From January 1 to March 10, the total amount of imports and exports through the gate reached 192,451 tonnes, marking a year-on-year decrease of 22.6%.

However, the total turnover of goods through it reached 531.58 million USD, a year-on-year increase of 30.46%. with export turnover reaching 325 million USD. A total of 466 businesses carried out trade procedures at the border gate, an increase of 139 over the same period last year.

According to the border gate management board, in the period under review, the total number of entries and exits through Bac Luan Bridge I border gate neared 1.27 million, an increase of 2,755.6% over the same period last year. Of the figure, nearly 634,170 entries were recorded, an increase of 2,905% over the same period in 2023; and more than 633, 600 exits were made, an increase of 2,619%.

At the Bac Luan Bridge II border gate, the total number of entries and exits reached 22,100, with 10,327 entries and 11,773 exits. The border gate was originally only for the trade of goods, but from December 11, 2023, immigration activities were allowed.

Ngoc said that the number of tourists has increased sharply since the 2024 Lunar New Year holiday. Especially since the beginning of this month after the meeting between officials from China’s Guangxi province and Vietnam’s Lang Son, Quang Ninh, Cao Bang, and Ha Giang provinces, trade activities at Mong Cai International Border Gate have been busier in line with a high-level agreement between the two countries.

She said this signals a return of international tourists, mainly Chinese, to Quang Ninh, and noted that immigration activities through the border gate are back to the level prior to the outbreak of the COVID-19 pandemic in 2021.

Gold drops as traders cash in earlier gains

Domestic gold prices reported a minor gain this morning as global prices picked up as investors hope that the US Federal Reserve will likely announce interest rate cuts in June.

Thursday’s morning trading session saw prices for SJC gold bars increase to VNĐ78,9-81 million (US$3,197-3,280) while gold rings increase to VNĐ67,93-69,43 million ($2,756-2,814), gaining VNĐ400,000 to VNĐ900,000 per tael compared to yesterday when prices were reported to experience a sharp drop.

Experts said it could be attributed to gold traders cashing in their earlier gains on gold bars and rings with most gold shops reporting a significant amount of gold sold across all trading systems in the last 24 hours. 

Petrol prices decrease slightly in latest adjustment

Petrol prices decreased slight from 3 pm on March 14, following the latest adjustment by the Ministry of Industry and Trade, and the Ministry of Finance.

Specifically, the retail price of E5RON92 bio-fuel was cut by 22 VND to 22,490 VND (0.91 USD) per litre, while that of RON95-III fell by 14 VND to 23,543 VND per litre

Meanwhile, the prices of diesel and kerosene rose by 78 VND and 97 VND to 20,549 VND and 20,706 VND per litre, respectively.

Mazut is now sold at 16,432 VND per kg, 299 VND higher than the previous adjustment.

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

US initiates safeguard investigation into fine denier polyester staple fiber

The United States International Trade Commission (USITC) has recently initiated a global safeguard investigation into fine denier polyester staple fiber imported into the US from many countries, including Vietnam, according to the Trade Remedies Authority of Vietnam (TRAV).      

The case was initiated by the USITC on February 28 following a petition filed by US manufacturers of fine denier polyester staple fibers, including Fiber Industries LLC d/b/a Darling Fibers, Nan Ya Plastics Corp, America, and Sun Fiber LLC.

These producers alleged that the import of fine denier polyester staple fiber coded HS 5503.20.0025 has increased sharply compared to domestic production and consumption, causing serious injury and having a negative impact on the domestic industry.

Relevant parties have 21 days from the date of publication of this notice in the Federal Register to join the investigation and receive information regarding the case.

If relevant parties do not register for the investigation, then they may submit a written statement of information pertinent to the consideration of injury on or before June 11 and pertinent to the consideration of remedy on or before July 29.

The USITC plans to make its injury determination by July 9 and will report to the President for consideration within 180 days after the date on which the petition was filed, or by August 26.

According to USITC’s statistics, Vietnam exported approximately US$5.9 million worth of the products to the US between 2021-2023, ranking eighth among global exporters and accounting for 3% of the US’ total import value of the products.

Earlier in 2017, products from the Republic of Korea, India, China, Taiwan (China), and Vietnam were all subject to an anti-dumping investigation by the US. Later, Vietnam was excluded from the scope of investigation at the request of the US producers.

At present, the 2017 decision remains in effect, with the exception of Vietnam.

Limit set on interest rates of loans for social housing

The Ministry of Construction (MOC) is drafting a regulation which stipulates the interest rate of loans for social housing cannot exceed 50 per cent of the average lending interest rate of commercial banks in the same period.

This regulation is among the proposed provisions for public feedback in the MOC's draft Decree on social housing development and management, attracting attention from the public.

Passed by the National Assembly in November 2023, the Housing Law has 13 chapters, including one chapter (Chapter VI) regulating social housing policies. The Prime Minister has assigned the Ministry of Construction to preside over and coordinate with ministries, branches and localities to develop a draft Decree regulating social housing development and management.

Based on the programmes and plans for social housing development in each period approved by competent authorities, the State Budget will provide interest rate compensation to credit institutions designated by the State to lend to subjects participating in investment in social housing construction and provide preferential loans to beneficiaries of social housing support policies.

In addition, the Government will also use ODA loans and foreign concessional loans to re-lend to designated credit institutions for commune housing loans according to regulations.

The State's preferential loan support will be through the Bank for Social Policies or credit institutions designated by the State to purchase, lease-purchase social housing, housing for the People's Armed forces or self-build or renovate and repair houses (Clause 5, Article 77), or borrow preferential loans through the Bank for Social Policies to develop social housing (Clause 4, Article 117).

Preferential loan capital through the Bank for Social Policies will be based on the annual plan approved by competent authorities. The State Budget will provide 100 per cent of the capital for the Bank for Social Policies to carry out lending for beneficiaries according to regulations.

Based on the annual plan approved by competent authorities, the State Budget will allocate 50 per cent of the capital. The Bank for Social Policies meets 50 per cent of capital from borrowers' savings deposits and mobilised capital. The State budget will compensate the difference in interest rates and management fees for the Bank for Social Policies according to regulations to lend to specified subjects.

According to Cấn Văn Lực, chief economist of BIDV Bank, the Government needs to set up a social housing development fund to have sustainable and truly preferential interest rates, more suitable to the needs of home buyers and social housing developers and businesses renovating old apartments.

“Loan interest rates from social housing development funds are normally half the average commercial loan interest rate on the market, which is appropriate. This fund should be mobilised from many different resources and budget capital will act as bait capital, which some countries such as Korea and Singapore have done,” said Lực.

Sharing the same opinion, Lê Hoàng Châu, Chairman of Hồ Chí Minh City Real Estate Association, also said that preferential credit packages for social housing often have low-interest rates for investors, buyers and renters, and 50 per cent of the commercial loan interest rate is a reasonable level. For example, the current preferential interest rate is 4.8-5 per cent per year and this preferential interest rate is determined annually.

“Therefore, if there is a supply of social housing, buyers and renters of social housing will certainly expect and choose this preferential loan level to buy or rent social housing. Currently, low-income people in urban areas are looking forward to preferential credit policies on social housing and enough supply to meet demand,” said Châu.

Vietnam-Argentina trade-investment ties key to recovery, development: official

Vietnam and Argentina should enhance cooperation in economy, trade and investment to expedite their respective economic recovery and development, the head of the Vietnam Trade Office in Argentina Ngo Manh Khoi has assessed.

According to the official, between 2007 and 2022, trade between the countries saw a 13-fold surge, to 4.88 billion USD from 378 million USD. Argentina currently stands as one of the leading suppliers of corn and animal feed to Vietnam.

In 2023, the bilateral trade stood at 3.45 billion USD, down 29.6% year-on-year. Vietnam’s import volume from the South American partner suffered a decline last year due to a historic drought hitting Argentina in the 2022-2023 crop season and causing a 54% reduction in its agricultural output. However, the farming productivity is projected to increase significantly in the 2023-2024 crop thanks to favourable weather conditions, hence a strong rebound of the import expected this year.

Regarding investment, Argentina currently runs five projects worth around 160,000 USD in Vietnam.

Khoi further noted that both countries share many similarities and have great potential to become hubs for goods transit, investment capital flow, and connections with other countries in the region and the world. As an active member of the Southern Common Market (MERCOSUR), Argentina serves as a gateway for Vietnamese goods to penetrate the South American market. Meanwhile, Vietnam acts as a bridge for Argentina to enter the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific.

He said the strong traditional relationship between the two nations, coupled with the attractiveness of each market, serves as a driving force and an attraction for them to get closer, expand, and develop their comprehensive relations, especially in the economic and trade sectors.
He went on listing challenges facing the sides’ cooperation, which include geographical distance, the lack of direct cargo and passenger transport routes, and differences in languages and business customs.

Khoi recommended Vietnam and Argentina focus on diversifying exports and imports and enhancing business cooperation regarding such potential goods as textiles, footwear, farm produce, wood products, and handicrafts. It is also necessary for the sides to coordinate the implementation of trade and investment promotion activities and push for the negotiations of a free trade agreement between Vietnam and MERCOSUR.

He also highlighted the expansion of technical and investment collaboration in sectors where both sides have strengths and demand like high-tech agriculture, agro-processing, biotechnology, health care,  and green energy./.

Hyundai auto sales fall 43% in February

A total of 2,033 Hyundai cars hit the road in Vietnam in February, a month-on-month fall of 43%, Thanh Cong (TC) Group, the assembler and distributor of Hyundai vehicles in Vietnam, announced on March 12.

Hyundai Accent remained the best-selling brand with 365 units sold, followed by Hyundai Grand i10 with 263 and Hyundai Creta with 238.

The group recorded the sale of 147 Hyundai Venue units, 132 Hyundai Santa Fe, 127 Hyundai Custin, 117 Hyundai Tucson, 76 Hyundai Elantra, 55 Hyundai Stargazer, and 47 Hyundai Palisade.

Regarding commercial models, 466 vehicles were sold in the month.

TC Group attributed the slump in its sales to the Lunar New Year holiday which lasted for a week, and expected better business results in the coming months.

Vietnam Rubber Group targets 13% increase in revenue this year

Vietnam Rubber Group has released its business results for 2024, with a positive outlook, according to the company’s document for its extraordinary shareholders' meeting in 2024.

This year, it plans to achieve a revenue of nearly VNĐ25 trillion (US$1.02 billion) and a profit after tax of over VNĐ3.4 trillion. These targets represent a 13 per cent and 2 percent increase, respectively, from the previous year.

The rubber producer has also presented a restructuring proposal to shareholders, which is set to be implemented by 2025. 

Particularly, the company plans to divest its capital from majority-owned companies, such as Rubber Trading and Tourism Services JSC, and seven other firms where the group does not hold a controlling share.

It will also explore additional capital investment to maintain controlling stakes in Ben Thanh Rubber JSC and initiate the dissolution of the Visorutex Joint Venture Enterprise in compliance with legal requirements.

Vietnam Rubber Group sets out to transform four entities, namely the Rubber Industry College, Vietnam Rubber Magazine, Rubber Healthcare Centre and Vietnam Rubber Research Institute, into enterprise-operated models.

As a part of the plan, the company has set a target of reaching a total consolidated revenue of nearly VNĐ28.6 trillion for the entire group in 2025, with an average annual growth rate of approximately 5 per cent and a consolidated profit before tax amounting to VNĐ5.05 trillion.

From 2021 to 2025, the accumulated total consolidated revenue is projected to reach VNĐ135 trillion, while the estimated total consolidated profit before tax is expected to be nearly VNĐ25.1 trillion.

During the period, the average annual workforce for the entire group is 82,848 individuals per year. By 2025, this number is anticipated to reach 87,070 employees, with an average income of VNĐ101 million per person per year.

For the core business sector until the end of 2025, Vietnam Rubber Group is planning to engage in the planting, cultivating, exploiting and trading of products derived from rubber trees. 

It will also invest in the expansion and upgrading of wood processing factories, focusing on increasing the production capacity of high-value-added products that meet market demands.

On the stock market, shares of the company closed Monday at VNĐ29,550 per share, up 1.9 per cent. 

Deputy PM urges resolving price manipulation for healthy real estate market

Deputy Prime Minister Trần Hồng Hà urged ministries and sectors to address the paradox of excess in the high-end segment and shortage in the affordable segment of the real estate market, and to resolve the issue of price manipulation to develop a healthy real estate market.

He made these remarks while chairing an online meeting of the Prime Minister's working group to address difficulties and obstacles in implementing real estate projects after the issuance of new laws, including the amended Land Law, the amended Housing Law and the amended Real Estate Business Law.

Deputy PM Hà said the difficulties and obstacles in the real estate market seriously affected the economic ecosystem, especially the banking sector, construction, production of construction materials, and consumer goods.

He emphasised that the Government and the National Assembly had urgently amended related laws and prepared legal guidance documents to remove barriers in the real estate market.

Regarding difficulties and obstacles related to credit, planning, legal status and real estate business activities, Deputy PM Hà asked ministries, sectors, localities, associations and enterprises to thoroughly assess the effectiveness of mechanisms, policies and laws.

Emphasising the development of a healthy real estate market, he requested the Ministry of Construction to summarise the main issues that can be resolved in the amended laws on land, housing and real estate business, and proposed that the Government and the National Assembly issue documents with authority to apply before the laws take effect.

The Deputy PM required the working group to compile the number of real estate projects that have been allocated land but are facing procedural difficulties; establish criteria for real estate investors' capacity; expand the access to social housing for low-income earners and enterprises in industrial zones; and provide comprehensive guidance for localities to implement mechanisms and policies for land recovery, land clearance, resettlement and land pricing determination.

Deputy PM Hà requested that the resolution of proposals from businesses and localities must clearly define the specific responsibilities and completion times for each ministry and sector.

Regarding funding for social housing projects, the State Bank of Vietnam and the Ministry of Finance are studying fiscal policies to support interest rates for preferential credit loans for businesses and individuals; establishing a social housing investment fund consisting of State budget funds and contributions from enterprises, which cover 20 per cent of the costs for building social housing in commercial housing projects and other legal sources.

The Deputy PM urged businesses and investors to provide commercial housing and social housing products at appropriate prices, ensure high-quality design and reasonable profit margins, and harmonise interests with the State and people.

According to the Ministry of Construction, the real estate market has shown many positive changes.

In Hà Nội, among 404 projects with difficulties and obstacles, 81 have been removed from the slow implementation list, 10 have had their land reclaimed, and 67 others have investors’ commitment to accelerate implementation progress.

The city is continuing to address difficulties and obstacles for 246 projects according to the guidance of the Ministry of Construction and other ministries and sectors.

However, the ministry also revealed difficulties and obstacles.

New laws on housing, real estate business and land have not yet come into effect, leading to unresolved current difficulties and obstacles. There are still many obstacles in organising law enforcement in localities. There is a shortage of focus on land use planning, construction planning, housing development programmes, five-year and annual housing development plans to serve as a basis for approving investment projects.

Deputy Governor of the State Bank Đào Minh Tú shared that, for the real estate sector, speculation and price manipulation were the main risks causing difficulties in capital circulation and debt recovery. Therefore, the SBV aimed to address issues in the real estate sector, especially in credit mechanisms, to reschedule and defer debts.

Reporting some difficulties in the VNĐ120 trillion (US$5.08 billion) social housing credit package, Tú said that the key issue was to create conditions to enhance access between demand and supply, and promote the supply.

At the meeting, representatives of associations, real estate businesses and banks focused on discussing solutions to determine reasonable prices for high-end commercial housing and evaluate the real estate market for customers with medium and low incomes.

Leaders of some ministries and sectors clarified proposals from businesses and localities regarding land valuation, land allocation legal procedures and land use rights auctions, and committed to address issues within their jurisdiction.

JICA highlights its noteworthy projects in VN

The Japan International Co-operation Agency (JICA), the Japanese government arm that disburses ODA loans, has been funding numerous projects in various sectors in Việt Nam.

At the recent 9th Japan Việt Nam Festival held in 23/9 Park in HCM City’s District 1, it publicised several of its projects in education, water environment, rural development, and tourism.

They include the expansion of the Bình Hưng Wastewater Treatment Plant in HCM City's Bình Chánh District in 2023 using loans from JICA, which prevents industrial and household wastewater from entering canals, thus improving the water environment.

Wastewater collection for treatment at the plant was improved in districts 4, 5, 6, 7, 8, 10, 11, and Bình Chánh.

Its capacity was improved to 469,000cu.m per day, an increase of 328,000 cu.m.

This also eliminated the flooding problem in District 8’s Mễ Cốc Wharf, helping reduce flooding in districts 5, 6, 10, and 11 during high tides.

The second is a project to build mechanisms to sustainably develop the handicrafts sector in Quảng Nam Province’s mountainous rural regions.

It is being carried out from 2021 to 2026 as part of JICA Partnership Programme by Japan’s Foundation for International Development/Relief and Quảng Nam Province.

​It aims to improve the livelihoods of ethnic minorities, there by facilitating handicrafts production using local resources and enabling sustainable tourism by preserving and leveraging local cultures and traditions.

A third project involves the recruitment of Japanese volunteers to introduce the tourism potential of Cần Thơ, Đà Lạt and Đà Nẵng cities as part of JICA’s Japan Overseas Cooperation Volunteers programme.

Japanese volunteers are dispatched to developing countries to contribute their skills and experience, thus strengthening Japan’s partnership with those countries.

Shota Kamiji, a JICA volunteer working in Cần Thơ City, said the programme trains volunteers in the language and customs of the country they are being sent to before sending them there for two years.

At the Cần Thơ Tourism Development Centre, he is tasked with researching the city’s tourism spots, culture and history to promote tourism through social media and the centre’s website in English and Japanese.

He also takes part in organising events.

He said locals are very friendly and the city has plenty of attractive tourist destinations, but since Cần Thơ is not well-known among Japanese tourists, he is focusing on changing that.

JICA is also investing in the Việt Nam Japan University to enhance its education, research and management quality.

The university was established 10 years ago, and now has around 700 undergraduate and post graduate students.

The Japan Việt Nam Festival celebrates the strong bilateral relationship and promotes cultural exchanges between the two countries.

It was also the closing event of the 50th anniversary celebrations for the establishment of diplomatic relations between Japan and Việt Nam. 

KOTRA exchange to connect Korean and Vietnamese businesses

The Korea Trade and Investment Promotion Agency (KOTRA Hanoi) plans to organise a business-to-business (B2B) trade matching session on March 12 between enterprises from provinces of Gyeongbuk and Chungbuk in the Republic of Korea (RoK) and Vietnamese importers.      

The trade exchange, the first by KOTRA Hanoi in 2024, offers Korean firms the opportunity to meet directly with Vietnamese importers.

A total of 17 Korean manufacturers are scheduled to introduce a range of high-quality products exported to many other countries worldwide, including cosmetics, fresh fruit, beverages, food, and medical equipment, among others.

The event is expected to provide a chance for Vietnamese enterprises to cooperate alongside potential partners from the RoK.

Located in the east of the RoK, Gyeongbuk is not only renowned for its tourism industry, but also for its economic development potential, with leading exporters. Businesses from Gyeongbuk will therefore use the occasion to showcase food, food supplements, and beverages.

Chungbuk province is famous for agricultural products, including rice, barley, beans, and potatoes. Its firms are set to bring fresh fruit to the matching session.

Shrimp emerges as major aquatic export product to Australia

Vietnamese aquatic exports to Australia in January-February 2024 surged by 33% year on year with shrimp accounting for over 60% of the total turnover, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Specifically, shrimp exports raked in US$34 million throughout the reviewed period, representing an increase of 20% against the same period last year.

Pangasius exports skyrocketed by nearly 70% to more than US$6 million, while other marine fish exports, with the exception of tuna, shoot up by 72%.

Australia is a potential market for Vietnamese seafood as more than 65% of domestic seafood consumption comes from imported sources.

At present, Australia imports seafood from more than 95 markets around the world. Of these, Vietnam has become the leading seafood supplier, accounting for over 22% of Australia's total seafood import turnover.

VASEP experts say there remains ample room ahead for Vietnamese firms to operate in the market thanks to opportunities from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), along with the time-honoured cooperative relationship between the two countries and the two governments’ due attention to trade activities such as seafood export activities.

In fact, after the CPTPP takes effect, Vietnamese seafood exports to Australia grew continuously from US$197 million in 2018 to US$365 million in 2022.

Australia is also a main provider of rock lobster for Vietnamese enterprises with an imported volume of about 40,000 tonnes per year.

Smart City environmental impact assessment approved
  
The Ministry of Natural Resources and Environment has recently approved the environmental impact report for the smart city project in Hanoi’s Dong Anh District.

Accordingly, the ministry has agreed with the project developer, the North Hanoi Smart City Development JSC, to build residential areas, schools, office buildings, and public facilities on an area of 271.45 hectares. The smart city will be home to more than 25,700 people.

In the first phase, the developer will build 60 townhouses, 247 villas, one apartment building, nine multi-purpose buildings, two secondary schools, two primary schools, and three kindergartens.

Phases two and three will continue construction with 209 villas, two kindergartens, four mixed-use buildings, and a K12 international school. The final two phases will include seven mixed-use buildings and a 108-story residential, financial, and commercial building.

Regarding the 108-story multi-purpose building project, the Ministry asks the contractor to work with the General Staff under the Ministry of National Defense and the Civil Aviation Department of Vietnam under the Ministry of Transportation to revise the construction plan and obtain approval from the authorities on the building's height.

It aims to "limit and minimize the impact of the construction on the operation of Noi Bai International Airport and ensure that the construction complies with the law," the ministry said.

To facilitate project implementation, the developer will clear an area of more than 41,700m2 in Hai Boi and Vinh Ngoc communes with public buildings, local houses, kindergartens, and public infrastructure.

As the implementation of the project is predicted to cause environmental issues, the ministry has asked the project contractor to come up with a solution for the resettlement of the residential areas. The company is also required to maintain the existing conditions of pagodas, martyrs' cemeteries, and other facilities.

Specifically, the ministry is asking North Hanoi Smart City Development JSC to build a wastewater treatment system.

In addition, the project's construction sites must be covered by aluminum walls with a height of 3m, while the operation of trucks and other heavy machinery is restricted. The roads must be kept clean with water trucks during the project.

The total investment for the Smart City project is estimated at US$4.2 billion. The Hanoi government launched the project in early November 2023, and it is scheduled to be completed in Q4/2032.

The main contractor for the project, North Hanoi Smart City Development JSC, is a joint venture between the real estate company BRG Group and its Japanese partner Sumitomo.

Car imports surge in February
 
In February, Vietnam imported 9,650 completely-built units (CBU) cars of various types with a total cost of US$203.4 million. This marks a 38.7% increase in volume and a 40.1% rise in value compared to the previous month.

According to a report from the General Department of Customs released on March 11, Indonesia emerged as Vietnam’s largest car seller, accounting for 4,441 units and US$64.4 million in value, representing 31.17% of the total car import value.

Thailand closely followed, selling 3,788 CBU cars to Vietnam, with a total value of US$76.9 million in February alone.

Cars imported from these two Southeast Asian nations totaled 8,229 units last month, making up 85.2% of the country’s total imported CBU cars.

Despite the uptick in February, Vietnam experienced a substantial drop in car imports in the first two months of the year compared to the same period last year. During January-February, there was a decline of 38.5% in volume and a 39.7% drop in value, with CBU car imports totaling 16,452 units and US$345.15 million.

In January, the number of CBU cars registered for customs clearance decreased by 9.1%, or 695 units, compared to December 2023.

The majority of CBU cars imported into Vietnam in January originated from three main markets: Indonesia (2,647 units), China (1,987 units), and Thailand (1,858 units).

Stock market gaining robust foundation

The Vietnamese stock market is converging various elements conducive to its growth, marked by positive shifts in terms of both quality and quantity.
 
Experts last week noted progressive improvement in legal frameworks in Vietnam in regards to the stock market, creating conditions to propel it forward. Pham Thi Thuy Linh, deputy head of the Market Development Department at the State Securities Commission (SSC), told a VIR roundtable on March 5 that the SSC is collaborating with various ministries and sectors to achieve the goal of upgrading the market.

Vietnam aims to upgrade the stock market from the frontier to the secondary emerging market status. As for the upgrade conditions, Vietnam currently meets seven out of nine criteria. The two remained criteria involve the pre-transaction escrow by foreign investors and the foreign investor ownership ratio.

“The SSC is actively refining these two conditions. Firstly, regarding the pre-transaction escrow by foreign investors, we have engaged in discussions with international rating agencies to find solutions. The SSC has proposed amendments to certain documents to initially waive the requirement for a 100 per cent reserve in cash for organised foreign investors, ensuring foreign investment and payment activities,” Linh said.

Secondly, concerning the foreign investor ownership ratio, the SSC is working alongside the Ministry of Finance and the Ministry of Planning and Investment to review sectors, possibly expanding the foreign investor ownership ratio in non-essential sectors. Simultaneously, they are implementing English-language transparent disclosures for investors to easily grasp ownership ratios of companies.

According to experts, Vietnam is currently on the verge, poised near the threshold of upgrading the market, and the qualitative shift in the legal framework is undergoing a discernible transformation, ensuring compliance with the criteria set by international organisations for Vietnam.

With efforts to enhance upgrade criteria, the stock market is anticipated to take a significant step forward with the anticipated launch of the Korea Exchange (KRX) trading system later this year.

Linh of the SSC mentioned that the system is currently being implemented at securities companies, meanwhile, the Vietnam Exchange and the Central Securities Depository are conducting trial tests. The KRX system will be put into operation immediately upon successful testing.

“Investors are hopeful that the official operation of the KRX will make a significant impact on the market in terms of liquidity and product offerings. The existing trading system has experienced several order congestions issues, so the infrastructure upgrade is needed to ensure smoother transactions,” Linh said.

It is expected that in the coming time, the new trading infrastructure will help investors trade faster, many organisations can trade automatically. In addition, the trading time will be shortened, and there will be many new products. The future not only involves derivatives in stock indices, but also derivatives in individual stocks.

In addition to internal factors, the stock market is also fuelled by growth dynamics from positive macroeconomic information. Vietnam’s economic growth target for 2024 is set at 6-6.5 per cent. The three economic growth drivers identified by the government in 2024 are investment, exports, and consumption.

“The macroeconomic picture is showing signs of recovery: exports in the first two months of the year increased by 20 per cent, industrial production indices also grew, and foreign direct investment remains strong. These are factors impacting the stock market beyond interest rate issues,” said Pham Huyen Trang, director of stock analysis at SSI Securities.

In terms of consumption, the global economic recovery brings good prospects for Vietnam’s economy. Currently, the total retail sales of goods and service revenues in the first two months of 2024 are estimated to have seen an 8.1 per cent increase compared to the same period last year.

The stock market has also grown by 12 per cent since the beginning of the year, a promising growth rate that reinforces investor confidence, Trang noted. Besides this, the continuous interest rate reductions by the State Bank of Vietnam and the inflow of funds into the domestic stock market have been more positive since the third quarter of 2023.

Syndicated lending proposed to reduce impacts of loan limit policy

A new regulation on reducing the loan limit under the amended Law on Credit Institutions will adversely affect capital supply for enterprises so commercial banks should cooperate in providing syndicated loans for businesses, experts said.

At a dialogue held by Vietnam Investment Review on March 11, experts said under the Law on Credit Institutions, which will take effect from July 1 this year, banks must reduce the loan limit for a customer from 15% to 10%, and for a customer and their related parties from 20% to 15% according to a roadmap from July 1, 2024 to January 1, 2029.

Dr. Pham Xuan Hoe, former Deputy Director of the State Bank of Vietnam (SBV)’s Institute of Banking Strategy, said at the dialogue that the new regulation in the law will definitely affect enterprises.

According to Hoe, the capital of large and medium-sized banks is currently about 70-80 trillion VND and 35-50 trillion VND, respectively. Thus, if the credit limit is reduced to 10%, customers can borrow only about 5 trillion VND, which is not enough for real estate, infrastructure and energy enterprises with huge capital demands. Therefore, projects with investment capital of more than 5 trillion VND must think about syndicated loans.

Besides, the credit limit regulation for a customer and their related parties under the law also has a very broad meaning. For example, a corporation has many independent subsidiaries, or related parties, so the credit limit of a bank for the corporation is also limited.

Therefore, Hoe said, to implement this regulation, the SBV needs to very clearly define the roles and tasks of State management agencies. Commercial banks also need to review very carefully, especially large customer groups, so as not to encounter difficulties when implementing the new regulation of the law.

He said the business culture of commercial banks needs to change, with an aim to enhance the cooperation to share both benefits and risks.

To lighten the impact of reducing the credit limit on enterprises, Nguyen Quoc Hung, General Secretary of the Vietnam Banks Association (VNBA), suggested that banks should cooperate to co-finance good projects.

A bank, whose customer has outstanding debt exceeding the regulated credit limit, needs to proactively invite other banks to participate in co-financing the customer’s projects, Hung said.

If the project is good, it is possible to ask other banks to co-finance it, Hung proposed.

In addition, syndicated loans with the participation of more than one bank in managing and evaluating projects also help increase the transparency and efficiency of the projects, he said.

Hung believed the five-year roadmap from 2024 to 2029 for banks to reduce credit limits is appropriate. He expected that banks will unite to deploy lending so that all people and enterprises can have access to bank loans and there need be no fear of lack of capital for large projects./.

US advised to grant Vietnam market economy status soon

International relations website geopoliticalmonitor.com of the United States posted an article on March 11 describing the historic signing of the Comprehensive Strategic Partnership between Hanoi and Washington as an opportunity for the US side to upgrade Vietnam’s recognition as a market economy.

The article outlined that the burgeoning trade flow between the two countries and the White House’s push for the establishment of partnership agreement on the Indo-Pacific Economic Framework for Prosperity (IPEF), means market status recognition would help the nation to expand its trade and investment with the US.

The US is presently Vietnam’s second-largest trading partner behind China and its largest export marker, with bilateral trade in 2022 hitting almost US$139 billion.

The bilateral benefits for US companies derived from recognition of Vietnam as a market economy include market access and export opportunities, namely in agriculture, machinery, aircraft, and pharmaceutical products, all of which can contribute to the development of a supply chain that suits America’s interests.

According to the article, over the past decade Vietnam has rapidly emerged as a major manufacturing centre, whilst it remains a major source for consumer electronics, furniture, semiconductors and other components, apparel, and footwear imports.

Market-status recognition would also contribute to a reduction in trade barriers, thereby making it easier and cheaper for US businesses to export goods and services to Vietnam.

The article states that with the ongoing trade tensions between the US and China, recognition of Vietnam as a market economy could further incentivise US companies to diversity their supply chains away from China and towards the Vietnamese market.

Additionally, lower import prices coupled with improved market access could enable US companies to increase their output and production in Vietnam. This thereby offers the potential to generate increased sales revenues and profitability for American companies operating in the country.

The US-ASEAN Business Council (USABC) plans to send a record-breaking number of US businesses to Vietnam later this month, surpassing last year’s delegation of 52 firms. This signals the increasingly expanding interest of US businesses in Vietnam.

Telecommunications, information technology, power generation, transportation infrastructure construction, environmental project management, and technology will all continue to offer promising opportunities for US companies.

Tech giants such as Apple and Intel have already made increased investments into Vietnam as they seek to diversity their supply chains, helping to spur Vietnam’s economic expansion. There is also increasing interest from the US Chamber of Commerce in support of Vietnamese recognition as a market economy.

So far 72 countries have now recognised Vietnam as a market economy, most notably the UK, Canada, Australia, and Japan.

Senegal increases rice imports from Vietnam

Senegal is a potentially lucrative market for Vietnamese rice due to high demand coming from the West African country, according to the Vietnam Trade Office in Algeria.

In 2023, Vietnam enjoyed a strong growth in rice exports to Senegal, with 12,392 tonnes shipped for US$5.35 million, up 215% in value compared to 2022, the trade office said in a statement on May 12.

In the first two months of 2024 alone, Vietnam exported 414 tonnes of rice to Senegal valued at US$307,820

This year, Senegal's demand for imported rice is forecasted to be high as people are stockpiling more food, including rice, amid a low rice supply in the domestic market.

Meanwhile, Senegal is preparing for the upcoming presidential election later this year, meaning it is likely to increase imports of rice from Asia.

In 2023, Senegal imported 1.3 million tonnes of rice worth more than US$500 million, down 12.4% in volume and nearly 13% in value compared to 2022.

India, Thailand, China, Pakistan, Uruguay, and Vietnam are the main suppliers of rice to Senegal – a market of more than 18 million consumers. Senegal also imports rice from Asia to re-export the staple to neighbouring countries.

Việt Nam's export recovery gains momentum

Việt Nam’s exports have been on a path of recovery since the beginning of the year. According to a report from the General Statistics Office (GSO), the total export turnover of goods in the first two months of 2024 reached US$59.34 billion, a 19.2 per cent increase compared to the same period last year.

The domestic economic sector accounted for $16.14 billion, a 33.3 per cent increase, 27.2 per cent of the total export turnover. The FDI sector, including crude oil, reached $43.2 billion, a 14.7 per cent increase, 72.8 per cent of the total export turnover.

Wood and wood products, in particular, have shown high export results in the first two months of this year. Trần Xuân Thiện, CEO of Thiện Linh Plywood Company, said that the global economy showed signs of slowing down in 2023, resulting in fewer orders. Thiện said, however, that demand seemed to have picked up since the beginning of the year. He said his company has secured orders until mid-2024.

Other exports including textiles, leather and footwear, iron and steel, electronics, aquatic products, fruits and vegetables, rice and coffee have all experienced significant growth compared to last year.

Deputy Minister of Agriculture and Rural Development (MARD) Phùng Đức Tiến said in February, the total export of agricultural, forestry and aquatic products reached $4.48 billion, a 21.8 per cent increase compared to the same period last year. In the first two months of the year, the total export turnover of these products is estimated at $9.84 billion, a 50.3 per cent increase, with a trade surplus of $2.68 billion. The sector aims to achieve an export target of $54-55 billion in 2024. Tiến stressed the importance of the diversity of export markets and improved quality of Vietnamese agricultural products, as recognised by markets such as the US, EU and Japan.

He said the ministry believes Việt Nam has ample opportunities to boost chicken meat exports to Halal markets. Once negotiations are completed, the Dehus Group can export up to 1,000 tonnes per month to Halal markets, with a total population of up to 2.2 billion people and significant potential.

Lê Tiến Trường, chairman of Vinatex, noted that Việt Nam's economic position is expected to significantly improve in 2024 as the global economy continues to recover.

"Many competing economies are facing many issues with labour and armed conflicts domestically, while Việt Nam remains a safe destination, which will help in securing additional orders," he said.

However, he said the financial health of Vietnamese businesses had been weakened after going through a prolonged difficult period, as well as new challenges, such as a 6 per cent increase in minimum wage from July 1, 2024, and the possibility of further increases in electricity prices after a 7 per cent rise in 2023. 

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