VIETNAM BUSINESS NEWS OCTOBER 25
Cashless payments surge in 9 months
Cashless payments in Viet Nam have continued to record a high growth rate this year, according to a recent Government report.
Specifically, online payments in the first nine months of this year reached 435.25 million transactions with a value of VND22.78 quadrillion, up 54.1 per cent in quantity and 30.7 per cent in value compared to the same period in 2020.
During the period, more than 1.19 trillion transactions worth more than VND13.5 quadrillion were made via mobile phone, up 74.98 per cent in quantity and 93.69 per cent in value.
According to the report, non-cash payments for public services in Viet Nam have witnessed strong changes with significantly improvements seen both in quantity and quality.
Currently, more than 90 per cent of tax payment transactions of enterprises in centrally-run provinces and cities are made through banks while local people nationwide can pay electricity bills through banks.
Some 42 per cent of medical facilities have implemented non-cash payments for medical services and 39 per cent of pensions, social insurance and unemployment benefits nationwide are paid through personal accounts.
However, the report also noted in addition to the surge of non-cash payments, payment fraud also become more common across the country in recent years.
Dao Minh Tuan, chairman of the Viet Nam Card Association, also admitted though banks have continuously updated new security technologies, fraud in payments is still increasing.
To minimise fraud, commercial banks have to simultaneously issue many warnings to customers. Most recently, Viet Nam Prosperity Commercial Joint Stock Bank (VPBank) and Commercial Joint Stock Bank for Foreign Trade of Viet Nam (Vietcombank) have given warnings to users to not access links of forums or websites impersonating the bank. At the same time, customers should not provide account security information, digital banking or card details, or any other information to these websites.
Representatives of banks said relevant parties need to enhance coordination to ensure payment security and safety.
To further promote cashless payments in Viet Nam, experts said the most important thing is to change people's consumption habits through financial education programmes as a pillar in implementing a comprehensive financial development strategy.
The Government also needs to complete the legal corridor for the digital economy and government, including digital finance.
The Government also needs to develop an open banking system with stronger cooperation among commercial banks, Fintech and payment intermediaries.
BRVT proposes MoT develop Bien Hoa-Vung Tau expy
Ba Ria-Vung Tau Province has written to the Ministry of Transport proposing the ministry continue acting as an executing agency of the Bien Hoa-Vung Tau expressway project under the public-private-partnership (PPP) format.
The Bien Hoa-Vung Tau expressway project has a length of some 54 kilometers, with 20 kilometers of it in Ba Ria-Vung Tau and the rest in Dong Nai Province, the local media reported.
Earlier, the prime minister had authorized the ministry to develop the expressway project. In addition, the National Assembly and the Government allocated the capital from the medium-term public investment plan for the 2021-2025 period to the ministry to implement the project.
The ministry also assigned the Project Management Board 85 to make pre-feasibility study for the first phase of the Bien Hoa-Vung Tau expressway project.
This is the first expressway project to be implemented in Ba Ria-Vung Tau Province, according to the provincial government.
The implementation of the project demands great technical skills, technology, designs, traffic arrangement and experience, so the Ministry of Transport, which has been in charge of several expressway projects nationwide, is well-qualified and experienced in implementing this project, said the provincial government.
The Ba Ria-Vung Tau government committed to asking local authorities and relevant agencies to speed up site clearance and compensation processes to start work on the expressway project soon.
Earlier on September 27, the Ministry of Transport sent a dispatch to the governments of Ba Ria-Vung Tau and Dong Nai seeking a consensus on the implementation of the project to propose the prime minister appoint one of them as an executing agency of the project.
Van Don International Airport to reopen soon
Van Don International Airport in the northern province of Quang Ninh will be reopened from October 27 after a long suspension due to the Covid-19 pandemic.
From October 27, Bamboo Airways will resume flights on the Van Don-HCM City route with three fights every Monday, Wednesday and Saturday. Fights depart HCM City at 3:05 pm and arrive at Van Don at 6:10 pm.
Vietjet Air plans to conduct daily return flights on HCM City-Van Don from October 31.
Passengers from Tan Son Nhat International Airport in HCM City to Van Don are requested to have negative Covid-19 test results by the quick testing or RT-PCR methods. However, those from Van Don are required to either be fully vaccinated against Covid-19 with the second jab given at least 14 days before their flight; recovered from Covid-19 or tested negative for Covid-19 within 72 hours before departure.
Airport Director Pham Ngoc Sau said that the airport had strictly conformed to Covid-19 protocols to ensure safety. “We’ll also co-operate with Quang Ninh Province in tourism promotion activities,” Sau added.
HCM City: 85.7 percent of firms hit by COVID-19
A survey by the FALMI of 11,502 local companies shows that wholesale-retail and vehicle repair were the sectors hit the hardest by the pandemic, accounting for 36.74 percent of the affected; followed by manufacturing and processing, 16.42 percent.
Meanwhile, information and telecommunications was the sector least impacted by the pandemic, making up just 3.69 percent, the FALMI reported.
Some 42.7 percent of the respondents said they were struggling in seeking customers and distributing their products; 27.15 percent found it challenging to access funding; 18.23 percent believed the provision of support policies were not timely enough; and 11.92 percent said they faced shortage of input materials.
The FALMI also reported that among more than 251,000 workers surveyed, 51.62 percent have been hurt by the pandemic. Of the affected, 48.18 percent said they had their working hours reduced; 32.21 percent lost jobs; 8.2 percent had their contract suspended; 7.45 percent took partly paid leave; and 3.96 percent took unpaid leave.
Over 39 percent of asked enterprises said they plan to cut their head count during the final months of this year.
The worst-ever COVID-19 resurgence forced HCM City to impose social distancing restrictions under Directive 16 in early July, causing local firms to suspend operation or scale down production, according to FALMI Deputy Director Phan Ky Quan Triet./.
Vaccine passports could help resort real estate sector
Accepting tourists with 'vaccine passports' is considered an important step in the strategy of living alongside COVID-19 and will help revive the tourism and resort real estate industry.
Nguyen Quoc Anh, deputy general director of Batdongsan.com.vn, said that the real estate market was still facing many difficulties, so the first priority for the resort real estate market was the recovery of the tourism industry.
Experts say that if the application of 'vaccine passports' in the tourism industry is successful, it will be a driving force for many other economic sectors because foreign-invested enterprises have the need to bring a large number of experts to work in Viet Nam.
"The pilot 'vaccine passport' programme is a good policy at present," said Do Quy Duy, Hai Phat Real Estate Sales Director.
During the pandemic, the demand of the resort real estate segment had been very low, especially coastal tourism real estate. Meanwhile, this market held great attraction for foreign investors, he said.
Economic expert Dinh Trong Thinh said that 'vaccine passports' would provide great support for investment businesses. In order to take advantage of opportunities, businesses must prepare specific development strategies, and create tourism products meeting the needs of customers.
General Secretary of Khanh Hoa Real Estate Brokers Association Phan Viet Hoang said that the 'vaccine passport' was the best solution for all tourism real estate.
Marketing Director of Danh Khoi Group Ngo Van said large foreign investors expected to access the resort real estate market in Viet Nam. Their target was a real estate product line having high growth within 3-5 years.
Therefore, the segment of resort and coastal tourism real estate would be an attractive segment for all customers and investors after the pandemic was controlled, he said.
Viet Nam would be one of the best markets in Southeast Asia waiting for large foreign investors with big projects, Van said.
In the fourth quarter, social distancing measures would be reduced, which would also provide favourable conditions to attract foreign investors to Viet Nam, creating a great push to the real estate market, especially resort real estate.
For domestic investors, Van said, from the third quarter of 2021, disbursement in real estate projects had increased, especially since the Government strengthened vaccinations to control the pandemic.
This would be the moment that investors pour capital to own resort real estate products with legality, good location and many distinct advantages.
Following this trend, investment cash flow is gradually returning to resort real estate to catch great opportunities when the economy recovers. Customers will choose attractive investment products at reasonable prices, Vietnam News Agency reports.
The pandemic is changing travel demand. Many tourists, especially families, want to go to private and safe resorts to relax in nature. That is an opportunity for owning or investing in the wellness resort real estate product line.
However, Nguyen Van Dinh, vice chairman of the Viet Nam Real Estate Brokers Association, said the land fund for investors after the plan for Phu Quoc to be the first island city in Viet Nam is scarce, meaning lower investment opportunities. Because the land fund has been already allocated to businesses before this plan.
Therefore, the investors need to seize investment opportunities in the resort real estate market. This segment is still considered a "promising land" for investors because it is expected to have a strong rebound after the pandemic is controlled.
Vietcombank’s charter capital raise plan approved
The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) will raise its charter capital to over 50.4 trillion VND (2.22 billion USD) under a plan recently approved by its board of directors.
The plan was adopted at Vietcombank's annual general shareholders’ meeting in April.
Accordingly, Vietcombank will issue more than 1 million shares to pay for last year’s dividends at a rate of 27.6 percent of 2019’s retained earnings. The State-owned bank will also issue additional individual shares, worth 6.5 percent of its total charter capital at the maximum at the time of offering, to investors and existing shareholders.
The issuance of shares for dividend payouts will add over 10.23 trillion VND to the bank’s charter capital while more than 3 trillion VND is expected to be raised from issuing individual shares.
Previously, the government had approved the State Bank of Vietnam’s proposal to provide an additional 7.65 trillion VND to maintain the State’s ownership ratio at Vietcombank, which now stands at 74.8 percent.
Vietcombank sets to increase total assets by 5 percent, total outstanding loans by 10.5 percent, and consolidated pre-tax profit by 11 percent this year. The non-performing loan (NPL) ratio will be kept at under 1 percent and dividends will be paid at 8 percent./.
Agricultural troubles hampering business recovery
Some farmers and distributors remain hesitant to restart operations meaning Vietnam could face food shortages in places, with vaccinations and conditional free movement seen as salvation.
Phung Duc Tien, Deputy Minister of Agriculture and Rural Development, has his hands full directing the reproduction of crucial agricultural commodities to circumvent any danger of food shortages in the last months of the year.
Vietnam still wants agriculture to grow by 2.8 per cent in 2021, while maintaining an export turnover of $44 billion.
In this context, the agricultural sector has no choice but to rely on livestock and fisheries – two fields that still have room to grow. However, the shortage of fully vaccinated workers and the current high transportation costs will likely hinder farmers from achieving high growth in the fourth quarter.
The stagnant flow of goods and discouraged farmers were the issues the Ministry of Agriculture and Rural Development’s (MARD) Working Group 970 reported to the prime minister last month.
According to the report, the agricultural production chain has suffered under the temporary closure of many seafood processing factories. In the south, which accounts for 65 per cent of Vietnam’s seafood exports, many companies have been pushed into the doldrums. The MARD estimates that the capacity of seafood processors in this region has decreased sharply by around 60-70 per cent.
Meanwhile, Vietnam’s $10-billion pork market remains fragmented.
In September, Masan MEATLife reviewed its restructuring plan with shareholders, resulting in a split of its animal feed business and allowing the company to transform its business platform to focus on branded meat.
Meanwhile, Dabaco Vietnam’s goal of becoming a billion-dollar enterprise in the next five years moved further away as the firm’s profits of the third quarter decreased by 64 per cent compared to the same period in 2020.
The market situation in the fourth quarter has not shown any signs of improvement so far, and the MARD has recorded a decrease in food consumption by 30-40 per cent. Industrial chicken consumption decreased by 70 per cent, while the selling price of pork and breeding pigs remained at a low level.
The restrictive orders to control the pandemic in the south narrowed the output of pig farms in the southern province of Dong Nai throughout the third quarter, with many households selling their herds early to cut losses. This, however, affected the breeding process and slowed down efforts to restore herds.
Another critical point to resolve is that pork imports continue to increase because Vietnam still has a supply-demand deficit, despite the large scale of domestic pig production which almost recovered to pre-African swine fever levels. But despite this, in the first nine months of 2021, Vietnam imported 125,600 tonnes of pork, mainly from Russia, Germany, and Poland, according to the MARD.
Ensuring food security remains a big challenge for Vietnam, despite being one of the world’s leading countries in exporting agricultural products.
The seafood industry is also in trouble – Nam Mien Trung, one of the largest shrimp companies in Vietnam, is restricting personnel movement between its seven production zones in Bac Lieu, Long An, Ninh Thuan provinces and a representative office in Ho Chi Minh City due to quarantine regulations.
“Hindering people’s movements between provinces, despite the fact that they have had two injections, is making vaccinations no longer meaningful,” said general director Nguyen Hoang Anh.
In the south, many businesses are preparing to enter the peak production season to serve the upcoming Lunar New Year celebrations, but remain worried about broken supply chains.
Nguyen Hoai Nam, deputy secretary general of the Vietnam Association of Seafood Exporters and Producers (VASEP) said, the shortage of workers is increasingly serious, especially in large-scale enterprises. Many businesses do not have enough goods to deliver according to their orders because there are not enough workers to buy raw materials and maintain production.
Currently, production cost per unit is large as many firms currently operating have had to invest in the stay-at-work model, general pandemic prevention, and continued wage payments for currently laid off employees, Nam added.
The application of the prime minister’s Directive No.16/CT-TTg from last year on fighting COVID-19 in the southern provinces and cities led to congestion in the circulation of rice and other field goods from factories to the export ports. The MARD’s Department of Crop Production (DCP) estimates that the summer-autumn rice procurement volume will decrease by up to 30 per cent compared to the same period in 2020.
Moreover, the amount of goods stuck in stock also greatly affects operations while transport difficulties slow down exports. For instance, rice inventories of the Northern Food Corporation amounted to 118,000 tonnes, as of the end of August. The MARD has asked the government to allow the purchase and temporary storage of summer-autumn rice so that farmers can rest assured to produce the autumn-winter crop.
According to the DCP, the total sowing area for the summer-autumn crop in 2021 in the entire southern region was 1.6 billion hectares. Output is estimated at 9,03 billion tonnes, up by 120,000 tonnes over the summer-autumn crop of 2020. In autumn-winter of 2021 in the Mekong Delta, 700,000ha was sown, expected to supply about 3.8 million tonnes.
Sapa Airport needs to mobilise $174 million from private investors
Deputy Prime Minister Le Van Thanh has issued a decision about the implementation of Sapa Airport under the private-public partnership (PPP) format.
The project has a total investment capital of VND6.94 trillion ($301.74 million), VND4 trillion ($173.9 million) of which will be mobilised from private investors. The airport is expected to take 46 years to break even.
The construction is expected to be divided into two phases. The first phase’s construction is planned to implement this year, which has an investment capital of VND4.2 trillion ($182.6 million) with the capacity of 1.5 million passengers per year.
The second phase is planned to be developed in 2028 with a capacity of three million passengers.
Land acquisition, including land clearance and compensation, will be funded from the public component while construction will be covered from the funds contributed by private companies.
Sapa Airport is one of six new airports approved for construction by 2030. The Ministry of Planning and Investment is assigned to co-operate with the Ministry of Finance and the relevant authorities to arrange the state budget in 2021-2025 to develop the project. Vietnam has 22 airports at present.
In the first six months, Lao Cai welcomed 1.1 million passengers, up 21 per cent on-year, according to the Ministry of Culture, Sports and Tourism.
Market opens new week on positive note backed by manufacturing stocks
On the Ho Chi Minh Stock Exchange (HoSE), the market benchmark VN-Index rose 5.44 points, or 0.39 per cent, to 1,394.68 points.
The market breadth was positive, with 237 stocks increasing while 196 stocks declined. The liquidity was also high as investors poured VND15.3 trillion (US$673.2 million) into HoSE.
The index's gain was driven by large-cap stocks, mostly in manufacturing and real estate sectors.
However, the VN30-Index, which tracks 30 biggest stocks on the southern bourse, fell 2.4 points, or 0.16 per cent, to 1,486.31 points. Of the VN30 basket, 14 stocks rose, while 15 slid and one ended flat.
Vietnam Rubber Group (GVR) led the index's support group, with a rise of 4.05 per cent. It was followed by Vinhomes (VHM) and Bao Viet Holdings (BVH), with BVH hitting the biggest daily gain of 7 per cent.
But as selling pressure persisted, the market is likely to face a downward trend in the afternoon session if it can't gather enough support.
On Ha Noi Stock Exchange (HoSE), the HNX-Index also climbed 5.05 points, or 1.29 per cent, to 396.26 points.
Vaccination pace, bailout packages help aid economic recovery
The Vietnamese economy is showing signs of recovery from the prolonged COVID-19 outbreak, but how quickly it picks up heavily depends on the pace of vaccination, the effectiveness of pandemic prevention measures, and the government’s bailout packages.
The view was shared by economists at a recent workshop in Hanoi to review Vietnam’s macroeconomic performance in the past three quarters and made recommendations for the remaining months of the year.
The event was co-hosted by the Vietnam Institute for Economic and Policy Research (VEPR) under VNU University of Economics and Business (UEB) and Konrad-Adenauer Stiftung (KAS) via an online platform.
COVID-19 deals heavy blow to economic performance
According to the General Statistics Office (GSO), the national economy suffered a contraction of 6.17% in the third quarter of the year, a record low figure since the announcement of Vietnam’s quarterly GDP so far.
This plunge mirrors the adverse impact of drastic social distancing measures introduced by the Government in order to contain the fourth COVID-19 outbreak. The downward trajectory can be seen in many economic sectors such as services, transportation, wholesale and retail, and construction, except for the agro-forestry-fishery sector.
Overall, the Vietnamese economy during the nine-month period grew by merely 1.42% year on year as the prolonged COVID-19 outbreak severely disrupted supply chains, affecting production and export activities across the country, especially in southern coronavirus hotspots.
In addition, the country’s Manufacturing Purchasing Managers' Index (PMI) has continued to experience a downward trend since the second quarter of the year, dropping from 45.1 points in July to 40.2 points in September. This low PMI level indicates deterioration in business outlook within the manufacturing sector.
Notably, for the first time since 2010, the number of enterprises that have either temporarily been suspended or dissolved exceeds the number of newly-established enterprises. Local businesses continued to face higher risks of financial distress, as apart from increased production input costs, those in the southern key economic region are enduring additional costs from COVID-19 testing for their employees for instance.
FDI inflows and exports see positive signs
Despite the poor economic performance, FDI attraction remains a bright spot in the overall gloomy picture. Total new and additional registered capital into Vietnam in the third quarter surged by 50% and 67% to US$2.95 billion and US$2.3 billion, respectively, prompting the nine-month FDI capital to hit US$22.15 billion, a year on year increase of 4.4%.
Singapore topped the list of 62 foreign investors in Vietnam, pouring US$4.98 billion into investment projects, followed by Japan with US$2.4 billion, China’s Hong Kong with US$1.49 billion, and the Republic of Korea with US$767.7 million.
Meanwhile, exports continue to make a practical contribution to economic growth. Statistics show the opening nine months of the year saw Vietnam rake in US$158.34 billion from exports, rising 29% year on year. Worthy of note is that US$116.74 billion was generated by the FDI sector, including crude oil exports, up 33% year on year.
Apparently, the FDI sector is taking advantage of bilateral and multilateral free trade agreements (FTA) Vietnam has signed with partners to increase exports.
The United States was Vietnam’s largest goods consumer, spending US$45.58 billion on imports, a year-on-year rise of 4.7%. It was followed by China (US$24.9 billion, up 8%), the European Union (US$19.3 billion, up 28.2%), the Republic of Korea (US$10.32 billion, up 13.3%) and Japan (US$10.6 billion, up 8.2%).
However, the nine-month trade balance saw a trade deficit of US$993 million compared to a trade surplus of US$1.85 billion recorded in the corresponding period last year. Businesses have resumed production since travel restrictions were eased in early October, and therefore they need materials for production that fuels imports.
Recommendations for economic recovery
According to experts, economic outlook in the remaining months of the year heavily depends on the pace and scale of vaccination, the effectiveness of pandemic prevention measures, and bailout packages the Government has introduced to cushion the impact of the COVID-19 outbreak and support businesses in production.
Amid the complicated nature of the COVID-19 pandemic, experts underlined the necessity to devise an overall and consistent strategy to deal with different pandemic scenarios, resolve inadequacies regarding cross-contamination in isolation areas, medical declaration, disruption in goods circulation, and a lack of medical equipment.
They also recommended that the Government and relevant ministries urgently deploy support packages for unemployed workers, especially those in the non-official sector.
In addition, fiscal policies should focus on accelerating disbursement of major national infrastructure projects, while monetary and markets tools should be governed in an appropriate and moderate manner to control inflationary pressure that normally builds up by year’s end.
DHL eCommerce stops operation in Vietnam
DHL eCommerce, a division of the world’s leading logistics company Deutsche Post DHL Group, has announced stopping nationwide domestic delivery operations in Vietnam.
The company’s decision was made four years after DHL eCommerce started operating in Vietnam. It also comes despite the ample potential for growth in the local e-commerce scene. The company has not disclosed the reason of its decision.
All DHL eCommerce Solutions customers will continue to be served during the notice period of their contracts until the end of November 2021. The company currently has 250 service points across the country.
All relevant employees have been informed of the situation and the company will make every effort to assist them in their transition. Other divisions such as DHL Express, DHL Global Forwarding, and DHL Supply Chain will continue to operate in Vietnam.
In July 2017, the company launched a nationwide network of ServicePoints to capitalise on the huge and relatively untapped potential of the local e-commerce market. It expected to benefit from the Vietnamese e-commerce market, which was forecast to grow at a compound annual growth rate of 32 per cent in 2018-2022 by Euromonitor.
High-tech laws not fit for purpose
The currently effective high-tech laws and regulations are dated back to the Law on High Technologies adopted by the National Assembly in 2008. During this period, Vietnam has adopted and implemented the Law on Investment 2014 and the 2020 version. Concurrently, during this period Vietnam has ratified two significant international treaties and multiple other free trade agreements with its trading country partners.
Clearly, Vietnam has committed to encourage direct investment and integrate its economy with the rest of the world. Yet, its high-tech laws remain the same as 13 years ago.
The world has based its tremendous growth on innovations and technologies, and Vietnam is not beyond this trend. For the country to grow at a similar rate with the region and the wider world, the economy must gradually switch to high-end production, services, and technologies. For the past two years, the world has had to endure unexpected challenges that almost saw the entire global economy come to a grinding halt – with the exception of the technology sector.
It seems that we are near the end of the tunnel and we see some light. It is time for Vietnam to resume its operations and prioritise what is most promising to help Vietnam regain some strength. It has to be innovative and tech-led, and the government should see its role in shaping and nurturing this direction.
On this note, the prime minister has issued several decisions over the past few years, on high-tech agricultural enterprises, on high-tech products development, and on regulating criteria of related enterprises. These are part of ongoing efforts from the government to consider and evaluate which enterprises should be offered tech-based incentives. However, in practice, few enterprises see these incentives as meaningful rewards – or they cannot access them easily.
Currently, only a few groups may be eligible for related incentives: high-tech enterprises; agricultural groups applying high technologies; and both sci-tech enterprises and organisations.
To enjoy these incentives, first and foremost they must apply for and obtain a certificate relevant to each business vehicle (for example, a Certificate of High-tech Enterprise, Certificate of High-tech Agricultural Enterprise, and Certificate of Sci-Tech Enterprise). In order to apply for any of them, the enterprise will have to meet several conditions.
First, the enterprise must manufacture high-tech products or apply high technologies that are named in a government list (such as precision agriculture, new processing tech, or agricultural preservation products); revenues from high-tech products must account for 30-70 per cent of the annual net revenues; total research and development expenses account for at least 0.5-2 per cent of annual net revenues; and the enterprise must have a certain number of employees with relevant qualifications.
Having met these stringent requirements, the enterprise will receive its relevant certificate and be entitled to enjoy a corporate income tax (CIT) preferential rate of 10 per cent for 15 years (the normal rate is 20 per cent); a CIT exemption for four years and 50 per cent CIT reduction for nine subsequent years; and exemption of import duty for selected fixed assets and 5-year exemption of import duty for materials not yet produced domestically.
Some projects may be entitled to land rental incentives subject to further conditions, as well as state funding and loans depending on the industry.
Vietnam’s intention to encourage high technologies has existed early on, but while the economy and actual development conditions have changed drastically over the last three decades, the regulations remain the same. The decisions to adjust the list of enterprises eligible for related incentives are welcomed, but are not that significant. The incentives have remained static over the years, and the criteria for selecting and incentivising related enterprises also remain the same. Maybe it is time to revamp these regulations to make the incentives stronger and easier to access by all enterprises. Only then can high-tech enterprises become a real driver for economic growth.
Shares to continue fluctuating around 1,380-1,400 with sharper divergence in large-cap group
Analysts from securities companies forecast that the VN-Index will continue to fluctuate in the accumulation area from 1,380-1,400 this week, accompanied by an uptrend and a sharper divergence in the large-cap group.
The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) gained 0.32 per cent, to finish Friday at 1,389.24 points.
It recorded a weekly loss of 0.25 per cent last week.
An average of 757 million shares was traded on the southern exchange during each session last week, worth VND22 trillion (US$968 million).
According to Vietcombank Securities Limited Company (VCBS), VN-Index mainly traded in a narrow range last week. Strong profit-taking pressure around 1,400 points made the VN-Index move sideways around 1,390 points in the first three days of the week without recording any significant increase or decrease.
Although short-term profit-taking pressure once again returned in the second half of the session on Thursday, the index was still not pushed back below 1,380 points. On Friday it once again returned to struggling trend around 1,390 points. However, the index recorded the second week in a row ending above 1,370 points, showing that investors are being quite optimistic about the current market, VCBS said.
Cash flow still seemed to be avoiding large-cap stocks, which have recorded outstanding gains compared to the general index in the first half of this year, it said.
VCBS expects that VN-Index will fluctuate and accumulate in the range of 1,380-1,400 points in the next few weeks, accompanied by an uptrend and a sharper divergence in the large-cap group.
Investors can look for short-term profit opportunities in the real estate and securities groups. Meanwhile, long-term investors can still take advantage of this "volatile" period to accumulate more target stocks, but should limit margin trading, it said.
According to Saigon-Hanoi Securities Co (SHS), the market adjusted slightly last week with the VN-Index continuously struggling around the psychological threshold of 1,400 points.
“The liquidity increased slightly and continued to be higher than the recent 20-week average, showing that selling pressure around 1,400 points was relatively strong, causing the market to retreat shortly after,” it said.
Foreign investors also had a strong net selling week with more than VND3.5 trillion on the two exchanges, causing correcting pressure on the market.
However, with the VN-Index ending above the support area of 1,375-1,380 points, it is likely that VN-Index will continue towards the psychological level of 1,400 points in this week.
In the negative scenario, if the selling pressure increases, the VN-Index is likely to need to retest the nearest support zone in the range of 1,375-1,380 points, it said.
Banking stocks dropped the most last week with losers such as Vietinbank (CTG) falling 3.3 per cent, Vietcombank (VCB) declining 2.3 per cent, Asia Commercial Bank (ACB) dropping 1.9 per cent, Military Bank (MBB) losing 1.8 per cent, VPBank (VPB) down 0.8 per cent, Techcombank (TCB) falling 0.6 per cent and Bank for Investment and Development of Vietnam (BID) decreasing 0.5 per cent.
Quang Ninh to resume commercial flights with Ho Chi Minh City from October 27
Flights between Van Don in the northern province of Quang Ninh and Ho Chi Minh City will be resumed on October 27 after interruption due to the COVID-19 pandemic.
Specifically, from October 27, there will be three flights a week on the route operated by Bamboo Airways, on Mondays, Wednesdays, and Saturdays.
The flights will take off at 3.5pm from HCM City and 6.10pm from Van Don.
Vietjet Air will also restart the operation of flights between the two destinations with the frequency of one flight a day from October 31. Flights will take off at 3.50pm from HCM City and 6.45pm from Van Don.
To meet the pandemic prevention and control regulations, passengers departing from Tan Son Nhat airport in HCM City are required to have a negative test result for SARS-CoV-2 by RT-PCR method or quick antigen test with validity no more than 72 hours from departure time.
Meanwhile, passengers travelling from Van Don need to meet one of the three conditions, either having been fully vaccinated for over 14 days, or having recovered from COVID-19 within the previous six months or testing negative for COVID-19 within 72 hours before departure.
The resumption of the commercial flights on Van Don – HCM City is to meet travel needs between the above-mentioned localities in the context that the Government allows the reopening of regular domestic air routes to ensure safe, flexible adaption to and effective control of COVID-19./.
Coastal localities take stronger measures against IUU fishing
Numerous stronger measures have been implemented by 28 coastal provinces and cities nationwide in the past four years in a bid to prevent and combat illegal, unreported and unregulated (IUU) fishing, towards developing a sustainable fishery sector, having the European Commission (EC)’s “yellow card” lifted and promoting Vietnam’s seafood exports.
Since the EC imposed the “yellow card” on the Vietnamese fishery sector, the Mekong Delta province of Soc Trang has set up and completed a provincial steering committee and inspection groups based at fishing ports to popularise IUU prevention regulations to fishermen.
The province has regularly organised inspections and examinations on legal documents, necessary equipment of fishing vessels before allowing them to go offshore and dock at Tran De fishing port.
Like Soc Trang, Bac Lieu, Tra Vinh and Ca Mau provinces have also rolled out measures to enhance local fishermen’s awareness of sustainable offshore fishing.
Nguyen Viet Trieu, Vice Director of the Fishery Sub-Department of Ca Mau province, said that in order to minimise IUU fishing activities, the provincial Department of Agriculture and Rural Development has given advice to the provincial People’s Committee on preventive measures and coordinated with relevant agencies to build and implement synchronic solutions such as closely supervising and monitoring fishing vessels committing violations in foreign waters.
Ca Mau's authorities have refused to issue new fishing licences to vessels repeating their violations and not allowed their captains and owners to enjoy fishery support policies from the State, he said.
Meanwhile, drastic measures have been also carried out to fight IUU fishing activities in other coastal provinces and cities. Currently, many localities have shown strong performance in the work, including Binh Thuan, Ninh Thuan, Kien Giang and Bac Lieu provinces.
In reality, active and prompt efforts to remove the EC “yellow card” on the Vietnamese fishery sector also aim to protect the lives of fishermen at sea./.
Black tiger shrimp exports to Spain enjoy robust growth
Vietnamese black tiger shrimp exports to the Spanish market witnessed vigorous growth during the past nine months, according to figures released by the Vietnam Association of Seafood Exporters and Producers (VASEP).
Most notably, black tiger shrimp exports to Spain in September alone saw a four-fold increase against the same period from last year, thereby causing the nine-month exports of the product to the demanding market to witness a 2.5 fold rise on-year.
Currently, the nation mainly exports fresh and frozen black tiger shrimp to the European country, with the average price export price in the market hovering at approximately US$11 per kilo.
Furthermore, white-leg shrimp exports to Spain skyrocketed by an annual sum of 54% to hit roughly US$2.9 million during the reviewed period.
Moreover, clam exports to the Spanish market also saw an increase of 38% to reach US$18 million, with this product being the leading Vietnamese seafood export item to Spain and accounting for 34% of the total export value to this market.
Local seafood exports to Spain during nine-month period rose by 15.4% to reach US$52.3 million compared to the same period from last year.
At present, the European nation ranks 22nd among Vietnamese seafood importers, accounting for 1% of total export turnover in the reviewed period.
Moving forward, seafood exports to Spain are projected to represent bright spots in the Vietnamese aquatic sector due to the increasing demand on occasions such as Christmas and New Year.
The VASEP therefore forecasts that seafood exports to Spain ahead in the fourth quarter of the year will expand by 13% to about US$21 million, bringing the export turnover this year to US$73 million, an increase of 15% compared to 2020.
Airbus Group has new general director in Vietnam
The Airbus Group has appointed Hoang Tri Mai as its new General Director in Vietnam, a representative of the group announced on October 25.
In this role, Mai will be in charge of overseeing all operations of Airbus in Vietnam, including supporting business activities and managing relationships of the firm with the Vietnamese Government, and related organizations and industry partners.
Before joining Airbus Group, Mai held the position of Country Director of Rolls Royce in Vietnam, Laos, Cambodia and the Philippines. She was born in Hanoi, graduated with a degree in business economics from the UK’s University of Reading, and used to work for Asia Commercial Joint Stock Bank (ACB).
Anand Stanley, President of Airbus Asia-Pacific said Vietnam is a key market of Airbus across all business sectors, adding that Airbus also has important industry partnerships in the Southeast Asian nation.
Airbus hopes its new general director will further promote Airbus' strong presence in Vietnam and work closely with its customers, partners and related entities, he said.
According to Airbus, Mai will work at the Airbus office in Hanoi, replacing Jean-Michel Caldagues, who will retire at the end of 2021 after 21 years working for Airbus./.
Material suppliers sense profits in public investment endeavours
Construction companies are looking into new efficient methods to overcome this years’ woes, with disbursement acceleration of public investment a top focus.
In a recent report, BIDV Securities Company stated that accelerating the disbursement of public investment is an opportunity for a series of related industry groups to benefit from, of which the most direct advantage could play into the hands of building material businesses, such as for cement and steelmakers.
Petrolimex Petrochemical Corporation JSC, which currently accounts for about 30 per cent of the asphalt market share, is expected to reap some benefits thanks to public investment projects such as the North-South Expressway, upgrades at Noi Bai and Tan Son Nhat international airports, and La Son-Tuy Loan Expressway.
“The asphalt segment could be the company’s main growth driver this year as it is benefiting from the upcoming public investment projects,” noted the report.
Nguyen Hoang Ngan, general director of Binh Minh Plastic JSC, stressed that the benefits of building material manufacturers “depend on mostly actual disbursement, not the plans.”
Nguyen Quang Cung, chairman of the Vietnam Cement Association (VCA) said, “Around 104-107 million tonnes of cement would need to be consumed this year.”
Finance director Colin Terry of INSEE Vietnam told VIR, “Our long-term strategies remains largely unchanged as we foresee the market progress backed by vaccine rollouts. We continue to ensure that we have diversified sources of key material and equipment supplies, as well as stay flexible in our operating model to be ready to support our customers as opportunities and volumes scale up again.”
As one of the largest cement companies in Vietnam, INSEE can fall back onto large capital and tech, and its products have been used in iconic buildings and infrastructure projects across the south of the country.
Cung of the VCA warned, “Public investment will partly increase the demand for cement in the future, but the cement market here remains risky amid export tax, oversupply, and increased prices of raw materials.”
According to the Ministry of Construction (MoC), construction materials account for 60 per cent of investment costs for most projects. Specifically, in highway projects, the cost of asphalt accounts for 35 per cent, steel for 30 per cent, and cement for 15 per cent. Businesses operating in this sector will benefit from the government’s push for public investment.
Meanwhile, the prospects of the steel industry have helped Hoa Phat Group continue to maintain its leading position in the industry. According to the company, this year will see the construction of the $3.7 billion Dung Quat 2 Complex.
The domestic steelmaker aims to produce eight million tonnes of crude steel to continue to lead the national market share in construction steel and pipes in 2021.
A representative of Hoa Phat Group also shared examples of public investment projects across the country that used the the group’s steel for construction, such as Vinh Tuy Bridge in Hanoi, the North-South Expressway, and My Thuan 2 Bridge, among others.
“For the North-South Expressway, Hoa Phat’s steel has been supplied in a series of bidding packages. In June, the construction contractor for My Thuan 2 Bridge ordered steel that was then delivered in July and August. According to our evaluation, there are very few competitors in Vietnam capable of producing and supplying such high-quality steel,” the representative claimed.
Minister of Construction Nguyen Thanh Nghi said that the industry is accelerating the disbursement progress of public investment, in which investors commit to the progress according to the monthly schedules. The ministry aims to complete its entire capital plan this year.
Reference exchange rate down 6 VND at week’s beginning
The State Bank of Vietnam set the daily reference exchange rate at 23,136 VND/USD on October 25, down 6 VND from the last working day of previous week (October 22).
With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,830 VND/USD and the floor rate 22,441 VND/USD.
The opening-hour rates at commercial banks stayed stable.
At 8:25 am, Vietcombank listed the buying rate at 22,625 VND/USD and the selling rate at 22,855 VND/USD, unchanged from October 22.
BIDV also kept both rates unchanged at 22,655 VND/USD (buying) and 22,855 VND/USD (selling)./.
Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan
Vietnam has strong and bettering economic fundamentals: journal