The Quang Ninh provincial People’s Committee started construction work on an industrial factory complex worth over 2.7 trillion VND (115 million USD) in total in Quang Yen town on September 1 and also granted investment registration certificates to two projects in the complex.

One of the projects is the Quang Yen electronics factory, invested by SHP and Saigontel, which produces bluetooth earphones and mobile phone speakers. The factory has an investment of nearly 1.47 trillion VND and is scheduled to become operational in the third quarter of 2023.

Another factory that was also granted the certificate on this occasion manufactures agricultural machinery engine spare parts. The 1.25 trillion VND project, also invested by SHP and Saigontel, is set to be opened in March 2024.

In recent years, the province has reformed investment promotion and selectively attracted capital to industrial parks and economic zones, with priority given to major projects from reputable investors, and those having high added value, applying modern and eco-friendly technology, and operating in the sectors that contribute to local socio-economic development.

Local industrial parks and economic zones are accommodating 283 valid projects which are not invested by the State budget, including 90 foreign direct investment (FDI) projects worth over 4.3 billion USD and 193 domestic ones worth over 111.8 trillion VND.

Central bank forecast to expand credit growth to 16 per cent

The State Bank of Viet Nam (SBV) might have to extend credit growth for the whole year 2022 to 16 per cent and grant more credit quotas to commercial banks in the near future as the pressure to loosen the credit room is strong, analysts forecast.

In a report released last week, Viet Dragon Securities Company (VDSC) expected the SBV to adjust its credit growth target to better suit actual needs.

The SBV earlier this year set credit target for 2022 at 14 per cent against 12 per cent in 2021. However, it said the rate might be adjusted flexibly in its operational approach.

According to VDSC, the SBV is under pressure to loosen credit as the SBV’s statistics showed credit growth as of August 15 this year reached more than 9.6 per cent, up some 1.5 times compared to the same period last year. It meant that credit from August 15 to the end of the year will be allowed to increase by only 4.4 per cent or about VND457.45 trillion, less than half of the credit demand from the beginning of the year to August 15.

Meanwhile, VDSC said, credit growth in the second half of a year is usually higher than in the first half of the year since 2013, except for 2019. However, 2022 has a peculiarity of being a post-pandemic recovery year. Therefore, capital demand accelerated sharply in the first half of the year. In the first seven months of 2022, the number of newly established and re-operating enterprises increased by 17.9 per cent and 49.7 per cent respectively over the same period. This implies that the capital demand for enterprises to return to operation and their capital need for new investment is still quite large.

Based on the recovery prospects of the economy, VDSC analysts forecast the credit demand in the economy will still be high in the coming months.

According to VDSC, the tightening of credit room in the third quarter of 2022 will partly affect business and expansion plans of enterprises in the rest of the year. Since early Q3 2022, banks have had to tighten their credit as their assigned credit growth quota ran out. Therefore, it has been difficult for enterprises to have access to bank loans.

Besides, the tightening will also affect the implementation of the 2 per cent interest rate support package in the Government’s economic recovery and development programme. The disbursement of the VND40 trillion support package has remained limited after nearly three months of implementation. The central bank reported commercial banks lent nearly VND4.1 trillion to nearly 550 customers under the package.

Nearly 150,000 firms newly-established and re-operational from Jan-Aug

In the first eight months of this year, Vietnam saw around 150,000 newly-registered and re-operational businesses, up 31.1% year-on-year, according to the Ministry of Planning and Investment.

In particular, there were 101,300 enterprises established, with total registered capital of VND1,136 trillion and 696,200 employees, along with 48,100 businesses resuming operations.

Of the new market entrants, there were 1,388 agriculture, forestry and fishery companies, 25,300 industrial and construction firms and 74,700 service enterprises.

Accordingly, the number of newly-established firms, registered capital and employees grew by 24.2%, 0.3% and 16.2% over the same period last year, respectively.

The number of companies that resumed their operations grew by 48.3% year-on-year.

In August alone, some 11,900 businesses were founded, a 9.5% decrease from the previous month, with total pledged capital reaching VND130.2 trillion, up 5,1%, and 75,200 employees, down 29,1%.

The average registered capital of a newly-established enterprise was VND11.2 billion, down 19.3% versus the same period last year.

The additional registered capital contributed to the economy in the first eight months totaled VND3,638.4 trillion, up 36.1%.

On average, some 18,700 businesses are established and restarted a month.

Roughly 59,600 enterprises have temporarily suspended their business activity in the first eight months, up 38.1% versus the same period last year.

Some 32,400 other firms halted operations pending dissolution, rising by 7.5 %, while 12,300 others completed procedures for disbandment, dropping by 0.9% year-on-year.

Over 13,000 enterprises pull out of the market monthly.

Wood exports to the US see difficulties, H1 earnings dropping

Export orders of Vietnamese wood enterprises to the US market tended to decrease due to the country's initiation of investigations and weak demand amid increased inflation.

According to statistics of the General Department of Customs, in July, the export value of wood and wood products reached US$1.3 billion, down 7.1 per cent over the previous month and up 2.1 per cent over the same period last year. This is the third consecutive month seeing exports of wood and wood products decreasing. In seven months, the export of wood and wood products was estimated at $9.7 billion, up 1.1 per cent over the same period in 2021.

The US has always been a large wood export market of Viet Nam. In recent years, taking advantage of the US-China trade war, Viet Nam has increased exports to this market. In the first seven months of 2022, the top five export markets for wood and wood products included the US, China, Japan, South Korea and Canada. In which, the US reached $5.6 billion, down 6 per cent over the same period last year and accounted for nearly 58 per cent of the total turnover.

According to the Vietnam Industry and Trade Information Center (VITIC), wood and wood product exports to the US in the second half of this year will be gloomy as the number of orders is on a downward trend. The US’ increased investigation into trade remedies makes it difficult to export wood to this market. High inflation in the US is negatively affecting the production and business activities of wood industry enterprises. The group of wooden furniture - the main export group of Viet Nam is most affected.

In mid-June, the Trade Remedies Administration under the Ministry of Industry and Trade said that the US Department of Commerce (DOC) had initiated an investigation into the evasion of anti-dumping and anti-subsidy tax on wooden cabinets originating from Viet Nam and Malaysia. Previously, the US also investigated against avoiding plywood products using hardwood materials imported from Viet Nam.

Retailers roll out promotions for National Day
     
Supermarkets, electronics stores and other retailers have announced a series of promotions for the upcoming National Day holidays.

Ho Thi Hong Dao, deputy director of marketing, Saigon Co.op, said prices have been slashed by up to 50 per cent on 25,000 locally made products for three weeks starting on August 25 under a programme called “Proud of Vietnamese Goods”.

The programme is on at all Co.opmart, Co.opXtra, Co.op Food, Co.op Smile, Cheers, Fine Life, Sense City, and HTV Co.op stores, she said.

The highlights of the programme include steep discounts on weekends on detergent, fabric softener, dishwashing liquid, cooking oil, monosodium glutamate, soy sauce, sugar, and rice, and ‘Shock prices’ on detergents, cleaning, bathing and oral care products from Surf, Sunlight, Lix, Comfort, On1, Aquala, Purite, Olive, Clear, Closeup, and P/S brands that are close to cost prices.

There are discounts of up to 50 per cent on gas stoves, trash cans, food-grade plastic bags, garbage bags, 360 degree mop set, and men's t-shirts and sports pants.

Many products such as yogurt, fish sauces, beers, pasteurized fresh milks, liquid detergents, conditioners, shower gels, and shampoos are priced at just VND3,000, VND4,900, VND6,600, and VND8,000 when customer buy the second, fourth and sixth items of the same product.

Customers who buy P&G, Coca Cola, Suntory, and Pepsico products can accumulate stars to redeem for vouchers (10 stars for one voucher worth VND 30,000), while loyal customers who buy Abbott, Suntory Pepsico, P&G will get five to six times the normal reward points.

The GO!/ Big C supermarket chain is offering up to 50 per cent discounts on over 300 products from August 25 to September 7.

It is also offering discounts of up to 40 per cent on Vietnamese home products and appliances, 35 per cent on fresh products and vegetables, 34 per cent on frozen products such as sausages, spring rolls and fish balls, 27 per cent on soft drinks and cleaning products, 22 per cent on milk and dairy products, and 35 per cent on personal care products.

Emart, Lotte Mart and WinMart supermarkets have also unveiled promotions to celebrate the occasion.

Electronics shops in HCM City like Nguyen Kim, Thien Nam Hoa, Dien May Xanh and Cho Lon are offering big discounts on TVs, cameras, mobile phones, and electronic household appliances. 

FLC Faros transfer to UPCOM delayed
     
The Ha Noi Stock Exchange (HNX) said that for the transfer of FLC Faros (ROS) shares' registration and depository to the UPCOM exchange, the review of the company's transaction registration documents can only be done after official conclusion of authorities and guidance of the management agency.

A representative of HNX said that in the initial investigation results from the authorities, the rise of the company's charter capital from VND1.5 billion (US$63,945) to VND4.3 trillion is prohibited according to regulations and is still under investigation.

Therefore, the northern exchange has not yet had basic information to determine FLC Faros' valid charter capital, its publicity and the volume of shares registered for trading.

Previously on August 25, the Ho Chi Minh Stock Exchange (HoSE) issued a decision on delisting 567.6 million ROS shares due to serious violations of the issuer on disclosure information and in cases where the exchange or the State Securities Commission of Viet Nam (SSC) considers the necessary of the delist to protect investors' interests.

Under regulations, a company that is subject to mandatory delisting or voluntary delisting but still meet conditions to be a public company, has to register for trading on the UPCOM exchange.

On August 30, the Viet Nam Securities Depository (VSD) announced to transfer registration and depository data of ROS shares from HoSE to UPCOM. However, this is a technical handling on the VSD's system for delisted shares.

Before being delisted, ROS share price was at VND2,510 a share, equivalent to the market capitalisation of more than VND1.4 trillion.

After the increase of FLC Faros's charter capital, experts proposed Government agencies tighten control and inspection in listed companies' activities, and increases their roles in protecting investors' rights. 

Catering and travel services generate VND56.8 trillion in August

Revenue of the accommodation, catering industry and travel sectors amounted to VND56.8 trillion this August, taking the total to VND393.2 trillion in the year to date, showed data of the General Statistics Office (GSO).

In August, the accommodation and catering sectors made VND53.5 trillion in revenue, bringing the total in the first eight months to VND377.8 trillion, up 48.1% year-over-year.

GSO attributed this strong growth to the increasing demand for travel and entertainment after two years of Covid restrictions.

In addition, the travel sector brought in some VND3.3 trillion, a 3.4-fold increase over the same period last year, adding up to total revenue of VND15.4 trillion in the first eight months.

Still, the number is lower than the pre-pandemic level, at 47.7% of the same period in 2019.

In August alone, Vietnam saw 486,400 international arrivals, up 38% over the previous month.

In the first eight months of the year, the total number of international passengers reached over 1.44 million, down 87.3% against the same period in 2019.

The Ministry of Culture, Sports and Tourism reported 72 million domestic tourists and 733,000 foreign visitors this year to date, generating a total revenue of VND316 trillion.

While the number of domestic travelers has exceeded the plan, that of international travelers is still lower than the expectation of five million this year.

Fuel retailers make urgent proposals to authorities 

Twenty-five petrol retail enterprises on August 29 have written to the Ministry of Industry and Trade and other relevant authorities proposing addressing inadequate issues in their recent business operations.

The document comprises proposals for a commission increase, removal of contributions to the petrol price stabilization fund, a price regulation within 24 hours and the permanent withdrawal of licenses of major enterprises that fail to comply with provisions on energy security, among others.

One of their concerns is the contributions to the petrol price stabilization fund made by retail enterprises as they are doubtful about the fund’s suitability with the Government’s intentions and its usefulness to society.

Representatives of retail enterprises sought to know why petrol retail enterprises facing consecutive losses are not allowed to cease their business operations and also received no support from the Government.

With a zero commission or a VND200 commission per liter paid by the major enterprises, petrol agents can hardly maintain their business operations, apart from the limited supply. In the meantime, the petrol retail enterprises incur lots of operational expenses for locations, logistics, transportation, employees, utilities supply, etc., the document said.

Despite heavy losses, they have to manage their business due to a regulation stating that their business licenses will be revoked permanently if they shut down.

To address the above issues, petrol agents proposed the Government remove contributions to the stabilization fund due to its negative impact on price regulation.

The Government should also provide financial support for the import of petrol to ensure energy security and allocate petrol for storage in major tanks to avoid a partial petroleum shortage as in the current situation.

In addition, the Government should permanently revoke the business licenses of major enterprises that fail to comply with provisions of energy security.

The commission paid by the major petrol enterprises should increase, at least VND600-800 per liter, for the petrol retail stations to maintain their operations. Besides, the time-limit of the price regulation should be shortened to 24 hours, including weekends and public holidays.

The petrol retail enterprises also proposed they should be allowed to sign contracts with different major petrol enterprises instead of only one major enterprise to increase their competitiveness and ensure the petroleum supply.

Despite the scale of business, whether a large or a small and medium-sized enterprise, they should receive equal treatment from the Government to ensure healthy competition in a market economy, said a representative of a petrol retail enterprise.

Enterprises see huge losses after audit

Enterprises’ audited financial statements showed that profit in the first half of the year translated into a loss, leaving them unable to trade on margin.

The Thaiholdings Joint Stock Company (Thaiholdings) saw its after-tax profit in the audited semi-annual financial statement stand at VND217.1 billion, down by VND180 billion against its income statements.

The company’s revenue from operations in the period was VND233 billion, dropping VND93.9 billion versus the figures recorded in its financial statements before an audit.

This was due to the difference in auditors’ opinion when Thaiholdings divested from its subsidiary, a leader of Thaiholdings explained.

Apart from that, the section, “other profit”, recorded a loss of VND1.94 billion in the financial statements before the audit; however, it turned out to be a loss of VND22.9 billion in the audited financial statement.

The VND21 billion difference was due to the company’s subsidiary recording fines for late corporate income tax payments from the previous periods, he added.

Saigon – Hanoi Securities JSC recorded a profit of VND39 billion in its income statement, while its semi-annual audited financial statement pointed out the company operated at a loss of VND86.5 billion.

The Hanoi Stock Exchange delisted stocks of Saigon – Hanoi Securities JSC and suspended it from margin trading from August 23 due to the profit-to-loss shift.

Marine Supply and Engineering Service JSC (MAC) also revised its profit from positive VND130 million to negative VND4.4 billion in its audited profit-and-loss statement. The adjustment was a result of a 25-fold increase in appropriation for investment loss provisions.

Besides, MAC’s Enterprise Cost Management rose to VND3 billion due to higher wages and provisions for bad debt.

The company had incurred a loss of over VND30 billion in the year to the end of June. If the situation persists, the company can face bankruptcy, according to an auditing firm.

VKC Holdings Join Stock Company recorded its loss after tax at VND191 billion, a surge of VND166 billion at a loss.

The upsurge in the loss was attributed to major adjustments in the cost management and other cost sections. Of these, business cost management soared to VND69 billion, standing at VND82.5 billion mainly due to setting aside provisions for short-term doubtful receivables worth VND65 billion.

Meanwhile, other costs skyrocketed by VND102 billion compared to the company’s independent income statements.

Due date real estate bonds heap pressure on developers

Although real estate experts are worrying about a debt of VND 360 trillion ($15.6 billion) in bonds that will be due date in the 2022-2024 period, some businesses have returned to issuing bonds for potential investments in their next periods.

Khang Dien Housing Trading and Investment JSC on August 20 approved a plan to issue corporate bonds privately. The maximum total issuance value is VND800 billion ($34.7 million).

This bond lot has a 3-year term and is issued at one time only. The nominal interest rate is fixed at 12 per cent per year and the release time is expected to be no later than the end of the third quarter of 2022.

According to its plan, Khang Dien will use these bonds to pour more capital into International Consulting Co., Ltd. to develop their projects. The new capital of this company after additional investment by Khang Dien would be at VND 1.5 trillion ($67 million), of which Khang Dien accounts for 99.9 per cent of the capital.

In June, Hung Loc Phat Real Estate Investment JSC announced the successful issuance of 150,000 bonds with a par value of VND1 million ($43.50) per bond for the domestic market. The bond batch has a term of 15 months and matures in June 2023.

In Ho Chi Minh City, Hung Loc Phat has implemented a series of projects such as Hung Phat 1, Hung Phat Silver Star, and The Golden Star. In Binh Thuan province, Mui Ne Summerland Project has a scale of 31.5 hectares and is considered one of the company’s biggest projects to date.

In a report sent to the Prime Minister in June, the Ministry of Finance stated that around VND62.5 trillion ($2.7 billion) of real estate bonds will be due this year, accounting for 43.2 per cent. In 2023 and 2024, the figure will balloon to VND360 trillion ($15.6 billion).

Nguyen Quang Thuan, CEO of Fiin Group, said that besides bank capital, real estate bonds have become a capital mobilisation channel for many real estate businesses in the past few years. According to figures from Fiin Group, 54 listed real estate enterprises currently have a loan balance of about VND435 trillion ($18.9 billion).

“This number is very large, equivalent to half of all the total credit in real estate. In addition, there is also international credit capital, with a mobilised balance of about $4 billion,” Thuan told VIR. “This shows that international investors remain interested in the Vietnam real estate market.”

However, a wider view is required. “In fact, bank credit to support real estate businesses is not large, accounting for only 14 per cent, while the rest is from customers and partners. To properly assess real estate credit, we need a broader perspective, not only on the credit room or corporate bonds but the entire credit mechanism in this area,” added Thuan.

Due date real estate bonds would not only put pressure on real estate businesses but also affect the liquidity risk of real estate agents who have committed to buy back bonds. In addition, this debt repayment pressure can affect the stock market because stocks are pledged as security for bonds or pledged to buy low-quality or problematic bonds.

Regarding the issuance of real estate corporate bonds in Vietnam, there was a sharp decline in the first half of this year but did not totally freeze. Thuan shared that the credit quality of domestic real estate businesses is still rather stable, with an overall leverage level of less than 0.5-fold.

The overall financial health of real estate companies is still relatively safe, except for companies set up for the purpose of raising bond capital or borrowing bank credit.

Notably, the number of apartments sold in the market in Hanoi and Ho Chi Minh City has dropped to less than half, to 29,000 units per year in 2020 and 2021, compared with 66,000 units per year in the 2015-2019 period.

Weighing stock market appeal in September

A bullish market trend is expected to linger in September leveraging a combination of factors, including improved liquidity and shortened payment schemes, among others.

The top attention of global investors these days has been focused on on the Fed’s upcoming meeting, slated on September 20-21, with expectations that the central bank would relieve the scope of the base interest rate increase from 0.75 percentage points to just 0.5 percentage points.

That is because, by the end of July, the rate of unemployment in the US fell to just 3.5 per cent thanks to soaring newly added jobs surpassing half a million during the month. Meanwhile, the consumer price index remained intact in July after picking up 1.3 per cent in June.

Earlier, the Fed had twice raised the basis point by 0.75 percentage points each in June and July to contain inflation.

Lam Gia Khang, head of Research at VietinBank Securities, noted that if the Fed gave a decision as what the market has expected – and with the recently improved liquidity of Vietnam’s stock exchange – the benchmark VNIndex is likely to continue the bullish trend and approach 1,350 score mark in September.

Upbeat assessments about stock market performance linger as investors expect the shortened payment scheme T+2, applicable from August 29, would bring positive impacts.

In addition, several banks with high-safety rates and good asset quality might have their credit limit loosened by the central bank in the middle of September.

Currently, the blue chips in the finance and banking sectors are enticing money flow, creating motivation to aid the benchmark index growth.

According to Truong Thai Dat, director of Analytics at DSC Securities, with the price per book averaging 1.39x in 2022 and the discount level compared to the average set price reaching 40 per cent, bank tickers are deemed attractive.

Among bank tickers with potential price upsurge, ACB and VPB are regarded as noteworthy.

Currently, the blue chips in the finance and banking sectors are enticing money flow, creating motivation to aid the benchmark index growth.

The group of lenders with state ruling including VCB, BID, and CTG also deserves attention, leveraging the proposed escalating third-quarter profit prospects compared to one year ago, when these banks had to push up loan-loss provisioning.

Moving forward, diverse organisations forecast that Vietnam’s GDP would surpass 10 per cent in the third quarter.

Accordingly, the tickers of sectors with robust rebounds like aviation and tourism would appeal to investors.

Meanwhile, tickers of businesses expected to catch a bonanza season in the third quarter like seafood and textile apparel have seen a slow rebound in their price compared to tickers of other fields.

The stock market movement in September in many previous years, however, has not been positive both in Vietnam and globally.

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