![Number of air passengers down 14% in September hình ảnh 1 Number of air passengers down 14% in September hinh anh 1](https://static-images.vnncdn.net/files/publish/2022/9/26/vietnam-business-news-september-26-caf2c744be6e4687b2c3cc780172dd46.jpg)
The number of air passengers in September reached 4.2 million, down 14% month-on-month, according to the Civil Aviation Administration of Vietnam (CAAV).
The volume increased by 19.6% and 3% compared to that the same month in 2021 and 2019, respectively, it said.
During the month, Vietnamese airlines served 712,000 foreign travelers, up 8.7% compared to last month and down 47.8% compared to that in September 2019. The volume of domestic passengers reached 3.7 million, a drop of 13% month-on-month but 34% higher than that the same month in 2019.
The CAAV attributed the decrease in the air passenger volume to the fact that airlines have entered the low season which usually lasts until the end of December, adding that the number will rise remarkably during Tet (Lunar New Year) holiday in the early months of each year.
Vietnamese airlines carried 37 million passengers in the first nine months of this year, including 2.9 million foreign and 19.5 domestic ones. The figures soared by 157%, 2,396% and nearly 140% respectively compared to the same period last year.
Vietnamese pomelo has large potential for export
Vietnamese pomelo has large potential for expanding exports to demanding markets including the US, the EU and Japan, according to the Viet Nam Trade Promotion Agency.
Nguyen Thi Thu Thuy, Deputy Director of the Export Promotion Centre, said that Vietnamese pomelo was considered to have superior quality to other countries thanks to its moderate sweetness and suitability to consumers of many regions and markets together with a low pest risk. As pomelo has thick skin, it is easy to preserve for a long time after harvest, which makes it possible to transport by sea.
Besides, agricultural products and pomelo in particular are subject to preferential tariffs under free trade agreements to which Viet Nam is a member. The export potential to many markets of Vietnamese pomelo is still large. Thuy pointed out that currently, Vietnamese pomelo was mainly exported in the form of fresh fruit with low added value. Pomelo could be processed into many different products such as fruit juice, essential oil and jam while the essence in pomelo peel could be used to produce many types of pharmaceuticals and foodstuffs.
Thuy said the US allowed the official import of green-skinned pomelo from Viet Nam, making pomelo the seventh fresh fruit of Viet Nam to be allowed to enter this market, after mango, longan, lychee, dragon fruit, rambutan and star apple. Other goods such as coconut and durian were already exported to the US but in frozen form. After pomelo, the US is considering procedures to allow the import of Vietnamese coconuts into the US.
Vu Thi Thuy, from the trade office in Hong Kong, said that Hong Kong had high demand for fresh pomelo, spending $36.4 million to import pomelo last year, an year-on-year increase of 28.2 per cent. Viet Nam ranked second in exporting pomelo to Hong Kong with an export revenue of $2.5 million, after Thailand with $7.8 million in 2021. However, in the first seven months of this year, Viet Nam’s export of pomelo to Hong Kong increased 133 per cent against the same period last year to reach $2.53 million, making Viet Nam the largest pomelo exporters to Hong Kong as Thailand’s export was at $2.5 million.
Tra Vinh Province approves $7.8m industrial cluster
The Mekong Delta province of Tra Vinh has decided to build the An Phu Tan industrial cluster in Cau Ke District at a cost of more than VND185 billion (US$7.8 million).
The Thien Phu Construction Investment and Electromechanical Joint Stock Company and Thai Son Traffic Construction Joint Stock Company will develop the 20ha cluster, according to the province People’s Committee.
It is expected to be finished in the third quarter of 2024.
Once operational, it will prioritise tenants in the automobile, mechanical, high-tech, packaging, footwear, textile-garment, food processing, and electronics supporting industries.
Construction of technical infrastructure has begun on three of them, Tan Ngai, Hiep My Tay and Phu Can. The province is soliciting investment in building technical infrastructure for the Luu Nghiep Anh cluster in Tra Cu District and Sa Binh cluster in Tra Vinh City.
Techcombank credit rating upgraded to Ba2 by Moody's, outlook stable
Moody's Investor Service has upgraded Techcombank's Baseline Credit Assessment (BCA) and credit rating, meaning Techcombank now has the strongest creditworthiness of all Vietnamese banks, with capital and profitability its credit strengths.
Specifically, Moody's upgraded Techcombank's long-term counterparty risk assessment (CRR) to Ba1 from Ba2 and long-term deposit to Ba2 from Ba3, with a stable outlook. Moody's also upgraded the bank's BCA to ba2 from ba3. Techcombank is currently the only Vietnamese bank with a BCA of ba2.
Moody's explained that its ratings action reflects Techcombank's strong standalone creditworthiness and the upgrade of Viet Nam's issuer rating to Ba2 from Ba3 on September 6, 2022. Before this rating action, Techcombank's BCA and ratings were constrained by Viet Nam's previous sovereign rating of Ba3.
Techcombank's asset quality also remained broadly stable despite the pandemic, with the gross non-performing loan (NPL) ratio increasing modestly to 0.7 per cent as of the end of 2021 from 0.5 per cent a year earlier. Loan loss coverage was also high at 163 per cent as of 2021.
Investors cautious about disbursing investments amid higher rates: experts
As many major central banks tightened monetary policies to contain soaring inflation, the State Bank of Vietnam (SBV) on September 22 also decided to hike its benchmark interest rate by 100 basis points, effective September 23. This is the first rate hike by the SBV since 2020, after the outbreak of the COVID-19 pandemic.
According to experts, the move is in line with current monetary market developments in order to avoid creating a significant management gap between Viet Nam and other economies.
Last week, the US Federal Reserve announced an increase in the central bank’s overnight interest rates by 0.75 percentage points to 3–3.25 per cent a year, its fifth rate hike in 2022. The Fed also affirmed that it would continue to raise rates and maintain them above 4 per cent a year after 2023 to curb inflation.
This has caused the US dollar to continue to appreciate strongly and break the 20-year peak in the international market, putting pressure on the USD/VND exchange rate and monetary policy management.
According to the forecast of VNDirect Securities Corporation, the deposit interest rate may increase by 30–50 basis points from the current level in the last months of 2022. Thereby, the 12-month deposit interest rate of commercial banks will, on average, increase to 6.1–6.3 per cent a year by the end of 2022, but still lower than the pre-pandemic level of 7 per cent a year.
Warrant market to be active in the rest of 2022
With the number of new released covered warrant (CW) codes increasing nearly four times between August 2021 and August 2022, the warrant market is expected to be active again in the last three months of the year thanks to new issuances.
SSI Securities Corporation listed 423 million covered warrants under 28 new CW codes that it issued at the end of August on the Ho Chi Minh Stock Exchange on Thursday.
The 28 are based on 12 blue-chip stocks, mainly in banking (ACB, MBB, STB, TCB, TPB, and VPB), real estate and building materials (VHM, KDH and HPG) and retail (FPT, MWG and VRE).
They have maturities of four, seven and 12 months, and conversion ratios of 2:1, 4:1, 6:1, 8:1, and 10:1.
An SSI spokesperson said the company constantly seeks to issue covered warrants for a diverse range of underlying stocks in different industry groups in the VN30 index basket, but focuses on certain stocks in demand such as HPG, STB and FPT.
Investors can buy and sell CWs issued by SSI on HOSE on a T+1.5 settlement cycle just like stocks. If they hold a warrant to maturity, the difference will be paid in cash in case it is in a profitable position.
Viet Nam’s covered warrant market has grown significantly in the three years since it came into being. It had 157 warrant codes of seven issuers as of the end of last month compared to 48 a year ago.
According to statistics, covered warrants issued by SSI are always very liquid.
HCM City to host int’l food expo next month
The HCMC F OODEX 2022, Viet Nam’s leading food and beverage (F&B) trade show, will take place next month in HCM City from October 19-22.
Featuring some 300 booths, the expo will play host to more than 300 local and international exhibitors and is expected to attract 18,000 visitors.
Products to be on display include raw or lightly processed food products (such as agricultural products, seafood, spices); deeply processed food; beverages; raw materials used in the food processing industry; and machinery and equipment for food production, packaging and preservation.
At the expo, there will be on-site performances of processing and making special dishes and drinks from Vietnamese and international businesses, along with seminars about opportunities and challenges driving the F&B landscape in Viet Nam and the world.
There will also be a symposium called “Development trends of the food industry” and a training workshop on “Standards of food for export to potential markets”.
Bright prospects for agri-seafood exports at year-end
On September 17, more than 100 tonnes of fresh durians from five local producers were exported to China via the official channel, marking the debut of many more shipments to this billion-population market in the forthcoming time.
After durians, passion fruits also have ample space for export to China as these two items were approved by China to enter the country by a protocol signed by the two countries in July.
Rice also eyes rosy prospects for accelerated exports fetching high prices, rooted in Vietnamese rice’s enhanced status in recent years, and partly from India’s recent policy halting broken rice export.
Thanks to the market's positive movement, Vietnam raked in $2.3 million from rice export in the first eight months of this year, up 8.1 per cent on-year.
The price of export rice rose constantly, inching up $20-30 per tonne compared to early September.
Tariff imposition and temporary halting of export of broken rice from India are shaking the worldwide rice export market and prompting rice importers to turn to Vietnam.
The rice sector aims to surpass the target of exporting 6.3 million tonnes worth $3.3 billion in export value as set early this year.
China’s stringent measures for pandemic control have resulted in modest growth of Vietnam’s commodity exports to this market compared to other major markets like the US, EU, South Korea, and ASEAN, which all fetched double-digit growth during this eight-month period.
Investment in Mekong subregion expected to recover post pandemic
At the 10th Mekong forum on strengthening development cooperation and economic recovery in the Mekong region on September 23, the attendants discussed ways to recover the economies of the Mekong subregion countries in collaboration with policy adjustments.
Dr. Nguyen Anh Tuan, standing vice chairman of the Vietnam Association of Foreign Invested Enterprises, showed many advantages of promoting foreign direct investment (FDI) in the Mekong subregion. According to Tuan, recognising the role of FDI in socioeconomic development, Mekong subregion countries have been adjusting policies to attract investment, creating a more transparent and favourable investment environment.
To take advantage of attracting internal direct investment, countries in the region would need to continue to improve the investment environment, create favourable conditions, and adopt policies to promote economic cooperation and contribute actively and responsibly to the building of a complete ASEAN Community by 2025.
The latest forecast of international institutions shows that Vietnam’s GDP growth rate in 2022 could reach about 6.5-7 per cent compared to 2.8 per cent in 2021. After a decline of 6.2 per cent in 2020, Thailand’s economy reached a growth rate of 1.6 per cent in 2021 and may hit 4.5 per cent in 2022.
The Asian Development Bank predicted Laos would recover with 3.4 per cent GDP growth this year and 3.7 per cent in 2023.
In the development orientation of the Greater Mekong region, Vietnam plays a central and connecting role in the region, as well as in the development of production networks and value chains in the region.
Assoc. Prof. Dr. Nguyen Duy Dung, director of the Institute for Southeast Asian Studies said, “Vietnam will be a reliable partner of businesses inside and outside the region, now and in the future.”
Data from the Foreign Investment Agency under the Ministry of Planning and Investment shows that as of August 2022, Vietnam had invested in four Mekong countries – Laos, Cambodia, Myanmar, and Thailand – with 549 valid projects worth $9.73 billion, accounting for 87 per cent of Vietnam’s capital invested in ASEAN countries.
Of these, 237 projects are located in Laos with the total registered investment capital of nearly $5.3 billion, 197 projects in Cambodia worth $2.9 billion, 109 projects in Myanmar worth $1.5 billion, and 16 projects in Thailand worth $32.8 million.
Vietnam’s investment in this region mainly focuses on mining, agriculture, forestry and fishery, manufacturing and processing, banking, finance and insurance, real estate, and wholesale and retail.
Localities innovating to boost public funding disbursement
The decentralisation of government spending will contribute to speeding up public investment disbursement, according to the Ministry of Planning and Investment.
According to Decision No.1012/QD-TTg released in August on assigning medium-term public investment plans of the central budget for 2021-2025, nearly VND31.4 trillion ($1.36 billion) of the Ministry of Transport’s medium-term capital is set to be transferred to seven localities across the country.
The prime minister has asked ministries to direct the localities – Hanoi, Hung Yen, Bac Ninh, Ho Chi Minh City, Dong Nai, Binh Duong, and Long An – to detail every project and task of the spending plan, which is hoped to help meet annual spending targets. Instead of immediately assigning the capital plan and then trying to disburse, plans are now considered carefully based on demand and capacity before capital allocation.
The $1.36 billion will be partly allocated to the projects for Ring Road No.4 in Hanoi and Ring Road No.3 in Ho Chi Minh City. Such decentralisation will contribute to speeding up disbursement.
Investment portfolios, preparation, construction, and settlement are seen as the most important tasks to boost the disbursement of public investment.
Eight-month revenue from retail, services remains growth
Total revenue from goods retail and services in the January-August period increased by over 19% year on year to nearly 157 billion USD, which is a high growth rate for the period in many years, according to the General Statistics Office.
Revenue from accommodation and eating out services in the period picked up 48.1% year on year to 377.8 trillion VND thanks to rocketing demand for entertainment and tourism in summer after more than two years of travel and going-out restrictions prompted by the COVID-19 pandemic.
The 8-month travelling and tourism revenue was estimated at 15.4 trillion VND, up 3.4 times from the same period last year, but equal to only 47.7% of the same period in 2019.
Revenue from other services came to 361 trillion VND, up 24.2% year on year.
Binh Duong province promotes trade with India
A delegation from the southern province of Binh Duong led by Nguyen Hoang Thao, permanent deputy secretary of the provincial Party Committee, paid a working visit to India from September 24 to 25.
The delegation had meetings with Tata Coffee Group about opportunities to expand production and business, the Indian Importers Chamber of Commerce and Industries (IICCI) and Chief Executive Officer Clubs (CEO Clubs) on mechanisms and policies related to trade and investment in Binh Duong province.
During the meetings, they exchanged information on Vietnam’s investment preferential policies as well as those of Binh Duong in particular.
The delegates also had a working session with Ambassador Nguyen Thanh Hai and staff of the Vietnamese Embassy in India on trade and investment relations between the two countries, especially opportunities to promote cooperation between Binh Duong and Indian localities and businesses.
On the morning of September 25, the Vietnamese delegation laid flowers at the President Ho Chi Minh Monument in New Delhi.
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 by 2025.
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.
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.
Roadmap to develop green ports in Vietnam
A roadmap for a green port system in Vietnam is being put forward to reduce impacts on the environment as well as greenhouse gas (GHG) emissions and promote energy efficiency.
The Vietnam Maritime Administration (VMA) cited statistics from the International Maritime Organisation (IMO) showing that GHG emissions of the maritime shipping industry increased nearly 9.6% between 2012 and 2018 (from 977 million tonnes to 1,076 million tonnes). CO2 emissions alone climbed from 962 million to 1,056 million tonnes.
It is forecast that until 2050, GHG emissions in the ndustry will increase 50% over 2018.
According to information released at the International Transport Forum 2020, emissions from maritime shipping activities cost an additional 12 billion EUR a year in the 50 largest ports in the world. Approximately 230 million people have been directly exposed to emissions at 100 seaports around the world in terms of shipping emissions.
Trade and legal disputes part of game with UKVFTA
Vietnamese businesses must stay vigilant and do their homework to avoid trade and legal disputes in exporting to the UK to take full advantage of the UK-Vietnam Free Trade Agreement (UKVFTA), which officially went into effect last May, said industry experts and policymakers.
The agreement was intended to provide both sides with the same trade benefits under the previously signed EU–Vietnam Free Trade Agreement (EVFTA ) as the UK has left the EU.
UKVFTA aims to go even further than the EVFTA to boost trade between Vietnam and the UK with 65% of all tariffs having been removed so far. In the next six years, the agreement is to remove up to 99.2% of all tariffs on Vietnamese exports, with the Southeast Asian country to remove 48.5% of all tariffs on UK products in return.
Early signs have shown a positive effect on bilateral trade with Vietnamese exports experiencing a 16.4% boost at 5.76 billion USD compared to figures recorded in the same period before the agreement went into effect. Vietnamese agricultural products, in particular, have seen the strongest gain with a 16% increase compared to the previous year, reaching over 230 million USD.
The trade agreement has provided Vietnamese products with a competitive edge in the UK market over competitors who have yet to sign a trade agreement with the kingdom. Key Vietnamese exports to the UK included seafood, agricultural products, textile, footwear, wood furniture and handicraft.
Untapped opportunities for Vietnamese pepper exports to UK
There are great business opportunities for Vietnamese pepper exporters in the United Kingdom - a lucrative market with high demand for pepper imports.
According to industry experts, local pepper exporters can also take advantage of the UK's supply shortages to increase exports of its key items such as pepper to the country as the impact of the COVID-19 pandemic, Brexit and the international sanctions against Russia have resulted in a supply instability and scarcity in the UK.
Currently, the UK is the second-largest importer and consumer of pepper in Europe after Germany and Vietnam's pepper exports to the UK market have surged positively in recent years.
In 2020, Vietnam shipped 5,621 tonnes of pepper to the UK, raking in 48 million USD of the total 14,000 tonnes and 121 million USD that the UK imported.
Garment-textile sector must go green to boost exports to EU: experts
Experts have advised Vietnamese textile-garment and leather-footwear firms to improve the sustainability of their production for export to the European Union (EU) after the European Commission (EC) proposed the goods must comply with ecological design criteria.
Earlier this year, the EC proposed a new strategy to make textiles more durable, repairable, reusable and recyclable, to tackle fast fashion, textile waste and the destruction of unsold textiles, and ensure their production takes place in full respect of social rights.
Europe is a traditional and key market for Vietnam’s textile and footwear industries, especially with the EU-Vietnam Free Trade Agreement (EVFTA).
Phan Thi Thanh Xuan, Vice Chairwoman and Secretary General of the Vietnam Leather Footwear and Handbag Association (LEFASO), said to meet the EU market’s requirements, local businesses must improve the quality of their human resources and production facilities, and employ clean energy and green technology.
Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), said an important solution is to invest in technology because it will help solve the labour deficit and environmental problems.
According to Giang, the number of textile enterprises using clean energy has increased to 60-65%, either via buying electricity or investing in installing solar energy projects. He predicted that in the next five to seven years, 100% of textile and garment companies can fully meet the clean energy target.
Experts said in the long run, improving product quality is key to ensuring sustainable export growth. The work requires efforts from enterprises and state management agencies, and incentives to encourage investment in supporting industries and material supply centres. The EU is tightening standards on environmental protection, so localities should promote the building of modern specialised waste treatment systems, they advised.
Bad debts remain a challenge for banks in Q4 2022
Besides interest and exchange rates, non-performing loans (NPLs) are also a concern for banking activities in the remaining months of 2022, experts have warned.
According to the World Bank (WB), if including potential NPLs from restructured debts, the number of NPLs in the Vietnamese banking system is not low and must be continuously monitored.
The State Bank of Vietnam (SBV) last year issued Circular No. 14/2021/TTNHNN. Under the circular, the SBV told banks to reschedule debt repayments to help customers affected by the COVID-19 pandemic until June 30 this year. The circular also allowed banks to keep the debt classification for COVID-19 borrowers unchanged.
According to SBV’s statistics, by late April this year, total accumulated scheduled loans hit 695 trillion VND, and 1.1 million borrowers benefited from the incentive policy.
In fact, the ratio of NPLs on the balance sheet at commercial banks has continued to increase since the end of 2020. Until June 30 this year, the total NPLs of 28 listed banks were about 122 trillion VND, an increase of nearly 11% compared to the end of the first quarter and nearly 20% compared to the beginning of 2022.
Experts forecast the NPLs of banks may continue to increase when Circular No. 14/2021/TT-NHNN expired on June 30 this year. When not being extended, many debts will have to be listed in worse debt groups if customers do not pay their debts on time, which will cause NPLs to increase.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes