Outside of the Ho Chi Minh Stock Exchange's building in HCM City. — Photo courtesy of HoSE

The Vietnamese stock market continued to perform negatively last week with weak liquidity, despite optimistic macro data.

Experts remain sceptical and believe that the VN-Index needs a long time to accumulate to create a bottom before returning to the uptrend.

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index closed the week at 1,024.8 points, while the HNX-Index on the northern bourse Ha Noi Stock Exchange (HNX) was at 204.9 points.

For the week, both benchmark indices set a weekly fall, with the former down 1.4 per cent and latter 1.2 per cent.

Last week, the market corrected despite the data showing that domestic inflation cooled down in February, and the manufacturing health index (PMI) recovered to above 50 points after three consecutive months below the threshold.

In the last two sessions of the week, the market dropped sharply after the news that the Ministry of Construction would suspend the proposal of a support package of VND110 trillion (US$4.6 billion) and less positive news related to real estate and bank industries.

The market liquidity plunged with the trading value on HOSE decreasing by 31.5 per cent over the previous week to more than VND37.6 trillion. The trading volume on the southern market also declined 29.9 per cent to nearly 2.3 million shares.

The trading value of the HNX slid 35.7 per cent to VND4.36 trillion, resulting in a fall of 32.3 per cent in the trading volume to 291 million shares.

Foreign investors continued to net sell on the two main exchanges last week, with a net sell value of over VND1.18 trillion.

Vietcombank Securities Company (VCBS) said that the nearest support level of the market was still around 1,020 points.

In a positive scenario, the VN-Index would test this level again and rebound. Short-term investors might consider opening an additional position of 10-20 per cent for the stocks already in the portfolio. On the contrary, if selling pressure gets stronger, causing the market’s benchmark to fall below the support area, investors should raise the proportion of cash to limit short-term risks.

In the medium and long-term, Saigon - Hanoi Securities JSC (SHS) believes that the market cannot create an uptrend in the short term, so the VN-Index requires a longer time for accumulation after forming a bottom to be able to create a new rally.

“The macro situation is still a riddle, especially in the credit and bond markets as well as the risk of a global economic recession and the further escalation of the Russia-Ukraine war. In general, the current stock price level is quite attractive for medium and long-term investment, on the other hand, there are many key shares moving actively like banking and technology stocks,” said SHS.

However, opportunities to disburse capital were low due to liquidity crunch, the securities firm added.

VNDirect Securities Corporation said that the global financial markets might focus on the meeting of the National People's Congress of China this week. This is the first National Assembly session of the world's No. 2 economy after China officially lifted the zero-COVID policy.

International observers said that during this session, China would form the country’s leadership team and set new growth targets for the post-COVID-19 period.

Markets are expecting that the Chinese Government will shift its policy direction to be more supportive for economic growth in the near future and the decisions of the Chinese leadership team will have a significant impact on the picture of global economic growth and international financial markets.

Investors should pay attention to groups of industries that are expected to benefit when China reopens and stimulates growth, such as rubber, seafood, cement, steel, and textile export industries, and groups of aviation and tourism, VNDIRECT recommended.

Vietnam’s overseas investments rise sharply in January-February

Vietnam’s outbound investments reached 115.1 million USD in the first two months of this year, 2.16 times higher than that the same period last year, according to the General Statistics Office (GSO) under the Ministry of Planning and Investment.

Of the sum, 109.4 million USD was poured into 10 new projects, a 2.1-fold rise year-on-year. Meanwhile, four other projects increased their capital by nearly 5.7 million USD.

Notably, Vietnamese conglomerate Masan Group’s subsidiary The Sherpa received a licence to place 105 million USD in Singapore-based tech firm Trust IQ Pte. Ltd. The project is part of Masan's strategic goal by 2025 to create a consumer - retail - technology ecosystem.

Vietnamese firms invested in 10 sectors abroad, including information-communications, services, wholesale and retail, health care, processing and manufacturing.

Singapore was the biggest recipient of the investments, with a combined capital of 105.5 million USD poured into a new project and another existing one. It was followed by Israel and Laos.

As of February 20, Vietnam counted 1,617 valid overseas projects valued at more than 21.89 billion USD, with 141 by State-invested firms worth some 11.67 billion USD, making up 53.3% of the total.

Laos, Cambodia and Venezuela lured the most Vietnamese investments, mainly in mining, and agriculture, forestry and fishery.

Pepper exports enjoy double digit growth in February

Vietnamese pepper exports increased sharply in February compared to the previous month and over the same period from last year, according to the details given by the Import-Export Department under the Ministry of Industry and Trade.

The Import-Export Department cited data from the General Department of Customs as saying that the country’s pepper exports in February reached 28,000 tonnes, worth US$86 million, marking an increase of 123.1% in volume and 98.2% in value compared to January, up 31% in volume and 35% in value compared to last February.

The first two months of the year witnessed the nation's pepper exports hit 41 thousand tonnes valued at US$129 million, up 35% in volume, but down 7.4% in value over the same period from 2022.

During the reviewed period the average export price of Vietnamese pepper was estimated to stand at US$3,177 per tonne, down 31.4% compared to last year's corresponding period.

In terms of the domestic market, in February prices of black and white pepper increased sharply due to growing import demand from the Chinese market.

This can be seen as on February 28 the price of black peppers rose by between VND8,000 per kg to VND8,500 per kg, equivalent to an increase of 13.9% to 15.3%, compared to January 30, to reach between VND64,000 per kg to 65,500 per kg.

Elsewhere price of white pepper stood at VND98,000 per kg, an increase of VND6,000 per kg compared to the end of January, but still lower than the figure of VND121,000 per kg seen in the same period from last year.

Moving forward, the global pepper market is forecast to recover due to increasing demand from importers.

Although the country is now amid its main harvest season, the output of the new pepper crops are showing a significant decline because of a decrease in areas and low productivity in some regions due to unfavourable weather conditions.

Ho Chi Minh City resolved to limit economic downturn

Ho Chi Minh City must make every effort in order to ensure the growth rate does not fall much lower than the 8% to 8.5% set target, according to economic experts.

During the course of a meeting aimed at reviewing the socio-economic situation in February and devising solutions for March hosted by the municipal People's Committee on March 3, experts said that the decline in the southern metropolis’ economy may be prolonged. However, it may also mark the start of bright spots and positive signals in terms of maintaining growth.

In his remarks, economic expert Dr. Tran Du Lich said the world economy is now brighter than forecasts from the end of last year as major economies have not fallen into recession, although are still in a state of stagnation.

According to him, currently the biggest issues for the Vietnamese economy relate to the recovery of the real estate market, the financial market, and high bank interest rates.

These represent huge challenges for the country's economic growth target of 6.5% in 2023.

Amid this context, Dr. Lich said that in the immediate future the prosperity for the southern city’s economy will not be seen, with a need to make greater efforts to achieve economic development results as expected by the end of the year.

Sharing this view, Dr. Truong Minh Huy Vu, deputy director of the Ho Chi Minh City Development Research Institute, said that the first quarter of the year will continue to endure a decline compared to 2022 and it is forecast that this decline may continue until the beginning of the second quarter.

According to Dr. Vu, to prevent the decline and maintain growth, the City needs to focus on disbursing public investment, promoting infrastructure projects, digital transformation, administration reform, and dialogue to remove difficulties faced by businesses.

Concluding the conference, Phan Van Mai, chairman of the Ho Chi Minh City People's Committee, assessed that the southern city must devise a series of solutions aimed at removing difficulties, while public investment has also enjoyed positive changes.

Furthermore, there remains some issues that need to be recognised during the month, such as falling industrial production and the number of enterprises withdrawing from the market being three times higher than the number of newly-established ones.

In March, Phan Van Mai suggested that local industries and business communities work to immediately grasp positive signals from the world economy in order to end the decline as soon as possible.

Specifically, the city needs to focus on solving the problems that businesses previously raised for discussion at the meeting.

Deccan Herald: Indian tourists show interest in Vietnam

Indian-based newspaper Deccan Herald has declared that tourists from the Indian city of Bengaluru are showing a growing interest in holidaying in Vietnam.

According to details given by the newspaper, people who have made multiple trips to the more popular travel destinations, such as Indonesia, Thailand, Singapore, and Malaysia, are now looking at heading to Vietnam. 

Marathe added that over the past six months he has been getting 60 to 70 bookings for tourists going to the nation every month. In contrast, before that there had only been one to two bookings a month from Bengaluru, with groups of four to eight now making the trip.

Furthermore, Deccan Herald quoted Rajiv Mehrotra, executive director of Holiday Concierge, as sayings that on a weekly average his company receives 10 to 12 enquiries from customers seeking Vietnamese destinations.

He added that November to April is the best time to visit Vietnam as after April it can get very hot.

According to the newspaper, several industry experts have said that compared to other Southeast Asian countries, a trip to Vietnam is at least 10% to 15% cheaper.

In November, Vishnu K Nair, an Indian wealth manager, told Deccan Herald that he went on a 23-day trip to Vietnam.

Deccan Herald also revealed that travel influencers and bloggers from across India are starting to promote Vietnam as a budget-friendly destination for youngsters.

Hanoi welcomes over 3.7 million visitors in two months

The capital city of Hà Nội welcomed 3.73 million visitors in the first two months of this year, earning VNĐ13.2 trillion (US$556 million) in revenue, up 2.8 times and 3.6 times year-on-year, respectively, the municipal Department of Tourism has reported.

The total number included 535,000 foreign holidaymakers and 3.2 million domestic visitors, the department said.

According to the department, tourism activities in the city have showed positive signs as the number of tourists visiting the capital city has been increasing in the first months of the year.

To attract more tourists, the city has focused on promoting cooperation to develop the market.

The department has enhanced connections with key tourism localities nationwide in order to build suitable programmes. It has also planned to welcome delegations of foreign travel businesses and reporters for exploring tourism products in Hà Nội.

Attention has been also paid to developing more night tourism products and experiential tours on the basis of exploiting the traditional culture values of the capital city; and strengthening promotion of tourism destinations and new products of the capital on domestic television channels, on US-based news channel CNN, digital platforms, and social networks. 

Live hog price drops to VND48,000 per kilo
     
Domestic live hog prices have fallen by 10 per cent compared to two weeks ago due to abundant supply while demand has decreased.

Current live hog prices across the country are from VND47,000 to VND57,000 (US$2-2.5) per kilo.

In the North, live hog prices are currently around VND48,000-VND49,000 per kilo, while Bac Giang and Lao Cai provinces have the lowest prices.

Similarly, in the central region and Central Highlands, the price of pigs in Nghe An decreased by VND2,000 to VND47,000 per kilo. Lam Dong and Binh Thuan provinces saw prices maintain at VND52,000 per kilo.

Meanwhile, the price of live hog in the South decreased by VND3,000-VND4,000 compared to two weeks ago from VND50,000-VND51,000 per kilo. In particular, the price of pigs at C.P Viet Nam Livestock Company is currently VND53,500-VND57,000 per kilo.

In some localities, the price of live hog is around VND50,000-55,000 per kilo. The prices have fallen by VND2,000-3,000 per kilo compared to the end of December 2022 and VND9,000-14,000 per kilo compared to mid-October 2022.

With the current price, pig farmers are taking heavy losses. Currently, the cost to raise a pig is VND60,000 per kilo. Thus, when selling at VND47,000 per kilo, the farmer loses VND13,000 per kg of live hog.

With the current prices, farmers and small-scale farms do not dare to re-herd. In the long term, the farmers still have to follow the production chain, bringing production costs down.

The price of live pigs went down, so the retail price of pork at traditional markets and supermarkets have also decreased.

The current selling price of pork is only around VND100,000-VND120,000 per kilo, down VND15,000-VND20,000 per kilo.

Abundant supply is the main reason why pig prices have gone down recently. According to a report of Hoc Mon Wholesale Market, the supply of pigs to the market is high at more than 5,000 live hogs per day.

Nguyen Tri Cong, chairman of the Dong Nai Livestock Association, said that live hog production in livestock enterprises is increasing rapidly. Meanwhile, consumption demand is falling sharply because many enterprises and factories have reduced their pork consumption by 20-30 per cent due to staff cuts. Even many factories had to suspend operations because there were no orders.

According to a market research report by Ipsos Company, in 2018, each Vietnamese person consumed an average of 31.4 kilos of pork, but by 2022, the consumption had decreased to 23.5 kilos. Meanwhile, last year, the total herd was over 31 million live hogs, an increase of 11 per cent compared to the same period in 2021. This further shows that supply is far exceeding demand.

Long Thanh airport project’s completion date to be rescheduled

The investor of the Long Thanh International Airport project has sought an additional six months to get the passenger terminal construction package done, meaning the first phase of the project cannot be finished in September 2025 as earlier planned.

The proposal was made in a letter which the State-run Airports Corporation of Vietnam (ACV) sent to the Ministry of Transport on March 3, which aims to seek more time to mobilize qualified and experienced contractors to build the terminal.

The terminal construction package under the third component, which includes the design, construction and installment of equipment, will cost over VND35,000 billion.

The package, scheduled to be executed in 33 months, was the most important in phase one of the airport project as it would determine the entire project’s schedule.

This package was put up for tenders on September 24, 2022, and later extended twice until November 30, 2022, but all bidding documents submitted to the investor were not qualified in accordance with the Bidding Law.

To remove obstacles, Deputy Prime Minister Tran Hong Ha asked ACV to determine the completion date of the terminal package and report it to the Ministry of Transport for consideration. After that, the terminal package was proposed to be executed in 39 months, including 36 months of construction and some months of trial operation.

HCMC sets deadline for removing hindrances to four realty projects

The HCMC People’s Committee has told relevant authorities to work out plans this month to eliminate regulatory bottlenecks for four of seven real estate projects facing legal issues in the city.

The city government has announced a conclusion by Bui Xuan Cuong, vice chairman of the city, following a meeting held in February over obstacles for realty projects in the city.

Accordingly, they approved the units-in-charge, plans and time limits for removing the regulatory bottlenecks of the following four projects.

First, for the commercial center and hi-end apartment project located on Ben Nghe Street, Tan Thuan Dong Ward, District 7, developed by Gotec, the Department of Natural Resources and Environment was assigned to review problems with the land use purpose conversion and propose coping measures to the city government prior to March 10.

For the Cuu Long apartment project, with its transaction name De La Sol, developed by CapitaLand in District 4, the vice chairman assigned the Department of Finance and Corporate Finance Sub-department to review and report the result to the city government before March 5.

The Department of Construction was asked to give feedback on the above matter to the city People’s Committee before March 10.

Cuong also designated the Department of Construction to work with the Urban Development Agency under the Ministry of Construction to guide the Thien Ly housing project investor to complete the necessary procedures for its remaining categories. The results need to be submitted to the city government by March 10.

Regarding the Co Giang apartment building project with its transaction name as Grand Manhattan, developed by Novaland in District 1, due to its complexities, the Department of Construction was told to review the ministerial-level guiding documents, work out plans for removing hurdles and submit the report to the city government before March 15.

According to Le Hoang Chau, chairman of the HCMC Real Estate Association, the bottlenecks faced by these projects were common, so if they are solved, the city would have a precedent for resolving over 70% of regulatory obstacles facing many property businesses in the city in the coming time.

Danang property prices sharply fall

Property prices in the central city of Danang have fallen by 25-30 percent compared to last year.

Many estate trading floors on Nguyen Phuoc Lan Street, which is home to many real estate agents in Danang, remain shut.

It is easy to see online information about real estate in Danang. However, demand is very modest. Many houses and land plots which have failed to be sold over the past one or two years have been offered for sale again at much lower prices.

Land plots in the Thi Anh area in Hoa Quy Ward are put up for sale at around VND2 billion (USD84,745) from VND2.4 billion previously. Those in the city centre have seen slightly lower price reductions.

Many houses are being advertised for sale at VND2-4 billion, depending on different locations, much lower than prices of 2019.

A house on Pham Van Nghi Street, Thanh Khe District, is being offered for sale at VND4.2 billion compared to VND4.6 billion advertised earlier. But the broker said customers could negotiate with the house owner for a further discount.

Nguyen Duc Lap, head of the Real Estate Research and Training Institute, said that the property market in Danang, and Vietnam in general, had slumped slump. This is attributed to higher interest rates. Since June last year, land prices in the city’s south and west have fallen by 20-30 percent.

In 2022, nine new apartment building projects in Danang with a total of 658 apartments were put up for sale. Only 56 percent of these apartments were sold, down 37 percent on-year.

Cross-border funds required to advance banking expansion

A slew of Vietnamese banks and securities firms are searching for international financing sources in an effort to expand operations.

Privately held lender Nam A Bank last week announced it has mobilised a fresh loan of $20 million from BlueOrchard, a global impact investment manager dedicating to fostering inclusive and climate-smart growth, to grow its loan portfolio in small- and medium-sized enterprises (SMEs).

BlueOrchard was founded in 2001 as an initiative of the UN, and the world’s first commercial manager of microfinance debt investments worldwide. Today, it provides investors around the world with premium investment solutions, including credit, private equity, and sustainable infrastructure, as well as debt and equity financing to institutions in emerging and frontier markets.

The company has invested around $10 billion in more than 100 countries and territories, creating lasting positive impact for underserved communities and the environment.

Nam A Bank was one among the first Vietnamese banks to embrace digital transformation, risk management, network growth, and community involvement, and it continues to be a leader in these areas.

Earlier this month, the International Finance Corporation (IFC) also invested $100 million in BRG-backed SeABank in a bid to bolster the bank’s ability to provide housing loans. Through this initiative, SeABank anticipates doubling the number of low- and middle-tier mortgages by 2026 amidst Vietnam’s rapid urbanisation rate of around 3 per cent annually.

Jacobs also added that the IFC aimed to enhance long-term funds supply for mortgage lending in emerging markets, allowing access to better quality housing, promoting inclusive development, and creating more jobs.

Last October, the IFC also invested a $75 million convertible loan in SeABank with an option to convert it to common shares of the bank within five years. The arrangement aims to boost the bank’s access to finance SMEs, especially those owned by women.

Techcom Securities (TCBS) also inked a $125 million unsecured loan syndication agreement in December last year, raising the total mobilised value of the foreign capital market during the last year to over $300 million. The $125 million syndicated loan is the third successful international capital raised by TCBS in 2022, after a syndicated loan of $170 million in April.

Four major financial institutions – CTBC Bank, Taishin International Bank, Sumitomo Mitsui Banking Corporation, and Maybank Securities (Singapore) – have co-arranged this fresh loan syndication.

Nguyen Tuan Cuong, deputy CEO of TCBS, said that the significant financing deal would help the security company to strengthen its position as one of the largest asset management technology companies in Vietnam in terms of equity, profitability and performance of core businesses.

Economist Nguyen Tri Hieu said domestic banks and companies successfully tapping into international financing sources demonstrate the confidence of foreign financial institutions in the long-term development of the Vietnamese economy.

VND6.3 trillion to be disbursed for North-South expy this month

The Ministry of Transport has announced it would disburse nearly VND6.3 trillion of public investment capital for the North-South Expressway project this month.

The Government has tasked the Ministry of Transport with disbursing nearly VND94.2 trillion of public investment in 2023.

According to its plan, the ministry would distribute over VND45.2 trillion to the second phase of the expressway project. It disbursed nearly VND1.2 trillion in January, aligned with the plan.

The project was divided into 12 subprojects with 25 bidding packages, of which the largest is worth VND8 trillion.

Fourteen of them got off the ground in early January this year, while the remaining 11 packages have found contractors, and are ready for construction, according to the Transport Construction Investment Management Authority.

Currently, the handover of cleared land has reached 77.5% of the requirement, enabling contractors to begin construction; and is expected to reach 100% in the second quarter of 2023.

Besides, authorities planned to develop 156 resettlement projects covering a combined 445 hectares.

The 729-kilometer North-South Expressway project’s second phase will run through 12 localities, comprising 267 kilometers of the Ha Tinh-Quang Tri section, 353 kilometers of the Quang Ngai–Nha Trang section, and 109 kilometers of the Can Tho–Ca Mau section.

It is expected to be completed in 2025 and put into service in 2026.

Foreign tourists account for 25 percent annual target in first two months

Vietnam received 1.80 million foreign tourists in the first two months of this year, nearly 25 percent of the year's target of 8 million, according to the latest report from the General Statistics Office (GSO).

According to the report, the number of foreign tourists arriving in February reached 933,000, up 7.10 percent against January, and 31.6-fold increase compared to the same period last year before the country completely reopened to international tourists in mid-March.

The country welcomed a total of 1.80 million foreign visitors in the first two months, a 36.6-fold increase on year, but barely 60 percent of the figure of 2019 before the Covid-19 pandemic occurred, the report said.

Up to 90.70 percent or 1.60 million of the visitors arrived in Vietnam by air during the first two months, while 8.60 percent entered by road, and 0.70 percent by sea.

Most of the visitors are from Asia with 1.29 million, followed by European visitors with 242,500, Americas 186,300, Oceania 77,300, and Africa 4,300.

During the period, the country earned a revenue of VND4.70 trillion, 2.2 times higher than the same period last year.

Vietnam aims to welcome 8 million foreign tourists this year, a modest figure compared to the figure of 18 million made in 2019.

Many tourism officials and experts have called on the government to ease visa policies in order to lure international tourists, saying that the current 15-day visa exemption for visitors from European countries has yet to satisfy them.

Director of the Ho Chi Minh City Department of Tourism Nguyen Thi Anh Hoa said that the list of 25 countries benefiting from visa exemptions to Vietnam is not competitive compared to that of other countries in the region. Singapore is offering visa exemptions to visitors from 157 countries, Malaysia 155 countries, and Thailand 64 countries.

The official urged the government to expand the list of countries and territories qualifying for visa exemptions and e-visas. She proposed extending visa-free stays from the current 15 to 30 days to attract more tourists.

Alcohol, tobacco and soft drinks face increase in excise tax

Alcohol, tobacco and soft drinks will be subject to an increased excise tax aiming to improve community health and tackle the national budget deficit as part of a comprehensive tax reform strategy for 2030.

The Ministry of Finance (MoF) has requested ministries, localities, and businesses for comments on a proposal to amend the current excise tax law primarily targeting the consumption, import, and production of alcohol and tobacco. The size of the proposed increase has not yet been mentioned.

In Vietnam, alcoholic beverages are currently subject to an excise tax rate of 65 per cent, increased from 50 in 2018, while the excise tax on tobacco stands at 75 per cent since 2019. According to the MoF, the consumption of alcohol in Vietnam is still high and increasing, so the excise tax increases between 2016-2018 were not strong enough to affect consumption.

Alcohol ranks 5th in the 15 leading health risk factors in Vietnam and is a major contributor to the rate of traffic accidents, injuries, domestic violence, and mental health issues. Alcohol is a direct factor in the increasing the rate of traffic accidents in men aged 15 - 49.

Over the past 15 years, duty on the alcohol industry has been adjusted five times. The tax increased from 50 per cent in 2015 to 55 per cent in 2016, and then rose to 65 per cent in 2018. The taxable price also changed from the import price to the wholesale price.

Nguyen Hoa Cuong, deputy director general of the Central Institute of Economic Management, speaking at a conference on tax and advertising regulation for alcohol last year, said, "There are still many issues that need to be discussed. For example, the method of taxation, the policies in other countries, the appropriateness of this approach, and the disproportionate impacts on different target groups”.

As in many countries, the introduction of a heavier tax generates two sides of the debate. Private businesses have profit incentives, actively pushing for more alcohol and tobacco consumption, while it is in the public interest to minimise the damage from these same substances.

Regarding soft drinks, the imposition of the tax aims to regulate the consumption of sugar-based beverages in line with international practice, If approved, the proposal would see the tax imposed on carbonated and non-carbonated soft drinks, energy drinks, sports drinks, and bottled instant coffee and tea. The MoF wants to widen the list of items subject to the excise tax to guide consumer trends, given their harmful effects.

This is not the first time the MoF has sought to impose a special consumption tax on soft drinks. In 2014, the idea was mooted with a specific tax rate of 10 per cent, but many ministries and branches resisted. The Ministry of Planning and Investment and the Ministry of Justice assessed that the tax argument was not really convincing at that time, while the Ministry of Industry and Trade worried about negative impacts on business prospects.

BCG Energy, Hanwha Energy agree new bond payment deadline

Vietnam's BCG Energy and its Singaporean partner Hanwha Energy have concluded a new timeline for the former to pay the latter part of an overdue bond.

The deadline has been set for June 30 this year, the Vietnamese firm stated on Friday, whilst explaining that financial conditions remain stable. The announcement follows a Hanoi Stock Exchange document issued on February 21, which listed companies that were late to make bond payments, including BCG Energy.

BCG Energy, part of Vietnamese conglomerate Bamboo Capital Group, issued a $5 million convertible bond to Hanwha Energy in September 2019, and this was used to develop renewable energy projects in Vietnam as part of the duo’s strategic partnership. The bond was intended to mature after three years, i.e. on September 4, 2022, with Hanwha given the option of converting it into shares.

BCG Energy said that towards the end of the term, Hanwha Energy decided not to convert, and the two sides agreed partially to change the bond into a debt to be settled by June 30, 2023.

BCG Energy CEO Pham Minh Tuan said his company had partially paid out to Hanwha Energy, and the two sides had agreed upon terms to settle the unpaid $3 million.

MoC reduces its pledge to build over one million social housing units

The Ministry of Construction's (MoC) initiative to invest in the construction of affordable homes and apartments for low-income individuals and industrial park staff between 2021 and 2030 has now been amended.

The MoC has adapted its objective for social housing (SH) construction to reflect unique realities. By 2030, around 1 million apartment units will be constructed. Of which, about 428,000 will be finished between 2021 and 2025, and approximately 634,000 will be completed between 2025 and 2030.

According to the MoC, presently, the proposed updated Housing Law and the Draft Resolution from the National Assembly on piloting the SH policy have developed in light of the scarce availability of funds from the state. There are advantageous measures for compliance with the legislation to encourage firms to engage in the establishment of SH for the purchase, rental, and lease-purchase of properties.

Deputy Minister of Construction Nguyen Van Sinh stated that the housing product structure in 2022 had been skewed towards the high-end sector, with accommodation for low-income households being inadequate. There are only nine newly approved social housing projects with a total of 5,526 apartments and two worker housing projects with a total of 1,729 units in the whole nation.

The MoC indicated that, to meet the target of SH development in 2030, roughly $36.71 billion is required. Credit is thus the main method for financing these initiatives. The MoC has suggested that the government should organise a $462 million preferential loan package, of which about $231 million would be provided to homeowners and the remainder to social housing investment companies.

Originally, the MoC had set a target of around 1.4 million finished residences by 2030. Of these, around 571,200 would be built from 2021 to 2025 and about 845,500 from 2025 to 2030. The original investment for the project was $47.5 billion.

According to the MoC, the goal volume of flats for public and worker housing to be built during the 2021-2025 period has been established by integrating information from localities based on the programme, an authorised community housing plan, and currently registered quantities.

FDI inflows drop significantly on-year

The total foreign direct investment (FDI) inflows in the first two months of 2023 fell by 38 per cent on-year, while FDI disbursement also declined by almost 5 per cent.

According to the Ministry of Planning and Investment's Foreign Investment Agency (FIA), the total FDI in the first two months of 2023 stood at $3.1 billion, equivalent to only 62 per cent of the same period in 2022.

As many as 261 new projects were granted investment registration certificates with the total registered capital of over $1.76 billion, equivalent to over 280 per cent on-year. The adjusted capital of 133 ongoing projects reached about $535.4 million, down 85.1 per cent on-year. There were 440 capital contributions and share purchases as of February 20, equivalent to $798 million and showing an increase of 3.7 per cent on-year.

The country's disbursed capital was $2.55 billion in the first two months, equivalent to a slight decrease of 4.9 per cent.

The FIA census also indicated that FDI was seen in 17 out of the 21 economic sectors in the first two months. Of those, processing and manufacturing took the lead with $2.17 billion, capturing 70.1 per cent of total FDI inflows. Real estate ranked second with $396.9 million, making up 12.8 per cent of the total, followed by wholesale, retail, and logistics and warehouses with $202.1 million and $142 million respectively.

Singapore was the top foreign investor in Vietnam with $978.4 million, accounting for 31.5 per cent of the total foreign investment into the country. Taiwan came second with $407.1 million and the Netherlands third with $369 million.

Bac Giang attracted the largest amount with $824.3 million, followed by Ho Chi Minh City with $369.1 million, Binh Duong with just over $342 million, Quang Ninh with $332 million, and Dong Nai with $215.7 million.

The export turnover of foreign-invested enterprises reported a decrease of about 5.3 per cent on-year to roughly $38.4 billion (including crude oil) or $38.1 billion (excluding crude oil), making up more than 76 per cent of the total export value of the country. Import turnover was estimated at $33 billion, a decrease of 10.9 per cent on-year, while the trade surplus stood at $5.4 billion (including crude oil) or $5 billion (excluding crude oil).

Accumulated to date, the roughly 36,600 valid foreign-invested projects across the country currently boast the total registered capital of more than $442.3 billion.

Agri-product shipments through Lao Cai border gate turn tough

The volume of agricultural products exported to China through the Lao Cai border gate stood at only 50% of pre-pandemic levels due to slow customs clearance.

The Chinese authority still imposes special requirements for goods transfers across the border, which slows down the speed of goods transport from Vietnam to China.

Vietnam has allowed Chinese drivers from the Hekou border gate to transport goods through the Lao Cai border gate directly to the collection points without using transfer vehicles.

The demand for Vietnamese dragon fruit in the Chinese market plunged when this country expanded its area for growing this type of fruit. Currently, only 15-20 trucks of dragon fruit are cleared by the Chinese customs daily.

Apart from the slow customs clearance process, the complicated inspection procedures have led to relatively high costs at the Hekou border gate. China announced that it would not reduce fees until the end of March when some inspection procedures are removed.

Despite the hindrances to agri-product exports, the Lao Cai border customs division has cleared over 80,000 tons of Vietnamese agricultural products worth nearly US$40 million since early this year.

The main agricultural products exported through the Lao Cai border gate are dragon fruit, mango, watermelon, rambutan, jackfruit, sweet potato and banana.

Further extension proposed for 2023 tax payments

The Vietnam Chamber of Commerce and Industry (VCCI) has proposed the six-month extension beyond the end of this year for settling all tax liabilities in 2023.

The VCCI made the above proposal in its feedback to the Ministry of Finance, contributing to the finalization of a draft decree on the extension of payments for value-added tax, corporate income tax, personal income tax and land rents that are due in 2023.

This policy was implemented in 2020, 2021 and 2022, leaving a positive impact on the country’s economy.

Decrees 41, 52 and 34 issued in 2020, 2021 and 2022, respectively, allowed businesses to defer their tax payments from the first to the second half of year. However, all tax liabilities must be settled by the end of December each year.

According to many enterprises, making all tax payments at the end of the year would cause cash flow problems as, at this time, they need short-term working capital to prepare orders in the new year and pay staff allowances.

Besides, most commercial banks request their clients to repay debts prior to December 31 as they need to comply with regulations on the credit growth limit.

The above reasons could explain the bottlenecks in the economy’s short-term cash flows in the year-end period when the supply of working capital could not meet the demand.

The 2023 draft decree still stipulates that the expiration date for fulfilling all tax liabilities is December 31, 2023.

The VCCI, therefore, proposed extending the time limits for all tax declarations and payments in 2023 by six months as the deferred tax payments will help adjust cash flows for the economy, preventing the imbalance of cash flow through different periods in the year, said the VCCI.

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