VITAS said that Vietnam was home to around 3,500 foreign-invested textile and garment projects worth $37 billion, boosting the sector’s production capacity and making a significant contribution to export turnover.

The foreign-invested enterprises play an important role in the textile and garment sector, contributing 65 per cent to the sector’s total export turnover. Major investors mainly come from South Korea, Taiwan, Hong Kong, and China. Among them, South Korea is the largest foreign investor in Vietnam’s textile and garment sector.

The expansion of foreign direct investment (FDI) has boosted both the scale and capacity of the local textile and garment sector. Vietnam is still the third-largest textile and garment exporter worldwide, trailing behind China and Bangladesh. In 2022, the country's textile and garment export turnover surpassed $44 billion, a huge leap from $2 billion in 2000.

In 2023, Vietnam’s textile industry posted an export turnover of $40.3 billion, down 10 per cent from the previous year due to shrinking demand from major markets like the United States and EU.

In the first four months of 2024, textile and garment orders have shown signs of improvement, with an export turnover of $10.3 billion, up 6.3 per cent on-year. The US is the top export market for Vietnam’s textile and garment products, followed by the EU, South Korea, China, and Japan.

The industry currently imports nearly all of its cotton and spends tens of billions of dollars on raw fabric each year. Over the past four months, cotton imports reached over $1 billion, an increase of 20.2 per cent on-year.

The import value of fabric was up 6.5 per cent to $4.34 billion. The figure for textile yarn was $833 million, an increase of 22.5 per cent. Meanwhile, $2.24 was spent to import raw materials for textiles, garments, and footwear, a rise of 18.9 per cent against last year’s period.

The leading localities in FDI attraction in the textile and garment sector are Dong Nai, Binh Duong, Tay Ninh, Long An, Nam Dinh, Hai Duong, and Binh Phuoc.

Central bank asks for close supervision of gold market

The State Bank of Vietnam (SBV) said that it has directed its branches in provinces and cities to closely monitor the developments of the local gold market, and at gold trading locations, and report to the central bank any case where people queue to buy gold.

The SBV stated that following the Prime Minister’s directive and the policy of increasing the supply of gold bars to the market through auctions, since April 19, the central bank has conducted six gold bullion auctions and their results were publicised on its portal.

Three of the six auctions of SJC-branded gold bars were successful with a total winning bid volume of 14,900 taels.

Notably, the session on May 14 saw eight bidders buying 8,100 taels of SJC-branded gold bullion out of the 16,800 that the SBV offered for sale. The highest and lowest winning bid prices logged were 87.73 million VND and 87.72 million VND per tael, respectively.

The state-owned Saigon Jewelry JSC (SJC) managed by the People's Committee of Ho Chi Minh City, bought a total volume of 2,000 taels per session and immediately sold them in the market.

The central bank said it will continue to hold more gold bar auctions in the coming time, with the next session slated for May 16.

The price of SJC gold has fluctuated significantly in recent days, reaching 92.5 million VND per tael on May 10. It ranged from 89.2 to 90 million VND per tael at 3pm on May 15.

SBV said that the auction aims to ensure stable, transparent, and effective operation of the domestic gold market. It has warned locals to stay prudent when trading gold amidst the world’s volatile market./.

Đà Nẵng wants to promote cooperation with Swedish partners: official

The central city of Đà Nẵng wants to promote cooperation with Swedish partners, especially when Việt Nam and Sweden celebrate the 55th anniversary of their diplomatic relations this year, said Vice Chairman of the municipal People’s Committee Trần Chí Cường.

Receiving Swedish Minister of Infrastructure and Housing Andreas Carlson in Đà Nẵng on May 15, Cường introduced the guest to the city’s socio-economic development, its advantages, and focuses in the coming time, particularly in smart city development.

Cuong said that Đà Nẵng city and Sweden have boasted a friendly relationship for many years. High-level Swedish delegations have visited Đà Nẵng and the city government has also had working visits to and activities in Sweden.

He expected that this year, the Swedish Embassy in Việt Nam and Swedish partners will coordinate to organise activities to enhance cooperation, and cultural and art exchanges, and hold international events in the city to promote cooperation between the two sides.

For his part, Andreas Carlson said his visit to Việt Nam aims to explore opportunities to strengthen bilateral cooperation between the Governments and businesses of the two countries as well as promote people-to-people diplomacy.

He said the two sides can cooperate more deeply in such areas as smart city development, and essential infrastructure such as seaports, airports, and urban transportation.

According to Andreas Carlson, in Sweden's new strategy on trade, investment, and global competitiveness, the country focuses on the Asian region and Việt Nam is an important partner.

Swedish businesses have had long-standing relationships in Việt Nam, he said, hoping that more such cooperative relationships will be established in the coming time. -

HCM City seeks stronger economic links with Australian partners

A business roundtable between Ho Chi Minh City and New South Wales state was held in Sydney on May 14, attracting representatives of over 150 Australian enterprises and investors.

Chairman of the HCM City People’s Committee Phan Van Mai introduced the potential and advantages of the southern largest economic hub of Vietnam, along with cooperation opportunities for Australian enterprises.

He also highlighted the emerging areas the city is interested in, including science - technology, innovation, digital transformation and green growth, and calling on educational institutions and businesses in Australia to continue exploring investment chances in HCM City.

HCM City wishes to cooperate more comprehensively and intensively with Australian partners, he said, adding that it will keep working to improve the investment climate and assist investors.

Philippa King, Deputy CEO of the Australian Trade and Investment Commission (AUSTRADE), noted that Vietnam and Australia are enjoying sound trade, investment, and tourism ties boosted by their Enhanced Economic Engagement Strategy, signed in November 2021. On that basis, the two countries have succeeded in realising the common ambition of becoming one of the 10 biggest trading partners of each other within two years.

She perceived that Vietnam is one of the fastest growing economies in the region, making it extremely attractive to Australian investors.

AUSTRADE is implementing initiatives to assist Australian enterprises to further engage with Vietnam. It is also striving to establish an investment centre in HCM City and carry out the Southeast Asia Business Exchange to increase bilateral trade. A series of activities will also be held to improve awareness of business opportunities in Vietnam and across Southeast Asia, according to the official.

She added that AUSTRADE will lead a business delegation to Vietnam in June. They will focus on partnerships in cyber-security, financial technology, and agricultural technology and also introduce Australia’s technological capacity and cooperation chances.

After the meeting, Mai met with representatives of four major enterprises of New South Wales which are planning to invest in HCM City.

Most of them said Vietnam still holds much development potential and boasts a young population along with a well-trained and skillful workforce, which are factors encouraging their investment in the Southeast Asian country.

They shared the intention to coordinate with HCM City to develop social housing, science and higher education, rooftop solar power, renewable energy, fast charging stations, and electric vehicles, among others. Some also wanted to learn more about local incentives for investment in technology and smart city building.

The HCM City delegation is paying a working visit to Australia from May 12 to 18./.

Over 400 domestic, foreign firms attend international food industry exhibition

The Ho Chi Minh City International Exhibition of Food and Beverages (HCMC FOODEX) 2024 opened on May 15 at the Saigon Exhibition and Convention Centre in the southern economic hub, with the event drawing more than 400 local and foreign businesses.

Upon addressing the opening ceremony, Nguyen Van Dung, vice chairman of the Ho Chi Minh City People's Committee, said the function is expected to support food production enterprises as they come together to introduce good quality Vietnamese products to the global market and vice versa.

It also serves as a platform to promote business co-operation opportunities between local and foreign manufacturers and distributors, as well as boosting market expansion, he noted.

The four-day event features 500 booths showcasing products from 400 major domestic and international businesses from the food industry such as Binh Tay Food, Sagri, Satra, and Vissan.

On display are a range of products in the categories of raw and deeply-processed food products, beverages, raw materials used in the food processing industry, machinery and equipment for production, packaging and preservation, as well as green and sustainable products.

The highlight of this year's event will be the business-to-business (B2B) sessions, aiming to connect food production enterprises with distribution units and international buyers.

Furthermore, a series of seminars and trade exchange events will be held during the course of the expo as part of efforts to assist firms in keeping updated on the latest information on trends in production, consumption, and orientations for potential export markets.

A cooking contest will also take place to introduce Vietnamese agricultural products through culinary culture.

Conference talks ways to broaden cooperation with Russia

The Vietnam Union of Friendship Organisations (VUFO), the Russian Embassy in Vietnam and Vietnam-Russia Friendship Association jointly held a conference in Hanoi on May 15 with the aim of sharing information about the situation in Russia and bilateral ties.

Talking points were focused on the current political, economic, cultural and social situation of Russia, cooperation between Vietnam and Russia, and potential for future collaboration.

In his speech, Russian Ambassador to Vietnam G.S. Bezdetko said this year both nations celebrate 74 years of diplomatic relations, as well as 30 years of signing the Treaty on Principles of Friendly Relations between Vietnam and Russia, while expressing his satisfaction with the development of political dialogue between the two countries.

ASEAN countries, including Vietnam, are important priorities in Russia’s foreign policy in the Asia-Pacific region, he added.

The ambassador also talked about the phone talks between Party General Secretary Nguyen Phu Trong and Russian President Putin on March 26 during which the two leaders discussed bilateral cooperation in the time ahead in security-defence, trade, culture, and tourism.

The Vietnamese Party chief used this occasion to invite President Putin to officially visit Vietnam soon and the invitation was graciously accepted.

Bezdetko stated that preparations for the visit are underway and it is expected to add fresh impetus to deepening bilateral cooperation between the two countries.

Concerning bilateral economic cooperation, Trade Representative of Russia in Vietnam V. N. Kharino said that both countries are working to effectively implement the Vietnam - Eurasian Economic Union (EAEU) Free Trade Agreement to elevate bilateral trade to US$ 10 billion by 2025.

Numerous Russian high-tech and healthcare businesses take heed to strengthening their presence in the Southeast Asian nation, he said.

Cashew exports look to US$4 billion

Export turnover of cashews reached US$1.16 billion in the first four months of this year, representing a year-on-year increase of 21.2 percent, according to the Ministry of Agriculture and Rural Development (MARD).

In April alone, Viet Nam exported 65,000 tons of cashews worth US$350 million, raising total export volume to 216,000 tons in January-April period.

Vietnamese companies regain control of cashew nut containers in suspected scam in Italy

Noticeably, the U.S. was the biggest importer of Vietnamese cashews by spending US$280 million to buy 52,000 tons, up 35.3 percent in quantity and 23 percent in value.

China ranked second by importing 31,500 tons, followed by the Netherlands with 13,700 tons.

Viet Nam has remained the world’s largest cashew exporter with annualy revenue of about US$3 billion for 16 consecutive years.

Viet Nam’s cashew export turnover reached a record of US$3.63 billion in 2021. 

The country’s cashew industry is facing serious challenges, especially the fiercer competition from Cambodia and some African countries.

At present, Viet Nam accounts for nearly 80 percent of the global cashew output./.

MARD checking 187 durian PUCs, PHCs

The Ministry of Agriculture and Rural Development has asked localities to strictly monitor PUCs and PHCs of durians after 187 units received warnings of violations.

The Agriculture and Rural Development Ministry (MARD) informed that at present, the proportion of durian codes under monitoring is rather low, at around 50 percent.

The Department of Plant Protection under MARD reveals that there are now 708 Production Unit Codes (PUCs) for durian on a surface area of over 26,000ha and 168 Pack House Codes (PHCs). However, the percentages of monitored PUCs and PHCs are only 52 percent and 47.6 percent respectively.

The provinces with low PUC monitoring are Dak Nong, Binh Phuoc, Vinh Long, Binh Thuan, Hau Giang, Tien Giang, and Dong Thap while those with low PHC monitoring are Long An and Dong Nai.

After receiving warnings from Chinese functional agencies about exported durian from Vietnamese contaminated with excessive Cadmium, the Plant Protection Department has established an inspection team to collect samples in localities mentioned in the above warnings. No samples were detected with the Cadmium level exceeding the threshold like being reported by China.

However, the Plant Protection Department admitted that localities now are not actively monitoring the status of durian growing and harvesting in accordance with the Protocol related to durian, and thus do not timely handle violations.

MARD requested stricter monitoring over all PUCs and PHCs to promptly discover regulation breaking actions in order to suspend or revoke the codes of violating growing units and packaging facilities.

Travel firms offer various tours, big promotions for this summer

Travel businesses are offering tour packages early to attract students in the upcoming long summer holidays.

This summer, domestic and foreign visitors will have an opportunity to enjoy the bustling atmosphere of the 2nd HCMC River Festival 2024 which is scheduled to officially open on May 31 and run until June 10.

The 2024 HCMC River Festival under the theme “Legendary Ship” promoting the land, people, and cultural identities of Vietnam in general and HCMC particularly will include a wide range of cultural, sports, and tourism activities, such as a spectacular fireworks display, a boat race, a swimming competition across the river, performance of water scooters, a floating market, introduction of waterway tourism products and others.

Saigontourist Group, a leading tour operator in Vietnam, has launched a special promotion program for this summer with 360 domestic and foreign tours. For domestic tours departing from HCMC, customers can enjoy discounts of up to 50 percent. Additionally, some sea and island trips to Nam Du, Phu Quoc, Nha Trang, Vung Tau, and Quy Nhon are also offered at competitive prices.

Tourist companies, consisting of Vietravel and Saco Travel, have also launched promotion programs to meet the rising travel demand for the upcoming summer holiday vacation.

Besides, a number of tours to Cambodia, Laos, Thailand, Singapore, China, Japan, and South Korea are also of great interest to visitors. Of these, a Cambodia land tour costs VND2 million - VND3 million (US$78-US$117) per person, and Thailand and China tour packages with flight tickets are VND6 million - VND8 million per person and VND14 million - VND16 million per person respectively.

The summer travel demand doesn't differ significantly from the five-day holiday for this year's Reunification Day (April 30) and Labor Day (May 1) from April 27- May 1. Foreign tours which are offering from VND8 – 15 million per erson attract many individual travelers and family travelers, General Director od Luxtour Tran The Dung said.

Many Vietnamese travelers are opting for outbound tours due to the significant increase in the price of domestic flights and tourism services, and the lack of shopping and entertainment areas, according to Ben Thanh Tourist.

Vietnam to import wind power from Laos

Deputy Prime Minister Tran Hong Ha has approved a proposal to import wind power from Laos submitted by the Truong Son wind power plant. This aligns with Vietnam’s Power Development Plan VIII and applicable regulations.

The Ministry of Industry and Trade had earlier submitted the proposal made by the Truong Son wind power plant to the Prime Minister for the import of electricity, detailing a connection plan to bring 250MW of power from Laos to Vietnam.

This plan is essential for bolstering electricity supply and enhancing security, thereby addressing potential power shortages in the country in the upcoming years, said the ministry.

The investor of Truong Son power plant project had proposed selling electricity to Vietnam Electricity Group (EVN) with a maximum import price set at 6.95 cents/kWh for commercial operations commencing before December 31, 2025.

EVN assessed that importing this electricity, particularly wind power, would strengthen the power supply stability for northern Vietnam.

Ho Chi Minh City needs nearly $35 billion for 10 metro lines

The southern city wants to build 10 metro lines by 2060, over 510km in length, and with a total investment of nearly $34.5 billion.

In a recent transport meeting, Tran Quang Lam, director of Ho Chi Minh City Department of Transport (DoT), said that the department has worked with relevant departments and units to formulate the metro project, proposing development directions, investment forms, and capital mobilisation plans.

In addition, specific mechanisms are also brought forward to accelerate investment preparation procedures and facilitate investment in the city’s urban railway network until 2035. New routes are expected to be added to the adjusted general planning for Ho Chi Minh City in 2040, with a vision for 2060.

By 2035, the city will have completed around 182.49km of metro lines, including Metro Line 1 (40.8km), Metro Line 2 (20.22 out of 62.8km), Metro Line 3 (29.53 out of 62.17km), Metro Line 4 (36.82 out of 43.4km), Metro Line 5 (32.5 out of 53.87km), and Metro Line 6 (22.85 out of 53.8km).

By 2045, the city will have another 168.36km of metro lines by completing the remaining sections of Metro Lines 2, 3, 4, 5, and 6 and building Metro Line 7.

Accordingly, the remaining sections of Metro Line 2 are 42.8km, Metro Line 3 (32.64km), Metro Line 4 (6.58km), Metro Line 5 (21.37km), and Metro Line 6 (30.95km) will be completed. Meanwhile, Metro Line 7 will be 51.23km in length.

By 2060, the city will continue to build Metro Lines 8, 9, and 10, bringing the total length of the city’s urban railway system to 510.02km. Specifically, the length of Metro Line 8 is 42.8km, Metro Line 9 with 28.31km, and Metro Line 10 with 87.84km.

The total capital for 10 metro lines in the city is estimated to reach around $34.5 billion.

At the meeting, experts said that the problem of capital resources is the key for the city to complete its urban railway system. The city should clarify the investment forms, capital mobilisation methods, and breakthrough mechanisms, especially financial policies, to fulfill the target.

Self-safeguard growing as a trend shaping future of payments

Businesses and consumers safeguarding themselves against emerging fraud threats is one of three key trends shaping the future of payments in Việt Nam, experts said.

A significant trend is the increasing adoption of cashless transactions by consumers. According to Visa’s 2024 Global eCommerce and Fraud Report, refund policy abuse and first-party misuse are the most common forms of fraud affecting nearly half of merchants worldwide. With the growing popularity of e-commerce, customers are demanding secure payment methods and effective fraud prevention measures to maintain trust.

In response to this trend, payment companies have introduced various solutions to enhance security for businesses and consumers. For example, the Visa Acceptance Platform connects merchants to a global network of payment providers and technology solutions. Through tools like tokenisation and fraud detection, merchants using Visa Acceptance Solutions have experienced an average increase in approval rates and a decrease in fraud rates.

Visa reported that merchants using Visa Acceptance Solutions saw an average increase in approval rates of 2.97 per cent and a decrease in fraud rates of 70 basis points.

Another significant trend in e-payment is the evolving payments landscape, which is expected to become more diverse and complex, presenting opportunities for all stakeholders to leverage.

At the Open Payments Forum, which was organised late last week by Visa Vietnam, speakers said that as Việt Nam continues its journey to becoming a cashless society, more participants are expected to join the payment ecosystem, creating a dynamic environment for merchants, financial institutions, fintech companies, and payment facilitators.

Furthermore, customer expectations in e-commerce have evolved, with customers now expecting a more personalised and seamless shopping experience. To meet these changing expectations and align with the cashless and contactless payment trends in Việt Nam, merchants are advised to implement tailored payment solutions and innovative digital experiences.

According to the Open Payments Forum, customer expectations have dynamically shifted as meeting basic expectations for a great user experience and smooth omnichannel journeys has changed.

The future of e-commerce will incorporate a wider range of touchpoints, omnipresent purchasing opportunities, along with innovative digital buying experiences and products. Merchants need to offer tailored payment solutions to meet these changing customer expectations, and to keep pace with the cashless and contactless payment trends in Việt Nam, they said.

The growing need for digitisation in Việt Nam, driven by the desire for businesses to remain competitive, is accelerating the adoption of digital payments in the country. Mobile wallets, online payments, embedded finance, and smart checkout technologies are gaining popularity, following closely behind cash in terms of usage and preference.

Economic experts mull over best way to aid growth

Financial experts are weighing up the best options for Vietnam to support the country's still nascent economic growth and ensure financial market stability.

Vietnam continued its bumpy path of recovery in April, reflecting the highly uncertain global environment, according to Yun Liu, ASEAN economist at HSBC Global Research. Encouragingly, exports rose 10.6 per cent on-year, driven by electronics, which grew 20 per cent on-year.

However, peripheral risks are keeping near-term sentiment cautious despite growing confidence of a cyclical recovery in the global trade cycle.

"Some exporters have noted concerns stemming from the Red Sea disruptions of trade with Europe. Unsurprisingly, textiles and footwear exports, for which Europe is a major destination, stalled in its recovery, falling almost 3 per cent on-year," said Liu.

Despite this, the economist assumes that an expansion of Vietnam’s manufacturing capabilities through robust foreign direct investment (FDI) inflows should provide a further tailwind to a stronger cyclical rebound as the broader trade cycle picks up.

New FDI to the manufacturing sector rose 50 per cent on-year, while FDI disbursements also rallied to a multi-year-high, exceeding $6 billion in the first four months.

Liu noted that inflation appears an imminent concern as headline inflation rose 0.1 per cent on-month, pushing the on-year ratio to 4.4 per cent, in line with market forecasts. This marks the first time in more than 18 months that inflation has been so close to the State Bank of Vietnam's (SBV) 4.5 per cent inflation ceiling.

Similar to previous episodes, the main drivers are higher oil prices and food inflation. "The former reminds us of how acutely sensitive Vietnam is to the volatility in the international commodity market, whereas the latter suggests that even an exporter like Vietnam cannot be insulated from high food costs," said Liu.

Coupled with the latest downward pressure on the VND, there are concerns this could prompt the SBV to hike interest rates.

"We expect inflation to breach the 4.5 per cent ceiling in the second quarter of this year, before likely dropping below 4 per cent on-year in the third. Moreover, a rate hike in the face of still-subdued credit growth would be negative for the nascent economic growth, so we do not expect the SBV to move," Liu said.

In fact, banking sector deposit rates recorded a slight upward trend again in April, particularly in the second half of the month. Specifically, a number of commercial lenders such as VPB, VIB, OCB, and STB hiked their interest rates in the range from 0.2-0.5 per cent annually for both short- and long-term.

Several state lenders such as VietinBank and BIDV also adjusted to increase interest rates by 0.2 per cent yearly for terms under 12 months.

However, deposit interest rates are still at their lowest level for many years, and the rates of some state lenders for long terms are also listed at a lower level than the group of joint-stock banks from 0.2 to 1 per cent annually.

Can Van Luc, chief economist at BIDV, assumes that the SBV will continue to relax the monetary policy in 2024 due to a combination of factors.

"First, the world economy continues to face many challenges. Global inflation is forecast to continue its downward trend and domestic inflation remains under control, below 4 per cent. Second, major central banks worldwide are expected to ease monetary policy tightening through lowering operating interest rates, and lastly, the government and SBV will continue to prioritise economic growth goals," said Luc.

Luc expects that the VND interest rates will enter a somewhat more stable period in 2024 and the interest rates in general will remain at a low level, and increase slightly from 0.2 to 0.5 per cent in the second half of the year when credit demand recovers more strongly.

Danish firms to intensify policy dialogue with Vietnamese counterparts

The Danish Minister for Food, Agriculture and Fisheries, Jacob Jensen, is leading a delegation to visit Vietnam from May 14-16. 

Danish Minister for Food, Agriculture and Fisheries Jacob Jensen and Vietnamese Minister for Agriculture and Rural Development Le Minh Hoan sign a Memorandum of Understanding on extending the government-to-government cooperation.

The minister's visit, which is accompanied by a group of Danish agri-food companies, aims to intensify policy dialogue with Vietnamese counterparts with a focus on a more sustainable food production and a resource efficient supply chain.

During his visit, the Danish minister has signed a Memorandum of Understanding with the Vietnamese Minister for Agriculture and Rural Development, Le Minh Hoan, on extending the government-to-government cooperation.

The cooperation will have increased focus on the green transition of food and agricultural production, aiming to promote a more sustainable and resilient food system for the coming years.

‘Denmark's green transition in sustainable food production has led to the development of strong, innovative methods and approaches throughout the value chain, which boost production yield and improve product quality but at the same time consume less water and energy. We look forward to sharing these insights and inspire further collaboration with our Vietnamese partners," the Danish minister said.

During the visit, he also made a keynote speech at a workshop on Antimicrobial Resistance in agriculture and aquaculture. 

During his visit in the South of Vietnam, Minister Jensen will visit Food Bank Vietnam, an important partner for the efforts to combat food waste and food loss. He will also pay site visits to a catfish aqua-farm in Tien Giang and an aqua-feed factory in Ben Tre, where close partnerships between Vietnamese and Danish research institutions and companies promotes the use of new green technologies and solutions for a sustainable aquaculture production in Vietnam.

On his last day of the visit, the minister will deliver a keynote speech at the seminar on “Sustainable agri-food production – Danish innovative technologies and financing opportunities”. The seminar will provide a forum to connect and facilitate exchange of experiences, technologies, financing and business opportunities between authorities, local decision-makers, sector managers as well as Danish and Vietnamese entrepreneurs.  

Light touch called for on gold trade

New measures to enforce stricter compliance and non-cash transactions in gold trading aim to increase transparency and regulatory oversight, but also raise concerns about their feasibility and potential disruption to traditional practices.

The State Bank of Vietnam’s (SBV) Ho Chi Minh City branch last week mandated that financial institutions and businesses involved in gold trading rigorously adhere to the invoicing regulations stipulated by the Ministry of Finance, ensuring compliance with anti-money laundering and counter-terrorism financing laws.

“Businesses must also monitor the buying and selling of gold bars and publicly post transaction prices at their venues,” a spokesperson for the SBV stressed.

In light of challenges related to gold bar transactions, the branch has requested that businesses promptly report back and offer suggestions for regulatory improvements. This directive is issued in response to frequent fragmented transactions in gold and silver, which often lack proper documentation, resulting in a transparency deficit and notable discrepancies between domestic and international gold prices.

The General Department of Taxation (GDT) has also been active, underscoring its recent initiatives to regulate electronic invoicing for gold transactions.

Earlier this month, the GDT also urged the SBV to help tighten monetary flows and consider enforcing mandatory non-cash payments for gold transactions. It also calls on local authorities to step up inspections and enforce compliance regarding invoice issuance.

Huynh Trung Khanh, an advisor to the World Gold Council in Vietnam, noted that a significant portion of the industry, comprising 5,835 gold and silver businesses accounting for up to 90 per cent of the market, has already adopted electronic invoicing. This development marks initial steps towards regulatory control over the sector.

Khanh, however, raised concerns about the feasibility of enforcing non-cash transactions across all gold sales.

“Mandating non-cash payments for gold transactions is not practical. Consumers, particularly the elderly who buy gold for savings, might be the first to react adversely, as not everyone has access to bank accounts or credit cards,” he stated.

He argued that while such a regulation could work for large transactions or for specific products like SJC gold bars, it would be impractical for smaller, everyday gold purchases.

“To date, no business sector has fully implemented a non-cash transaction rule. Imposing such a rule on the industry would be stricter than the regulations stipulated on gold trade management,” Khanh added.

Economist Ngo Tri Long also highlighted the deep-rooted preference for cash among Vietnamese consumers, particularly in rural areas, where gold is often bought as a small-scale investment or gift. “Imposing a cashless rule could significantly inconvenience these individuals, many of whom are not tech-savvy and lack the means for digital transactions,” Long pointed out.

He suggested that the proposal for non-cash payments should be limited to larger investment-grade purchases. “A policy requiring non-cash payments for transactions of one SJC gold bar or more would be more feasible and align better with the current economic landscape,” Long added.

Economist Vu Dinh Anh criticised the proposal as impractical. “The method of payment, whether for purchasing one thousand taels or just one tael of gold, should remain flexible, as it does not effectively regulate the market or deter gold purchases,” Anh remarked.

He further emphasised that banning cash transactions in the gold market would not address the disparities between domestic and global gold prices or the challenges in raw material imports, and could potentially worsen these issues.

There are experts who support the initiative. Nguyen Van Duoc, a member of the Vietnam Tax Consultancy Association and CEO of Trong Tin Accounting and Tax Consultancy, said, “Implementing non-cash payments would enhance management efficiency, facilitate tax collection, and streamline macroeconomic governance, resulting in a more transparent and efficient economy.”

Duoc pointed out a significant oversight in current practices. “We lack control over the amount of gold traded privately. Ideally, this initiative should have been enacted much earlier rather than being merely proposed now. It’s time for the SBV to intervene. Proper legal frameworks need to be established to appropriately regulate these transactions,” he suggested.

Despite his support, Duoc voiced concerns about potential barriers, such as limited public understanding and inadequate infrastructure for non-cash payments, which could particularly affect gold transactions.

“While not everyone is familiar with electronic banking, especially among older and rural populations, these are the minority. Overlooking these few cases may be necessary to achieve broader economic benefits,” he remarked.

Nguyen Van Thuc, a senior tax and accounting expert, recommended a cautious approach. “A preliminary survey or pilot programme should be undertaken before wide-scale implementation. This would allow us to make necessary adjustments and avoid any major issues during the policy’s rollout,” Thuc said.

Under the existing anti-money laundering regulations, transactions valued over VND400 million ($16,650) require reporting to the SBV. Businesses dealing in gold, silver, and gemstones, as well as payment intermediaries, must undertake thorough customer due diligence. This includes collecting, updating, and verifying customer information to gauge money laundering risks and ascertain the origins of assets.

Additionally, as per rules governing the gold market, entities are required to adhere to established accounting regulations, ensure proper issuance and usage of invoices, and are responsible for publicly listing details such as the weight, purity, and pricing of gold products at transaction points, maintaining accountability for product quality.

Forex rate hike dampens business performance in Q1

The VND-USD exchange rate has risen 5.9 per cent so far this year, badly affecting the performances of a slew of businesses in the first quarter.

These firms tend to have large dollar-denominated loans or big import values, leading to them incurring foreign exchange losses and badly affecting the profit picture.

In Q1 of this year, Power Generation Corporation 3 (Genco 3) under state utility group Vietnam Electricity saw its post-tax profit contract by $27 million, whereas it counted $25.8 million in profit one year ago.

Besides the fact that the average electricity price during the period was lower compared to a year ago, resulting in a drop in the company’s power sales revenue, its foreign exchange losses amounted to $25.7 million in Q1, compared to $7.1 million profit in the same period last year.

At the end of Q1, Genco 3 reported $1.43 billion in loans, encompassing over $223 million in short-term and about $1.21 billion in long-term loans. The loans are mostly in US dollars, Chinese renminbi, and Japanese yen, and were used to expedite a raft of sizable hydro and thermal power plants.

For textile and apparel firms, state-run Vietnam Textile and Garment Group (Vinatex) bagged $164.8 million in net revenue in Q1, down 6 per cent on-year.

Thanks to cost-saving measures, Vinatex counted $14.3 million in accrued profit during the period, up 5 per cent on-year.

Member units under Vinatex, however, mostly have dollar loans for production and business activities.

With the surging forex rate, Vinatex incurred $1.9 million in foreign exchange losses during the period, double compared to one year ago.

Its post-tax profit during the period shed 35 per cent on-year, falling to a mere $1.52 million.

At private-held southern major Century Synthetic Fiber Corporation (STK), the company counted $11.07 million in revenue in Q1, down 8 per cent on-year, yet its accrued profit amounted to $13.4 million, almost double on-year thanks to cost-saving measures.

Foreign exchange losses during the period, however, reached $316,600, pulling the company’s post-tax profit to nearly $30,000 during the period, shedding 56 per cent on-year.

In the group of retailers, MobileWorld Investment Corporation (MWG), the number-one company in mobile and electronics retail, counted $4.25 million in foreign exchange losses in Q1 of this year, compared to zero in the same period last year.

Similarly, leading steelmaker Hoa Phat Group reported $9.62 million in implemented foreign exchange losses and $7.6 million from unimplemented foreign exchange losses in Q1.

As for national flag carrier Vietnam Airlines, in Q1 of this year the company incurred $32.1 million in foreign exchange losses, triple that from a year ago, driving its financial costs to $61.2 million, which was double compared to last year.

At PetroVietnam Drilling and Well Services Corporation (PV Drilling), foreign exchange losses in Q1 came to $2.2 million, up 83 per cent on-year.

Do Duc Chien, deputy chairman of PV Drilling, revealed that as the company has multiple loans in foreign currencies and most of its investments are counted in US dollars, the solution to restrict foreign exchange risks is negotiating with its partners to make USD payments and only shifting USD into VND when necessary, while striving to keep its USD balance at the highest possible level.

In addition, PV Drilling is using derivative products from the SBV to stabilise the greenback amid market volatility.

Vietcombank Securities JSC assumed that as the exchange rate pressure is eminent because the US Federal Reserve is keeping interest rates and the dollar index high, meanwhile the VND interest rate will remain low.

This means that the risk associated with incurring foreign exchange losses will last until the Fed moves towards lowering interest rates.

Experts forecast that the Fed will commence rate cuts in the second half of this year.

Masan, Japanese partner reach framework agreement

Masan High-Tech Materials (HNX-UpCOM: MSR) announced on May 14 that it had reached a framework agreement with Mitsubishi Materials Corporation Group of Japan.

MMC Group intends to acquire 100 per cent of H.C. Starck Holding (Germany) GmbH from Masan High-Tech Materials.

The parties will enter into a long-term, win-win APT and tungsten oxide offtake agreement.

Masan is expected to retain its ownership in Nyobolt, a fast-charging lithium-ion battery technology company based in the UK.

Masan is also expected to retain potential monetary upside from future commercialisation of blackmass technology intellectual property developed by HCS.

In 2020 Masan High-Tech Materials acquired 100 per cent of HCS with the goal of bringing tungsten recycling technology to Việt Nam to transition itself to a more circular and sustainable business model.

In the same year MHT entered into a partnership with MMC Group.

However, due to regulatory constraints limiting MHT’s ability to import tungsten scrap into Việt Nam to implement its recycling strategy, MHT intends to sell 100 per cent of HCS to MMC Group to focus on optimising its domestic operations.

This framework agreement marks the next step in the parties’ business cooperation.

The use of proceeds from the envisaged transactions will be to reduce MHT’s outstanding debt balance. The offtake agreement with MMC Group anchors MHT’s tungsten products order book and enables it to maximise its overall order book.

The retention of Nyobolt is strategic and there is significant potential upside: in July 2023 the company successfully demonstrated an EV concept with six-minute charging.

Nyobolt has also signed Head of Terms with two major commercial customers and is in the final stage of finalising contracts, demonstrating significant progress towards commercialisation.

The combined transactions are expected to be accretive to Masan Group’s consolidated earnings and are consistent with the group’s deleveraging target of net debt to EBITDA of 3.5 times or less.

This also marks the first step in the group’s continuing journey to reduce interest in non-core businesses.

MMC Group’s potential acquisition of HCS plays to its strengths in the mid- and down-stream portions of the tungsten value chain.

The acquisition will provide MMC Group with access to HCS’s production hubs in Europe, North America and China as well as a comprehensive tungsten scrap recycling platform backed by proprietary intellectual property including 90 worldwide patents and another 53 in the application phase.

Binding agreements between the parties shall be subject to further discussions and customary corporate approvals.

Masan High-Tech Materials is the global leader in providing advanced tungsten materials used in key industries such as electronics, chemical, automotive, aviation and aerospace, energy, and pharmaceuticals with production facilities in Việt Nam, Germany, Canada, and China.

As the largest manufacturer of mid-stream tungsten products outside of China, the company has a research and development centre each in Germany and Việt Nam, and it is currently operating the Núi Pháo polymetallic mine and a state-of-the-art tungsten processing plant in Thái Nguyên Province.

It is also a globally significant producer of fluorite and bismuth.

HCS, a wholly owned subsidiary of Masan High Tech Materials, is the world’s leading manufacturer of high-quality tungsten powder tailored to individual customer needs.

MMC Group is an “integrated materials manufacturer”, providing such basic materials as copper and cement.

The group also manufactures and sells mechanical parts, electronic materials and components used in automobiles, home appliances and others, and the tools used to make them.

It is also involved in recycling and the energy business. 

Ensure feasibility of direct power purchase mechanism: Deputy PM

Deputy Prime Minister Trần Hồng Hà asked to focus on ensuring feasibility of the direct power purchase agreement (DPPA) mechanism to create a foundation for a competitive power market.

Speaking at the meeting discussing the draft decree on DPPA on Tuesday, Hà said that the implementation of power policies remains slow due to the lack and inconsistency in the legal framework.

DPPA is considered a foundation for Việt Nam to develop a competitive power market in which the State management will be separated from electricity production, transmission and distribution. The State management will only focus on ensuring the national energy security while enterprises, whether state-owned or private, can compete equally, Hà stressed.

The DPPA decree needs to clarify participants, responsibilities and obligations of parties to ensure economic benefits and grid safety.

In addition, it is necessary to develop policies to encourage the use of green and renewable energy to get green credits.

With regard to the proposal of conducting direct power trading through private lines or investing in new storage system, Hà said that the regulations should be developed towards not regulating the capacity limits.

Hà asked the Ministry of Industry and Trade and Việt Nam Electricity (EVN) to calculate and announce the renewable power capacity which can be raised as a basis for reducing coal- and gas-fired power sources in the planning, emphasising that the eighth national power development plan (PDP8) does not limit the development of renewable energy providing that it meets technical criteria to replace other sources at reasonable prices.

The decree also needs regulations to ensure transparency in the use of electricity sources of enterprises for the granting of green credits.

According to Deputy Minister of Industry and Trade Nguyễn Sinh Nhật Tân, the draft regulates the direct power purchase to be conducted via the national grid and separate lines, implementation procedures and responsibilities of relevant parties.

The viewpoint of the decree is to ensure feasibility without issuing sub-documents.

Accordingly, direct power purchase through separate lines can be applied to customers who are located near generation sources with the prices agreed upon the generators and customers.

Direct power purchase through the national grid will be applied to customers who are located far the generation sources and conducted via the spot electricity market with fees including transmission, distribution, dispatching, trading operation, and others.

A representative from Việt Nam Electricity Association said that it is necessary to strictly manage the direct power purchase through separate lines to prevent rampant development and disruptions to existing planning.

The DPPA is expected to be submitted to the Government for consideration within this month.

Under the Government’s power market development plan approved in 2013, Việt Nam aimed to develop a competitive generation market in 2012-18, a competitive wholesale electricity market from 2019 and a competitive retail electricity market from 2023.

However, the implementation failed to meet the target. Currently, the competitive power market are mainly formed for generation and wholesale while the retail market is still at early stage.

Quang Nam forum promotes innovation, e-commerce on digital platforms

More than 200 live streamers, entrepreneurs, and representatives from cooperatives gathered at a forum on innovation and e-commerce on digital platforms in the central province of Quang Nam on May 15 as part of TechFest Quang Nam 2024, an innovation startup promotion event.

The forum offered an opportunity for the participants to expand their connectivity, thus introducing their innovative startup projects and products, “One Commune-One Product” items, and typical agricultural products of Quang Nam.

It also provided updates on modern distribution channels, policies and market information, while helping stakeholders to sell products on digital platforms, and optimise technologies to raise production and business efficiency.

On this occasion, representatives of the Agency for Enterprise Development under the Ministry of Planning and Investment presented orientations for sustainable e-commerce development, and outstanding models rolled out by some localities and businesses in this regard./.

VinFast customers to access extensive network of 700,000 charging points in Europe

VinFast Auto on May 15 announced the signing of a cooperation agreement with Bosch, one of the leading global suppliers of automotive technology and services, giving VinFast customers in Europe access to Bosch's extensive network of 700,000 charging points in 30 European countries and providing them with the freedom and convenience to travel across Europe with confidence.

Building on their two-year collaboration on charging services in North America, Bosch and VinFast have partnered to provide VinFast customers in Europe with the confidence to embark on journeys across the continent through easy access to a vast network of compatible charging stations.

Aligned with VinFast’s principle of "placing customers at the forefront," this partnership highlights the company’s dedication to supporting communities in Europe with their transition to sustainable transportation. It also marks a pivotal achievement in VinFast's efforts to expand in the European market.

This agreement ensures an accessible charging experience for VinFast customers, who can locate, charge, and pay seamlessly through the VinFast smartphone app or directly through the vehicle's integrated infotainment system. They also receive complete transparency over their charging sessions and history, allowing them to manage charging costs effectively.

As Bosch is continuously innovating its charging technology efforts, this partnership ensures VinFast customers are at the forefront of charging advancements and can receive a wide variety of options as they become available. They can also access a more comprehensive customer support system from both VinFast and Bosch for any charging-related issues.

Beyond established markets like the US, Canada, and Europe, VinFast is quickly expanding into burgeoning markets across Asia, including India, Indonesia, Thailand, the Philippines, as well as the Middle East and Africa./.

Vietnam’s steel industry commits to green transition

More than 400 major industry players from the Asian steel sector, including industry experts, associated trade associations and government representatives joined the 2024 Southeast Asia Iron and Steel Institute (SEAISI) Conference and Exhibition in the central city of Da Nang.

The event featured a series of trade promotions and special seminars that introduce the latest steel production technologies and provide forecasts on global steel demand in the coming years.

The conference, themed ‘Surviving and Thriving in the Decarbonised World’, was a way for steel producers to share business strategies, their approach to advanced technologies and gain information from regional partners.

Chairman of the Vietnam Steel Association (VSA) Nghiem Xuan Da, said: “The conference is an excellent opportunity for us to discuss policy development, technology and the challenges and opportunities of working towards a sustainable green steel industry.”

Dr. Edwin Basson, Director General of the World Steel Association, said global steel production has increased tenfold since the 1950s. The steel industry has been profoundly impacted by four major trends intensified by the pandemic, which have brought significant changes: technological advances, socio-economic transformations, geopolitical shifts, and notably, climate change.

Since 2015, Vietnam’s steel industry has developed into one of the leading manufacturers in ASEAN for the production and consumption of finished steel products and in 2023 was ranked 12th in the world in crude steel production, with an output of 20 million tonnes. However, the industry remains a major greenhouse gas emitter and environmental impactor - responsible for 7% of national total emissions and about 46% of industrial processes, according to experts.

Vice Chairman of the Da Nang City People’s Committee Tran Chi Cuong said central and local state management agencies need to focus on creating conditions for the Vietnam Steel Association and the steel manufacturing business community to have a successful green transformation, contributing to Vietnam’s commitments made at the 26th UN Climate Change Conference (COP26).

“It is recommended that experts and international organisations pay attention and help support the Vietnam Steel industry in sharing experiences, technology, techniques, financial support, human resources and management solutions, in order to build, develop and implement a carbon neutral roadmap,” Cuong said.

There was also an exhibition area at the conference, with steel companies from Southeast Asia and well-known brands from countries with advanced steel industries, such as Australia, Japan, and the Republic of Korea, participating./.

Vietnam Airlines to offer 300,000 cheap tickets during summer peak

The national flag carrier Vietnam Airlines will offer nearly 300,000 cheap tickets during the upcoming summer peak season.

Accordingly, a one-way ticket is set from VND1,098,000 (US$43) for Economy Class and from VND1,905,000 for Business Class. The prices are inclusive of taxes and fees and offered for sale on early-morning or late-night flights.

In addition, better deals will be available if passengers book their tickets at least seven days ahead of their departure.

The programme runs from May 15 to September 6, 2024.

To meet travel demand, Vietnam Airlines will offer nearly 1 million seats on late-night flights on domestic routes in June, July, and August.

Deputy PM emphasises need for advanced urban railway technology

Deputy Prime Minister Tran Hong Ha has emphasised the importance of selecting advanced urban railway technology during the first meeting of a task force established to accelerate urban railway projects in Hanoi and Ho Chi Minh City.

The meeting, held in Hanoi on May 15, underscored the Government's commitment to developing a robust urban railway network in Vietnam's two largest cities.

Deputy PM Ha, who is also head of the task force, also stressed the need to ensure mastery of the chosen technology throughout the entire project lifecycle, from design and production to operation and management, towards forming an urban railway industry in the country.

The Ministry of Transport (MoT) and the two cities were asked to work closely together to build a comprehensive plan for urban railway development.

The MoT was tasked with promptly building mechanisms, policies and legal frameworks for the management and operation of the urban railway system. This includes issuing standards and regulations for technology, machinery, elevated and underground railways, passenger stations, organisational structures and workforce training.

During the implementation of urban railway projects, attention must be paid to developing the urban transportation construction industry, with key domestic firms involved, the leader noted.

According to the approved master plan, Hanoi will build 10 urban railway lines with a total length of 417.8 km while Ho Chi Minh City will construct 11 lines stretching around 229.1 km.

To date, Hanoi has completed and put into operation one line, the 13km Cat Linh – Ha Dong. Two other lines, Nam Thang Long-Tran Hung Dao and Nhon-Hanoi station totaling 24 km are under construction. Meanwhile, HCM City is building two lines - the Ben Thanh - Suoi Tien and Ben Thanh - Tham Luong, with a total length of 20.74km.

According to Chairman of the Hanoi People's Committee Tran Sy Thanh, Hanoi and Ho Chi Minh City need to build an additional 18 urban railway lines, which is a significant volume of work that requires a comprehensive, breakthrough and synchronous solution package.

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