The Vietnam Maritime Administration (Vinamarine) has called for efforts to minimise impacts of skyrocketing sea freight costs on imports and exports.

Vinamarine’s statistics show that global container shipping fees have increased by 12%, while costs on routes from Asia to Europe have risen by 11-14%.

International container shipping rates have increased by more than 70% over the same period last year and by more than 110% compared to the time before the COVID-19 pandemic.

There are fears that the lack of empty containers, disruptions caused by Red Sea conflicts and rising transport demands could push up sea freight rates to the records set during the COVID-19 pandemic.

Rates tend to increase rapidly and even change within a day, according to Pham Quoc Long, President of the Vietnam Ship Agents, Brokers and Maritime Services Providers Association.

Previously, shipping lines normally quoted container freight rates for a period of 15-30 days but now they only quote for a week.

Current rates are double but are still five times lower than during the COVID-19 pandemic.

Long said that the biggest impact was on small businesses that sign short-term charter contracts, but since most enterprises in Vietnam were small or medium sized, they were bearing the brunt of price increases. Vietnam’s charterers should join together to gather goods so that they could have better positions in negotiation with carriers, he said.

Most recently the Ministry of Transport asked Vinamarine to work with port companies, associations and shipping lines to figure out problems and offer possible solutions.

Vinamarine has asked supervision to be enhanced on the collection of port services charges and surcharges in addition to container shipping fees.

Efforts also need to be enhanced to prevent congestion at ports, ensure the supply of empty containers and speed up the release of goods.

Vinamarine also urged enterprises to increase cooperation to develop production and transportation plans together as base to negotiate long-term contracts with carriers so that the impacts from fluctuating freight rates can be mitigated./.

Policy on rescheduling debt repayment period extended

The State Bank of Vietnam (SBV) has decided to allow commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors for an additional six months, to support struggling businesses.

At a recent conference held in Hanoi, the SBV said the decision would hold until the end of the year, rather than as previously agreed, expiring at the end of this month.

The extension is expected to reduce pressure on companies which are struggling to service their debts and support economic recovery under the current challenging economic situation.

An additional six months is welcomed by most businesses, as well as the banking sector, both of whom were concerned over their ability to meet the payment deadline of June 30.

The change (Circular 02/2023/TT-NHNN) was made as reports show while existing bad debts have not been resolved, additional new bad debts were expected to surge with the deadline on certain sectors expiring at the end of this month.

Dr Tran Duc Thuc from Ho Chi Minh City University warned that provisions for risky debts were still increasing and in spite of support, banks' bad debts were still rising.

According to Thuc, bad debt will increase in 2024 when corporate bonds come to maturity. The sale of assets is also difficult, so firms do not have money to service debt or to pay bonds. If banks are not allowed to extend the payment deadline of existing debts, the debts will be transferred to an even more poorly functioning debt group.

At the conference, the SBV’s Governor Nguyen Thi Hong said as of June 14 this year, credit increased by 3.79% against the end of last year. According to the Government’s targets, credit growth by the end of the second quarter of 2024 is set to reach 5-6% and 15-16% for the whole year.

According to the Governor, credit growth still has to control risks, ensure the safety of the banking system and focus on economic growth drivers, including those meeting the new trends such as green credit.

The SBV said it would proactively manage credit growth to contribute to controlling inflation, stabilising the macroeconomy and supporting economic growth.

Credit institutions must promote credit safely, effectively, accurately and promptly meet the capital needs of the economy, the SBV said, adding the institutions must direct lending to production, business and priority sectors and key economic growth drivers./.

PM orders enhanced price management measures

Prime Minister Pham Minh Chinh has asked price management to be enhanced in the coming time, under an official dispatch recently sent to ministers, heads of ministerial-level agencies, and the chairpersons of the Peoples’ Committees of the provinces and centrally-run cities.

Ministries and sectors need to keep a close watch on the market developments, and roll out measures to ensure domestic supply-demand balance and stabilise prices, given the pressure from the implementation of the market roadmap for State-managed products which were delayed over the past time, rising costs of imported materials and sea shipping, and wage reform.

Competent sides must do the same for the strategic goods in the global market as well as regional and international situations so as to give timely warnings of the risks that may affect domestic prices and to propose rational, flexible and effective solutions and scenarios to relevant administrations.to

They are urged to ensure smooth supply, circulation and distribution of products and services, particularly petrol and strategic goods with a possibility of being impacted by the global supply chain disruption, conflicts, and geopolitical tensions.

Besides, the stakeholders are ordered to focus resources on the building and completion of an institution to guide the implementation of the Law on Price adopted in 2023, creating a full legal framework for the price management and administration work.

The Ministries of Industry and Trade (MoIT), Health, Education and Training, and Labour-Invalids and Social Affairs (MoLISA) are responsible for reviewing, reporting and proposing a specific roadmap for price adjustments in their authority, while joining hands with the Ministry of Finance (MoF), the General Statistics Office (GSO), and other competent agencies to evaluate impact on the consumer price index and specific goals and scenarios to curb the inflation, and report to the Prime Minister before June 30.

The MoF is requested to work with the Ministry of Planning and Investment, the State Bank of Vietnam, the GSO, and other competent agencies and localities to step up price forecast, update price management scenarios in a detailed, specific, and timely fashion in the remaining months of the year so as to propose rational measures to keep inflation at 4-4.5% this year to the Government and the Prime Minister.

It is asked to join hands with relevant agencies to harmoniously and effectively carry out solutions to ensure petrol supply for the domestic market and carry out inspection on the application of the electronic invoices for petrol products.

Regarding food, building materials and air transport services, competent ministries must closely watch the market development to stablise prices and assure supply-demand.

With other important and essential goods, ministries, sectors, and localities must keep a close watch on the supply-demand balance and market developments to have rational administration measures.

The Ministry of Information and Communications must coordinate with competent sides to enhance communications work on price listing and the Government’s price management work.

Deputy Prime Minister Le Minh Khai is responsible for monitoring and directing relevant ministries, agencies, and localities to realise the dispatch./.

Vietnam, Cambodia look forward to 20 billion USD trade

Trade has been a bright spot in the Vietnam-Cambodia relationship, experiencing impressive growth over the past more than a decade and expected to reach 20 billion USD.

Cambodia serves as a source of many raw materials for Vietnamese industry, particularly rubber. It is also a major consumer of Vietnamese products like iron and steel, construction materials, processed food and consumer goods.

Data from the Ministry of Industry and Trade's Asia-Africa Market Department revealed a strong upward trend. Two-way trade grew by an average of 18.5% annually between 2010 and 2015, and 17% per year between 2016 and 2020, reaching 5.31 billion USD in 2020 from 2.92 billion USD in 2016.

The year 2022 saw a significant jump of 11% to 10.57 billion USD in trade value. The positive momentum has carried into 2024, with the first five months recording a trade value of 4.6 billion USD, reflecting a 13.4% increase.

Vietnam's exports to Cambodia during the first half of 2024 were estimated at 2.5 billion USD, mainly consisting of iron and steel, apparel, and petrol and oil. However, this represented a 1.1% decrease compared to the same period last year.

Meanwhile, Vietnam's imports from Cambodia in the period surged by 38.4% to an estimated 2.9 billion USD, driven by cashew nut, rubber, fruits and vegetables.

Vietnamese Ambassador to Cambodia Nguyen Huy Tang said in 2024 and beyond, the two countries will continue to coordinate to realise existing agreements and memoranda of understanding, including the border trade and the 2023-2024 bilateral trade promotion agreements.

Trade experts believed that fostering a favourable and stable business environment is crucial to facilitate exports. They also advocated for increasing investment in research and development to enhance the quality and competitiveness of Vietnamese goods, and pursuing free trade agreements and economic accords with Cambodia as well.

Vietnamese businesses are encouraged to focus on producing high-quality and competitively priced products and services to attract Cambodian consumers. Building a broad and stable distribution network in Cambodia is also seen as a key step toward further success./.

Vietnam’s Q2 GDP growth to moderate amid higher inflation: Standard Chartered

Vietnam’s GDP growth in the second quarter of the year is forecast to moderate to still-strong 5.3% from 5.7% in the first quarter, according to the Standard Chartered Bank’s recent macro-economic updates about Vietnam.

vietnam s q2 gdp growth to moderate amid higher inflation standard chartered picture 1

Standard Chartered economists noted that retail sales and export growth in June are expected to ease to 8.2% and 14.2% compared to 9.5% and 15.8% in May, respectively, while electronics exports are likely to continue their year-to-date improvement.

Meanwhile, imports and industrial production in June are likely to grow by 26.0% and 5.2% compared to 29.9% and 8.9%, respectively, recorded in May.

Inflation in June may rise to 4.5% from 4.4% in May, thereby marking a third straight month when it has stayed above 4%. Education, housing and construction materials, health care, and food have all contributed to driving inflation recently, and this trend is likely to continue over the coming months.

“Despite the likely slowdown in the second quarter, we think Vietnam’s recovery remains intact. However, economic challenges could persist in the third quarter amid rising price pressures, foreign exchange weakness and soft global demand,” said Tim Leelahaphan, economist for Thailand and Vietnam of Standard Chartered Bank.

The bank anticipates that the State Bank of Vietnam (SBV) will move to hike the refinancing rate by 50 basic points ahead in the fourth quarter of the year in response to rising inflation. Foreign exchange weakness supports the financial institution’s call for a hike in the fourth quarter of the year, or possibly earlier. According to experts, the US Federal of Reserve moves will be key to the SBV’s policy decisions.

Central localities team up to promote tourism in Taiwan

Three localities in central Vietnam – Da Nang, Quang Nam and Thua Thien-Hue – have co-hosted a programme themed "Amazing Central Vietnam Heritage" to introduce their tourism potential in Taipei of Taiwan (China).

The June 23 event attracted the participation of more than 120 representatives from numerous airlines, travel agencies, and news agencies in Taipei.

Representatives of the three Vietnamese localities introduced a range of typical tourism products, including resort tourism, cultural tourism, MICE (meetings, incentives, conferences, and events), golf tourism, and wedding tourism to local partners and tourism firms.

A business-to-business (B2B) matching session was also held to help businesses from the three localities to popularize their various tourism products and services.

Vu Tien Dung, head of the Vietnam Economic and Cultural Office in Taipei, said Vietnam welcomed nearly 530,000 visitors from Taiwan in the opening five months of this year, representing an increase of 110.1% year on year.

Most notably, about 45% of the visitors headed to popular tourist destinations in the central region such as Hue, Hoi An, and Da Nang.

According to the Da Nang Department of Tourism, the number of Taiwanese visitors to Da Nang ranked second among the central city’s top 10 international tourism markets throughout the reviewed period.

Vietnam sees robust growth and abundant opportunities await

Vietnam is expected to see robust growth in the next 5 -10 years, opening more investment opportunities for foreign investors, including ones from Singapore, in all sectors, said insiders.

The NTU Alumni Regional Conference 2024, an annual event organised by Singapore-based Nanyang Technological University, was held in Hanoi on June 22.

The event brought together distinguished speakers who are renowned leaders in business, public service and academia from Vietnam, Singapore and other ASEAN countries. This year’s conference centered around the theme "Economic Growth, AI and Innovation.”

Attending the event, Singapore Ambassador to Vietnam Jaya Ratman highlighted the strong collaboration between the two countries across all sectors.

“We cooperate across almost every area, including trade, defence, security, culture, food and politics and of course have strong people-to-people relationships, so we are well represented here,” he said.

“There is so much more we can do together. As both countries have progressed over the past few decades, our needs and aspirations have evolved. Hence, our preoccupation in recent years with deepening and widening the scope of cooperation in the digital and green arenas.”

At the conference, speakers were all positive about the growth potential of Vietnam. Nguyen Duc Hung Linh, co-founder and chief advisor of Think Future Consultancy, said that Vietnam is going to experience strong development over the next 5 - 10 years as it has established itself as a major manufacturing hub, particularly for electronics.

“Samsung, which accounts for nearly 25% of Vietnam’s exports, continues to expand its operations, while the shift of manufacturing bases from China to Vietnam due to trade tensions further bolsters this sector,” Linh said.

The participation of Vietnam in multiple free trade agreements (FTAs) is also a significant growth driver, as these agreements reduce tariffs and open new markets for Vietnamese goods, he added.

“The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) are expected to boost Vietnam’s GDP by 1.32% and 4.9% by 2030, respectively. The European Union-Vietnam Free Trade Agreement (EVFTA) is projected to increase the country’s exports to the world’s largest trading bloc by 42.7% by 2025.”

Sharing the same thought, Pham Quoc Anh, CEO of Pacifico Energy Vietnam, said that Vietnam has a good foundation for growing businesses, such as a young population, the willingness to accept new ideas and a wide spread of the Internet.

Vietnam’s young population is a significant asset, with a median age of around 32 years and a labour force participation rate of 77%. A World Bank study suggests that Vietnam’s demographic transition could add 1.5% to annual GDP growth over the next decade.

These are also advantages for luring foreign investors into Vietnam  in the future, Anh said, adding that green energy, manufacturing and logistics are industries attracting more interest as Vietnam is targeting the green growth.

Linh from Think Future Consultancy said that huge opportunities are also seen in the tourism industry.
"The Government’s tourism strategy aims to make tourism a spearhead economic sector by 2030, contributing 12-14% of GDP. Efforts to develop sustainable tourism and diversify offerings will likely boost this sector."

Meanwhile, Chu Viet Cuong, Board Director of Vietjet Air, believed that the room in Vietnam’s aviation industry is still very large and investors can find opportunities through joint ventures.

However, he also pointed out some weaknesses that the country needs to improve on quickly. “We are no longer in the era of cheap labour costs and large land funds. Now we need more skilled workers for the new industries. On the other hand, we also need to create a clear and transparent environment for enterprises,” he said.

Ninh Thuận Province wants businesses to embrace e-commerce

Ninh Thuận Province is implementing solutions to promote e-commerce in production facilities, businesses and communities to modernise the distribution system and expand consumption.

E-commerce is becoming an inevitable trend in modern business, attracting a large number of businesses and consumers, as it helps save time, reduce transaction and promotion costs, find partners, and generally improve competitiveness.

More and more businesses in Ninh Thuận are realising its advantages and tying up with e-commerce platforms such as Sendo, Lazada, Tiki, and Shopee and social media platforms to promote their products.

These platforms are becoming effective sales channels for typical local products such as grape, apple, aloe vera, fish sauce, dried seafoods, asparagus, purple onion, garlic, bird’s nest, garlic, seaweed jam, and dried meats.

Trịnh Nguyễn Đoàn, manager of Quang Minh, a fish sauce production facility in Thuận Nam District, said his plant makes three products that have been recognised by Ninh Thuận Province as three-star One Commune - One Product (OCOP) items.

The company is now selling on Ninh Thuận's e-commerce platform and others such as Lazada and Shopee, he said.

According to the Province Department of Industry and Trade, to date, more than 90 businesses are on the province's e-commerce platform (sanphamninhthuan.vn) with 350 products.

They include all of the province's three-star OCOP products.

Local banks are also actively promoting modern solutions such as Internet, mobile and digital banking, QR code payments and cards.

With the goal of becoming a pioneer in e-commerce applications, the province has identified four key issues to develop its digital economy: non-cash payments, economic digitisation, digital management and digital data.

The province aims to have the digital economy accounting for about 12 per cent of its economy by this year, 30 per cent of small and medium-sized enterprises using digital platforms, all businesses using electronic invoices, e-commerce accounting for over 7 per cent of retail sales, and having all OCOP products online.

Trần Quốc Sanh, deputy director of the province Department of Industry and Trade, said e-commerce helped businesses access new distribution methods, improve their competitiveness by reducing costs and expand their markets.

To promote digitisation, Ninh Thuận would coordinate with banks and credit institutions to continue promotion of digital payment accounts and e-wallets.

It would also propagate and encourage stores, supermarkets, hospitals, and schools to accept non-cash payments.

The department would coordinate with the Department of E-Commerce and Digital Economy and the Việt Nam E-Commerce Association to link up local businesses with e-commerce platforms.

With these solutions, the province hopes to have 55 per cent of its population shopping online by 2025.

Policy on rescheduling debt repayment period extended

The State Bank of Việt Nam (SBV) has decided to allow commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors for an additional six months, to support struggling businesses.

At a recent conference held in Hà Nội, the SBV said the decision would hold until the end of the year, rather than as previously agreed, expiring at the end of this month.

The extension is expected to reduce pressure on companies which are struggling to service their debts and support economic recovery under the current challenging economic situation.

An additional six months is welcomed by most businesses, as well as the banking sector, both of whom were concerned over their ability to meet the payment deadline of June 30.

The change (Circular 02/2023/TT-NHNN) was made as reports show while existing bad debts have not been resolved, additional new bad debts were expected to surge with the deadline on certain sectors expiring at the end of this month.

Dr Trần Dục Thức from HCM City University warned that provisions for risky debts were still increasing and in spite of support, banks' bad debts were still rising.

According to Thức, bad debt will increase in 2024 when corporate bonds come to maturity. The sale of assets is also difficult, so firms do not have money to service debt or to pay bonds. If banks are not allowed to extend the payment deadline of existing debts, the debts will be transferred to an even more poorly functioning debt group.

At the conference, SBV’s Governor Nguyễn Thị Hồng said as of June 14 this year, credit increased by 3.79 per cent against the end of last year. According to the Government’s targets, credit growth by the end of the second quarter of 2024 is set to reach 5-6 per cent and 15-16 per cent for the whole year.

According to the Governor, credit growth still has to control risks, ensure the safety of the banking system and focus on economic growth drivers, including those meeting the new trends such as green credit.

The SBV said it would proactively manage credit growth to contribute to controlling inflation, stabilising the macroeconomy and supporting economic growth.

Credit institutions must promote credit safely, effectively, accurately and promptly meet the capital needs of the economy, the SBV said, adding the institutions must direct lending to production, business and priority sectors and key economic growth drivers. 

Stock market awaits support factors for breakthrough

The stock market traded in a sideways trend last week, with continuous fluctuations testing investors' patience as expectations for a market breakout to reclaim the 1,300-point peak did not materialise.

Additionally, trading volume was below the 20-day average, indicating a cautious sentiment among investors.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,282.02 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) ended at 244.36 points.

Both benchmark indices recorded a slight weekly increase, with the VN-Index and HNX-Index each rising by 0.16 per cent.

Liquidity on HoSE saw a slight drop, with the market's trading value reaching VNĐ23.4 trillion per session (US$919 million), reflecting a marginal 4.4 per cent decrease from the previous week.

Foreign investors continued to sell heavily, with net sales of around VNĐ1 trillion per session from June 17-21. Blue-chip stocks were the main focus, particularly FPT shares, which accounted for one-fourth of the net sales. On HoSE, foreign investors sold off stocks for five consecutive sessions, with a total net sale of 139.8 million shares worth VNĐ4.9 trillion, increasing by 1.64 per cent in volume but decreasing by 10.1 per cent in value compared to the previous week.

Nguyễn Khắc Thành, an analyst at Saigon-Hanoi Securities (SHS), observed positive signals in the market, noting that the VN-Index frequently tested the strong support level around 1,270 points and subsequently rebounded to the 1,280-point area. However, liquidity decreased on both exchanges compared to the previous week, reflecting investor caution during the expiration week of derivative contracts and ETF portfolio restructuring.

After a week under adjustment pressure, the market experienced strong volatility around the 1,300-point resistance level, corresponding to the upper boundary of the mid-term trend line. Thành noted the market traded within a narrow range of 1,270-1,285 points for five sessions. SHS data indicate that the 1,285-point level is the highest since September 2022 and May 2024.

The VN-Index closed the week above the 20-day average level of around 1,280 points, with highly differentiated trading activities and reduced liquidity. Thành expects the VN-Index to continue accumulating within the 1,250-1,300-point range, with a balance around 1,280 points. The current movement suggests an expectation for the VN-Index to surpass the 1,285-point level, aiming to return to the 1,295-point resistance area. In a less optimistic scenario, the VN-Index might trade between 1,250 and 1,280 points.

The Vietcombank Securities (VCBS) analysis team highlighted that gold prices had surged to a two-week high due to signs of economic weakening in the US. Specifically, global gold prices rose sharply on June 20 after data indicated a slowdown in the US economy, reinforcing expectations that the Federal Reserve (FED) might begin cutting interest rates in September. Analysts noted that bullish speculators have regained dominance in the gold market, targeting prices above $2,400 per oz. Meanwhile, major central banks remain cautious on interest rates.

Domestically, VCBS analysts observed that the VN-Index closed the week with a slight decline, reflecting cautious sentiment in the 1,270-1,290 points range. Technically, indicators remain unclear, suggesting the market needs more time to find a balance point. However, significant short-term volatility risks are not a major concern. 

Electricity consumption reaches new record
 
Daily electricity consumption in Vietnam has reached a new record amid the intense hot weather.

According to data from the National Load Dispatch Centre, the country’s electricity consumption climbed to 1.025 billion kWh on June 14, breaking the previous record of 1.001.9 billion kWh set on May 28.

The figure would continue rising if heat waves persist in the coming days, the centre said.

To ensure electricity, the Vietnam Electricity Group has boosted electricity imports and accelerated power projects as well as encouraged customers to use electricity efficiently and economically.

In the first five months of the year, the total system's electricity production reached 124.25 billion kWh, a rise of 12.2 percent on-year. Specifically, electricity consumption for residential use increased by 18.08 percent, while the rate is 18 percent for commercial and service sectors and 12.15 percent for industrial and manufacturing sectors.

Today, June 23, the northern region of Vietnam has been forecasted to see rains which would help the temperature to fall to 35 degrees centigrade.

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