VIETNAM BUSINESS NEWS JANUARY 1116:21 Overseas remittances to Vietnam increase as Tet approaches In the run-up to Tet (Lunar New Year), the biggest traditional festival of Vietnam, the inflow of remittances sent by overseas Vietnamese to the homeland has been on the rise, fueled further by local banks’ preferential programmes. Vietnamese abroad sent home some 12.5 billion USD last year, up 10 percent on-year, according to Standing Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu. About 28 percent of the remittances was delivered through international money transfer companies, 70 percent via credit institutions and 2 percent by post, he said. In Ho Chi Minh City alone, data from the SBV's branch showed that the city attracted 6.5-6.6 billion USD worth of remittances in 2021. In 2022, the volume of remittances to Vietnam is projected to grow about 2.6 percent. Fruit and vegetable exports to EU market likely to rise by 15% this year
Vietnam’s fruit and vegetable exports to the EU market are likely to enjoy a 15% increase this year thanks to maximising benefits from the EU-Vietnam Free Trade Agreement (EVFTA), according to the Ministry of Industry and Trade. Most notably, Vietnamese fruit and vegetable exports to the EU market recorded positive growth, despite being heavily affected by the complicated developments relating to the COVID-19 pandemic. According to statistics compiled by the General Department of Vietnam Customs, Vietnamese fruit and vegetable exports to the fastidious market last year saw a surge of 7.6% to reach US$193.7 million compared to the same period from 2020. With the EU’s import volume of fruit and vegetables hitting roughly US$100 billion per year, coupled with the advantages brought about by the EVFTA, Vietnamese fruit and vegetable export turnover to the choosy market is set to continue to increase by between 10% and 15% this year and gross approximately US$200 million, according to experts. HCM City businesses ready to welcome back foreign tourists HCM City tourism businesses are ready to welcome foreign tourists back as the city received approval from the Government to reopen to visitors this month. According to Le Truong Hien Hoa, deputy director of the city Department of Tourism, the city has developed a smart tourism plan for 2022-30, focusing on digital transformation by building applications on virtual tours, accommodation, destinations, services and other information. The plan aims to build a database on tourism and visitors to share with businesses, as well as to support them with digital transformation. The department is expected to discuss issuing safety criteria with businesses to welcome foreign visitors as they arrive. The city has issued many policies to support tourism businesses like non-interest loan packages, and training courses for tour guides and managers and staff working for tourism-service providers, food and beverage businesses, and hotels. Vietcombank remains best-performing credit institution The Bank for Foreign Trade of Viet Nam (Vietcombank) remained the best-performing credit institution and the largest contributor to the State budget among listed ones in 2021. The bank, with over 50 per cent of its charter capital owned by the State, fulfilled and surpassed the targets for last year despite the continued abnormal socio-economic changes, Chairman of its Board of Directors Pham Quang Dung told the bank's meeting in Ha Noi on Monday. In 2021, it mobilised VND1.154 quadrillion (almost US$51 billion) from individuals and organisations, up 9.5 per cent from the previous year. Outstanding loans were estimated at VND963.6 trillion, rising 15 per cent from the end of 2020. Meanwhile, non-performing loans (NPLs) were maintained at 0.63 per cent of the total, lowest among the large-scale credit institutions. Vietcombank contributed about VND11 trillion to the State budget last year. Shares nosedive on late massive selling On the Ho Chi Minh Stock Exchange (HoSE), the market benchmark dropped 1.62 per cent, to 1,503.71 points. The market's breadth was negative with only 141 gainers, and 308 losers. During the session, over 1.38 billion shares were traded on the southern bourse, worth nearly VND41.8 trillion (US$1.84 billion). The benchmark's downtrend was due to losses of many large-cap stocks, especially in real estate and banking sectors. The VN30-Index, which tracks 30 biggest stocks on HoSE, fell 1.14 per cent, to 1,514.70 points. Of the VN30 basket, 24 stocks slid, while only four inched higher and two ended flat. Foreign investors net sold VND477.07 billion on HOSE, including Vincom Retail (VRE) with VND266.61 billion, Vingroup (VIC) with VND160.42 billion, and Vinamilk (VNM) with VND125.61 billion. Foreign investors were net buyers on HNX with the value of VND66.70 billion. On the Ha Noi Stock Exchange (HNX), meanwhile, the HNX-Index lost 2.22 per cent to end at 482.89 points. During the trading session, investors poured nearly VND5.2 trillion into the bourse, equivalent to a trading volume of more than 185.6 million shares. 19 State-owned enterprises achieved 70 per cent rise in profits Nineteen State-owned groups and corporations under the Commission for the Management of State Capital at Enterprises (CMSC) achieved total pre-tax profit of VND34.2 trillion (US$1.5 billion) in 2021, exceeding the annual plan by 70 per cent. The 19 bodies earned total revenue of VND821.3 trillion, equivalent to 99 per cent of the annual plan and up by 8 per cent compared to 2020. The total amount of money they contributed to the State budget was VND62.4 trillion, 27 per cent higher than the whole year’s plan. Thirteen out of 19 corporations and groups completed and exceeded the annual revenue plan. In contrast, six enterprises did not fulfil revenue targets, namely Viet Nam Electricity (EVN), Vietnam Airlines (VNA); The Airports Corporation of Viet Nam (ACV), The Viet Nam Railways Corporation (VNR), the Viet Nam National Coffee Corporation (Vinacafe) and Viet Nam Southern Food Corporation (Vinafood 2). There were 14 out of 19 groups and corporations that completed and exceeded the before-tax profit plans for the year; 14 completed and exceeded the budget payment plan; five achieved higher profits than annual plans and in 2020. Among the group of five units achieving higher profits than planned, the Viet Nam Oil and Gas Group (PetroVietnam) recorded VND40.7 trillion in pre-tax profit, up by 139 per cent of the yearly plan and up 105 per cent over the same period of 2020. Vietnamese rice becomes increasingly popular in EU market The enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) has been considered one of the driving forces for greater presence of Vietnamese rice in the EU market, according to insiders. Statistics released by the General Department of Vietnam Customs showed that Vietnam exported 53,910 tonnes of rice worth US$38.07 million during the past 11-month period of 2021, representing a rise of 0.8% in volume and 21.6% in value against the same period from 2020. These results prove that local businesses have effectively taken advantage of the EVFTA amid complicated developments linked to the COVID-19 pandemic and high sea freight rates to the European market. Notably, local rice export prices to the market surged by 20.3% to an average of US$781 per tonne. Among the leading rice exporters to Sweden this year, only Vietnam, the United States, and Norway have witnessed positive growth. This increase can largely be attributed to the impact of the EVFTA, which has led to Vietnamese rice products enjoying competitive advantages within the fastidious market. VinFast’s vehicle sales up over 21%
in 2021 This was also the first month VinFast officially handed over the VF e34 electric car model to its customers. One of the breakthrough activities of VinFast in 2021 was the launch of a comprehensive online business model, which helped customers minimize contact during the pandemic period. The model has proven effective as 40% of orders for the company's electric cars were made online. At the CES 2022 Consumer Electronics Show in Las Vegas, the US, VinFast announced its switch to all-electric vehicle production from the end of 2022, and officially received pre-orders for two electric car models VF 8 and VF 9. Customs clearance resumed at border
gates, crossings with China The Guangxi side said at first, priority will be given to handling goods, especially farm produce and frozen products, which are being stuck at the border gates. Previously, to review and strengthen COVID-19 prevention and control measures, Guangxi temporarily suspended customs clearance at border gates in Dongxing city from December 21, 2021. Vietnam, Canada eye stronger economic cooperation Vietnamese Deputy Minister of Industry and Trade Do Thang Hai and Chief Trade Commissioner and Assistant Deputy Minister Sara Wilshaw at Global Affairs Canada signed a Memorandum of Understanding (MoU) on establishing a joint economic committee (JEC) between the two countries on January 11. By establishing the JEC, the Government of Canada is advancing trade diversification in the region basing on the success of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and collaboration through the Asia-Pacific Economic Cooperation (APEC) forum, as well as advancing free trade negotiations between Canada and the Association of Southeast Asian Nations (ASEAN), of which Vietnam is a member. The MoU will provide a platform to improve dialogue and collaboration on shared and emerging priorities with Vietnam which is Canada’s largest trading partner in ASEAN, the statement said. It is hoped to help deepen the Canada-Vietnam bilateral relationship, enhance Canada’s presence in the Indo-Pacific and create opportunities for Canadian businesses to scale up and grow internationally, it added. Despite complicated developments of the COVID-19 pandemic, two-way trade between Vietnam and Canada hit approximately 5.4 billion USD in the first 11 months of 2021, representing a year-on-year increase of 16.6 percent. Transport Ministry urges disbursement of 2021 public investments Minister of Transport Nguyen Van The has urged for an acceleration of the disbursement of 2021 public investments. A document on this issue, recently signed by the minister, points out that to date, many units of the ministry have yet to disburse last year’s public investment plan, with the disbursement rate being much lower than the ministry’s average. To reach the target of having 96 percent of public investment disbursed as assigned by the Prime Minister, the Transport Ministry asks investors and project management boards to speed up disbursements and clearly report reasons for the slow pace. The heads of the investors and project management boards bear the main responsibility for the slow work. According to the ministry’s Planning-Investment Department, last year, the ministry’s total investment was 43.2 trillion VND (1.9 billion USD), of which 37.1 trillion VND, or 85.6 percent, was disbursed. Expert highlights three factors helping Vietnam secure FDI inflows Low labour cost, favourable geographic location and the expansion of investment abroad are three key factors helping Vietnam secure its foreign direct investment (FDI) attraction, according to Chief economist VinaCapital Michael Kokalari. The official explained that factory wages in Vietnam are about two-thirds below those in China, but the quality of the workforce is comparable. Secondly, Vietnam has close geographic proximity to Asia’s supply chains – especially in the high tech industry. Also, Japan and the Republic of Korea (RoK) face structural issues that compel both countries to invest abroad – and Vietnam is the most attractive destination in the region. Further to that point, the two countries are currently burdened by “secular stagnation”, which is primarily caused by poor/declining demographics, and other factors, including heavy debt. Japan’s demographics started seriously deteriorating around 1990, and the Japanese responded to the country’s deteriorating economic prospects at that time by aggressively investing in Southeast Asia, the official added. In addition to the three factors highlighted above, an increasing number of multinational corporations are seeking to diversify their manufacturing outside China. 5th Vietnam Rice Festival concludes The 5th Vietnam Rice Festival wrapped up in the Mekong Delta province of Vinh Long on January 10 with "Ngoc Troi Thien Vuong " (LT28) rice of Loc Troi Group (LTG) winning the first prize of the good Vietnamese rice trademark competition. Co-organised by the Vietnam Farmers’ Union (VFU), the Ministry of Agriculture and Rural Development, and the Vinh Long People's Committee, the festival featured nearly 400 stalls run by 665 businesses and cooperatives. Its theme highlighted sustainable agricultural development. There were also sideline events such as a workshop on rice products developed under the “One Commune One Product” programme; competitions for Vietnamese rice trademarks and dishes made from rice; and an exhibition on achievements of the Vietnamese rice sector. During its four-day course, the festival attracted more than 30,000 visitors. VinFast to include navigation system across full lineup VinFast is set to become the first all-electric carmaker to integrate what3words navigation across its entire lineup, announced the company on January 10. what3words is the location technology service that has split the entire world into 10 square feet (3m) chunks and assigned each chunk a unique combination of three random words to help identify it. The system’s advantage is a voice search in more than 50 different languages, including Vietnamese. Drivers can enter a what3words address through voice or text input to find exactly where they’re looking for. Users can also convert their current location into a what3words address by using the service’s companion app. Reference exchange rate down 20 VND The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 23,105 VND/USD on January 10, down 20 VND from the previous day. With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,818 VND/USD and the floor rate 22,431 VND/USD. Hanoi develops industrial parks for 2021-2025 The Chairman of the Hanoi municipal People’s Committee has signed a decision approving the establishment of two to five industrial parks in outlying districts for the 2021-2025 period. They are Soc Son IP in Soc Son district, Dong Anh IP in Dong Anh district, Bac Thuong Tin IP in Thuong Tin district, expanded Phu Nghia IP in Chuong My district and Phung Hiep IP in Thuong Tin district. The city will also step up the ongoing building of IPs and remove difficulties for Hanoi Southern Supporting IP for the second stage. Hanoi is now home to 10 IPs covering a total area of over 1,347 ha, nine of them sit on a site of more than 1,270h and have occupancy rate of nearly 100 percent. Vietnam diversifies dragon fruit markets As vegetarians make up a large proportion of population in the countries that consume dragon fruit at weddings, it is a huge potential market for Vietnam’s dragon fruit, according to the Ministry of Agriculture and Rural Development. The ministry said Vietnam’s dragon fruit export to India, a country with a large proportion of population consuming dragon fruit at weddings, went up quickly during 2019-2020, reaching over 11,000 tonnes and fetching 9.86 million USD. Source: VNA/VIR/SGT/ND/VNS/VOV/SGGP |
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