VIETNAM BUSINESS NEWS AUGUST 18
15:14 Foreign investment poured in Vietnam despite COVID-19
Despite
impacts of the COVID-19 pandemic, Vietnam is still attracting foreign
investment in its electronic industry, Taiwan-based website Digitimes has
reported. According to
the website, foreign electronic companies have been maintaining their
factories in Vietnam's northern region despite the pandemic. Vietnam's
semiconductor industry is expected to grow strongly in the next five years. According to
Fitch Solutions, amid COVID-19, Vietnam is still chosen by many foreign
investors as a destination to build production bases, especially in the
electronic industry. As many as
65 percent of foreign electronic enterprises set up their production bases in
northern localities of the country, while about 30 percent of them built
facilities in the southern region, and a few in the central region. According to
a report by global technology research and advisory company Technavio, the
Vietnamese semiconductor market is poised to grow by almost 19 percent in
2020-2024 to 6.16 billion USD. Meanwhile,
Vietnam’s smart phone shipments witnessed an 11 percent year-on-year growth
in the second quarter of 2021 with Chinese original equipment manufacturers
capturing around half of the market, according to Counterpoint Research’s
Monthly Vietnam Channel Share Tracker./. Shares finish lower due to profit-taking The market
edged lower yesterday as strong selling force weighed on many pillar stock
groups, while foreign investors kept fleeing from the two main exchanges. On the Ho
Chi Minh Stock Exchange (HoSE), the market benchmark VN-Index closed the
trading day at 1,363.09 points, down 0.57 per cent, or 7.87 points. This
ended its two gaining sessions. The market’s
breadth was negative as 232 stocks fell while 148 increased. However, the
liquidity remained high with more than 768.6 million shares traded on HoSE,
worth more than VND25.77 trillion (US$1.13 billion). After the
sharp recovery in the first two sessions of the week, profit-taking
activities were reasonable. Analysts
from Saigon - Hanoi Securities JSC (SHS) said in a daily report that
technically, the benchmark still can not close above the resistance zone of
1,370 - 1,375 points. Therefore, the scenario of extending rallies to hover
around the psychological level of 1,400 points has not been activated. "We
need to wait and see more to find the direction," SHS said. Selling
force increased significantly in the afternoon session, putting many
large-cap stocks under pressure. The 30
biggest stocks tracker, VN30-Index, witnessed a drop of 0.44 per cent to
1,494.12 points. Of which, 21 stocks of the VN30 basket declined while seven
climbed, and two ended flat. Vinhomes JSC
(VHM) posted the biggest losses yesterday, down 4.31 per cent to VND111,000
per share. The sell-off occurred after Viking Asia Holdings II Fund, backed
by KKR Group, announced that it has registered to sell 31.96 million VHM
shares and is expected to no longer be a major shareholder in Vinhomes. Real estate
developers like Vincom Retail JSC (VRE), another one of the trio stocks of
Vin family, and Novaland (NVL) also dropped 1.58 per cent and 0.58 per cent,
respectively. Other pillar
stocks recording big losses were Saigon Beer - Alcohol - Beverage Corporation
(SAB), down more than 4 per cent, and PetroVietnam Gas JSC (PVGas, GAS), down
1.91 per cent. A group of
big bank stocks including Techcombank (TCB), Vietinbank (CTG), VPBank (VPB)
and JSC Bank for Investment and Development Of Vietnam (BIDV, BID)
contributed to the downward trend. However, the
index pared some losses on gains in large-cap stocks, led by Hoa Phat Group
(HPG), up 1.92 per cent. It was
followed by Vingroup JSC (VIC) and Vietcombank (VCB). Similarly,
on the Ha Noi Stock Exchange (HNX), the HNX-Index finished lower at 343.11
points, down 0.12 per cent. During the
session, more than VND4.8 trillion was poured into the northern market,
equivalent to a trading volume of nearly 174 million shares. Also
weighing the market was the large net sell value from foreign investors.
Accordingly, they continued to net sell a value of nearly VND1.4 billion on
the southern bourse, and a value of VND56.29 billion on HNX. Over 10,000 Australian consumers to taste Vietnamese rice A promotion
programme titled ‘Viet Nam, Land of World’s Best Rice’ will present 10,000
bags of Vietnam’s Ban Mai Cung Dinh rice to consumers in Australia. Organised by
the Vietnam Trade Office in Australia and a number of enterprises, the
programme features a series of activities between August 18 and September 27,
aiming at trademark promotion and trade connectivity. The rice
gifts will be distributed via the M-Import company and MCQ supermarket chain. In addition,
AusViet company will also offer hundreds of promotional gifts of Vietnam’s
ST25 and Jasmine Vilaconic rice trademarks in Melbourne. In Sydney,
an event inviting local people to try cooked rice using different Vietnamese
rice products available in Australia is scheduled to be held based on local
social distancing conditions. A virtual
rice exhibition will also take place at the end of the programme. According to
the Trade Office, in July, despite the fact that Australia was cutting its
rice import, Vietnamese rice exported to the market grew impressively by
37.03 percent from the same period last year. Viet Nam aims for top five global aquaculture producers over
next decade The
Government sets goal to become one of the world’s top five aquaculture
producers over the next decade, according to its recently-approved plan. The plan
also rolls out specific goals, including achieving annual growth rate of
processed seafood output at more than 6 percent and raising export value of
value-added process aquatic production to over 40%. Domestic
consumption of processed aquatic products is expected to reach
VND40,000-45,000 billion (or US$1.7-2 billion) while export value of these
products is projected to stand at US$14-16 billion. To realize
the above goals, the Government targets to attract investment into developing
large aquatic processing companies, step up processing capacity of key
products such as shrimp, tra fish and tuna, and diversify products. Viet Nam’s
aquatic export is forecast to hit US$9 billion in 2021 thanks to the
recovery of consumption in key markets like the U.S., the European Union, and
other potential markets. The
Southeast Asian country fetched US$4.1 billion from exporting aquatic
products in the first six months this year, up 20 percent on year, reported
Viet Nam Association of Seafood Exporters and Producers (VASEP). By the end
of June 2021, tuna export totaled US$364 million, up 24 percent against the
same period last year. Meanwhile, the squid and octopus export reached US$277
million, a year-on-year rise of 15 percent. MobiFone wins five prizes at International Business Awards 2021 Telecoms
service provider MobiFone won prizes for its five products at the 18th
International Business Awards (IBA) 2021. It received
Gold Stevie Winner for MobiEdu Platform, Silver Stevie Winner for telephone
operator monitoring system and three Bronze Stevie Winner awards for
MobiWifi, SmartData Gateway and Fintech Platform. A
representative from MobiFone said: “The five awards are recognition from the
international community for Make in Vietnam and Make in MobiFone products.
Following guidelines from the Government, the Ministry of Information and Communications,
MobiFone has created digital platforms and services, thus helping maintain
stable life in the complicated changes of the COVID-19 pandemic.” The awards
encourage MobiFone to bring new products and services with high technology to
the local market, contributing to creating a digital society and economy in
Vietnam. The MobiEdu
Platform helps maintain teaching for schools through an online model free of
charge amid the COVID-19 pandemic. Earlier, the platform also received the
Sao Khue Award from Vietnam Software and IT Services Association of (VINASA). The IBA is
one of the leading prestigious prizes in the world. The IBA this year
received more than 3,700 nominations from organisations in 63 countries and
territories. They competed in multiple categories including Company of the
Year, Marketing Campaign of the Year, Best New Product or Service of the
Year, Startup of the Year, Corporate Social Responsibility Programme of the
Year. This year's contest also has some prizes to recognise the response and
efforts of organisations and individuals to the COVID-19 pandemic./. Korea Investment PE to pour $200 million into Masan Group Vietnamese conglomerate Masan Group Corporation will be raising
$200 million in a rights offering to Korea Investment Private Equity. It was not
immediately known how much Masan Group is raising in total in the latest
funding round. The unit of Korea Investment Holdings Co. will tap its blind
pool fund to finance a portion of the stake purchase and raise the remainder
through a project fund, the newswire added. Korea
Investment PE will be the latest South Korean shareholders of Masan Group
along with the National Pension Service (NPS), SK Group, and Seoul-based IMM Investment
Corporation. The deal will also mark Korea Investment PE's second investment
in Vietnam after injecting $300 million into Vingroup in collaboration with
IMM in 2019. In 2019,
Masan Group purchased a 83.7 per cent stake in Vingroup's retail division
VinCommerce and then sold a 16.3 per cent stake in the retailer to SK Group
for $410 million in April this year. Currently, SK Group is holding a 29.2
per cent stake in VinCommerce. In May, a
consortium led by Alibaba Group (Alibaba) and Baring Private Equity Asia
(BPEA) has poured $400 million into The CrownX (TCX), which consolidates
Masan Group’s interests in Masan Consumer Holdings and VinCommerce. At that
time, Masan also announced that it was in advanced discussions regarding a
further strategic investment of $300-400 million into The CrownX from other
investors, expected to close in 2021. In these transactions, Masan still
holds the controlling stake. Masan made constant efforts to raise capital
from international investors in a bid to change the façade of its modern
retail platform, thereby contributing to the development of the local retail
market. FDI inflows to Ho Chi Minh City dip over COVID-19 worries in
first seven months Following
the worst COVID-19 outbreak in the country this year, foreign direct
investment (FDI) capital flowing into Ho Chi Minh City in the first seven
months of 2021 dipped to $1.78 billion, down 25.1 per cent against last
year's period. Around 345
new projects were granted investment registration certificates in the period
with the total registered capital of over $284.5 million, down 42.3 per cent
in quantity and 20.1 per cent in capital compared with the corresponding
period a year prior. Meanwhile,
98 existing projects adusted foreign investment capital with an additional
$522.5 million, a decrease of 13.3 per cent on-yer in the number of projects,
but nearly double the capital amount against the year prior. In addition,
there were 1,438 instances of capital contribution and share purchases by
foreign investors, with $975 million, a 46.2 per cent drop on-year. Singapore
took the lead in the city's FDI rankings with the registered investment
capital of nearly $612.3 million, followed by Japan ($321.9 million), South
Korea ($223.4 million), and the Netherlands ($137.6 million). The
manufacturing and processing sector attracted the largest proportion of FDI
in the first seven months with $440.6 million, followed by trade ($383.1
million), real estate ($349.7 million), and science-technology ($350.9
million). Ho Chi Minh
City is among the leading FDI recipients in Vietnam. In the first seven
monhts, Ho Chi Minh City ranked second in Vietnam's FDI attraction with a
total registered capital of nearly $1.8 billion, trailing behind Long An.
Since the resurgence of the COVID-19 pandemic, the city has become the largest
pandemic area of Vietnam, dampening the FDI outlook in the coming time. Vietnam strives to keep CPI growth low by end of 2021 Vietnam
looks to maintain Consumer Price Index (CPI) growth lower than 1 percent a
month during the last quarter of 2021 in an effort to keep inflation under
the 4 percent target for the year, heard a recent meeting between Deputy
Prime Minister Le Minh Khai and the National Pricing Management Committee in
Hanoi. According to
the committee, keeping the figure lower than 4 percent by the end of the year
is important so the country can have a good start to 2022, especially in
light of Vietnam's dual-target strategy of achieving COVID-19 containment and
economic development simultaneously. CPI,
however, has always been tricky during this time of the year as the market
will likely experience surges in demand for certain commodities during the
end of the year. This has been made more challenging a task since the fourth
outbreak of the novel coronavirus, which started in late April and until now
has not been put completely under control. The
committee has asked the Ministry of Finance to implement more flexible
monetary policies and make adjustments to some macroeconomics targets in
response to the pandemic. Local administrations must keep an eye on the
market's supply and demand of essential commodities and ensure a smooth flow
of goods and services, especially for localities that have been put under
lockdown. Businesses
have been advised to start preparing for the Lunar New Year by stocking up on
popular goods. Market surveillance agencies across the country have been told
to turn in reports to the central government as well as to ensure businesses
under their watch must publicise their prices in a transparent manner. CPI for the
first seven months of 2021 has increased by 1.64 percent compared to the same
period last year while inflation has increased by 0.89 percent. Major
contributing factors included rising import prices for animal feed,
fertiliser, construction materials, petroleum products and Liquefied
Petroleum Gas (LPG). According to a report by the Ministry of Industry and
Trade, since the end of last year prices for WTI crude oil increased by 53.1
percent, Brent crude oil by 46.2 percent and steel ingots by 57-101 percent. Prices for
certain essential commodities such as rice have also seen a surge due to
increased demand in the global market since the beginning of the year. On the
other hand, some progress has been made in pulling down prices for pork and
poultry in the domestic market./. Vietnamese firms double overseas investment in seven months Viet Nam
invested US$570.1 million overseas over the last seven months, 2.3 times
higher than the same period last year, according to the Foreign Investment
Agency, under the Ministry of Planning and Investment. Of the total
figure, Vietnamese investors poured US$145.3 million in 28 new projects,
a year-on-year decrease of 29.6 in terms of investment capital; and added
US$424.8 million to 11 projects, up 9.1 times against the same period last
year. Among 12
sectors attracting Viet Nam’s investment, science and technology took the
lead with US$270.8 million, accounting for 47.5 percent, followed by retail
sales, car repair and maintenance, agriculture, forestry and
aquaculture. The U.S. was
Viet Nam’s largest outward investment destinations among 18 countries and
territories, with US$302.8 million, making up 53.1 percent. It was followed
by Cambodia, Laos, France, Germany and the Netherlands. Weighing real estate ticker growth potential As real
estate tickers have been more appealing these days, investors are keen on
which are the best bet in the forthcoming months. According to
Nguyen Viet Quang, Hanoi Branch director of Ho Chi Minh City-based Yuanta
Vietnam Securities JSC, real estate tickers make up 21.39 per cent of the
total capitalisation of Vietnamese stock markets, second only to bank
tickers. Quang noted
that the fourth wave of the COVID-19 pandemic has dealt a heavy blow to
southern key industrial zones, with production and business of IZ-based
manufacturers stagnating. This will be clearly reflected in industrial real
estate businesses’ third-quarter results. As for
housing stocks, supply sources are expected to jump 40 per cent on-year as
many projects would launch products in the later months of this year. As for
housing stocks, supply sources are expected to jump 40 per cent on-year as
many projects would launch products in the later months of this year. Real estate
businesses with big land funds are expected to draw investors’ attention like
Vinhomes JSC (HSX: VHM), Nam Long Investment JSC (HSX: NLG), or Khang Dien
House Trading and Investment JSC (HSX: KDH). Le Ngoc Nam,
Analysis and Investment Advisory director at Tan Viet Securities JSC, said
that a few housing stocks saw rosy growth since the second quarter of 2021. For
instance, VHM saw its Q2 profit triple on-year, with profit mostly coming
from project transfers. Not only
blue-chips and developers with large market capitalisation like VHM, tickers
of average size like NTL of Tu Liem Urban Development JSC, DPG of Dat Phuong
JSC, IDC of IDICO Corporation, or HDC of Ba Ria-Vung Tau Housing Development
JSCalso registered impressive results. For instance, HDC on HSX raked in
VND143.2 billion ($6.2 million) in after-tax profit in the first half, up 82
per cent on-year and equal to 56 per cent of the full-year profit target. “Real estate
tickers are also appealing because of the reasonable pricing. For example,
the price per earning (P/E) of VHM is around 11x compared to its peak at 36x.
Similarly, IDC, HDC, and DPG also have good P/E levels,” said Nam. He added
that as industrial real estate stocks have been hot in recent years, in the
upcoming time they may plateau out, except for stocks with good supportive
factors. However,
Tran Minh Tuan, advisor to the Board of Management at Smart Invest
Securities, said the growth of real estate stocks in the past months came
largely from speculation, rather than good fundaments. He argued
that when stocks in other fields like steel, banking, securities, food, and
petroleum are all increasing, the money flow will tend to go to ticker groups
where price often increases slower compared to other groups, like that of
real estate tickers, leading to those tickers' price hike recently. "It
would be hard for real estate businesses – particularly for-rent industrial
real estate – to post upbeat revenue and profit figures in H2 or next year.
The growth of real estate tickers is therefore unsustainable," he
concluded. Meanwhile,
Nguyen Chuong, advisor to FPT Securities assumed that despite mounting
hardships from COVID-19, both housing and industrial real estate tickers have
their charm. Housing projects
have been maintaining stables sales, he explained, and the last two quarters
are often the time when businesses finalise the cost of their projects,
leading to a sharp growth in their revenue and profit. Chuong, therefore,
forecast that real estate tickers may lead the market growth in the latter
months of 2021. Meanwhile,
industrial real estate tickers do not much rely on a business cycle and often
grow in proportion with foreign investment flows into Vietnam. Firms with
large land funds have great advantages for future development, Chuong said. Usually,
players in this field will receive one-off payments of land rental for a
long-term contract, so the pandemic impacts on their money flow and profit
are only short-term. Queried
about what the five most promising tickers are, Chuong has named DIG and CKG
for housing real estate, and LHG, GVR, and SZC for industrial real estate. Chuong noted
that each of these stocks have their own story. For instance, LHG of Long Hau
Corporation is expected to soar after the 124ha first phase of the Long Hau 3
project is completed in the 2021-2023 period. Advisor Tuan
from Smart Invest Securities, however, recommended investors to pay attention
to the tickers of industry-leading players like VHM as their brand and reputation
would ensure effective sales activities despite the pandemic. He recommended
investors to pick businesses having completed products ready for handover to
customers, instead of those with new projects in the pipeline. ‘Green lane’ proposed for waterway transport of rice The Ministry
of Industry and Trade (MoIT) has proposed a “green lane” be quickly opened
for waterway transport to ensure smooth trading of rice. In its
urgent proposal, the MoIT suggested the Prime Minister assign ministries,
sectors, and relevant localities to promptly open a “green lane” for waterway
transport, which is currently in charge of 95 percent of the rice output in
the Mekong Delta - the country’s biggest agricultural hub and also home to a
large river and canal network. Keeping
waterway transportation uninterrupted will substantially help rice exporters
maintain supply chains, from the fields to ports for overseas shipment, the
MoIT said. It proposed
the PM assign the Ministry of Transport to coordinate with the Ministry of
Health and relevant ministries, sectors, and localities to soon devise a
“green lane” plan for waterway transport that can both ensure COVID-19
prevention and ease the existing congestion in the flow of goods. Strict
social distancing measures under the PM’s Directive 16 are being imposed on
19 provinces and cities in the south, including the Mekong Delta, to curb the
spread of COVID-19. That has reportedly led to congestion in the
transportation of rice from fields to factories and ports. According to
the Vietnam Food Association, the country exported over 3.49 million tonnes
of husked rice in the first seven months of 2021, down 12.7 percent year on
year. This year’s total export volume is forecast at 6 million - 6.2 million
tonnes worth about 3.32 billion USD./. Vinamilk forms joint venture with Del Monte in Philippines Vietnam
Dairy Products Joint Stock Company (Vinamilk) said on August 17 that it has
forged an alliance with Del Monte Philippines Inc (DMPI), a subsidiary of Del
Monte Pacific Limited. Total
investment capital for the first phase is 6 million USD, in which, Vinamilk
and its partners contribute 50 percent each. The joint
venture will import dairy products from Vinamilk, and market and
distribute them in the Philippines through DMPI. It will use the co-brand Del
Monte-Vinamilk for its products and promote the brand strength of both
businesses. The joint venture will take advantage of Vinamilk’s strength
in production and Del Monte in distribution. Despite
facing difficulties due to the application of social distancing, Vinamilk
completed production of the first shipment for the joint venture at the end
of July. The joint
venture's products are expected to officially reach Filipino consumers in
September. Revenue of the joint venture in the first year is estimated at
around 8.8 million USD and has the potential for double digit growth of about
50 percent a year in the medium term. Vinamilk is
among the top 40 largest dairy companies in the world. Its products have
been exported to 56 countries including the United States, Japan, the
Republic of Korea, and the Association of Southeast Asian Nations (ASEAN). Vinamilk has
three factories in the US, New Zealand, and Cambodia and a dairy farm complex
in Laos. Overseas business currently accounts for 15 percent of Vinamilk's
total revenue. DMPI is a
producer and distributor of healthy food and beverages including
ready-to-drink pineapple juice. It has been operating for more than 95 years
in the Philippines Del Monte
Pacific Limited is a company listed on the Singapore Stock Exchange and the
Philippine Stock Exchange. It indirectly owns 87 percent of DMPI./. Ben Tre earmarks over 2.19 million USD for trade promotion
activities The Mekong
Delta province of Ben Tre is expected to outlay more than 50 billion VND
(2.19 million USD) for trade promotion activities from now to the
end of 2025 under a programme recently approved by its provincial
authorities, according to Nguyen Minh Canh, vice chairman of the provincial
People’s Committee. The trade
promotion programme for 2021-2025 period aims to encourage and facilitate
enterprises of all economic sectors that are engaged in producing commodities
to invest in product development, expand the consumption market as well as
support the campaign "Vietnamese people prioritise using Vietnamese
goods", he said. The province
will focus on assisting One Commune One Products (OCOP), specialty and key
products of the province. It will maintain and expand the distribution
network, developing production, improving the products’ competitiveness,
affirming their brands, and promoting exports and sustainable development in
the context of international integration. The vice
chairman said Ben Tre has set the target to support more than 2,000
businesses seeking consumption markets through trade promotion activities,
especially e-commerce applications. The province
will organise from five to ten exhibitions and 20 meetings to connect the
province’s businesses and distributors, supermarkets, and wholesale traders
from provinces and cities across the country, he said. Communication
campaigns will also be launched to raise people’s awareness about goods and
services in the province. Every year,
the provincial Department of Industry and Trade will
facilitate businesses to take part in regional and international
trade fairs and exhibitions where they can display and introduce OCOP
products, specialty, handicrafts, and farm produce, Canh said. According to
the department, the programme will be applied to units in charge of
implementing its trade promotion projects, trade promotion organisations in
and outside the province. Enterprises engaged in the production and trading
of products certified under the OCOP programme, typical rural industrial
products at provincial and national levels, and the specialty of the province
will also be included. The province
invested 31.5 billion VND (1.37 million USD) in trade promotion activities in
the 2016-2020 period, resulting in a growth of 11.7 percent in the trade
sector and an increase of 16.31 percent of export turnover per year./. Product restructuring helps increase pepper export value A dramatic
shift occurring in product structure has served to boost the export value of
Vietnamese peppers, with the country exporting 154,000 tonnes of peppers
worth approximately US$500 million during the first half of the year. This figure
represents a decline of 7.5% in volume and an increase of 39.8% in value
compared to the same period from last year. At present,
domestic pepper prices remain at a high level, with black peppers being
traded at between VND76,000 and VND79,000 per kilo, while the selling price
of white peppers stands at VND113,000 per kilo. The export
price of black pepper increased by 6.6% to US$4,150 per tonne, while the
export price of white pepper enjoyed a surge of 6.6% to climb to US$6,050 per
tonne. According to
information given by the Import-Export Department, Vietnam exported over
118,540 tonnes of black pepper worth US$366.35 million in the first half of
the year, a drop of 11.2% in volume, but marking a rise of 38.3% in value
over the same period from last year. The average
export price of black pepper also surged by 55.7% to US$3,090 per tonne, with
notable foreign markets including the Republic of Ireland, the United Arab
Emirates, and France. The
country shipped a total of 3,850 tonnes of ground white pepper abroad
worth US$17.33 million throughout the reviewed period, an increase of 84.1%
in volume and 114.1% in value compared to the same period from last year. Most
notably, strong export growth was recorded in a number of markets, such as
the United States, the UK, Australia, Japan, the Republic of Korea, Malaysia,
and South Africa. Experts
believe that the complicated nature of developments relating to the fourth
wave of COVID-19 will impact the export of the local product due to high
freight rates and a shortage of empty containers, thereby leading to
stagnation occurring as a result of a large amount of peppers building up in
southern ports. Pepper
prices within the global market are anticipated to remain stable at a high
level ahead in the third quarter of the year, largely due to the supply
sources of pepper from Indonesia, China, Malaysia, Brazil, and Cambodia. With the
current rise of pepper prices, Vietnamese pepper exports are set to bounce
back as turnover reaches several billions of US$ in the near future. Product restructuring helps increase pepper export value A dramatic
shift occurring in product structure has served to boost the export value of
Vietnamese peppers, with the country exporting 154,000 tonnes of peppers
worth approximately US$500 million during the first half of the year. This figure
represents a decline of 7.5% in volume and an increase of 39.8% in value
compared to the same period from last year. At present,
domestic pepper prices remain at a high level, with black peppers being
traded at between VND76,000 and VND79,000 per kilo, while the selling price
of white peppers stands at VND113,000 per kilo. The export
price of black pepper increased by 6.6% to US$4,150 per tonne, while the
export price of white pepper enjoyed a surge of 6.6% to climb to US$6,050 per
tonne. According to
information given by the Import-Export Department, Vietnam exported over
118,540 tonnes of black pepper worth US$366.35 million in the first half of
the year, a drop of 11.2% in volume, but marking a rise of 38.3% in value
over the same period from last year. The average
export price of black pepper also surged by 55.7% to US$3,090 per tonne, with
notable foreign markets including the Republic of Ireland, the United Arab
Emirates, and France. The country shipped
a total of 3,850 tonnes of ground white pepper abroad worth US$17.33 million
throughout the reviewed period, an increase of 84.1% in volume and 114.1% in
value compared to the same period from last year. Most
notably, strong export growth was recorded in a number of markets, such as
the United States, the UK, Australia, Japan, the Republic of Korea, Malaysia,
and South Africa. Experts
believe that the complicated nature of developments relating to the fourth
wave of COVID-19 will impact the export of the local product due to high
freight rates and a shortage of empty containers, thereby leading to
stagnation occurring as a result of a large amount of peppers building up in
southern ports. Pepper
prices within the global market are anticipated to remain stable at a high
level ahead in the third quarter of the year, largely due to the supply
sources of pepper from Indonesia, China, Malaysia, Brazil, and Cambodia. With the
current rise of pepper prices, Vietnamese pepper exports are set to bounce
back as turnover reaches several billions of US$ in the near future. Tight but flexible regulations needed for healthy corporate bond
market “Ensuring the healthy
development of the bond market and the capital market requires the
synchronous development of all components participating in the market,
including State management agencies, businesses, and investors,”
said Do Ngoc Quynh, secretary general of the Vietnam Bond Association, during
an online seminar on corporate bonds held on August 16. “While
developing the equity market, market regulators must ensure the effective
operation and necessary management over the market. If the management is too
tight, the market cannot develop, but if the regulations are too loose, a
crisis can occur, thus management agencies must always observe and adjust the
policy as needed.” He noted
that businesses issuing bonds publicly would have wider
access to investors but also have to bear greater responsibilities, such as
transparent information disclosure, and ensuring credit ratings. If they
choose to issue bonds privately, the access to investors will
be narrower and the costs of capital higher. “Market
participants must fully comply with regulations. Any enterprise that
publishes false information, or lacks transparency will be fined strictly,”
he added. According to
banking expert Nguyen Tri Hieu, in the US, the banking system is divided into
two segments, commercial banking and investment banking. “Only
investment banks are allowed in bond issuance. While in Vietnam, banks are
multi-functional as some can be commercial banks and investment banks at the
same time,” Hieu said. Support of
Vietnamese banks for the corporate bond market is crucial as they provide
technical support for eligible businesses to issue bonds. "They
also supported the distribution of the amount of bonds. Thanks to their
support, in the first 6 months of this year, despite the pandemic, the amount
of corporate bonds grew strongly,” he noted. “But bond
investors should note that banks are just the distributors of bonds and do
not guarantee the safety of investment in corporate bonds. They enjoy service
fees from issuers without being responsible for the repayment capacity of the
issuers, meaning that they do not guarantee that bond issuer will pay
the interest and principal on the due date.” He added
that most of the current amount of bonds on the market were unsecured or
secured by stocks, which fluctuate according to the market. In the case
of other collateral assets, investors do not have the power to seize those
collateral assets, like banks do. Even when the business goes bankrupt, the
collateral assets will be paid in order of priority, firstly taxes to the
Government, then wages for employees and paying off bank debts and finally
the buyers of the bond. "Now
the corporate bond market has many potential risks as the COVID-19
pandemic makes businesses unable to operate and have to borrow money. And
those risks are endured by bondholders," Hieu stressed. According to
Tran Van The, vice chairman of the Board of Directors of Deo Ca Group, which
is involved in infrastructure investment, the total investment of the
group in traffic projects is currently over VND60 trillion (US$2.6 billion). “In the
period of 2021 - 2030, the Government is determined to complete 3,800km of
highways, which requires enormous medium and long-term capital needs. Therefore,
Deo Ca Group must develop a long-term strategy to restructure our capital,
and we have taken into account the plan to issue corporate bonds in September
and October 2021. “This helps
us up capital to the transport projects under the form of public–private
partnerships (PPPs), such as Cam Lam - Vinh Hao project, a component project
of the North - South expressway with a total investment of VND9 trillion, or
two other projects of Huu Nghi-Chi Lang project worth VND7.5 trillion, and
Dong Dang-Tra Linh worth VND12 trillion," The said. “The capital
demand is very large, in the process of issuing bonds, we still encounter
some obstacles in terms of policy as well as practice. “For
example, according to Article 6, Decree 28/2021/ND-CP dated March 26, 2021
stipulating the financial management mechanism of investment projects under
the form of public-private partnership, PPPs project enterprises are only
allowed to issue non-convertible bonds under the form of private placement.
This regulation has restricted businesses,” The added. “We
recommend that businesses should be allowed to issue corporate bonds to the
public, even to issue international bonds, because the sector of transport
infrastructure investment requires extremely large capital, suitable for
international bond issuance." The added
that there should be an infrastructure investment fund specialising in
lending capital with preferential interest rates, creating confidence for
investors to buy bonds of transport infrastructure enterprises. Bamboo Capital establishes financial company with charter
capital of $17.5 million Bamboo
Capital JSC, a multi-industry company operating in trade and services, has
approved the establishment of a financial company with a charter capital of
VND400 billion ($17.5 million). The company
has a charter capital of VND400 billion ($17.5 million), of which Bamboo
Capital contributes 80 per cent, equivalent to VND320 billion ($14 million). After the
establishment of BCG Financial, the company will have seven directly-owned
subsidiaries, together with 45 indirectly-owned subsidiaries and 12
affiliates. Most of its
member organisations will operate within the group's main business areas
agricultural production, commerce, infrastructure, and real estate
construction, and renewable energy. In which, renewable energy is a medium
and long-term strategic segment that is poised to create a stable source of
income in the next five years. Thanks to
its subsidiaries, in the second quarter of 2021, BCG generated revenues of
more than $35.85 million, up 56 per cent over the same period. After
deducting expenses, BCG's after-tax profits were $13.8 million, 17 times
higher than in the same period last year. These
revenues mainly came from the handover and transfer of projects, as well as
its construction and installation activities and renewable energy projects
that have been energised by the end of 2020. Accumulated
in the first six months, BCG cashed in $63.5 million in revenues, an increase
of 60 per cent; and more than $21 million in profits after tax, 18 times
higher than in the same period last year. Compared
with the company's target of $235.6 million in revenues and $35.3 million in
profits after tax for 2021, BCG achieved 27 and 59 per cent, respectively. Ho Chi Minh City applies new support measures for enterprises
affected by pandemic Ho Chi Minh
City is implementing a series of solutions to support enterprises with
capital, land rent, as well as electricity and water bills, helping them
overcome the difficulties amid the pandemic. Accordingly,
the city directed banks to implement business support policies such as
restructuring debt repayment terms, interest exemption and reduction, as well
as reducing or waiving fees for certain debt groups. The city
proposed the government to provide higher support for bank loans and tax
support for businesses operating under models approved by competent
authorities. The city
assigned the Ho Chi Minh City branch of Vietnam Bank for Social Policies and
districts to allow businesses to borrow at zero per cent interest to pay
wages for workers. Ho Chi Minh
City will also extend the time to pay value-added tax, corporate income tax,
personal income tax, and land rent in 2021. It also proposed the government
to reduce land rent by 50 per cent during the period of business shutdown. In addition,
the city recommended the Ministry of Industry and Trade to reduce the cost of
electricity for production enterprises and exempt workers in businesses
operating under models approved by competent authorities from electricity
bills. The city has
also exempted water bills for concentrated isolation areas from June to the
end of 2021. A 10 per cent discount on water bills will be applied for all
customers in Ho Chi Minh City from September to November 2021. Also, water
bills for businesses operating under models approved by competent authorities
will be exempted or reduced, while the payment of arrears will also be
extended until December 31. Tra Vinh to develop VND300-billion industrial cluster The Mekong
Delta province of Tra Vinh decided to establish the Hiep My Tay industrial
cluster in Cau Ngang District, with a total investment of around VND300
billion, VND50 billion more than what was originally planned, said a local
official. The
industrial cluster will cover an area of 40 hectares in the district,
according to Nguyen Quynh Thien, vice chairman of the provincial
government, Bnews newspaper reported. Thuan Phat
Trading and Construction Company, whose general director is Lai My Thanh
residing in HCMC’s District 11, is the project’s investor. The industrial
cluster is expected to be put into service in the third quarter of 2023. Once it is
operational, the industrial cluster will prioritize attracting companies
operating in the sectors of handicraft, wooden furniture for interior
decoration, construction materials, packaging and manufacturing, footwear and
textile-garment, food processing and fertilizer production, among others. To serve the
socioeconomic development of the province in the 2020-2025 period, Tra Vinh
decided to establish four industrial clusters ---the Tan Ngai industrial
cluster covering over 21 hectares in Chau Thanh District, the 33-hectare Sa
Binh industrial cluster in Long Duc Commune of Tra Vinh City, the Phu Can
industrial cluster covering 10.5 hectares in Tieu Can District and the Hiep
My Tay industrial cluster in Cau Ngang. This Mekong
Delta province is home to three industrial parks, Long Duc, Cau Quan and Co
Chien. Earlier, it had announced a zoning plan to establish 13 industrial
clusters in the province. Scenarios for seaport development in south in H2/2021 As port
activities have been hit by the pandemic, three growth scenarios have been
projected for seaports in the south by Saigon Newport Corporationfor the
second half of 2021. Vietnam's
import and export activities have been growing in the past seven months as a
number of free trade agreements have come into force. However, since the
fourth wave of the pandemic, port activities have been disrupted by movement
restrictions. Many
factories have had to scale down or halt production, creating backlogs of
containers at various ports. In this context, Saigon Newport Corporationhas
laid out three scenarios for seaports in the south. In the first
scenario, the COVID-19 pandemic would be brought under control by the end of
the third quarter of 2021 with vaccination on a large scale and businesses
starting to resume operation. This will increase the volume of freight cargo
passing through Ho Chi Minh City's seaports by 5-7 per cent and 12-15 per
cent through seaport in the Cai Mep area in the second half. In this
scenario, shipping lines would actively move goods from Ho Chi Minh City to
overseas to ensure the import and export needs of businesses. In the
second scenario, the pandemic would be contained at the beginning of Q4.
Freight cargo volume through ports in Ho Chi Minh City would increase by 3-5
per cent and 15-17 per cent in the Cai Mep area. Shipping lines and
businesses would increase goods transport to Cai Mep as Ho Chi Minh City will
begin collecting port infrastructure charges in October. The third
scenario is that the pandemic would be brought under control by the middle of
Q4. Businesses would gradually resume production in the last months of the
year with slower recovery due to the long-term effects of social distancing.
Freight cargo volume passing through the seaports of Ho Chi Minh City and Cai
Mep would be equivalent to the first traffic seen in H1. In H1/2021,
the throughput of goods through Ho Chi Minh City's seaports reached about 3.8
million twenty-foot equivalent units (TEUs) and more than 2.6 million TEUs in
the Cai Mep area. E-commerce gives MSMEs equal opportunities to access global
market Cross-border
e-commerce has changed the way firms are doing business, with micro, small
and medium sized enterprises (MSMEs) given more equal opportunities to access
global market, said Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce
and Industry (VCCI). As the
unprecedented COVID-19 crisis has forced many countries around the world to
close borders and restrict travels, thousands of in-person business meetings,
conferences and trade exhibitions between Vietnam and its major trade
partners, such as China, the Republic of Korea, the EU and US, have been
cancelled and delayed. To tackle
such challenges, the Ministry of Industry and Trade (MoIT) has cooperated
with other ministries, local administrations and overseas trade offices to
make use of digital platforms to promote trade and boost exports, according
to Deputy Minister Do Thang Hai. More than 1
million online trading sessions have been organized and hundreds of thousands
of Vietnamese companies have engaged in virtual trade promotion events with
potential partners from 55 countries and territories, including many new
markets in Africa, Hai said. Through
these events, growers of seasonal farm produce in Bac Giang, Hung Yen, Son
La, Ca Mau, Dak Lak, Soc Trang and others have also received support to trade
their products on multiple popular online marketplaces like Sendo, Shopee,
and Voso.vn. It has not only helped farmers seek buyers but also attracted
more investment into agricultural production and processing. Thanks to
such efforts, Vietnamese agricultural products have gained access to more
major markets, said To Hoai Nam, Standing Vice Chairman and General-Secretary
of the Vietnam Association of Small and Medium Enterprises (VINASME). “Thieu”
lychee had cracked open the door to France, Japan and the Netherlands while
Hung Yen’s longan had found its way to the EU, he cited, adding that plum and
dragon fruits are getting similar support to go global. Since early
2021, a number of both in-person and virtual conferences to boost sales of
“thieu” lychee have been held, connecting growers with domestic and foreign
traders, said Minister of Industry and Trade Nguyen Hong Dien. These have
proved effective as the lychee has expanded its foothold in demanding markets
such as Japan and the EU. Exports of the fruit reached over 89,000 tonnes
this year, accounting for 41.4 percent of total sales. The MoIT is
making all necessary legal steps to export more Vietnamese agricultural
specialties via cross-border e-commerce, with a hope that farmers can
directly supply their products to foreign end-users, Dien revealed. Vu Ba Phu,
Director of the MoIT’s Vietnam Trade Promotion Agency (Vietrade), said his
agency is developing a trade promotion ecosystem mobile app to help
Vietnamese firms improve the effectiveness of their promotion activities. It will also
pilot a project providing support for Vietnamese producers to remotely join
foreign trade expos and work with renowned global e-commerce platforms like
Amazon, Alibaba and Global Sources to help the firms cut export promotional
costs and introduce their products to global importers and customers, Phu
noted./. Source:
VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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