VIETNAM BUSINESS NEWS DECEMBER 8
Virtual Vietnam Foodexpo 2021 opens
The Virtual Vietnam Foodexpo 2021 kicked off on December 7, expected to help enterprises boost displaying, business matching, and cooperation activities on the digital platform.
The event through December 10, held on the website https://e.foodexpo.vn, is part of this year’s national trade promotion programme organised by the Ministry of Industry and Trade (MoIT), aiming to assist enterprises in the food industry to maintain business cooperation and expand the market.
The event features 300 booths of businesses from more than 20 provinces and cities nationwide. It also attracts a large number of importers from various countries and territories, including the Republic of Korea, Japan, the EU, Canada, Russia, India, the US, and China.
Reference exchange rate up VND27 on December 8
The State Bank of Vietnam set the daily reference exchange rate at 23,237 VND/USD on December 8, up 27 VND from the previous day. With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,934 VND/USD and the floor rate 22,539 VND/USD.
Shares gain on strong buying force on December 7
On the Ho Chi Minh Stock Exchange (HoSE), the market benchmark VN-Index gained 2.35 per cent to end at 1,446.77 points. The market's breadth was positive with 396 gainers and 67 losers. As many as 766 million shares were traded on the southern bourse, worth nearly VND21.7 trillion (US$940.2 million).
The VN30-Index, tracking the 30 biggest stocks on HoSE, gained 2.14 per cent, to end at 1,512.62 points. All 30 out of 30 stocks in the VN30 basket posted gains.
On the Ha Noi Stock Exchange (HNX), the HNX-Index rose 2.42 per cent, to 446.41 points. During the session, investors poured over VND3 trillion into the market, equivalent to a trading volume of 105 million shares.
First free trade zone in Hai Phong granted investment registration certificate
The Hai Phong Economic Zone Authority (HEZA) on December 7 granted an investment registration certificate for the Lach Huyen free trade zone, the first of its kind in the city.
Focusing on logistics and high-tech industry, the zone covers 752 ha and costs over 11 trillion VND (476.7 million USD). Funded by Xuan Cau Holdings, its construction is scheduled for the beginning of 2022, with its first phase expected to be completed in 2025 and the second and third phases in 2030. Once operational, it will attract between 40,000 and 50,000 workers.
PetroVietnam’s oil and gas output hit 9.97 million tonnes in 11 months
The Vietnam Oil and Gas Group (PetroVietnam) has reported that its oil and gas exploitation output reached 9.97 million tonnes between January and November, surpassing its target for the entire year by 2.5 percent.
Of the total, oil output hit 9.72 million tonnes, completing its yearly target 39 days ahead of schedule. The production of fertilizers, petroleum, and other petroleum products also adhered to their plans toward completing and exceeding the set targets.
The group also had one new oil and gas discovery at its Soi Vang-1X well and put a mine and two facilities into operation.
Opportunities open for Vietnam to export dairy products to Israel
Israel's removal of import quotas and opening of its dairy market create a good opportunity for Vietnamese businesses to approach Israeli importers and boost exports to the country in the near future.
In early December, the Israeli Ministry of Finance and Ministry of Agriculture and Rural Development agreed to abolish import quotas for a wide range of dairy products, including low-fat yogurt and cheese, in a bid to reduce the price of dairy products for Israeli consumers.
The move will allow the market to open to the free import of products from European countries, with the average price per kilogram of yogurt consumed in Israel falling to 8.5 NIS from the previous price of 17 NIS.
US tax on Vietnamese honey products too high
The US Department of Commerce (DOC) announced a preliminary anti-dumping tax of 412.49 percent on honey products imported from Vietnam, doubling the rate of 207 percent initially proposed by the American Honey Producers’ Association.
Honey from four other countries, including Brazil, India, Ukraine and Argentina, are also subject to the tax. However, Vietnamese honey products suffer the highest rate.
Chairman of the Vietnam Beekeepers’ Association Dinh Quyet Tam called on the US Government and the DOC would reconsider the decision as between now and April 8, 2022, the DOC will continue collecting feedback from stakeholders and issue the final decision.
Bamboo Airways to open direct flights to Italy next year
Bamboo Airways plans to promote operations in Italy, and South, Central and Northern Europe markets from the first quarter of next year, aiming to launch a supplementary market for direct flights connecting Vietnam with Germany and the UK, as well as deploying a regular direct flight between Vietnam and Italy from the end of 2022 and the beginning of 2023 in line with market conditions.
Chairman of FLC Group and Bamboo Airways Trinh Van Quyet said that the carrier would actively carry out preparations including opening a representative office in Italy and selecting an agent in the Italian market. Besides, Bamboo Airways also strives to negotiate and collaborate with Italian partners to expand domestic flight networks in Italy and Europe, in the form of codesharing.
Vietnam’s garments expected to grow by 11.2% in 2021
Vietnam’s apparel sector is forecast to grow by 11.2 percent annually this year with an export revenue of 39 billion USD, reported the Vietnam Textile & Apparel Association (VITAS).
VITAS has built three scenarios for growth. In the first scenario, export earnings will hit 42.5-43.5 billion USD if the pandemic is basically under control in the first quarter next year. The second scenario sets a revenue of 40-41 billion USD if the pandemic is curbed in mid-2022 and 38-39 billion USD if the pandemic lasts till late 2022 in the third scenario.
US increases imports of processed fruit and vegetables from Vietnam
Vietnam remained the 11th largest supplier of the products to the US throughout the reviewed period with a turnover reaching US$171.9 million, representing an annual rise of 49.9%. The import proportion from the country accounted for 2.3% of its total import value, marking an increase of 0.5 percentage points against the same period from last year.
The period witnessed the US largely import fruits, nuts, and other edible parts of plants coded HS 2008, along with fruits, vegetables, and juices coded HS 2009 from markets such as Mexico, Thailand, China, and Canada.
The import proportion of these two groups from Vietnam only accounted for 4% of the US’ total import value, which therefore creates opportunities for local businesses to boost exports to this huge lucrative market in the near future.
Vietnamese animal feed imports on the rise
Vietnam is the largest corn importer in Southeast Asia and is forecast to be the fifth-largest importer in the world, opening the door for foreign animal feed suppliers to expand their trade in the country.
Vietnam's import turnover of animal feed and raw materials reached nearly US$4.14 billion in the past 10 months, up 29 per cent on the same period in 2020. This number will continue to grow, providing opportunities for corn and fermented by-products (DDGS) exporters around the world to increase their trade with Vietnam.
Currently, Vietnam is the largest corn importer in Southeast Asia and is forecast to be the fifth-largest corn importer globally in 2021 and 2022. It is forecast that Viet Nam's import demand for corn and grain by-products for animal feed will triple over the next ten years. Corn will account for the majority, while the rest will be wheat and barley, reflecting the trends of the meat industry.
Measures should be taken to limit risks in imported timber
Bilateral trade turnover of Vietnam and China in wood products has reached about US$2 billion each year. To maintain and develop Vietnam's export wood industry to this market, businesses need to reduce the risk of commercial fraud in wood products imported from China.
A study by the Vifores and Forest Trends based on data from the General Department of Customs shows that China is one of Vietnam's three important export markets for wood and wood products after the US and Japan. Notably, the export of peeled boards, an input material for the production of boards, to China has grown strongly in recent times.
There is currently direct competition between Chinese businesses and Vietnamese plywood purchasers in the Vietnamese market. The network of Chinese traders now covers plywood factories in northern provinces such as Bac Giang, Thai Nguyen, and Phu Tho to purchase raw materials. This causes some difficulties in terms of raw materials for Vietnamese purchasers.
Vietnamese authorities are actively co-ordinating with timber associations and related parties in identifying risks and providing sanctions for violating companies. These measures and sanctions should be prioritised and strengthened in order to limit risks in the flow of imported timber.
Balance of goods supply and demand for Tet to be ensured
The Ministry of Industry and Trade plans on ensuring goods supply according to the varying pandemic development, even preparing for the possibility of a large-scale outbreak of COVID-19 over Tet (Lunar New Year).
Departments are requested to monitor the supply and demand of goods, especially essential items, ensuring goods supply and stabilising the market at year-end. At present, localities are also developing market stabilisation programmes and directing producers, traders and distributors to stock up on goods, stabilising the market until the Lunar New Year 2022.
Deputy Minister of Industry and Trade Do Thang Hai said that the ministry supported enterprises and localities in the connection of supply and demand to promote consumption of goods for businesses and trade promotion, stabilising the market on holidays and Tet.
TPBank allowed to raise capital by nearly US$178 million
The State Bank of Vietnam (SBV) has approved TPBank to increase its maximum charter capital by VND4.1 trillion (US$177.8 million) through the issuance of common shares to existing shareholders.
Accordingly, the bank plans to issue more than 410 million common shares to existing shareholders at a rate of 35 per cent, meaning shareholders holding 100 TPB shares will receive 35 new shares. Issued shares are not subject to transfer restrictions.
After completing the issuance, TPBank's charter capital is expected to rise to nearly VND15.82 trillion, up nearly 26 per cent compared to the current charter capital of nearly VND11.72 trillion.
Sabeco expected to earn over US$176 mln from cash dividend
Holding nearly 7.4 million shares of WSB, Sabeco is expected to receive dividends of more than VND11 billion (US$176.2 million) in the first phase of 2021 from Saigon Beer Western JSC (WSB).
Saigon Beer Western will close the list of shareholders to receive cash dividend in the first installment of 2021 at a rate of 15 per cent on December 14. With 14.5 million outstanding shares, the company is expected to spend approximately VND21.8 billion to pay the advance dividend. The payment period is expected to take place on December 30.
VietinBank to pay US$164 mln in cash dividend
Earlier this month, VietinBank announced a plan to distribute nearly VND13.3 trillion (US$573.8 million) of profit after tax. Accordingly, after provisioning more than VND3.7 trillion, the bank will spend over VND3.8 trillion to pay cash dividend at a rate of 8 per cent, meaning a shareholder owning a share will receive VND800.
The rate increased by 3 percentage points compared to the plan previously approved at the annual meeting, with the total cash dividend rising by about VND1.44 trillion. With the remaining of VND5.67 trillion, VietinBank will pay stock dividends to increase its charter capital.
Four provinces propose adding wind and solar power projects to PDP8
Ninh Thuan, Binh Thuan, Quang Ninh, and Thai Binh provinces have recently sent proposals to the Ministry of Industry and Trade to add a series of wind and solar power projects to the National Power Development Plan VIII (PDP8).
Binh Thuan proposed to add 22,200MW of offshore wind farms projects, including the 3,400MW Thang Long Wind, 3,500MW La Gan, 1,000MW Vinh Phong, 4,600MW Tuy Phong, and 5,000MW Binh Thuan wind farms.
Ninh Binh People’s Committee proposed adding approximately 42,595MW of power to the planning, including 1,888MW from onshore wind farms and 21,000MW from offshore wind farms. The province also proposed to switch 4,600MW planned for nuclear power into LNG power.
Thai Binh province is looking to add 8,700MW of wind power to the PDP8, including a 5,000MW project invested by Xuan Thien Ninh Binh JSC, 3,000MW proposed by the joint venture between T&T group and Orsted Corporation from Denmark, and a 700MW wind farm proposed by Pondera Group from the Netherlands.
Quang Ninh would also add 3,000MW from offshore wind farms and 2,000MW from onshore wind farms. In 2021-2030, the province expects to reach a total capacity of 2,500 MW from both onshore and offshore wind farms.
Hanoi aims for growth of 7.5-8% during 2021-2025
The Hanoi government has recently introduced an action plan for socio-economic development during the 2021-2025 period with the average economic growth target of 7.5-8%. It aims to have digital economy account for approximately 30% of its gross regional domestic product with an average labour productivity growth rate of 7-7.5%.
Under the action plan, the ratio of public schools meeting the national standards will reach 80-85%, while the number of hospital beds per 10,000 people will reach 30-35. The rate of urbanisation is expected to reach 60-62% over the next five years.
Over the next five years, Hanoi will reduce the total rice growing areas to 140,000 hectares, while 25,000 hectares will be converted to other uses featuring higher productivity. The capital city is looking to create about 22,000 new jobs per year so as to keep the unemployment rate below 3%.
HCM City seeks to borrow nearly VND11 trillion in 2022
HCMC plans to borrow nearly VND11 trillion next year, of which VND9.9 trillion will be used to finance its budget deficit and VND989 billion to pay debt.
The city expects to collect nearly VND386.6 trillion in revenue, up 5.9% over the estimate for 2021 and 4.3% versus the expected revenue in 2021. Of the total, revenues from domestic production and business activities, crude oil and import-export activities are projected at some VND259.6 trillion, VND10.5 trillion and VND116.5 trillion, respectively.
In addition, the city’s budget revenue next year is estimated at VND89.7 trillion, rising 9.29% over the estimate for this year. Meanwhile, the city estimated its spending at VND99.7 trillion next year, including VND43.5 trillion for development, VND48.7 trillion for regular expenditures and VND3.4 trillion for backup funds.
Central banks aims at maintaining credit growth but controlling risks
According to the State Bank of Vietnam, the credit balance of the whole economy by November 25 increased by 10.1 percent compared to the end of last year. Currently, credit growth has risen by 1.38 percentage points, aiming at manufacturing and priority sectors according to the policy of the Government.
However, credit into potentially risky areas will be strictly controlled. The banking industry also implemented many solutions to contribute to the recovery and support of the economic recovery momentum to realize the dual goals of the Government.
Specifically, by October 25, credit institutions had restructured the repayment terms and kept the debt groups unchanged for over 330,000 customers affected by the pandemic with a total outstanding loan of VND250 trillion. They had exempted, reduced, and lowered interest rates for about 1.8 million customers affected by Covid-19 with a total outstanding loan of nearly VND3.5 quadrillion.
HCMC's disbursement of preferential loans up by 120 percent
The State Bank of Vietnam-Ho Chi Minh City Branch informed that by the end of November this year, city-based credit institutions have disbursed nearly VND447.4 trillion of loans for 27,277 enterprises and households under the Bank-Business Connection Program, an increase of 120 percent compared to the credit package that 11 credit institutions registered in the program at the beginning of this year.
These credits have preferential interest rates at no higher than 4.5 percent per annum for short-term loans in VND and 9 percent per annum for medium and long-term ones.
It is expected that from now until the end of the year, the program will continue to be implemented in localities in the direction of not only providing new loans but also restructuring loans without changing debt groups and reducing interest rates on old loans for customers affected by the Covid-19 pandemic following Circular No.14/2021 of the State Bank of Vietnam.
Apartment lessors earning below VND100 million not subject to VAT, PIT