Members of the Vietnam Automobile Manufacturers’ Association (VAMA) logged their August vehicle sales at 30,846, a month-on-month increase of 2% and a year-on-year surge of 247%.

VAMA reported on September 13 that of the total, the sale of passenger and special-purpose vehicles expanded by 9% and 21%, respectively; while that of commercial vehicles saw a decrease of 20% compared to the previous month.

Insiders said the 247% surge was understandable because this time last year saw many provinces and cities implementing social distancing to help control the COVID-19 epidemic.

During the January – August period, VAMA's members sold a total of 262,940 vehicles, up 50% year-on-year.

Among the non-VAMA members who unveiled their sales, TC Motor supplied 5,449 units to the market in August, lifting its total sale in the first eight months of this year to 47,638. Meanwhile, VinFast sold 18,052 automobiles during the January – August period.

As per data from VAMA, TC Group, and Vinfast, Toyota Vietnam topped the list of sellers in August with 6,796 units. It was followed by Hyundai, Kia Vietnam, Mitsubishi Vietnam, Mazda, and VinFast, with 5,449; 4,404; 4,039; 3,090; and 2,137 units, respectively.

Economists: petrol stabilisation fund to be scrapped
     
Economists and industry experts have voiced concerns over the petrol stabilisation fund continuing as a tool to keep prices down, deeming it too ineffective to make a real difference.

It is thought that Viet Nam's prices will strongly fluctuate along with global prices for the foreseeable future as the country's petrol supply could only meet 70 per cent of domestic demand.

While a stabilisation fund may suffice in the events of slight increases, it's inadequate in responding to strong fluctuations. To make matters worse, it has proven to hinder bringing down prices as retailers lack incentives to improve sales during periods in which domestic prices are lower than the international market.

With the immediate target of bringing prices back to VND20,000-22,000 per litre to support business activities and keep inflation under control, they urged the Government to scrap the fund. At the same time, it should improve the country's storage to the tune of millions of cubic metres, which may ensure a stable supply for up to half a year at the current consumption rate.

Continuous petrol price surges since the beginning of the year had driven prices up, especially in the key transport industry, said the former head of the General Statistic Office and economist Nguyen Bich Lam.

Lam said during the first six months of 2022, road transport costs increased by 5.94 per cent, waterways by 12.91 per cent, sea routes by 14.28 per cent and airways by 18.32 per cent, which had driven CPI up by 2.44 per cent from the same period last year.

According to industry experts, increased storage was a much better approach to price regulation, especially in light of current global volatile prices. However, a glaring weakness in the country's lack of infrastructure for petrol storage was also a matter that needed to be addressed in any case.

Economists cited several successful models employed by economies around the globe in which strategic commodities such as oil and coal were purchased in large quantities when their prices fell. In the event of price surges, commodities could be used to maintain a stable price level domestically, minimising damage to businesses and the economy.

The method was widely viewed as a proactive and effective way to control petrol prices among international economists.

Experts once again called for the abolishment of special consumption taxes on petrol products. They stressed the importance of bringing prices down below VND20,000 and the tremendous stabilising effect it will bring to business performance and domestic consumption.

In addition, they urged the Government to consider shortening the current price adjustment period from ten to five days to help petrol retailers reduce expenses. Meanwhile, they should also focus on eliminating the middlemen and cutting costs in distributing resources.

Taiwanese firms eye investment in Hai Phong

The Hai Phong Economic Zone Authority (HEZA) on September 12 hosted a meeting with a business delegation from Taiwan (China) to introduce cooperation and investment opportunities in the northern city. 

C.Y. Huang, head of the delegation, said Taiwanese businesses are tending to expand their investment globally and they are especially interested in Hai Phong. 

In 2022, with HEZA's support, Taiwanese businesses had a working session with representatives of VinFast automobile factory of Vingroup to expand cooperation in manufacturing spare parts for electric cars, he said.

Director of HEZA Le Trung Kien said in the first weeks of September 2022, HEZA welcomed two business delegations from Taiwan, wanted to explore the business and investment environment in Hai Phong. 

He expressed his wish that Taiwanese businesses will soon cooperate with VinFast to form an industrial development and production ecosystem. 

HEZA will create all the most favourable conditions, especially in administrative procedures, to support investors and businesses to study and deploy their investment activities in Hai Phong, Kien stressed.

Authentication system to prevent counterfeiting via QRCode

The Vietnam E-commerce and Digital Economy Agency (iDEA), under the Ministry of Industry and Trade, has put into operation a system of authenticating genuine goods via QRCode at truyxuat.gov.vn, to encourage people and businesses to use solutions to develop products in e-commerce transactions.

According to Do Dinh Tan, from iDEA, the authentication system provides the ability to retrieve information about product origin for consumers when purchasing products.

This will provide consumers with enough information about the origin of products and allow businesses to clarify product information, which helps solve the problem of counterfeit goods and creates great opportunities for the application of digital technologies.

VTR shares under restriction order

The Hanoi Stock Exchange (HNX) announced on September 13 that Vietravel’s shares, coded VTR, will be traded only on Friday on the Unlisted Public Company Market (UPCoM).

The HNX sent the order following a negative VND104 billion-plus in the equity of Vietravel, according to the semi-annual review report for the year 2022.

Accordingly, 17,294,833 shares, now sold at VND10,000 each, will be curtailed drastically on UpCoM, estimated at VND172,984,330,000.

The exchange of regular shares resumed normalcy after Vietravel managed to tackle the issue.

Like many other businesses in the travel and aviation sector, Vietravel took a heavy hit from the Covid-19 pandemic and has just revived since the end of Covid lockdowns and restrictions late last year.

In a general financial report in quarter two of 2022, the revenue of Vietravel is some VND1,000 billion, earning VND48.9 billion after tax, an increase over the pre-pandemic period.

However, the subsidiaries of the company saw losses of VND6.9 billion, mainly from the aviation sector.

On September 8, Vietravel Airlines and Asean Cargo Gateway signed an investment cooperation contract to launch a cargo air transportation service, named VUAir Cargo.

Vietravel will hold a 51% stake and Asean Cargo Gateway will fund the balance.

Delisting poor quality shares helps make market more transparent

Delisting shares on the stock market is a tool for market regulators to create a transparent investment environment, and filter and remove poor quality stocks that cause market manipulation, strengthening investors' confidence in the stock market.

According to statistics from the Vietnam Securities Depository (VSD), since the beginning of this year, 18 companies have cancelled their share listings on HOSE and HNX to switch to the Unlisted Public Company Market (UPCoM). Notably, there are more than 70 enterprises having their status as public companies cancelled and leaving the stock market.

Huynh Anh Tuan, General Director of Dong A Bank Securities Joint Stock Company, said that many of the delisting cases were related to information disclosure, business results seeing losses for three consecutive years, or accumulated total losses exceeding the amount of charter capital.

When a stock is in danger of being delisted, the stock price plummets and will reflect most of the intrinsic value of the business. When transferring the listing to UPCOM, shareholders will not have much access to information about the business. The UPCOM has low disclosure and financial reporting requirements. Most new businesses will have to publish financial statements after an entire year. However, there are still many businesses seeing their shares increase after switching to UPCOM.

Lawyer Nguyen Thanh Ha, Chairman of the Board of Directors of SBLAW Law Firm, said that according to current regulations, shares are delisted, but still meet the condition of a public company, and must register for transactions on the UPCOM system.

Enterprises whose shares are subject to mandatory delisting may only register to list again after trading for at least two years on UPCOM and fulfilling the obligations of the listing organisation.

After a stock is delisted, two cases occur. With shares that will be transferred to other exchanges after being delisted, if they move to a larger exchange, the number of shares held by investors will be converted to the new exchange and traded normally.

If they are transferred to a smaller market, these stocks can still be registered for trading to maintain liquidity. However, if an enterprise's business deteriorates and there is a risk of bankruptcy, the result will be a serious decline in liquidity.

As for unlisted shares that are not transferred to other floors, it is very difficult for investors to transfer their shares. At that time, there are two ways to protect investors' interests. That is, the company issuing the shares must spend money to buy back these shares or the State Securities Commission will request that the shares be transferred to an unofficial or secondary exchange so that investors can continue selling them.

Deputy General Director of Kien Thiet Securities Company Do Bao Ngoc said the stock market always had a process of screening businesses over time. Only companies with good performance and compliance with securities laws are eligible for long-term listing.

For companies that do not comply with the law, removing them from the listing would also help reduce risks for new investors, he said.

Interbank interest rates expected to reduce, USD gain to slow down

The instability and negativities lately in the domestic interbank market like the 6.48-percent overnight interbank VND interest rate on September 7 has been attributed to three main reasons, according to Dinh Quang Hinh – Head of the Macroeconomics – Market Strategy of VNDIRECT Securities Co.

Accordingly, the first reason is a large amount of VND has been net withdrawn from banks as the State Bank of Vietnam (SBV) increases net withdrawal via treasury bills and foreign currency sales this August.

Secondly, SBV wants to maintain a higher interest rate of VND compared to USD in the interbank market to reduce pressure on the USD/VND exchange rate in the context of a strengthened USD because the Federal Reserve System (FED) maintains its roadmap to rise the policy interest rate.

Lastly, the capital demand has significantly grown as SBV officially raised the credit growth limit for certain commercial banks in September.

However, it is estimated that the strong rise of the interbank interest rate is temporary and can stops anytime in the next few weeks as a result of a drop in exchange rates and supportive actions of SBV like net injection of liquidity into the market at the beginning of September.

AgroViet 2022 opens this month

Viet Nam's 22nd international agricultural exhibition, AgroViet 2022, will take place from September 15-18 in Hà Nội.

This exhibition aims to enhance trade promotion activities, expand cooperation and act as a bridge between businesses and consumers. It will create opportunities for provinces and cities nationwide to introduce potential in agriculture production.

The exhibition is one of the activities under the Strategy for Sustainable Agriculture and Rural Development for the 2021-2030 period, with a vision to 2050.

AgroViet returns after two years of being held online due to the COVID-19 pandemic. This event attracts the attendance of enterprises from six countries: Australia, Russia, Japan, China, Thailand and Indonesia.

At this exhibition, foreign enterprises, organisations and joint venture companies display high-quality agricultural products, machines, equipment and technologies for the production and processing of agricultural products; supporting services, logistics services and e-commerce.

Meanwhile, domestic enterprises will show many agricultural, forestry and fishery products with clear origins, geographical indications, products meeting standards of "One Commune One Product" programme (OCOP), and organic products. 

Viet Nam follows rice market rules

Viet Nam complies with the rice market rules in terms of prices and always holds responsible for food security, said head of the Department of Crop Production, under the Ministry of Agriculture and Rural Development (MARD), Nguyen Nhu Cuong.

Nguyen made the statement in response to the information that Thailand and Viet Nam have agreed to cooperate in raising the price of rice in the global market, following months of talks aimed in part at improving rural incomes.

Viet Nam has joined a number of free trade agreements (FTAs), he said, adding that the country complies with regulations of the FTAs it has signed. 

The rice volumes of Thailand and Viet Nam account for 10 percent of the world production of paddy rice and around 26 percent of the global rice export. 

Viet Nam exported nearly 4.2 million tons of rice in the first seven months of 2022, up 20.5 percent year-on-year, according to the MARD.

But earnings were only 9 percent higher, at US$2 billion, since global rice prices have fallen by over 10 percent to US$489 a ton on average.

Exports to the U.S. grew fastest at 65.3 percent, followed by the Philippines, Viet Nam's top market, at 48.6 percent.

Progress made on public debt management: MoF
     
Progress has been made in reducing Viet Nam's public debt according to the latest report released by the Ministry of Finance.

The country's debt level has gone down from 61.4 per cent to 43.1 per cent of its gross domestic product (GDP) during the 2017-21 period.

While some of the country's objectives have been met, economists urged the Government to improve fiscal policies, debt and risk management to achieve greater efficiency and stability.

The report said Viet Nam's public debt has been steadily on the decline as the Government tightened up the control of key debt indicators and stepped up efforts in risk management to make sure it stayed under the debt ceiling set by the National Assembly.

According to the ministry, by the end of 2021 external debt was calculated at VND1 quadrillion while domestic debt was at VND2 quadrillion. The shift has significantly enhanced the country's ability to control exchange rates and national financial security.

As the country continued to improve its economic performance, experts have warned that its ability to access financial assistance will gradually deteriorate while its debt portfolio will become more complex and require a clear and consistent management approach in order to minimise risk and maximise efficiency.

Experts have suggested the Government consider the establishment of an independent debt management office (DMO) modelled after successful examples such as those found in Austria, Finland, Ireland, Portugal and Germany.

UKVFTA provides opportunity for steel industry to expand exports, switch to decarbonisation
     
The UK – Viet Nam Free Trade Agreement (UKFTA) was providing significant opportunities for Viet Nam to expand the export of steel and iron products in the UK.

The deal also enhances cooperation with the UK in accelerating the decarbonisation process of the iron and steel industry as Viet Nam was striving to achieve net zero by 2050.

Since the UKVFTA came into effect on May 1, 2021, Viet Nam’s export of steel and iron products saw a dramatic rise in the context that the UK increased the investigation and application of trade remedies on steel and iron products originating from several other countries.

Statistics of the Ministry of Industry and Trade showed that steel and iron exports of Viet Nam to the UK increased by 1,269 per cent in 2021 over the previous year, one among the fastest growing exports to the UK besides vegetables (82 per cent), pepper (49 per cent), rattan products (56 per cent) and ceramics (32 per cent).

Customs statistics showed that the export of iron and steel products to the UK totalled nearly 419,000 tonnes in 2021, worth more than US$491 million, compared to the volume of just 51,851 tonnes and the export value of $35.88 million recorded in 2020.

Iron and steel products exported to the UK saw rapid growth after the trade deal was put into effect. In the period from January 1 to April 30, 2021 before the trade deal came into force, the iron and steel exports to the UK was just 32,000 tonnes worth more than $38 million.

The UK Department for International Trade revealed that iron and steel was one among the top five goods imported to the UK from Viet Nam in the four quarters to the end of the first quarter of 2022 with a revenue of £336.8 million ($390 million) or 7.2 per cent of all UK goods imported from Viet Nam.

Other products in the top five included telecoms and sound equipment (£1.4 billion or 29.7 per cent), clothing (£1.4 billion or 29.7 per cent), footwear (£334.8 million or 7.1 per cent) and furniture (£329.9 million or 7 per cent).

Digital economy to make up 25% of HCM City’s GRDP by 2025

Ho Chi Minh City’s digital economy is hoped to account for 25% of the southern hub’s gross regional domestic product (GRDP) by 2025. 

The goal was set out in a Directive on speeding digital transformation and building HCM City into a smart city issued by the Standing Board of the municipal Party Committee.

Accordingly, attention will be paid to raising public awareness of digital transformation; organising the implementation of digital transformation tasks and building digital government; and integrating and effectively exploiting data to serve the fight against COVID-19 pandemic, socio-economic recovery and development, and modern-oriented governance.

Specific action programmes will be mapped out and implemented, while the application of information technology will be accelerated across fields in association with ensuring information security and safety in building digital government, economy and society.

Investments will be strongly poured into human resources development, focusing on training and fostering cadres, civil servants and public employees. 

Resources will be prioritised in digital transformation in Thu Duc city, contributing to forming a highly-interactive innovation city in the East of the southern hub. 

Ireland pledges to create breakthrough in Vietnam’s dairy sector

Ireland will provide high-quality dairy products for the Vietnamese market, thus creating a breakthrough in the dairy sector, Minister of State at the Irish Department of Agriculture, Food and the Marine, Martin Heydon T.D. told a recent seminar in Hanoi.

Ireland exports more than 5 billion EUR (4.93 billion USD at current exchange rate) worth of dairy products each year. These products have been shipped to 150 markets around the world.

Nguyen Do Anh Tuan, Director of the Department of International Cooperation under the Ministry of Agriculture and Rural Development, said that Vietnam has a fairly developed agriculture, with the export value of agro-forestry-fishery products increasing continuously. Vietnam has strengths in rice, coffee, rubber, cashew nuts, pepper, tea, and tropical fruits.

He expressed his hope that Irish partners will strengthen cooperation with Vietnam in improving management and training capacity; shared experience in the development of green agriculture and circular agriculture as well as in building a safe and traceable food management system, and developing livestock production, including dairy cows.

Easing visa policy key to boosting international tourist numbers

Vietnam is expected to welcome a high influx of foreign visitors from September to April of the following year, a period representing the peak season for foreign tourist attraction, providing that it moves to ease its visa policies.

Vietnam has set a target of welcoming 5 million foreign visitors this year, but statistics show it had only attracted 1.44 million as of August 31. It hopes to meet the yarly target as the September - April period is considered the peak season for foreign visitors in Vietnam. 

The Vietnam National Administration of Tourism believes that the domestic tourism market has already recovered from the COVID-19 pandemic thanks to tourism stimulus programmes launched by localities nationwide.

Localities welcomed roughly 80 million domestic holidaymakers during the initial eight months of the year, marking an increase of 33.6% compared to the same period from 2019, the pre-pandemic period in which the tourism sector was in its heyday.

However, the number of foreign arrivals has so far yet to meet expectations, though the country reopened its borders in the middle of March. Statistics show 1.44 million foreign arrivals have been reported over the past eight months, representing a decline of 87.3% compared to the same period from 2019 and meeting less than one third of this year’s plan. 

According to the calculations made by local travel companies, Vietnam attracted 18 million international tourists in 2019, and its revenue was large compared to the revenue generated by 85 million domestic tourists in the same year. Therefore, tour operators fear that they will continue to encounter difficulties over the coming months unless the international tourism market has yet to fully recover.

As part of efforts to attract international visitors, easing visa policies is considered an important tool. While Vietnam is considering expanding visa exemption as a solution to boosting international tourism, neighbouring countries have already taken action.

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