Statistics from the Vietnam Maritime Administration showed that despite being affected by the COVID-19 pandemic, the total volume of goods through Vietnamese seaports reached nearly 485.3 million tonnes in the first eight months of this year, representing year-on-year growth of 6 percent.

The volume of container cargo reached nearly 14 million twenty-foot equivalent units (TEUs), up 8 percent respectively over the same period last year.

The container cargo reached more than 1.7 million TEUs this month, a year-on-year increase of 7 percent.

Some seaport areas saw high growth in the volume of goods, such as Quang Tri Port with more than 73 percent increase, and Quang Ngai over 43 percent.

The seaport areas in Nam Dinh, Can Tho, Thanh Hoa, and Thai Binh also saw increases of between 20 percent and 32 percent over the same period last year.

HCM City ready to welcome investment opportunities in new situation

Despite being significantly affected by the novel coronavirus (COVID-19) epidemic, the rate of foreign investment attraction in Ho Chi Minh City since the beginning of the year has continued to rise, especially with a spike in domestic investment occurring at industrial parks and export processing zones.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, the initial seven months of the year witnessed the southern metropolis overcome difficulties caused by the COVID-19 epidemic. This can be seen with the locality’s FDI ranking third in the country at approximately US$2.4 billion, accounting for 12.6% of total investment capital. 

Of the figure, investment through capital contribution and share purchase methods made up a large proportion, reaching 76.2% of the total investment capital in the city. In terms of the number of new projects, Ho Chi Minh City still leads the country with 598 projects overall.

The Foreign Investment Agency stated that due to the impact of the COVID-19 epidemic, the lack of travel by investors has caused numerous difficulties, coupled with hurdles when making new investment decisions and foreign investment projects, all of which has contributed to reduce FDI attraction.

Despite increases occurring in newly registered investment capital and additional adjustment, these rises can be put down to large projects which had been submitted and negotiated a long time ago.

In the midst of this situation, Ho Chi Minh City is pressing forward with plans aimed at improving the local business environment, therefore offering optimal conditions for both businesses and investors.

The municipal People's Committee has therefore assigned the Department of Planning and Investment to co-ordinate efforts with relevant departments and agencies in a bid to find solutions aimed at effectively carrying out the provincial competitiveness index, the administrative reform index, and the satisfaction index of public administration services.

This should be done in order to exploit the digital transformation programme and to promote the efficiency of online public services as a means of creating a more favourable investment environment for firms whilst improving the efficiency of investment promotion activities.

Cao Phi Van, deputy director of Ho Chi Minh City Trade and Investment Promotion Center, believes that the southern city will be proactive in inviting and meeting domestic and foreign financiers. Indeed, it will seek to draw additional investment in projects that belong to seven breakthrough schemes, four key industries and key industrial product groups, nine priority service areas, the smart city project, and creative urban areas. Priority will be given to investors who possess strong financial resources and new eco-friendly technologies that feature a high concentration of gray matter in order to call for greater investment.

Furthermore, the southern city is witnessing a sudden increase in domestic investment capital. Since the beginning of the year, the total investment capital of domestic enterprises has hit roughly US$193 million, up 58.75% from the same period last year.

Of the figure, 27 new projects had registered investment capital totaling close to US$162 million, up 55.97% from the previous year. This sudden increase in domestic investment capital can be viewed as a positive factor for Ho Chi Minh City, although it also poses a challenge for the southern city to create more land funds for businesses to expand their investment.

Japan- largest import market for Vietnamese transport vehicles

The first seven month of the year saw Vietnam's export of transport vehicles and spare parts to Japan reach US$1.2 billion, accounting for 28% of the nation's overall export turnover of this commodity group, according to the General Department of Customs.

During the reviewed period, export turnover of transport vehicles and spare parts reached a figure of US$4.38 billion. Among more than 30 export markets of the products of its kind, Japan, the US, and the Republic of Korea recorded the largest turnover, making up more than 50% of Vietnam’s total export value. 

Meanwhile, export of this commodity group to the US during the opening seven months of the year hit US$904 million, holding 21% of the total export turnover of transport vehicles and spare parts of Vietnam.

However, the nation's export value of the products endured a fall from last year due to the impact of the novel coronavirus (COVID-19) epidemic on the world economy, thus also adversely affecting the country's production, export and import activities, in which the most affected markets were Switzerland, down 94% and Norway suffering a fall of 91% in terms of export value. 

Quang Ninh a pioneer in smart tourism development

The northeastern province of Quang Ninh is one of the pioneers nationwide in implementing smart tourism solutions.

Quang Ninh is now focusing on its smart tourism administration centre, which is expected to be put into operation this year.

Smart tourism is expected to help Quang Ninh fully exploit its natural advantages for sea and island tourism. It has a coastline of more than 250 kilometres and more than 2,000 islands and islets which account for two-thirds of the total number in Vietnam.

Online exporting represents golden opportunity for business development

Evidence shows that local businesses are still failing to seize upon a number of online exporting opportunities, therefore missing out on further development due to a lack of co-operation with partners and not conducting effective business transactions with a high level of profitability.

Recent years have witnessed e-commerce undergo strong growth at an average annual rate of 30%, greatly contributing to the national economy. However, the majority of these activities are focused only within the domestic market or for the promotion of Vietnamese trademarks internationally. 

With global consumer habits changing, the global selling ability is increasing whilst online exports have moved passed the stage of being a trend and are now firmly a reality.

According to Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, previous import and export activities were generally only for large-scale businesses that had huge economic and financial potential. They largely became giants of their sectors thanks to import and export activities, allowing them to dominate multiple fields of production and business.

This is in contrast to the current era where cross-border e-commerce and e-commerce in general has undergone huge changes, with small and medium-sized enterprises (SMEs) seizing on this trend to enjoy an equal chance of accessing global trade.

Once a direct interaction between producers and consumers occurs, particularly with consumers who order items that lead to production, this will become a global trend, Loc says, adding that global customers represent both an opportunity and a challenge for local businesses.

Concurring with this point of view, Nguyen Xuan Hung, managing director of Iexport.vn Global Exchange, Fado Vietnam Company, states, “The biggest challenges of Vietnamese business individuals, especially SMEs when participating in online buying-selling, and cross-border online buying-selling, are human resources, language barriers, and an understanding of rules in this field.”

Recent years have seen businesses also start to pay greater attention to upgrading their websites with efforts to improve product images and clarify technical specification and standards, therefore providing an easier experience for international customers.

Despite this, exporting a single order is not easy as it also depends on many factors that relate to logistics conditions and payment conditions, which remains a challenge, Hung adds.

Advertisement and trade promotion

The Ministry of Industry and Trade (MoIT), the unit that is tasked with global trade promotion, has organised a range of activities to support entrepreneurs and businesses, especially SMEs, and boost cross-border trade via the internet.

Cao Quoc Hung, Deputy Minister of Industry and Trade, states the MoIT has been carrying out a broad array of measures such as issuing necessary documents and strengthening the dialogue that exists with the business community. This is being done to remove difficulties and problems faced in production and business activities, in particular import and export activities.

"We will expand and develop more online public services while implementing the motto "The Government offers better services to people and businesses". Enterprises also need to stay active in studying new trends, suitable models, and human and material resources in order to become involved in a digital transformation in import and export," Hung says.

This comes after the MoIT launched the Vietnam Export Support Platform at ECVN.com in late July, with features including the Import-Export Business Community, which will help businesses find opportunities to trade online and swiftly overcome difficulties caused by the novel coronavirus epidemic. It is highly anticipated that ECVN will help firms quickly approach and take full advantage of opportunities from new generation trade agreements such as the European Union-Vietnam Free Trade Agreement (EVFTA).

These can be considered methodical and necessary steps that create the best possible conditions for Vietnamese businesses, especially SMEs, to participate in online export and trade, further develop their brands, whilst expanding their operational scale.

Nearly 4,000 new firms established in Binh Duong

 A total of 3,999 new enterprises have been set up in the southern province of Binh Duong since the beginning of 2020, with registered capital of VND26.95 trillion (US$1.16 billion).

The figures represented slight annual decreases of 2.5 per cent in the number of firms and 1 per cent in capital value.

The reduction reflected the impact of the COVID-19 pandemic on business operations in the province.

On average, each firm registered VND6.74 billion worth of capital during the period, increasing 2.1 per cent year-on-year.

The freshly established companies operate across 17 sectors.

Sectors that recorded annual increases in the number of newcomers included agro-fishery (up 68.75 per cent); health and social aid activities (45.45 per cent); information and communications (14 per cent); and education and training (13.7 per cent).

Notably, electricity production and distribution posted a significant rise of 1,685 per cent against last year.

Phu Huu Minh, vice director of the province's Department of Planning and Investment, said to facilitate new registrations in the current difficult time, the department has capitalised on its information system, delivered outcomes via postal services, and guided firms to use online administrative services. 

Listed realty firms to enjoy fruitful last quarter despite disease, travel restriction

Although there are some listed property developers worth investing in, challengers are still aplenty, especially as earning don’t normally surge until the final quarter of the year.  According to KIS Vietnam Securities JSC (KIS), the earnings of the real estate sector in the first half of the year were dull as the market was hit hard by external factors.

Listed real estate companies posted a 21.7 per cent annual drop in revenue in the first six months and post-tax profits of parent companies’ shareholders fell 12.7 per cent year-on-year.

All listed property developers have fulfilled 27.5 per cent and 27.7 per cent of their revenue and post-tax profit plans.

The companies also reported total net-debt on June 30 surged 50 per cent year-on-year. The listed firms with the highest amount of net debt were Vinhomes JSC, Novaland and Dat Xanh Group, whose net debts gained 153 per cent, 57.9 per cent and 107 per cent, respectively, compared to the first half of 2019.

KIS analysts said the difficulties for the real estate sector will not fade soon.

In the third quarter, the property market will stay dreary as social-distancing measures to fight the COVID-19 pandemic will make sellers stall sale events, they said.

In addition, buyers will be hesitant because they are still worrying about the future, they added.

Specialists at Agribank Securities JSC (Agriseco) said the property industry is among the worst-hit sectors during the pandemic as social distancing measures have disrupted sale activities and postponed construction.

Meanwhile, buyers are not rushing to purchase real estate products because the economic outlook is still quite gloomy, they said, adding resort, leasing and retail sections are the hardest hit and will take time to recover.

In addition, buyers are still tied-up by a number of legal bottlenecks that have remained unsolved since 2018, which will keep the number of ready-for-sale projects very low.

According to CBRE, the total supply of property outputs in the Ha Noi market in the second quarter dropped 39 per cent year-on-year to nearly 5,570 items and the quantity of sold items in the second quarter fell 27 per cent on-year to 5,100. Meanwhile, in HCM City, the total supply reached a five-year low of 1,644 items.

SSI Securities Corporation (SSI) reported that in the first six months of 2020, the trading volume of high-class apartments with the selling price of average VND60 million (US$2,590) per square metre dipped nearly one-third from the previous year.

Apartments with leasing price of more than $1,000 per month were also empty because of the COVID-19 pandemic. The average leasing price offered on the market was slashed by 20-25 per cent due to lower demand and spending on house leasing was also curbed.

Middle-class apartment leasing interest rates have dropped by 30-50 basis points since the outbreak began. The rates in HCM City range from 4.5 per cent to 6.2 per cent per year and from 4 per cent to 5.4 per cent per year in Ha Noi.

Agriseco also noted that the financial condition of real estate firms has worsened, therefore, companies have had to borrow more to maintain their operations.

On June 30, the total outstanding debt of the real estate sector increased by 16 per cent in six months to VND161 trillion ($6.95 billion). The ratio of total outstanding debt to total revenue also hiked to 0.87 by the end of the second quarter from 0.67 compared to 2019. Moreover, the ratio of borrowings to equity capital jumped 54 per cent in the second quarter – the highest quarterly gain since the beginning of 2019.

Second-half expectations

According to KIS analysts, increased discounts and gifts, and due date extensions will be key to boost local market demand, while top-leading companies such as Vinhomes and Khang Dien House Trading and Investment JSC will record earnings surge in the last months of the year as they are about to complete selling thousands of apartments

KIS also expected lending rates provided by commercial banks will remain low until the end of the year. The average lending rate for house buying was 11.4 per cent in the last quarter – unchanged from the previous one. The rate fell 20-40 basis points for one-year loans in July and early August because banks wanted to boost house-purchasing power while borrowing demand in other sectors was weak.

According to SSI Securities, domestic market studies have shown 38-40 per cent of the population consider real estate products a safe investee.

The growth of the market depends on the infrastructure development and interest rates, the company said, adding low-storey buildings are more attractive to buyers because they can easily obtain the land use right certificate when purchasing.

Agriseco specialists said listed companies perform better than the market average and their stocks are good investees as their projects are often licensed, debt-to-equity ratios are low and sale volumes are often optimistic.

Conference promotes RoK investment in Quang Ninh

Representatives of large companies from the Republic of Korea (RoK) took part in a recent conference promoting investment in the northeastern coastal province of Quang Ninh.

Incentives for investors at local industrial parks and economic zones, and potentials of the province were among the topics at the event.

Speaking at the conference, Chairman of the provincial People’s Committee Nguyen Van Thang said Quang Ninh considers the RoK a key market to attract investment to local projects, particularly those on industrial infrastructure building, processing-manufacturing, advanced technologies, and support industry.

The province priporitises quality foreign direct investment projects that use advanced technologies, save environmental resources, and follow the sustainable socio-economic development, he said.

Jeong Woo Jin, RoK Deputy Ambassador to Vietnam, described the province a promise land for economic groups and enterprises in Vietnam and overseas, lauding its completed infrastructure, open policies, and administrative reform.

At the event, the Quang Ninh Investment Promotion Agency and the Korea International Cooperation Agency signed a memorandum of understanding on trade promotion cooperation, under which the sides will support each other in organising related conferences and workshops and sending working delegations to their respective nations./.

Vietnam’s trade revenue estimated to exceed 336.2 billion USD in 8 months

Vietnam's import-export turnover is estimated at 336.32 billion USD in the first eight months, an annual reduction of 0.3 percent, according to the General Statistics Office.

The domestic sector remained a bright spot with its export and import values reaching 60.8 billion USD and 72.05 billion USD, both recording on-year increases of 15.3 and 2.9 percent, respectively.

The eight-month export turnover was about 174.11 billion USD. There were 27 products reeling in over 1 billion USD each. They included phone and components (31.5 billion USD); electronic devices, computers and components (27.6 billion USD); and apparels (19.2 billion USD). However, most of agricultural products saw a reduction in their export revenue.

The US was the biggest importer of Vietnam, purchasing goods worth 46.7 billion USD, an annual growth of 19 percent. The market was followed by China (27 billion USD), the EU (22.9 billion USD), the Republic of Korea (RoK) (12.6 billion USD), and Japan (12.5 billion USD).

The country’s import in the period, meanwhile, was estimated at 162.21 billion USD, down 2.2 annually. Vietnam spent 151.6 billion USD and 10.55 billion USD on buying production materials and consumer goods overseas, down 1.7 percent and 9.2 percent on year, respectively.

China was the biggest exporter of Vietnam, with its turnover estimated at 49.3 billion USD, followed by the RoK (28.7 billion USD) and ASEAN member countries (19.4 billion USD)./.    

Vietnamese aviation industry dejected as COVID-19 returns

The second wave of COVID-19 that began at the end of July, the peak summer travel period, has disillusioned airlines that had earlier begin to hope for a recovery.

After the first wave was controlled by the end of April they gradually increased operations on domestic routes to somewhere approaching normalcy.

They were very hopeful of offsetting the earlier losses during the peak July-September travel season, but the fresh wave has dashed those expectations.

According to the Civil Aviation Authority of Vietnam (CAAV), between July 19 and August 18 the five domestic carriers, Vietnam Airlines, Vietjet, Bamboo Airways, Pacific Airways, and VASCO, operated only 16,400 flights, down 33 percent from the previous month and 45 percent from the same period last year.

Vietnam Airlines’ schedule was nearly 40 percent lighter at 4,300 flights. Vietjet Air’s was down 31 percent at 5,700.

Bamboo Airways, Pacific Airways and VASCO’s were down 17 percent, 15 percent and 43 percent month-on-month.

A decrease in demand also dragged down fares, with round-trip tickets between Hanoi and HCM City at the end of September priced at only 1.2 million VND (52 USD), down two or three times from early July.

General Director of Vietnam Airlines Duong Tri Thanh forecast the total number of domestic flights in the last five months of the year to be only 70 percent of last year’s.

For the full year the number could be 30-40 percent lower as could fares, he said.

To improve cash flow, airlines have to sell tickets for Tet (Lunar New Year) one month earlier than normal and offer a lot of discounts.

The Vietnam Aviation Business Association has called on the Government to offer airlines credit worth 25-27 trillion VND (1.07 billion USD-1.16 billion USD) at preferential interest rates for three- or four-year terms.

It was one of the recommendations it made to the Government recently to stimulate the sector that is facing a severe downturn due to the pandemic.

It also called for extending the waiver and reduction of aviation service charges until the end of 2021 and cutting all airport service charges by 50 percent.

The association also petitioned Prime Minister Nguyen Xuan Phuc to allow resumption of flights to countries that have controlled the COVID-19 outbreak and allowing foreign tourists to enter Vietnam if they comply with safety requirements.

The International Air Transport Association has said the Vietnamese aviation industry will only return to last year’s levels by 2024.

Vietnamese airlines would suffer estimated losses of more than 4 billion USD this year, it said.

HCM City accelerates disbursement of public investment capital

Ho Chi Minh City had disbursed nearly 21.28 trillion VND (920 million USD at current exchange rate) of public investment capital as of August 23, fulfilling 50.5 percent of the assigned capital this year, the city’s Department of Planning and Investment reported.

At a recent online meeting on the issue, Director of the Department of Planning and Investment Le Thi Huynh Mai said both the amount of disbursed capital and the rate of disbursement were higher than the figures for the same period last year.

Specifically, the amount of disbursed capital was up 2.35 times year on year and the rate of disbursement up 1.89 times.

The official stressed that the achievement was a bright spot in the city’s performance in 2020 considering the complicated developments of the COVID-19 pandemic.

To fulfill the target for this year, the city has set a range of solutions. In early September, the Department of Planning and Investment will submit to the municipal People’s Committee a plan of actions for the last three months of the year, designed to remove difficulties for production and business activities, thus supporting enterprises and economic recovery.

Those who hold the top positions will be required to bear responsibility for the disbursement of public investment capital. Agencies, organisations or businesses that fail to complete targets in this work will not be considered for any emulation titles or awards.

The municipal authority will hold regular meeting, once every two weeks, to review the pace of work and capital disbursement of each major project. Capital will be transferred from projects with low disbursement rate to those with high rate. The city’s inter-sectoral working group will select key projects with low disbursement rate due to obstacles in procedures regarding investment, construction, bidding and land clearance to help them handle the problems.

Regarding projects using Official Development Assistance (ODA) capital, the city will work with the Ministry of Finance to reach agreement on the value of capital in Vietnamese dong in September.

Chairman of the municipal People’s Committee Nguyen Thanh Phong required drastic actions towards the goal of disbursing 80 percent of public investment capital before October 15 and 100 percent by the end of the year.

He said district authorities should cut the time for procedure processing by at least 30 percent as well as reduce the time taken for land clearance.

Looking into the collection of contributions to the State budget, Phong required the city’s taxation and customs agencies to review tax dossiers and tax policies to prevent tax losses and fraud.

Director of the municipal Department of Finance Pham Thi Hong Ha reported that in the first eight months of the year, the city collected an estimated 216.76 trillion VND (9.35 billion USD) for the State budget, fulfilling 53.4 percent of the yearly plan. She attributed the drop in State budget revenue to the decline in production and business activities under the impact of the COVID-19 pandemic.

To support the recovery of production and business activities, the city will continue to implement policies to exempt or reduce taxes and fees in accordance with policies adopted by the Government and the municipal People’s Council.

Ho Chi Minh City aims to fulfill at least 85.45 percent of the task on State budget collection, equivalent to 347 trillion VND.

The city’s authorities also plan to provide another support package for businesses affected by the COVID-19 pandemic.

Speaking at a recent meeting, Chairman of the municipal People’s Committee Nguyen Thanh Phong said the city is considering another support package, especially for enterprises that have suspended operations due to the impact of the outbreak.

The city will issue specific policies to help enterprises or industries heavily affected such as travel, restaurants, hotels, and transport and tourism-related services, he said.

More than 21,000 businesses in the city have suspended operations and laid off a large number of employees, said Phong.

Public investment hits five-year high

Public investment in August and the first eight months of this year increased 45.4 percent and 30.4 present year-on-year, respectively, according to the General Statistics Office (GSO).

The investment hit five-year high, reaching 47.4 trillion VND (2.0 billion USD) in August and 250.5 trillion VND between January and August.

In the eight months, the amount of capital under the management of the central government was 41.2 trillion VND, equivalent to 48.7 percent of the yearly target and up 65.1 percent against the same period last year; and the volume of capital under the management of local administrations was 209.3 trillion VND, equivalent to 51.1 percent of the yearly target and a year-on-year rise of 25.2 percent.

Vietnam attracted 19.54 billion USD worth of FDI as of August 20, down 13.7 percent year-on-year, according to the Ministry of Planning and Investment.

There were 1,797 new FDI projects licensed, with registered capital totalling 9.73 billion USD, down 25.3 percent in project numbers but up 6.6 percent in value compared to the same period last year. The increase was attributed to the inclusion of the Bac Lieu LNG-to-power project, with investment capital of 4 billion USD, or 41.1 percent of the total.

Meanwhile, 718 existing projects were permitted to raise their investment by more than 4.87 billion USD in total, a 22.2 percent increase year-on-year.

Foreign investors also outlaid 4.93 billion USD on share purchases or capital contributions during the period, down 48.2 percent.

During the eight-month period, Vietnam invested a total of 330 million USD abroad, up 15. 8 percent year-on-year, the ministry reported.

Of that number, 218.4 million USD was poured into 86 new projects and the remaining 111.8 million USD pledged to 25 existing projects.

Listed realty firms to enjoy fruitful last quarter

Although there are some listed property developers worth investing in, challengers are still aplenty, especially as earning don’t normally surge until the final quarter of the year.

According to KIS Vietnam Securities JSC (KIS), the earnings of the real estate sector in the first half of the year were dull as the market was hit hard by external factors.

Listed real estate companies posted a 21.7 percent annual drop in revenue in the first six months and post-tax profits of parent companies’ shareholders fell 12.7 percent year-on-year.

All listed property developers have fulfilled 27.5 percent and 27.7 percent of their revenue and post-tax profit plans.

The companies also reported total net-debt on June 30 surged 50 percent year-on-year. The listed firms with the highest amount of net debt were Vinhomes JSC, Novaland and Dat Xanh Group, whose net debts gained 153 percent, 57.9 percent and 107 percent, respectively, compared to the first half of 2019.

KIS analysts said the difficulties for the real estate sector will not fade soon.

In the third quarter, the property market will stay dreary as social-distancing measures to fight the COVID-19 pandemic will make sellers stall sale events, they said.

In addition, buyers will be hesitant because they are still worrying about the future, they added.

Specialists at Agribank Securities JSC (Agriseco) said the property industry is among the worst-hit sectors during the pandemic as social distancing measures have disrupted sale activities and postponed construction.

Meanwhile, buyers are not rushing to purchase real estate products because the economic outlook is still quite gloomy, they said, adding resort, leasing and retail sections are the hardest hit and will take time to recover.

In addition, buyers are still tied-up by a number of legal bottlenecks that have remained unsolved since 2018, which will keep the number of ready-for-sale projects very low.

According to CBRE, the total supply of property outputs in the Hanoi market in the second quarter dropped 39 percent year-on-year to nearly 5,570 items and the quantity of sold items in the second quarter fell 27 percent on-year to 5,100. Meanwhile, in HCM City, the total supply reached a five-year low of 1,644 items.

SSI Securities Corporation (SSI) reported that in the first six months of 2020, the trading volume of high-class apartments with the selling price of average 60 million VND (2,590 USD) per square metre dipped nearly one-third from the previous year.

Apartments with leasing price of more than 1,000 USD per month were also empty because of the COVID-19 pandemic. The average leasing price offered on the market was slashed by 20-25 percent due to lower demand and spending on house leasing was also curbed.

Middle-class apartment leasing interest rates have dropped by 30-50 basis points since the outbreak began. The rates in HCM City range from 4.5 percent to 6.2 percent per year and from 4 percent to 5.4 percent per year in Hanoi.

Agriseco also noted that the financial condition of real estate firms has worsened, therefore, companies have had to borrow more to maintain their operations.

On June 30, the total outstanding debt of the real estate sector increased by 16 percent in six months to 161 trillion VND (6.95 billion USD). The ratio of total outstanding debt to total revenue also hiked to 0.87 by the end of the second quarter from 0.67 compared to 2019. Moreover, the ratio of borrowings to equity capital jumped 54 percent in the second quarter – the highest quarterly gain since the beginning of 2019.

Second-half expectations

According to KIS analysts, increased discounts and gifts, and due date extensions will be key to boost local market demand, while top-leading companies such as Vinhomes and Khang Dien House Trading and Investment JSC will record earnings surge in the last months of the year as they are about to complete selling thousands of apartments

KIS also expected lending rates provided by commercial banks will remain low until the end of the year. The average lending rate for house buying was 11.4 percent in the last quarter – unchanged from the previous one. The rate fell 20-40 basis points for one-year loans in July and early August because banks wanted to boost house-purchasing power while borrowing demand in other sectors was weak.

According to SSI Securities, domestic market studies have shown 38-40 percent of the population consider real estate products a safe investee.

The growth of the market depends on the infrastructure development and interest rates, the company said, adding low-storey buildings are more attractive to buyers because they can easily obtain the land use right certificate when purchasing.

Agriseco specialists said listed companies perform better than the market average and their stocks are good investees as their projects are often licensed, debt-to-equity ratios are low and sale volumes are often optimistic.

Lobster farmers incur huge losses amid Covid-19

Lobster farmers in Binh Thuan Province's Nhon Hai Commune are facing big losses from falling prices due to Covid-19.

According to the farmers, in 2019, high-quality lobsters were sold at VND1.6m (USD69) to VND2.1m a kilo. However, because of Covid-19, the demands from both local and export markets dropped so the prices fell sharply. The lobsters of all quality are being sold at VND800,000 a kilo.

All farmers in Nhon Hai have suffered losses from at least VND300m (USD13,000) to as high as VND1.5bn. Several people have closed their farms to try to find another job. Moreover, the lobsters are also suffering from diseases such as milky hemolymph disease, killing 40% of the lobster population.

63-year-old Pham Thanh The who has 15 years of experience said, "My family raised nearly 5,000 lobsters but we have incurred VND1bn in losses because of low prices. The price for a one-kilo lobster fell by VND500,000 (USD21). It's so painful. Farmers are having to rush to sell off the lobsters," The said.

Nguyen Xuan Ba, head of the fisheries association in Nhon Hai Commune said he and his brother raised 1,200 lobsters and suffered VND300m loss. According to Ba, the farmers had tried to hold off from selling, hoping that the pandemic could be controlled soon.

However, if the lobsters are mature and not sold soon, they will grow old and face many diseases due to weaker health. A resort project has been approved to start construction nearby so their farming area has been badly affected by the construction activities. The lobsters easily suffocate from the lack of oxygen. That's why the farmers have rushed to sell the lobsters.

"We don't have a dedicated farming area. Several people have given up raising lobsters. Some others tried to raise the lobsters off-shore. It's more expensive and the results are as yet unknown," Ba said. "This area has a prime location that is rarely affected by storms."

Many farmers have asked provincial authorities to provide financial support to change jobs or design a farming area for them.

Nguyen Van Tien, head of Nhon Hai Commune Farmers Association, said, "Raising lobsters used to be our village's main source of income. But recently, the communal authorities asked us to stop farming so that the water surface can be used for investment projects."

For the 2019-2020 crop, only over 50 households in Nhon Hai raise 75,000 lobsters. Despite low prices, traders are still very cautious about buying.

Inbound tourism shrinks 66.6% on year in January-August

Foreign arrivals to Viet Nam were estimated at nearly 3.78 million in the first eight months this year, a decrease of 66.6% compared to the same period last year, the General Statistics Office reported.

Of the total figure, 80.8% foreign tourists traveled to the country by air, down by 65.7% on year, said the statistics agency.

Last year, Viet Nam welcomed a record number of inbound tourists, reaching over 18 million, up 16.2% against 2018, according to the Viet Nam National Administration of Tourism.

The country set goal to host 20.5 million international visitors with total revenues of US$36 billion in 2020.

Meanwhile, Viet Nam’s trade with the rest of the world dipped by 0.3% on year in January-August, to US$336.32 billion, in which export value rose 1.6% to US$174.11 billion and import turnover declined by 2.2% to US$162.21 billion.

It is worth noting that the domestic sector’s export turnover rose 15.3% to US$60.80 billion while its import volume posted an annualized increase of 2.9% to US$72.05 billion.

Top export items in the reviewed period included phones and spare parts (US$31.5 billion, down 5.5% on year), electronic products, computers and spare parts (US$27.6 billion, up 24.8%), garments and textiles (US$19.2 billion, up 31.9%), footwear (US$10.9 billion, down 8.6%).

The US was the largest importer of Vietnamese goods, with total turnover of US$46.7 billion, up 19% against the same period last year, followed by China with US$27 billion, up 13%, and the EU with US$22.9 billion, down 4%.

Confidence of European business leaders stabilising in Vietnam

The confidence of European business leaders in Vietnam is returning despite the uncertain times, according to the latest Business Climate Index (BCI) from the European Chamber of Commerce (EuroCham) and Decision Lab. 

The BCI is a regular barometer of EuroCham members and their perceptions of the trade and investment environment. Each quarter, it tracks the performance of EuroCham’s member companies and their perceptions of the economic environment in Vietnam.

The overall BCI score saw a slight increase over the last three months. It rose from 27 per cent in the first quarter to 34 per cent in April, and remained stable into the second quarter. This confirms that confidence is returning to the market after a fall during the initial emergence of COVID-19. However, the BCI also shows that European business leaders continue to feel the impact of the global pandemic and remain cautious about the future prospects of their enterprises.

The latest BCI reveals that European enterprises fared better over the last three months than first anticipated during the height of the COVID-19 pandemic. In the first quarter, just one in 10 EuroCham members had foreseen a short-term improvement in their performance. However, businesses outperformed these predictions, with 24 per cent describing their business situation as “good” or “excellent” over the last three months.

Looking ahead there are more grounds for optimism, with around a quarter of EuroCham members predicting a rise in orders in the third quarter. Meanwhile, a further 28 per cent anticipate a similar level of orders to the second quarter, and this should help to drive growth into the autumn. Despite these positive signals, companies continue to feel the impact of COVID-19 on their business operations, with around half predicting a drop in headcount in the next quarter.

Nicolas Audier, chairman of the EuroCham, said, "Despite the stormy waters of a global pandemic, our data shows that the government’s swift and effective response to COVID-19 has successfully steadied the ship here in Vietnam. While the confidence of our member companies has improved and stabilised, business leaders continue to feel the effects of this virus and remain cautious about the future prospects of their business operations."

“The BCI also found that international travel restrictions are having an impact on European enterprises in Vietnam. The government has worked with foreign business communities to facilitate the safe return of essential workers, and we are grateful for their assistance. Looking ahead, global trade will remain unpredictable for some time but we can be confident that European business will be one of the factors driving long-term economic growth in Vietnam, now that the EU-Vietnam Free Trade Agreement has entered into force,” he added.

Vietnam and EU seek to maximise benefits from EVFTA post-COVID-19

Government agencies as well as experts from the EU and Vietnam gathered at a seminar in Hanoi on August 28 to discuss the EU-Vietnam Free Trade Agreement and Vietnam’s integration in global value chains in a post-COVID-19 world. 

Making the opening speech, Giorgio Aliberti, head of the Delegation of the EU to Vietnam emphasised that, “The signing and ratification of the trade agreement is an historic milestone in EU-Vietnam cooperation. The EU-Vietnam Free Trade Agreement (EVFTA) will be an important factor to nurture opportunities for economic recovery for Vietnam in the aftermath of COVID-19. The reduction of tariffs is among the top priorities of this agreement.”

According to Dr. Vu Tien Loc, president of the Vietnam Chamber of Commerce and Industry, Vietnam's economy is facing many difficulties under the negative impact of COVID-19 but the signing of the EVFTA has brought confidence and rare opportunities for businesses during this period.

“The agreement has opened up a 'highway to Europe' for Vietnamese businesses. However, not only has the EVFTA brought opportunities but also challenges by putting local companies in the same arena with giants. Overcoming these great challenges will lay a solid foundation for the development of Vietnamese businesses in the current highly competitive integration context,” Loc noted.

In his speech at the seminar, Dr. Carsten Schittek, Minister Counsellor and Head of the EU Trade Section of the Delegation shared his opinion about the EVFTA and its contributions to accelerating Vietnam’s integration into the EU's global value chains (GVCs) after COVID-19. Meanwhile, Jean-Jacques Bouflet, vice president of the European Business Association (EuroCham) focused on strengthening linkages between Vietnamese and European companies in in the context of the EVFTA post-COVID-19.

Truong Chi Binh from the Institute of Industry Strategy Policy (IPSI) of the Ministry of Industry and Trade (MoIT) cum vice president, general secretary of the Vietnam Association for Supporting Industries (VASI), said that integration into the GVCs will roll many challenges in the way of Vietnamese enterprises so they will need ample support such as access to credit (concessional loans and non-collateral guarantees), stabilisation of costs and labour sources, reduction of administrative procedures and informal costs, and more (and better prepared) enterprises in the supporting industry.

He added that local companies will also need help with reaching international standards, improving management processes, lean administration, cost reduction, trade capability and connectivity, setting up clusters of businesses to produce complete sets of components, and with penetration opportunities to new markets.

Also at the seminar, Dr. Nguyen Thi Thu Trang, director of the WTO's International Trade Center (WITC) of the Vietnam Chamber of Commerce and Industry (VCCI) discussed the opportunities and challenges from the EVFTA and COVID-19 relating to the objectives of attracting foreign investment, improving domestic added value, as well as reducing and eliminating barriers to GVCs.

Along with the opportunities, he highlighted the intrinsic drawbacks Vietnamese enterprises face in human resources, infrastructure, logistics, as well as challenges relating to the business environment and the connectivity and capabilities of domestic firms (especially in the supporting industries).

As part of the seminar, participants discussed the actions that should be taken by Vietnamese enterprises and by the government in order to seize the opportunities brought by the EVFTA to integrate further into the GVCs in the aftermath of COVID-19.

The seminar was the first of three round-table events to be organised by the EU Delegation until the end of 2020. 

Israeli press praises Vietnam’s foreign diplomacy, economic achievement

Israeli press have spotlighted Vietnam’s policy for external diplomacy and its economic growth in the first eight months of this year on the occasion of the Southeast Asian nation celebrating the 75th anniversary of its August Revolution (August 19) and National Day (September 2).

The Jerusalem Post carried an article titled “Vietnam: A bright star in Asia” on August 30 lauding the country’s the foreign policy of independence, self-reliance, openness, diversification and multilateralisation of external relations and active international integration.

It noted Vietnam has to date established a network of 30 strategic partners and comprehensive partners. “The country effectively implemented the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP). The first new generation FTA in the world has helped Vietnam’s export turnover to members such as Japan, Canada and Mexico increase significantly compared to 2018,” the article said.

The article mentioned the Vietnam-EU Free Trade Agreement (EVFTA) and Vietnam-EU Investment Protection Agreement (EVIPA) signed last year and approved by the Vietnam National Assembly in June 2020. It cited the European Commission as calling the EVFTA “the most ambitious” FTA the EU has ever reached with a developing country.

The country’s relations with the US were also highlighted in the article. It said the sides managed to overcome their past animosity to normalize relations in 1995, adding that they are now comprehensive partners, with bilateral trade increasing from 450 million USD in 1994 to 77 billion USD in 2019.

In particular, the article mentioned the positive forecasts of the IMF and the WB on Vietnam’s economic growth despite the COVID-19 pandemic.

“Vietnam has garnered international praise for its swift and effective response to the COVID-19 outbreak. Although the country is not immune to the global economic downturn, its prospects for recovery remain positive and are brightest among Asian countries,” it said.

The same day, the Forbes magazine in Israel also published an article assessing Vietnam growth between January and August this year. It cited Edward Teather, ASEAN economist at UBS Research, as saying “Vietnam is suffering some pain from the impact of COVID-19, but the outlook is looking one of the brightest in the region”.

The article reported that the Vietnamese government has sought to increase public and private investment since January to help the economy emerge from the coronavirus pandemic. In June, the country approved its biggest commercial project this year, a 9.3 billion USD tourist resort by Vingroup, Vietnam’s largest private conglomerate, with foreign investors also participating in the project.

According to the article, there have been many reports that a large number of major foreign companies would choose Vietnam as theirs next manufacturing hub. Apple looked for managers and engineers in Hanoi and Ho Chi Minh City, while Google began production of its low-cost smartphone with Vietnamese partners.

It cited statistics that showed 18.82 billion USD in FDI was poured into Vietnam in the first seven months of this year, equivalent to 93.1 percent of the figure of the same period in 2019. July alone saw 3.15 billion USD flowing into Vietnam in the form of FDI and share purchase, up 79.8 percent year on year.

Source: VNA/VNN/VNS/VIR/VOV/SGT/NDO/Dtinews