Foreign investment into Vietnam up sharply
One of the bright spots in the economy during the first quarter of this year was the positive results in FDI attraction and disbursement. Figures show that, in the first 3 months of the year, total foreign investment reached over 10 billion USD, up 18.5% over the same period of last year.
After 5 years of operations, with steadily increasing output, the company built more factories earlier this year to meet the needs of production expansion.
The average size of both newly-licensed projects and those adding capital increased strongly year-on-year, which was the main reason behind the strong increase in FDI. Another positive in the first quarter was that disbursed capital rose 6.5% year-on-year.
It is forecast that FDI attraction will continue to be positive in the context of many investors shifting the location of their investment and major investors in the country expanding existing projects./.
Property giants rush to develop projects in HCMC’s neighboring localities
Many large real estate companies in HCMC have rushed to acquire land funds and develop projects in HCMC’s neighboring localities, such as Long An, Binh Duong, Dong Nai and Ba Ria-Vung Tau, rather than in the city.
Last year, the supply of real estate products was modest due to Covid-19. Enterprises mainly conducted merger and acquisition (M&A) deals to acquire land lots and expand their market shares.
Early this year, the supply improved but real estate developers have gone outside HCMC as the land fund in the city has been smaller, while the price has been higher.
According to data from BIDV Securities Company, except for Khang Dien with 100% of its land funds located in HCMC and Vinhomes with 51% of land funds in HCMC and Hanoi, other large real estate developers have over 80% of their land funds in other localities. In addition, HCMC has sold an average of 30,000 apartments a year, but more than 8,000 apartments in Binh Duong were sold in the January-September period last year.
The trend of seeking land funds in other localities will continue in the coming years.
Novaland was actively involved in M&A deals in 2020. It concluded a deal for a 286-hectare project in Dong Nai and some other deals with a total value of nearly US$1 billion. In 2021, it launched multiple projects in HCMC’s neighboring localities.
Nam Long is not an outsider to the trend as 91% of its land fund is mainly in other localities. Last year, it bought 20 hectares of land at the Waterfront project in Dong Nai from Keppel Land, raising its total land fund to 701 hectares.
Nam Long Land CEO Nguyen Thanh Son said it came up with a plan to develop new urban areas in localities near HCMC 15 years ago.
VNDirect forecast that developing real estate projects in localities adjacent to HCMC and Hanoi will be the key trend this year as the prices of land lots there remain low.
According to Bui Quang Anh Vu, CEO of Phat Dat Real Estate Development JSC, the development of property projects in HCMC’s neighboring localities is a strategy to adapt to the current difficult period.
Meanwhile, Nguyen The Nhien, deputy general director of Hung Thinh Land, said his firm was one of the first to adapt to the trend, adding that his firm sold over 10,000 products and spent more than VND10 trillion buying projects last year.
Many other enterprises have had plans to put up their new projects in HCMC’s neighboring localities for sale. For example, the Phu Dong Group will introduce its high-end apartment project on Pham Van Dong Street in Binh Duong’s Di An City with more than 400 units.
Additionally, An Gia Group has announced launching new projects in Binh Duong and Ba Ria-Vung Tau. Hung Thinh will also introduce apartment building projects with thousands of units in the two provinces in May.
Nam Long has put up for sale the second phase of the Water Point urban area project with an area of 335 hectares in Long An and Novaland has introduced the AquaCity urban area project in Dong Nai.
Resort projects have also been launched, such as the NovaWorld coastal urban area project of Novaland from Dong Nai to Ba Ria-Vung Tau.
Hung Vuong Developer introduced the first 700 villas on a coastal road in Ba Ria-Vung Tau’s Binh Chau, part of the Venezia Beach project covering 72 hectares of land.
Farmers struggle as shallots devalue to record low
Currently, there are more than 51,000 tons of unsalable shallots in Vinh Chau Town of Soc Trang Province, while the price of shallots at the field has dropped to a record low of only VND4,000-VND5,000 per kilogram, sending farmers into a difficult situation.
Mr. Ngo Hung, Secretary of the Party Committee of Vinh Chau Town of Soc Trang Province, on April 17, said that the price of shallots was at an all-time low, and the locality was carrying out many solutions to help farmers to consume their produce.
The Economic Department of Vinh Chau Town informed that at present, there are more than 51,000 tons of shallots that cannot be sold. Earlier, farmers had harvested shallots massively from January to February, with a total area of 5,300 hectares. However, up to now, shallots have not been able to consume yet.
The price of shallots packed in mesh net bags is currently from VND15,000 to VND20,000, while that of unharvested shallots grown on sandy soil is only VND4,000-VND5,000 per kilogram and VND9,000-VND10,000 per kilogram for those grown on field soil.
Mr. Ma Chi Tho, Head of the Economics Department of Vinh Chau Town, said that because shallots originating from China and Thailand were sold on the market at only VND3,000 per kilogram, so domestically-grown shallots also declined. Besides, due to the complicated situation of the Covid-19 pandemic, shallots could not be exported in the past months. Previously, Vinh Chau shallots were mainly exported to China.
Mr. Thach Nua, 52, a farmer in Vinh Hai Commune in Vinh Chau Town, said that his family had planted 1.5 hectares of shallots and finished harvesting nearly a month ago. However, because the price of shallots was too low, his family had to stockpile about 60 tons of shallots to wait for the price to go up. With the current average price of VND6,000-VND9,000, farmers suffer heavy losses, with an average loss of nearly VND10 million per 1,000 square meters of shallots. Currently, the prices of seeds, fertilizers, and plant protection drugs are quite high, so the prices of shallots at the fields must be from VND15,000 per kilogram upwards for farmers to earn profits.
Not only Mr. Thach Nua’s family, but many other shallot farmers in Vinh Chau also face difficulties because of the record low price of shallots. Many families cannot afford to start a new shallot crop and do not have warehouses to store shallots, or they have to sell shallots at low prices because they must pay for fertilizers and plant protection drugs.
Mr. Ngo Hung said that besides focusing on carrying out solutions to find a market for shallots, the Party Committee of Vinh Chau Town has agreed to call for support of local officials to “rescue” shallots, contributing to helping shallot farmers to overcome the current difficult situation.
HCMC’s street houses for lease sees low demand despite rental cuts
Over one year since the Covid-19 pandemic hit Vietnam, retail spaces at street houses for lease in HCMC still see a limited number of customers although the owners have slashed rentals sharply.
Nguyen Van My, owner of a 100-square-meter house in a six-meter-wide alley on Nguyen Tri Phuong Street, District 10, said that his house has been vacant for two months as his previous customer returned the premises. Earlier, he had leased the house to a Malaysian seafood export company on a long-term basis for a monthly rate of VND22 million, but the company returned the property in February this year to find a cheaper one.
My then cut down the monthly rental to VND16 million and offered the property for lease on many real estate platforms but saw no customers.
Truong Thanh, owner of a street house in District 7’s Phu My Hung, said that it was difficult to find customers during the pandemic. Last year, after several months, the local economy felt the impact of the virus and his customer decided to stop renting the house.
Until the beginning of this year, after dealing with tens of real estate brokers, Thanh managed to find an appropriate customer, a commerce company. However, he had to reduce the rental by nearly 30% and pay the brokerage fees, which were equivalent to one month’s rent.
Vo Thi Khanh Trang, head of the Research Department of Savills Vietnam in HCMC, told the Saigon Times that many lessees have returned retail spaces at street houses, including those in downtown HCMC, due to the impact of the pandemic. The rentals were also cut sharply.
While the operation of shopping malls remains stable, that of retail spaces and street houses is tough, with the number of street houses for lease being on the rise.
The occupancy of retail spaces in shopping malls in the city fell slightly in the first quarter but still reached 93%, and the rentals remained stable at some US$50 per square meter per month, she added.
According to the Savills representative, the market entry plans of foreign lessees are progressing slowly due to Covid-19, although they consider Vietnam as one of the potential investment destinations.
She added that street houses located at street corners in inner-city areas still remain attractive to customers. These locations and those near hotels as well as premium office buildings are forecast to see a rising number of lessees in the upcoming time. Potential lessees could be operators of mid-end and high-end brands.
Further, street house owners should be flexible in meeting new demands from customers. For instance, amid the pandemic, lessees want to rent parts of a house to cut operational costs, while the owner wants to lease the entire house, leading to an imbalance between demand and supply, Trang said.
Travel companies reopen in lead up to summer
The increasing travel demand ahead of summer has enabled many travel companies to reopen after months of closure.
Some businesspeople said in case the Covid-19 pandemic remains under control, the number of domestic tourists this summer could return to the summer 2019 level.
According to travel companies, the number of tourists booking tours has increased significantly and some companies have recently received groups of over 1,000 tourists.
Nguyen Huu Y Yen, general director of Saigontourist Travel Service Company, said the company has received summer vacation bookings from large groups of tourists, who prefer packages that comprise air tickets and hotel accommodation.
Nguyen Viet Hung, CEO of First District Tourist Company, said since March, the company has received groups of up to 500 tourists for the summer vacation. The most popular destinations include Phu Quoc, Ho Tram, Nha Trang, Binh Thuan, Ba Ria-Vung Tau and Hue.
“The number of tourists visiting Hue during the recent weekends has risen to 3,000-4,000 people a day. The occupancy rates of some three- and four-star hotels in the city have reached 60-70%,” said Nguyen Van Phuc, deputy director of the Tourism Department of Thua Thien Hue Province.
The province expects to receive more tourists, especially from HCMC, Hanoi and neighboring provinces, during the upcoming holidays such as Hung Kings Commemoration Day on April 21, Reunification Day on April 30 and International Labor Day on May 1.
“Some tourist attractions are sometimes overloaded. In mid-March, only 10-15% of travel companies in HCMC remained operational. However, many companies, especially small and medium companies, have resumed their operations,” said Nguyen Thi Khanh, chairwoman of the HCMC Tourism Association.
“We are working with the Vietnam Tourism Association to launch stimulus programs nationwide to boost tourism recovery,” she added.
Nguyen Huu Y Yen, general director of Saigontourist Travel Service Company, said the increasing number of domestic tourists will help travel companies survive until the international tourism market is resumed.
According to Nguyen Viet Hung, CEO of First District Tourist Company, if the number of tourists this summer is equivalent to 75% of the 2019 summer level, two-thirds of people working in the tourism industry that have been laid off will be able to return to work.
Pandemic is changing landscape of consumer credit: experts
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| A board shows a consumer lending product of FE Credit. The consumer finance market has large potential in Viet Nam. — Photo enternews.vn |
According to Can Van Luc, a member of the National Financial and Monetary Advisory Council, financial companies will reshape their business strategies after the pandemic, depending on changes in consumers’ habits and behaviour.
Specifically, consumers tend to tighten their budget and pay more attention to healthcare, environment and healthy lifestyles. Digital technologies, e-commerce and online shopping are becoming popular in the operation of enterprises and consumption of residents.
“Consumer lending is gradually shifting from traditional methods to using technologies like consumer data, online marketing, online verification through big data, artificial intelligence and direct disbursement to customers’ accounts and electronic wallets,” he said.
A survey by FiinGroup found that the pandemic caused a decline of 25 per cent of the world’s consumer market in 2020, pushing up bad debts by 100 per cent and profits down by nearly 200 per cent.
Market research company Ipsos found that about 80 per cent of surveyed Vietnamese said that their incomes were negatively affected by the COVID-19 pandemic, with 41 per cent seeing a drop of more than 20 per cent. The pandemic also urged consumers to limit using cash and switch to electronic wallets and online payments.
The COVID-19 pandemic is also changing the landscape of the consumer finance market which urges financial companies to move towards consumer trends of cashless payment.
Nguyen Thanh Phuc, deputy director geneeral of FE Credit, said that as the pandemic was under control in Viet Nam, the borrowing demand was predicted to increase. However, the ability to repay was assessed to be lower due to the impact of the pandemic on incomes.
Phuc said that financial companies must be very cautious in evaluating customers.
He is also optimistic about the potential of the consumer market of Viet Nam in the long term, given the country’s anticipated economic growth.
Viet Nam was becoming an attractive destination for production in the global shift, opening job opportunities which would help improve incomes and promote consumer demand, he said.
Phuc expected Viet Nam’s consumer finance market would post stronger growth than other countries in the region with a population of nearly 100 million, 60 per cent of whom had low and medium incomes.
Luc said that the consumer finance market had large development potential with economic growth anticipated at 6.5-7 per cent per year in 2021-30 period and income growth at around six per cent per year by 2020.
The Government also aims to promote the healthy development of the consumer finance market to prevent black credit.
He urged financial companies to diversify products to meet demand.
The outstanding consumer credit was estimated to total VND1.8 quadrillion at the end of 2020, accounting for around 20 per cent of the total outstanding loans in the economy and 2.5 times higher than 2012.
Banks to create favorable conditions for people to access credit
According to the State Bank of Vietnam (SBV), so far, banks have restructured the repayment term for nearly 263,000 customers affected by the Covid-19 pandemic with a total credit outstanding balance of more than VND353 trillion.
Besides, they have also exempted and reduced interest rates for more than 660,000 customers with a total credit outstanding balance of over VND1.27 quadrillion. Credit institutions have provided new loans with lower interest rates than before the pandemic, with accumulated loans from January 23, 2020, to now exceeding VND3 quadrillion to more than 452,000 customers.
For the lending program to employers to compensate for work stoppages, by January 31, 2021 (the time to stop disbursement as prescribed), SBV had disbursed a total of VND42.9 billion to the Vietnam Bank for Social Policies (VBSP), and this bank has provided loans in 56 provinces and cities, with a total credit outstanding balance of VND41.82 billion for 11,276 employees who were ceased work. Currently, the program’s credit outstanding balance at the VBSP is VND39.66 billion.
SBV’s leader said that the central bank would continue to synchronously implement solutions to remove difficulties for customers affected by the Covid-19 pandemic and solutions to remove credit problems for people and enterprises that suffered damages caused by natural disasters or the pandemic to restore production and business activities. At the same time, it would direct credit institutions to continue to create favorable conditions for people and enterprises to access credit, meet the legitimate credit needs of the people, and contribute to restricting black credit.
Vietnamese electric motorbike start-up gets foreign funding
Dat Bike, a Vietnamese technology start-up that plans to make electric motorbikes, has raised 2.6 million USD in a pre-series A funding from Singapore’s Jungle Ventures, Wavemaker Partners, Hustle Fund, and iSeed Ventures.
Electric motorbikes are usually weak and have a low range, delivering only half the performance of a petrol bike.
But Dat Bike claims its Weaver can rival petrol bikes in power and range, its 5,000W motor helps accelerate from 0 to 50km/h in just three seconds, its charging time is the fastest in the country at just under three hours, and its brake mechanism is tailored to the traffic situation in Vietnam.
Song Nguyen, founder and CEO of Dat Bike, said: “We want to transform the 250 million gasoline bikes in Southeast Asia into electric vehicles. We believe that if given a choice everyone would pick electric over gas. It is just that the current electric motorbikes in the market lag behind in power and range, making it difficult for people to make the switch.
“The fresh funds will allow us to continue to innovate and create the most compelling electric motorbikes for Southeast Asia and the world.”
Amit Anand, founding partner of Jungle Ventures, said: “This investment in Dat Bike marks our first investment in the mobility sector which is rapidly getting transformed by technology. The 25 billion USD two-wheeler industry in Southeast Asia in particular is ripe for reaping benefits of new developments in electric vehicles and automation.
“We believe that Dat Bike will lead this charge and create a new benchmark not just in the region but potentially globally for what the next generation of two-wheeler electric vehicles will look and perform like.”
The Weaver can be bought on the company’s website and physical store in Ho Chi Minh City. It costs 39.9 million USD./.
Services sector expected to expand by 7-8 percent this decade
Vietnam’s services sector is targeting a growth rate of 7-8 percent in the 2021-2030 period, higher than the economy’s average growth rate, and eyeing to account for 50 percent of GDP by 2030.
In the 2030-2050, the sector is expected to grow faster than the average rate of the national economy and occupy 60 percent of GDP.
The goal is set out in the strategy on the development of the services sector for 2021-2030, with a vision to 2050.
The strategy looks to reform institutions, boost the services sector in a more transparent, efficient, and competitive manner, and speed up the restructuring of the sector in the context of the fourth Industrial Revolution.
The strategy attaches importance to knowledge-intensive and competitive services including distribution, tourism, IT, finance-banking, logistics, education and training, and healthcare. Tourism service centers will be set up with a view to churning out high-quality and competitive tourism products with bold national and cultural identity.
Domestic and foreign economic components will be mobilised to upgrade and build modern infrastructure and technical facilities in favor of service development. Especially, State budget allocation will give a priority to modernisation and upgrading key infrastructure sites namely transport, airports, seaports, telecom, tourism, finance, and banking.
The strategy looks to open service markets in line with Vietnam’s international commitments./.
Ba Ria-Vung Tau economy grows in Q1
The southern province of Ba Ria-Vung Tau managed to achieve positive economic growth in the first quarter of 2021 driven by a surge in industrial production, port services and domestic travel.
Speaking at a recent meeting to review the socio-economic development for the quarter, Deputy Secretary of the provincial Party Committee Nguyen Thi Yen said key economic sectors achieved growth during the quarter.
The province achieved the dual goal of containing COVID-19 while ensuring economic growth, she said.
So its revenues rose by 6.7 percent to more than 22 trillion VND (953.46 million USD), she said.
Industrial production value excluding oil and gas rose by 7.3 percent year-on-year.
The value of port services jumped by 9.6 percent.
The province sped up work on some crucial transport projects to facilitate connectivity to the Cai Mep-Thi Vai port complex in Phu My town.
The tourism sector saw a robust recovery, with the number of visitors in the first quarter doubling from a year ago to 1.8 million.
In the second quarter, the province plans to focus on improving its business climate and competitiveness to attract foreign investment./.
Airlines urged to strengthen maintenance for unused jets: CAAV
A total of 39 aircraft have been left unused and parked on runways and in storage facilities as of the end of this year’s first quarter due to border closures and air travel bans induced by the COVID-19, according to the Civil Aviation Authority of Vietnam (CAAV).
Among the aircraft, 18 belong to the national flag carrier Vietnam Airlines, 14 to Vietjet Air, three to Bamboo Airways and four to Pacific Airlines, data of the CAAV shows.
The grounded aircraft are among 269 airplanes registered as Vietnamese currently, up 13 from the same time last year. These comprise 247 flat-winged jets of Boeing, Airbus, ATR and Embraer as well as 22 helicopters.
It is a matter of fact that an aircraft’s condition can deteriorate for just sitting on the ground, causing problems when the plane returns to service. CAAV Director Dinh Viet Thang has issued a notice requesting airlines to rotate between in-service and stored jets every month.
Accordingly, airlines are required to leave aircraft unused for no longer than one month in order to reduce safety risks associated with prolonged parking. They must report and obtain approval from the CAAV if an airplane needs to be grounded for more than a month for repair and maintenance, except for periodic inspection.
Airlines must regularly update and strictly comply with instructions provided by manufacturers in terms of maintenance for aircraft in long-term storage, Thang said, adding that inspection and maintenance measures must be strengthened for these jets in order to promptly get any problems fixed./.
Vietnam’s exports to US see strong surge in Q1
The US was the largest importer of Vietnamese goods in the first quarter of 2021, with total export turnover hitting 21.2 billion USD, an increase of 32.8 percent year-on-year, according to the Ministry of Agriculture and Rural Development (MARD)’s Agro Produce Processing and Market Development Authority.
The Authority said the strong growth is likely to be maintained in next months despite the COVID-19 pandemic.
Export turnover of vegetables and fruits, and aquatic products to the US in the reviewed period was valued at 23.4 million USD, and 189.15 million USD, up 3.7 percent and 5.4 percent, respectively, compared to the same period last year.
Statistics of the Ministry of Industry and Trade (MoIT) also show that the export value of machinery, equipment and spare parts to the US expanded by 215 percent to 1.58 billion USD in January this year.
Meanwhile, the export turnover of telephone and components to the country hit 6.1 billion USD in January, up 3.4 billion USD from the same period last year.
According to the MoIT, the purchase power in the US has recovered in recent months and this offers a good opportunity for Vietnamese goods in the context that the global economy is still severely affected by the COVID-19 pandemic.
Deputy General Director of the MoIT’s Export-Import Department Tran Thanh Hai underlined the necessity to pay special attention to accelerating digitalization and applying e-commerce in export activities.
The Government, ministries, sectors and localities need to define new orientations amid great changes in the world, he said, adding that the MoIT will propose issuing a new strategy for export activities in the coming time./.
Vietnamese rice export prices fall to lowest level over five month-period
The price of Vietnamese 5% broken rice has dropped to between US$485 to US$495 per tonne over the past week, marking its lowest level since December 10 last year, according to figures released by the Ministry of Industry and Trade.
This comes as rice export prices have continuously experienced a downward trend since the beginning of the year, with the price from mid-April plunging to a five-month low.
Most notably, the price of 5% broken rice between April 10 and April 17 recorded a fall to between US$485 and US$495 per tonne compared to the price of between US$495 and US$500 per tonne recorded in the previous week.
Furthermore, the rice export prices in a number of other countries, including India and Thailand, have also endured a downward trajectory.
India’s 5% broken rice price also dropped to a three-month low as it dipped to between US$388 and US$392 per tonne compared to the price of US$390 and US$395 per tonne recorded a week previously. Elsewhere, Thailand’s 5% broken rice price also fell to between US$465 and US$482 per tonne from its level of between US$488 and US$500 per tonne last week.
The latest plunge in rice prices can mainly be attributed to a 4% decline in the Thai baht since the beginning of March, according to details given by traders based in Bangkok.
The first quarter of the year saw rice exports face a decrease of 30.4% in volume and 17% in turnover compared to the first quarter of last year, with 1.1 million tonnes worth US$606 million.
The decline in rice exports throughout the reviewed period can be put down to shortages occurring in terms of supply sources in the winter-spring crop, while the high price of rice has also made many importers decide to wait for a fall to occur before making a move.
According to statistics published by the Vietnam Food Association (VFA), the nation ranked second in the world for rice exports last year with 6.15 million tonnes, while Thailand exported 5.7 million tonnes of rice, raking in US$3.07 billion in the process.
With the exception of high-grade aromatic rice, the country’s 5% broken and 25% broken rice during the early months of the year has been facing fierce competition from the same type of rice originating from India and Thailand.
The VFA therefore anticipate that rice exports starting from the end of April could improve as the supply source of the commodity is now in abundance, adding that the rice industry has set an export target of over 6.1 million tonnes for this year.
Cement consumption increases by 2.6% over the same period
According to statistics from the Ministry of Construction, in March, consumption of cement products reached about 8.87 million tonnes, up 1.5% over the same period last year, of which domestic consumption was about 5.02 million tonnes.
Accumulation of the first quarter of 2021, total cement consumption reached 21.6 million tonnes, up 2.6% year-on-year, in which, domestic consumption reached 13.48 million tonnes, and cement export reached 3.59 million tonnes, up 9.5%; while clinker export was estimated at 4.53 million tonnes, a year-on-year increase of 7.3%.
At the same time, the amount of cement in stock nationwide in the first three months of the year totals about 4.6 million tons, equivalent to 20 to 25 days of production, mainly clinker.
According to experts, although this is the slowest time for cement consumption in the year, the consumption results are quite positive. In the context that the COVID-19 epidemic has been effectively controlled and the path to economic recovery is becoming more and more clear, cement production is expected to increase as major construction projects are about to be deployed in the near future.
Public capital disbursement remains slow in Q1
The timely disbursement of public capital plays an important role in helping the economy recover from the Covid-19 pandemic, but the disbursement process in the first quarter of 2021 was very slow, according to the Ministry of Finance.
Data of the ministry showed that from January to March, the country disbursed over VND66 trillion in public investment capital, meeting only 11.7% of the whole year’s target.
Up to now, most ministries and localities have reported a low public capital disbursement rate. Forty-four of 50 ministries and departments and 27 of 60 localities have disbursed less than 10% of their public capital.
As of late March, Quang Nam Province disbursed VND711 billion in public capital, meeting 13% of the entire year’s target, while Ninh Thuan Province distributed VND275 billion, meeting 10% of the target.
The Finance Ministry attributed the low disbursement rate to incomplete procedures for project adjustment, slow site clearance and the impact of the Covid-19 pandemic.
The ministry said some large public projects such as components of the North-South Expressway are adjusting their investment procedures.
Le Tuan Anh, deputy director of the Department of Investment, said slow site clearance was the main reason behind the slow disbursement. Many projects are facing difficulties in determining land prices, finalizing compensation plans and getting rid of constructions on the project site.
For projects using official development assistance or preferential loans from foreign countries, the Covid-19 pandemic has disrupted the import of equipment and travel of foreign experts, severely affecting the projects’ progress.
Economic expert Nguyen Tri Hieu said public capital disbursement is an important factor for post-pandemic economic recovery.
However, the slow disbursement of public capital has hampered the country’s socioeconomic development and affected the macroeconomic stability.
Economic expert Nguyen Minh Phong said ministries, departments and localities must have a specific timeline for the public capital disbursement of different project groups, simplify some investment and disbursement procedures and address obstacles related to site clearance.
Besides, leaders of ministries, departments and localities that are responsible for public capital disbursement must be disciplined if they fail to meet the progress requirements and rewarded if they get the job done.
Japanese companies increase presence in Vietnam’s retail market
Japanese companies have increased their presence in Vietnam’s retail market instead of focusing on the manufacturing sector, according to the Japan External Trade Organization (JETRO).
Addressing a press conference on April 15 announcing the seventh Japan Vietnam Festival, Hirai Shinji, chief representative of JETRO in HCMC, said Vietnam remains an attractive destination for Japanese companies to invest in the manufacturing sector. However, Japanese companies are gradually shifting to non-manufacturing sectors, especially retail, to take advantage of a growing middle class in Vietnam and a population of nearly 100 million.
A report of JETRO several years ago showed that up to 40% of Japanese investors in Vietnam were active in the manufacturing sector. However, the figure has dropped to some 20% at present.
Japanese food manufacturer Meiji recently announced the establishment of its operations in Vietnam with charter capital of 200 million yen (US$1.8 million) to sell the Meiji-branded infant formula imported from Japan.
Sojitz Corporation and Vietnam Livestock Corporation, a subsidiary of Vietnam’s leading dairy producer Vinamilk, have reached an agreement to establish a new joint venture for the purpose of importing, processing and selling beef products in Vietnam.
Aeon opened its sixth shopping mall in Vietnam last December and fashion brand Uniqlo opened its seventh outlet in the country in March 2021.
Many other Japanese retailers such as household goods chain Muji, pharmacy chain Matsumoto Kiyoshi and fashion brand Miki House have opened their first outlets in HCMC and have plans to expand to other cities.
At the Japan Vietnam Festival organized in HCMC this weekend, Japanese retailers such as FamilyMart, Hachi Hachi, Kamereo, Akuruhi and Logitem will present a wide variety of Japanese products, from clothes and food to cosmetics from 50 Japanese producers. Many of the products will be introduced to Vietnamese consumers for the first time.
In terms of e-commerce, JETRO and Japanese companies have collaborated with large e-commerce platforms in Vietnam such as Shopee, Lazada and Tiki to enable Vietnamese consumers to access Japanese goods.
Japan’s exports of agriculture-forestry-aquaculture products and food to Vietnam in 2020 rose 17% compared with 2019, helping Vietnam become Japan’s fifth biggest importer of these products after Hong Kong, the United States, mainland China and Taiwan.
Amid the Covid-19 pandemic, Japanese instant products such as ice cream, spices, natto (fermented soybean), vinegar and masks have become more familiar among Vietnamese consumers.
Kien Giang to invest in infrastructure for tourism development
As part of its socio-economic development plans from now until 2025, the province of Kien Giang will be focusing on tourism, with more investment in infrastructure projects such as airports and seaports, and promote Phu Quoc to an international marine eco-tourism and service center.
According to Kien Giang’s five-year socio-economic development plan, the goal is to make tourism the main economic contributor to the province, making it a tourist center in the Mekong Delta.
To this end, the province will invest in the construction of infrastructure at planned tourist spots, encouraging investments in developing coastal ecotourism zones and routes, resorts, pilgrimage and exploration sites, etc.
The province is encouraging businesses to upgrade and expand tourist areas and existing accomodation facilities and offering assistance to help with difficulties, but will revoke undeveloped projects.
In cooperation with relevant units to develop tourism and marine services, the Department of Tourism – appointed by the Provincial People’s Committee – is pushing investments in tourism infrastructure, specifically key tourist areas, island and coastal tourism at Phu Quoc, Kien Hai, Kien Luong, Hon Dat and Rach Gia city, with Phu Quoc targeted to become an international marine eco-tourism and service center.
Relating to developing general infrastructure, including tourism infrastructure, the provincial government is accelerating multiple investment plans to continue upgrading and expanding the Rach Gia Airport, the Phu Quoc International Airport, the Bai Vong port, the general port at Mui Dat Do and the Phu Quoc bay – lagoon port.
Phu Quoc in Kien Giang Province has been a prominent tourist destination for both domestic and foreign tourists in recent years.
According to data provided by the Department of Tourism, the island had welcomed around 5.1 million tourists of the 8.78 million coming to the province in 2019, before the impact of the Covid-19 pandemic on tourism.
The total revenue from tourism amounted to over VND18,595 billion in 2019. The total number of hotel rooms all across the province has increased from 23,000 to 28,000 in a span of two years from 2019.
Irrational gamble by small banks at trading sessions
Bank stocks, especially of smaller banks, are currently attracting a cash flow in the stock market in recent sessions. However, investors stand to face many risks if banks continue on their swinging waves at trading sessions.
The stock code SHB of Saigon-Hanoi Commercial Joint Stock Bank has continuously been increasing and now has suddenly soared to VND 28,500 per share in the day sessions from less than VND 16,000 per share in the trading session on 10 March. With an increase of up to 80% in less than a month, SHB not only established a historic peak but also became the focus of GSO during this period.
In these sessions, SHB liquidity pushed up very high, with tens of millions of shares transferred in each session. It was this huge demand that helped SHB to have impressive reversal moments, being traded at a sudden drop at ceiling price, with the order to buy millions of shares pushed up at the same time. For example, on the 26 March session nearly 80 million shares matched, equivalent to VND 1,520 bn.
Previously, more than 1.2 billion shares of SSB or Southeast Asia Commercial Joint Stock Bank, also had a wave of rapid increases of 20% on 24 March on HOSE, from reference price of VND 16,800 per share to VND 20,150 per share. Immediately after that, SSB continued to have a series of increases and surpassed the peak of VND 28,000 per share in the session on 31 March. Thus, after only six sessions, SBB recorded an increase of nearly 70%. Although SSB is just a rookie, SSB liquidity is huge with millions of shares traded per session.
Similarly, BAB or North Asia Commercial Joint Stock Bank, moved to list from UPCoM to HNX at reference price of VND 16,000 per share, and increased by 30% right in the session on 12 March, to VND 20,800 per share. The streak of BAB continued to last for many successive sessions, helping this stock to surpass the level of VND 36,000 per share in the session on 12 March. Thus, within only eight sessions, BAB recorded an increase of approximately 130%.
The increase in sessions of the above two stocks caused missed shareholders to decide to pour in money to collect the banking codes with prices below VND 20,000 per share, equivalent to the starting point of SHB. In the opinion of investors, if SHB and SSB go up to nearly VND 30,000 per share, banks with the same starting point cannot have prices below 2.0 but must have an equivalent price.
With this thought, investors did not hesitate to pour capital into many bank shares. In particular, two banking codes, STB of Saigon Thuong Tin Commercial Joint Stock Bank, and EIB of Vietnam Export-Import Commercial Joint Stock Bank, increased to the limit due to huge demand from investors. On 30 March, STB created a liquidity record with nearly 100 million shares transferred, equivalent to a value of VND 2,000 bn.
The fact that SHB suddenly reached its historical peak surprised the stock market because it seemed to have no information outside of its 2021 business plan, with pre-tax profit growing 70% year-on-year. Meanwhile, SHB is facing risks stemming from too fast capital gains in the past. Since 2015, SHB chartered capital has nearly doubled, from VND 9,486 bn to VND 17,558 bn, of which, in the first three quarters of 2020, SHB issued an additional VND 5,552 bn. Capital scale increased rapidly in a short time, while business efficiency increased slowly, and not commensurate with the net profit margin (NIM) of only about 2.8%, but much lower than the industry average of 3.84%.
Although SHB 2021 profit story is still quite vague, for investors this is easier to understand than the case of STB and EIB. STB received less positive information related to the pledge of STB to secure the loan, with the debt balance likely to lose the capital of nearly VND 1,900 bn. Specifically, KLB has cooperated with customers to handle all collaterals related to their loans to a group of customers with collaterals of 176 million shares of STB. As for EIB, the best news comes from the proposed amendment of the regulations to organize the annual shareholders meeting. EIB is currently the only bank unable to hold the 2020 shareholders meeting due to insufficient attendance.
The fact that BAB doubled its price after being listed on the HNX is an unusual and equally mysterious phenomenon. Earlier at the end of 2017, BAB had quietly put 500 million shares to list on UPCoM with a starting price of VND 20,000 per share. BAB listing price surprised investors at that time because it was 1.62 times higher than the book value of VND 12,318 per share, even higher than that of major listed banks at that time. However, despite the suspicions of investors, BAB still increased strongly after being listed, and there was a time when this stock increased to nearly VND 29,000 per share.
Although this rising wave of BAB took place during the time when bank stocks attracted cash flow, it was still questioned by investors because the business activities of BAB were very weak compared to other listed banks. According to the financial statements of 2020, the pre-tax profit of BAB was VND 737 bn, down by 21%. The decrease was mainly due to the sharp increase in the cost of provisioning while the net interest income grew weakly.
Notably, BAB’s NPL at the end of 2020 was VND 628 bn, an increase of 25.6% compared to the beginning of the year, and the ratio of NPLs to outstanding loans increased from 0.69% at the end of 2019 to 0.79%. As in the past, the stockholder structure was too condensed and had no major shareholders owning more than 5% of the shares, which was too easy to drive the price of BAB shares.
The rising wave of SSB is also being questioned because the bank shareholder structure is almost similar to BAB. Concentrated shareholder structure is also the reason why SSB liquidity has not increased, especially during ceiling hitting sessions. With this feature, according to analyst forecasts, when the bank waves pass, SSB and BAB will be the first bank stocks to lose liquidity.
On the contrary, investors holding shares of SHB or STB are not too worried about liquidity, but face a huge risk of price decline when stocks enter the adjustment phase. Investors holding SHB shares will not forget the 5 April session. From reference price of VND 27,000 per share, this stock suddenly dropped sharply to floor price of VND 24,300 per share, when the holder suddenly launched an order to sell millions of shares at floor price.
HCMC drastically fights against smuggling, trade fraud
Ms. Phan Thi Thang, Vice Chairwoman of the People’s Committee of Ho Chi Minh City, chaired a conference to summarize the work in 2020 and discuss directions and tasks in 2021 of the Steering Committee on Combating Smuggling, Trade Fraud, and Counterfeit Goods of HCMC (HCMC Steering Committee 389 for short).
According to HCMC Steering Committee 389, the number of cases decreased due to the impact of the Covid-19 pandemic, but the inspection and control have focused on conspicuous areas, warehouses, yards, and gathering points with large quantity and value of goods, contributing to improving the effectiveness of the fight against smuggling, trade fraud, and counterfeit goods in the city.
The market inspection and control are still limited. According to the HCMC Steering Committee 389, the city has a fast economic growth rate, production and business activities are more and more developed while the management of local authorities has not kept up with changes of sellers, commodity groups, and key areas to promptly inspect and handle. Trade fraud and counterfeiting are increasingly sophisticated and complex, with new fraudulent tricks having emerged. Even food products are counterfeited.
The representative of the Market Surveillance Agency of HCMC is concerned that recently, the e-commerce sector in HCMC has developed strongly, any goods can be bought and sold online, but this agency has not found any effective measure to manage and supervise. Meanwhile, the number of consumer complaints about the situation in which customers had paid but they never received goods; goods are not as advertised; goods are fake or of poor quality, is on the increase.
Mr. Bui Ta Hoang Vu, Director of the Department of Industry and Trade of HCMC, said that when detecting a violation, the handling process is very complicated due to the lack of smooth and synchronous coordination between agencies. Therefore, to effectively combat smuggling and trade fraud, it is necessary to review the operating mechanism, management, the process of inspection, detection, and handling of violations.
Director of Market Surveillance Agency of HCMC Truong Van Ba, Deputy Director of HCMC Steering Committee 389, said that in 2021, the committee would continue to promote the fight against smuggling, commercial fraud, and counterfeit goods in the new situation. This task is determined to be an important and regular task to direct drastically, closely with a focus on the assigned tasks. It will also strengthen the propaganda and mobilization of the people, coordinate with news agencies, radio stations, mass organizations, and socio-professional organizations to participate in the fight and not to abet smugglers and commercial fraudsters.
Speaking at the meeting, Ms. Phan Thi Thang highly appreciated the efforts of functional authorities in the work of uncovering many smuggling and counterfeiting rings and networks, contributing to stabilizing and developing the market, at the same time ensuring the legal and legitimate interests of producers, traders, and consumers.
The Covid-19 pandemic still develops complicatedly and prolongs, which will pose a great danger and challenge to the socio-economic development, national security, and the life of the people. Therefore, Ms. Thang said that the fight against smuggling, trade fraud, and counterfeit goods need more specific, practical, and drastic solutions and tasks. The leaders must take responsibility if serious, complicated, and protracted violations happen in their areas or fields, or there are corrupt officials or civil servants in public service activities. Units will continue to carry out and organize the effective implementation of plans in the fight against smuggling, trade fraud, and counterfeit goods in 2021.
Regarding the difficulties and problems of departments, sectors in particular, and the HCMC Steering Committee 389 in general, Ms. Phan Thi Thang asked the committee to summarize them, especially overlapped, inconsistent, and asynchronous issues of legal documents that have been promulgated by ministries and agencies. Based on this, the municipal People’s Committee will propose measures to remove them, preventing these subjects from taking advantage of legal loopholes to operate illegally. The city will also study to promulgate regulations and procedures for coordination among units in the process of inspecting and handling violations if necessary.
Ms. Phan Thi Thang entrusted the HCMC Steering Committee 389 and the Department of Finance to make plans to arrange more warehouses and have solutions for fast, accurate, and effective handling of exhibits. In the long run, the relevant agencies need to sit together to draft guides on the process of handling exhibits, with specific regulations on handling time to quickly release the inventory to avoid congestion, facilitating functional authorities to carry out their tasks effectively.
The report of the HCMC Steering Committee 389 shows that in 2020, departments and functional authorities of the city uncovered and handled 25,538 cases, down 45.39 percent compared to 2019. In which, violations on banned goods and smuggled goods were 2,769 cases, down 30.3 percent; commercial frauds were 21,804 cases, down 47.65 percent; counterfeit goods were 965 cases, down 15.5 percent. The total State budget revenue from those violations was nearly VND5.44 trillion.
Long An capable of developing high-tech economic zone: Deputy PM
The Mekong Delta province of Long An has opportunities and advantages needed for development of a high-tech economic zone in line with the goal set for 2020-2025 by the local Party Committee, said Permanent Deputy Prime Minister Truong Hoa Binh at a conference held in the locality on April 19.
He requested Long An seek advices from scientists, businessmen, and residents to set out its development orientations for the zone and highlighted that there is a need for harmonious development between urban and rural areas.
Binh noted the province should identify its spearheaded sectors with a focus on high-tech industry, support industries and logistics.
The application of advanced technologies in agriculture, institutional reform, e-government building, and investment climate improvement are also necessary, the official added.
Secretary of the provincial Party Committee and Chairman of the provincial People’s Council Nguyen Van Duoc said the province has worked for economic restructuring toward industrialisation and modernisation in recent years.
Long An grew about 9.11 percent on average during the 2016-2020 period. In 2020 alone, its growth was 5.91 percent, doubling the nation’s general growth rate.
The province is now working to complete its planning for 2021 – 2030 with a vision toward 2050, he said, adding that this is a strategic planning with a long-term vision for breakthrough growth based on the pillars of industry, services, logistics, eco-urban areas, and high-tech agriculture.
Huynh Van Son, Director of the provincial Planning and Investment Department, informed that Long An is offering incentives for projects invested in localities with disadvantaged socio-economic conditions across a range of fields including education-training, health, culture, sports, and environment.
At the conference, leaders of local departments and sectors and businesses signed a series of agreements concerning the sponsoring of consultation services for digital transformation and assistance for technological, telecommunications, and financial firms, among others./.
National Power Transmission Corporation launches first digital transformer station
Vietnam’s National Power Transmission Corporation (EVNNPT) put into operation its first digital transformer station in Thuy Nguyen district, the northern port city of Hai Phong on April 19.
The 210kV station was built at the total cost of more than 348 billion VND (15 million USD) on an area of some 40,100 square metres spanning Dong Son and Kenh Giang communes.
According to EVNNPT Deputy General Director Luu Viet Tien, the station helped cut around 80 percent of the amount of copper cable, slash copper cable transport and installation costs, while reducing the risks of incidents caused by cable damage.
Tien said that the digital transformer station is a new technology in both Vietnam and many developed countries in the world, adding before carrying out construction of the station, EVNNPT held several conferences with large equipment suppliers such as Siemens, ABB and GE.
He said the 220KV digital station will ensure stable power supply for socio-economic development in Thuy Nguyen district, Hai Phong city and regions in the vicinity, reduce power loss as well as enhance connectivity, safety, stability and flexibility in operation of power system.
EVNNPT will make evaluation on the efficiency of the station so as to select suitable technologies for transformer stations in the future.
The Vietnam Electricity Group (EVN) plans to have all equipment on transmission lines and 80 percent of 110 kV circuit facilities digitalised from now to 2022.
By 2025, EVN will have digitalised 100 percent of facilities on medium- and higher-voltage power lines, according to EVN Chairman Duong Quang Thanh.
To that end, the group will press on with applying digital technologies like Internet of Things, big data, and cloud computing, he said, noting that it will use artificial intelligence (AI) in monitoring and examination and make use of cameras and smart drones to repair lines.
It will continue research on building information models and digital worker platforms to serve its staff while developing AI applications for image analysis and data governance.
EVN said it has completed 61 of the 63 centres for remote control of transformer stations and converted 670 of the 844 transformer stations into unmanned ones./.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes
