VIETNAM BUSINESS NEWS MARCH 7
Two-month public capital disbursement faster than last year’s same period
A building of the Tay Ho kindergarten, a project completely funded with public capital and invested by the People's Committee of Hanoi's Tay Ho district.
More than 44.6 trillion VND (1.95 billion USD) of public investment was disbursed in the first two months of 2022, equivalent to 8.61 percent of this year’s target and higher than the rate of 5.09 percent in the same period last year.
The Ministry of Finance said the disbursement rates for domestic and foreign capital reached 9.22 percent and 0.2 percent, compared to the respective figures of 5.68 percent and 0.38 percent seen during the same period last year.
Seven ministries and 20 localities have recorded a disbursement rate of over 15 percent, including the Vietnam Fatherland Front Central Committee 32.65 percent, Thai Binh 31.7 percent, and Lai Chau 27.3 percent.
Taiwanese firms study investment chances in Vinh Long
The Vinh Long People’s Committee on March 4 hosted a business delegation from Taiwan (China), who came to learn about opportunities for investing in the Mekong Delta province.
According to Vu Xuan Dang, vice director of the Ministry of Planning and Investment (MoIT)’s southern investment promotion centre, Taiwanese investors are currently interested in Vinh Long’s sectors of seafood processing, leather and footwear, agriculture, energy, and services.
Chang Wen Chung, director of the Taipei Economic and Cultural Office in Ho Chi Minh City, said if Vinh Long continues to improve its infrastructure such as electricity, water, transportation, and labour resources as well as support investment incentives, more Taiwanese businesses will choose to invest in the locality.
At the meeting, two Taiwanese enterprises signed documents showing their commitment to investing in Vinh Long. Earlier, the Taiwanese business delegation visited a number of projects, which are calling for investment in the province.
Bamboo Airways announces Hanoi-Melbourne direct flights
Vietnamese carrier Bamboo Airways announced its direct flights connecting Hanoi and Melbourne in Australia at a ceremony held on March 5, becoming the first Vietnamese airline to launch regular commercial direct flights between the two cities.
There will be one round trip per week starting from April 27.
Tickets for the new air route have been up for sale on Bamboo Airway’s offices, websites, and mobile app.
The route helps shorten the travel time between the two cities to more than nine hours, saving over 21 hours compared to transit flights.
Bamboo Airlines uses 787-9 Dreamliner for flights on this route.
Bamboo Airways operated its first flight connecting Ho Chi Minh City and Melbourne on February 19-20, and announced the HCM City-Sydney direct air route on February 28.
Production links to boost seaweed farming in Vietnam: experts
With a diverse marine ecosystem, Vietnam has favourable conditions for seaweed farming, which, however, have yet to be fully tapped.
To boost seaweed farming effectively and sustainably, experts have stressed the need to supply quality seeds to farmers, step up the application of high-technologies and utilise the certification system to ensure product quality, biosecurity and environmental safety.
Competent agencies and banks should offer preferential loans and other incentives to encourage small-scale seaweed farming households to set up links in production, they said.
Tran Dinh Luan, General Director of the Directorate of Fisheries, said his agency is coordinating with the World Wide Fund for Nature in Vietnam to implement a project on developing sustainable seaweed chains in the country.
The project is expected to help farmers raise productivity, meet market demands, expand production area, lengthen the value chain and move towards circular agriculture, he said.
According to the Directorate of Fisheries, the area cartilage seaweed (Kappaphycus Alvarezii) in Vietnam would reach 900,000ha, equivalent to 600,000-700,000 tonnes of dried seaweed per year. The country now has 20 types of seaweed containing agar which is used in food processing.
Banking sector optimistic despite ongoing conflict in Europe
It's too early to tell how the ongoing Russia-Ukraine conflict will affect Vietnam's banking sector, said industry experts.
However, the conflict almost certainly will drive oil prices up, disrupt the global supply chain and create inflationary pressure. As a result, firms will likely be more hesitant to make investments, consumers cut back on spending and demand for credit drops.
During 2021, the banking sector reported 146 trillion VND in profit, or 6.39 billion USD, a 33 percent increase year-on-year, mainly from interest and banking fees. The profit trend has been said to likely continue in the near future but the sector's profitability is not without risks.
A large part of future success depends on the banks' ability to recover and restructure debts. Assets tied up in bad debts will likely rise as government measures to support businesses are set to expire at the end of June, said Yuanta Securities, a Taiwanese investment bank.
Inflation poses another risk to profitability. In the event inflation hits 4 percent this year, most banks are to face 2-4 percent lower profitability, according to Maybank Kim Eng Securities.
Mekong Delta needs to change mindset in agricultural development: PM
Prime Minister Pham Minh Chinh on March 6 stressed the need for Mekong Delta provinces and centrally-run cities to create breakthrough changes in the mindset and have a strategic vision in agricultural development.
The Government leader made the request at a conference on agricultural development in the Mekong Delta held in Kien Giang province by the Ministry Agriculture and Rural Development (MARD) and the People’s Committees of 13 and provinces and centrally-run cities in the region.
Stressing the Mekong Delta’s significant role in politics, economy, social affairs, national defence-security and trade with ASEAN member countries and the Mekong sub-region, PM Chinh emphasised that the Party and State have paid due attention to the region's development.
As the country’s biggest agricultural production centre, the Mekong Delta has helped to ensure national food security and exports, and creates jobs for 65 percent of local residents.
The region contributes 31.37 percent of the national agriculture sector’s gross domestic product (GDP), produces half of the country’s rice, 65 percent of aquatic products and 70 percent of fruits, and makes up 95 percent of the nation’s rice exports and 60 percent of fish exports.
Work on two major industrial zones to get underway in Binh Duong
The southern province of Binh Duong will start construction of two giant industrial zones of more than 1,000 hectares each this year with an eye on foreign investors.
Chairman of the provincial People's Committee Vo Van Minh said construction of Vietnam – Singapore Industrial Park III (VSIP III) in Bac Tan Uyen district would begin this month.
When it opens, the province would prioritise high-tech tenants and labour-intensive industries such as apparel and footwear, he said.
In the second quarter, work would begin on the Cay Truong Industrial Park in Bau Bang district, he added.
Binh Duong also plans to expand Nam Tan Uyen and Rach Bap industrial parks along with a number of others to meet the increasing demand from domestic and foreign investors.
Reference exchange rate up 8 VND at week’s beginning
The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 23,159 VND/USD on March 7, up 8 VND from the last working day of previous week (March 4).
With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,853 VND/USD and the floor rate 22,464 VND/USD.
The opening-hour rates at commercial banks remained stable.
Vietnam, US seek to propel trade ties forward
The Vietnam-US Business Summit 2022 on reshaping the future of the bilateral economic ties is set to open on March 8 and will discuss ways to promote bilateral trade and investment, with Prime Minister Pham Minh Chinh scheduled to make an important speech at the event.
The Vietnam-US Business Summit 2022 on March 8 will be co-hosted by the American Chamber of Commerce in Hanoi (AmCham Hanoi) and the Vietnam Chamber of Commerce and Industry (VCCI) ahead of the US-ASEAN Summit which is due to run from March 28 to March 29 in Washington.
According to AmCham Hanoi, US President Joe Biden is set to welcome PM Chinh and other ASEAN leaders to attend the US-ASEAN Summit. This will mark the first face-to-face meeting between President Biden and ASEAN leaders since he took office early last year.
PM Chinh and US Secretary of Commerce Gina Raimondo will deliver keynote speeches at this important event, with the function featuring the participation of numerous US and Vietnamese leaders from the private economic sector and those from across the region.
Key issues which will be discussed during the occasion include driving future growth and innovation through the digital and creative economy, meeting energy development needs to boost future Vietnamese growth, and promoting sustainable investment and stable policies to fuel economic recovery.
India represents Vietnam’s third largest rubber importer
India imported 125,950 tonnes of rubber from Vietnam last year, making it the third largest rubber importer, according to the Indian Ministry of Commerce and Industry.
Last year saw India consume 1.2 million tonnes of rubber worth US$3.75 billion, up 34.8% in volume and 37.5% in value compared to 2020.
Of the total volume, 125,950 tonnes were shipped from Vietnam for US$243.56 million, representing year on year increases of 85.9% in volume and 142.3% in value.
Indonesia, the Republic of Korea, Vietnam, Malaysia and Thailand are the five largest markets supplying rubber to India. Notably, rubber imports from these markets grew strongly in both volume and value compared to the previous year.
China resumes importing Vietnamese fresh chilies
The General Administration of Customs of China has recently licensed five Vietnamese businesses to export fresh chilies to the mainland, starting from March 3, 2022.
Under a decision released by the Chinese authorized agency, Vietnamese fresh chili products exported to China must ensure the country’s phytosanitary requirements. All shipments of fresh chilies must be quarantined by relevant Vietnamese units with clear notes of relevant technical parameters in the phytosanitary certificate.
These are the first five Vietnamese enterprises licensed to officially export fresh chilies to China again, after the northern neighbor temporarily suspended importing the products from Vietnam.
As China, a market of 1.4 billion consumers, has great demand for food and farm produce, Vietnamese businesses should to carefully study China’s market regulations to meet its requirements, said Nong Duc Lai, Trade Counselor of the Vietnamese Embassy in China.
As of March 4, 2022, a total of 1,808 agricultural product and food codes were granted by Chinese authorities to Vietnamese enterprises for official export to their market, according to Lai.
Viet Nam enjoys strong growth in agricultural trade surplus
Viet Nam has enjoyed a trade surplus of US$1.8 billion from agriculture, forestries and fisheries during the first two months of the year, 86.7 per cent higher last year's figure, according to the Ministry of Agriculture and Rural Development (MARD).
Foreign trade of agricultural, forestry and aquatic products reached $14.2 billion in the first two months of 2022, a year-on-year increase of 15.8 per cent. The revenue of these exports was estimated at $8 billion, up 20.9 per cent year-on-year, while imports exceeded $6.2 billion, up 10 per cent.
From January-February, shipments of key agricultural products totalled over $3.2 billion, up 10.2 per cent. Aquatic exports saw a significant surge of 47.2 per cent to $1.5 billion. Forestry exports also increased 17 per cent to nearly $2.9 billion during the period. Animal products, meanwhile, slid 3.5 per cent to just $54.1 million.
Russia-Ukraine crisis hits local livestock industry
Viet Nam’s livestock industry is likely to be hurt due to the increase in raw materials and animal feed prices since the Russia-Ukraine conflict began, the Agribank Securities JSC (Agriseco) has said.
Russia and Ukraine are the world’s top and third-largest wheat exporters, and the conflict has driven prices up by 17.8 per cent.
Ukraine is also the fourth-largest exporter of corn, accounting for 22 per cent of global supply. Corn prices have risen by 8.4 per cent since fighting began.
Currently, local livestock breeders and animal feed producers are primarily relying on imported raw materials from these two countries.
The Ministry of Industry and Trade has forecast that the local livestock industry will continue to face many difficulties this year due to the development of the pandemic. Global supply chain disruption will also continue to affect the local livestock industry.
State-owned banks maintain top position in network coverage
The group of State-owned banks have continued to maintain their leading position in terms of network coverage in the country’s banking industry.
According to banks’ financial reports, State-owned Agribank has topped the list of network coverage with 939 branches nationwide by the end of last year. It was followed by three other State-owned banks: BIDV with 189 branches, Vietinbank with 155 branches, and Vietcombank with 121 branches.
In the group of private banks, Sacombank has led with 109 branches while MB and LienVietPostBank have come second and third with 99 and 76 branches, respectively. Sacombank has gained the position after it merged with Southern Bank which had more than 160 branches and transaction offices.
In terms of growth in network coverage, TP Bank gained the highest growth rate of 35.9 per cent last year. The bank had 53 branches by the end of last year, up 14 branches against the end of 2020.
Other banks, which last year opened an additional one to five branches against the end of 2020, are Vietcombank and HDBank (five branches); VPBank (four branches); Viet Capital Bank (three branches); OCB (two branches); Bac A Bank and Nam A Bank (one branch each).
HCM City condo prices rise
A report by property market research company JLL said in the last quarter the average primary selling price was US$2,700 per square metre, up 18 per cent quarter on quarter and 10.5 per cent year-on-year.
However, while increasing prices, the company said developers also offered attractive payment policies such as paying only 15 per cent of apartment value until handover time, discounts of up to 7 per cent and gifts.
JLL said the number of transactions last quarter topped 5,800 units, a 66.7 per cent year-on-year rise, as the pandemic was controlled and buyers could attend launch events in person.
Pent-up demand as a result of various restrictions during the social distancing period caused an increase of nearly 93 per cent in sales during the quarter, it said.
Speaking on the outlook for this year JLL said the market recovered after strict isolation social distancing.
Many projects are under relaunch and are likely to bring 32,400 units of new supply onto the market in 2022.
Sales are expected to grow strongly thanks to the existing stable demand and digital sales channels, it said.
HCM City’s IIP up 2.1 percent in January – February
Ho Chi Minh City’s Index of Industrial Production (IIP) rose 2.1 percent year-on-year in the first two months of 2022, according to the municipal Department of Statistics.
In February alone, the index increased by 20 percent compared to the same period last year, mainly driven by the industrial production and mining industry which recorded a yearly rise of 3 folds, and a month-on-month surge of 113 percent.
In January – February, the city’s four key industries – mechanics, electronics and information technology, chemistry and rubber, and food processing – picked up 9.0 percent from the same period last year.
The chemistry’s IIP posted a high growth of 35.3 percent, while the mechanical industry saw an increase of 6.2 percent. Meanwhile, that of food – beverage and electronic industries decreased by 1.5 percent and 13.2 percent, respectively. A yearly growth of 4.3 percent was also seen in the group of traditional industries in the first two months.
The city’s sales of products of the manufacturing and processing rose by 1 percent year-on-year during the period, while this sector’s inventory grew 15.1 percent compared to the same period last year.
Despite the emergence of new strains of coronavirus, HCM City’s industrial production has gradually recovered and developed in the first months of 2022.
Management accountants crucial to reduce businesses' carbon footprints
Management accountants are crucial to supporting and implementing these goals, and their expertise will contribute to decision-making and drive performance towards key milestones, according to a statement released by the Institute of Management Accountants (IMA).
As the world seeks to address the impact of climate change, especially following commitments made at COP26, businesses are committing to reducing carbon emissions and reaching net zero over the coming decades.
In addition to external drivers, companies are motivated by operational efficiency, risk management, and relationship-building opportunities that enhance performance and value.
IMA is one of the largest and most respected associations focused exclusively on advancing the management accounting profession.
Globally, IMA supports the profession through research, the Certified Management Accountant and Certified in Strategy and Competitive Analysis programmes, continuing education, networking, and advocacy of the highest ethical business practices.
Twice named Professional Body of the Year by The Accountant/International Accounting Bulletin, IMA has a global network of about 140,000 members in 150 countries and 350 professional and student chapters. Headquartered in the US, IMA provides localised services through its four global regions: the Americas, Asia-Pacific, Europe, and the Middle East and India.
Hai Phong attracts over 305 million USD in foreign investment in two months
The northern port city of Hai Phong raked in 305.66 million USD worth of foreign capital in the first two months of 2022, given the complex developments of COVID-19.
Hai Phong – The northern port city of Hai Phong raked in 305.66 million USD worth of foreign capital in the first two months of 2022, given the complex developments of COVID-19.
The sum was equivalent to 38.25 percent of the figure for the same period last year and fulfilled 12.22 percent of the target set for this year.
The outcome was attributable to the drastic direction of the municipal authorities and significant efforts of localities and sectors involved, particularly the Hai Phong Economic Zone Authority (HEZA).
Notably, the HEZA has recently granted investment registration certificates for two housing projects that can accommodate about 14,000 workers of the Pegatron Vietnam Co., Ltd and Universal Scientific Industrial Vietnam Co., Ltd. at the Dinh Vu – Cat Hai economic zone.
More than 400,000 securities accounts opened in first two months of 2022
According to the Vietnam Securities Depository (VSD), domestic investors opened more than 405,000 securities accounts in the first two months of 2022, higher than the total number of newly-opened accounts in the whole year of 2020 (393,659 accounts).
Thus, by the end of February 2022, the total number of securities accounts in Vietnam, including domestic and foreign investors, was more than 4.7 million.
According to statistics from the Ho Chi Minh City Stock Exchange, market liquidity in February reached nearly VND23.21 trillion per trading session, down nearly 16 percent from the previous month.
Experts explained that money was withdrawn from the stock market to inject into production and business activities after the country had returned to a normal state.
No more new coal-fired thermal power plants for Mekong Delta by 2030