Duong into a green, smart, and worth-living city.

With more than 350 projects worth over 5.9 billion USD, Japan is currently the second biggest foreign investor in the province, an industrial hub in the south of Vietnam.

The Tokyu Group has participated in many infrastructure development projects here, including Tokyu Binh Duong Garden City, an urban area built in coordination with Becamex in 2012.

Binh Duong's first waste-to-energy plant put into operation

A 5-MW waste-to-energy facility, the first of its kind in the southern province of Binh Duong, became operational on January 12.

The plant was invested by the Binh Duong Water Environment Joint Stock Company (BIWASE). Its inauguration contributes to the development of green economy and circular economy in the country's industrial capital, according to Nguyen Van Thien, Chairman of the company's Board of Directors. 

It can process 200 tonnes of waste a day. The project has a total investment of 1.2 trillion VND (about 49 million USD), including 20 million USD co-financed by the Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA).

An organic fertiliser production line with a capacity of producing 840 tonnes per day was also put into operation on the same day. 

BIWASE has four waste separation and treatment technology lines with a total daily capacity of 2,520 tonnes and four incinerators which can be able to process 500 tonnes of waste a day. 

Savills Vietnam forecasts growing demand for industrial, office property

Government policies and market forces are expected to propel the real estate sector for continued growth in 2024, with demand in industrial and office leasing segments expected to increase, according to experts from Savills Vietnam.

The latest report of the company said hi-tech investment incentives are generating significant demand for industrial real estate, including warehouses, cold storage facilities, logistics and data centres. Tax incentives, favourable land policies and streamlined administrative procedures have attracted high-tech investors to Vietnam, notably giants from the US, the Republic of Korea and Japan. 

To meet the ever-growing demand, developers have heavily invested in industrial real estate projects, especially in areas with potential in attracting hi-tech projects such as Ho Chi Minh City, Hanoi, Binh Duong, Dong Nai, Bac Ninh, Bac Giang and Thai Nguyen.

According to Savills Vietnam, the Vietnamese office market has defied the global trend, maintaining a high occupancy rate with stable rental growth. Notably, Ho Chi Minh City stands out as one of the potential office markets in the Asia-Pacific, boasting an occupancy rate of over 90%, while Hanoi also witnesses a high occupancy rate of 85%.  

Foreign enterprises and technology companies are increasingly interested in Environmental, Social, and Governance (ESG) standards, leading to a growing demand for certified sustainable offices. In Ho Chi Minh City, around 28% of Grade A office supply is green certified, and it is predicted that by 2026, 80% of Grade A and B office supply will be certified.

In Hanoi, 20% of Grade A office supply was already green certified as of December 2023, with an additional 68,400 sq.m of green office space expected from new projects such as 27-29 Ly Thai To, Grand Terra, and Tien Bo Plaza.

General Director of Savills Vietnam Neil MacGregor said there is a growing demand for offices in suburban areas where rental prices are lower and commuting to industrial zones and high-tech parks is more convenient.

By the end of 2026, Grade A and B office supply in Ho Chi Minh City is projected to increase by an additional 200,000 sq.m, representing a 20% increase from the current supply. Hanoi is expected to add 220,000 sq.m, up 13% from the existing supply.

Vietnam’s insurance market to rebound with caution

Vietnam’s domestic insurance market managed to pull through a difficult time in 2023 but it will take time for the market to rebuild trust among consumers, according to policymakers and industry insiders.

Experts have long voiced concerns over a lack of trust among consumers, even before last year's insurance crisis, during which consumer trust was said to be at an all-time low after numerous scandals broke out, negatively impacting the entire industry. They said 2023 should be remembered as a valuable lesson for the industry and the market.

In a recent report by the Ministry of Finance, insurance benefits payout in 2023 was estimated at 86.37 trillion VND (3.57 billion USD), an increase of 31.14% compared to the previous year, with non-life insurance companies paid 23.814 trillion VND, while life insurance companies paid 62.562 trillion VND.

According to the ministry, timely and substantial payments have helped individuals and businesses overcome difficulties, stabilise production and business activities, as well as contributing to the economy.

Since the crisis, regulatory agencies and insurance companies have taken measures to reassess the situation, considering it an opportunity to cleanse and readjust the market after a period of rapid growth. The focus is on developing the market sustainably, transparently, and safely.

Solutions have been proposed by the ministry and its sub-department overseeing the industry, the Insurance Management and Supervision Bureau, to enhance market transparency and safeguard the rights of insurance participants.

Ngo Viet Trung, the bureau's director, said the industry has overcome one of its most challenging times but it will require additional time for transformation towards increased depth, enhanced quality and more effective contribution to the country's socio-economic development.

In the future, the Ministry of Finance aims to manage and supervise insurance companies based on risk through safety capital checks, business classification, evaluation, risk management, and updating and improving early warning systems. Additionally, there will be a continued focus on managing, supervising, inspecting, checking and strictly handling law violations to increase legal deterrence and compliance.

Under the 2022 Insurance Business Law, businesses will have to publicly disclose information such as decisions on penalties for violations in insurance business activities, court judgments and decisions regarding the company's insurance activities, and decisions to prosecute companies, managers, and controllers of insurance companies.

To ensure the sustainable development of insurance sales through banks, it is necessary to not only enhance transparency in providing insurance through banks but also focus on two main pillars: ensuring customers' active participation, respecting their choices and strengthening supervision to ensure the quality of insurance sales.

The ministry has stated that it will continue to direct the improvement of insurance business laws, enhance management, supervision, inspection, and checks, and increase communication to disseminate information about insurance contract laws.

Vietnam Airlines transports apricot, peach blossoms for Tet

The national flag carrier Vietnam Airlines will transport apricot and peach blossoms for the upcoming Tet (Lunar New Year) on domestic flights from January 11 to February 24.

A passenger will be allowed to check in with one branch of apricot or peach blossoms, measuring a maximum of 150cm x 40cm x 40cm as checked baggage.

Transportation fees will be 450,000 VND (18.4 USD), not including VAT.

Earlier, Vietnam Airlines Group, which comprises Vietnam Airlines, Pacific Airlines, and Vietnam Air Services Company (VASCO), announced an additional capacity of over 100,000 seats, equivalent to nearly 550 flights, for the peak Tet season from January 25 to February 24.

These figures bring its total to 2.1 million seats and 10,700 flights during the period.

The additional flights will mostly be operated on routes connecting Ho Chi Minh City and Hanoi to Da Nang, Hai Phong, Vinh, Thanh Hoa, Hue, Da Lat, Can Tho, Nha Trang, Phu Yen, and Phu Quoc.

Home loans expected to drive retail credit growth in 2024

Home loans will be a driver for retail credit growth in the near future as interest rates keep cooling down and the real estate market recovers from the second half of 2024, analysts predict.

In a recent report, analysts from Vietcombank Securities Company (VCBS) said they expected a recovery of the real estate market from the second half of this year when the actual demand for buying houses to live in is still high and the need for property investment increases again.

Retail credit is decelerating as demand for consumer loans, home purchases, car purchases and property investments all decline. The proportion of retail credit of total outstanding loans decreased from 47 per cent at the end of 2022 to 46 per cent at the end of the third quarter of 2023.

According to VCBS, home loans have been the main growth driver for many years with a five-year compound annual growth rate (CAGR) of 26 per cent. However, growth slowed in 2023 due to high interest rates and a frozen real estate market. At the end of the third quarter of 2023, outstanding home loans decreased by 1 percentage point over the same period of the previous year, accounting for 13.8 per cent of total outstanding loans.

VCBS forecasts loans for real estate and construction enterprises will continue to increase rapidly, but there will be a differentiation in capital access between real estate segments and enterprises in the market. Specifically, credit will focus on the affordable real estate segment that serves real housing needs, industrial parks and transportation infrastructure construction.

However, part of the credit will be disbursed to real estate enterprises, which face financial difficulties, for the purpose of debt restructuring.

VCBS reported that by the end of the third quarter of 2023, outstanding loans to real estate enterprises and construction sector loans of credit institutions increased by about 13.4 per cent since the beginning of the year, higher than the credit growth of the entire banking industry. The two types of loans accounted for 7.7 per cent and 8.3 per cent of the entire banking industry’s total outstanding loans, respectively.

According to experts, after a period of tightening credit for real estate enterprises, banks have begun to promote disbursement to real estate developers, because the real estate market has shown signs of recovery in the wake of declining interest rates and the Government’s legal support under Resolution 33/NQ-CP 2023 and Circular No. 10/2023/TT-NHNN on solutions to remove difficulties for the development of real estate market.

Banks have also increased lending to meet the increasing demand of real estate enterprises in the context of decreasing interest rates and an unfavourable corporate bond environment. 

Vietnamese firms adjust their strategies to boost production

Experts believe that the world and domestic economic situation in 2024 will continue to have difficulties and challenges. In that context, Vietnamese businesses need to proactively implement solutions to promote production and sales.

Looking at the market outlook for 2024, experts have pointed out two issues. First, some export industries have good signals because they have exhausted foreign inventories, but some other industries are still facing difficulties due to consumers tightening their spending. Second, some foreign importers have moved to other markets that are better than Việt Nam.

Regarding this issue, Deputy Director of the Import-Export Department of the Ministry of Industry and Trade Trần Thanh Hải recommended that local businesses carefully consider and adjust their business strategies by returning to the domestic market and wait for a big boost in purchasing power so domestic manufacturers can boost production.

Regarding exports, currently 70 per cent of businesses have changed their strategies and have had many orders. For example, the fruit and vegetable industry has set an export record because it changed strategies.

In 2024, Việt Nam has many sources of plastic raw materials due to many FDI (foreign direct investment) enterprises invested in this field. Therefore, Vietnamese businesses can take advantage of this source of raw materials to reinvest in production instead of importing raw materials.

In addition, there are still some industries that are lagging behind, such as seafood and electronics, which still depend on FDI.

Director of the Centre for WTO and Integration (VCCI) Nguyễn Thị Thu Trang suggested that Vietnamese associations and enterprises should focus on engagement programmes to orient businesses towards sustainable development, and development associated with the requirements, procedures and regulations of developed countries such as CO2 emissions, renewable energy, and products that use high technology and use less labour.

In particular, it is necessary to invest in smart factories and improve domestic products' quality to be on par with exports. At the same time, there needs to be communication about trade promotion programmes for businesses covering all provinces and cities nationwide. In addition, the State needs to support and advise on financial policies so that local businesses can quickly grasp, implement properly and prepare both economic and human resources, according to Trang.

“Regarding the outlook for 2024, I predict that the domestic macro economy will maintain stable growth, inflation will be controlled, and promoting public investment will be the premise for the stable development of industries. In particular, in 2024, the Government will still focus on prioritising development in three main areas, including production, exports and domestic consumer services. In particular, agriculture is still used as support to promote sustainable processing,” said economic expert Nguyễn Trí Hiếu.

Maintaining a stable growth rate in the current context is considered a positive result, helping local enterprises hope for strong business prosperity in 2024.

At this time, most businesses have been making efforts to prepare production and sales plans for Tết (Lunar New Year) goods. Even though the general situation is difficult and consumer spending is still weak, businesses have predicted the situation, proactively coordinated raw material sources and produced to ensure enough goods for people during the upcoming Tết period.

Chairwoman of HCM City Food Association Lý Kim Chi said: “Việt Nam currently has signed cooperation agreements with many regions through free trade agreements (FTAs). Enterprises in the food industry are gradually taking advantage and promoting export turnover to increasingly prosperous markets.”

This shows that new-generation FTAs ​​have been opening up a large market for Vietnamese businesses. Not only that, these agreements have contributed to helping Vietnamese businesses make major changes in quality, because these are markets with very high and strict quality requirements, according to Chi.

“Việt Nam's key products are facing competition from countries like India and Thailand right at home. This requires businesses to innovate, change technology, digitally transform, trace product origins, improve labour productivity, increase product value and maintain the domestic market as well as adapt to requirements from export markets," stressed Chi.

Based on the prospect of a world economic recovery and forecasts of Việt Nam's economic situation, the Vietnam Textile and Apparel Association (VITAS) has set a target of textile export turnover in 2024 reaching US$44 billion, an increase of 9.2 per cent compared to 2023. Currently, many businesses have enough orders for the first quarter of 2024 and the situation will likely improve in the second quarter of 2024 when the US Federal Reserve cuts interest rates to support businesses to recover.

Vice President of Vietnam Textile and Apparel Association (VITAS) Trần Như Tùng said: “In 2024, to achieve the set goal, VITAS suggested the State soon deploy a package of VNĐ120 trillion with preferential interest rates for construction of social housing and worker housing as well as continue to support businesses with funding to train and improve vocational skills for workers, especially for difficult-to-train professions such as textile engineers, dyeing and design engineers, and technological innovation, green and digital transformation skills.” 

MoIT focuses on Key Industrial Law project for resilient industrial base

The Ministry of Industry and Trade (MoIT) has identified the construction of the Key Industrial Law and the strategic advancement of industries within its purview as a central mission for this term, according to Minister Nguyễn Hồng Diên.

During a working session with the ministry's units on Thursday, Minister Diên underscored the significance of developing the Key Industrial Law to establish an independent, self-reliant, and resilient industrial base. This initiative aims to contribute to rapid and sustainable economic development, positioning the country as a high-income society.

Resolution No. 29-NQ/TW, issued on November 17, 2022, during the sixth meeting of the 13th Central Committee, emphasised the importance of prioritising the creation and enhancement of institutional frameworks, policies, and specialised legal systems for national industrial development and key sectors. The resolution sets the direction towards industrialisation and modernisation until 2030, with a vision towards 2045.

One of the central tasks of the Ministry of Industry and Trade in the upcoming period is the urgent institutionalisation of policies, legal frameworks and strategies to promote the development of key national industries.

The project on the Key Industrial Law is currently under research and development to promote the development of foundational and strategic industries. It aligns with the directives outlined in Resolution No. 29-NQ/TW, taking into account the context of scientific and technological advancements, innovation, and achievements of the Fourth Industrial Revolution.

The legislation intends to facilitate a shift from broad-based manufacturing to in-depth research, design, and production in Việt Nam, integrating high levels of knowledge and technology to modernise the industry.

To ensure the quality of the law's policies, MoIT has consistently sought opinions from reputable and experienced economic experts. The proposal for building the Key Industrial Law will be submitted to the Government as soon as possible for review and supplementary consideration in the National Assembly's 2024-2025 legislative agenda.

In addition to constructing the Key Industrial Law, the continuous improvement of development strategies for priority industries is crucial.

After the Prime Minister approves the Development Strategy for the Textile and Garment, as well as Leather-Footwear Industries, the MoIT is tasked with formulating strategies for the steel, automobile, and dairy industries. These strategies aim to enhance self-sufficiency and sustainability, increase value-added, and foster the growth of industrial enterprises within these sectors. The ministry plans to present these strategies to the Prime Minister in 2024 for review and approval.

During the working session, Minister Diên highlighted key considerations for the development of the Key Industrial Law and the Development Strategy for the Vietnamese automobile industry, as well as other industries.

He emphasised the importance of maintaining the quality and timeline of these tasks and stressed the need for policies, laws, and development strategies for industries to align closely with the Party's guidelines on industrialisation and modernisation, as outlined in Resolution No. 29-NQ/TW, and the direction of the Government to create a sustainable legal framework, ensuring consistency in promoting the development of foundational and priority industries for the nation.

The MoIT is currently developing the Key Industrial Law, which encompasses three policies.

First, it focuses on creating and implementing the National Programme for Industrial Development to overcome past shortcomings in strategic planning. This programme aims to ensure the practical allocation of resources for the focused development of essential industries and introduces mechanisms to monitor and supervise implementation.

The second policy aims to boost the competitiveness of vital industrial sectors to enhance investment efficiency and promote cluster-based industrial development. This policy ensures alignment with development plans at the national, regional, and provincial levels, considering industries, professions and industrial clusters.

The third policy aims to foster sustainable development in the industry by improving productivity and quality, transitioning toward a sustainable circular economy. It includes objectives to decrease energy consumption and emissions, and encourage eco-friendly production, addressing climate change and gradually meeting global standards set by advanced industrialised countries. 

SBS sees long-term investment risks in VOSCO

After more than 50 years of operation, Viet Nam Ocean Shipping JSC (VOSCO) is struggling as a global economic slowdown and intensifying competition within the industry have caused a decline in transportation demand, said SBS Securities.

As a result, the company's profitability has been steadily decreasing.

In the third quarter of 2023, VOSCO's net revenue reached VNĐ715.8 billion (US$29.2 million), almost flat from the same period last year, while its profit after tax was negative by more than VNĐ23.3 billion. 

For the first nine months of 2023, the company’s net revenue still increased by 26 per cent to nearly VNĐ2.3 trillion, but profit after tax plummeted 89 per cent to just over VNĐ50.8 billion.

Maritime transportation companies, including VOSCO, were severely affected by the COVID-19 pandemic in 2020 and the global economic downturn. 

This has led to a decrease in demand, intensifying industry competition, while a recent decline in freight rates has also posed significant challenges for firms in the industry.

VOSCO currently owns and operates a fleet of 13 vessels, totalling approximately 460,000 dwt. The fleet consists of eight dry cargo and bulk cargo ships, three oil tankers and two container vessels. 

The company planned to sell the general cargo vessel Neptune Star in 2023, which accounts for around 7.1 per cent of the fleet's total deadweight. In 2024, it is also expected to sell the oil tanker Đại Minh, but the sale has yet to be finalised, leading to potentially unfavourable quarter-four financial results, according to SBS.

In the long term, the company intends to expand its fleet to 23 vessels by 2027, including 16 dry cargo ships with nine outsourcing, four oil tankers, and three container vessels. A projected total deadweight is approximately 800,000 dwt.

VOSCO has experienced challenges for a considerable period, resulting in a decrease in both the scale and quality of its fleet. Obstacles have also hindered investment opportunities and fleet rejuvenation.

According to SBS, the Houthi attacks in Yemen's Red Sea have disrupted international trade through the Suez Canal, which serves as the shortest shipping route between Europe and Asia, accounting for approximately one-sixth of global maritime transport volume. 

If this situation persists, transportation costs will rise as vessels are forced to take longer routes, leading to rising inflation during a period of declining transportation demand and slowing global economic growth.

In the challenging background, the securities firm believes that VOSCO faces investment risks in operating their dry cargo and container vessels below cost and waiting for improved freight rates to operate at higher prices. 

This has resulted in a decrease in VOSCO's operational efficiency as operating costs continue to rise.

Moreover, in the current economic difficulties and instability, the volume of traded goods is expected to fall significantly.

SBS recognises VOSCO as one of Việt Nam’s leading maritime transportation companies, catering to a wide range of domestic and international clients. VOSCO boasts a diverse fleet, comprising dry cargo carriers, oil tankers and container ships, operating seamlessly on both domestic and international routes.

However, ahead of a challenging economic situation and numerous uncertainties, the sharp decrease in demand and low freight rates have severely impacted the company’s profitability. 

Furthermore, VOSCO has been unable to pay cash dividends for over 12 years.

On the stock market, the company’s shares (VOS) were traded at VNĐ11,350 per share at 2.26pm local time, down 2.16 per cent. However, the price is currently higher than SBS’s valuation, causing the securities to assess VOS shares as a high-risk investment for the long term. 

As a result, SBS suggests selling VOS shares. 

New credit policy to encourage social housing, industrial park development

The State Bank of Vietnam (SBV) will adjust down credit risk-weighted (CRW) indicators for loans for social housing and industrial park projects to encourage the development of realty segments.

The new policy under Circular No. 22/2023/TT-NHNN that amends and supplements a number of articles of Circular 41/2016/TT-NHNN regulating capital adequacy ratios for banks and foreign bank branches, will be effective from July 1, 2024.

According to the newly-issued circular, the CRW for loans to buy social houses and houses under the Government’s support programmes and projects will be reduced by half to a maximum of 50 per cent.

The circular also regulates the loan-to-value (LTV) ratio will be also adjusted to 100 per cent or more and the debt-service coverage ratio (DSCR) will be above 35 per cent.

The new circular adjusts down the CRW for loans to finance industrial park projects from 200 per cent to 160 per cent.

For loans serving agricultural and rural development according to Government regulations, the new circular adds a CRW of 50 per cent.

Credit institutions, which are mandatory transferees of other poor-performed credit institutions according to the Government’s approved mandatory transfer plans, will be allowed to apply a CRW of zero per cent for loans, guarantees and deposits at the mandatorily transferred credit institutions.

The amendments and supplements in the new circular are expected to encourage credit institutions to promote the development of loans for social housing and housing projects under the Government's support programmes and projects. At the same time, it contributes to solving difficulties and promoting the real estate market to develop safely, healthily and sustainably.

According to experts, the support policy will positively affect credit institutions' lending to individual customers who buy social housing and housing for low-income people in the near future. 

Condo prices maintain an upward trend despite gloomy market

Condominium market prices in both Hà Nội and HCM City maintain an upward trend this year, according to CBRE Vietnam.

Condominium primary selling prices in both cities remained high, especially in Hà Nội, with primary prices recording rapid growth mainly due to the large quantity of new supply in the high-end segment. 

The number of high-end condominium units accounted for 75 per cent in Hà Nội and 84 per cent in HCM City in 2023’s total new launches. On the other hand, the mid-point segment, with selling prices more budget-friendly to the majority of the population, accounted for only a small proportion, while the affordable segment has completely disappeared in both markets in the past few years.

Dung Dương, Executive Director of CBRE Vietnam, said: "In 2023, we observed a reversal in the trend between the Hà Nội and HCM City residential markets, with the Hà Nội market now following a similar trajectory to that of HCM City about three years ago." 

Particularly, at the end of 2023, the average primary selling price in Hà Nội reached VNĐ53 million per sqm (excluding VAT and maintenance fees), up 4.6 per cent quarter on quarter and 14.6 per cent year on year. This was the primary price recorded in HCM City during the 2020-2021 period. 

On the contrary, the primary prices for condominiums in HCM City levelled off at around more than VNĐ61 million per sqm in 2023, down 1.7 per cent year on year. 

Võ Huỳnh Tuấn Kiệt, Associate Director of CBRE Vietnam's Housing Project Marketing, said at the end of 2023, real estate companies had many policies on reducing selling prices, with a condition that buyers must implement faster payment to receive the house. This was a business strategy and the decreasing trend was only for some projects in HCM City.

In the secondary market, the selling price of condominiums in Hà Nội and HCM City went on opposite trends, according to the CBRE Vietnam's report on Hà Nội real estate market in the fourth quarter of 2023, released in Hà Nội on January 9.

Secondary prices in Hà Nội in the fourth quarter of 2023 continued to increase from the previous quarter, reaching around VNĐ33 million per sq.m, up 5 per cent year on year. Limited new supply, while newly launched projects setting high prices contributed to boosting the demand in the secondary condominium market in Hà Nội. 

In contrast, secondary prices in HCM City recorded VNĐ45 million per sq.m for the condominium market and VNĐ140 million per sq.m for the landed property market on average, down 5 per cent and 2 per cent year on year, respectively. 

During 2023, the secondary market in HCM City went through several price adjustments, yet the price fall gradually slowed towards the last quarter.

"Continuing this momentum, in 2024 we also expect that the overall price level in the housing market in Hà Nội and HCM City will tend to be stable. Especially, the apartment housing segment in Hà Nội will continue the increase in prices in 2024," Nguyễn Hoài An, Senior Director, Hanoi Branch, CBRE Vietnam, said.

According to experts, reducing the selling price of commercial property is still a difficult issue due to the small number of approved projects, development of project for a long time, and increase in construction costs and prices of building materials.

Lê Đình Chung, General Director of SGO Homes, said it was difficult to reduce the prices of the commercial products. The State was promoting the development of social and affordable housing projects, but it was difficult to find land funds for development of those products.

Many experts believe that housing prices can only decrease if the market increases supply. If social housing projects or mid-range price houses enter the market, the housing prices could be more stable.

At present, the policies supporting social housing development, from land taxes to loan incentive packages, are available and those are expected to have positive effects on the property market in 2024.

In particular, the draft amended Land Law has basically been completed and will be submitted to the National Assembly for approval at an extraordinary meeting next week.

When this law is passed, many projects with legal obstacles will have the opportunity to have these removed, so they can continue to develop, creating supply for the market. 

With these factors, the real estate market in 2024 is expected to enter a new cycle with more stability and sustainable growth.

According to the CBRE's report, in 2023, the residential market in both Hà Nội and HCM City experienced the lowest new supply in the past ten years.

Specifically, in Hà Nội, nearly 10,300 condominiums and 2,600 landed property units were newly launched in 2023, representing a decrease of 32 per cent and 84 per cent, respectively, compared to 2022.

In HCM City, there was a more modest new supply with nearly 8,700 condominiums and only 30 new landed property units launched, indicating a decline of 54 per cent and 98 per cent, respectively, compared to 2022.

However, there was an improvement in the number of newly launched units in the latter half of 2023 compared to the first half, particularly a significant increase of over 60 per cent in the Hà Nội condominium market and an 11 per cent increase in HCM City.

Mega-urban projects in the West and East of Hà Nội and in the East of HCM City continued to dominate the market with the highest share of new supply in both cities, contributing more than 60 per cent of new supply in Hà Nội and nearly 80 per cent of new supply in HCM City.

In terms of absorption rate, Hà Nội and HCM City recorded more than 22,000 residential units sold (including both condominiums and landed properties) in 2023, but representing only half of the units sold in 2022.

However, there was an improvement in the absorption rate in the second half of 2023, thanks to the proactive efforts of developers. These efforts included implementing preferential sales policies such as extended payment schedules and offering discounts of up to 40 per cent for early payment.

Additionally, positive macro factors such as declining interest rates have contributed to an improved sentiment among home buyers. As a result, the number of residential units sold in the last two quarters of the year helped increase the sold units by more than 60 per cent in Hà Nội and doubled in HCM City compared to the first half of the year.

Hà Nội to promote industrial development

Given the many difficulties and challenges expected this year, the Hà Nội Department of Industry and Trade must have specific solutions to promote the capital city’s industrial development, said Nguyễn Mạnh Quyền, Vice Chairman of Hà Nội People's Committee, at a conference to deploy the tasks of Hà Nội's industry and trade sector in the new year.

Specifically, the department would focus on removing difficulties and obstacles, supporting businesses to restore production and business, and attracting investment in large industrial projects.

In particular, it would promote international economic integration and effectively implement free trade agreements; propose solutions to increase import-export turnover; and support businesses bringing goods into foreign distribution channels.

Trần Thị Phương Lan, acting director of the Hà Nội Department of Industry and Trade, said that the capital city's industry and trade sector aimed to increase the added value of the industry by about 7 - 7.5 per cent this year.

Export turnover increased by about 4 - 5 per cent. Total retail sales of goods and social service revenue increased by about 10 - 11 per cent. The consumer price index (CPI) is controlled below 4 per cent.

The rate of industrial clusters with wastewater treatment stations that meet the corresponding national standards or technical regulations for industrial clusters and craft village industrial clusters that have been put into operation was 100 per cent.

To achieve this goal, Hà Nội's industry and trade sector would co-ordinate with localities, departments and branches to implement investment plans, renovate markets, effectively deploy e-commerce; strengthen goods quality inspection in the online business environment; and ensure food safety.

Regarding the industrial sector, the Hà Nội Department of Industry and Trade would focus on resolving the existing 70 industrial clusters that have come into operation, and renovating the infrastructure of industrial clusters; and starting construction of the remaining industrial clusters.

At the same time, the department would implement solutions to ensure adequate electricity supply for production, business and people's daily life.

Along with that, it would support businesses to open new markets by taking advantage of free trade agreements to promote sustainable export growth, focusing on export support for craft village products; and support for businesses in the digital transformation industry.

The department had also chosen to develop a number of industries with competitive advantages, and the ability to deeply participate and contribute high added value to the production network and global value chain.

It would also gradually form and develop industrial clusters for a number of priority industries and industrial products with competitive advantages, high specialisation and value in the production chain.

The department would also develop supporting industries, connect and promote supporting industry enterprises to become product suppliers for domestic and foreign customers, said Lan.

Hà Thị Vinh, Chairwoman of the Hà Nội Craft Villages Association, said that in order for Hà Nội's craft villages and traditional crafts to develop sustainably and contribute to the capital's economic growth this year, the city needed to build a centre for science and technology, sample design, and restoration of ancient ceramics that preserve both cultural and social values, rich in identity, and have great value in economic development. 

Investors' profit-taking triggers stock market decline, large-cap stocks suffer

Large-cap stocks faced profit-taking, leading to a decline in share prices on Friday across both national exchanges, following two consecutive sessions of market advancement.

The benchmark VN-Index lost 0.65 per cent to end at 1,154.70 points.

It had gained a total of 0.31 per cent over the previous two days.

More than 1 billion shares were traded on the southern bourse, worth VNĐ22.75 trillion (US$928.7 million).

The market breadth was negative with 380 declining stocks, 132 gaining ones and 60 others ending flat.

The VN30 Index, which tracks the performance of the 30 biggest stocks by market capitalisation and trading liquidity, rose 0.01 per cent to 1,163.66 points.

In the VN30 basket, 21 stocks declined while eight made gains, and one stayed flat.

The banking sector significantly influenced the market and the VN-30 basket, driven by the increasing momentum of stocks such as Military Bank (MBB), Vietinbank (CTG), Asia Commercial Bank (ACB), Techcombank (TCB), Sacombank (STB), Saigon-Hanoi Bank (SHB), and HDBank (HDB). By the close of the trading session, banks were the only group to experience price increases.

On the opposite side, the decline in the stock market was attributed to investors engaging in profit-taking, which had a significant impact on large-cap stocks.

As investors sought to capitalise on their gains, they sold off their holdings in these prominent stocks, leading to a downward trend in the market. The profit-taking activity reflected a cautious sentiment among investors who were keen to secure their profits after a period of market advancement. This behaviour contributed to the overall decline in stock prices, as the selling pressure on large-cap stocks intensified throughout the trading session, said news site vietstock.vn.

Losers included PVPower (POW), Việt Nam National Petroleum Group (PLX), Vinhomes (VHM), Vincom Retail (VRE), Mobile World Group (MWG) and Vinamilk (VNM). They lost between 1 per cent and 1.7 per cent.

On the Hà Nội Stock Exchange, the HNX Index lost 1.03 per cent to end at 230.31 points.

More than 98 million shares were traded on the northern market, worth VNĐ1.9 trillion.

Firms hire as business improves
 
Many firms in the southern region have started looking for new employees after receiving more orders.

The roads leading to the Kim Huy, Dai Dang, Song Than, VSIP, and My Phuoc industrial parks in the southern province of Binh Duong have seen many posters showing job vacancies. Many companies have arranged stalls providing job information along the roads to look for workers.

Luu Tinh Uyen from the Esprinta Company said that they needed around 300 more workers as partners from the US and Europe had placed more orders.

"We're offering monthly salaries of over VND 9 million for new workers while those with experience will be paid between VND 15-20 million," Uyen said.

Some other companies in the area also put up posters and banners announcing job vacancies. Leading Star and Vision companies both require 1,000 workers, while Esprinta needs 500, and the Kytech Industrial Company 100.

In the neighbouring province of Dong Nai, TKG Taekwang Vina has also announced vacancies for 1,000 workers.

Chairman of the company's Labour Union, Dinh Sy Phuc, said that they have more orders since the fourth quarter of 2023 and will need more workers as their business is recovering this year.

"We haven't had to lay off workers since the fourth quarter of 2023 and over 32,000 workers are currently employed," he said.

Nguyen Quoc Hung from Elite Long Thanh Company also said that they were ensuring stable work for over 3,200 workers and needed between 800-1,000 more workers to expand production.

After many labour cuts in 2023, the country's biggest employer PouYuen Vietnam in HCM City has also started recruitment.

Do Minh Quan from the company's human resources department said that they were employing workers for many factories with monthly salaries starting from VND6 million.

Quan added that they and many other firms were struggling as they only had a few applicants for the jobs they were advertising.

Explaining the situation, deputy director of the Binh Duong Department of Labour, Invalids and Social Affairs, Pham Van Tuyen, said that many migrant workers had returned to their hometowns after being unemployed for a long time in 2023.

"I think firms would have to wait until after the Tet Lunar New Year Holiday when people start to return to seek work," the official said.

Tuyen also added that firms in Binh Duong currently need between 10,000-12,000 more workers while those in HCM City also seek to employ between 25,000-29,000. However, most of these firmed preferred experienced workers.

Statistics from the Binh Duong Provincial General Statistics Office said that a survey of 429 firms in the area showed that 65.34 percent predicted better business in the first quarter of 2024 and 67.95 percent prepared to retain or increase their staff.

“We've asked job agencies to co-operate with authorities from provinces nationwide to attract more workers back to Binh Duong after the Tet holiday," the official said.

Vietnam raises nearly VND9.50 trillion for forestry project

Vietnam has raised nearly VND9.50 trillion (nearly USD388 million) to implement a 1-billion-tree-growing project over the past three years.

The information was announced at a Friday meeting by the Ministry of Agriculture and Rural Development (MARD) which reviewed the first three years of implementing a prime ministerial initiative on planting one billion trees in the 2021-2025 period.

According to MARD, nearly 770 million trees have been planted between 2021 and 2023, exceeding the plan by 121 percent.

About 76.20 percent of the USD388 million raised for the project came from ODA and private funding, with the remainder sourced from the state budget.

Provinces that have grown the largest number of trees include northern Lao Cai and Phu Tho provinces with 61 and 52 million trees, respectively. The Mekong Delta province of Long An contributed 45 million trees, the Central Highlands province of Gia Lai 37 million, and the central province of Nghe An 34 million.

MARD has set a goal to grow 492 million more trees in the 2024-2025 period, including 98,210 hectares of newly planted forests equivalent to over 216 million trees.

The project, however, is facing some challenges, including a shrinking land fund for new forest planting and slow allocation of investment capital for annual forest development, the ministry said.

MARD's Minister Nguyen Quoc Tri suggested units and localities involved review and assess the results achieved so far and continue planting trees according to the approved plan.

"It's also necessary to promote public awareness and participation in the work," he said, highlighting the importance of flexibility and proactiveness in the implementation of the initiative.

Vietnam spends nearly USD900 million on rice imports
 
Despite being a major rice exporter with revenues reaching USD4.78 billion in 2023, Vietnam also spent USD900 million buying rice from other countries.

According to a report from the Vietnamese Ministry of Agriculture and Rural Development, the country exported eight million tonnes of rice, earning USD4.78 billion last year, an increase of 38.40 percent against 2022's figures.

Rice export revenues ranked third after timber and seafood products, the report said.

The country also enjoyed the highest prices among major rice exporters at USD663 per tonne. Some of the country's big markets all increased their import volumes.

The Philippines continued to be Vietnam's largest rice buyer with values of USD1.75 billion, an increase of 17.40 percent compared to 2022. Indonesia ranked second with export values rising by 992 percent on-year to USD640 million. Rice exports to China also increased by 30.70 percent, earning USD530 million.

Despite being a big rice exporter, Vietnam also spent USD860 million to buy rice for animal food processing in 2023, mostly from Cambodia and India.

The ministry predicts that the global rice market will continue to face short supplies in 2024 and Vietnam's rice can benefit from higher prices, reaching over USD700 per tonne.

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