VIETNAM BUSINESS NEWS JANUARY 7
Fifth Vietnam Rice Festival underway in Vinh Long
The fifth Vietnam Rice Festival is underway in Vinh Long province in the Mekong Delta on January 7 – 10 as part of an effort to promote Vietnamese rice domestically and globally.
From a rice importer over three decades ago, Vietnam has risen to the world’s top exporter. In 2020, Vietnam exported 3.07 billion USD worth of the grain, making it the second largest rice producer in the world, only after India. In the first 11 months of last year, the country shipped abroad 5.75 million tonnes of the food for 3.03 billion USD, up 0.8 percent and 7.2 percent year on year, respectively.
Vietnam’s ST 25 rice won the first place at the World’s Best Rice competition in 2019 and the second in 2020.
By 2025, Vietnam sets to have 3.6 – 3.7 million hectares of land under rice which will generate 40 – 41 million tonnes of paddy annually. The country also targets to export around 5 million tonnes of rice in the next five years.
VinFast announces plan to switch to all-electric vehicle production
Vietnamese automaker VinFast announced on January 6 to stop producing internal combustion engine (ICE) cars and switch to all-electric vehicle production from the end of 2022 at the Consumer Electronics Show CES 2022 in Las Vegas, the US.
Along with the commitment to becoming a carmaker of this type, the company launched five electric vehicles including models VF 8 and VF 9 in the D and E segments, which were previously introduced at the 2021 LA Auto Show.
The exteriors of these cars were designed by Italian design firms Pininfarina and Torino Design.
Inflation forecast to be under control in 2022
Though there will be pressure on inflation in 2022, experts forecast it will remain under control and the National Assembly's target of 4 per cent target is still feasible.
The director of the Institute of Economics and Finance Nguyen Ba Minh forecast the average consumer price index (CPI) in 2022 will increase roughly 2-3 per cent compared to 2021.
Expert Nguyen Duc Do also agreed that CPI in 2022 will remain at a low level. Though the economy is recovering, the output of 2022 will still be below potential. If Viet Nam’s GDP in 2022 grows by 6.5 per cent, the Government’s target, or even 8-9 per cent as some forecast, the average GDP growth rate in the 2020-22 period is only at 4-5 per cent, much lower than 6 per cent in the 2011-20 period.
However, experts said controlling inflation in 2022 will not be easy as the index can increase quite high from the beginning of this year, in the wake of the global economic recovery and commodity prices on an upward trend.
Year-end e-commerce boom portends economic revival
Viet Nam, like many other countries, suffered economically from the COVID-19 pandemic in the second half of 2021, but the boom in demand during the peak year-end shopping season augurs well for a recovery and provides momentum for 2022.
A survey by Facebook and GroupM Vietnam found that 46 per cent of internet users in rural areas shop online. The report also predicted that the monthly spending on FMCG in rural areas will increase by 7 per cent annually until 2025, faster than in tier 1 urban areas (4 per cent).
The Facebook-Bain study, ‘SYNC Southeast Asia,’ said after a long period of restrictions, the 2022 Lunar New Year is expected to explode across the country as consumers spend and shop earlier than usual for Tet.
At the same time, e-commerce is gradually becoming familiar to many people, with 79 per cent saying they purchased online during Tet 2021 and 90 per cent saying they would consider shopping online in future, it said.
Hanoi expands promotion programmes on threshold of lunar New Year
Ha Noi is carrying out a series of stimulus and promotion programmes so as to recover the purchasing power of the domestic market on the occasion of the upcoming lunar New Year holiday.
Major supermarkets such as VinMart and Co.opmart plan to offer discounts of up to 50 per cent on thousands of products.
E-commerce platforms like Sendo, Shopee, Lazada and Tiki are also carrying out attractive promotion programmes to stimulate the purchasing power.
In HCM City, environment-friendly building materials are gaining in popularity
The number of construction works built using environment-friendly materials is steadily increasing in HCM City thanks to the convenience and economy they offer and thus a competitive advantage to builders.
More than 10 years ago the Government issued a decision on developing environment-friendly unburnt building materials for environmental protection.
There are now more than 1,600 factories producing concrete bricks (aggregate cement bricks), autoclaved/non-autoclaved aerated concrete bricks, foam concrete blocks, hollow-core concrete panel (acotec), and autoclaved aerated concrete wall panels.
The total design capacity of these facilities is around 10.2 billion standard blocks per year, or almost 30 per cent of the total building materials production capacity.
The country annually saves 7.5 million cubic meters of clay, equivalent to 375ha of land exploited to a depth of two metres, reduces coal consumption by 750,000 tonnes, and cuts carbon dioxide emissions by 2.85 million tonnes.
Demand for cash at the end of the year will not be high: SBV
As the upcoming Lunar New Year is coming near, the need to withdraw cash at ATMs is predicted to not be as high as in previous years, said Le Anh Dung, deputy director of the Payment Department under the State Bank of Viet Nam (SBV).
Dung attributed the reduced cash withdrawal to the COVID-19 pandemic, which has significantly affected people's income. Along with that, there is a growing trend in shifting from cash payments to electronic payments; from ATM systems to other payment systems such as 24/7 payment, payment points accepting cards, and payment by mobile.
Dung also said that currently, the National Payment Corporation of Viet Nam (NAPAS) could perform a very large transaction volume, up to 7 million switching transactions per day while still ensuring safety.
SBV said that payment activities in the economy were carried out safely, efficiently and smoothly. Non-cash payment indicators grew relatively well.
ABBANK starts 2nd phase of capital hike, plans 35% bonus share issue
An Binh Commercial Joint Stock Bank plans to further increase its capital by issuing bonus shares to existing shareholders at a rate of 35 per cent.
It will use undistributed profits of VND2.26 trillion and VND183.4 billion from its additional charter capital reserve fund to issue nearly 243.95 million ordinary shares.
This will be its second phase of capital enhancement after recently issuing 114.26 million shares to existing shareholders at a rate of 20 per cent, and another 11.43 million shares to employees under an ESOP scheme to increase its capital from VND 5.7 trillion (US$250.4 million) to nearly VND6.97 trillion ($306.46 million).
After the second phase its capital is expected to increase to nearly VND10 trillion ($439.2 million).
Vietnam-EU trade increases 14.8 percent in 2021
Trade between Vietnam and the EU rose 14.8 percent in 2021 to 63.6 billion USD despite impacts of COVID-19.
According to the Ministry of Industry and Trade, in the year, Vietnam exported 45.8 billion USD worth of goods to the EU, up 14.2 percent year on year, while importing 17.9 billion USD worth of products from the market, a rise of 16.5 percent.
The ministry attributed the results to the EU-Vietnam Free Trade Agreement (EVFTA), which took effect more than one year ago.
Notably, the export revenue of products using the EUR.1 certificate of origin (C/O) reached about 7.8 billion USD, which showed Vietnamese firms’ greater attention to optimising of incentives from the deal.
Vietnam’s tourism readies to grab new opportunities
2022 is forecast to be another challenging year for tourism due to the complex nature of COVID-19. The sector must carry out the dual goal of ensuring the safety of tourists while effectively introducing international and domestic tourism recovery programmes.
2021 was seen as a gloomy year for Vietnam’s tourism sector as the number of local travellers was estimated at about 40 million, much lower than previous years.
Travel firms, however, were active in seeking solutions, leveraging the idle time to prepare for recovery in 2022.
Vietnam will welcome dozens of flights in the first quarter of the new year carrying international tourists to popular destinations such as Phu Quoc Island, Khanh Hoa, and Da Nang.The Ministry of Culture, Sports and Tourism has asked cities and provinces to diversify and introduce new tourism products while ensuring the safety of holiday-makers.
Binh Duong resolved to complete targets for 2021-2025
The southern province of Binh Duong, one of the localities hard hit by the COVID-19 pandemic last year, will make great efforts to achieve targets set for 2021-2025, with annual economic growth set at 8.5 percent.
Under the 2022 socio-economic development plan, Binh Duong’s Gross Regional Domestic Products (GRDP) is expected to increase from 8-8.3 percent from 2021, and per capita income is projected at around 169.8 million VND per year.
Last year, the locality’s GRDP rose 2.62 percent and its export revenue reached 31.5 billion USD, up 13.5 percent; and its import, 24.7 billion USD, up 14.7 percent.
VND3 trillion approved for railway infrastructure maintenance
Transport Minister Nguyen Van The has approved VND3 trillion (USD129.31 million) for the maintenance of national railway infrastructure in 2022.
Of the sum, VND2.69 trillion would be used for regular maintenance activities, VND260 billion will be for emergency repairs following the impact of natural disasters.
The Vietnam Railway Authority has been assigned to sign contracts for the railway infrastructure maintenance.
In 2021, the Ministry of Transport approved VND2.82 trillion for railway infrastructure maintenance.
Deputy Prime Minister Le Van Thanh recently signed a decision approving the railway system plan for 2021-2030, with a vision to 2050, which sets a target of building nine new railways by 2030.
Vietnam approves My An-Cao Lanh Expressway project worth more than $2 billion
The prime minister has signed Decision No.2203/QD-TTg in late December, authorising the investment strategy of the first phase of the My An-Cao Lanh highway, which would be financed by loans from the South Korean government.
The project's particular purpose is to establish the My An-Cao Lanh expressway to successfully foster the Central Mekong Delta development by completing and linking the N2 route, the Ho Chi Minh road, and the North-South expressway.
The My An-Cao Lanh expressway's first phase will be designed as a four-lane restricted expressway, with a roadbed width of 17 metres and a speed limit of 80kmh, according to Decision No. 2203.
Roughly $2 billion is anticipated to be required for the whole conclusion of the project, with a loan from the Korea Development Economic Cooperation Fund making up around $158.80 million.
Nearly $17.4 billion needed for Vietnam’s airport network towards 2030
During 2021-2030, the Ministry of Transport proposes building six new airports, bringing the total number of airports countrywide to 28 to serve 283 million passengers.
Along with this, the MoT proposes focusing on building and upgrading of major airports in Hanoi and Ho Chi Minh City, gradually upgrading these to ensure effective exploitation of the existing 22 airports, along with six new airports to raise the total number of airports in Vietnam to 28. The total passenger capacity would then reach about 283 million passengers.
Of the 28 airports by 2030, Vietnam would have 14 international airports, such as Van Don, Cat Bi, Noi Bai, Danang, Phu Bai, Long Thanh, Tan Son Nhat, Can Tho and Phu Quoc, along with 14 local airports.
By 2050, the MoT proposes to establish 31 airports in total, including 14 international airports and 17 local airports.
Banks expect profit increase, bad debt reduction for 2022
According to a survey conducted by the State Bank of Vietnam, commercial banks believe that profits recovered and improved significantly, in the fourth quarter of 2021, thus raising expectations for an improvement over the entire year.
About 95% of credit institutions also expect their pre-tax profits to grow positively in 2022, while 3% expect it to be unchanged and 2% are worried about decreasing profits.
The liquidity of the whole banking system is expected to remain in a good state, with more improvements over the first quarter of 2022, compared to the fourth quarter of 2021.
The survey results show that most credit institutions believe that the bad debt of the entire system will rise slightly in the fourth quarter of 2021, but they expect it to reduce slightly in the first quarter of 2022.
Credit growth of the banking system is forecast to increase by 5.3% in the first quarter of 2022 and 14.1% over the whole of 2022, slightly revised lower than the forecast of 14.3% in the previous survey.
Interest rates are also predicted to remain stable in the first quarter of 2022 and may increase slightly by the end of 2022.
Railway sector asked to reform mindset to boost development
Deputy Prime Minister Le Van Thanh has requested the Vietnam Railway Corporation (VNR) to make drastic reforms so as to address shortcomings and develop the sector further in the time ahead.
The Government Office on January 6 released an announcement of the Deputy PM’s conclusion at a recent meeting on rail transport.
According to the document, the railway sector is facing an array of difficulties and challenges: the national infrastructure in this field has yet to receive due investment, the sector’s market share been shrinking while road and air transport booming, and the lingering COVID-19 pandemic greatly affected infrastructure upgrade, rail transportation of passengers, as well as the VNR’s performance.
Expanded credit growth quota supports firms in recovery
The State Bank of Vietnam (SBV)’s expansion of credit growth quotas for commercial banks has created favourable conditions for lenders to boost lending, contributing to supporting capital sources for individuals and firms to recover after the COVID-19 pandemic.
According to the SBV, as of December 22, credit increased by 12.68 percent compared to the end of last year. Notably, the credit growth had increased significantly for the past few weeks as until November 25, the rise was only 10.1 percent.
This means trillions of Vietnamese dong of bank loans had been poured into production and business in the past few weeks when the country has gradually reopened after a long time under social distancing.
To meet rising capital demands at year-end, SBV last month extended credit growth quotas to 11 banks. TPBank had the highest rising rate of 6 percent, a jump from from 17.4 percent to 23.4 percent, thanks to its strong capital adequacy ratio (CAR) according to Basel II standards and a diverse investment portfolio.
Other banks, which were allowed to expand their credit room by roughly 4-5 percent last month, included Techcombank (from 17.1 percent to 22.1 percent), MSB (from 16 percent to 22 percent) and MB (from 15 percent to 21 percent).
Reference exchange rate up 10 VND
The State Bank of Vietnam set the daily reference exchange rate at 23,138 VND/USD on January 7, up 10 VND from the previous day.
With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,832 VND/USD and the floor rate 22,443 VND/USD.
Binh Duong, Gangnam district sign strategic cooperation deal
The southern province of Binh Duong and Gangnam district of the Republic of Korea (RoK)’s Seoul city signed a strategic cooperation agreement via videoconference on January 6 to promote international trade and cultural exchange activities.
The province has so far established bilateral ties with 10 cities and provinces worldwide and is also an official member of prestigious multilateral organisations such as the World Technopolis Association (WTA) and the Intelligent Community Forum (ICF).
On the occasion, Vietnam’s Becamex IDC and the Gangnam-based Convention & Exhibition Center (COEX) reported their joint activities, including the signing of a deal to manage and run the 22,000 sq.m World Trade Center Binh Duong New City Expo, which is to reopen in early 2022.
Vietnam Airlines offers Tet plant transport services
Vietnam Airlines will transport branches of peach blossoms and ochna flower as check-in baggage on its domestic flights from January 17 to February 15 (the 15th day of the new lunar year).
Of note, with the launch of its e-commerce site vnamall.vietnamairlines.com, the carrier offers peach blossoms and ochna flower purchase and delivery services for customers living in Hanoi and HCM City starting January 7.
Member carriers of Vietnam Airlines Group, comprising Vietnam Airlines, Pacific Airlines, and VASCO, plan to resume 10 more domestic air routes from January 2022, raising the number of such routes to nearly 50.
The number of seats will also be raised by 120 percent from the current level to nearly 2 million to serve the Lunar New Year peak, which falls in late January and early February.
Can Tho keen to attract more investment from Singapore
Singapore is hoped to invest in and partner with the Mekong Delta city of Can Tho in sectors that the latter boasts strength in, Secretary of the municipal Party Committee Le Quang Manh said on January 6.
The cooperation fields, including the 500-ha Vietnam-Singapore industrial park project in Vinh Thanh district, are believed to turn Can Tho into a hub of the Mekong Delta, Manh added.
Local authorities also welcome Singaporean investors in the fields of health care and renewable energy, particularly investing in the station No.5 of the O Mon thermal power plant and semiconductor factories so as to replace fossil fuel and reduce carbon emissions.
Singapore has been the leading foreign investor of Vietnam in the past two years, primarily in industrial parks and financial and logistics services, among others.
VN-Index hits new record high
Vietnam's benchmark stock market index (VN-Index) hit a new record high on the January 6 morning session after rising 6.07 percent to reach 1,528.57 points.
Over 1.13 billion shares worth over 35.39 trillion VND (1.55 billion USD) changed hands. There were 223 stocks rising, 225 sliding and 48 ending flat on the market.
On the Hanoi Stock Exchange (HNX), the HNX-Index increased 4.53 point to 484.89 points. More than 142.1 million shares worth nearly 3.99 trillion VND were traded. There were 114 stocks gaining, 131 falling and 44 staying the same.
The UPCoM-Index edged up 0.13 point to 114.39 points, with over 115.7 million stocks traded with a total value of nearly 2.62 trillion VND. A total of 181 stocks gained, 164 dropped, and 78 others remained unchanged.
Notably, foreign investors net sold more than 270 billion VND worth of stocks on the Ho Chi Minh Stock Exchange (HOSE), and net bought 13 billion VND on the HNX and close to 7 billion VND on the UPCoM.
Vietnam issues plan on RCEP implementation