The Hanoi People's Council has approved a plan to select a contractor for the technical support project in preparation for Metro Line No. 3 running from Hanoi Railway Station to Hoang Mai district.

The plan is part of a broader resolution which also facilitates research and construction support for an integrated urban transport system.

The technical support project involves eight packages of consulting and non-consulting services using non-refundable official development assistance worth 308 billion VND (12.8 million USD) from the Asian Development Bank (ADB) and the European Union (EU).

Expected to cost 40.5 trillion VND, the 8.7 km metro line will be mostly underground, from downtown Dong Da district to southern Hoang Mai district, along the Tran Hung Dao – Tran Thanh Tong – Kim Nguu – Tam Trinh streets.

Funding will come from a combination of sources, including 274.1 million USD from the city’s budget and nearly 1.5 billion USD in foreign loans from the ADB, Germany's KfW Development Bank, and the French Development Agency (AFD).

Once operational, Metro Line No. 3 is expected to significantly improve traffic flow and reduce congestion in Hanoi. The line is designed to carry 488,000 passengers daily, providing a vital transportation link between the city centre and the western and southern districts./.

Manufacturing business sentiment to rise

Vietnamese manufacturing business sentiment is set to rise in the third quarter on the back of the country’s unexpectedly higher economic growth in the second quarter and an optimistic outlook for the year.

A survey by the General Statistics Office (GSO) on production and business trends in the manufacturing, processing and construction industries for Q2 and forecast for Q3 released last week revealed that 82.9% of businesses expect improved/stable business activities in the third quarter compared to the second quarter. In comparison, 17.1% foresee greater difficulties.

This marked an improvement compared to the previous survey, where 77.6% of businesses forecast more favourable or stable production and business activities and 27.1% predict greater difficulties.

However, optimism varies across different types of enterprises.

State-owned enterprises (SOEs) lead with 43% predicting better conditions, followed by foreign direct investment (FDI) enterprises at 42.6%, while only 39.6% of private domestic enterprises forecast an improvement. In contrast, 17.3% of domestic firms anticipate tougher times, compared to 16.4% of State-owned and 16.8% of FDI enterprises.

This survey was conducted among 6,114 manufacturing and processing enterprises.

In the second quarter, the two major challenges for the manufacturing and processing industry are "low domestic market demand" and "high competition from domestic products", with 53.4% and 50.4% of enterprises identifying these issues, respectively.

Consequently, 28.9% of businesses have urged the Government to implement more effective measures to stimulate domestic demand and promote the "Vietnamese use Vietnamese goods" campaign. Additionally, 26.1% of businesses requested that the Government and local authorities intensify trade promotion efforts to explore new markets and partners, thereby increasing product consumption both domestically and internationally.

Interest rates remain a significant challenge, with 22.3% of businesses struggling due to high loan interest rates, up 3.9 percentage points from Q1 2024. To alleviate the pressure of rising input costs, 50.1% of businesses have called for the Government to lower lending rates, while 28.2% suggested banks simplify loan procedures and conditions.

Textile and footwear enterprises face unique challenges, reporting difficulties concerning export orders and the skilled labour force. Consequently, 18.6% of businesses have called for Government support in training and upgrading the skills of workers to meet production requirements.

Additionally, 24.5% of businesses have urged improvements in logistics services; 23.4% have requested reductions in land rental costs for production and business activities; and 22.4% have emphasised the need for a stable power supply.

Regarding administrative procedures, 31.5% of businesses have called for continued reforms to reduce waiting times and streamline administrative processes.

Vietnam's economy expanded by 6.93% during the second quarter and 6.42% in the first half.

According to Nguyen Thi Mai Hanh, Director of the GSO's National Accounts Department, Vietnam's economy in the second half of the year requires steadfast commitment, coordinated fiscal and monetary policies, along with stimulus measures for investment and consumption and innovating growth drivers for breakthroughs to achieving the yearly-target of 6.5% growth./.

Petrovietnam leaders request smooth progress of Block B gas – electricity project

Chairman of the Board of Directors of the Vietnam Oil and Gas Group (Petrovietnam) Le Manh Hung has stressed the necessity to prevent any difficulties from impacting the progress of the Block B gas – electricity project chain as it is the most critical project of the group from now to 2030 and is drawing significant public interest.

Hung on July 3 led a delegation to the Mekong Delta province of Hau Giang province to work with the Management Board of the Song Hau 1 Thermal Power Plant Project (SH1PP) and Southwest Pipeline Operating Company (SWPOC) regarding the progress of their tasks in the first six months of this year and the implementation for the midstream and downstream sections of the project chain.

President of the Petrovietnam Board of Management and CEO Le Ngoc Son requested the SH1PP Management Board to focus on the finalisation of the SH1PP project, slated for completion in 2024.

He emphasised the importance of synchronising the progress of projects in the midstream, and downstream sections. Regarding the midstream – gas pipeline, he acknowledged the gas pipeline project's smooth implementation progress. As for the downstream - O Mon III and IV thermal power plants, Son stressed the need to implement tasks to ensure adherence to the schedule.

Son asked the project chain’s exploitation and construction board to adjust the project schedule in accordance with the current implementation situation.

As the largest of its kind in Vietnam, the Block B gas – electricity project chain is expected to produce 5.06 billion cu.m of gas per year during the stable phase, providing supply to four O Mon thermal power plants in Can Tho with a total installed capacity of nearly 4,000 MW./.

Agro-forestry-aquatic product exports rise by 19% in six months

Vietnam shipped some 29.2 billion USD worth of agro-forestry-aquatic products abroad during the January-June period, a year-on-year increase of 19%, according to the Ministry of Agriculture and Rural Development.

The sector’s trade surplus during the six-month span surged 62.4% against the same time last year to around 8.28 billion USD.

Seven products and groups of products posting an export turnover of over 1 billion USD each were coffee, rubber, rice, fruits and vegetables, cashew nuts, shrimp, wood and wooden products.

Specifically, the country exported 4.68 million tonnes of rice worth 2.98 billion USD, up 10.4% and 32%, respectively, and shipped 350,000 tonnes of cashew nuts abroad for 1.92 billion USD, an increase of 24.9% and 17.4%, respectively.

Coffee exports, despite seeing a drop of 10.5% in volume to 902,000 tonnes, saw a rise of 34.6% in value to 3.22 billion USD thanks to rising export prices.

During the period, most of Vietnamese agro-forestry-aquatic exports were destined to Asia (13.9 billion USD), America (6.6 billion USD), Europe (3.7 billion USD), Africa (565 million USD), and Oceania (405 million USD), with the US, China and Japan being the largest purchasers.

Along with export, the country’s agro-forestry-aquatic product production was the key for the sector’s growth, and a beacon of the economy.

Statistics from the General Statistics Office showed that the sector has enjoyed both bumper harvests and soaring prices, with the price index of agricultural products in the first six months of the year rising 10.29% against the same time in 2023.

Given the robust export growth, Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that the export revenue for the whole year could hit 54-55 billion USD.

The Ministry of Industry and Trade said that it will work to bolster agricultural product exports to such key markets as China, the US, Japan and the EU, and open doors for them to enter potential ones like the Halal market and Middle East, helping to maintain export momentum in the remaining months of 2024.

As supply chain disruption due to conflicts, geopolitical tension and trade wars among powers has ratcheted up the global demand for agricultural products, Vietnam has boosted exports in a sustainable manner while ensuring national food security, according to Minister Nguyen Hong Dien.

The country will continue the negotiations, signing and upgrade of free trade agreements (FTA) with potential partners, helping enterprises to diversify their markets, products and supply chains to increase shipments, he said.

Besides, the ministry will join hands with ministries, sectors, localities and associations to support firms to capitalise on the signed pacts, particularly their tax incentives, and improve their production capacity as well as ability to settle trade remedies-related lawsuits and arising international trade disputes./.

Vietnam boosts industrial production, attracts large-scale projects

Hanoi is working to boost industrial production, raise production efficiency and capacity of businesses in industrial parks and clusters, and lure big projects to this field, Chairman of the People’s Committee Tran Sy Thanh has said.

The city will continue pushing ahead with industrial production in line with the development programme for priority industries, the supporting industry development programme, and the key industrial product development project, he said while mentioning tasks and solutions for the last six months of this year.

At the same time, it will continue removing obstacles to enterprises while focusing on tapping the domestic market, improving domestic consumption and developing Vietnamese brands, effectively implementing the campaign “Vietnamese people prioritise using Vietnamese products”.

Digital application in tourism will be stepped up, he said, adding that information on tourist attractions, craft villages, and cultural relic sites and heritage will be digitalised, and more software launched to make it easier for visitors to access tourism information.

According to Dau Ngoc Hung, head of the city Statistics Office, between January and June, the number of newly-established enterprises dropped 3%, while those resuming operation rose 17% year-on-year.

He cited a survey by the office showing 77.4% of the firms operating in processing and manufacturing said their production and business in the second quarter were stable and even better than the previous quarter, and 82.8% said they hope for a brighter picture in the July-September period.

In processing and manufacturing alone, 28.7% of the enterprises saw better operation in the April-June period, 48.7% said their production and business remained stable, and 22.6% faced difficulties.

According to the survey, 32.3% of the businesses in the sector forecast better results in the third quarter when export markets are expected to see improvements and orders to increase, while 49.9% said they hope for stability, and 17.8% anticipated more difficulties.

Statistics show that the index of industrial production (IIP) rose 5% during the January-June period, with processing and manufacturing up 4.1%, and the consumption index up 13.1%. The inventory index, however, decreased by 30.1% at the end of June.

Notably, a host of solutions were put in place to support the labour market. In the first half, the city created jobs for 124.900 laboures, meeting 75.7% of the yearly plan, and up 10% year-on-year.

Hanoi also entrusted the Vietnam Bank for Social Policies (VBSP) to provide loans worth 2.1 trillion VND (82.3 million USD) for needy people and social policy beneficiaries.

As many as 35,900 people have received assistance worth a total of 1.08 trillion VND from the city's unemployment insurance fund. Meanwhile, nearly 1.5 billion VND was earmarked to support 385 people in vocational training.

The number of tourists to the capital city increased by 13.7% to 14 million in the reviewed period, including 3.14 million international visitors, a rise of 52.6% over the same period last year.

The city attracted over 1.1 billion USD in foreign direct investment, up 52% year-on-year. However, it still faced some obstacles, including low State budget collection.

Although public investment disbursement increased from the previous period, it remained lower than the national average and failed to meet the set requirements./.

Hanoi rolls out measures to accelerate H2 growth: official

In the second half of this year, Hanoi will roll out various measures in a bid to boost its economic growth, contributing to fulfilling yearly targets, according to Chairman of the municipal People’s Committee Tran Sy Thanh.

The city will promote administrative reform and digital transformation, and improve State management capacity in all fields, the official elaborated, adding it will maximise resources, accelerate disbursement, and effectively implement public investment capital for 2024.

He went on to say that the city is working to speed up the progress of key, essential and social housing projects, focusing on removing difficulties to official development assistance (ODA) and foreign-invested projects, and those that use non-State budget capital to stimulate investment.

Industrial production will be promoted, and production efficiency and capacity of enterprises in industrial parks and clusters will be improved, the official said.

The city will continue pushing ahead with industrial production in line with the development programme for priority industries, the supporting industry development programme and the key industrial product development project.

The municipal People's Committee will keep tabs on market developments, strengthen management towards market stabilisation, supervise price declaration and strictly handle unreasonable price hikes.

Local authorities will devise and update price management scenarios and roadmaps for adjusting some public services, and health and education services in conformity with market developments, ensuring the goal of controlling inflation.

Thanh also said that the city will focus on tapping the domestic market, improving domestic consumption and developing Vietnamese brands, effectively implementing the campaign “Vietnamese people prioritise using Vietnamese products”.

In agriculture, the city will restructure crops with the goal of improving land use efficiency, reducing rice cultivation area, and expanding the area of vegetables, flowers and ornamental plants. It will seek to promote products and brands under the "One Commune - One Product" (OCOP) programme, prioritising regional specialties and handicrafts that see the engagement of crowds of labourers.

Hanoi's gross regional domestic product (GRDP) in the first half expanded by 6% compared to the 5.86% growth in the same period last year, according to the municipal People’s Committee.

In the second quarter of the year, the capital city’s industrial production showed signs of recovery as the number of orders continued increasing.

During January-June period, the index of industrial production (IIP) rose 5%, with processing and manufacturing up 4.1%, and the product consumption index up 13.1%.

The number of tourists to Hanoi increased by 13.7% to 14 million in the reviewed period, including 3.14 million international visitors, a rise of 52.6% over the same period last year.

The city attracted over 1.1 billion USD in foreign direct investment, up 52% year-on-year. However, it still faced some obstacles, including low State budget collection. Although public investment disbursement increased from the previous period, it remained lower than the national average and failed to meet the set requirements.

The number of newly established enterprises as well as their registered capital decreased as compared with the same period last year, while those that dissolved or temporarily suspended operations increased. The development of commercial and social housing and resettlement projects have yet to meet requirements./.

Credit growth soars in June

Credit growth has accelerating since the beginning of June, signaling that the 15% growth target is achievable, if the rate is maintained in the remaining months of this year.

Updates from the General Statistics Office showed that credit growth reached 4.45% as of June 24, while the State Bank of Vietnam's statistics showed that credit growth was at 2.41% as of May, meaning that credit expanded at around 2.04% in the first three weeks of June, equivalent to the growth rate of the first five months of the year.

The State Bank of Vietnam said that credit tended to increase faster in the second half of the year. If the growth rate is maintained, the credit growth target set at 15% for the full year might be within reach.

“The credit usually accelerates in the second half of the year, so the low credit growth rate in the first half is not worrying but consistent with the economy’s recovery. The credit growth was slow in the first months of this year as commercial banks were cautious in lending due to unresolved bad debts,” said Nguyen Duc Do, deputy director of the Institute of Economics and Finance.

Nguyen Chi Quang, director of the Monetary Policy Department under the State Bank of Việt Nam, said that the central bank has asked commercial banks to evaluate and report the ability of credit growth in the second half of this year so that the central bank can make appropriate adjustments in the allocation of credit rooms if necessary.

Commercial banks are unable to achieve the designated credit growth targets, will be put under consideration for next year’s credit room granting, he said.

Banks are optimistic about credit growth this year. At Vietcombank, credit growth rate was reported at 2.1% in mid-June but rose to 4.3% by June 30 and is expected to reach 12% by the end of the year.

At SHB, credit growth rate was at only 2.5% in mid-June but is estimated to be at 5% by the end of the month. The bank expects to achieve a credit growth rate target of 14% this year.

Previously, Deputy Governor of the State Bank of Vietnam Dao Minh Tu asked commercial banks to pay attention to credit quality while providing lending.

Nguyen Kim Hung, deputy chairman of the Vietnam Association of Small and Medium – Sized Enterprises (SMEs), said that lending rates have been kept stable for months and it is time to introduce more fiscal packages to support enterprises.

According to Do, Vietnam was among countries with the highest credit growth rate to GDP ratios in the world. With a GDP growth rate of around 5-6% per year, plus inflation at 4% and credit growth at around 15%, there might be a risk of an asset bubble.

Độ added that the credit growth target for each year should be carefully considered and it is necessary to develop other capital raising channels to reduce the dependence on banking credit./.

Vietnam well-positioned towards cashless society: UK newswire

Vietnam's digital payment ecosystem is undergoing a remarkable transformation, driven by a tech-savvy population, government initiatives, and innovative financial solutions, according to finextra.com, a leading UK newswire and information source for worldwide financial technology.

In its writing posted on July 3, it highlighted one of the most significant trends in Vietnam's digital payment landscape is the rapid growth of e-wallets, with major players like MoMo having gained immense popularity. These e-wallets offer a wide range of services, from bill payments and mobile top-ups to online shopping and even ride-hailing services.

Consumers are drawn to the convenience and security of these digital wallets, which are accessible through mobile apps. As a result, e-wallet transactions have surged, contributing to the decline of cash transactions.

QR code payments have become ubiquitous in the country, allowing users to make payments by simply scanning a QR code with their smartphones. It is widely used in restaurants, retail stores, and even street vendors.

QR codes have made payments more efficient and contactless, especially in the context of the COVID-19 pandemic. Customers appreciate the speed and simplicity of completing transactions with a quick scan.

It held that the Vietnamese Government played a significant role in promoting digital payments. Initiatives like the National Payment Corporation of Vietnam (NAPAS) have been instrumental in standardising payment systems and facilitating interoperability among various payment providers. These efforts aim to reduce the reliance on physical cash and enhance financial inclusion. The government also encourages businesses to offer cashless payment options to customers.

Meanwhile, P2P payment platforms have been in favour among Vietnamese consumers since it helps individuals to easily transfer money to friends, family and even businesses. P2P transfers are used for various purposes, such as splitting bills, sharing expenses, and sending remittances.

According to Finextra, cross-border payment services have become essential amidst the growth of the nation’s international trade. Fintech firms and traditional banks offers solutions to businesses and individuals to send and receive money internationally. These services are not only convenient but also cost-effective, making it easier for Vietnamese businesses to engage in global commerce.

It concluded that Vietnam's digital payment revolution is marked by a shift away from cash transactions toward convenient, secure, and efficient digital payment methods. E-wallets, QR code payments, contactless cards, and innovative fintech solutions have played a pivotal role in reshaping the country's payments landscape./.

Vietnam pushes trade promotion in India, secures major tourism deal

The Vietnamese Consulate General in Mumbai coordinated with the Vietnam Trade Office in India to deploy a series of activities to boost trade promotion in the western Indian state of Maharashtra.

Their efforts included discussions with major Indian conglomerates such as Reliance, Tata Consultancy Services, and Sun Pharma to explore opportunities for economic, commercial and tourism cooperation between the two countries.

A key outcome was facilitating a collaboration between Vietnam Airlines, Vietravel and Sun Pharma to bring nearly 5,000 Sun Pharma employees on a vacation to Vietnam in late August 2024. This initiative not only benefits Sun Pharma and Vietnam's tourism industry but also strengthens economic ties between the two nations.

Sun Pharma is the world's fourth largest pharmaceutical conglomerate with a global revenue of 5.4 billion USD, operating 43 manufacturing facilities and supplying quality medicines to over 100 countries. This collaboration underscored Sun Pharma's confidence in Vietnam's tourism and represents a significant step forward in attracting Indian tourists to visit and explore the Vietnamese market./.

Vietnamese rice export prices hit nearly US$1,000 per tonne

Vietnamese rice export prices have soared considerably in recent times thanks to high demand for import globally.

The average export price of Vietnamese rice to Brunei reached US$959 per tonne in the opening five months of the year, according the General Department of Vietnam Customs.

Along with Brunei, other markets such as the United States, the Netherlands, Ukraine, Iraq, and Turkey also purchased Vietnamese rice at US$868, US$857, US$847, US$836, and US$831 per tonne, respectively.

With the Philippines reducing rice import duties from its current rate of 35% to 15%, Vietnamese rice exports are anticipated to enjoy robust growth ahead with prices remaining at a high level, according to industry insiders.

Statistics show that the Philippines consumed 1.83 million tonnes of rice during the initial five months of the year, accounting for nearly 50% of Vietnam’s total rice exports.

Experts predict that Vietnamese rice exports will remain stable, especially as prices look set to increase until the end of the year if India has not yet lifted the ban on rice exports to stabilise domestic food security.

Despite enjoying numerous advantages, the export of rice in the second half of the year is likely to face hurdles as India moves to lift its ban placed on rice exports.

Furthermore, droughts and salinity occurring in the Mekong Delta provinces will also pose challenges to the rice industry.

Vietnam exported US$4.6 million tonnes worth US$2.9 billion in the first half of the year, up 10.4% in volume and 32% in value compared to the same period last year.

RoK, Vietnam solidify ties to boost bilateral economic links

The Republic of Korea (RoK) media has given extensive coverage to bilateral economic and trade co-operation during the course of Vietnamese Prime Minister Pham Minh Chinh's recent four-day visit to the East Asian nation.

According to information given by news outlets Korea Times, Newsis, and KBS, the RoK-Vietnam Business Forum draw the participation of about 530 government officials, along with representatives from ministries, localities, and businesses of both countries.

The purpose of the forum was to find solutions to expand investment, exchanges, and bolster bilateral economic collaboration following the two countries’ upgrading of their relationship to a comprehensive strategic partnership on the occasion of the 30-year diplomacy anniversary.

RoK Minister of Trade, Industry and Energy Ahn Deok Geun emphasized measures aimed at achieving the bilateral trade target of US$150 billion by 2030 such as expanding the scope of investment and trade to sectors not only including intermediate goods, but also consumer goods, services, and infrastructure.

To build a stable global supply chain network it can be considered as essential to concretize a plan to create synergy by connecting the nation’s core mineral resources such as rare earths with the RoK’s advanced production technology. Minister Geun also mentioned the potential for co-operation in the fields of clean energy and nuclear power.

PM Chinh called on Korean corporations and businesses to intensify their investment in the Vietnamese market and committed to improving various policies and regulations by simplifying administrative procedures in a bid to help companies reduce long-term costs by improving essential infrastructure such as education, transportation, and digital system.

Korea Times affirmed that for the RoK, Vietnam is of increasingly strategic importance as it develops into an important production hub amid escalating trade tensions between the United States and China.

Yonhap news agency, Hankuk Kyongjae, mk.co.kr, and Chosun Ilbo newspaper stated that recently the Vietnamese Government has spared no efforts to attract greater investment in the semiconductor industry. The RoK-Vietnam Business Forum witnessed the determination of political and business leaders from both sides as they work together to solve future challenges for both countries. They therefore pledged to expand investment and trade in areas such as digital transformation, supply chain co-operation, new energy, renewable energy, and semiconductors.        

Currently, the total investment capital of Korean businesses in the nation amounts to US$87 billion. In line with this, as many as 19 major Korean groups and enterprises including SK, POSCO, and Hyosung have signed business agreements with 18 Vietnamese firms and Government agencies in the presence of leaders of Vietnamese ministries and sectors.

Korea business newspaper commented that the forum and the agreements signed serve to highlight the potential for strengthening economic linkages and common growth between both sides.

The results of the forum are expected to pave the way for fresh business opportunities whilst simultaneously promoting stronger economic links between the two countries.

The RoK’s Ministry of Trade, Industry and Energy assessed that the forum established a foundation for economic collaboration efforts between the two countries to be more diversified and enhanced.

The Korean Government will therefore seek to support the economic links through diverse channels such as the joint committee on the implementation of the Vietnam-Korea Free Trade Agreement (VKFTA) aimed at helping Korean firms to intensify their business activities in the Vietnamese market.      

Vietnam increases raw cashewnut imports from Cambodia

Vietnam is increasing raw cashewnut imports from Cambodia, making it the major supplier of the material for re-processing, according to the General Department of Vietnam Customs.

Statistics show Cambodia became the largest cashewnut seller to Vietnam in the first five months of this year, supplying nearly 760,000 tonnes of the product valued at over US$971 million, up 39% in volume and up 29% in value from a year earlier.

Along with Cambodia, Vietnam also imported nearly 450,000 tonnes of raw cashewnuts from other markets such as Ghana, Indonesia, Nigeria, Tanzania, and Ivory Coast.  

Vietnam processes 3.5 - 4 million tonnes of cashew nuts for export by purchasing raw materials to process into kernels. However, processors heavily rely on the purchase of raw materials as up to 90% of the unprocessed products are imported.

Vietnam is currently the largest cashewnut exporter in the world, accounting for nearly 80% of total global output, and it has held the position for 16 years in a row.

It aims to earn US$4 billion from cashewnut exports this year compared to more than US$3.6 billion recorded last year.

HCM City real estate revenue up 6% in H1

Real estate revenue in HCM City reached VNĐ124 trillion (US$4.9 billion) in the first half of the year, up 6.1 per cent year-on-year, according to the HCM City Statistics Office.

The real estate market has shown signs of recovery this year, with 3 per cent growth in the second quarter and 2.5 per cent in the first quarter, after a 6.4 per cent decline last year from 2022.

The market hit its lowest point in the first quarter of 2023 with a negative growth rate of 16.2 per cent.

Lê Hoàng Châu, chairman of the HCM City Real Estate Association (HoREA), said the market continues to face challenges such as an abundance of high-end housing and a shortage of affordable housing, particularly social housing.

Industry analysts remain optimistic about the market’s outlook, expecting benefits from increased foreign direct investment in the real estate sector and revisions to the Land Law.

Foreign direct investment in the property sector was up 70 per cent year-on-year to reach over $1.98 billion as of the end of May.

The influx of foreign capital, accounting for 18 per cent of total FDI, makes the property sector the second most attractive sector after manufacturing.

HCM City’s strategic location and robust infrastructure make it an attractive investment destination for foreigners, particularly its real estate sector, said industry analysts.

Competitive prices in the property market, especially in HCM City, have lured the interest of many foreign investors, they noted.

A report by Cushman & Wakefield has noted a positive outlook for foreign investment in the Vietnamese property sector from 2024 to 2026, driven by low interest rates and various supportive Government policies.

Major investors from countries such as Singapore, Hong Kong, mainland China, Japan, and South Korea are increasingly interested in the high-end and luxury segments in Việt Nam, with Singapore leading the way with nearly $3.25 billion in investments in the first five months, according to the report.

Industry analysts also expect the market to benefit from the revisions to the Land Law to take effect on August 1.

They are expected to increase the supply of social housing by encouraging enterprises to invest in the segment.

They will particularly benefit two main groups: overseas Vietnamese and individuals who are resettled and have received compensation.

It allows overseas Vietnamese to buy houses in Việt Nam and get ownership, which is expected to attract more investment from them.

It also stipulates that resettlement areas must meet conditions related to technical and social infrastructure.

But the property sector has admittedly been facing challenges such as debt repayment pressures, fraud and other financial scandals.

Numerous bond issuers, mostly real estate developers, have missed interest and principle payment deadlines since the end of 2022 following the arrest of Trương Mỹ Lan, chairwoman of Vạn Thịnh Phát, for financial fraud.

This has shaken market confidence.

Despite multiple challenges facing the city, its Gross Regional Domestic Product (GRDP) grew by 6.46 per cent in the first half of the year.

The country’s largest city aims to achieve a yearly growth rate of 7.5-8 per cent. 

Mountainous areas need more foreign investment to thrive

Aside from harnessing domestic resources, it is important to attract foreign investment to optimise the potential and advantages of ethnic minority and mountainous areas, according to experts.

Such 'soft' factors as limited knowledge, skills and experience have impacted foreign investment attraction in ethnic minority and mountainous areas, they said.

Hoàng Văn Xô, director of the Department of International Co-operation at the Government’s Committee for Ethnic Minority Affairs (CEMA), said there are 53 ethnic minority groups with 11.7 million people residing in 52 provinces and cities nationwide, accounting for over 11 per cent of the total population.

Developing ethnic minority areas is a consistent priority policy of the Vietnamese Party and Government, he said.

Xô noted that the biggest asset of ethnic minority communities is the eight million working-age people, so a measure for eliminating poverty has to be promoting human resource training.

Hong Sun, chairman of the Korean Chamber of Commerce in Việt Nam (KOCHAM), said businesses from the Republic of Korea (RoK) have invested in some mountainous provinces such as Cao Bằng, Lai Châu, Điện Biên and Bắc Kạn, but the investment value remains modest.

He perceived that in the investment promotion for ethnic minority and mountainous areas, it is necessary to select projects that suit local conditions. For example, northern midland and highland localities should not call for investment in the semiconductor sector, but hi-tech agriculture.

The distance between urban and mountainous areas in Việt Nam is too big, Hong pointed out, adding that one of the biggest barriers is the incomplete transport infrastructure.

Therefore, CEMA should coordinate with the Ministry of Planning and Investment to mobilise more resources for developing infrastructure and the workforce, the KOCHAM executive suggested.

Echoing the view, Morimoto Yutaka, chairman of the Japanese-invested Accord Biz Co. Ltd, recommended mountainous provinces focus on attracting foreign investment to hi-tech agriculture to make use of local human resources and favourable natural conditions.

To do that, Việt Nam needs to expand the logistics system, infrastructure and, especially, export markets, according to Yutaka.

To continue tapping into mountainous areas’ potential, CEMA’s Department of International Cooperation recently signed a strategic co-operation deal with the Institute of International Investment Studies Company (ISC) to support highland localities to improve foreign investment quality and effectiveness and attract more investment.

Under the deal, the two sides will cooperate in equipping the localities’ cadres with legal knowledge, improving their foreign investment management and promotion skills, organising investment promotion activities and giving advice on international investment co-operation.

Phan Hữu Thắng, chairman of the ISC and the Việt Nam Industrial Park Finance Association, described the agreement as an important step in mobilising international resources and experience to help with socio-economic development in ethnic minority and mountainous areas, improve local lives and enhance the country’s integration into the world. 

MOF proposes exemption on corporate taxes on income from green bond interest and carbon credits

The Ministry of Finance is proposing amendments to the Law on Corporate Income Tax to encourage environmental protection and sustainable development.

These amendments stipulate that firms will be exempt from corporate taxes on income from green bond interest and carbon credits.

The proposal aims to protect the environment and promote sustainable development in line with the global trend of using tax policies to incentivise environmentally friendly practices.

Several countries, including Mexico, India and the United States, have implemented tax policies related to corporate income to support environmental protection and sustainable development.

In the United States, income generated from green bonds issued by local governments is exempt from income tax; in Thailand there are policies to exempt or reduce corporate income tax on income derived from carbon credit transfers.

Carbon credits provide an economic incentive for reducing greenhouse gas emissions by allowing organisations or countries to trade emissions permits. This market-based approach encourages emission reductions in a cost-effective manner and promotes sustainable development.

Việt Nam's Law on Environmental Protection (No. 72/2020/QH14), passed by the National Assembly in 2020 and effective on January 1, 2022, includes regulations on carbon credits and exchange and transfer mechanisms. These regulations provide a legal framework for the implementation and management of carbon credit activities in the country. By setting out supporting policies and mechanisms, the State aims to encourage the development of carbon market and promote environmental protection efforts.

In addition to carbon credits, the Law on Environmental Protection also addresses the issue of green bonds.

The Ministry of Finance (MoF) has assessed the potential impact of tax exemption for interest income from green bonds and green bond transfer income. It is estimated that if successful issuance of green bonds were to occur, with a scale of 0.17- 0.5 per cent of the bond market size, the amount of corporate income tax exempted would be approximately VNĐ100 billion-VNĐ300 billion (between US$4 million-$12 million).

The ministry considers this reduction in State budget revenue to be relatively small, constituting a very small proportion of the total State budget revenue from current corporate income tax.

In addition, it has identified that the current Corporate Income Tax Law exempts tax on income from transferring emission reduction certificates (CERs) of enterprises that are granted such certificates. It has also recognised the existence of voluntary emission reduction certificates (VERs), which serve a similar purpose, but tax on income from the transfer of VERs not exempted.

Therefore, finance officials have suggested the need to amend the regulations in the Law on Corporate Income Tax to encompass income from the tax-free transfer of emission reduction certificates, including both CERs and VERs.

Real estate market to ‘prosper’ from 2025: Batdongsan

The real estate market is in the "exploration" stage, the sentiment index is flat and buyers are waiting for positive signals, according to property listing platform Batdongsan.com.

Nguyễn Quốc Anh, its deputy general director, said research indicated that the market might go through reversal, exploration, consolidation, prosperity, and stability in the next two years and buyers would have different priorities when choosing a property in each stage.

From now through the end of this year it would be in the exploration stage, and buyers’ priorities are meeting actual housing needs, clear legal status for properties and good financial support policies, stable rental incomes, and optimising costs when buying.

During this stage apartments would attract the most buyers and have the highest liquidity of any segment, he said.

He expected the consolidation period to begin in Q1 2025, with buyers still prioritising their own housing needs and good cash flows.

If monetary factors are favourable, transactions involving private houses and townhouses would gradually improve, he said.

The period of prosperity would last from the second to fourth quarter of 2025, with buyers and investors paying more attention to investment and price appreciation, and land and villas finally coming to the party, he said.

Then, in 2026, the market will enter a stable development period, and people will look for investment opportunities again.

Batdongsan.com.vn also carried out a study of consumer sentiment for the second half of 2024, and found the index moving sideways.

Buyers are waiting for positive signals from the market, lower bank lending interest rates and new legal policies to improve things, it found.

Bạch Dương, country manager of Batdongsan.com, said the Government’s decision to advance by five months to August 2024 the date the Law on Real Estate Business and Law on Land and Law on Housing would take effect is a positive signal since it would strengthen the legal framework for real estate and help accelerate the market’s recovery.

They would make land valuation more consistent and realistic, tighten requirements for developers to safeguard the rights of buyers, create favourable conditions for overseas Vietnamese to own property, attracting more investment from abroad, and enhance professionalism and transparency in the brokerage industry, he said.

Lê Bảo Long, strategic director of Batdongsan.com, said real estate is always in demand, and young families, especially newly married couples, would be key buyers in the coming time.

He said a survey found 73 per cent of married couples without kids plan to buy a house next year near amenities such as schools and shops.

He also said the trend of buying on the secondary market is growing due to the low primary market supply and high prices. 

Prices of petrol, other fuels adjusted

The retail sale prices of petrol and other fuels were adjusted up from 3pm on July 4 by the Ministry of Industry and Trade and the Ministry of Finance.

Accordingly, the price of E5RON92 bio-fuel rose by VNĐ447 to VNĐ22,461 (US$0.88) per litre, while that of RON95-III went up by VNĐ542 to VNĐ23,552 per litre.

Meanwhile, diesel 0.05S and kerosene are now sold at VNĐ21,176 a litre and VNĐ21,216 a litre, an increase of VNĐ487 and VNĐ602 respectively.

The price of mazut oil 180CST 3.5S is VNĐ17,534 per kilo, up VNĐ88.

The two ministries decided not to use the petrol price stabilisation fund. 

Central bank works on protecting banking service users

The State Bank of Vietnam (SBV) will research and amend regulations on safety and security in online banking service provision to better protect customers, an SBV official said on Thursday.

At a workshop on solutions to protect bank customers held in Hà Nội, SBV Deputy Governor Phạm Tiến Dũng said the banking industry has made continuous efforts and closely coordinated with relevant ministries and branches in the digital transformation process, with some notable achievements.

“More than 87 per cent of the nation’s adults have payment accounts at banks. Many banks have more than 95 per cent of transactions on digital channels. Non-cash payment has grown strongly, with annual growth rate of payment transactions via mobile and QR code reaching more than 100 per cent per year in the 2017-23 period,” Dũng said.

He said there are regular investments and upgrades in banking technology infrastructure. Currently, the interbank electronic payment system handles an average of VNĐ830 trillion (US$33 billion) per day. Meanwhile, the financial switching and electronic clearing system handles an average of 20-25 million transactions per day.

However, Dũng noted, while digital banking products and services have brought convenience, the banking industry has also faced risks and challenges related to security and safety, from cyber attacks to fraudsters using technology to scam and appropriate people's money, which are becoming more sophisticated.

Dũng said to protect the rights and benefits of customers, the SBV will continue to invest in upgrading payment infrastructure and streamlining the information technology infrastructure of credit institutions and payment intermediaries to ensure bank services to run smoothly and safely and well connected with services of other industries, such as health care.

“We will continue to coordinate with the Ministry of Public Security to effectively implement Project 06, with a focus on exploiting chip-based ID information and e-identification app VNeID accounts, to accurately identify and authenticate customer information,” Dũng said, adding banks will support customers in providing banking products and services in a convenient and safe manner and ensuring the prevention of risks and frauds over online payments.

The SBV also plans to enhance information security and safety in payment and banking activities and coordinate with relevant agencies in preventing, investigating and handling high-tech crimes to protect the legitimate rights and interests of customers.

They are also pressing ahead with financial education and communication programmes, to improve knowledge and skills for the public, especially people in rural and remote areas.

The SBV has recently launched biometric verification, with facial recognition, to finalise online banking transactions of VNĐ10 million ($391) or more.

The policy is aimed to ensure that online payment transactions are only made by the bank account owner, which will help improve security and confidentiality and minimise the risk of frauds and scams in online payment transactions. According to the bank, three days after the change, online banking transactions have basically run smoothly. 

Government issues two options for direct electricity trading

The Government has issued details of the direct power purchase agreement (DPPA) mechanism between renewable energy generators and large customers, with two options being through a private power line and the national grid via EVN.

For the case of trading renewable energy through a private power line, the electricity price will be set under agreement between seller and buyer.

The electricity price for the contracts trading renewable power through the national grid will be accordance of the regulations on electricity prices issued by the Ministry of Industry and Trade.

Large customers are those who use electricity from 500,000 kWh per month, estimated at around 3,000 customers and making up for 30 per cent of the total electricity consumption, according to the July 3 Decree 80/2024/NĐ-CP.

This threshold has been chosen in order to harmonise the benefits between relevant parties, including customers and EVN.

The ministry's statistics show that there are nearly 1,500 customers using over 1 million kWh per month, accounting for 26 per cent of the total electricity consumption.

There are about 7,700 customers using from 200,000 kWh per month, or 36.5 per cent of the total electricity consumption.

A survey conducted by the MoIT at the end of last year found that approximately 20 large companies were interested in purchasing electricity directly, with a total demand of nearly 1,000 MW.

Additionally, 24 renewable energy projects with a capacity of 1,773 MW looked at selling electricity through the DPPA mechanism and 17 projects with a capacity of 2,836 MW were considering becoming participants. 

Opportunities and challenges in upgrading the Vietnamese stock market

The elevation of Việt Nam's stock market from frontier to emerging status brings numerous benefits but with it, also significant challenges.

Ensuring continued stable development, maintaining the upgraded status and avoiding a downgrade were key topics discussed at the “Motivating the Stock Market Upgrade” seminar held in Hà Nộion July 2.

Việt Nam's stock market has become one of the fastest-growing in terms of size and liquidity in the region. However, it is still classified as a frontier market, while most exchange-traded funds (ETFs) pursue stocks in emerging markets.

Nguyễn Ngọc Hiển, Editor-in-Chief of Lao Động Newspaper, said Việt Nam's stock market holds the highest weight in frontier market indices, comprising up to 29 per cent in the MSCI Frontier Markets Index and 38 per cent in the FTSE Russell Frontier Index.

Vũ Chí Dũng, Director of the International Cooperation Department at the State Securities Commission, believes the government's continuous efforts in policy innovation and management have significantly enhanced the attractiveness of Việt Nam's stock market over more than two decades.

“Việt Nam needs to act quickly to be reclassified as an emerging market if it aims to attract more investment from international institutional investors. Việt Nam's stock market is currently on FTSE Russell's watchlist for an upgrade to Secondary Emerging Market status,” Dũng added.

Drawing from South Korea's experience in upgrading its stock market, Đinh Minh Trí, Head of Retail Client Analysis at Mirae Asset Securities (Vietnam), offered several recommendations. The first factor is improving transparency and information disclosure.

Ensuring the disclosure of information in English for large listed companies to attract international investors and making financial processes and corporate governance more transparent. Enhancing market access for foreign investors, such as simplifying registration and account opening procedures, is also essential.

Additionally, extending trading hours and improving the payment and clearing systems are necessary. This requires developing information technology systems towards modern trading to ensure safety, efficiency, and risk management.

Trí said: “Based on South Korea’s experience, Việt Nam can apply comprehensive measures to perfect its stock trading system. Most large securities companies in South Korea have implemented AI and chatbot systems to enhance customer service and support automated trading.

"AI helps analyse data and make market predictions, while chatbots assist customers with common issues and provide information quickly,”

Trần Thị Khánh Hiền, Director of Research at MB Securities, noted that alongside opportunities, listed companies face significant challenges when the market is upgraded.

The market capitalisation of listed Vietnamese companies is still relatively small, so the number of stocks meeting the MSCI Emerging Markets Index criteria is limited. According to the MSCI Frontier Markets Index, Việt Nam has the largest weight at 26 per cent, but only two Vietnamese stocks are in the top 10 by weight.

As the market opens up, external factors will increasingly impact Việt Nam's stock market and listed stocks. Competition with investment opportunities in other markets will also intensify.

Hiền added: “Upgrading the market requires the joint efforts of many parties, not just ministries and sectors, but also market participants. Companies need to professionalise investor relations (IR) activities, ensure consistency in the frequency and quality of information provided, and diversify investor access channels.

"In fact, some international rating agencies still believe that the ability of foreign investors to access information in Việt Nam's market is limited and needs improvement.” 

Enhancing corporate governance to upgrade the stock market

The year 2024 will see great strides made in upgrading the Vietnamese stock market, a conference has been told.

But to achieve this goal, enterprises must fully comply with the responsibilities and obligations of their Board of Directors according to corporate and securities law.

The Government and Ministry of Finance (MoF) are particularly focused on improving corporate governance quality linked with Environmental, Social, and Governance (ESG) standards for listed companies. This is evidenced by practical actions from the Việt Nam Institute of Directors in promoting and implementing corporate governance standards.

At the “Enhancing Corporate Governance Capacity for Listed Companies” conference, Vũ Thị Chân Phương, Chairwoman of the State Securities Commission (SSC), said: “Over 25 years of development, the Vietnamese stock market has become a crucial channel for medium and long-term capital for the economy.”

From just three listed companies when it began in 2000, the stock market has grown, now boasting almost 1,800 with a market capitalisation exceeding VNĐ7,066 trillion, an increase of 19 per cent compared to the end of 2023, equivalent to 69 per cent of GDP.

The average daily trading value on the Hồ Chí Minh Stock Exchange alone is around US$1 billion, and the number of investor accounts has reached more than 7 million, about 7.5 per cent of the population. Many companies have successfully raised capital in the stock market.

In the future, the stock market will continue to develop, aligning with international standards and practices, aiming for an upgrade from a frontier to an emerging market. Therefore, improving corporate governance is becoming increasingly essential.

The process enterprises must address is split into four factors: enhancing transparency and financial reporting, raising governance standards, attracting investment and improving the company's image and sustainable development with social responsibility.

Phương said: “ESG requirements will become more critical as the stock market is upgraded. Companies must focus on environmental, social, and governance issues to meet international standards and the expectations of global investors.”

She said enterprises must fully comply with the responsibilities and obligations of the Board of Directors as per corporate and securities law. Currently, public company governance is still limited, and finding suitable independent Board members is challenging for enterprises.

“With a strong determination to improve corporate governance, attract foreign investment to the stock market, the State Securities Commission will advise the government and the MoF to develop the best legal frameworks, facilitating listed companies and always accompanying enterprises in corporate governance issues, ready to address any concerns,” Phương added. 

Sanguine economic growth prospects ahead due to export recovery

The rebound in consumption demand in many countries globally indicates positive signs ahead for Vietnamese exports, contributing to accelerating Vietnamese economic growth at about 6% this year, according to insiders.

Bui Huy Son, director of the Department of Planning and Finance under the Ministry of Industry and Trade (MoIT), revealed that the country raked in US$188.97 from exports in the first half of the year, up 13.8% year on year.

Processing and manufacturing took the lead, bringing in US$159.92 billion, or 84.63% of total export turnover and up 13.8% against the same period last year.

Agricultural products continue to represent a bright spot in terms of export growth, with turnover soaring by 18.8% to US$18.21 billion in the reviewed period. 

Meanwhile, the fruit and vegetable sector grossed US$3.4 billion, up 28% year on year. Among them, durian, dragon fruit, bananas, and longans all significantly contributed to the sector’s export growth.

According to the MoIT, Vietnam’s total trade turnover was estimated to be at US$369.59 billion, up 16.03% year on year, resulting in US$8.4 billion in trade surplus.

With regard to factors that have caused exports to grow positively, MoIT Deputy Minister Phan Thi Thang pointed out that the signing of numerous free trade agreements (FTA) with more than 60 markets worldwide has served to open up a wealth of opportunities for local businesses as they seek to promote exports and take full advantage of tariff incentives.

Currently, the MoIT has put in place drastic solutions to facilitate production and develop stable supply sources for export and the domestic market alongside ensuring energy security.

According to the World Bank’s statistics, the Vietnamese export value of goods and services is equivalent to 94% of GDP, ranking 14th globally.

Of the figure, the export of commodities accounts for up to 82% of GDP, while service exports, mainly tourism and transportation services, make up 12% of GDP.

Nguyen Duc Hung Linh, directory of Think Future Consultancy, analysed that Vietnam secured GDP growth of over 7% in 2018-2019, the highest level recorded in 10 years, and its exports also surged by 13.2% and 8.4%, respectively.

In 2023, when exports fell by 4.6%, GDP growth reached only 5%. However, the export sector has recorded plenty of positive signs.

Experts outlined that improved purchasing power in developed countries has had a clear impact on the Vietnamese economy.

Vietnamese exports during the five-month period increased by 15.2%, with exports to the US, the EU, the Republic of Korea, and Japan all rebounding by 22.3%, 16.1%, 10.9%, and 3.2% respectively.

With positive signs seen in developed markets, there are bright prospects ahead for Vietnamese exports in the second half of the year and moving into 2025.

However, apart from sanguine signs, economists predicted that import and export activities will continue to depend on a number of markets, type of products, and the foreign-invested sector moving forward.  

Moreover, several key export products to major markets such as the EU and the US continue to face pressure from trade defence investigations and technical barriers related to the environment, sustainable development, and green transformation.

Vietnam's exports surge in first half of 2024, driving trade surplus

Vietnam’s goods export turnover was estimated at 190.08 billion USD in the first half of 2024, a year on year rise of 14.5% and pushing up the country's trade surplus to 11.63 billion USD, reported the General Statistics Office (GSO) on June 29.

The growth was driven by both domestic and foreign-invested sectors. The domestic economic sector saw an export rise 20.6% to 53.39 billion USD USD, accounting for 28.1% of the total.

Meanwhile, the foreign-invested sector, including crude oil, posted a 12.3% increase to 136.69 billion USD, making up the remaining 71.9%.

Processed industrial goods dominated exports, generating an estimated turnover of 166.79 billion USD.

Imports also grew steadily, rising 17% year-on-year to 178.45 billion USD. The domestic economic sector contributed 65.74 billion USD to import turnover, reflecting a 22.3% increase. The foreign-invested sector imported 112.71 billion USD worth of goods, up 14.1% compared to the same period last year.

Raw materials for production were the leading import category, accounting for a significant 94% share with a value of 167.73 billion USD.

The US remained Vietnam's largest export market, with an estimated turnover of 54.3 billion USD. China retained its position as Vietnam's top import market, with an estimated value of 67 billion USD./.

Demand for capital to rise amid debt repayment pressure

Corporate demand for funds is expected to increase in the second half of the year, while concerns persist regarding debt repayment pressures, analysts said.

According to a report by credit rating agency FiinRatings, the industrial production index saw 6.8 per cent growth in the first five months of 2024, with manufacturing expanding by 7.3 per cent. 

In addition, Việt Nam’s exports grew by 13.8 per cent year-on-year in the first half due to recovering demand in key markets, leading to an uptick in imports of raw materials.

The positive trends suggest that businesses now have a stronger capacity to absorb capital, prompting them to explore various financing options such as loans and bond issuances. 

Moreover, the resolution of legal obstacles in the real estate sector is expected to drive credit growth in the sector.

In response to the expected credit expansion, banks have been issuing bonds to raise medium- and long-term funds. 

In the corporate bond market, there were 26 bond issuances last month totaling VNĐ23.2 trillion (US$911 million), with credit institutions being the primary issuers. 

Since the beginning of 2024, total corporate bond issuance has reached VNĐ36,088 trillion, with public and private issuances accounting for VNĐ8.9 trillion and VNĐ27.2 trillion, respectively.

Despite the positive developments, the pressure of corporate bonds maturing in 2024 remains significant, especially in the real estate and renewable energy sectors. 

Almost all bond issuers, mostly real estate developers, have announced late payment of principal and interest worth trillions of Vietnamese đồng.

Experts said the biggest concern of investors today when buying corporate bonds is ensuring the safety of their capital.

The violations of Tân Hoàng Minh Group and Vạn Thịnh Phát in the market, along with a number of real estate companies failing to pay principal and interest, have made investors cautious.

The problem is no longer about yields. Even if bond yields are raised, investors are still cautious. This is a common psychology that holds back transactions in the bond market, analysts said.

Outstanding corporate bonds were worth VNĐ1 quadrillion at the end of last year, with a total of VNĐ240 trillion of maturing bonds this year.

Trần Dục Thức, a professor at HCM City University, has warned of a spike in bad debt levels due to firms facing challenges in selling assets to service their debt or bond obligations.

The Government has taken steps to address these challenges, with the central bank allowing lenders to reschedule debt repayment for certain sectors for an additional six months. 

The move aims to ease financial pressure on companies and support economic growth.

As of mid-June, credit growth has only increased by 3.79 per cent compared to the previous year-end. 

Việt Nam has set a credit growth target of 5-6 per cent for the first half of the year and 15-16 per cent for the entire year. 

Credit institutions are encouraged to prioritise lending to production, business, priority sectors, and key economic growth drivers. 

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