Cát Lái Port in HCM City. The city is focusing on developing its services sector and overcoming obstacles to it. - VNA/VNS Photo

While HCM City’s services sector has seen great growth and makes a big contribution to Việt Nam’s GDP, it faces several limitations that hinder its development, a conference held to discuss its development on Thursday heard.

HCM City is a large economic, commercial, tourism, and services hub with a favourable location close to the Mekong Delta and south-eastern provinces.

Nguyễn Văn Dũng, Deputy Chairman of the city People’s Committee, said HCM City identifies services as a key sector that plays a big role in the city’s economic growth.

Over the past 10 years it has accounted for over 60 per cent of the city’s economy, showcasing how it has been growing strongly.

But it has not achieved its full potential.

The sector consists mostly of small and medium-sized businesses, with a few large ones.

They thus have limited access to capital and collaboration between them is rare.

There are also issues with underdeveloped infrastructure (especially logistics and storage) and connectivity with nearby provinces.

Dũng said the development of the services sector needs connectivity within the city and with nearby provinces.

The city is working on a number of policies to facilitate its development, including a project titled “Building HCM City to become a large services hub of the country and the region, with modern and prestigious services of high added value.”

Bùi Tá Hoàng Vũ, Director of the city Department of Industry and Trade, said services with high added value are ones that satisfy basic demands of customers but also include additional services that improve the overall experience.

They are more complex and require a higher degree of expertise, advanced technologies and creativity, he said.

If the city could harness its development potential well, especially the high added value services, it could create a strong driving force for the socio-economic development of the southeast, the delta and even the entire country, he added.

Other experts said there are two trends that would greatly impact the city’s services sector, which are sustainability and regional connectivity.

Sustainability is important for services development as it ensures businesses can operate for a long time while also protecting the environment, they said.

As for regional connectivity, with other provinces and even other countries, it could help elevate the services sector and enhance its value, they added.

They also said the sector’s development needs to be in line with global trends such as digital transformation and creating an eco-system of services.

Dr Nguyễn Hoài Nam, Director of the Economic Law Programme at Hoa Sen University (HCM City), said in order to create a favourable business climate for local services providers, the city needs to tackle legal choke points and barriers that are driving up business expenses and hindering operations such as regulations on fire safety and inspections.

Since 2010 the city has been focusing on developing nine key services, including finance, banking, commerce, logistics, and tourism.

It has adopted numerous policies to develop its services infrastructure and transform the city into an international financial hub.

2024 Hà Nội Semiconductor Investment Festival to start next week

The 2024 Hà Nội Semiconductor Investment Festival will take place next week, from July 29-31.

The festival will be held at the Hà Nội University of Science and Technology and Hòa Lạc High-Tech Park across the three days by Hanoi Promotion Agency (HPA) under the instruction of Hà Nội People’s Committee. 

The festival aims to organise meetings with associations, businesses and investors operating in the semiconductor industry and investing and trading in products belonging to the semiconductor and high-tech industry ecosystem in Hà Nội and other provinces.

It also provides information on the current development of semiconductor technology enterprises in Hà Nội and solutions to promote cooperations.

It will connect, promote investment and trade in the semiconductor industry in Hà Nội and products belonging to the semiconductor and high-tech industry ecosystem.

The festival is expected to attract more than 1,500 delagates. Activities within the programme framework include: conference on connecting investment and developing the semiconductor industry in Hà Nội in 2024; special discussion: potential and challenges in attracting foreign investment into the semiconductor industry in Hà Nội and workshop on 'developing human resources for the semiconductor industry in Hòa Lạc High-Tech Park' and a visit to Hòa Lạc High-Tech Park and special discussion: building an ecosystem for the semiconductor industry in Hà Nội, Việt Nam.

There will also be an exhibition to connect and promote investment and trade in the Hà Nội semiconductor industry, which take place across the three days. 

HCM City sees a rise in apartment supply in H1

Despite an increase in new developments and resumption of a number of stalled projects, primary market supply of apartments in HCM City remains low, according to a Savills Việt Nam report on the first half of the year.

In the first six months of this year, primary stock remained stable year-on-year at 6,751 units.

Supply was mainly concentrated in Thủ Đức City (57 per cent share) and Bình Tân and Bình Chánh districts (29 per cent).

In the second quarter, the inventory improved by 14 per cent quarter-on-quarter but decreased by 3 per cent year-on-year to 5,635 units.

It included an 87 per cent jump in new supply quarter-on-quarter and a 215 per cent year-on-year rise to 1,186 units at two new projects and eight upcoming launches.

With the launches indicating a gradual recovery in market confidence, sales doubled quarter-on-quarter and soared by 600 per cent year-on-year to 2,300 units, supported by decreasing lending rates, clear legal status and attractive sales policies.

Developers offered policies such as payment of 5 per cent before handover, a fixed guaranteed interest rate for 15 years and discounts of up to 20 per cent.

In the first half, primary prices averaged VNĐ73 million (US$2,800) per square metre.

“Primary supply remains constrained, but is showing green shoots,” Troy Griffiths, deputy managing director of Savills Việt Nam, said.

“The implementation of revised laws, city planning and key infrastructure delivery are welcome.”

Increasing housing needs amid supply constraints might result in a geographical shift to capture unserved demand.

With expanding infrastructure, satellite provinces like Bình Dương and Đồng Nai have improved affordable apartment supply of nearly 24,000 units in the next three years.

In the first half of this year, buyers from HCM City accounted for nearly 80 per cent of transactions at new Bình Dương apartment projects. 

Stock market remains attractive to retail investors

Despite the remarkable surge in gold prices and the gradual increase in deposit interest rates, the stock market continues to stand out as an appealing investment channel.

Stocks remain attractive, with 106,000 new accounts opened in June, and a total of 751,000 new accounts opened so far this year.

Cash flow into the stock market surged over this period, with a 37 per cent increase in average daily trading value compared to the entire year of 2023, reaching VNĐ23.3 trillion (US$916.6 million).

Retail investors continued to drive market demand, while foreign and institutional investors showed fluctuating trends.

Last month, retail investors made net purchases of VNĐ15.58 trillion, totalling VNĐ55.95 trillion in the first six months. Foreign investors, however, continued their net selling with a total of over VNĐ52 trillion.

Đinh Đức Minh, Investment Director at VinaCapital Fund Management, said that the Vietnamese stock market had shown better growth compared to other ASEAN markets and MSCI indices of emerging and frontier markets.

From the beginning of the year, until the first week of July, the benchmark VN-Index recorded a 13.6 per cent increase in local currency and an 8.4 per cent gain when converted to US dollars.

However, it was important to note that the overall market growth, although surpassing deposit interest rates, didn't fully reflect its attractiveness. This was due to the significant divergence among stock groups.

While some stocks experienced declines in the first six months of the year, there were numerous others that doubled or even tripled in value.

Many open-end funds listed on exchanges significantly outperformed the 10.3 per cent growth of the VN-Index in the first half of the year.

The VinaCapital Modern Economy Equity Fund (VMEEF) led with an impressive 30.2 per cent growth, followed by the SSI Sustainable Competitive Advantage Fund (SCA) at over 27 per cent, the Dragon Capital Dynamic Securities Fund (DCDS) at 21.9 per cent and the Bảo Việt Prospect Equity Open-Ended Fund (BVPF) at 20.4 per cent.

These funds attract capital from retail investors and are managed by experts with publicly disclosed portfolios and objectives.

"This upbeat outlook is driven by the purchasing power of domestic investors, who account for 85-90 per cent of market transactions, with expectations of a positive economic recovery in 2024-2025 and interest rates that, although slightly higher than last year, remain relatively attractive for stock investments,” Minh told the Saigon Times.

Similarly, the analysis team at Yuanta Securities Vietnam believes that stocks offer more appeal compared to other investment channels, despite the upward trend in savings interest rates. This is due to the relatively low valuation of large-cap stock groups and the VN-Index.

As of July 11, the market had shown signs of profit-taking after a series of consecutive gains. The VN-Index is currently trading within the range of 1,280-1,290 points, having reached the milestone of 1,300 points in June.

This key marker sparked expectations among investors for the Vietnamese stock market to continue its upward trajectory and retest previous highs. The bullish trend is taking inspiration from the US stock market's continuous record-breaking performance, driven by the technology sector.

In Việt Nam, the banking and real estate sectors, which collectively represent 51 per cent of the market capitalisation, have experienced sideways movement and encountered specific challenges.

The recent market trends are viewed as a cooling-off phase following a period of significant growth, particularly in the first quarter. However, the overall sentiment remains positive and many analysts stay optimistic about the VN-Index's prospects.

Mirae Asset's analysis team notes that buying pressure is gradually prevailing, with significant selling pressure being well absorbed.

The average daily trading value has increased by 5 per cent, while the total trading volume for the month has decreased by 8.7 per cent.

Maybank Securities' analysts expect short-term pressure from foreign investors, exchange rates and interest rate hikes, but anticipate a gradual reduction in the second half of 2024.

Regulatory changes on pre-funding requirements also contribute to market optimism.

Minh from VinaCapital said he sees a positive outlook on the stock market, considering the rapid economic recovery surpassing expectations and the potential for listed companies to achieve favourable business outcomes throughout the year.

VinaCapital's portfolio, which represents approximately 90 per cent of the market capitalisation, is projected to experience profit growth of around 20 per cent for the year.

While the stock market might still face influences from exchange rate and interest rate pressures, these pressures are expected to gradually subside in the near future, Minh added. 

Low interest rates for home loans to boost credit growth

Real estate credit is expected to increase as interest rates for land and home loans at many banks are staying at the lowest level in many years.

According to a home buyer, interest rates for his home loan are currently low at 6 per cent per year. About two years ago, the rate was about 10 per cent per year, but now the financial pressure on him and his family has been significantly reduced.

Interest rates for loans to buy real estate or repair houses at many banks are quite low, at about 5-6 per cent per year.

For example, SHB is applying preferential interest rates from 5.79 per cent per year for home loan customers, with a loan term of up to 25 years. Customers can borrow up to 90 per cent of the property value.

Similarly, Sacombank is also spending VNĐ10 trillion in preferential loans for customers who want to buy, build and repair houses, or buy cars with interest rates from only 6.5 per cent per year.

At BVBank, home loan interest rates are being implemented with many flexible options from 4.99 per cent per year for the first six months, 5.99 per cent per year for the first nine months, 6.49 per cent per year for the first 12 months, 7.49 per cent per year for the first 18 months and 7.9 per cent per year for the first 24 months.

Attractive interest rates are also appearing at major banks. Accordingly, BIDV is deploying a housing credit package with interest rates from 5 per cent per year, with a loan term of up to 30 years.

Vietcombank is also spending VNĐ50 trillion for individual customers to borrow money to buy houses, build and repair houses and buy cars, with preferential interest rates from only 4.9 per cent per year in the first six months for loans under 24 months and from 5 per cent per year in the first 12 months for loans over 24 months.

At foreign owned banks, interest rates are also very attractive. Specifically, Shinhan Bank Vietnam Limited is applying a fixed lending interest rate of 5.2-6 per cent per year for the first 1-3 years.

Similarly, HSBC Vietnam is lending to customers at an interest rate of 5.5 per cent per year for 25 years, with a maximum loan value of up to 70 per cent.

Experts are quite optimistic about the possibility that credit will increase in the near future.

According to Dr. Cấn Văn Lực, chief economist at BIDV, real estate credit currently accounts for one fifth of the total outstanding loans. The early application five months ahead of schedule of new laws, namely the Land Law, Housing Law, Real Estate Business Law and Law on Credit Institutions, will contribute to promoting the recovery of the real estate market, which will help improve business performance of banks in the second half of the year, especially when lending interest rates remain low.

In agreement, economist Dr. Lê Xuân Nghĩa said real estate is still an important lending channel for banks, especially the low-cost housing segment. However, it is necessary to redesign preferential policies to promote the low-cost housing segment to increase supply in accordance with people's financial situation.

Experts predict that low lending interest rates may remain until the end of 2024, but then are likely to increase if the economy recovers and credit increases. Therefore, banks will adjust up savings deposit interest rates, causing home loan interest rates next year to be higher than currently.

Therefore, experts recommend that customers should choose loan packages with fixed interest rates over a long period, which can help them stabilise financial plans and avoid shocks from interest rate changes. 

Information security incidents in Việt Nam rise by 60%

The technical monitoring system of the Authority of Information Security (AIS), under the Ministry of Information and Communications, recorded 90,033 information security weaknesses and vulnerabilities of agencies and organisations in Việt Nam last month.

The number of serious incidents handled by the authority has increased by nearly 60 per cent in the first six months of this year compared to last.

Cyber attacks were considered one of the top challenges that organisations in the country and around the world were facing, said Lê Văn Tuấn, AIS Director, at a workshop on enhancing businesses' ability to respond to cyber attacks in Hà Nội on Thursday.

Across the world, the scale of cyber attacks tended to take place on a global scale, he said.

The targets are in important fields and key infrastructure such as energy, power networks, banking, healthcare, environmental resources, transportation, information and communication, causing damage to many countries.

In Việt Nam, there have recently been a number of serious security incidents related to data encryption, causing damage to businesses in terms of reputation and finances.

Despite warnings from the AIS, the number of victims of online fraud is still growing.

Through the implementation of the national malicious domain name warning and prevention system, the AIS has prevented 3,170 online fraud websites as of June, protecting more than ten million people from accessing fraudulent websites that violate the law.

Therefore, the AIS co-ordinated with cybersecurity company Kaspersky to organise training programmes on Kaspersky Interactive Protection Simulation (KIPS).

"Through simulated interaction drills, leaders and responsible individuals will gain a visual and comprehensive understanding of the unit's information security status. This enables them to make appropriate and effective actions amid the increasingly complex situation of information security today," said Tuấn.

HCM City to offer interest subsidy for priority sectors

Loans given by the HCM City Finance and Investment State-owned Company to priority sectors that drive socio-economic growth will be subsidised by the city starting July 29.

It will be provided to 100 per cent domestic enterprises, economic organisations and public service units.

It will benefit businesses related to technology, digital transformation, start-ups, trade and agricultural services, education, healthcare, sports and culture, technical and environmental infrastructure, the city’s four key industries (food processing, pharmaceutical chemicals-rubber-plastic, mechanical engineering, and electronics), and support industry.

The maximum loan per project to benefit from the programme will be VNĐ200 billion (US$7.8 million).

The maximum subsidy rate will not exceed the average 12-month đồng deposit interest rate of the four State-owned banks (Agribank, BIDV, Vietcombank, Vietinbank).

The interest rate will be announced every month by the State Bank of Việt Nam.

The subsidy is for seven years.

The Departments of Planning and Investment and Industry and Trade will receive applications for the subsidy and the People's Committee will approve.

Resolution 09 to provide the subsidies was issued by the city People's Council last September.

The HCM City Finance and Investment State-owned Company said it is preparing to start as soon as the People's Committee notifies it.

Pangasius exports expected to recover in the last months of the year

Pangasius export turnover recorded growth in the first half of this year.

Citing data from the General Department of Việt Nam Customs, the Việt Nam Association of Seafood Exporters and Producers (VASEP) said that pangasius export turnover reached nearly US$172 million in June, an increase of 20 per cent over the same period last year.

Pangasius export turnover reached $918 million in January-June period, posting 5 per cent year-on-year increase.

In terms of products, frozen pangasius fillets are still the main export. The product's exports reached $739 million by the end of last month, a year-on-year increase of three per cent, accounting for 80 per cent of the total.

Exports of dried pangasius and other frozen products reached $162 million in the first half of this year, up 17 per cent year-on-year, accounting for 18 per cent of the proportion.

Regarding the consumption market, VASEP said that China continued to be the largest importer of Vietnamese pangasius.

Vietnamese pangasius exports to this market reached more than $258 million in the first half of this year, down eight per cent over the same period last year.

The US is the second largest importer of Vietnamese pangasius after China. The export value of Vietnamese pangasius to the US reached $160 million in the reviewed period, up 14 per cent year-on-year.

In addition, Việt Nam's pangasius exports to the CPTPP market also recorded positive growth in the first half of the year with an export value of $128 million, an increase of 11 per cent over the same period last year.

In addition, a number of other markets also recorded positive growth in Việt Nam's pangasius imports in the first six months of the year, including Brazil, Thailand, Colombia and Saudi Arabia.

VASEP said that after a difficult period last year, the whole industry had focused on and took advantage of all export opportunities.

Experts predicted that demand would continue to grow in the second half of this year, as countries began to prepare for festivals and holidays.

Pangasius export prices were also expected to recover with overall pangasius exports expected to reach $1.8 billion this year, up six per cent. 

Vietjet, Lufthansa Technik enter an exclusive total component support agreement

Vietjet and Lufthansa Technik, the world’s leading MRO provider, have inked an exclusive Total Component Support (TCS) agreement.

The signing ceremony on Wednesday marked a significant milestone in the long-standing partnership between the two companies during the 2024 Farnborough International Airshow. 

This comprehensive multi-year agreement for 184 Airbus A320 family and nine Airbus A330 aircraft will start from October 2024 onwards. It encompasses extensive component services for Vietjet's growing fleet, ensuring the airline’s operational excellence and the highest standards of maintenance. This agreement represents the largest TCS contract Lufthansa Technik has secured in the Southeast Asia region.

"Lufthansa Technik is committed to providing Vietjet with the highest quality of service and support to ensure the continued success of their operations,” said Johanna Koch, Vice President of Corporate Sales Southeast Asia and Indian Subcontinent at Lufthansa Technik.

Vietjet Chief Operating Officer Michael Hickey said: "The agreement reflects our strategic vision to enhance our fleet's reliability and performance, we are poised to achieve new heights in operational efficiency.

"We look forward to continuing our dedication to providing our passengers with quality, seamless and safe travel experience.” 

The Lufthansa Technik Group is one of the leading providers of technical aircraft services in the world. The portfolio includes maintenance, repair, overhaul, and digital fleet support among others. Vietjet is also Lufthansa Technik's first AVIATAR Technical Logbook customer in Asia Pacific from 2022.

In collaboration with Lufthansa Technik Group and other leading global aviation partners, Vietjet continues to invest in advanced aviation technology solutions and services to ensure the highest standards of safety and quality.

The airline consistently expands its fleet with new, fuel-efficient aircraft, achieving a technical reliability rate of 99.6 per cent, ranking it among the top airlines both regionally and globally.

Vietjet has been awarded a 7/7 star safety rating by AirlineRatings and has been consistently recognised as one of the world's safest low-cost airlines. 

SSC drafts regulations to boost market upgrade

The State Securities Commission of Việt Nam (SSC) has officially published a draft circular that aims to amend and supplement several articles of four existing documents governing the securities market, following feedback.

It seeks to update and refine the rules around securities trading, clearing and settlement, securities company operations, as well as information disclosure requirements on stock exchanges.

The draft circular introduces several provisions intended to facilitate the participation of foreign institutional investors in the domestic stock market. It aims to remove the pre-funding requirement, allowing these investors to purchase securities without the need to have the full amount of required funds in their accounts upfront, ensuring equal access to market information for foreign investors.

Under the proposed framework, securities companies will assess the settlement risk of each foreign institutional investor and determine the appropriate level of required funds for their securities purchase orders, based on a mutual agreement. 

In the event a foreign investor fails to fully settle a transaction, the remaining payment obligation will be transferred to the securities company where the order was placed, through the company's proprietary trading account, with a few specified exceptions.

In such cases, the securities company is permitted to sell the shares that were transferred to its proprietary trading account to the defaulting foreign investor, either through an off-exchange agreement or a transaction on the securities trading system.

This must be done by the next trading day after the shares were booked into the securities company's account, as long as the transaction does not exceed the maximum foreign ownership limit for those shares.

Except for this specific scenario, the securities company must sell the shares on the securities trading system. Any financial obligations arising from these transactions will be carried out according to the agreement between the securities company and the foreign institutional investor or its authorised representative.

When a foreign institutional investor places a securities purchase order, but fails to fully settle the transaction as required, the Vietnam Securities Depository and Clearing Corporation (VSDC) will transfer the remaining payment obligation to the securities company where the purchase order was placed. 

The securities company will be responsible for settling the transaction through its own proprietary trading account.

The draft regulation also introduces changes to the settlement timeline for foreign institutions. Previously, these investors were required to have sufficient funds in their accounts by around 2.30pm on T+1 (one day after the trade date). Under the new proposal rules, the deadline has been moved to 9.30am on T+2. This reduces the timeframe between when the foreign institution must fulfil its settlement obligation and when the securities are delivered down to just a few hours, from 9.30am to 1pm on T+2.

Regarding information disclosure, the draft circular also stipulates that the language for information disclosure in the securities market shall be Vietnamese. Listed organisations, public companies, stock exchanges and the VSDC are required to disclose information simultaneously in both Vietnamese and English.

The English language disclosure must be consistent with the content of the Vietnamese language disclosure. In the event of any discrepancy or difference in interpretation between the Vietnamese and English information, the Vietnamese information shall be considered the original and authoritative version.

The requirement for simultaneous disclosure in English applies according to the following phased approach: Large-scale listed organisations and public companies shall commence simultaneous disclosure of periodic information in English starting from January 1, 2025.

The large listed organisations and public companies will need to provide English-language versions of their extraordinary disclosures, information disclosed upon request and details about other company activities starting from January 1, 2026. 

For public companies that do not fall into the large-listed category, the requirement to provide English disclosures for periodic reporting will begin on January 1, 2027. 

These companies will be expected to offer English versions of their extraordinary disclosures, information disclosed upon request and details about other activities starting from January 1, 2028. 

Fruit and vegetable exports expected to set a new record

With a turnover of more than US$3.8 billion in the first seven months of the year and abundant supply when the harvest is about to begin, fruit and vegetable exports are expected to set a new record of $7 billion this year.

The record export would mark the outstanding development of the country's agricultural industry.

According to a report from the Việt Nam Vegetable and Fruit Association (Vinafruit), the country's fruit and vegetable export turnover in the first seven months grew 23.4 per cent over the same period last year.

This was a remarkable achievement, reflecting the continuous efforts of businesses in improving product quality and expanding markets.

Fruit and vegetable export activities continue to be favourable thanks to rising demand in traditional markets such as China and potential markets including South Korea, the US, Japan and Thailand.

Across the list of ten import markets leading Vietnamese fruits and vegetables most of which recorded growth rates from 15 to 96 per cent.

In particular, China still maintains its position as the largest market, accounting for 64 per cent of total export turnover with $2.1 billion in the first half of the year, posting 22 per cent year-on-year increase.

Key products contributing to this growth include durian, banana and dragon fruit.

Vietnamese fruits and vegetables also recorded an increase in demand in new markets such as the UK and the EU.

These are markets with great potential and are being exploited by the Vietnamese fruit and vegetable industry.

Market expansion to Europe not only helps diversify product output but also enhance export value, contributing to the goal of reaching $7 billion this year.

The Agency of Foreign Trade under the Ministry of Industry and Trade said that Việt Nam's fruit and vegetable export activities would continue to face many advantages in the coming time thanks to abundant domestic supply and rising demand from traditional, as well as emerging markets.

Businesses needed to focus on capturing new consumer tastes in major markets, said the agency.

For the Chinese market, in addition to processed durian, products such as medicinal herbs, coconuts and frozen fruits also have the prospect of opening up for import.

Flexibility in meeting diverse market needs will be a decisive factor for Vietnamese businesses to strengthen their position and expand market share.

Big wave of CEO departures despite economic recovery

Numerous chief executives of publicly listed companies have resigned this year despite an ongoing economic recovery, according to recent data released on Tuesday.

The list of departing CEOs includes several individuals who have been at their positions for only a few months. 

Nguyễn Thanh Sơn recently left his role as general director of An Gia Real Estate Investment and Development Corporation (AGG), which went public four years ago, after only five months. 

No explanation was provided for his resignation.

Similarly, the general director of Thủ Đức House (TDH) has resigned after nearly two and a half years, citing operational challenges and an inability to meet the company’s performance criteria. 

Thủ Đức House is confronting significant financial challenges while facing enforcement actions from the HCM City Tax Department due to tax debt.

The CEO of Hải Phát Invest (HPX), who joined Hải Phát in 2017 and ascended to the role of general director in 2018, has also departed from his position due to “differences of opinion.”

Meanwhile, three senior executives of the Hậu Giang Pharmaceutical (DHG) have also resigned because of “business pressures and stringent restructuring mandates.” 

Many CEOs have not fulfilled the expectations established by their respective companies upon their appointments, experts said.

Most companies also cited ongoing significant challenges in their business operations, they added.

For example, Thủ Đức House’s after-tax profits were negative as of the end of 2023, resulting in total equity of only VNĐ390 billion.

It reported an after-tax loss of nearly VNĐ1.7 billion in the first quarter.

Hậu Giang Pharmaceutical saw a 38.4 per cent decline year-on-year in after-tax profit during the first quarter, totalling just VNĐ222 billion.

Việt Nam’s GDP expanded 6.4 per cent in the first half of this year, but domestic consumption remains weak, with most consumers prioritising expenditures on essential goods only.

The real estate sector also remains mired in difficulties, with multiple companies under pressure to repay maturing bonds.

According to the HCM City Real Estate Association, the value of maturing corporate bonds in the real estate sector this year will reach VNĐ329.5 trillion, the highest level in the past three years, up from VNĐ144.5 trillion in 2022 and VNĐ271.4 trillion in 2023.

With the average CEO tenure typically around five years, recent studies indicate that increasing resignations stem not only from poor performance but also ethical concerns. 

As the threat of an economic slowdown looms, many leaders may choose to resign to protect their legacies, experts said. 

Hà Nội promotes farm produce exports

More than a decade ago, Trần Văn Hiếu and his colleagues established Developing Agriculture and Consulting Environment Company Limited (DACE) headquartered in Bắc Từ Liêm District with a focus on developing growing areas to produce organic spice products from ginger, turmeric, cinnamon, anise, garlic, chilli and lemongrass.

Since the beginning, DACE has pursued quality certifications with an eye on exports.

Currently, products of DACE have been exported to the US, some European countries, the Middle East, the Republic of Korea, Japan, Australia and Russia. The company's total annual export output reaches thousands of tonnes, mainly for cinnamon, anise, ginger, turmeric and chilli pepper.

Văn Đức Agricultural Service Cooperative in Gia Lâm District owns one of the largest vegetables growing area in the capital city with a total area of 220 hectares. Besides supplying vegetables for supermarkets and wholesale markets, the cooperative also exports around 300-500 tonnes of vegetables mostly to Taiwan (China) and the Republic of Korea.

Many other major high-quality farm products from Hà Nội are also exported to countries around the world such as Đại Thành late ripe longan to the US, Đồng Phú organic rice to Germany, pink aromatic bananas to China, and tea to India, Kenya and Sri Lanka.

Statistics of the municipal Department of Agriculture, show around 250 enterprises and cooperatives in the capital city are exporting agricultural products. Sixty nine enterprises are exporting to East Asia, 59 to the Europe and the US, 50 to South Asia, 19 to Southeast Asia and 13 to the Middle East.

In 2023, exports of farm produce brought in more than US$1.35 billion. In the first half of this year, agricultural products continued to register the highest growth rate among 11 major export products of Hà Nội. Major export farm produces are rice (accounting for 50 per cent of the export value), coffee (14 per cent), cashews (11.5 per cent), pepper (6.8 per cent) and tea (4.6 per cent).

The markets which agricultural products of Hà Nội are exported to all require high quality standards in terms of food hygiene and safety. According to Nguyễn Thị Thu Hằng, Director of the municipal Department of Quality, Processing and Market Development, this affirms their quality. 

Hằng said that there is huge potential for Hà Nội to promote the exports of agricultural products. Currently, there are 16 growing areas and four packaging facilities with a capacity of around 30-50 tonnes per day who have been granted codes for exports.

Hà Nội also has large areas of potential products for exports such as Japonica rice (more than 7,000 ha), pink aromatic bananas (3,200 ha), organic vegetables (50 ha) and many processed products of high quality, suitable for domestic and foreign consumers.

Specifically, Hà Nội also pioneers in the development of the One-Commune-One-Product (OCOP) programme, all products highly suitable for export. Since 2019, Hà Nội has evaluated and classified 2,711 OCOP products, including six 5-star, 12 potential 5-star, 1,437 4-star and 1,220 3-star. 

To support businesses in promoting exports, in municipal agriculture the department has regularly organised activities to provide training and disseminate regulations of major export markets and free trade agreements such as the EU-Việt Nam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) for enterprises, producers, traders and exporters. 

According to Bùi Thị Hạnh Hiếu, general director of Bảo Minh Agricultural Products Processing and Business Joint Stock Company, quality is the first thing exporting farms need to focus on.

To ensure quality, her company has joined with farmers in the capital city to establish a closed value chain to ensure product quality and traceability.

There are a number of factors which affect the export capacity of Hà Nội, among which, the most important factor is to standardise products, Tạ Văn Trường, Deputy Director of Hà Nội Department of Agriculture and Rural Development said.

When the quality and safety of products are ensured, the opportunity to meet technical requirements will be greater, thereby increasing the opportunities to access export markets.

He added that Hà Nội needs large enterprises with capacity to invest in high-tech agriculture and processing.

In addition, the capital city needs to regularly organise trade promotion programmes and improve regional links to increase exports, along with providing trainings and consultancies for enterprises in building brands, developing products and production and business strategies.

Nguyễn Mạnh Quyền, Deputy Chairman of Hà Nội People’s Committee, said Hà Nội’s agriculture must rise to be the spotlight of the country in term of technology and processing.

Hà Nội must become a centre for transshipments and processing of agricultural products and the agricultural industry of the capital city must link with other provinces and cities in accordance with international standards to serve domestic consumption and boost exports. 

MoIT promotes operation of new industrial production projects

The Ministry of Industry and Trade (MoIT) will promote the operation of new industrial production projects, creating more motivation for production development and goods for export, said Phạm Tuấn Anh, deputy director of the Department of Industry, MoIT.

The ministry said it will continue to effectively implement supportive policies for enterprises approved by the Government to remove difficulties and obstacles in production and business activities, especially in major industries, such as textiles, garments, footwear, automobiles, mechanical engineering and steel.

The ministry will also focus on perfecting institutions, policies, laws, and development strategies for a number of foundation industries, which will motivate the development of other industries over the short and longer term.  

In addition, it continues to effectively implement cooperation programmes with localities to restore and promote the growth of the industrial sector in localities and key economic regions.

In addition, the ministry supports enterprises in taking opportunities from large public investment projects and the Government's policies to restore the real estate market. It also encourages businesses to promote buying domestically produced goods, especially raw materials and products available on the domestic market, and to seek new markets for key export industrial products.

According to the ministry's report, despite achieving positive growth results in the first six months of 2024, Việt Nam's industrial sector still faces many challenges. 

The internal strength of domestic manufacturing industries is still weak, and major industrial bottlenecks in the past years have not been effectively overcome. Industrial production still depends largely on external factors, especially on the FDI sector. The added value of domestic industries is still low, while supporting industries are underdeveloped, leading to the lack of many domestic hi-tech industrial products.

On the other hand, industrial production has not recovered comprehensively. Some key manufacturing industries, such as smartphones, televisions, cars, and crude iron and steel, have still decreased compared to the same period in 2023.  

Meanwhile, some key export products, like footwear, wood, phones and components, recovered but have not yet returned to the peak in 2022.

The situation in the world and region will continue to be complicated and volatile in the last six months of 2024. 

Geo-political tensions and competition with major countries are expected to increase. While the recovery of major trading partners is still slow, there is still a risk of disruption to the global supply and production chains. 

Some key export products to major markets, such as Europe and the US, continue to face pressure from trade defence investigations and technical barriers.

The domestic real estate market is also recovering quite slowly. The domestic market growth is lower than expected. The consumer price index (CPI) is under pressure following wage reform from July 1 and adjusting electricity prices according to the new mechanism.

Therefore, it is necessary to introduce many synchronous solutions for the long term to ensure stable and sustainable growth for the industrial sector, said Anh.

The General Statistics Office (GSO) reported that Việt Nam’s Index of Industrial Production (IIP) expanded 7.54 per cent in the first half of 2024 compared to the same period last year.

The manufacturing and processing sector grew by 8.67 per cent year-on-year. Electricity production and distribution was up by 13.26 per cent and water supply, waste and wastewater management and treatment activities by 7.13 per cent. The mining sector saw a decline of7.22 per cent.

Deputy PM asks ministries to remove difficulties of fisheries industry

Deputy Prime Minister Lê Minh Khái has assigned the Ministry of Finance and the Ministry of Agriculture and Rural Development (MARD) to coordinate with relevant ministries and agencies to remove difficulties of seafood enterprises.

According to recommendations from the Việt Nam Association of Seafood Exporters and Producers (VASEP), the fishing industry faces many difficulties including unreasonable regulation on ceiling interest costs during calculating income tax, unreasonable delays in getting fishing certifications and problems with the minimum size set for the tuna they are allowed to land.

Fishing enterprises have reflected that imposing a ceiling on interest costs during calculation of corporate income tax is unreasonable.

Specifically, according to Decree 132/2020, in case the total value of loans a bank granted to a business exceeds 25 per cent of the latter’s equity, and accounts for over 50 per cent of the latter’s total medium and long term loans, the bank and the business will be regarded as affiliated parties.

In this case, when determining taxable income, the interest expenses in lending transactions with affiliated parties of the business, including the bank mentioned above, must not exceed 30 per cent of the total net profit. Any excessive amount would be considered unreasonable expenses and therefore liable to corporate income tax.

Most Vietnamese businesses are small and medium-sized enterprises and start-ups, so bank loans are the main source of investment capital for development. 

VASEP said this regulation affects enterprises' business results as well as their capital flow in the new investment period.

The lending transactions between banks and enterprises need to be recognised as normal business activities. Imposing a ceiling on interest costs will make the enterprises that have not enough financial ability, hesitate investment and innovation in technology. While, the investment and the innovation are vital requirements for the development of enterprises as well as the country's economy.

The seafood enterprises also complained that issuing a Statement of Catch (SC) at fishing ports after the enterprises bring raw materials to factories are taking too long. 

SC is a certificate to the fish processing plants or processors who want to use the fish brought from the port or other means as raw material for processing to fishery products. 

The SC certificate ensures the fish/raw material used in the processing process is monitored and regulated until the final processing of fish products.

Many batches of fish material have had to wait up to three months to get the SC certificates. This greatly affects the production and export of enterprises.

VASEP recommends that MARD should change the process on issuing the SC certificate at fishing ports during traceability confirmation under the illegal, unreported and unregulated (IUU) fishing regulations. This is the key to solving many bottlenecks in the IUU control process at present.

The other issue is the regulation on the minimum size of aquatic products permitted in fishing in natural waters in the Government's Decree 37/2024 effective from May 19. The minimum length allowed to catch for skipjack tuna is set at 500 mm (50 cm). Skipjack tuna with a length of 500 mm has a weight of 5–7 kg, while the international standard on size allowed to catch for this kind is 1.8–3.4 kg per unit. 

Skipjack tuna for canned food production usually weighs an average of 1.8–3.4 kg per unit because customers prefer canned products made from small-sized fish.

VASEP said Decree 37/2024 will mean a host of difficulties for fishermen who will need to change to new fishing gear with an appropriate mesh size and control the size of tuna that they catch. Traders and export processing enterprises will either not get or face serious shortages of tuna raw materials for purchase and export.

MoF strives to collect budget revenue exceeding estimates

The tax sector has striven to achieve and surpass the assigned State budget revenue targets, thereby ensuring funding for fulfilling the budget's tasks and urgent emerging tasks from now until the end of the year, according to Minister of Finance Hồ Đức Phớc.

State budget revenue has reached 68.5 per cent of the estimate as of mid-July, a year-on-year increase of about 15 per cent.

The minister said that thanks to the simultaneous implementation of solutions and many initiatives and creativity in the past four years, the entire financial sector has exceeded budget revenues.

State budget revenues were over by nearly 15 per cent in 2021, by 26.4 per cent by 2022 and last year revenue exceeded by more than eight per cent, with an equivalent amount of more than VNĐ131 trillion (US$5.41 million) allocated to investment projects.

Therefore, preparing State budget estimates for 2025 and for the next three years was extremely important, said the minister.

He has requested localities to estimate revenue and expenditure sources, forecast the production and business situation of the enterprise so that when making estimates, it must be close to reality.

Nguyễn Minh Tân, Deputy Director of the State Budget Department under the Ministry of Finance, said that when developing State budget revenue estimates for next year, the ministry set a target to strive for domestic revenue to increase by at least about 5-7 per cent next year compared to the estimated assessment performed this year.

Therefore, central ministries and agencies responsible for sector management should consider reviewing and eliminating overlapping, redundant and ineffective policies, especially social welfare policies, when drafting budgets.

In addition, the deputy director asked them to only propose to promulgate new policies, projects and tasks when the implementation resources were balanced, fully anticipating State budget needs according to decentralisation to implement new policies, regimes and tasks that have been decided by competent authorities. 

Vietnam Airlines gets loan extension

The State Bank of Vietnam (SBV) has issued a new circular on refinancing for credit institutions that provided loans to Vietnam Airlines JSC and restructuring the debt repayment term due to the impact of COVID-19.

The key change is an extension of the refinancing term, which will now allow automatic 5-time extensions at maturity for the remaining principal. 

Each extension will be for a period equivalent to the initial refinancing term, with a total maximum refinancing period of six years.

This increased flexibility is aimed at helping Vietnam Airlines stabilise its finances and maintain operations during the pandemic.

Previously, the maximum extension was limited to two times, with a total duration not exceeding three years.

Resolution No 135/2020/QH14 of the National Assembly had authorised the SBV to provide VNĐ4 trillion (US$157.7 million) in refinancing to Vietnam Airlines, with a maximum of 2 extensions allowed. 

However, a new Resolution No 142/2024/QH15, passed in June, has now increased the number of permitted extensions to a total of five.

In the first quarter of 2024, Vietnam Airlines reported impressive financial results, with revenue reaching nearly VNĐ28.3 trillion - a year-on-year increase of over 25 per cent.

It also recorded a strong rebound in net profit, which exceeded VNĐ4.4 trillion, marking the end of an extended 16-quarter losing streak.

However, despite these positive developments, the national flag carrier continues to face significant financial hurdles in 2024, particularly as the restructured debt obligations start coming due from July onwards.

Đặng Ngọc Hòa, Chairman of the Board of Directors, said that the company's consolidated profit before tax is projected to exceed VNĐ4.6 trillion in the first half of 2024. But the second quarter is expected to contribute only around VNĐ200 billion in profit, despite being the peak summer travel season.

He said he expected that the airline will gradually overcome its negative equity position, eliminate accumulated losses, and restore its financial health to the levels seen prior to the COVID-19 pandemic.

On the stock market, shares of Vietnam Airlines closed Wednesday with a decline of nearly 4.2 per cent to VNĐ21,700 a share.

Cần Thơ exports 1.2 tonnes of special longan to the US

Up to 1.2 tonnes of thanh nhãn (bright yellow-fleshed longan) grown in Cần Thơ City's Cờ Đỏ District, have been exported to the United States.

The municipal Department of Agriculture and Rural Development, in collaboration with Vina T&T Group, held a ceremony to mark the export contract on Tuesday as the fruits went off by air freight.

Cờ Đỏ District is home to 400ha of thanh nhãn trees. The longan in the district has been granted 33 export planting area codes and is sent to markets including the US, Australia, Japan, Thailand, the EU and China.

Nguyễn Đình Tùng, General Director of Vina T&T Group said thanh nhãn is considered the 'king of longans' with large fruits, thick flesh, small seeds and a slightly sweet taste, so it is favoured by many customers stateside.

From the beginning of the year until now, Vina T&T has exported over 20 tonnes of thanh nhãn the US and Australian markets, Tùng said.

Cần Thơ is a locality with a large output of thanh nhãn in the Cửu Long (Mekong) Delta region and the city has teamed up with businesses to ship about 250 tonnes of longan per year to overseas markets.

In his speech at the ceremony, Vice Chairman of the municipal People's Committee Nguyễn Ngọc Hè, asked farmers and cooperatives to cooperate in establishing a sufficient growing area to meet the export demands. 

Source: VNA//VNS/VOV/SGGP/VGP