The Ministry of Labor, Invalids and Social Affairs (MOLISA) suggested the Government issue a new decree on regional minimum wage, applicable from July 1.

The ministry proposed that regional minimum wage should be increased by 6 percent on average in all four regions, or around VND200,000-280,000.

The proposal was made as consumer price index is projected to rise from 4-4.5 percent this year, making it difficult for workers to ensure the minimum living standard for their families with the current regional minimum wage introduced two years ago.

Specifically, the monthly minimum wage should be increased to from current VND4.68 million to VND4.96 million in region I; from VND4.16 million to VND4.41 million in region II, from VND3.64 million to VND3.86 million in region III, and VND3.25 million to VND3.45 million in region IV.

Region I covers urban areas of Ha Noi and Ho Chi Minh City while region II covers rural areas of Ha Noi and Ho Chi Minh City along with Can Tho, Da Nang and Hai Phong cities.

Region III covers provincial-level cities and districts of Bac Ninh, Bac Giang, Hai Duong, and Vinh Phuc provinces and region IV encompasses the rest of the country./.

Airlines increase night flights to meet summer demand

Airlines in Vietnam have increased the number of night flights to meet the increasing demand during summer.

According to the Civil Aviation Authority of Vietnam (CAAV), some airlines still need to lease planes as planned. As scheduled, national flag carrier Vietnam Airlines will receive two planes in June and July, compared to 4-6. Meanwhile, VietJet Air will not receive any planes this year, compared to 4-8 as planned.
 
Domestic airlines have increased flights in the evening, at night, and early morning amid rising summer demand.

Vietnam Airlines will operate around 5,200 flights at night and in the early morning this summer, up 134 percent against last summer.

The national carrier has offered many attractive discounts to encourage customers to purchase air tickets early. For instance, the airline will offer a 10-15 percent discount to groups of 4-8 passengers.

VietJet Air’s night flights this summer will be increased by 35 percent, concentrating on air routes from Hanoi, HCM City, Danang and Nha Trang to different localities.

VietJet Air has also launched promotional programmes for flights scheduled to depart from September to December.

Bamboo Airways offers a discount of 8 percent for flights between 10 pm and 2 am on the following day on Friday, Saturday and Sunday every week, lasting until the end of 2024.

In the context of the aircraft shortage, Vietnam Airlines has increased the time to use their fleet to 11 hours per day from the previous 10 hours. The time would be raised to 12 hours if necessary.

Vietjet Air has increased the time from 12.8 hours to over 13.2 hours daily for its fleet.

Import-export turnover through Lạng Sơn surpasses $22 billion

Total import-export turnover of goods through Lạng Sơn Province reached over US$22 billion after the first four and a half months of the year, up 29 per cent over the same period in 2023.

Tân Thanh and Hữu Nghị are the two most active border gates, with customs working to clear imports and exports including agricultural products, fresh fruit, cars, electronic components and household goods daily.

Since April 2024, on average, there have been around 400 vehicles bringing fresh fruit through the province's border gate area every day, mainly through Hữu Nghị and Tân Thanh gates.

Director of Tân Thanh customs branch Vũ Văn Bình said agricultural products exported through Tân Thanh border gate include mango, jackfruit, watermelon, durian, dragon fruit, and tapioca starch.

In the agricultural season, the Tân Thanh department carries out customs clearance procedures for around 200 vehicles per day on average, although it can clear up to nearly 300 vehicles at the peak. Around 8,000 to 10,000 tonnes of fresh fruit are exported per day, an increase of more than 50 per cent compared to the end of 2023.

At Lạng Sơn Province border gates, agencies and officials coordinate to ensure smooth operations. They also maintain diplomatic contacts with Chinese partners to facilitate trade activities. Customs Branches also actively prioritize procedures, extend customs clearance time, and implement traffic management to reduce congestion at Hữu Nghị international border gate.

VNDirect approved for capital increase to over $597 million

The State Securities Commission (SSC) has granted VNDirect Securities Corporation a certificate to conduct a public stock offering. 

The offering will take place within a 90-day period from the date of the certificate issuance.

Specifically, the securities firm will issue over 300 million shares with a face value of VNĐ10,000 per share (US$0.39). Approximately 243 million shares will be offered to existing shareholders, equivalent to a 20 per cent ownership ratio.

The company will also issue nearly 61 million shares to distribute a 5 per cent dividend to existing shareholders.

The registration and payment period to purchase these shares will be from June 6 to July 3.

With the earning of over VNĐ2.4 trillion from the issuance, VNDirect plans to allocate 40 per cent of the funds for securities margin lending, 20 per cent for investments in valuable papers, 20 per cent for securities issuance guarantees and 20 per cent for the issuance and distribution of warrants.

Following the offering, VNDirect's charter capital will increase from VNĐ12.2 trillion to nearly VNĐ15.2 trillion (equal to over $597.1 million). This will solidify its position as the securities company with the largest charter capital in the industry.

Currently, SSI Securities Corporation holds the title of the largest securities company with a charter capital of over VNĐ15.1 trillion, followed by VPBank Securities (VPS) with a charter capital of VNĐ15 trillion. 

If the capital increase is successful, VNDirect will surpass both of these companies.

Additionally, VNDirect's annual General Meeting of Shareholders has also approved a plan for a private placement, with approximately 244 million shares expected to be offered to professional securities investors. 

There are plans to allocate over 24 million shares through the employee stock ownership plan (ESOP) and issue more than 12 million bonus shares to employees.

If all these plans are successfully executed, the company will issue a total of nearly 585 million new shares, resulting in an increase in VNDirect's charter capital from VNĐ12.2 trillion to over VNĐ18 trillion.

As of now, VNDirect has not yet organised its annual General Meeting of Shareholders for 2024. 

The company has announced that it will finalise the list of shareholders participating in the meeting on May 16, but the specific details regarding the timing, location and meeting materials have not been disclosed.

On the stock market, VNDirect's shares are traded at VNĐ22,150 per share at 9:50am on Monday.

Bond issuances surge despite lack of credit ratings

A report by the Vietnam Bond Market Association shows that in the first four months of this year, the total value of corporate bond issuances amounted to $1.5 billion and included six initial public offerings and 30 private placements.

During the same period, the volume of bonds enacted by real estate firms accounted for over 51 per cent, much higher than last year’s figure of 22.5 per cent, while construction businesses have also massively embraced bond issuances.

In the first quarter (Q1) of the year, bond values distributed by businesses in the construction and building material sectors grew by more than 2.5-fold compared to the whole of 2023.

Bond transactions in the market were also vibrant. Nguyen Quang Thuan, CEO of FiinRatings, a provider of financial data analytics and research, said, "The average value of bond transactions was approximately $166.6 million in Q1, soaring over 2,100 per cent on-year, with the real estate sector making up 29 per cent of the market’s total transaction value."

Economist Le Xuan Nghia believes it is necessary to turn corporate bonds into a key capital mobilisation source for the economy; and in the long term, corporate bonds must be made the main medium and long-term capital raising channel for businesses.

"Consumer loans account for 50-70 per cent of total outstanding loans in the United States and Europe, meaning banks mainly lend short-term. With long-term capital, businesses mainly mobilise through the bond and stock markets," said Nghia.

"Vietnam has a lot of work to do to build a healthy corporate bond market, especially with corporate bonds issued to the public and increasing credit ratings. If the market was designed properly, Vietnam would be a leading corporate bond market in the region," he added.

Economic experts believe that a developed credit-rating culture would contribute to increased transparency and improved investor confidence, thereby creating the conditions for developing a healthy and sustainable corporate bond market.

The government's goal is to increase the scale of the corporate bond market to 20 per cent of GDP by 2025, increasing to 30 per cent by 2030, from the current level of 10 per cent.

However, the rate of corporate bonds with credit ratings in Vietnam is still low. According to FiinRatings, the proportion of rated corporate bonds in ASEAN countries averages 51 per cent; with the highest amounts in Indonesia, Thailand, and Malaysia, ranging from 54-82 per cent.

Meanwhile, in Vietnam, last year saw rated corporate bonds accounting for just 9 per cent of total privately issued corporate bond volume.

In Q1, there were 30 individual corporate bond issuances worth more than $1.12 billion, but the amount of rated corporate bonds only accounted for 7.5 per cent.

"Investors need to understand the role of credit ratings to make decisions and manage risk for their portfolios," said FiinRatings CEO Thuan.

More issuances approved to bolster securities capital

Vietnamese securities firms are rapidly raising capital to enhance financial capacity, gearing up for market shifts and the expected upgrade to emerging market status.

SSI Securities Corporation (SSI) last week approved the issuance of 453.3 million shares to increase its charter capital to nearly $818.54 million. This issuance comprises up to 302.2 million shares from equity and up to 151.1 million shares offered to existing shareholders.

Similarly, Viet Dragon Securities approved a plan to boost its capital by nearly 54.3 per cent, reaching about $135 million. VDSC will distribute an 11.5 per cent dividend in shares, issue 8.85 million ESOP shares, and conduct a private placement of up to 81 million shares to strategic and professional investors to enhance financial capacity and support business expansion.

Vietcap Securities endorsed three capital-raising methods, increasing its charter capital to nearly $300 million, while FPT Securities also plans to raise its charter capital from $89.38 million to approximately $127.45 million.

MB Securities will issue rights to 109.4 million shares to shareholders and conduct a private placement of over 28.7 million shares (at a negotiated price, not lower than book value) to professional investors to support business activities.

Meanwhile, Viet First Securities and Thien Viet Securities both approved the issuance of more ESOP shares to bolster their capital.

ACB Securities also received approval from the State Securities Commission (SSC) and the Ministry of Finance to increase its charter capital by $125 million to about $291.67 million.

Capital mobilisation is critical for enhancing profit margins in margin lending, a significant growth driver for securities firms, and is essential for boosting proprietary trading, the second-most important business segment for these companies.

By the end of Q1, total market margin debt returned to its 2021 peak, reaching $8.33 billion, marking a nearly 20 per cent increase from the end of 2023, with considerable growth potential remaining.

At the AGM in April, Nguyen Mien Tuan, chairman of Viet Dragon Securities, detailed the company’s strategy to expand its capital base to enhance financial capacity, supplement margin lending, advance payments, proprietary trading, underwriting, capital business, and technology investments.

“Most securities firms’ capital-raising initiatives are viewed as preparation for significant developments following the launch of the Korean Exchange (KRX) trading system and the expected upgrade of the Vietnamese stock market from frontier to emerging status by 2025,” Tuan said. “The KRX system, anticipated to allow intra-trading transactions and selling pending securities, requires securities firms to enhance resources for technology investment, new products, and improving user experience.”

An upgrade to emerging market status is projected to attract significant foreign capital inflows, estimated by the World Bank to be $25 billion by 2030, thereby increasing competition among securities firms.

Nguyen Khac Hai, head of Legal and Compliance at SSI, said, “Both short-term and long-term capital pressures are increasing on securities firms to upgrade systems and enhance service capabilities for investors. Most securities firms plan to raise capital in 2024 and 2025 to prepare for this significant development.”

Nguyen The Minh, analysis director at Yuanta Securities Vietnam, observed that recent capital increases have largely come from firms without bank backing due to the lack of financial support.

“Additionally, the SSC prohibits securities firms from raising funds from customers, necessitating the search for market capital to support business operations,” Minh said. “Furthermore, many securities firms are transitioning towards investment banking models, moving beyond securities trading for transaction fees, which requires immediate resource preparation.”

Minh believed that upcoming market changes, such as intraday trading, selling pending securities, and relaxing margin requirements for foreign investors, will make securities firms pivotal in risk mitigation, necessitating compliance with minimum charter capital requirements.

“Pre-funding operations, in particular, require substantial capital,” Minh noted. “Some securities firms are increasing capital following investments in corporate bonds or commitments to repurchase bonds. This increase could indicate risks in bond recovery, prompting investors to scrutinise these firms’ proprietary trading portfolios closely.”

US to end duty-free tariffs on Vietnamese solar panels

The US' duty-free tariff treatment for solar products from Cambodia, Malaysia, Thailand, and Vietnam, will end in June, according to an announcement by the White House on May 16.

President Biden initiated a temporary, 24-month duty-free period in June 2022 to facilitate certain imports from Cambodia, Malaysia, Thailand, and Vietnam to ensure a steady supply of materials while the US' domestic solar manufacturing was ramped up. Since then, US solar manufacturing and deployment have both grown dramatically.

According to the White House, President Biden’s 'Investing in America' agenda has catalysed a clean-energy manufacturing and deployment boom in the US.

In response to this, China has further ramped up its solar capacity and began dumping artificially cheap modules and components onto the global market to circumvent trade enforcement measures in an attempt to put other countries’ manufacturers out of business.

Agricultural exporters face hardship amid escalating costs

Surging input costs show little sign of abatement, causing concern among agricultural producers.

Nguyen Ngoc Luan, director of Global Trading Connection Co., Ltd., based in Ho Chi Minh City’s Hoc Mon district, revealed that the price of coffee is increasing each day, leading to coffee producers like them unable to run production and business activities smoothly.

"Coffee prices have gone up continually from 2023 until the present, and this is a situation that could drag on for the rest of the year," said Luan.

The price of coffee started to rise in July last year, initially fetching $1.7per kg, then raising to $2.08 per kg. By late 2023, 1kg of coffee fetched $3.75, and is now around $5.40

Salt intrusion in southwestern localities and a lack of water for irrigation are contributing factors to the adverse impact on the quality of agricultural produce.

Nguyen Dinh Tung, chairman of Vina T&T Group, a major exporter of distinct local fruits based in Ho Chi Minh City’s Phu Nhuan district, cited the price of coconuts as an example of the runaway costs.

"Coconuts sold from the garden now fetch $5.40 for a batch of 10 while export-standard coconuts go for around $8.30. Previously, a batch of 10 coconuts could be bought for between $1.70 and $2.10," said Tung.

Amid such sharp price volatility, firms in the food industry are forecasting a sharp hike in the price of processed food for the rest of this year as well as for the 2025 Lunar New Year season.

Global Trading Connection's Luan believes that many businesses will be forced to make supply purchases at these inflated costs as their current stock has almost drained out.

"We bought in small amounts at first and bought on specific occasions. The company can accept losses to fulfill contracts for our long-term clients, but for new customers we must renegotiate the price so we must wait for the customer to accept the new price before buying materials," said Luan.

At this point, the company is unable to grow their new customer base as it has been forced to put up its prices by 30 per cent for export orders, which no new potential partners have agreed to.

"At present, the best option is to take more profit from items to cover other areas showing less, and accept a reduction in overall profit," said Nguyen Trung Dung, chairman of DH Foods JSC based in Ho Chi Minh City’s District 5.

Industry experts have suggested businesses bolster partnerships in material-growing areas to ensure a stable supply chain and ensure a strategic approach to taking orders.

"The price of agricultural products depends heavily on the global market. That's why for this year's crop season, when sales volumes were large and prices were fairly low, we signed contracts for the whole year to reduce our risk," said Dung.

Logistics firms take alternative steps

While logistics businesses in Vietnam are taking action to respond to Red Sea tensions, the situation may drag on for some time.

Over the past weeks, the Business Planning Department of Vietnam Railways (VNR) has been working on more contracts from businesses after Red Sea tensions forced them to find alternative means of transportation.

Nguyen Chinh Nam, head of VNR’s Business Planning Department, said, “We have received some more contracts in recent times. The amount of goods exported to China increased the most, followed by transit goods exported from Vietnam to third markets via China such as Europe, Central Asia, Mongolia, and others. Our international transport output increased by more than 40 per cent on-year.”

An Tin Logistics is one firm that has found an alternative rail solution, reducing shipping time and risks for customers. According to a representative, instead of going directly from Vietnam via the Suez Canal, which takes 45 days, or going through the Cape of Good Hope, which takes 55 days, export businesses can go by rail from Vietnam to China and then to Europe in just 27 days. Compared to sea transport, the outstanding advantage of the Vietnam - China - Europe railway cargo route is more stable.

“By doing this, we have received the support of many export businesses because it optimises shipping time, promptly delivers goods to partners, and avoids order cancellations, and protects business reputation. In addition to significantly reducing transportation time, it helps save logistics costs, improves capital turnover and enhances product competitiveness for businesses,” he said.

“Currently, although rail transport is only used for consumer goods and common household appliances, such as garments, or canned and bottled foods, for agricultural products that do not require refrigeration, it has eased worries among businesses, and these are all key export items of Vietnam. We will keep close eyes on the situation, and work with partners to choose the most appropriate option in the logistics chains for each industry.”

According to the Vietnam Logistics Business Association (VLA), since the end of 2023, due to conflicts in the Red Sea, many shipping lines have had to change routes, not going through the Suez Canal but having to go around the Cape of Good Hope, lengthening ships’ journeys.

In 2023, Vietnam’s import-export turnover of goods is $71.14 billion with the European region and $122.3 billion with the North American region. The total import-export turnover of these two regions accounts for 28.4 per cent of the country’s total trade turnover value last year. Therefore, the Red Sea conflict causes a significant impact.

“The security crisis in the Red Sea is increasing costs, which has an impact on logistics enterprises of Vietnam as well as countries that export many goods to these areas. There is currently no improvement and no solution, so we continue to wait,” said Le Duy Hiep, chairman of the VLA. “We currently recommend that shipping lines increase costs in the spirit of sharing with customers, and avoiding profiteering.”

Despite interim challenges, there are potential opportunities for logistics companies in Vietnam. According to the VLA, Vietnam’s trade showed positive signs with a rise of 15.5 per cent in the first quarter of 2024, creating more opportunities for logistics companies. As a result, they have invested in infrastructure, IT, and automation to increase competitiveness.

Hiep said that because imports and exports occur across all provinces and cities, regional links are essential. “Therefore, coordination between provinces and regions is essential. There needs to be specific policies to enhance connectivity and promptly resolve difficulties,” he said.

In addition, green logistics are also changing the way they operate. Logistics businesses in Vietnam are increasingly investing in automation to increase competitiveness.

“There have been clear advances and transformations in digital transformation for logistics services, such as the majority of logistics businesses now apply electronic delivery orders, electronic bills, and electronic service invoices,” said Hiep.

He added that at seaports, they have applied the e-port model, electronic customs clearance of ships, and submission of documents to relevant authorities through software and online.

Credit rises 9.6% in HCMC in Jan-Apr

January-April credit in HCMC grew by 9.6% year-on-year to VND3.5 quadrillion, driven by an increase in long-term credit, according to data from the HCMC Statistics Office.

The State Bank of Vietnam’s HCMC branch reported that credit in April increased by 0.35% against the previous month. From January to April, credit rose by 1.31% versus the end of 2023 and climbed by 9.33% compared to the same period last year. Long-term credit expanded by 1.96%, while short-term credit inched up by 0.6%.

During this period, local banks restructured loans for nearly 40,570 customers, keeping their loan classifications unchanged. The total restructured debt amounted to VND46.8 trillion.

Through a program connecting banks and businesses, loans to support enterprises reached over VND184.1 trillion, benefiting 43,171 businesses, households and cooperatives.

Lending to businesses in industrial parks and export processing zones in HCMC amounted to nearly VND222.2 trillion, a 3.8% rise against the end of 2023 and benefiting 3,634 clients.

SIAL Canada 2024 opens ways for Vietnamese firms to expand export markets

Two Vietnamese firms – Tufoco and Sapo DAKLAK - joined SIAL Canada 2024, the largest food innovation trade show in Canada and North America, which drew tens of thousands of exhibitors from more than 40 countries and over 20,000 visitors from around the world.

Both companies attracted the attention from many visitors, opening prospects for Vietnamese firms to export processed food products in the future, as the exhibition is considered a gateway to the North American market for all participating businesses.

According to Vietnamese Counselor in Canada Tran Thu Quynh, the Vietnamese Trade Office has supported Vietnamese businesses, especially small- and medium-sized firms, to join the event.

Along with seeking ways to assist the firms in transporting samples, the office will work to connect Vietnamese firms with local importers in the coming time, Quynh said.

In the SIAL Canada 2024, Tofuco introduced canned coconut water and juice to North America, one of the fastest growing markets.

Jenny Pham, Sales Manager of Tofuco, said that the firm aims to seek distributors and importers in this region.

Meanwhile, Sapo DAKLAK, which produces frozen fruits and vegetables, came to the event to expand export markets as the firm plans to open its third factory later this year. Sapo DAKLAK brought to this exhibition frozen fruits processed according to international standards, ensuring quality as well as retaining nutrition and natural colour of the products.

Sapo DAKLAK Sales Manager Mia Dang said that after the SIAL Canada, the firm will attend Thaifex in Thailand, Seoul Food in the Republic of Korea, and other exhibitions in Australia, Russia, and France.

Apart from businesses seeking to directly export agricultural products and processed foods to the Canadian market, other firms in Vietnam are also seeking to partner with local companies in production and increasing added value to Vietnam's agricultural products.

Quynh said this is a good way to enhance added values for farm produce, making it easier to bring Vietnamese products to the Canadian market and others which both Vietnam and Canada share free trade agreements with./.

NZ launches "Made with Care" campaign in HCM City

The New Zealand Trade and Enterprise (NZTE) kicked off its 2024 "Made with Care" global campaign in Ho Chi Minh City on May 20.

This year, NZTE continues its successful collaboration with major retailers AEON and LOTTE to make a wide range of New Zealand food and beverage products readily available to Vietnamese consumers.

The campaign, running until May 22, features leading New Zealand food and beverage brands such as Anchor, Anlene, Bostock, Fresh Co, Freshmax, Kiwi Crunch, Meadow Fresh, Mr. Apple, Olivado, Rockit, T&G, and Zespri.

Launched in Vietnam in 2021, the "Made with Care" campaign has become a key support for food and beverage trade between the two countries. This year's iteration marks a new phase of cooperation, underlining both nations' commitment to further expanding bilateral trade.

According to the NZTE, the food and beverage sector holds a key role in the trade relationship between Vietnam and New Zealand, accounting for 84% of New Zealand's exports to Vietnam, with a total value of 790 million NZD (483 million USD) by the end of December 2023. Major exports include apples, kiwi, dairy products, and wine./.

HCM City to host iTech Expo 2024 in July

The first-ever international technology exposition (iTech Expo) 2024 will take place in Ho Chi Minh from July 10-12, featuring 500 booths from leading technology countries and territories around the world, heard a press conference on May 20.

Jointly organised by Ho Chi Minh City Computer Association, VIETBUILD Construction International Organisation Corporation and Alta Media, the event is expected to attract 300 domestic and international companies.

Themed “New tech for new era”, the expo aims to explore leading technology trends to promote digital transformation and global scientific, technological and engineering development.

On display will be innovative technologies and modern products, solutions and applications in various fields such as 5G, Artificial Intelligence (AI), Internet of Things (IoT), blockchain and high-tech agriculture.

According to Lam Nguyen Hai Long, Chairman of the Ho Chi Minh City Computer Association, the highlights at the expo are groups of products and solutions related to smart lighting technology and smart city development applications, consumer electronics and information technology, manufacturing equipment and electronic components.

iTech Expo is set to be annual event, aiming to build Vietnam’s brand in Southeast Asia and Asia, he continued.

Twelve seminars will be held within the framework of the expo, along with business matching programmes, Hai added./.

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