The number of tourist arrivals to Hanoi surged 2.5-fold in the first half of 2023 compared to a year earlier, attributable to the reform of tourism promotion activities, improvement of service quality, and upgrade of cultural facilities and hotels.

The capital city welcomed over 1.4 million international visitors and 771,000 domestic tourists in H1, respectively rising 6.1-fold and 16.5% year on year, according to the municipal People’s Committee.

By the end of June, Hanoi had 3,756 tourism accommodation establishments with nearly 70,300 rooms, including 603 hotels rated one - five stars with 25,600 rooms that account for 16.1% and 36.3% of the total respective figures.

The occupancy rate of the hotels rated one - five stars reached 60.1% in H1, increasing 32.3% from the same period last year.

Among suppliers of qualified tourism services, there are currently 29 food service establishments, 35 others providing shopping services, six offering entertainment services, and one delivering healthcare services, helping attract a large number of visitors, statistics show.

The Hanoi People’s Committee recently reviewed the cooperation programme with CNN International to advertise the city on this channel since 2017. This partnership will continue until 2024.

The municipal Tourism Department has held specialised conferences and discussions on tourism product development, communications, and personnel training to seek ways for tackling difficulties facing stakeholders involved in tourism. It has also conducted a survey on agricultural and rural tourism potential so as to develop this type of tourism.

Besides, the city has stepped up connectivity and cooperation with key tourism localities in the north, the south, and the central and Central Highlands regions to create tours linking with them.

It has renewed activities in the pedestrian space around Hoan Kiem Lake and the vicinity while opening similar areas surrounding the Son Tay ancient fortress, Thien Quang Lake, and the southern urban area of Ring Road 3 in Hoang Mai district.

The department has also coordinated with travel companies and destinations, especially relic and heritage sites, to offer night tours.

Nguyen Manh Quyen, Vice Chairman of the municipal People’s Committee, said aside from making reforms, the administration will order the department to diversify forms of tourism promotion such as on digital platforms like websites and social networks (Youtube, Facebook, Tiktok), produce video clips available in five foreign languages (English, French, Chinese, Japanese, Korean) to introduce local destinations, and create souvenirs and travel publications imbued with the local culture.

Director of the Tourism Department Dang Huong Giang said her department is also focusing on developing tourism infrastructure such as the transport system connecting tourist attractions with local and national roads. It is completing the zoning plans of some key tourism sites and projects in Ba Vi, Huong Son - Quan Son, Soc Mountain - Dong Quan Lake, and Van Tri - Co Loa.

A plan is also being drafted to develop different types of tourism matching each locality’s advantages, such as cultural, night, MICE and culinary tourism in central areas. Leisure, agricultural and cultural tourism would be developed in the west (Ba Vi, Son Tay, Thach That, Quoc Oai), while weekend leisure, shopping - entertainment and sport tourism in the north (Me Linh, Dong Anh, Soc Son). Shopping, night and MICE tourism can be developed in the east (Gia Lam, Long Bien), while craft village, agricultural, rural and cultural tourism better suits the south (Ha Dong, Thuong Tin, Thanh Tri), she added.

Vietnam, Japan foster trade cooperation

The Vietnamese Government and the Ministry of Industry and Trade (MoIT) always treasure trade cooperation with Japan, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan told Governor of Japan’s Wakayama prefecture Kishimoto Shuhei during a working session in Hanoi on July 27.

Tan welcomed Governor Kishimoto’s visit to Vietnam on the occasion of the 50th anniversary of bilateral diplomatic ties this year.

He hailed the authorities of Wakayama prefecture for working closely with the MoIT to effectively implement the Memorandum of Understanding on trade and industry cooperation signed in 2018 and renewed in 2021.

Since 2019, both the MoIT and Wakayama prefecture have maintained the annual exchange of delegations and trade promotion missions, and business networkings both in-person and online formats, contributing to fostering trade relations and industrial cooperation between their business communities.

To further strengthen the cooperative relationship between the MoIT, the Vietnamese business community and Wakayama authorities and businesses, Tan suggested focusing on collaborative activities in various areas, such as promoting trade, facilitating investment, technological transfer and green transition in sectors of strength such as apparel, aquaculture processing and environment treatment, training and supply of Vietnamese workers to Wakayama firms.

Highlighting the success in opening the new direct international air route between Wakayama prefecture and Hanoi, Da Nang, Governor Kishimoto wished to work closely with the MoIT to further step up collaboration in workforce training to meet the needs of firms in Wakayama.

Additionally, there is a need to strengthen bilateral trade, including helping enterprises and products from Wakayama to access the Vietnamese market, which is increasingly favouring high-quality products originating from Japan, he said.

Speaking highly of the proposed initiatives, Tan invited the authorities of Wakayama prefecture to send business delegations to Vietnam International Sourcing in September and the Vietnam Foodexpo in November, both scheduled to be held in Ho Chi Minh City.

Kishimoto promised to foster comprehensive cooperation between Wakayama and MoIT, contributing to further tightening ties between Vietnam and Japan.

Vietnam – a leading market for Czech companies in Asia

The Czech Chamber of Commerce on July 25 welcomed a new export strategy of the Government and suggested Vietnam should be one of the primary markets for the Czech Republic in implementing the strategy.

The Czech cabinet on July 25 approved the 2023-2033 export strategy in an effort to strengthen Czech companies’ position in supply chains and diversify non-EU markets.

“The value of the Czech Republic’s exports reaches more than 70% of our gross domestic product, and we are one of the most open economies in the world. It is therefore clear that the support of our exporters is key to the sustainability and growth of our economy,” said Josef Síkela, Minister of Industry and Trade, at a press briefing on the same day.

Under the strategy, the Czech Republic will continue to focus on innovative companies that supply competitive products abroad, and carry out trade missions abroad, including engaging in trade fairs.  

The Czech Chamber of Commerce immediately welcomed the approval of the new export strategy.

“We support the government’s intention to create conditions for exporters that would help diversify exports to non-EU countries, making it easier for companies to operate permanently in foreign markets and strengthen their competitiveness through the support of exports based on sophisticated products and innovations,” said Zdenek Zajicek, president of the Czech Chamber of Commerce.

In economic diplomacy, according to him, the Czech Republic should focus on the USA, the Republic of Korea, Israel, Vietnam, African countries and Georgia.

At the Czech-Vietnamese Business Forum held in mid-June, Czech Deputy Minister of Industry and Trade Edvard Kozusnik affirmed that Vietnam is one of the Czech Republic’s most important partners in Asia.

Also at this forum, President of the Czech Chamber of Commerce Zdenek Zajicek announced that he would organize a delegation of Czech businesses to visit Vietnam in September.

Vietnamese footwear products introduced in India

The Vietnam Trade Office in India on July 27 launched the Vietnamese booth at the 7th India International Footwear Fair (IIFF) in New Delhi, popularising products of Binh Tien Imex Corp., Pte., Ltd (Biti’s) and Emall Trade and Service Corporation.

The launching ceremony drew Vice Director of Asian-African Market Department under the Ministry of Industry and Trade Do Quoc Hung; Vietnamese Trade Counselor in India Bui Trung Thuong; President of Global Trade and Technology Council of India Gaurav Gupta; President of the World Sikh Chamber of Commerce Parmeet Singh Chadha; and a number of Indian and Vietnamese businesses.

The IIFF is the leading footwear industry event in South Asia and one of the largest and most important footwear industry fairs in India. The event attracts a large number of businesses, manufacturers, traders and importers from all over the world. It offers a chance for businesses to introduce their products and approach the Indian market as well as others in the world.

Binh Tien, a reputable firm of Vietnam, has exported its products to more than 40 countries, including China, Japan, Italy, France, the UK, the US and Russia. It is seeking to enter the Indian market through B2B (Business to Business) methods and expectedly B2C (Business to Consumer) format in the future.

Meanwhile, EMall, with the brand names of Pierre Cardin Shoes and Oscar Fashion, has clinched its firm foundation in the footwear, accessory and leather in Vietnam, Myanmar, Cambodia and Laos with a system of over 100 shops. Through the fair, the company aims to seek partners who are retailers and distributors of leather shoes in the Indian market with a middle class of 600 million people.

The IIFF is a good opportunity for Vietnamese firm to explore the latest trends and seek partners, thus expanding their connections in the footwear industry.

Along with exhibiting products, the IIFF also includes seminars and forums for businesses to exchange experience. The fair will run until July 29.

Korean Cheabol invest US$1 billion in a carbon fiber factory in Ba Ria-Vung Tau  
 
Hyosung Vietnam has unveiled a plan to build a carbon fibre factory with a total capital outlay of up to US$1 billion in Phu My 2 Industrial Park in Ba Ria-Vung Tau Province. The investment in the initial phase is expected at US$160 million. 
      
The plan was announced during a meeting between Nguyen Van Tho, Chairman of Ba Ria-Vung Tau People's Committee, and a high-level delegation from Hyosung Vietnam Co Ltd last week. The discussions focused on procedures to implement the project.

Tho warmly welcomed Hyosung's interest in investing in the province and urged relevant agencies to assist the company in executing its investment plans. He also praised the timely progress of Hyosung's projects in the province, including a polypropylene (PP) factory and an LPG terminal in Cai Mep Industrial Park.

Seoul-based Hyosung is a big foreign investor in Vietnam with a total investment of about US$3.5 billion nationwide, of which Dong Nai and Ba Ria-Vung Tau provinces have received the highest investment, with US$$1.9 billion and US$1.4 billion, respectively.

Annual Vietnam - Laos trade fair opens

The Vietnam - Laos trade fair (VIETLAO EXPO 2023), the largest annual trade promotion event co-organised by the countries’ ministries of industry and trade, opened in the Lao capital city of Vientiane on July 27.

Lasting until July 31 and attracting hundreds of Vietnamese and Lao firms, the fair features approximately 250 booths. The Vietnamese section comprises 120 standard booths run by 60 enterprises from various sectors such as pharmaceuticals and medical equipment, agro-forestry-fishery, food processing, garments, handicrafts, interior and exterior decorations, plastics, and consumer products.

Within the course of the expo, there will also be product showcases, business transactions, face-to-face and online business networking conferences, and cultural exchange performances.

In his speech at the opening ceremony, Vietnamese Ambassador to Laos Nguyen Ba Hung highlighted that economic cooperation, a long-term foundation for the bilateral relationship, is developing steadily. He expressed his pleasure to witness this year's fair being held on a large scale, showcasing a diverse and rich array of high-quality products that cater to the demands of consumers in both markets. This demonstrates the dedication and confidence of the Vietnamese and Lao business communities towards the development of their countries’ trade relations, he stated.

Lao Minister of Industry and Trade Malaythong Kommasith emphasised that the expo is an important event, serving as an opportunity for the sides’ businesses to enhance their trade, investment, and tourism cooperation. This not only contributes to the socio-economic development of each country and increases their trade volume, but also deepens the great friendship, special solidarity, and comprehensive cooperation between the two parties, states, and peoples.

In 2022, the Vietnam-Laos trade turnover exceeded 1.63 billion USD, an increase of 18.9% year-on-year. In the first six months of 2023, the figure amounted to 835 million USD, an annual rise of 1.3%.

Alibaba to double investment in emerging Vietnam market

Alibaba.com, the global business-to-business (B2B) e-commerce platform of Alibaba Group, plans to double its investment in emerging manufacturing hubs across Vietnam.

This information was confirmed by an Alibaba representative at a press briefing on July 26 to unveil the group’s plans to expand operations in Vietnam over the coming three years.  

Apart from staff based in Hanoi and Ho Chi Minh City, the group will also move to increase personnel in localities such as Binh Duong, Bac Ninh, Long An, Da Nang, and Hai Phong, said Roger Luo, director of Alibaba in Asia-Pacific.  

The expansion of Alibaba.com's operations in the Vietnamese market will help small and medium enterprises (SMEs) to utilise the power of global e-commerce to grow beyond the domestic market, said Luo.

Moreover, Alibaba.com will also seek to recruit local human resources in order to provide proper services and support to Vietnamese exporters in these regions.

“Alibaba.com currently has more than 47 million buyers who are businesses from over 190 countries. With specially designed digital tools, Alibaba.com is the starting point for Vietnamese SMEs looking to enter the international market,” stressed Luo.

“Through doubling investment in emerging manufacturing hubs, we believe this move will attract more businesses to participate in global e-commerce,” he added.

According to Alibaba.com’s statistics, the average number of buyers of Vietnamese products increased by 55% in March compared to the same period from 2022, while the number of Vietnamese products available on the platform also increased by 24%.

At present, Vietnamese businesses enjoy advantages in fields such as agricultural products, food, fashion, handmade furniture, construction, architecture, and home garden products.

It was reported that the total number of transactions of buyers during the first six months of the year increased by 33% year on year.

Industry insiders pointed out that with the global market also witnessing a growth rate of up to 91% in online traffic, especially in emerging markets like Southeast Asia, there is a positive outlook ahead for Vietnamese products to go global.

Local ethnic community coffee brand recognised in Đắk Nông

The National Office of Intellectual Property of Việt Nam has recognised the brand ownership for the products of Rock Way coffee and macadamias grown by Dano Farm – the first green agro-forestry cooperative of a multi-ethnic community in Quảng Sơn Commune in the Central Highlands.

Director of Dano Farm Tạ Thị Liên said that the brand was built over three years and aims to boost sustainable and high-value crops for the community of 41 ethnic groups.

Liên said the multi-ethnic community had grown 117ha of coffee, of which 5ha was an organic farming practice by 37 households and sandwiched between a macadamia area from 2018. The area also has 42ha of mulberry cultivation used to feed silkworms.

She said the organic Rock Way coffee brand has attained UTZ certification, which was launched to bring high-quality products to the global market and spread the impact of sustainable farming practices.

She said the ethnic community began growing macadamia nuts to create a green canopy for coffee trees, and they used fermented fruit, fish and silkworm waste to fertilise the coffee instead of chemicals.

The Dano Farm cooperative plans to expand the green agro-forestry model to 2,500ha in the next five years as an ecology-based farming model with low-carbon crops.

Liên said Dano Farm will begin weaving silk in a traditional method to boost the brand's recognition in the coming years, paving a smooth path for export.

She said the cooperative has been seeking partners in Europe and Japan as two key export markets in the future.

According to the management board of the UNESCO-recognised Đắk Nông Global Geopark, organic coffee and craft products will be included in the park’s local partnership system as the community is located in the area of the Geopark.

The Central Highlands province has developed 135,572ha of coffee farms with an output of 332,620 tonnes per year, earning an export turnover of US$148 million from 102,000 tonnes. 

'Buy now, pay later' poses risk if left uncontrolled

Although "Buy now, Pay later" (BNPL) - a type of financing that allows consumers to make purchases and pay for them over time - is growing in popularity in Việt Nam, experts worry it could pose some financial risks if left uncontrolled.

Phạm Nguyễn Anh Huy, senior lecturer in finance at RMIT University, said BNPL companies have ample room for growth thanks to the low credit card usage and high consumer demand in the country.

"Consumption demand is rising steadily against a backdrop of merely 5.0 to 6.0 per cent of the population using credit cards. That's where BNPL comes in handy," said the lecturer.

Huy said with BNPL, consumers can pay for items, normally of less than VNĐ10 million (US$423), in a series of interest-free instalments. However, that's only part of the story.

Given that BNPL-financed loans are fairly easy for consumers to get approved, some consumers tend to overspend on items they wouldn't normally be able to afford if they had to pay upfront, leading to excessive debt that is difficult to manage.

The risk of default would be even higher for consumers of financial illiteracy and when lenders fail to access the creditworthiness of their borrowers. Risk management, he said, would be instrumental in keeping the risk in check.

According to the Vietnam Banks Association, the rate of consumers in default has been climbing steadily in recent years owing to the practice of "deliberate default".

Consumers dodge paying back their loans because they know they can do so with impunity. Legal loopholes make it almost impossible to bring to court those who default on low-value loans.

Another problem is that BNPL platforms have no connection with the Credit Information Centre (CIC). Without CIC data, they have to assess the creditworthiness of borrowers based on past transactions.

This is an approach that could result in default risk underestimation.

BNPL also carries data security risks because BNPL-financed purchases are made through a third-party's platform. Although data-sharing has been legally regulated, specific rules for the BNPL industry have yet to be put in place.

Senior Lecturer Huy said BNPL non-performing loans could soar if the industry is left to its own devices without governmental control. Rising non-performing loans, in turn, would erode lenders' profits and push them into bankruptcy, as was the case of Openpay in Australia recently.

He also said amid the current economy marked by high inflation and high interest rates, investors tend to switch their portfolios away from risky investments and technology companies tend to lay off staff.

"As a result, BNPL companies are likely to suffer a wave of liquidity shortages, which could negatively affect the growth of the industry," said Huy.

It is also worth noting that Atome, a BNPL company run by Singapore-based Advance Intelligence Group, has confirmed its withdrawal from the Việt Nam after entering the country just last year.

In a statement to Tech in Asia, the company said Việt Nam's contribution to its overall business was limited and it began a planned and orderly pause of its operations in the country in May.

Research & Market data show that the BNPL financing industry in Việt Nam would reach a compound annual growth rate of 31.1 per cent between 2023 and 2028. BNPL-financed purchases are expected to climb from $1.4 billion in 2022 to $8.8 billion in 2028. 

Measures needed to increase capital absorption of firms

It is critical to increase the capital absorption capacity of firms to promote economic growth, which will require a combination of solutions besides rate cuts, Deputy Governor of the State Bank of Việt Nam (SBV) Đào Minh Tú said at a conference on Tuesday.

The conference was jointly held by the Thời Báo Ngân Hàng (Banking Times), the SBV and Việt Nam Association of Small and Medium Sized Enterprises to discuss solutions to increase the capital absorptive capacity for enterprises in the context of low credit growth and global and domestic economic headwinds.

Tú said that the global economy saw complex developments in the first half of this year with struggling production and trade, increasing geopolitical conflict, high inflationary risk and tightened monetary policies.

In the domestic market, economic growth was lower than the projected scenario, expanding at 3.72 per cent from January to June due to declining global demand and emerging internal economic problems, which was undermining the financial health and capital absorption capacity of enterprises.

He cited statistics that credit growth was low, only expanding at 4.73 per cent as of June 30. The goal for credit growth was set at 14 per cent for the full year.

All of these factors posed challenges to the economy and monetary policy management in particular. “Never before has monetary policy management been as difficult as this year. Raise rates or lower rates? Increase or decrease monetary supply? And how to ensure a balance between credit quality and credit growth to maintain national financial security?” Tú said.

Võ Trí Thành, director of the Institute for Brand and Competitiveness Strategy, said that the Vietnamese economy is facing significant challenges and uncertainties, including external factors such as global economic slowdown as well as internal problems.

Most forecasts were that the Vietnamese economy would grow below 5 to 5.5 per cent this year, which means that the target of 6 per cent GDP growth was challenging.

At the conference, Thành highlighted two headwinds to the Vietnamese economy. The first headwind was the global economic slowdown. The second headwind was the most difficult financial and monetary conditions ever.

Thành noted that the second headwind could potentially ease because inflation might reach its peak and could decrease faster than expected. However, it remained a major concern, particularly with the trend of rising prices of food as some countries started to food security measures.

To achieve the GDP growth target, besides expecting the recovery of the global economy, Việt Nam also needs to tackle the economy’s internal problems, including the effective implementation of the Government’s policies such as speeding up public investment disbursement, stimulating demand and improving the business climate to attract investment, Thành said.

He stressed that interest rates should be reasonable, still, it was not a one-size-fits-all solution. He urged comprehensive measures, including expanding the market for enterprises and offering new business opportunities.

According to Nguyễn Văn Thân, chairman of Việt Nam Association of Small and Medium Sized Enterprises (SMEs), about 25 per cent of the association’s member companies were facing difficulties in accessing credit, partly because the Government’s policies had not yet demonstrated consistency and businesses themselves had not proven their ability to recover capital.

To increase the capital absorptive capacity of enterprises, lowering rates was just a prerequisite.

Thân said in the long term, it was necessary to amend the Law on Supporting SMEs and create conditions for enterprises to restructure their production capacity and establish value chains.

Enterprises also need to improve their competitiveness, corporate governance capacity and financial transparency to be able to access credit, he added.

In the current context, if the loan conditions could not be easier, it was necessary to take measures to provide trust-based guarantees for SMEs, Thân said.

According to Kentut Ariadi Kussuma from the World Bank, the problem did not necessarily stem from enterprises' capacity to use money. “They don’t need to borrow,” he said.

He cited data from listed companies in the stock market which showed that there was still a lot of room to borrow but firms did not.

He also highlighted the danger of too many supply-side solutions in the environment of weak demand, pointing out that lower domestic rates in the context of higher global rates created pressure on Vietnamese đồng.

Besides, high credit growth in a weak demand environment could direct credit to non-productive sectors, which could lead to higher non-performing loans (NPLs) and financial instability.

“Rather than focusing on credit growth, it is more important to make sure credit flows into high-productivity sectors,” he said.

As Việt Nam aims to become a high-income country by 2045, it is important to consider diversifying policies away from the credit growth limit, he said, adding that the credit growth limit was effective during the upturn but less effective during the downturn.

The central bank could consider additional tools such as a capital buffer, dynamic provisioning, a loan-to-value cap or loan-to-income, he said.

A representative from the Bank for Investment and Development of Việt Nam (BIDV) said the comprehensive implementation of solutions was needed to increase the capital absorptive capacity for enterprises which would require effort from not only relevant ministries and management agencies but also banks and firms themselves.

The focus would be placed on effectively implementing the economic recovery and development programme, developing the capital market and strengthening the disbursement of public investment.

Firms should implement restructuring to ensure finance for core business efficiency and expand markets to reduce inventories.

According to Tú, any policies must be put into consideration for both medium-and-long term benefits because the lesson of NPLs in the previous period remained.

The central bank’s viewpoint was to continue to lower rates when there were favourable conditions for cuts, Tú said.

He urged commercial banks to cut operation costs to create room for further rate cuts.

In the first four months of this year, SBV slashed operating interest rates four times in the context of increasing inflationary risk and climbing rates in the global market.

Currently, lending rates were 0.5 to 2 per cent lower than at the end of 2022 with short-term rates for production and business loans at around 5 to 9 per cent per year and long-term rates at around 8.5 to 11 per cent per year.

Divergence in profit forecasts likely heading into 2024

Multiple securities reports have forecasted that the pre-tax profit of the entire banking industry will experience a deceleration and subsequently exhibit a significant divergence over the next year, but bank stocks are still highly sought after.

In its report released last week on the banking industry, Vietcombank Securities (VCBS) projected that the pre-tax profit of the industry will witness a growth of approximately 10 per cent in 2023. However, this growth rate is notably lower than the average growth rate of nearly 35 per cent observed in the previous year.

VCBS specifically highlights the likelihood of a divergence in profit prospects among different banking groups, which is expected to become more pronounced in 2024.

“Some smaller banks may experience decelerated growth or even negative growth in 2024 if there is a deterioration in the real estate market and the global macroeconomic situation. This would result in a slowdown in credit growth and make it difficult for customers to repay their debts, especially when circulars and policies that provide support expire,” the report said.

Similarly, Ho Chi Minh City Securities Corporation (HSC) estimates that the average profit of the research group will only see an increase of 12-15 per cent in 2023. Particularly in the latter half of the year, HSC expects profits to rise by over 20 per cent compared to the same period.

VCBS pointed out that one of the main reasons for this deceleration in profit stems from the ongoing efforts of banks to resolve bad debts and recover capital, given the challenges faced due to the stagnant real estate market which serves as the primary collateral for most loans, hence significantly impacts the industry’s credit quality.

Nevertheless, the on-balance-sheet bad debt ratio and provisioning level are not anticipated to experience a significant increase in 2023, thanks to the government’s decree on supporting the extension of corporate bonds, and a circular allowing loan restructuring.

Addressing credit quality, Pham Nhu Anh, general director of Military Bank, predicts ongoing challenges and uncertainties for the real estate market over the next year or so. Factors such as incomplete construction, delayed product handovers, and legal procedure complications contribute to these difficulties. Additionally, dwindling confidence among homebuyers directly affects loan demand and the ability to comply with payment commitments.

“These challenges will directly impact the stability of the real estate market and negatively affect related industries such as iron and steel, building materials, and construction, consequently reducing banks’ credit quality,” Anh noted.

The first bank to announce a profit decline after six months was LienVietPostBank. By June 30, it completed 41 per cent of the yearly plan but marked a decline of 31.8 per cent compared to the same period the previous year. Despite a slight increase compared to the end of 2022, the bad debt ratio remained within a safe range.

Although Vietcombank has yet to release its financial statements, general director Nguyen Thanh Tung disclosed that capital mobilisation and credit growth in the first six months of the year increased by 6.6 and 2.6 per cent, respectively, compared to the same period last year.

Up to now, investors have approached banking stocks with caution, particularly concerning the bond market, real estate, and bad debt pressures. However, as these issues are gradually resolved, bank stocks are becoming more attractive at their current valuations.

HSC in its report demonstrated that the valuation of bank stocks is currently at its lowest level in the past five years. Moreover, the internal health of banks has significantly improved, and the banking industry has benefited the most from the long-term economic growth narrative.

As a result, the expectation of excellent business performance is anticipated to dispel some of the investors’ pessimism surrounding banking stocks, particularly for banks with strong resilience.

HSC also added several bank codes to the recommended list for the year’s second half, including HDB, MBB, and TCB. According to HSC experts, these stocks still offer attractive valuations, provided that the overall risk factors are mitigated.

VCBS believed that banks maintaining a healthy credit balance amid the prevailing economic challenges present low-risk investment opportunities, which are expected to yield acceptable profits in the second half of 2023.

“We assess the investment outlook for banking stocks to be in line with the market, as industry-wide price-to-book valuations currently stand approximately 20 per cent below the five-year average. Banks with good asset quality and exceptional growth rates among others in the industry are considered suitable options for long-term investment,” VCBS recommended.

Nghi Son oil refinery to suspend operation for two-month maintenance

Nghi Son Refinery and Petrochemical LLC (NSRP) has announced that it will conduct a comprehensive maintenance of its refinery for the first time since commencing commercial operations, starting from August 25.

According to NSRP, the first maintenance, which lasts 55 days, will strictly adhere to production practices, safety measures, and sustainability in production to ensure stable and long-term output for the refinery.

Currently, the oil refinery has a processing capacity of up to 200,000 barrels per day, equivalent to 10 million tons per year. With its optimal design and integrated petrochemical processing and production technologies, Nghi Son is capable of turning out products with high competitiveness, solidifying its position as a key fuel supplier in Vietnam.

The maintenance aims to enhance the reliability and stability of equipment and production activities. During the maintenance, Nghi Son refinery will temporarily suspend its entire operation.

So Hasegawa, general director of NSRP, said, “The maintenance of the entire refinery is part of our commitment to safety, ensuring continuity of production stability, securing stable and long-term operation for local businesses and labor, and producing high-quality gasoline and oil products sustainably for the local market.”

To minimize the impact of the production suspension, NSRP has actively deployed solutions to expedite maintenance, reducing the duration while ensuring quality and safety. Concurrently, NSRP is collaborating with competent authorities to ensure that the maintenance will not adversely affect the domestic fuel market and consumers.

NSRP is a joint venture comprising four large investors: PetroVietnam, Kuwait Petroleum Europe (KPE), Idemitsu Kosan (IKC), and Mitsui Chemicals (MCI).

ACB to launch VND20-trillion bond issue

The board of directors of Asia Commercial Joint Stock Bank (ACB) has approved a plan to issue bonds through private placement in 2023, with a total value of up to VND20 trillion.

Under the approved plan, ACB will issue a maximum of 200,000 bonds in 20 rounds, with each bond having a face value of VND100 million or a multiple of VND100 million.

These bonds will be non-convertible, not underwritten, and not considered a subordinated debt of ACB. They will have a maximum term of five years and carry a fixed coupon rate throughout their tenure.

The proceeds from the bond sales will be used to meet the bank’s lending and investment requirements, ensuring compliance with safety benchmarks mandated by the State Bank of Vietnam.

At the end of the first quarter of 2023, ACB had over VND36 trillion worth of outstanding bonds. Bonds with a maturity of one to two years amounted to VND11.45 trillion.

Those with terms of three years and five years accounted for VND20.7 trillion and nearly VND1.5 trillion, respectively. The remainder has a term of 10 years, totaling VND2.4 trillion.

Bank deposits increase slowly due to interest rate cuts

Deposits at local banks continued to grow in May, albeit at a slower pace than in previous months due to ongoing reductions in interest rates, according to the State Bank of Vietnam (SBV).

By the end of May, individuals’ deposits had reached VND6,347 trillion, an 8.7% increase or an additional VND15 trillion compared to the beginning of the year.

However, May marked the month with the lowest increase in individual deposits, as the additional amount recorded was only VND14,700 billion, which is less than one-tenth of the amount in January.

In January, the banking system posted a surge of VND178,000 billion in deposits versus the end of 2022, while bank deposits increased by VND136,000 billion in February.

Additional deposits were recorded at VND101,000 billion in March and VND52,000 billion in April. The deposit channel has recently become less attractive to individuals due to lower interest rates.

After reaching its peak in January, interest rates have continuously been revised down, ranging from 1.5% to 4% per annum. For fixed-term deposits, interest rates have fluctuated around 4% to 8% per annum.

Deposits from organizations and businesses saw an increase of VND94,000 billion in May, reaching a total of VND5,748 trillion.

However, compared to the end of 2022, deposits from organizations and businesses decreased by 3.45%, with withdrawals amounting to VND205,000 billion.

As of the end of May, commercial banks provided an additional VND29,000 trillion in loans to the economy, bringing the total outstanding loans to VND12,314 trillion, up 3.27% from the end of 2022.

HCMC keen on social housing development

The HCMC People’s Committee has assigned relevant departments to explore and establish specific mechanisms to promote social housing development in the city.

The Department of Planning and Investment will conduct a review and propose solutions to streamline administrative procedures for approval of projects to build social homes and those for workers.

The department will work with relevant agencies and the HCMC Finance and Investment State-Owned Company to recommend including social housing projects in the city’s investment stimulus program, in line with the National Assembly’s Resolution 98 on special policies for HCMC.

The Department of Finance has been entrusted with considering an increase in state funding to support and encourage businesses, particularly prominent real estate companies, to participate in the construction of social housing. This department will collaborate with the Department of Construction and related agencies to publicly release a list of housing projects so that interested businesses can study them and propose taking part in their execution.

The Department of Industry and Trade is responsible for integrating social housing planning into the design of new urban and industrial areas. To fulfill this commitment, at least 2% of the total land area of industrial zones will be allocated for planning social and public facilities for the workers employed within those areas. The city will set aside backup land and invite infrastructure developers, industrial businesses, and real estate companies to invest in constructing accommodation and rental housing for workers.

In the case of underutilized industrial zones, where portions of land are yet to be developed, the city will examine and potentially revise the construction plan to allocate land for the development of workers’ housing, rental accommodation, and trade union facilities.

The Department of Natural Resources and Environment is entrusted with reviewing and issuing specific solutions to streamline administrative procedures concerning land allocation, land leasing, and land conversion from rice fields and protected forests to social housing development.

These solutions will also include additional incentives to support and attract businesses that invest in social housing projects.

Meanwhile, the Department of Construction is directed to supervise and instruct project owners of commercial housing and urban areas to invest in the construction of social housing on the 20% land allocation as per the approved schedule.

Dong Nai approves section of HCMC Beltway No. 4 in the province

Dong Nai authorities have given their consent to the investment plan for a section of HCMC Beltway No. 4 that will pass through the province.

On July 24, the Dong Nai People’s Committee sent a document to the Ba Ria-Vung Tau authorities expressing their agreement with the scale and schedule of the section of HCMC Beltway No. 4 that will cross the province.

According to the plan, the section passing through Dong Nai will have a width of 22 meters, with four lanes for vehicles, two emergency lanes, and a system of collecting roads in residential areas.

The pre-feasibility study is expected to be approved in the fourth quarter of this year, as per the agreement by the Dong Nai authority. Compensation for site clearance, resettlement, and construction in several categories is projected to be completed in the second quarter of 2025.

The selection of contractors and work on the project will begin in 2025, with a scheduled completion in the fourth quarter of 2027. If everything proceeds smoothly, the project could be opened to traffic in the first half of 2028.

The HCMC Beltway No. 4 stretches 200 kilometers, crossing four localities, namely HCMC, Binh Duong, Dong Nai, Long An, and Ba Ria-Vung Tau.

The project requires an investment of VND100,000 billion and has a starting point intersecting with the Bien Hoa-Vung Tau Expressway and an end point at Hiep Phuoc port in HCMC.

HCMC proposes mechanism, policy to promote exploitation of rooftop solar energy

Chairman Phan Van Mai of HCMC People’s Committee suggested encouraging mechanisms, policies for the exploitation of HCMC’s rooftop solar energy in a seminar with NA's Standing Committee on energy development in the 2016-2021 period.

HCMC People’s Committee reported that as to energy planning in the city, the Committee has assigned the HCMC Department of Industry and Trade to prepare the Planning for Electricity Development in HCMC in the 2016-2025 Period, with a Vision to 2035 and submit to competent agencies for approval. Meanwhile, the municipal People’s Committee has urged petrol and oil supply activities from fuel businesses.

Due to a limit in land resources and its specific geographic location, HCMC mostly focuses on the growth of rooftop solar energy among common alternative energy types. Until now, more than 14,000 such structures have been built, with a power harnessing capacity of 358.38 MWp, accounting for 3.71 percent of the country’s total one. In addition, two investors have asked for permission from HCMC People’s Committee to investigate the possibility of constructing wind turbines for power in Can Gio District.

Chairman Phan Van Mai stressed that HCMC is particularly interested in energy security. Reserving sufficient petrol and oil is an urgent matter to do. The development of on-site power generation to answer the high needs of the city is a wise method that has been applied in several countries.

Therefore, he proposed that the Government and relevant ministries, agencies soon introduce suitable mechanisms and policies to promote the exploitation of rooftop solar energy. This will enable HCMC to make better use of the solar energy potential here, to add renewable energy projects into the Electricity Planning No. 8.

Vice Chairman of the National Assembly Nguyen Duc Hai asked that the municipal authorities timely issue necessary dispatches related to energy within its power while carrying out planning and preparing a corresponding plan for energy development in the city.

He also reminded HCMC to strictly observe Clause 11 of Article 5 in Resolution No.98 of the National Assembly regarding boosting the growth of rooftop solar energy – a strength of HCMC. Besides, there should be feasible solutions to address arisen problems when implementing electricity projects in the city (land planning adjustment, land resource allocation, land compensation, resettlement support).

As to the above proposal of HCMC, the delegation is going to collect necessary documents for in-depth consideration before preparing the NA’s Standing Committee’s Report on Monitoring Results and Resolution Implementation.

Before this, Vice Chairman Nguyen Duc Hai had a working session with Petroleum Co. – Zone II about the observance of legal policies on energy development.

Walmart seeks apparel, appliances and consumer goods from Vietnam

 US retailer Walmart is seeking local suppliers in Vietnam ahead of its participation in the Vietnam International Sourcing Expo 2023, to be held in Ho Chi Minh City from September 13-15.

Walmart will seek supplies of apparel, textiles and accessories, footwear, consumer electronics, furniture and home decor, food and consumer goods, according to the Ministry of Industry and Trade.

Avaneesh Gupta, Walmart's senior vice president of general merchandise and apparel sourcing, will lead a delegation to the Vietnam International Sourcing Expo 2023.

In late May 2023, Sarah Thorn, Walmart's Senior Director on Global Government Affairs, told a meeting with Minister of Industry and Trade Nguyen Hong Dien that Vietnam is among Walmart's top five suppliers.

She said Vietnam's top exports include apparel, home appliances, electronics, and processed food and that Walmart imported a total of US$2 billion worth of goods from Vietnamese suppliers.

Sarah urged the ministry to support Walmart in expanding its operations in Vietnam, given the uncertainty of global supply chains, potential pandemics, and geopolitical tensions.

Walmart now has 30 research centers located in 17 countries. The company works with about 2,400 key suppliers and 4,000 factories, and about 500,000 containers are delivered to Walmart's global stores each year.

In 2013, Walmart opened a representative office in Vietnam to find local suppliers and expand the company's operations in the country.

Travel companies in Hanoi look to benefit from new e-visa rule

Local travel companies in Hanoi are working to explore the opportunities in the year-end period in the expectation that the e-visa stay extension will boost tourist arrivals to the city. 

National lawmakers on June 24 agreed to lengthen the e-visa stay for foreigners in Vietnam from 30 to 90 days. In addition, e-visa holders will be allowed multiple entries.

The move is expected to boost tourist flows to Vietnam and Hanoi in the post-pandemic period and make Vietnamese tourism more competitive in the region.

In anticipation of the e-visa validity extension to take effect on August 15, local travel businesses are working hard to develop new products and services.

Nguyen Cong Hoan, General Director of Hanoi-based Flamingo Redtours, said his company plans to develop a cross-border tour linking Hanoi with Ho Chi Minh City and destinations in Laos, Cambodia and Thailand.

Meanwhile, Nguyen Hong Nhat, General Director of Asia Premier Cruise (APC), revealed that the company's cruise ship Ambassador in Ha Long Bay, Quang Ninh Province, now hosts new art performances every day from 5 pm to 10 pm.

The shows include singers, dancers, disc jockeys and musicians who perform from sunset. Passengers on the cruise also enjoy Vietnamese cuisine. "We are preparing for the end of the year, which is usually the busiest season for Vietnamese tourism," said Nhat.

Tran Thi Bao Thu, Director of marketing and communication at Vietluxtour, said her company will introduce international visitors to cross-country tours. Travelers will experience local culture and cuisine, she said, expecting such activities to draw an influx of big spenders from the US, Europe and Australia.

Not only are travel companies rushing to create their own advantages, but district authorities in Hanoi have also taken measures to organize travel programs.

Dang Huong Giang, Director of the Hanoi Tourism Department, said her agency will work with relevant units to develop a food tour map for tourists.

The department will also facilitate further growth of meeting-incentive-conference-exhibition (MICE) travel, golf tourism, and experiential travel in both urban and suburban districts.

"In the year-end period, Hanoi will host several major events, including a travel photography contest, an Ao Dai festival, and a travel promotion program," Giang added. 

She said these events will give businesses a chance to introduce their products and services to international guests.

Singapore's online booking platform Agoda announced on July 24 that the number of inquiries from tourists planning to stay longer in Vietnam has increased by 33% in two weeks.

French travelers topped the list with a 72% increase in inquiries during the period, followed by those from the Netherlands, New Zealand, Germany and the US.

In the first half of the year, Hanoi welcomed a total of 12.3 million visitors, up 42% year-on-year. The figure included two million foreign tourists, seven times more than last year.

During the six-month period, Hanoi earned nearly VND45 trillion (US$1.9 billion) from tourism, up about three-quarters from the first half of last year.

Despite the prospects, local businesses are still awaiting further guidance from the government on extending the validity of e-visa.

Director of Golden Tour Vietnam Pham Tien Dung said Vietnamese tour operators have been working with their overseas partners to plan their operations.

"All we need is a transparent and clear instruction on immigration," he said. "Our products and services are ready, but we are waiting for the government to clarify the rule."

According to Tran The Dung, General Director of Vietluxtour Travel, his company is unsure which countries will benefit from the new e-visa policy.

"The majority of long-stay tourists come from Europe, Australia and the US, and they have planned their trips a long time ago. I think the new rule will have an impact on the tourism sector in October at the earliest," he said.

Three more metro routes proposed for HCM City

The HCM City Department of Transport has recommended adding three metro routes to the city’s adjusted master development for 2040 and a vision to 2060.

The first route would connect Tan Son Nhat International Airport, the city centre, Thu Thiem urban area and Long Thanh International Airport.

The second route will be across the Soai Rap River in Can Gio District and link to the Can Gio sea tourist site. While the third would connect Thu Thiem and Tan Kien stations.
The department has also suggested expanding Metro Line 6 linking Ba Queo and Phu Lam areas by seven kilometres. After expansion, it would link with Nguyen Van Linh Street, Metro Line 2 and Thu Thiem-Long Thanh Railway.

The department will continue working with concerned agencies on the proposals to add the projects to the city’s adjusted master development plan for 2040 with a vision to 2060.

HCM City has planned to build eight metro lines with a total length of 220 kilometres. The projects will have a total investment of USD25 billion. Only two projects are being built so far.

HCMC-Long Thanh-Dau Giay Expressway frontage road opened to traffic this month

 A  2.7-kilometer residential frontage road that runs parallel with the HCMC-Long Thanh-Dau Giay Expressway will be opened to traffic by the end of this month, according to the HCMC Department of Transport.

When in place, the frontage road will significantly ease traffic in the eastern gateway area of the city, which is currently facing congestion due to the ongoing construction of the An Phu interchange which connects Mai Chi Tho Avenue and HCMC-Long Thanh-Dau Giay Expressway.

Daily traffic volume on HCMC-Long Thanh-Dau Giay Expressway has surged 30% to 70,000 vehicles since the 99-km Dau Giay-Phan Thiet Expressway worth VND12.5-trillion was put into operation on April 29 this year, shortening the travel time between HCMC and Binh Thuan Province which is known for its beach resorts in Mui Ne.

Consequently, the section between HCMC’s Mai Chi Tho Avenue and Dong Nai Province’s National Highway 51 is frequently congested, especially on weekends.

The construction of the VND869 billion frontage road along HCMC-Long Thanh-Dau Giay Expressway began in April 2027 under the build-transfer format. It has four lanes for vehicles.

The frontage road is divided into two sections. The first section is 2.7 kilometers long, linking Mai Chi Tho and Do Xuan Hop roads, and the second section, 600 meters long, connects D11 road and Beltway No. 2.

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