VIETNAM BUSINESS NEWS DECEMBER 6
Issues at Nhon-Hanoi Station metro line to be discussed at upcoming meeting
The Ministry of Planning and Investment has requested a meeting with the government task force to discuss solutions to improve the progress of the Nhon-Hanoi Station metro line.
The proposal was made as the main contractor Hyundai E&C-Ghella, asked the investor Hanoi Metropolitan Railway Management Board (MRB) to issue a compensation of $114 million for delays in land clearance. Besides, there is a problem over differences between the terms of the FIDIC contract and Vietnamese laws. The Ministry proposed the task force to assign the Ministry of Construction to work with relevant parties to deal with this problem.
The project has completed 74 per cent of construction, with the underground section only 32.2 per cent completed. The construction includes 10 bidding packages, however, eight were forced to be extended. As of October, VND15.96 trillion ($693.9 million) had been disbursed for the project, including VND1.43 trillion ($62.17 million) in 2021, only 29 per cent of the plan. The reason for delay is that cost estimates were raised by numerous contractors.
Market extends losses on blue-chip stocks on the first trading session of the week
The VN-Index on the Ho Chi Minh Stock Exchange (HoSE) declined 10.89 points, or 0.75 per cent, to 1,432.43 points. It lost 38.73 points in the last trading session, with some considering the fall as the "black Friday" of the Vietnamese stock market.
The market's breadth was negative as 87 stocks rose, while 359 stocks slid. The liquidity also fell compared to last Friday's trade with total trading value on HoSE posting a loss of 1 per cent to VND14,44 trillion (US$626.5 million). However, foreign investors was net buyers on HoSE this morning, with a net bought value of VND273.87 billion.
The benchmark's downtrend was mainly driven by losses in many large-cap stocks. The 30 biggest stocks tracker VN30-Index plunged 7.24 points, or 0.48 per cent, to 1,496.76 points. Of the VN30 basket, 12 stocks increased, while 17 stocks edged down and one stock stay unchanged.
On the Ha Noi Stock Exchange (HNX), the HNX-Index also inched 0.76 per cent down to 445.84 points.
Vietnamese and Belgium businesses sign 144MW energy plant
Belgian Vyncke NV and domestic Kim Tin Group have signed a cooperation agreement to develop energy plants with a total of 144MW at its two medium-density fireboard (MDF) manufacturing factories in southern Vietnam.
Vyncke NV will supply equipment and technical solutions to ensure quality and progress at Kim Tin Group's energy plants for two MDF factories with a total capacity of 144MW.
Each rooftop solar power system will have a capacity of 72MW and would be leased right after completion. They will be installed on the roofs of Kim Tin MDF Chon Thanh and Kim Tin MDF Dong Nai factories. These two factories have a total capacity of 1 million cubic metres of MDF a year and are located on a total area of more than 650,000 square metres, including factory and warehouse for rent, and dormitory, with a total investment of up to $350 million.
Bad debts rise again
There is a clear indication that bad debts are now increasing rapidly. By the end of August, credit institutions had handled about VND1.300.000 bn of bad debts. The bad debts determined according to Resolution 42 were around VND 424,100 bn, of which the amount of VND 364,100 bn has been dealt with from 15 August 2017 until 31 August 2021.
The introduction of Resolution 42 has contributed greatly to bad debt settlements. Bad debts decreased from 1.99percent at the end of 2017 to 1.91 percent in 2018 and to 1.63 percent in 2019. However, by 2020, they increased again to 1.69percent , and by the end of September they were at 1.9percent , same as at the beginning of 2017 before Resolution 42. This shows the strong impact of the Covid-19 pandemic on credit institutions.
Over 20 tons of Vietnam’s canned lychee available at French supermarkets
More than 20 tonnes of canned lychee from Vietnam has hit the shelves of supermarkets in France for the first time. This is also the first time canned fruit from Vietnam has been sold at a retail chain in France. The lychee was imported by Tang Frères, the largest retail system, importer, and wholesale distributor of Asian food in France.
Reference exchange rate up strongly on December 6
The State Bank of Vietnam set the daily reference exchange rate at 23,165 VND/USD on December 6, up 48 VND from the last working day of previous week (December 3). With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,859 VND/USD and the floor rate 22,470 VND/USD. During the week from November 29 to December 3, the daily reference exchange rate followed a downward trend for most of the week except for Wednesday. It ended the week down 26 VND.
VN Aviation Administration releases new guidances to cope with Omicron variant
The Civil Aviation Administration of Vietnam has issued a directive asking aviation service providers to seriously implement the tests as prescribed by the Ministry of Health.
When cases are detected, the units must report to the medical authorities and local administrations. Carries are also asked to boost their checks and supervision of passengers coming from or transiting through African countries or those having the Omicron variant, while airport authorities must report those cases entering Vietnam so that they will be reported to the Ministry of Health and the Ministry of Transport.
The authority has proposed the Ministry of Transport to ask the Ministry of Health for concrete guidance on medical check of passengers coming from a number of countries having Omicron such as the Republic of Korea and Japan; and to ask the Ministry of Public Security to tightly control and detect in a timely manner the passengers coming from or transiting through countries with Omicron to Vietnam through aviation ports to help prevent the danger of the variant’s entry and spread in Vietnam.
Hanoi to develop 35 key industrial products in 2022
Hanoi has launched a plan to foster the development of key industrial products (KIP) in 2022, expecting 30-35 products to earn the recognition next year. The city is also working to ensure 100 percent of the firms manufacturing KIPs will benefit from its support policies, and such firms will push their production value up by 10-12 percent against 2021 and contribute 35-40 percent of the city’s total industrial production and 15 percent of total exports.
To this end, the city is taking six measures, namely improving the business environment for KIP firms, supporting KIP firms in technological development, developing human resource, selecting and honouring KIP, promoting trade and investment, and formulating supportive policies. Previously, Hanoi honoured 26 products as KIP in 2020 and 46 products this year. So far, the city has recognised 163 products from 107 firms after four years, from 2018 to 2021. For the 2021-2025 period, the municipal authority aims to have 150-180 products recognised as KIP.
Vietnam to export strawberries to Malaysia and Singapore
The northern province of Son La is about to export the first batches of strawberries to the Malaysian and Singaporean markets.
According to Luong, Son La strawberries have varieties from Japan and are typically harvested from early December to mid-May each year. Strawberries are picked at their peak ripeness to maintain their sweetness and fragrance on the same level as those imported from the Republic of Korea.
Son La strawberries are currently traded at a price of VND380,000 per kilo in Hanoi.
Dak Nong calls for FDI in two renewable energy projects
Dak Nong province is calling for investment in the $740 million Tuy Duc wind farm and the $520 million Krong No solar project.
Dak Nong has five out of 157 projects on the government's list of projects calling for foreign investment in 2021-2025. These projects include the $715 million Chon Thanh-Dak Nong railway project, a $43 million logistics centre, Tuy Duc wind farm, Drong No solar power project, and a $20 million project producing electric cables and equipment for renewable energy.
Many investors have proposed adding 13 renewable energy projects to the national power planning with a total capacity of 2,167MWp. Regarding wind power, there are 14 projects with a total capacity of 972MW, eight of which are being appraised by the Ministry of Industry and Trade and six others have already been approved in principle.
Local shrimp firms promote export to achieve export target
The last month of 2021 is the time for enterprises to speed up the delivery of orders to foreign partners as planned.
Currently, Vietnam's frozen and steamed shrimp products have been exported to many markets globally, such as Japan, Australia, the US, and the EU. Besides, the advantages from free trade agreements that Vietnam has signed, along with an increase in export shrimp prices over the same period, will continue to create many advantages when exporting.
Shrimp exports in November this year nearly hit $350 million, up about 11 percent. In the first 11 months of 2021, shrimp exports exceeded $3.5 billion, up nearly 3 percent year-on-year. At present, enterprises are striving to achieve the goal of $4 billion in 2021.
Magnetic stripe ATM cards to remain usable after December 31
The State Bank of Vietnam (SBV) has issued a dispatch on the standards for domestic chip cards, saying that its amended Circular 19/2016 requires banks to switch from magnetic stripe cards to chip cards from March 31 next year. Accordingly, customers can continue to use magnetic stripe ATM cards for transactions at ATMs, point-of-sale (POS) and bank counters, and for internet and mobile banking services after December 31 this year. SBV asked card issuers and card payment organizations to ensure card holders’ transactions are carried out smoothly, safely and do not affect the interests of cardholders. They were also asked not to issue policies and regulations that go against the law on bank card operations.
Vietnamese famers have average income of 3.4 million VND/month