Real estate companies are continuously announcing plans to issue bonds to raise capital.

The Board of Directors of Nam Long Investment Joint Stock Company (NLG) on September 19 approved a plan to issue corporate bonds with a maximum total value of VNĐ500 billion (US$21.2 million), expected to be implemented in the third quarter of this year.

The bond lot is a non-convertible bond, with a term of five years, without warrants, with an expected interest rate of 9.6 per cent per year.

With the proceeds, Nam Long will use them to invest in the Nam Long 2 Residential Area project in Nam Cần Thơ Urban Area, Cần Thơ City. The project has a total investment capital of VNĐ500 billion; total area of 43.8 hectares. In mid-February this year, Cần Thơ City People's Committee allocated land to Nam Long to implement the project.

Also on September 19, Văn Phú - Invest Investment Joint Stock Company (VPI) approved a plan to issue bonds to the public with a maximum total value of VNĐ650 billion. They are non-convertible bonds, without warrants.

The company did not disclose the purpose of this capital mobilisation.

On September 14, the Board of Directors of Industrial Investment and Development Corporation - Joint Stock Company (BCM) also approved a plan to issue bonds with a total par value of VNĐ760 billion.

Hồ Chí Minh City Infrastructure Investment Joint Stock Company (CII) recently revealed its plan to mobilise bonds of nearly VNĐ7 trillion at the company's 2023 Extraordinary General Meeting of Shareholders.

CII said it is working with an international financial institution to guarantee payment for bonds that the company plans to issue with a total value of nearly VNĐ2.4 trillion, with a term of over 10 years.

The company also plans to issue convertible bonds to existing shareholders with a term of 10 years, total value VNĐ4.5 trillion.

Statistics of the Hà Nội Stock Exchange (HNX), from the end of July until now, show that real estate businesses have mobilised a total of VNĐ24.82 trillion from the bond channel. In September alone, there was a lot worth VNĐ1 trillion issued by the Vietnam - Singapore Industrial Park Joint Venture Company Limited (VSIP).

Businesses issuing large bond volumes included Capitaland Tower Co Ltd (with four lots of bonds with a total value of nearly VNĐ12.24 trillion), Lan Việt Real Estate Co Ltd (VNĐ4.1 trillion), BIM Real Estate Joint Stock Company (BIM Land) (VNĐ2.3 trillion), and Phú Thọ Land Joint Stock Company (VNĐ1.9 trillion).

In addition to the bond channel, in September, real estate businesses also announced plans to mobilise capital through other channels.

For example, Ngân Hiệp Real Estate Joint Stock Company plans to borrow from MBBank with a maximum credit limit of VNĐ1.2 trillion.

This enterprise is a subsidiary of No Va Real Estate Group Joint Stock Company (Novaland or NVL), borrowing capital for the purpose of investing, constructing and developing two projects of Ngân Hiệp 1 and 2 tourism areas, part of the Novaworld – Hồ Tràm project in Bà Rịa-Vũng Tàu Province.

Another enterprise, Sài Gòn-Hải Phòng Industrial Park Joint Stock Company (SHP) also plans to borrow VNĐ1.12 trillion, to invest in the social housing project under the Tràng Duệ Commercial Services and Workers' Housing project.

SHP is a subsidiary of Kinh Bắc Urban Development Corporation - JSC (KBC).

Kiên Giang Construction Investment Consulting Group Joint Stock Company (CKG) has just approved a plan to offer more than 13.4 million individual shares to professional stock investors.

Accordingly, the company expects the issuance price to be VNĐ15,000 per share, 44 per cent lower than the market price of CKG at the closing time on September 14. If completed as planned, CKG will collect more than VNĐ201 billion from this deal to pay off due debts, debts payable to construction units, and payment for raw materials.

Vietnam’s central bank may cut interest rates further: UOB

United Overseas Bank (UOB) in Vietnam expects the State Bank of Vietnam (SBV) to cut interest rates by another 100 basis points to 3.5% in the fourth quarter.

The expected rate cut would help strike a balance between fueling economic growth and easing inflationary pressure, according to UOB’s report on the market outlook released yesterday (September 25).

Vietnam started the year with a slower pace of economic growth, registering a gross domestic product (GDP) increase of a mere 3.28% in the first quarter, down from the 5.92% rise in the fourth quarter of 2022.

Low external demand and slack manufacturing were the primary causes. Consequently, the second quarter saw the economy expanding a slight 4.14%, leading to growth of 3.72% in the first half of the year, way below the 6.46% recorded in the same period in 2022.

The manufacturing sector, accounting for about 34% of Vietnam’s GDP, grew by a mere 1.1% year-on-year in the April-June period. In contrast, the services sector, which contributes 43% to GDP, demonstrated stronger resilience, with a 6.1% increase. Manufacturing contributed more than 60% of the overall economic growth in the first half this year.

Vietnam’s Purchasing Managers’ Index (PMI) rebounded above 50 in August, after a five-month decline. However, it lagged behind the ASEAN regional average for the twelfth consecutive month.

Vietnamese exports, heavily affected by weakened external demand, decreased for nine of the past ten months. Notably, exports to the U.S., its largest market which accounts for 28% of Vietnam’s total export value, contracted by 9.4% in August 2023.

Retail sales remained robust, with a 10% increase in August 2023, compared to the same month last year. Moreover, over 7.8 million tourists had visited Vietnam in the year to the end of August, signaling the potential recovery to at least two-thirds of the 2019 levels by the end of 2023.

However, Vietnam’s GDP growth for the third quarter may not inspire strong optimism, as the services sector only partially offsets sluggish growth in exports and manufacturing. UOB experts maintain an annual growth forecast of 5.2% for 2023 and 6.0% for 2024.

“We anticipate a growth rate of 5.6% in the third quarter and 7.6% in the fourth quarter. External risk factors that warrant close monitoring include the Russia-Ukraine conflict and its impact on energy, food and commodity prices, as well as disruptions in global supply chains and China’s economic recovery rate,” said UOB specialists.

On the inflation front, the consumer price index (CPI) is below the target of 4.5%. However, a recovery in the headline CPI in the last two months, following a six-month downtrend (with August seeing a 2.96% year-on-year increase), indicates persisting inflationary pressure. It is particularly concerning given recent crude oil price hikes.

“From January to August, the overall inflation rate in Vietnam increased about 3.1% year-on-year, higher than the 2.6% seen in the same period last year. We foresee rising inflationary risks for the year,” said UOB experts.

Amid these economic challenges, the SBV responded swiftly by cutting its re-financing rate by 150 basis points to 4.5% in June. “However, we still anticipate a further 100 basis-point cut to 3.5%, but the timeframe has been pushed to the final quarter to balance growth and inflationary pressures,” the experts projected.

Gov’t seeks clarification on Can Gio transshipment port project

The Government has requested HCMC to provide further details on the Can Gio International Transshipment Port project, particularly concerning its impact on socio-economic development plans and the UNESCO-recognized Can Gio Mangrove Biosphere Reserve.

In Official Dispatch 7320/VPCP-CN addressed to relevant ministries, HCMC, and Ba Ria-Vung Tau Province, Deputy Prime Minister Tran Hong Ha urged HCMC to work with relevant ministries and agencies in clarifying the project’s impact on and conflicts of economic interest with the existing seaports and and those port plans approved by the Prime Minister, as well as its implications for socio-economic development and the Can Gio Mangrove Biosphere Reserve.

The document must also specify the project’s approval authority as required by the Government.

Relevant ministries and Ba Ria-Vung Tau authorities have been tasked with closely working alongside HCMC authorities to prepare and finalize the project study.

In late August of this year, the HCMC People’s Committee submitted Document 4075 to the Government regarding the Can Gio International Transshipment Port project.

The project aims to develop an international transshipment port in Can Gio for HCMC and the region, attracting local and international shipping lines, and transportation and logistics companies. The goal is to integrate them into the global transportation supply chain.

The Can Gio International Transshipment Port, proposed to be situated in Thanh An Commune, is expected to have a capacity of 4.8 million TEUs by 2030, with a potential increase to 16.9 million TEUs by 2047.

The first phase of the project is planned to commence operations by 2030, with investment preparation taking place from this year until 2024, followed by two years of port construction.

HCMC recently announced plans to clear 90 hectares of coastal mangrove forest to make room for the Can Gio International Transshipment Port project.

The Can Gio International Transshipment Port would require a total of 571 hectares of land. Of this, 90 hectares of mangrove forest would have to be cleared, including nearly 83 hectares of natural mangrove forest and seven hectares of forest land without trees. The project would also utilize 481 hectares of water surface.

Vietnam considering master plan for minerals as construction materials

Vietnam is mulling over the creation of a master plan for the use of mineral resources as raw materials for construction.
 
The Ministry of Construction is submitting a master plan to the prime minister for the exploration, exploitation, processing, and use of minerals for 2021-2030, and beyond.

Pham Van Bac, head of the Construction Materials Department at the Ministry of Construction (MoC), said the master plan closely follows Resolution No.10-NQ/TW dated February 2022 on the strategic direction for the for the geological, mineral, and mining industries through 2030, with a vision to 2045.

The plan sets out specific objectives for each mineral group, including exploration, exploitation, processing, and use. Each stage will identify specific mines for investigation, with priority given to mine development in areas that mirror domestic needs. Low-quality minerals will also be exploited if they meet export regulations and generate high economic value.

Domestic researchers have stated that the master plan should be managed in the direction of green mining and circular mineral exploitation, and that there must be additional backup plans for projects that fall behind schedule.

Quach Duc Tin, deputy director of the Institute of Geosciences and Mineral Resources under the Ministry of Natural Resources and Environment – the consulting agency of the master plan – said, "For mineral exploitation, Vietnam needs a realistic assessment of its reserves. Relevant stakeholders should focus on exploiting minerals economically and reducing the amount of waste discharged into the environment."

"State management agencies play an important role in supervising mineral exploitation licensing. They need to have a reasonable tax and fee policy so that businesses can feel secure," Tin added.

In August 2018, Decision No.995/QD-TTg assigned tasks to ministries when organising the national sector planning. Among them, the MoC was tasked with preparing the master plan for the exploration, exploitation, processing, and use of minerals for construction materials for 2021-2030, and the succeeding two decades.

Agribank board member becomes new chairman of SCB

Phan Dinh Dien, a member of Board of Directors of Agribank, has been appointed chairman of the Saigon CommercialBank (SCB) effective September 22, following a decision by the State Bank of Vietnam (SBV).
 
Dien succeeds Vu Anh Duc, who, after serving a one-year tenure as chairman of SCB, has returned to VietinBank, assuming a significant role.

The newly appointed chairman, Dien, boasts an impressive tenure of nearly 30 years within the banking and finance sector. Throughout his career, he has held various leadership positions, ranging from department head and branch leadership to a member of Agribank's Board of Directors.

Under Dien’s leadership, regulatory authorities anticipate that SCB will maintain its stability, ensuring safety and swiftly achieve its comprehensive restructuring objectives.

In October last year, in the wake of numerous SCB branches recording mass cash withdrawals by the public, the SBV placed SCB under special surveillance. This strategic move was intended to exert stringent control, minimising adverse impacts on the bank and the broader credit organisation system.

Historically, many banks have experienced similar intensive oversight, but have subsequently recovered and flourished.

After more than a year under this unique oversight, the SBV indicated that SCB's operations are gradually stabilising, effectively addressing challenges and prioritising its restructuring plan.

Furthermore, the regulatory body on September 18 proposed a review and a policy decision on the SCB's restructuring to the government.

Mekong Delta striving to control produce quality via PUC

The Mekong Delta is leading the country as to the number of Production Unit Codes (PUCs) for exported fruits and packaging facilities. There are challenges to maintain these codes via the ability to satisfy requirements from importing countries.

Deputy Director Le Van Thiet of the Plant Protection Department (under the Agriculture and Rural Development Ministry) informed that Vietnam has issued 6,883 PUCs for 25 exported fruits like dragon fruit, longan, lychee, mango, rambutan, star apple, lemon, grapefruit, and mangosteen to 11 markets such as China, the US, Australia, New Zealand, the Republic of Korea, Japan, European countries, Thailand. 57 percent of them are located in the Mekong Delta, the highest being Dong Thap Province.

In addition, in the Mekong Delta, there are now 626 PUCs for packaging facilities in operation, accounting for nearly 40 percent of the whole country, the highest being Tien Giang Province. Sadly, after regular examination, the province has to withdraw 535 PUCs as related facilities could not satisfy the requirements of importing nations.

Head of the Kien Giang Province Plant Growing and Protection Unit said that without fully meeting the requirements by the Plant Protection Department on establishing and monitoring fruit farms and packaging facilities, a business cannot export its produce. Therefore, PUCs are the key for domestic produce to enter foreign markets.

Since 2021, the Plant Protection Department has received 4 notices from China as to fruit shipments not in compliance with phytosanitary criteria or not having valid phytosanitary certificates. Tien Giang Province occupied the highest proportion of violations, at 35.6 percent for 267 cases.

Except for Hau Giang Province with a high monitoring percentage of over 80 percent and nearly 95 percent for fruit farms and packaging facilities respectively, other provinces like Dong Thap and Long An have disappointing monitoring proportions of only 23 percent and 0.3 percent correspondingly, which are unacceptably low.

According to the Tien Giang Province Agriculture and Rural Development Department, for more effective management and issuance of PUCs, in the upcoming time, it is going to hold more training sessions for residents in need and closely check to withdraw the PUCs of any places not satisfying the requirements.

Deputy Director Thiet commented that the attention of provinces to the PUC monitoring task has improved lately but not enough. Most are still at the stage of instructing how to establish a facility and register for a PUC, not to the monitoring and checking stages. This is the main factor leading to violations lately.

Another difficulty, as cited by Deputy Director Tran Cong Danh of the Kien Giang Province Department of Agriculture and Rural Development, is that a large number of farmers still underestimate the importance of PUCs. They are rather confused about the process to sign up for a PUC, necessary information or requirements after owning one.

Deputy Minister of Agriculture and Rural Development Hoang Trung stressed that it is forbidden to issue a phytosanitary certificate to any shipments not complying with regulations. The violating shipments have to return to places of origin, and related businesses are not allowed to export goods until proper measures are applied to amend the situation. In serious cases, the PUCs of those enterprises must be withdrawn.

Functional agencies and the local authorities must provide more instructions and carry out more frequent examinations of the facilities and farms with operative PUCs. When a violation is detected, a phytosanitary certificate is not delivered to that shipment.

The Agriculture and Rural Development Ministry also requests that localities strengthen their monitoring of places obtaining PUCs and do not issue any codes to organizations breaking the regulations. This Ministry is working with the Justice Ministry to ask the Government to develop two decrees related to PUC issuance for farms and packaging facilities as well as sanctions for law breaking cases.

Statistics from the Ministry of Agriculture and Rural Development reveal that from 2013-2022, the surface area of fruit farms in the Mekong Delta expanded significantly to reach over 400,000ha. This impressive growth must go along with maintaining produce quality and obeying phytosanitary regulations via safe production.

Fruit farms must strictly follow production procedures and requirements of importing countries, and further, observe Vietnamese Good Agricultural Practices (VietGAP). It is necessary to keep a diary of plant cultivation, plant diseases or pests and treatments, especially those attracting much concern of importing countries.

Packaging facilities must closely obey the one-way packaging procedure and traceability rules. They must use suitable equipment to satisfy the requirements of importing nations. Their production technology improvements, human resources training, management capacity increase, food sanitation monitoring can greatly enhance their own competitiveness.

SK Group to build biodegradable material factory in Vietnam

SKC Co. of the Republic of Korea (RoK) is planning to build a factory in Vietnam to produce materials for biodegradable plastics, as it pushes to expand the eco-friendly materials business.

SKC, a chemical unit under the energy-to-telecom conglomerate SK Group, said on September 25 that the factory of Ecovance, a joint venture between SKC and two other RoK partners, will be established in Vietnam's northeastern city of Hai Phong to manufacture polybutylene adipate terephthalate (PBAT), a biodegradable co-polymer widely used as feedstock for general plastics.

The facility is set to go operational in 2025 and produce 70,000 tonnes of PBAT a year.

Officials of SKC and Ecovance visited Hai Phong on September 22 for a ceremony where Vietnamese authorities presented them with an investment registration certificate.

Ecovance specialises in developing PBAT with enhanced durability. PBAT is extensively used in general purpose plastics, from industrial films and food containers to diapers and masks.

SKC will also be building a separate facility to produce an annual 36,000 tons of its biodegradable material, named Limex, at the same site, according to the firm.SKC is pivoting to an advanced materials company largely engaged in the manufacturing of secondary battery materials and other advanced components like semiconductor packaging.

Netherlands’ De Heus opens aquatic feed factory in Can Tho

The Dutch-based supplier of animal nutrition products De Heus freshly opened a 2.7ha aquatic feed plant in the Mekong Delta city of Can Tho on September 26.

Locating at the Tra Noc II Industrial Park in O Mon district, the 18.6 million USD facility is capable of manufacturing 240,000 tonnes of high-quality feed products for tra and basa fish (Pangasius) per year.

At the opening ceremony, Deputy Minister of Agriculture and Rural Development Phung Duc Tien took note of the corporation’s contributions to Vietnam’s aquaculture development.

He suggested it study the use of domestically available sources of raw materials and alternative ingredients to reduce production costs and enhance efficiency.

Realising Vietnam’s advantages to be among key seafood suppliers globally, De Heus is committed to developing its strategic position in Vietnam.

De Heus Vietnam constantly strives to help Vietnamese fish farmers move towards sustainable success, access top-quality genetic solutions, technical management solutions, and financial resources, while connecting them to the consumer market, said Johan van den Ban, General Director of De Heus Vietnam.

Dutch Consul General to Ho Chi Minh City Daniel Stork took the occasion to highlight the countries’ strong and enduring relationship based on long-term commitments and important partnership in various fields such as agriculture, sustainable development, and water management.

The operation of the plant will help realising UN’s sustainable development goals, notably those involving food security, nutrition improvement and sustainable farming, noted the diplomat.

De Heus plans to use rooftop solar power for all of its plants and farms in 2024, expecting to annually cut CO2 emissions by 470 tonnes.

Festival preserves values of Vietnamese craft villages

The Vietnam Craft Villages Festival 2023 will take place in Hanoi from October to November to preserve and promote the values of traditional craft villages, the organising board said at a press conference on September 26.

The event will be co-organised by the Department of Cooperatives and Rural Development under the Ministry of Agriculture and Rural Development (MARD), and the Hanoi Department of Agriculture and Rural Development.

A wide range of activities are on schedule, including a ceremony to honour excellent craftsmen, an opening ceremony, an art programme, an international exhibition introducing craft products and those under the One Commune One Product (OCOP) programme, and an international workshop on preservation and development of craft villages.

Thang Long Imperial Citadel will host major events on November 9-12.

Particularly, the MARD will organise a Vietnamese handicraft product contest to encourage development of products with high applicability and meeting criteria for sustainability during the international integration process. It aims to preserve the identity of Vietnamese craft villages, while enhancing products’ values and improving workers’ income.

According to Director of the Department of Cooperatives and Rural Development Le Duc Thinh Chuc, the festival creates an opportunity to honour standout craftsmen and excellent workers, develop tourism offerings, and connect craft villages with businesses to promote consumption.

Meanwhile, Deputy Director of the Hanoi Department of Agriculture and Rural Development Ta Van Tuong said that Hanoi will host seven events of the festival, including a Van Phuc craft village culture-tourism and trade week, an event to introduce the southern region’s OCOP products, and a Hanoi autumn festival.

Furthermore, the Hanoi Gift Show 2023 as well as visits to Hanoi craft villages such as Bat Trang, Van Phuc and Duong Lam will be arranged within the framework of the festival.

Hanoi to host Vietnam Crafts Village Festival 2023

The Vietnam Crafts Village Festival 2023 is scheduled to take place from October to November in various venues across the capital of Hanoi, mostly at Thang Long Imperial Citadel from November 9 to 12, a press conference heard on September 26.

At the press conference held in Hanoi, the organisers - the Ministry of Agriculture and Rural Development and the Hanoi Department of griculture and Rural Development - announced that they would coordinate with local authorities to put on a wide range of activities.

Major highlights are a fair on One Commune One Product (OCOP) products and the Vietnamese handicraft products contest 2023.

The OCOP fair will showcase a range of agricultural specialties and handicrafts made by enterprises, cooperatives, and traditional craft villages from provinces and cities nationwide.

Meanwhile, the Vietnamese handicraft products contest 2023 will be held to honour Vietnamese handicraft products and promote them to the wider world.

Entries to the contest include ceramics and glass; weaving and embroidery; rattan, bamboo, leaves; lacquer, mother-of-pearl mosaic, fine art wood; and others such as stone and metal carvings, flowers, and paintings. The organisers will present first-, second-, third- and consolation prizes to the winners.

A ceremony honouring talented craftsmen will be held on November 9.

An international seminar on preserving and developing craft villages, workshops on the Vietnam-San Marino trade connection, and Vietnam-Mongolia trade promotion will get underway on this occcasion.

The craft village festival provides an opportunity for businesses and localities to promote agricultural specialties across the country, and for consumers to find their favourite products, according to the organisers.

Da Nang praised as new hotspot for meetings and incentive trips in Vietnam

Online newspaper Micenet of Australia recently hailed central Vietnam as a new destination for meetings, incentives, conferences and exhibitions (MICE) events.

The central region is rapidly developing following the launch of many international and domestic flights to/from Da Nang, which is fast growing into a destination for MICE. The central city is also located near two UNESCO world heritage sites - Hoi An about 30km southeast, and Hue, 100km northwest, that can help the locality become a favourite destination with visitors.

Furthermore, there is a wide choice of luxury and five-star international and local brand hotels in the city and along a 60km stretch of beach.

“This year, Danang Department of Tourism is focusing more on MICE events. It engages in overseas marketing, especially in India, organises roadshows, hosts famtrips and attends trade fairs. It is also aiming for more direct flights. All MICE group participants to Da Nang receive a gift,” said Subhash Chandar, general manager of Asia DMC.

Citing various hotels and resorts that fully meet the requirements for organizing MICE events, Micenet suggested that InterContinental Danang Sun Peninsula Resort is a typical MICE destination. The resort has received six MICE requests in the information technology (IT) and healthcare sectors, featuring a variety of meetings, customized menus, spa and fitness options, and outdoor activities.

The media outlet also suggested other hotels with event capabilities, including Pullman, Furama, Crowne Plaza, Hyatt Regency, Vinpearl and the Sheraton Grand, along with APEC Park and Ariyana Convention Centre that cater to various types of events.

Micenet pointed out that festivals and events run throughout the year, from culture, food, music, and film to sports and wellness, becoming a key factor in developing MICE tours in the central region.

Corporate hospitality events can be timed around the middle of the year, such as the International Fireworks Festival and the joint golf tourism Festival – BRG Open Golf Championship Da Nang which this year included an exhibition and international conference on golf and golf tourism. Notably, the central city is home to six championship and well-rated golf courses.

Besides the array of beautiful beaches, other popular attractions include the Marble Mountains’ tunnels, caves, and marble sculptured-arts village. In particular, Sun World Ba Na Hills is a popular tourist complex that can be accessed by cable car and offers a French village, unique bridge, amusement park, and spiritual structures.

The journey via the winding Hai Van Pass to Hue, the former imperial capital, may be awe-inspiring, but the ultimate reward is the array of monuments and architecture which can be found in the Citadel, emperors’ tombs, and Buddhist pagodas and monasteries, wrote Micenet.

Vietnam among leading regional power magnets for FDI

An array of investor-friendly attributes are transforming Vietnam into one of Southeast Asia’s most powerful magnets for foreign direct investment (FDI), magazine Global Finance of the United States recently wrote in its article “Vietnam’s Great Expectations”.      

The media outlet pointed out several key factors of Vietnam in attracting FDI, including boasting almost uniquely favourable demographics, with 40% of its population of 100 million under the age of 25.

The country has a 1,300-kilometre land border with China, meaning it has direct access to that market of 1.2 billion consumers, along its low wage costs, and a large, well-educated labour force. In addition, through its ASEAN membership the country has tariff-free access to 800 million more people across Southeast Asia.

“The 2023 outlook for the business environment in Vietnam shows promising signs of improvement,” says Thierry Mermet, CEO of Source Of Asia (SOA), a consultant to companies looking for business opportunities in Vietnam and ASEAN. 

“Vietnam is really cementing its position as one of the top three places where European business leaders want to invest,” Mermet explained.

He cited EuroCham’s recent Business Confidence Index report, saying “3% more leaders have picked Vietnam as one of their top three investment choices. It’s a solid indicator that we’re on the right track.”

Another indicator of the country’s increasing pull is homegrown electric vehicle manufacturer VinFast, which recently became the world’s third-largest automaker by market capitalisation, behind Tesla and Toyota, the US magazine noted.

Global Finance quoted Barry Elliott, vice president of Tomkins Ventures and a supply chain guru long active in Vietnam, assessing that, “Since 2020, Vietnam has been one of the preferred destinations for Japanese firms choosing to shift their production to the ASEAN region in the first round of subsidy allocations. This trend continues.”

The media outlet also confirmed that the US is in the process of boosting its economic and technical ties with Vietnam as the two countries recently agreed upon the establishment of their comprehensive strategic partnership during US President Joe Biden’s visit to Vietnam in early September.

The US magazine went on to affirm that the overseas Vietnamese community has made great contributions to the country’s economic development. On a recent trip to Ho Chi Minh City, Jacqueline Poh, managing director of Singapore’s Economic Development Board (EDB), met with startups in financial services, robotics, and renewables. She noted the great influence made by a returning diaspora with deep experience abroad.

“All have a can-do spirit, support for each other, and gumption,” said Poh, ”This heady mix has created a conducive local startup ecosystem.”

SBV rolls out measures to reign in raising exchange rate

Measures have been taken by the State Bank of Vietnam to reign in the rising US dollars against the VND.      

According to an SBV report, the exchange rate for the greenback broke the VND24,000 mark on September 11 and reached its highest level at VND24,076 on Monday.

On the black market, the US$ exchange rate on Monday was trading at around VND24,320 - 24,400, an increase of about VND170 compared to the previous week.

Commercial banks reported a US$ exchange rate of VND24,500-24,600 earlier this month, a 3.3% increase year-to-year compared to the same period last year.

The VND is facing significant pressure as the DXY index (a measure of the strength of the US dollar against a basket of six major currencies) has risen for the 10th consecutive week, marking the longest upward trend in recent years.

Economists and experts said actions taken by the US Federal Reserve (Fed) including raising interest rates and US government bond yields are contributing factors to a rising DXY index, which has reached 106 points, the highest level in the last six months.

MB Securities (MBS) said in a report if the Fed was to continue raising interest rates by another 0.25 percentage points in November, the exchange rate could reach as high as VND24,300 - 24,500 in the final months of 2023.

In addition, SBV's recent loosening of monetary policy, in contrast to the tightening in the US, has put extra pressure on the US$-VND exchange rate. This is, however, not unique to Vietnam as China and Japan, two major Asian economies, have also been loosening their purse strings.

In contrast to the Fed's recent interest hikes, the SBV has slashed interest rates four times since May last year.

However, experts said the SBV had ample time to prepare before making its moves and the risk was considerably lower this year. Factors that support the central bank's moves included Vietnam's high trade surplus, inflow of FDI and remittances, which all contribute to the country's foreign currency supply.

Tran Ngoc Bau, CEO of WiGroup, a financial market research company, said the rise of the greenback was within the SBV's anticipation, and that the possibility of a sharp increase at the end of 2023 remained minimal.

Dr Can Van Luc, a member of the National Advisory Council for Monetary Policies said even if another round of interest increase was to take place in November, as announced by the Fed, fluctuation would likely be insignificant as the market would have had enough time to prepare.

However, a rising exchange rate will still produce negative effects including higher costs for production and imported consumer goods, especially for private businesses.

Nguyen Viet Hung, a financial officer at the Dong Anh Mechanical Corporation said a fluctuating exchange rate would likely hurt import-independent businesses.

Textile, leather, footwear and fruit businesses have been struggling with fluctuating exchange rates since the beginning of the year as the higher exchange rate has pushed up costs for importing machinery, equipment, and raw materials, significantly reducing the profits.

Governor of the State Bank of Vietnam Nguyen Thi Hong, said maintaining the US$-VND exchange rate would likely remain a challenging task.

She said it was important to look at the bigger picture while managing the exchange rate.

"A higher exchange rate benefits export-oriented businesses, but domestic production relies heavily on imports, with the import/GDP ratio close to 100%. So, when the exchange rate rises, importing businesses face difficulties," she said.

Her deputy Dao Minh Tu said the central bank must find a balance between interest rates and exchange rates.

The Southeast Asian economy's trade surplus, estimated at US$20.1 billion in the first eight months of the year, as well as a record 24% increase in FDI inflow are to serve as much-needed buffers for the remaining months of 2023.

The SBV has also been making its own moves to address the rising exchange rate including the recent issuance of treasury bills, which has net absorbed nearly VND30 trillion from the banking system.

Economist Dinh Trong Thinh said SBV's key objective is to absorb excess money from the market, which has been produced by the government's economic stimuli including increasing public spending and slashing VAT and interest rates post-COVID-19.

Deputy PM asks to clean up data on securities traders

The Deputy Prime Minister has requested the Ministry of Finance (MoF) to direct the review, authentication, and cleaning of information on securities traders, including relatives participating in transactions.

The Government Office on September 23 conveyed the direction of Deputy Prime Minister Trần Lưu Quang to the State Securities Commission, the Vietnam Stock Exchange (VNX), and the Vietnam Securities Depository and Clearing Corporation (VDSC) to connect the national database on population, electronic identification and authentication system.

The move aims to clean up the data of individuals involved in securities trading. This task is expected to be completed in November.

Cleaning up user data involves cross-referencing their information with the national database on population to ensure consistency and eliminating incorrect, duplicate or fictitious data.

The direction was issued as a result of numerous individuals being prosecuted for manipulating the stock market to gain profits.

In March 2022, former chairman of FLC, Trịnh Văn Quyết, was indicted by the Criminal Investigation Agency of the Ministry of Public Security (C01) for the crime of market manipulation, as stipulated in Article 211 of the Criminal Code.

In the first months of this year, the market continued to have many other cases of stock price manipulation, resulting in administrative sanctions and/or additional penalties (if applicable).

For example, in the case of 1369 Construction JSC (C69)’s stocks, Đoàn Bá Hồng was fined VNĐ550 million (US$22,511), while in the case of APG Securities JSC (APG)’s shares, Lê Thị Hải Bình was fined VNĐ1.5 billion, prohibited from securities trading for two years, and banned from holding positions in securities companies and funds for two years.

Previously, the MoF had set a direction for the number of investors in the stock market to reach 8 per cent of the population by 2025 and 10 per cent by 2030, focusing on developing institutional and professional investors and attracting the participation of foreign investors.

Data of VSDC showed that the number of domestic retail investor accounts recorded a rapid increase in the last four months, reaching over 100,000 accounts per month.

As of the end of August, the number reached 7.59 million units, which is approximately 7.6 per cent of the population.

The market’s participants are increasingly diverse in terms of profession and age.

Brazil's aerospace firm Embraer targets expansion in Vietnam

Brazil's aerospace leader Embraer is strategically extending its operations in Vietnam, reflecting a wider ambition to intensify Brazil-Vietnam trade and technological partnerships.
 
Brazil's President Luiz Inácio Lula da Silva stated during the press meeting on September 25, "Brazil aspires to broaden its export spectrum to Vietnam, incorporating advanced machinery and high-tech equipment while enhancing scientific and technological collaborations, especially in innovation.”

Brazil’s aerospace company Embraer has marked its foray into the Vietnamese market, having delivered five E190 aircraft to Bamboo Airways. Established in 1969 and headquartered in Brazil, Embraer is the third-largest commercial aircraft manufacturer globally, specialising in aircraft with fewer than 130 seats. It is known for its elite business jets catering to the affluent.

"Vietnam presents a substantial market, compatible with Embraer’s existing aircraft range designed for shorter routes," said Francisco Gomes Neto, CEO of Embraer, during a meeting with Vietnam's Prime Minister Pham Minh Chinh.

The aerospace giant expressed a keen interest in sustaining the Vietnamese government's support, exploring cooperative opportunities and expanding its market presence in Vietnam.

"We are prepared to implement aircraft maintenance and repair services in Vietnam and supply technological solutions in the aviation sector," said Neto.

Embraer, presently the world’s third-largest commercial aircraft manufacturer, just behind Boeing and Airbus, recorded revenues of $4.6 billion and a profit of $540 million in 2022.

Embraer is renowned as Brazil’s “champion” in the aerospace sector, and the company is meticulously strategising to conquer Asian markets.

According to Nikkei Asia, the company views India and Vietnam as the most promising markets in the region, aligning its expansion strategies to gain significant footholds in these developing economies, known for their rapidly growing aviation sectors and increasing demands for advanced aircraft.

In addition, Brazil's president also voiced a special interest in seeing Vietnam negotiate and enter Free Trade Agreements with the Southern Common Market, envisioning a strengthened trade link between the bloc and ASEAN.

The leaders, post-dialogue, concurred on accelerating exchanges to quickly reach an agreement on Brazil recognising Vietnam's market economy status. They also agreed to promote the signing of agreements to avoid double taxation.

Tin Thanh Group receives $6.4 billion to build factories in Vietnam and US

A sum of $6.4 billion was invested in Tin Thanh Group, a pioneer in using renewable energy and reducing global emissions, by Acuity Funding on September 25 to implement one manufacturing project in Vietnam and two others in South Carolina in the United States.

Around $1 billion will be used to develop four biomass power plants and thousands of hectares of sorghum cultivation in central and southern Vietnam, and a further $1.7 billion will be allocated for Tin Thanh Group (TTG) to build a tyre retreading and truck service plant in South Carolina to serve over one million trucks in the US with the goal of reducing emissions, saving costs, and transitioning to green energy.

The remaining $3.7 billion in funding will be spent on the establishment of a green hydrogen manufacturing facility in South Carolina.

Land grant approvals and support have also been given to TTG from the state of South Carolina, totalling huge incentives of over $500 million.

TTG is partnering with Air Products, a $67 billion corporation on the New York Stock Exchange, to implement this project. The results will contribute to revolutionising the automotive industry and replacing outdated and polluting coal-fired power plants.

Speaking at the ceremony, Australia’s Ambassador to Vietnam Andrew Goledzinowski congratulated Acuity Funding and Tin Thanh Group on concluding this pioneering deal.

Skoda cars available in Vietnam

Czech automaker Skoda has just brought Kodiaq and Karoq, two sport utility vehicle models imported from Europe, into the Vietnamese market via local auto distributor and assembler TC Motor.
This marks Skoda’s official presence in Vietnam.

TC Motor and Skoda last year entered into a cooperation agreement on technology transfer and Skoda passenger vehicle distribution in the Southeast Asian country.

Skoda Karoq is a pioneer product in a new generation of SUVs manufactured by Skoda. The model is renowned for its durability, strong performance, and high-class safety.

Skoda Karoq is equipped with a 1.4 TSI Turbo engine. Its full-LED Matrix headlights can automatically adjust light direction and intensity. Other features include Virtual Cockpit digital screen, LED Ambitient Lighting system, Climatronic automatic air conditioning, and Air Care air filtration system.

Kodiaq is a large 7-seat SUV with features including Kessy smart key, hands-free trunk opening, 360-degree camera, smart air care, and 8-inch infotainment screen. The model has different options equipped with either 2.0 TSI Turbo or 1.4 TSI Turbo engines.

Skoda Karoq and Kodiaq are offered in Vietnam with two versions—Ambition and Style—with nine color options.

Skoda Vietnam applies a three-year warranty for new cars. The company’s suggested selling price for its car models ranges from VND999 million to VND1.4 billion.

With nearly 130 years of establishment and development, Skoda is among the global oldest automobile brands. It is currently one of the brands owned by the Volkswagen Group.

Ratio of short-term capital for long-term loans to fall to 30%

Vietnamese banks and foreign bank branches in Vietnam must lower the ratio of short-term capital used to make medium- and long-term loans to 30% from the current 34%, with effect from October 1, according to the State Bank of Vietnam (SBV).
The change is in line with the central bank’s Circular 08/2020, which amends and supplements Circular 22/2019.

Data from the SBV showed that 88% of capital at banks comes from deposits with tenors of less than 12 months. Meanwhile, 52% of the banking system’s outstanding loans are mid- and long-term loans.

Experts view the change as necessary for ensuring liquidity and stabilizing the banking system, as the implementation of the new regulation aims to prevent liquidity risks, stabilize banking operations and drive sustainable economic growth, according to the Vietnam News Agency.

As of July 2023, most banks complied with the existing 34% cap. State-run commercial banks came with a 24.97% ratio, joint-stock commercial banks 33.66%, and the systemwide ratio 26.14%.

The SBV had initially capped the ratio at 40% until September 30, 2021. This was followed by a 37% cap in effect from October 1, 2021, to September 30, 2022, and a 34% cap from October 1, 2022, to September 30, 2023.

Vietjet offers 50% discounts for business, SkyBoss tickets

Vietjet is offering discounts of 50% on Business and SkyBoss tickets as a gift for travelholics this autumn.

The promotion is valid from September 25 to October 25, 2023, and applies to domestic and international flights with flexible flight time until the end of February 2024.

The opportunities to experience Vietjet's business class tickets have never been easier when booking tickets at website www.vietjetair.com, Vietjet Air mobile app, ticket offices, official global agents.

To receive a discount of 50% for Business and SkyBoss tickets, passengers apply promotion code DOM50 for domestic flights scheduled from January 20 to February 9, 2024, and promotion code INT50 for international flights scheduled from October 1 to November 30, 2023.

Passengers with Business and SkyBoss tickets will enjoy luxury and prestige from the ground to the clouds with separate check-in areas, private entrances, business lounge and organic culinary banquet served throughout the flight with a diverse menu including vegetarian dishes, halal dishes, along with up to 60kg of checked baggage and a Golf club set.

Lobster exports through Mong Cai border gate decline

Lobster exports to China via the temporary floating bridge km3+4 have recently dropped to 30 tons per day to align with customs clearance requirements and prevent cargo congestion at the border gate.

According to the Mong Cai International Border Gate’s Management Board in Quang Ninh Province, lobster exports through the temporary floating bridge km3+4 have now resumed.

Prior to this adjustment, lobster shipments via the floating bridge averaged between 40 to 50 tons per day.

On September 20, a significant number of trucks carrying lobsters to China became stranded at the border gate due to prolonged customs clearance procedures. This delay resulted in a substantial number of lobsters perishing, leading to significant losses for exporting businesses.

The customs clearance delay was caused by Chinese authorities conducting inspections on 100% of lobsters imported from Vietnam, as opposed to the previous 20% to 30% sampling approach.

In response to the cargo backlog and to mitigate losses for businesses, Chinese authorities have committed to increasing staff for lobster inspections at the border gate. Meanwhile, Vietnamese businesses will adjust the volume of lobsters in line with the customs clearance capacity.

US$400 million sought for upgrading roads linking to Laos and China

The Department for Roads of Vietnam has presented a project to upgrade and modernize national highways connecting with northern Laos and China, utilizing loans from the World Bank.

According to the plan, the renovation of three national roads linked to Laos and China, funded by World Bank loans, will last five years, from 2025 to 2029.

The upgrade will cover a 38-km section passing through Dien Bien Province and Tay Trang border in Dien Bien Province, and three sections of National Highway QL4H with a combined length of 94 kilometers.

A 52-km segment of National Highway QL217, stretching from National Highway QL1 to Ho Chi Minh Road, will also upgraded as part of the initiative.

The highway improvement project is estimated to require an investment of VND9,419 billion, equivalent to US$400 million. Out of this, over VND 7,500 billion, sourced from World Bank borrowings, will be allocated to cover construction, equipment and consultancy services.

The project includes reciprocal capital of VND1,900 billion, or US$81 million, designated for project management, site clearance, tax payments, and other fees and charges.

According to the Department for Roads of Vietnam, the project will contribute to enhancing connectivity, meeting the growing transportation demand, and reducing travel time between border checkpoints and seaports, ultimately lowering transportation costs, mitigating environmental pollution, and reducing traffic accidents.

Upon completion, the project is also expected to stimulate trade between Vietnam and northern Laos and China.

SBV raises VND50 trillion through short-term bond sales

The State Bank of Vietnam (SBV), the central bank, has successfully raised VND50,000 billion from the banking system through short-term G-bond auctions held from September 21 to 26.

In the auction conducted on September 26, the SBV awarded 28-day G-bonds worth VND20 trillion to nine out of 11 bidders at a coupon rate of 0.58%. This rate was higher than the previous auction on September 25, where it stood at 0.49%.

During three consecutive auction sessions on September 21, 22, and 25, the SBV offered 28-day G-bonds worth VND30 trillion and managed to withdraw the same amount from the market.

The SBV’s decision to issue G-bonds is aimed at adjusting down liquidity in the banking system in the short term, according to SSI Securities Corporation. In contrast, Maybank (MSVN) views it as a move to ease pressure on exchange rates in the near future.

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