A Vietnam Airlines flight from Malaysia’s Kuala Lumpur landed safely at Noi Bai international airport in Hanoi at night on May 7, making it the first operated by the national flag carrier between the two capitals after 26 months due to COVID-19 pandemic.

Talking to the Vietnam News Agency in Kuala Lumpur, Hoang Minh Tri, head of the airlines’ branch in Malaysia, said there will be three flights on the route per week.

The resumption is necessary, as demand is recovering thanks to the control of the pandemic, Tri said.

He said that Malaysia authorities request passengers to present a negative COVID-19 test result prior to boarding.

According to the manager, between now and the end of the year, Vietnam Airlines will also gradually increase its frequency on the Kuala Lumpur – Ho Chi Minh City route to a maximum of two flights a day. 

Tri said he hopes in 2023, demand for travel between the nations will get back to the level before the pandemic.

The branch stopped operating flights from Malaysia to Vietnam from March 17, 2020, due to the former’s pandemic-induced border closure. On February 18 this year, it reopened the air route.

Smart home market revenue to hit $453 million by 2026
     
The revenue of Viet Nam’s smart home market is expected to reach nearly US$240 million this year and $453 million by 2026.

The information was revealed in the Viet Nam Smarthome Report 2022, which was launched at a workshop on Internet of Things (IoT)/Smart home in Viet Nam held in Ha Noi on Wednesday.

According to the survey, conducted by Lumi Viet Nam Joint Stock Company in Ha Noi, Da Nang and HCM City, 80.5 per cent of respondents understand the concept of “smart homes” but only 10.9 per cent use it.

Nguyen Tuan Anh, Chairman of the company, said the smart home market in Viet Nam was thriving, with an expected growth of 30 per cent.

Expressing his views on the potential of the IoT/smart home trend, Anh said that the future of billions of IoT devices, when connected, was really a near future with almost no limits for the development of smart homes, smart offices, smart city, and smart traffic devices.

With a rapidly-adapting economy and a dynamic and tech-savvy population, it could be said that Vietnamese people's living standards and the need to enjoy comfort were increasing day by day, he noted.

IoT technology and its core products were one of the indispensable foundations for the process of modernising the living experience of Vietnamese users, said Anh.

The competition in providing smart home solutions and equipment would become stronger among Vietnamese IT companies as well as between Vietnamese enterprises and those from Europe, the US and China, he noted.

When asked about choosing between smart home brands from Viet Nam and abroad with the same price, respondents said that they would prioritise Vietnamese products. Specifically, up to 64.75 per cent of respondents would choose Vietnamese brands and 35.25 per cent foreign brands.

With advantages such as convenience, safety and time saving, smart homes were chosen by 77.2 per cent of men and 22.8 per cent of women who participated in the survey, Anh said.

About 38 per cent of people whose income ranges from VND30-50 million and about 12.5 per cent of those with income of below VND20 million selected smart home solutions.

Belt roads around big cities to drive economic development

With breakthrough mechanisms and flexible policies, inter-regional transport projects – like belt roads No.3 in Ho Chi Minh City and No.4 in Hanoi – are expected to be the driving force for the economic development of the country.

At a roundtable discussion on inter-regional transport connections on May 5, experts said that these two projects not only meet the need to reduce traffic pressure in the inner city but also enable new development spaces to exploit the potential of land use and improve the competitiveness of the economy.

In the view of economist Tran Dinh Thien, the decision to build the two belt roads stems from the fact that the two major economic centres of Hanoi and Ho Chi Minh City have been inhibiting economic growth and urban development for a long time due to traffic congestion.

Over the last two decades, only 1,000km of expressways have been built across the country. As two of the country's key traffic projects, the two belt-road ventures will be submitted to the National Assembly for consideration at the third session of the 15th National Assembly in the next few weeks.

The building of the latest belt in the capital will expand the space for socioeconomic development in urban and rural areas, creating an inter-regional transport and economic development corridor. For Hanoi, this is also the road connecting Noi Bai International Airport and a second international airport in the southeast of the capital, regulating the expressway system and reducing the load on belt road No.3, which connects five satellite cities in the urban cluster of Hanoi.

The Belt Road No.4 will be funded with a mixture of public and public-private partnership investment. The total budget for the project stands at about $3.7 billion, including three sub-projects undertaken by investors with a total investment of almost $1.3 billion.

Greener orientation in demand for IZs

With the importance attached to Vietnam’s many industrial zones, attractive incentives towards green growth are necessary to move investors in the right direction.

The rapid industrialisation in Vietnam has been posing many environmental challenges. Trang Bui, general director of Cushman & Wakefield Vietnam, realised that in industrial production, investors must pay attention to planning to be able to reduce emissions and ensure a good working environment for all.

Dr. Jason Lee, country representative at Global Green Growth Institute (GGGI) said, “Vietnam is on its way to becoming a global manufacturing hub.”

In 2020, the sector accounted for over 58 per cent of the total foreign investment into the country and remains a driving force for the economy.

The Green Growth Index, developed by GGGI, measures the performance of 115 countries in four green growth dimensions: efficient and sustainable resource use, natural resource protection, green economic opportunities, and social inclusion. The index and its dimensions are highly relevant metrics for tracking the implementation of the Sustainable Development Goals, the Paris Climate Change Agreement, and the Aichi Biodiversity Targets.

According to the index, Vietnam is on par with other Southeast Asian nations and performs better than other lower middle-income countries, in areas such as efficient and sustainable energy (EE), efficient and sustainable water use (EW), and social inclusion. On the other hand, the results also reveal certain areas that Vietnam can improve and perform better in such as green trade (GT), green employment (GJ), and green innovation (GN).

Vietnam’s industrial property picking up steam in Q1

The industrial property segment has seen positive signs so far this year, with outstanding projects being started or pipelined.

Fuchs, a leading German lubricants player, has taken on a 20,000 square metres land lease at Phu My 3 Specialised Industrial Park (PM3 SIP) in the southern province of Ba Ria-Vung Tau to build its latest factory. The 55-year lease, agreed in March, is attributed to the province’s competitive prices and excellent proximity to the Cai Mep Port cluster, which currently handles 30 per cent of Vietnam’s container exports.

Meanwhile, according to JLL, the southern provinces have seen a new supply of IPs and ready-built factories (RBF).

The supply of IP space and RBFs grew significantly in the first four months, reaching almost 27,000 hectares and 3.8 million sq.m, respectively.

VSIP3 in Binh Duong held a groundbreaking ceremony in March, with more than 30 corporations and companies already interested in researching and developing production, equivalent to 175ha of industrial land.

A month previously, Amata Long Thanh Hi-tech IP in the southern province of Dong Nai was approved to lease additional land. In addition to existing projects, in the first quarter the market also recorded two newly-started projects in Phu An Thanh IP in the southern province of Long An and for Frasers Property in Binh Duong IP. These projects are estimated to provide the market with more than 85,000sq.m of RBFs by the end of 2022.

Meanwhile, in the northern provinces, the commencement of Thuan Thanh I IP in February has bolstered Bac Ninh province’s market, adding 160ha of land for lease and increasing the total industrial land area in the north to more than 10,000ha. In the same province, VSIP Bac Ninh projects increased the investment capital by nearly $941 million over the period, and Goertek’s manufacturing plant in Que Vo IP in Bac Ninh increased its capital by over $300 million. The total supply in the northern region remains stable at 2.2 million sq.m.

The occupancy rate of IPs in the north this quarter remained at 80 per cent, rapidly increasing compared to 75 per cent in the same period last year. The occupancy rate of RBFs also continued to be high, reaching 98 per cent. The supply in 2022 promises to be abundant as provinces bordering Hanoi have plans to deploy IPs in the area. The IPs of Binh Giang 2, Thanh Ha, and Kim Thanh were added to Hai Duong province’s IP planning in March. Elsewhere, Hung Yen approved IP No. 5 in February.

In the RBF market, some prominent projects are expected to be launched this year, such as GD.1, funded by KTG-BKIM in Yen Phong II-C IP, and GD3 from BW Industrial at VSIP Hai Duong, both of which will add to the currently limited supply of RBFs.

Large-scale industrial real estate surge projected

According to the ‘Competition in Industrial Real Estate in Vietnam’ report released at the end of February by the Vietnam Competition and Consumer Authority under the Ministry of Industry and Trade, fierce competition in the industrial real estate segment is expected in the coming years, with no single company dominating the market.

Through negotiation and execution of various free trade agreements, Vietnam is gradually integrating into the global economy. These agreements will expand opportunities for capital investment in supporting industries, manufacturing industries, added-value industries, and high-tech content industries. As a result, Vietnam may attract more European, South Korean, Japanese, and Chinese investors to build factories, enabling the growth of industrial real estate.

Many large-scale mergers and acquisitions (M&A) occurred in industrial real estate, with a predominance of foreign-invested enterprises (FIEs), as FIEs with a financial advantage will choose to stay ahead through M&A with domestic enterprises with available land funds and projects that have been essentially completed in terms of investment regulations. Foreign investors are particularly interested in purchasing and increasing land funds in Vietnam’s major industrial areas.

Most international groups that engage in mergers in Vietnam form joint ventures to maximise the benefits of both foreign and local partners. The foreign party has most of the decision-making authority in this model, while Vietnamese investors give legal backing.

With the purpose of owning and developing 240,000 square metres in My Phuoc 4 Industrial Park (IP) in Ho Chi Minh City, ESR Cayman Ltd. entered the Vietnamese market by forming a joint venture with BW Industrial Development JSC.

Securities groups pivot to public capital

Securities companies are vying to seek access to public capital, either via an initial public offering or merger and acquisition agreement with international financiers.

Hana Financial Investment (HFI) – a part of Hana Financial Group, one of South Korea’s four largest financial groups – last week completed its acquisition of 35 per cent in BIDV Securities Company (BSC). The deal is rumoured to be around $113.8 million and plays a pivotal part in Hana’s strategic plan in Southeast Asia’s financial landscape.

Hana Financial also unveiled its ambition to bolster BSC’s digitally-led capabilities by 2026 by using proceeds from the share purchase to revitalise the brokerage’s digital platform and expand into other sectors.

The South Korean bank had previously expanded its reach in Vietnam’s finance and banking scene in 2019 by purchasing 15 per cent interest in BIDV, one of the country’s four main commercial banks.

CEO of Hana Bank, Park Sung-ho, noted last week during his meeting with Vietnam’s Deputy Prime Minister Pham Minh Khai, “We hope that the close-knit connection between Hana Financial Group and BIDV will be upgraded to the level of strategic cooperation, which would serve as a prime example for economic engagement between the two countries and contribute to the bilateral relations.”

It was anticipated that the Hana Bank would increase its investments in Vietnam, not only in banking but in other industries as well.

In the same boat, VietinBank has reportedly looked for strategic foreign partners in a bid to offload its ownership in VietinBank Securities. VietinBank’s stake in this securities firm must be at least 51 per cent of the capital, so the company’s board has authorised a foreign ownership limit ratio of 49 per cent.

Meanwhile, market watchdogs are also interested in TCBS – the brokerage arm of Techcombank – and its potential initial public offering (IPO) plan. Ho Hung Anh, chairman of Techcombank’s Board of Directors, said last week at the bank’s AGM that there are many prospective partners showing their appetite for the TCBS public fundraising roadmap.

Meanwhile, KB Securities remarked that Techcombank is presently contemplating an IPO for TCBS within the next 1-2 years, with the goal of market capitalisation of $5 billion and profit after tax of VND5 trillion ($217.4 million) by 2025.

TCBS contributed VND3.8 trillion ($165.2 million) in terms of profit to the parent bank (a 41.5 per cent increase or-year) and maintained its dominance in the bond brokerage industry for the sixth consecutive year. Statistics from the Ho Chi Minh Stock Exchange (HSX) showed that three securities businesses have already applied for listing on this exchange in March and April – including Thanh Cong Securities JSC and Vietnam Construction Securities JSC, which are currently listed on the unlisted public company market (UPCoM).

Meanwhile, Viet First Securities Corporation (VFS) in mid-April submitted to list around 80.25 million shares, switching its exchange from UPCoM to HSX. “This is part of the company’s strategy to list VFS’ shares on the southern bourse. Additionally, this would serve to improve its liquidity and cement its position in the market,” the firm said in a statement. “Increasing charter capital will also be a priority for the company’s commercial operations, including proprietary investments and margin lending, and the company expects to do so on a long-term basis.”

Viettel Construction plans to issue 21.5 million shares to pay dividend

Viettel Construction, which is listed on the Hochiminh Stock Exchange with the stock code CTR, will issue nearly 21.5 million shares to pay the 2021 dividend for its existing shareholders.
The total value of the issue is VND216.7 billion, the local media reported.

Viettel Construction, a unit of the local telecoms company Viettel Group, will begin its issue after receiving approval from the State Securities Commission of Vietnam.

In the first quarter of 2022, CTR posted VND2 trillion in net revenue, up 14% year-on-year. In 2022, CTR aims to earn VND8.6 trillion in revenue and VND414 billion in after-tax profit.

Bank accounts of Thu Thiem land auction winners to be frozen for failing to pay fees

Dream Republic Corporation and Sheen Mega JSC will have their bank accounts frozen if they fail to pay land use fees for the land lots they won at auction late last year.

They are among four businesses that won the land auctions in the Thu Thiem New Urban Area in HCMC’s Thu Duc City but two of them already cancelled their bids and lost their huge guarantee deposits.

The Thu Duc City Tax Office today, May 5, said it had written to the two firms asking them to act before coercive measures are taken on May 6.

The office will freeze their bank accounts for one month.

Dream Republic Corporation, which won the auction for a 6,400-square-meter land lot in late December last year, must pay a land use fee of VND3.82 trillion and a registration fee of VND500 million for this lot.

Meanwhile, Sheen Mega JSC, which won the auction for an 8,600-square-meter land lot, is subject to a land use fee of VND4 trillion, but exempt from the registration fee, the local media reported.

Ministry promotes opening new flights to Can Tho

The Ministry of Transport has recently requested agencies and units to increase the operation of flights to/from Can Tho International Airport. In the coming time, airlines will study to open new flight routes and have more preferential policies on fares for routes to/from this airport.

Accordingly, the Ministry of Transport requested the Civil Aviation Authority of Vietnam (CAAV) to direct airlines to continue monitoring and researching the market to open new international and domestic flight routes to/from Can Tho International Airport, effectively implementing the airline and tourism connection in the Mekong Delta.

At the same time, the CAAV should encourage Vietnamese airlines to continue to have preferential policies on fares for flights to/from Can Tho; consider prioritizing confirmation of landing and take-off time for flights to/from Can Tho International Airport following regulations.

Especially, the Ministry of Transport asked the CAAV to study and coordinate with agencies and units of the Ministry of Culture, Sports, and Tourism, the People's Committees of Can Tho City and other provinces in the Mekong Delta, airline enterprises, and other relevant agencies and units to organize a seminar to promote tourism and destinations in Can Tho as soon as possible.

Besides, the CAAV is responsible for proactively working directly with international airlines to introduce and orient them to expand their routes to Vietnam, including Can Tho City; study and develop a project to increase the exploitation of flights to/from Can Tho International Airport, and report to the Ministry of Transport in June 2022.

As for the Airports Corporation of Vietnam (ACV), the Ministry of Transport requested it to put Can Tho International Airport into 24/7 operation as soon as possible so that it can receive international flights in the evening time frame.

Decisive factors for Vietnamese consumers to purchase electric vehicles
 
The lack of charging infrastructure in public places and traveling distances remain barriers to the use of electric vehicles among Vietnamese and Southeast Asian consumers.

Lower fuel costs, concerns about climate change/ emissions reduction, and a better driving experience are the top factors motivating consumers in Vietnam and other Southeast Asian countries to decide to buy an electric car.

This was one of the findings of the latest study on global automotive consumers conducted by the consulting firm Deloitte in six countries in Southeast Asia including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

In the latest survey, Deloitte pointed out that 64% of Vietnamese respondents considered lower fuel costs as the key factor that impacts the decision to acquire an electric vehicle (EV). In addition, personal health concerns also affect Vietnamese consumers’ decision to buy electric cars (with 54% of the respondents).

However, the lack of charging infrastructure in public places and distances remain barriers to the use of EVs among Southeast Asian consumers.

On average, Southeast Asian consumers expect the driving range of a fully charged battery EV to be at least 491km. Malaysia, Singapore, and Thailand are the three countries that recorded the highest level of mileage expectations while drivers in Vietnam expected less.

Most consumers in Southeast Asia, including Vietnam (with 64% of respondents) plan to charge their EVs at home. Nearly 30% of Vietnamese surveyed people choose street charging points or public charging stations and the remaining 10% choose to charge at work.

More than 50% of Vietnamese respondents, who intend to charge their electric vehicles at home, want to use a combination of the regular power grid and alternative power. Meanwhile, the remaining 41% want to use the regular power grid.

The study also revealed more than 40% of respondents who do not plan to charge their EVs at home said that the cost of installing a charger is prohibitive, while the remaining 31% say they cannot afford to install one.

In general, Southeast Asian consumers are hesitant to purchase EVs due to lingering concerns around the lack of public charging infrastructure. Other barriers include the cost/ price premium, safety concerns related to battery technology, and the time required to charge.

The increase in electricity prices will make regional consumers reconsider buying electric cars if the price of electricity is as high as the price of fossil fuels, which the number of Vietnamese respondents accounts for the highest percentage (71%) in Southeast Asia (where the average proportion is 53%).

Vietnam-based automaker VinFast is also setting up charging stations across Vietnam to complete its EV ecosystem. In addition to VinFast's VF e34 electric car, the first locally-produced EV in Vietnam which has been rolled, there are only some small electric cars from China or Porsche's Taycan. 

However, the Vietnamese EV market is expected to be more active in the coming times as other EV models will be launched in Vietnam such as the KIA EV6 which is planned to be released by the Vietnamese distributor THACO in the next quarter of 2022. 

Real estate remains second biggest magnet for FDI

Foreign investors pledged to pour over US$2.8 billion in real estate sector in the first four months this year, accounting for 30.3 percent of the total foreign direct investment inflows.

With the above figure, the sector retained its position as the second biggest magnet for foreign direct investment after manufacturing and processing (US$6.2 billion).

The number of newly established enterprises in the real estate sector saw a year-on-year increase of 47.2 percent in the reviewed period while 845 real estate firms resumed operations, up 92 percent against the same period last year, reported the Ministry of Planning and Investment.

As of April 20, foreign direct investment inflows totalled more than US$10.8 billion, official statistics show.

The southern province of Binh Duong took the lead in attracting foreign investment with nearly US$2.35 billion, accounting for 21.7 percent, followed by the northern province of Bac Ninh (US$1.57 billion) and Ho Chi Minh City (US$1.28 billion).

Singapore was the largest investor in Viet Nam with more than US$3.1 billion, making up 28.8 percent of the total capital inflows. The Republic of Korea and Denmark ranked second and third with US$1.82 billion and US$1.32 billion, respectively.

The total realized foreign direct investment capital was estimated at US$5.92 billion, up 7.6 percent on year.

Vietnam-Brazil trade growing: official

Trade turnover between Vietnam and Brazil reached 6.35 billion USD last year, the highest value so far, said Ngo Xuan Ty, Head of the Vietnamese Trade Office in Brazil.

In the first three months of this year, the figure stood at 1.7 billion USD, up 11.9 percent year-on-year, of which Vietnam’s export revenue was 533.2 million USD, a rise of 3.5 percent, Ty told a consulting session on export to Brazil held by the Vietnam Trade Promotion Agency at the Ministry of Industry and Trade on May 6.

The official said Vietnamese rice noodle has been favoured by local consumers as well as Asian people in Brazil, and suggested Vietnamese businesses increase the export of other products like garments-textiles and footwear.

To access the market, the firms should pay attention to product quality, packaging and price, while stepping up trade promotion, especially through major fairs in Brazil, he continued.

Pointing out the complicated tax system in Brazil, Ty asked Vietnamese enterprises to carefully study products, saying they should seek local partners or consulting firms in this regard.

First quarter pepper exports to EU market surge by 92.9%

The EU-Vietnam Free Trade Agreement (EVFTA) is being effectively utilized by local enterprises amid the export turnover of peppers to the EU market expanding by 92.9% during the opening quarter of the year.

Statistics compiled by the General Department of Customs indicate that pepper exports during the first quarter of the year reached 53.8 thousand tonnes, worth US$ 250.8 million, a drop of 12.1% in volume but up 40.3% in value compared to the same period from last year.

Most notably, the first quarter of the year saw, the export speed of pepper to the European region increase the most with a rise of 92.9%, whilst strong growth was seen in the Americas, up 63.5%, Africa, up 10.3%, and Asia, up 6.4%.

Furthermore, the share of Vietnamese pepper exports to the EU increased from 20.21% in the first quarter of 2021 to 28.08% in the first quarter of this year.

Vietnamese logistics enterprises neglect information security
     
A recent survey by the Viet Nam Logistics Research and Development Institute (VLI) shows that Vietnamese businesses do not pay much attention to the information security of online platforms.

Only 5.26 per cent of businesses believe that security neglect hinders the digital transformation process of enterprises.

The survey also shows that 38.24 per cent of logistics enterprises believe that COVID-19 has formed a need for digital transformation, while 42.65 per cent of enterprises believe that the impact of COVID-19 is changing the needs of customers, such as using more electronic transactions and e-commerce delivery services.

In addition, other trends have been formed, such as changing the concept of logistics business operation and the ability to work remotely.

Enterprises participating in the survey showed an interest in the important role of digital transformation. However, the process generates many difficulties and barriers, such as technical compatibility between their businesses and partners in the logistics service chain (44.74 per cent), limited funding and human resources (42.11 per cent).

Nearly 40 per cent said that they had not yet found the right conversion technology, and 28.95 per cent wondered how to spend appropriate investment and how to start the process.

Moreover, converting a huge amount of existing information to a digital platform was also an obstacle for 15.97 per cent of businesses.

Meanwhile, logistics businesses do not pay attention to the information security of online platforms, and only 5.26 per cent of businesses think that this is an obstacle to the transformation process of enterprises.

The survey results show that to promote a strong digital transformation, it is necessary to closely cooperate with logistics enterprises in the whole service chain network to make the right decisions in choosing the right application or platform.

Changes in charge, fee rates for supervising derivatives activities
     
The Ministry of Finance has just issued Circular No 25/2022/TT-BTC dated April 28 regulating charge and fee rates, collection, management and uses in the securities sector. The new circular is to replace Circular No 272/2016 and takes effect starting from July 1.

The circular supplements the collection of fee rates for supervising derivatives activities. Of which, fee rates of supervising derivatives activities for Vietnam Securities Depository (VSD) is 10 per cent of revenues from position management services or clearing services and escrow management services.

Similarly, fee rates for supervising derivatives activities for stock exchanges are 10 per cent of revenues from derivatives trading services.

The circular also supplements fee rates for supervising securities activities for reimbursing banks. Of which, the fee rate for stocks, fund certificates and covered warrants is 0.001 per cent of clearing prices, net payment/settlement day, with a maximum of VND1 million per day (US$43.56 a day).

Meanwhile, the fee rate for corporate bonds is 0.0001 per cent of clearing prices, net payment/settlement day, with a maximum of VND100,000 a day.

Some charges and fees are unchanged such as fee rates of licence for establishment and operation for securities companies are VND20-100 million per licence; licence for establishment and operation for investment fund management companies and securities investment companies is VND30 million.

The circular says fee payers have to submit all charges and fees after being granted securities operation licences and certificates for the State Securities of Viet Nam (SSC).

Hanoi People’s Committee takes over construction of Metro Line 1

Hanoi People’s Committee officially replaces the Ministry of Transport (MoT) in developing Metro Line No.1 from Ngoc Hoi to Yen Vien.

The Railway Management Board of the MoT and the Hanoi Metropolitan Railway Management Board will cooperate with each other to study the investment plan.

The MoT and Hanoi People’s Committee will still cooperate to develop the Ngoc Hoi complex and perform the land clearance at Tia and Phu Xuyen stations.

Hanoi People’s Committee assigned the departments and relevant agencies to combine with the MoT during the planning and building process.

The project has a total investment capital of $3.52 billion. The first phase of Metro Line 1 was divided by the MoT into two separate sub-projects.

Accordingly, the first sub-project focuses on building the Ngoc Hoi complex which takes on the functions of the existing Hanoi and Giap Bat railway stations, plus building several functional zones for future rail lines with an estimated total capital of almost $858 million.

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