The authorities of the northern province of Bac Giang on May 4 presented certificates recognising investment registration to two Singaporean-funded projects worth 132 million USD in the local districts of Viet Yen and Yen Dung.

One of the projects is invested by the Singaporean-based HIUV Applied Materials Technology Investment Pte. Ltd and located at Viet Yen’s Viet Han industrial park. The 90-million-USD project, set to span some 52,803 sq.m. of land, aims to manufacture self-adhesive PET protective films, EAV films, silicone films, film materials, and plastic products and materials serving the solar energy industry.

After being operational following its 12-month of construction, the facility is expected to employ about 300 people and contribute to the State budget approximately 44.5 billion VND (1.89 million USD) per year.

The second is a 42-million-USD factory by the Yonz Technology Singapore Pte. Ltd. at the Yen Lu industrial park, Yen Dung district. Covering about 100,000 sq.m., it is designed to annually produce some 110,000 tonnes of aluminum frames for the solar battery manufacturing and assembly industry. Expected to be completed in 24 months after receiving the certificate, the plant will create nearly 1,090 jobs and annually contribute to the State budget approximately 187 billion VND.

Bac Giang now houses 493 foreign-invested projects valued over 9.1 billion USD.

Retail petrol prices fall sharply following latest adjustments

Retail petrol prices reduced sharply as of 3 p.m. on May 4 following the latest review jointly conducted by the Ministry of Industry and Trade and the Ministry of Finance.

Accordingly, the price of E5RON92 bio-fuel fell by VND1,251 to VND21,437 per litre at a maximum, whilst that of RON95-III was also down by VND1,319 to VND22,320 per litre.

Diesel 0.05S and kerosene are now to be sold at no more than VND18,254 and VND18,528 per litre, marking reductions of VND1,143 and VND952, respectively.

Meanwhile, the price of mazut 180CST also decreased by VND334 to 15,509 per kg. 

The two ministries moved to extract VND500 per litre from the prices of E5RON92 and RON95, VND300 per litre from the prices of diesel and kerosene, as well as VND300 per kg from the price of mazut for the petrol price stabilistion fund.

Ministries, agencies, localities urged to curb cross-border poultry smuggling

The Ministry of Agriculture and Rural Development on May 4 asked ministries and localities to strengthen the control, prevention, detection, and handling of the smuggle of poultry and poultry products into Vietnam.

It has been reported that over the past time, the smuggle of such products into Vietnam remain complicated in border localities, especially in central and southern provinces.

The ministry asked provinces and centrally-run cities to pay attention to and direct relevant agencies and authorities at all levels to strengthen inspection, supervision, and control, especially in rural areas, border gates, trails, openings in border areas, seaports, and waterways to promptly detect and strictly handle the cases.

Once seized, the contrabands will be destroyed immediately, and samples taken for testing.

At a recent conference seeking solutions for Vietnam’s poultry production to overcome difficulties in the new situation on April 27, the Vietnam Poultry Breeding Association reported that now many products used as animal feed such are smuggled into Vietnam as food for humans.

The association called on authorities and agencies to strengthen control on cross-border poultry transportation which helps prevent disease outbreaks and ensure healthy competition in the domestic market.

In the first four months of this year, Vietnam imported 51,000 tonnes of chicken meat, excluding illegal imports.

Vietnam posts trade surplus of $6.35 billion in four months

In April alone, the import-export turnover stood at 53.57 billion USD, representing decreases of 7.7% from the previous month, and 18.8% from the same period last year.

During the four-month period, Vietnam exported about 108.57 billion USD worth of goods, a year-on-year drop of 11.8%, of which the domestic economic sector contributed 25.58 billion USD, down 11%.

As many as 20 items joined the more than one-billion-USD club, making up 83.8%  of the total export turnover.

Among groups of exports, fuels and minerals generated about 1.33 billion USD; processing industry commodities, 96.1 billion USD; agro-forestry products, 8.56 billion USD; and aquatic products, 2.58 billion USD.

Meanwhile, the country imported around 102.22 billion USD worth of goods from January to April, down 15.4% year-on-year, of which 36.62 billion USD came from the domestic economic sector, a decrease of 11.4%.

For import, the more than one-billion-USD club gathered 19 items that accounted for 75.8% of the combined value.

Vietnam spent 95.64 billion USD on production materials; and 6.58 billion USD on consumer goods in the four months.

The US was Vietnam’s biggest buyer with 28.4 billion USD, while China was the country’s largest exporter with 33.3 billion USD.

Prime minister asks for $435 million bailout to support forestry and aquatic sectors

Prime Minister Pham Minh Chinh has tasked the State Bank of Vietnam (SBV) with studying a bailout worth VND10 trillion (almost $435 million) to support the forestry and aquatic sectors.
 
The prime minister has assigned the SBV to find solutions to provide credit and decrease lending rates for enterprises involved in the forestry and aquaculture sectors. The SBV has been asked to build the bailout package this month in order to support the relevant firms in a timely manner.

The prime minister requires the Ministry of Finance to propose governance agency solutions on the exemption, reduction, and postponement of the taxes, land and water surface rents, and land use fees that are to be applied in 2023.

Associations and businesses should closely coordinate with ministries to ease the difficulties in terms of VAT refunds and trade lawsuits while ensuring the implementation of product traceability.

He directed the Ministry of Industry and Trade to review and amend legal regulations, mechanisms, and policies related to trade, and strictly address violations to prevent them from affecting the reputation of Vietnam’s forestry-fishery sector.

Mechanisms and policies to develop domestic and export markets have to be perfected, trade promotion activities must be stepped up, and attention needs to be focused on increasing the market shares of exports to major players such as China and South Korea.

The prime minister’s requirements were issued in response to the weak export turnover of the forestry and aquatic sectors compared to that seen in 2022.

Notably, the export value of timber and forest products was estimated at $17.1 billion in 2022, exceeding the initial target by 3.8 per cent. The industry was expected to increase to $17.5 billion in 2023.

Fire safety regulation frustration lingers for FIEs

Many foreign-invested enterprises are confused with the inconsistent regulations relating to fire prevention and safety, which may impact their factories’ construction and operation processes.

At the prime minister’s meeting with investors in Hanoi on April 22, Kim Sung Hun, general director of Amkor Technology Vietnam, presented several proposals to help Vietnam to improve the investment environment. Two of the three main proposals related to fire regulations.

Amkor Technology is one of the world’s largest providers of outsourced semiconductor packaging, design, and test services. The company is developing a 23-hectare plant for manufacturing, assembling, and testing semiconductor materials at Yen Phong II-C Industrial Park in the northern province of Bac Ninh.

The standards and regulations on fire prevention and control are bottlenecks for the business community. To get a handle on the situation, Prime Minister Pham Minh Chinh signed a dispatch on April 5 which stated that construction works and business units that have difficulties with fire prevention facilities will be classified specifically. The classification was set to be completed by April 30.

The prime minister has also requested the Ministry of Public Security (MoPS), Ministry of Construction (MoC), and relevant agencies, to review and immediately supplement technical standards and regulations, ensuring they are consistent with the current practice on fire prevention, creating better conditions for production and business activities.

The review will promptly help management agencies promote reforms, reduce administrative procedures, and meet practical requirements for socioeconomic development. Ministries and relevant agencies will guide fully and in detail the regulations and solutions for agencies, enterprises, and people to effectively serve production and business activities.

Pham Thi Ngoc Thuy, board office managing director for Private Economic Development Research under the Advisory Council for Administrative Procedure Reform, said that within the past 18 months, several legal documents had been released that set standards and regulations related to fire prevention and control.

According to Thuy, many enterprises are building workshops and warehouses under old regulations on fire prevention and control, but when construction finishes, the inspection agency tells them to observe new regulations.

In a meeting with the Ho Chi Minh City Union of Business Association on April 21, Huynh Ngoc Quan, deputy head of the Fire Prevention and Rescue Police Department in Ho Chi Minh City, also said that there were too many documents relating to the issue.

Many South Korean-invested companies in Bac Ninh province reported that they invested tens of thousands of US dollars to complete the fire protection system for their facilities to comply with all regulations, but after construction ended, the work did not meet the new regulations.

Banks get moving with fresh deals

The Vietnamese banking sector continues to be characterised by a dynamic merger and acquisition landscape, driven by domestic consolidation and foreign investment.

At last week’s AGMs, numerous credit institutions expressed their intention to execute more buyout deals, as it is likely that merger and acquisition (M&A) activity in the banking sector will remain a key driver of change and innovation in the industry. 

One key aspect that the Sacombank’s board addressed is the foreign ownership limit (FOL) of the bank’s shares. In May 2021, Vietnam Securities Depository readjusted Sacombank’s FOL back to the original level of 30 per cent.

Do Quang Hien, board chairman at Saigon-Hanoi Bank (SHB), revealed that the bank is engaged in negotiations with several international partners.

He indicated that SHB’s strategy for attracting strategic foreign investors is to seek long-term partners who are willing to get involved in strategic management and share technology and other resources. However, as most foreign investors tend to limit their involvement to strictly financial investment, SHB must alter its strategy to pursue the right kind of capital from major overseas institutions.

Elsewhere, LPBank currently sets its foreign ownership limit ratio at 5 per cent. CEO Ho Nam Tien revealed that the bank is currently searching for foreign investors who are aligned with its strategy.

One notable trend in the Vietnamese banking M&A market has been the acquisition of weaker banks by stronger institutions. This consolidation is driven by a variety of factors, including the need for increased scale and efficiency, the desire to gain access to new customer segments, and the need to mitigate risk

In response to the State Bank of Vietnam (SBV) call for credit institution restructuring and bad debt settlement, Vietcombank, MB, VPBank, and HDBank have expressed their willingness to aid weaker banks as part of the transfer programme.

Viet Capital Securities in February identified specific banks that these institutions plan to prop up, with Vietcombank to support CB Bank, MB to back Ocean Bank, VPBank to support GP Bank, and HDBank to help Dong A Bank.

Furthermore, these supporting banks will receive certain benefits, including exemption from merging distressed banks’ financial statements, allowance for separate consolidated capital adequacy ratios, and greater credit ceilings from the SBV.

These banks will also be permitted to sell/transfer, combine, or operate distressed banks as a subsidiary following the completion of the reorganisation plan.

Pham Quang Dung, chairman of Vietcombank, revealed last week that the bank has completed the mandatory transfer plan with a weak local bank and is awaiting approval from the SBV. Vietcombank had just announced its plan to issue private placements to foreign investors in 2023-2024, and is currently following the necessary procedures.

Likewise, Pham Nhu Anh, MB’s deputy executive officer in charge of the bank’s board, also announced that the mandatory transfer of ownership between MB and a local lender was presented and approved.

In the midst of all this, HDBank’s board revealed its intentions to expand its reach by acquiring a struggling bank in Vietnam. As of now, the bank is still in the process of wrapping up the necessary legal documentation to finalise the acquisition.

However, there is a hint of uncertainty surrounding whether or not HDBank will be able to achieve its FOL of 49 per cent.

As Nguyen Thi Phuong Thao, standing vice chairwoman of HDBank’s board explained, the SBV have set regulations to enable credit institutions to acquire weaker banks and raise their FOL. But, the details surrounding these guidelines are still undisclosed.

On the other hand, some banks have failed to persuade their shareholders to agree with their M&A plans. Last week, MSB indicated a potential M&A deal with a currently operating commercial bank in Vietnam, rumoured to be PGBank.

Despite numerous market speculations regarding the identity of MSB’s merger target, shareholders raised concerns during the meeting, citing previous unsuccessful merger cases within the banking system, and questioned the potential hasty approach of MSB’s merger decision-making.

However, the outcome of the AGM has left the fate of the proposed merger with a Vietnamese financial institution hanging by a thread, as only slightly more than 56 per cent of shareholders voted in favour of the proposal, failing to meet the required threshold of 65 per cent.

Meanwhile, Vietnam National Petroleum Group (Petrolimex) has accomplished the transfer of their entire 40 per cent capital contribution in subsidiary PGBank.

Three triumphant bidders also emerged as the new shareholders of PG Bank – Cuong Phat Corporation, Vu Anh Duc Trading Corporation, and Gia Linh Import-Export and Trading Development.

The three entities each acquired a substantial portion of PG Bank shares, with a near-even split of roughly 13 per cent each, totaling a staggering 120 million shares.

Earlier in March, VPBank announced the sale of 15 per cent to SMBC Financial Group of Japan for nearly $1.5 billion. The investment will catapult VPBank’s total equity to approximately VND140 trillion ($5.96 billion), cementing its position as the second-largest equity lender in the system.

Confusion compounded by consumer finance apps

Consumer finance companies in Vietnam are facing significant challenges due to negative aggressive debt collection practices and unlicensed debt trading applications.

Nguyen Hoang Minh, head representative of the Vietnam Banks Association in Ho Chi Minh City, shed light on the current state of the financial sector in the country.

Currently, there are 16 licensed companies under the State Bank of Vietnam (SBV), while unlicensed apps have proliferated, causing adverse effects on legitimate companies, leading to confusion and misperceptions of legal financial services.

Even legally sanctioned consumer finance companies, which have been granted permits for management, are being conflated with illegal lending practices.

Lending and debt recovery activities in Q1 have shown minimal growth, with some financial companies experiencing a decrease in both lending and debt recovery. In contrast, during 2016-2022, financial companies demonstrated robust growth, with annual growth rates of 19-20 per cent.

Le Quoc Ninh, consumer finance chairman at the Vietnam Banks Association, also expressed concern about the challenging environment facing consumer finance companies, particularly after negative reports emerged about unlicensed finance companies. These companies are often not subject to the supervision of the SBV.

According to Ninh, recent issues with debt collection activities by certain consumer lending and pawnshop chains have resulted in investigations by law enforcement agencies, impacting the reputation of legitimate consumer finance companies.

In recent times, several commercial banks have started openly selling consumer loan debt, signalling the emergence of a debt trading market in Vietnam. This is deemed a positive sign, as credit institutions often sell off smaller debts, including consumer loans, to avoid the hassle of managing them.

Financial expert Nguyen Tri Hieu has recommended the establishment of a consumer loan debt trading exchange in Vietnam. While the country already has a debt trading market for businesses managed by the Vietnam Asset Management Company, there is currently no platform for trading consumer loan debts. Therefore, it is imperative that the SBV provides direction for such an exchange.

Ngo Xuan Duy, legal director at the International Debt Trading Company of Vietnam, has highlighted legal issues for companies operating in the debt trading sector. While circulars issued by the SBV directly regulate credit financial institutions, there are no specific regulations for debt trading companies.

He has called for regulations that go beyond credit organisations and specifically address the unique challenges and complexities of debt trading. By providing clear guidance on debt collection practices and legal proceedings, a robust legal framework can support the growth and development of the debt trading industry in Vietnam.

Tran Thi Khanh Hien, head of Research at VNDirect, told VIR that the current challenging environment would likely deter foreign investors.

Bigger hurdles around corner for industrial real estate

The bottlenecks in procedures, infrastructure, land, compensation, and site clearance are posing great challenges in attracting investment to Vietnam, and industrial real estate in particular.

Despite lots of talk in attempting to overhaul the real estate market in Vietnam, patience will likely be required as many new challenges are set to pop up even as old ones are solved.

In its latest report, VNDirect Securities said that the factors supporting industrial park (IP) real estate in particular were fading, while some barriers are appearing to rise.

Dinh Thanh Phuong, director of business operations at KCN Vietnam, said that the current difficulties of the industrial real estate market are mainly related to compensation and site clearance for infrastructure investment and administrative procedures for granting land use right certificates.

In particular, the procedures for transferring the form of land lease and payment of land have been greatly affecting the access to capital for project development from commercial banks.

In addition, the determination of land area for construction of common-use infrastructure, difficulties in funding sources for infrastructure maintenance and repair, progress of appraisal and approval for adjustment of IPs, and regulations on their construction are also delaying many projects.

Meanwhile, Bui Trang, country head of Cushman & Wakefield Vietnam, said that the industrial real estate sector is facing stiff competition from countries in the region such as Thailand, Indonesia, and India.

Along with that, the global minimum tax expected to be applied in 2024 may ensure Vietnam’s tariff advantages are not as great as before. The global minimum corporate income tax is an agreement reached by dozens of nations to combat tax evasion by multinational corporations of a certain size.

Meanwhile, the competitive advantage of Vietnam’s IPs is still being lost due to high land prices, lengthy procedures, and inadequate infrastructure in some areas.

According to VNDirect Securities as well as many other segments, IP real estate still has many problems related to legal procedures, so it is difficult to expand the available land to invest in real estate property at this time. The decline in FDI inflows into Vietnam will also affect the development dynamics of this industry.

Figures from the Foreign Investment Agency under the Ministry of Planning and Investment said that as of April 20, the total registered foreign capital in Vietnam reached nearly $8.9 billion, down 17.9 per cent over the same period last year.

FDI inflows into Vietnam weakened in the first four months of 2023 due to the impact of new investment plans and production expansion in the context of global economic uncertainties, including slowing global growth, high inflation, and financial market liquidity being tightened due to rising USD interest rates.

Other issues emerged last year with the implementation of Decree No.35/2022/ND-CP in May 2022 on the management of industrial and economic zones. It states that investment divergence must be carried out during the whole process, from policy to approval and implementation on the project site.

In addition, Decree 35 does not allow foreigners to stay in IPs, leading to difficulties in arranging accommodation for workers.

There is also a lack of procedures in the mechanism of converting IPs into urban-service areas. In addition to the relevant conditions, the converted decision can be carried out only if there is a consensus between the investor of the IP and more than two-thirds of the enterprises subleasing land in the area agreed to be converted.

Meanwhile, the concept of IP combined with urban areas and services is still facing problems because of the confusion in the legal system to regulate such a complex. It could eventually be guided in the Law on Housing, the Law on Real Estate Business, or it may be necessary to have a separate mechanism altogether.

According to Cushman & Wakefield Vietnam, the industry has recently faced many challenges with reduced demand and disrupted supply chains.

Due to the lengthy legal and procedural situation, in the first quarter of 2023, the Ho Chi Minh City market did not record a new supply of IPs. The market recorded a supply of 82,000 sq.m of ready-built factories (RBFs) and 51,500 sq.m of warehouses.

According to experts, IP real estate still has many problems related to legal procedures, so it is difficult to expand the available land to deploy new projects at this time. This is also a common difficulty of many real estate segments in recent years.

Market finds support on new policies 

While the less positive business results of listed companies have been mostly priced in, many recently issued supportive policies will help improve investor sentiment and increase cash flows on the stock market, according to analysts.

VNDirect Securities Corporation said that the profit of the whole market decreased slightly by 2.6 per cent year-on-year.

As of April 24, 697 listed companies on the stock exchange, accounting for 25.8 per cent of market capitalisation, released their first quarter business results, with a fall in net profit of 2.6 per cent over last year. Notably, the chemical industry's profit dropped by 67.6 per cent on-year, negatively affecting the profit growth of the whole market. The plunge in the prices of chemicals such as phosphorus and fertiliser drove the fall.

In contrast, the real estate industry grew 69.4 per cent over last year, leading the profit growth and contributing 16.2 per cent to the growth of the whole market.

If taking into account the estimated business results of the first quarter of 2023 of some listed banks, the banking industry's profit will grow by about 14 per cent year-on-year, contributing 5.8 per cent to the profit growth of listed companies.

This will lift the net profit growth of the whole market in the first quarter of 2023 by 5.6 per cent.

However, some industries, such as steel, securities, and oil and gas, are forecast to have negative results but have not yet announced their financial statements.

Currently, the VN-Index is trading at 0.7 times the 5-year average price-to-earnings ratio (P/E) and 0.7 times the 5-year average price-to-book value ratio (P/B).

The index's earnings-to-price ratio (E/P) averaged around 8.7 per cent in March, excluding the dividend yield of 1.7 per cent. The gap between E/P and 12-month bank deposit rates widened slightly in April as deposit interest rates maintained their downward momentum while E/P was almost flat.

Although the current gap between E/P and deposit interest rates is still not as attractive as last October and November, with the expectation of a high deposit rate likely to continue to ease in the coming months, the gap may expand further, analysts at VNDirect said.

They believe the less positive business results in the first quarter of 2023 have been mostly priced in. And the securities company expects that many recently issued supportive policies, such as the State Bank of Vietnam's Circular 02/2023 and Circular 03/2023 on debt rescheduling and allowing banks to continue buying corporate bonds, will help improve investor sentiment and increase cash flows on the market.

Meanwhile, public investment remains the focal point throughout 2023, said analysts at VNDirect.

In the first quarter of 2023, realised state capital jumped by 18.1 per cent over last year to VNĐ91.5 trillion (nearly US$4 billion), higher than last year's growth rate of 12.3 per cent.

Last week, the VN-Index traded actively with the Hồ Chí Minh Stock Exchange (HOSE)’s average matching level of over 480 million units per session, slightly improving compared to 460 million units per session the previous week.

During the week, the benchmark index dropped in the first two sessions, but after falling to the support level of 1,030 points, it started recovering and closed the week at 1,049.12 points.

Foreign investors witnessed a balanced trading week with a net buying of VNĐ11.96 billion. Hòa Phát Group (HPG) and Maritime Bank (MSB) were bought the most, with a net buying value of VNĐ373 billion and VNĐ344 billion, respectively.

Mirae Asset Vietnam Securities believes the recovery helped the VN-Index escape the short-term downtrend and find equilibrium. In the medium term, it is approaching the resistance level at 1,054 points and is still in a downtrend. The threshold of 1,050-1,054 points is also an important resistance for the VN-Index in this recovery. 

Impacts of Cần Giờ int’l transshipment port project need to be scrutinised

The Ministry of Transport (MoT) has agreed with the HCM City People's Committee on the need to set up an outline of a research project to build Cần Giờ international transshipment port and carefully evaluate the impacts of the project.

According to the MoT, the project needs to update new cargo forecast data, and assess the capacity and flow of containers to and from the port’s container terminals when the volume of container cargo increases according to the forecast data.

Besides, analysis and evaluation of the influence of the construction of this port on the distribution of cargo volumes, cargo flows, and maritime transport routes of the region and the country are needed.

In particular, the project must carefully consider the impact of the construction of a new large-scale port like Cần Giờ port on other seaports in HCM City and nearby areas, including HCM City’s Cát Lái, Hiệp Phước and Cái Mép-Thị Vải in the southern province of Bà Rịa-Vũng Tàu that have been invested and in the plan.

The MoT said that it is necessary to clearly forecast two types of goods, including international transshipment goods brought to Việt Nam by shipping lines and Việt Nam's import-export goods.

At the request of the MoT, the HCM City People's Committee needs to map out and propose a plan to implement each phase of the project in which size, capacity, vessel receiving capacity and related utilities are mentioned.

Regarding the investment and financial plan, the MoT suggested that the project analyse the financial sources that can be used, including private capital, loans from financial institutions and capital sources from the State budget for infrastructure. 

Significant funding pumped into educational startups

Despite forecasts that the global economic situation may negatively impact the startup market, the edtech sector in Vietnam is still flourishing due to increased investment in education, affordable internet costs, and advancements in industry technologies.

Edtech startup MindX, which provides technology education for all ages and guarantees job placement, on April 12 successfully raised $15 million in a Series B funding round led by Singapore’s Kaizenvest investment fund. Other investors in this round include Thailand’s Aksorn education group, Japan’s Mynavi recruitment company, and Wavemaker Partners, which led the Series A funding round of MindX.

On April 4, Prep, an e-learning platform specialising in standardised language test preparation, also raised $1 million in seed funding co-led by East Ventures and Cercano Management. The doubles Prep’s total funds raised after $1 million was received from Touchstone Partners last year.

Also in April, DTP Education Solutions received significant investment from Japanese education corporation Gakken Holdings. As a result of the investment, Gakken now owns 35 per cent in DTP, making it the largest shareholder of the publisher.

According to Nikkei Asia, Gakken views Vietnam as a strategic location for expanding its presence in the Southeast Asian market. With Japan experiencing a declining birth rate that threatens the company’s position in the domestic market, Gakken aims to leverage this investment to expand its textbook and workbook business in Vietnam and the broader Southeast Asian region.

In recent years, Vietnam has been assessed as the country with the highest level of expenditure on education and training in the world. According to Bain & Company’s e-Conomy 2022 report, the average Vietnamese family spends about 20 per cent of their income on investment in their children’s education, while this rate in Southeast Asian countries is 6-15 per cent.

Additionally, according to Germany’s market and consumer data provider Statista, the population share with internet access in Vietnam is estimated at over 75 per cent in 2023, and is forecasted to continuously increase between now and 2028, facilitating the growth of edtech.

In July 2021, the Vietnamese government set a target to expand online training to 90 per cent of universities and 80 per cent of high schools and vocational training institutions by 2030. As Vietnam seeks to improve the quality of its workforce, particularly in digital skills training, experts believe that there is still significant potential for growth in educational technology.

However, amidst a funding crisis, investors are tightening their wallets, and many Asian educational unicorns, including Unacademy and BYJU’s in India, are cutting jobs and delaying expansion. The situation in Vietnam is no different, with investors losing interest and startups finding it increasingly difficult to raise capital, especially during the growth phase. The competitive edtech market in Vietnam means that startups must compete at all costs.

According to a representative of Nextrans investment fund, customer acquisition is becoming increasingly expensive and time-consuming for both new and established edtech startups targeting the K-12 segment. Therefore, such startups need to have a clear goal and strategy to overcome this challenge.

According to Nextrans, Vietnamese education technology startups secured eight investments worth a combined $46.8 million in 2022. Although this amount is lower than the peak of 2021, which saw $158 million invested, it still represents an increase from 2019-2020.Notably, while the majority of investment in 2021 came from two deals in later-stage startups (EQuest’s $100 million and Elsa’s $15 million), capital flows in 2022 have been directed towards emerging startups such as Edupia, Marathon, Vuihoc, and Azota.

Vietnamese businesses seek investment opportunities in US

The Vietnamese Embassy in Washington DC in coordination with the strategic consulting firm The Asia Group on May 4 organized a meeting with Vietnamese businesses attending the 2023 SelectUSA Investment Summit.

Those in attendance in the event included Diane Farrell, Deputy Under Secretary for International Trade, US Ambassador to Vietnam Marc Knapper; representatives of the Department of State, the Department of Energy, the Office of the United States Trade Representative (USTR), the administrations of a number of states in which Vietnamese enterprises have run investment projects, a number of associations and US enterprises investing in Vietnam.

The Vietnamese delegation to this year’s summit consists of more than 30 delegates from 20 businesses that have or are intending to invest in the US in different fields and industries such as electric vehicle and battery manufacturing and assembling, technology, software, interior design, construction, logistics, transportation, food, packaging.

Some businesses such as VinFast Auto have pledged large investments in the US and contributed to bringing Vietnam to the 9th position in the list of 10 countries in the Asia-Pacific region with the largest investment commitments in the US for the period from January 2013 to December 2022.

Diane Farrell pledged that the US Government will create favorable conditions for Vietnamese businesses to make the right choices when investing in the US.

Vietnamese businesses shared their business plans in the US and expressed their hope that both nations’ government agencies would continue to support their business investment activities in the US.

On the same day, Ambassador Nguyen Quoc Dung and Ambassador Marc Knapper attended a roundtable discussion with US businesses, hosted by The Asia Group.

US business representative highly appreciated Vietnam's development potential, presented business and investment plans in Vietnam, and contributed ideas to further boost Vietnam's development, especially in the fields of energy, aviation, technology, climate change response.

The 2023 SelectUSA Investment Summit is an important annual conference aimed at attracting direct investment in the United States. This year’s event got underway from May 1- to May 4 in the state of Maryland, drawing nearly 4,000 attendees along with the presence of economic development organizations (EDOs) from across the states and territories throughout the US, including more than 1,200 investors from over 70 countries and territories globally.

3% power price hike not much impact on CPI

The Electricity of Vietnam’s recent decision to raise the average retail price of electricity by 3% as of May 4 will not have much impact on the country’s consumer price index (CPI), according to an official of the country’s sole power group.  

Nguyen Xuan Nam, deputy director general of the Electricity of Vietnam (EVN), cited the recent statistics by the General Statistics Office of Vietnam, saying 10% and 5% electricity price hikes will fuel national CPI by 0.33% and 0.17% respectively.

A 3% hike will certainly have a smaller impact on CPI, he said at a press briefing in Hanoi on May 4.

According to Nam, such an increase is to help the group partly compensate losses it has suffered over recent years. A 2022 financial report alone shows the group sustained a loss of more than VND26 trillion as the input cost rose nearly 21.5% compared to 2021’s figure.

The group said that, if electricity prices are not increased this year, its loss will amount to VND64 trillion due to the depreciation of the domestic currency (VND) against the US dollar, the increase in input fuel prices for thermal and gas power plants, and the purchase price of renewable electricity.

This is the first average retail electricity price hike EVN has adjusted over the past four years. The decision has been approved by the Ministry of Industry and Trade.

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