VIETNAM BUSINESS NEWS MARCH 29
15:51
Fitch rates Vietnam at
“BB”, with positive outlook Fitch Ratings has affirmed Vietnam’s long-term foreign-currency issuer default rating (IDR) at “BB” with a positive outlook. A report released on March 28 by the
rating agency said the affirmation reflects Vietnam’s continued strong
medium-term growth prospects, despite the COVID-19 pandemic and the global
economic spillovers from the war in Ukraine, and strong external finance
metrics relative to peers. Fitch Ratings noted the rapid recovery
of economic activities thanks to the Government's flexible approach in
response to the pandemic and high vaccination rates. Vietnam continues to benefit from the
export sector thanks to the implementation of important trade agreements,
foreign direct investment (FDI) inflows still maintain high growth and
tourism flows gradually resume from 2022, it said. Fitch forecasts that the country’s GDP
growth to accelerate to 6.1 percent in 2022 and 6.3 percent in 2023 from 2.6
percent in 2021, led by a recovery in domestic demand, strong exports and
high FDI inflows. According to Fitch Ratings, Vietnam's
success in stabilising public debt, its growth potential in the medium term
and the rise of foreign exchange reserves which are reaching a record high
are offering a cushion for the country to cope with external shocks. It forecasts that efforts to maintain
macroeconomic stability, strive for a high economic growth rate, reduce the
disparity in GDP per capita compared to its peers and further improve public
finances through sustained fiscal consolidation, expansion of the collection
base, and medium-term debt stabilisation, overcoming weaknesses in the
banking sector in terms of capitalisation, transparency regarding asset
quality and regulatory frameworks, will be positive factors to help further
enhance the country's credit rating in the coming time. Bac Giang to kick off many
infrastructure projects in Q2 The northern province of Bac Giang has
planned to begin a host of basic infrastructure projects within the second
quarter, focusing on speeding up the progress of and tackling hurdles facing
major ones. The province is striving to start the
construction of the Nhu Nguyet bridge on April 30, and of the Dong Viet
bridge on May 19. Local authorities are set to pay a
special attention to investment preparations and compensation for site
clearance at the Viet Han, Quang Chau, Hoa Phu, Tan Hung and Yen Lu industrial
parks. Tourism development, particularly at
existing destinations like the eco-spiritual site Tay Yen Tu and the Truc Lam
– Phuong Hoang Zen monastery, is also another focus. Vietnam’s nickel demand
expected to increase Vietnam has the opportunity to be at
the forefront of the global movement towards the electrification of
transport, so demand for nickel in Vietnam will continue to rise, experts
have said. It is forecast that the demand for
metals used to produce electric batteries, including nickel, will increase
due to the rise in electric vehicles. Worldwide nickel reserves are currently
estimated at around 89 million tonnes. Nickel is one of many sought-after
global resources, as is widely used in technologies such as batteries for
vehicles. The proportion of nickel-metal used in
producing batteries currently accounts for about 4 percent of the world's
nickel production. As the amount of nickel used in batteries
for electric vehicles is higher, the demand for nickel will increase
significantly. Moreover, in the context of the
growing stainless steel manufacturing industry, nickel consumption is
expected to continue to increase (from 2.4 million tonnes in 2019 to 2.8
million tonnes by 2025), with a growth rate of about 2.2 percent a year. Vietnamese exports regain
strong growth momentum The first half of March saw Vietnam's
overall export turnover reach US$15.32 billion, marking a sharp increase of
nearly 76% over the same period from last month, while import turnover hit
roughly US$15.23 billion, a rise of 20.3%, according to the General
Department of Vietnam Customs. Most notably, the country’s trade
surplus hit approximately US$100 million throughout the reviewed period. During the first half of March, import
and export turnover enjoyed strong growth compared to the first half of
February, with key export groups such as phones, computers, equipment,
garments and textiles enjoying signs of recovery with high growth in turnover
compared to the same period from last year. Between the beginning of the year and
March 15, the total export turnover reached nearly US$69.78 billion, with the
nation enduring a trade deficit of roughly US$500 million. Ho Chi Minh City Economic Forum
scheduled for mid-April Ho Chi Minh City will host its
economic forum 2022 themed "Digital economy: Growth engine and future
development of HCM City" from April 14 to 16, the municipal People's
Committee announced on March 28 at a press conference. The forum is expected to provide an
ideal venue for local and international experts, along with business
representatives, to seek solutions to accelerate digital transformation and
strengthen human resources in the city. The forum is expected to attract the
participation of more than 900 delegates from relevant Vietnamese ministries,
diplomatic missions, and international financial institutions such as the
World Bank, International Monetary Fund (IMF), International Finance
Corporation (IFC), and Asian Development Bank (ADB), as well as international
organisations including the World Economic Forum (WEF) and the Organisation
for Economic Co-operation and Development (OECD). Farm produce exports set
sights on US$50 billion target this year By utilising various free trade
agreement (FTAs) and focusing on advantageous products, the agricultural
sector is likely to exceed its export target of US$50 billion set for this
year, said Deputy Minister of Agriculture and Rural Development Phung Duc
Tien. According to the Ministry of
Agriculture and Rural Development, agro-forestry and fishery exports during
the initial months of the year surged by 15.8% to reach nearly US$14.2
billion against the same period from last year. Despite recording positive signs in
exports, the sector continued to face numerous difficulties caused by the
complicated nature of COVID-19 and other external factors. Deputy Minister Tien pointed out that
the pandemic has served to ramp up costs of input materials, including animal
feed for the domestic livestock and aquaculture industries. Visa expands funding
programme for women entrepreneurs in Vietnam Visa, the world’s leader in digital
payments, on March 28 announced the expansion of the She’s Next Grant
Programme in Vietnam to support women entrepreneurs in capital mobilisation,
business governance and development. Accordingly, the programme will
continue to receive applications from March 28 to the end of April 29, 2022.
Eligible entrants must be Vietnamese citizens who acquire at least 51%
women-owned enterprises that have operated for at least one year. The programme will be built based on
Visa's commitments to improve the digitalisation capacity for more than 50
million small-sized businesses across the globe. Alongside, Visa will also implement a
number of other useful programmes that encourage consumers to support local
firms and accompany small and medium-sized enterprises in the digital
transformation process. Corporate bond yields
expected to rise this year In 2021, corporate bond yields were at
their lowest level in history at just 7.86 percent a year. The interest rate
may have created a bottom and will support corporate bond yields inching up
in 2022. In a recent report, SSI Research said
that last year, enterprises issued a total of 722.7 trillion VND (31.6
billion USD) worth of bonds, up 56 percent year-on-year. The net number of
corporate bonds issued in 2021, excluding the amount of matured and called
away bonds, was estimated at 438 trillion VND, up 63 percent. The total amount of corporate bonds in
circulation at the end of 2021 was estimated at about 1,390 trillion VND,
equivalent to an average growth rate of 46 percent per year in the period
from 2017 to 2021. The size of the corporate bond market increased sharply,
from 4.93 percent of GDP in 2017 to 16.6 percent of GDP in 2021. SSI said that this growth was in line
with the capital market development orientation, reducing the dependence of
enterprises on bank credit. The average maturity of corporate
bonds issued in 2021 decreased to 3.86 years from the average of 4.32 years
in 2020. It was mainly because banking and real estate bonds have shorter
maturity dates, down by 0.5 years and 0.3 years, respectively, to 4.2 years
and 3.6 years. Construction of bridge spanning
Hau River begins Construction of Chau Doc bridge which
connects Kien Giang province’s Chau Doc city and Dong Thap province’s Tan
Chau town started on March 28. The bridge, which crosses the Hau
River, is 667m in length and 14m in wide. It has a designed capacity of 60
kilometres per hour and is estimated to cost 534 billion VND (23.4 million
USD). The bridge, which is expected to be
put into operation in 2024, is part of a regional linkage project with a
total investment of more than 2.1 trillion VND (93 million USD). Once completed, the project will help
shorten the travel time from Chau Doc to Tan Chau as well as from the western
region to Ho Chi Minh City, promoting economic development and tourism in
southwestern border areas. Vietnam National Trade
Repository to make debut The Vietnam National Trade Repository
(VNTR) has been completed and is set to make its debut on March 30, according
to the Ministry of Industry and Trade (MoIT). According to the ASEAN Trade in Goods
Agreement (ATIGA), each member country will build its own national trade
repository which will be connected with the ASEAN Trade Repository so as to
ensure policy transparency, facilitate regional trade, and support
businesses. The MoIT said the portal, developed by
the ministry with support from the British Government through the British
Embassy in Vietnam, provides updated trade information in both English and
Vietnamese. It is connected with the ASEAN Trade
Repository at https://atr.asean.org/ to guarantee the country’s compliance
with the rule on information transparency in ATIGA. Foreign arrivals to Vietnam
in March surge The number of international arrivals
to Vietnam in March increased by 41.4 percent over the previous month and 2.2
times against the same period last year as Vietnam has fully reopened and
many international flights have been restored, according to General
Statistics Office (GSO). In the first quarter of this year, the
number of foreign tourists to the country reached nearly 91,000, a
year-on-year rise of 89.1 percent. Among them, visitors arriving by air
accounted for nearly 90.5 percent of the total international arrivals to
Vietnam, an increase of 165.2 percent. Revenue from accommodation and food
services in the January-March period increased by 1.2 percent year on year,
while tourism revenue rose by 1.9 percent year on year. CPI inches up 1.92 percent in
Q1 The Consumer Price Index (CPI) in the
first quarter of 2022 posted a year-on-year rise of 1.92 percent, the General
Statistics Office (GSO) reported on March 29. The office said CPI in March increased
by 0.7 percent month-on-month, the highest monthly increase since 2012. Among
the 11 groups of key commodities and services, 10 experienced price hikes
from the previous month. According to GSO General Director
Nguyen Thi Huong, hikes of petrol and gas prices in tandem with global fuel
prices, and prices of construction materials, contributed to the increase in
the overall CPI in the last quarter. The price of rice in January-March
increased by 1.1 percent year-on-year, contributing 0.03 percentage points to
the CPI. Notably, house rent strongly fell by
15.14 percent year-on-year due to a cut in support of the people facing
difficulties caused by the COVID-19 pandemic. Core inflation in the quarter
was up 0.81 percent compared to a year ago, the GSO said. Consultations to promote
Vietnam’s export-import activities The Trade Promotion Agency under the
Ministry of Industry and Trade announced that it will host 30 consultation
events for enterprises in 2022. These will be part of a chain of
programmes to support businesses in accessing foreign markets, and applying
regulations and standards, and international commitments on export-import
goods. Accordingly, representatives of
Vietnamese trade offices abroad, domestic and foreign market experts and
those specialising in various fields, will give consultations to localities,
business associations and enterprises on issues of their concern. How to help agricultural
businesses promote exports to Turkish market Turkey currently represents the
nation’s second largest export market in West Asia, just behind the United
Arab Emirates (UAE), with the surplus in bilateral trade balance between both
sides in recent years frequently belonging to Vietnam. However, the proportion of Vietnamese
exports in terms of Turkey's total imports remains low at about 0.5%. Many Vietnamese products exported to
Turkey account for a small proportion, lower than those of their direct
competitors, except pepper, cashew nut, fiber, and rubber. In order to provide updated
information on the market situation, regulations, standards, as well as the
import and export conditions of the Turkish market for local products such as
pepper, cashew nut, rubber, fruit, handicrafts, the Vietnam Trade Promotion
Office in Turkey will hold a consultation on exports. This will look at the
Turkish market in both in-person and offline formats, with the event taking
place on March 30 in the northern province of Hung Yen. Vietnamese exports regain
strong growth momentum The first half of March saw Vietnam's
overall export turnover reach US$15.32 billion, marking a sharp increase of
nearly 76% over the same period from last month, while import turnover hit
roughly US$15.23 billion, a rise of 20.3%, according to the General
Department of Vietnam Customs. Most notably, the country’s trade
surplus hit approximately US$100 million throughout the reviewed period. During the first half of March, import
and export turnover enjoyed strong growth compared to the first half of
February, with key export groups such as phones, computers, equipment,
garments and textiles enjoying signs of recovery with high growth in turnover
compared to the same period from last year. Between the beginning of the year and
March 15, the total export turnover reached nearly US$69.78 billion, with the
nation enduring a trade deficit of roughly US$500 million. Escalating food and petrol
prices push up CPI to 1.92% in Q1 The recent surges in the price of food
and petrol has led to the consumer price index (CPI) to rise by 1.92% in the
first quarter of the year while core inflation also soared by 0.81%, the
General Statistics Office (GSO) announced on March 29. The GSO pointed out that gasoline
prices soared in line with global fuel prices, while rental housing prices
also edged up again after the COVID-19 pandemic was finally brought under
control in the nation. Furthermore, the price of essential
consumer goods and services also inched up due to the escalating prices of
input materials and petrol. These factors resulted in the CPI in
March expanding by 0.7% compared to the previous month, marking a climb of
1.91% compared to December last year and up 2.41% against the same period
last year. The GSO’s latest report highlights
that core inflation in March also rose by 0.29% over the previous month,
marking a rise of 1.09% on year. The first quarter of the year saw
average core inflation increase by 0.81% compared to the same period last year,
lower than the general average CPI. Domestic air fares rise ahead
of national holiday travel rush Despite Reunification Day on April 30
and International Labor Day on May being a month away, local airlines are
already hiking up prices for flights during the holidays amid soaring demand
for travel. In line with the increased interest
for travel, a one-way ticket from Hanoi and Ho Chi Minh City to the southern
island of Phu Quoc costs between VND1 million to VND3.2 million, equivalent
to between US$44 and US$140, excluding tax. Furthermore, a one-way ticket price
for flights from Hanoi and Ho Chi Minh City to Da Nang hovers between VND1.4
million and VND2.4 million, equal to between US$61 and US$105, including tax.
After the holiday, airfares are expected to see a decline of roughly
VND700,000 to VN 1.1 million, equivalent to between US$31 and US$48. Several agencies reported that package
tours to Da Nang and Phu Quoc continue to be in high demand during the
holidays, with ticket prices two to three times higher compared to normal
days. VND2 trillion supports
households, businesses in Ha Noi The funds will be distributed through
the Social Policy Bank of Vietnam's network in collaboration with district
and commune-level government to ensure the intended beneficiaries will
promptly receive much-needed financial aid. In a recent announcement, city
officials said it had prepared different plans for different scenarios of
pandemic development and economic recovery. The idea is to remain vigilant
and flexible to ensure production stays uninterrupted. Do Anh Tuan, head of the city's
planning and investment department, said the city had formed several task
forces to closely work with businesses, cooperatives and households affected
by the pandemic. Consumer goods and services
survey to start To effectively implement the Party
Central Committee’s Secretariat on strengthening the campaign “Vietnamese
people give priority to using Vietnamese goods,” goods and services will be
surveyed according to quality, information, consumer choice, models and
reasonable and competitive prices. The survey will be posted on the
VCPA’s website. From April 1 to November 20, customers
will take the survey through a questionnaire, which will then be appraised
through the council. After the survey, the top 100 goods and services will be
chosen. Yen Bai approves $64 million
of investments To accompany businesses, the
provincial chairman of the people's committee Tran Huy Tuan affirmed that the
province would promote comprehensive and synchronous administrative reform,
focusing on simplification and shortening processing time for administrative
procedures in the field of land, investment, construction, tax and customs. In addition, the province seriously
implements tasks and solutions to improve the business environment and
enhance competitiveness in order to improve the efficiency of investment
attraction in the province in the direction of selecting real investors
having financial potential, prestige, and using modern eco-friendly
technology. Low level of car production
holds back Vietnamese auto part suppliers Only Toyota and Hyundai crossed the threshold
in 2021, with 64,172 and 56,028 vehicles, respectively. Meanwhile, Kia fell short of the
threshold with just 35,181 vehicles. VinFast followed with 34,746 and
Mitsubishi with 26,346. Truong Thi Chi Binh, an expert at
Vietnam Institute of Strategy and Policy for Industry and Trade, underlined
the low level of car production as a setback for the Vietnamese auto part
industry. She said low production meant low
demand for domestic auto parts, discouraging suppliers from investing in new
production lines. Without new production lines, the
suppliers become less competitive in price as they cannot achieve economies
of scale. Consequently, car producers have to
find their auto parts elsewhere. Nascent model of open banking
entices institutions Financial institutions are placing
premiums on open banking services following global trends – but the
cutting-edge implementation is fraught with obstacles owing to a flimsy legal
framework. Nguyen Quoc Hung, general secretary of
the Vietnam Banks Association (VBA), assessed that open banking is a
potential business model that helps banks access a wide range of customers at
low cost through partners’ applications, build optimal solutions, and provide
the most comprehensive and convenient services for customers. Can Van Luc, BIDV’s chief economist,
believed that open banking is a fairly novel concept as Asian banks only
began experimenting with this approach in the last few years. Likewise, deputy general director of
VietinBank, Tran Cong Quynh Lan, said that the bank has been working on an
open banking implementation strategy since 2017. As Lan underscored, the lack of a
complete regulatory framework for open banking in Vietnam would be a
substantial impediment to banks’ efforts to implement these collaborative
services. However, there are currently no
official norms for open application programming interfaces or what type of
services can use what data partners, among other open questions.
Simultaneously, there is no standard for IT systems, data storage, security,
or connection. A representative from Viet Capital
Bank told VIR that, as a customer-centric bank, it aims to provide convenient
and seamless services to its customers. Pham Tien Dung, Deputy Governor of the
State Bank of Vietnam, said that the existing legislative framework for open
banking in Vietnam is in place, but it is not sufficient to meet the evolving
needs of the current state. The provisions are scattered
throughout some major laws, such as on electronic transactions, credit
institutions, cybersecurity, and several more. Some documents on handling
violations related to personal information also have content on the issue. Direction steady for low
interest rates The local central bank is anticipated
to maintain its accommodative stance while keeping a close eye on
inflationary concerns and, as a result, economists expect that a likely
larger interest rate rise would further boost credit growth. Fresh data from the State Bank of
Vietnam (SBV) showed that the credit growth rate for the whole system reached
3.11 per cent as of March 10, up 2 per cent on-year. Increasing capital
requirements by businesses are reflected in the rapid recovery of lending in
the early months of 2022. According to the SBV, credit might
grow by 5.3 per cent in Q1/2022 and by 14.1 per cent for the whole year. The
rate of credit growth has increased significantly since the beginning of the
year as compared to the same time last year as businesses began relaunching
manufacturing and other commercial activities. Fund management group Vietnam Holdings
believed that, unlike in several developed countries where expectation of
potentially sustained inflation is putting pressure on central banks to raise
interest rates, Vietnamese interest rates have remained low, and more easing
is expected. According to SSI Securities
Corporation, deposit rates jumped 0.2 per cent at some major banks for a
tenure of more than six months. Deposits grew at a positive pace of
15.7 per cent during the same time, and capital mobilisation grew at a low
rate of just 3.1 per cent. Deposit interest rates are likely to
rise somewhat in the second half of the year by roughly 0.2-0.25 per cent,
which is expected to boost household capital mobilisation. Bao Viet Securities Company also
forecasted that the interest rate in 2022 would be difficult to reduce
further. On the contrary, it could rise by 0.25-0.5 per cent. Consultations to promote
Vietnam’s export-import activities The Trade Promotion Agency under the
Ministry of Industry and Trade announced that it will host 30 consultation
events for enterprises in 2022. These will be part of a chain of
programmes to support businesses in accessing foreign markets, and applying
regulations and standards, and international commitments on export-import
goods. Accordingly, representatives of
Vietnamese trade offices abroad, domestic and foreign market experts and
those specialising in various fields, will give consultations to localities,
business associations and enterprises on issues of their concern. Cost of Ring Road No. 3
section up by over VND1.6 trillion The estimated cost of the Tan Van-Nhon
Trach section of the Ring Road No. 3 project, which will connect HCMC, Binh
Duong, Dong Nai and Long An, has risen by over VND1.6 trillion after six
years of delays. The My Thuan project management board
has sent a report on the progress of the first phase of the section to the
Ministry of Transport. The section was designed to have a length of 8.75
kilometers and connect provincial road 25B in Dong Nai with the HCMC-Long
Thanh-Dau Giay Expressway in HCMC. The Tan Van-Nhon Trach section will
have 6.3 kilometers in Dong Nai and 2.45 kilometers in HCMC. The Ministry of Transport approved the
investment for the section at VND5.33 trillion in 2016. At the time, site
clearance for the sections in HCMC and Dong Nai would need nearly VND149
billion and VND476 billion, respectively. The figures have increased by VND1.45
trillion and VND175 billion to nearly VND1.6 trillion and VND651 billion. VND18.6-trillion road project
approved The prime minister has approved the
National Highway 50B project linking HCMC and the Mekong Delta provinces of
Long An and Tien Giang at an estimated investment of VND18.6 trillion. Director of the Long an Department of
Transport Dang Hoang Tuan said the project was included in the road traffic
system planning for the 2021-2030 period with a vision to 2050, the local
media reported. The road, which will be 55 kilometers
long and 78 meters wide, will start at an intersection with Pham Hung Street
in HCMC and end at the Trung Luong T-junction in Tien Giang Province. The
section in Long An, Tien Giang and HCMC will be over 35, 14 and 5.8
kilometers long, respectively. Of the total investment, more than
VND13.8 trillion will be used for site clearance. The section in Long An will pass
through the Can Giuoc, Can Duoc, Chau Thanh and Tan Tru districts and include
three bridges—Can Giuoc, Vam Co Dong and Vam Co Tay. Production of pangasius
fingerlings should be cautious In the face of the price fever of
commercial pangasius fish, causing the price of fingerlings to climb to over
VND50,000 per kg for 30-35 pieces per kg, on March 28, the Vietnam Pangasius
Association advised farmers not to raise pangasius fingerlings too much to
avoid the recurrence of oversupply, leading to heavy losses. The Department of Agriculture and
Rural Development of Long An Province also recommended that people should not
massively expand the scale and area of pangasius fish hatcheries. They should
update information on the commercial pangasius market, the demand for
fingerlings of the provinces raising commercial fish to make a suitable
production plan. According to the Department of
Agriculture and Rural Development of Long An Province, over the past time,
pangasius fingerlings have been raised on an area of about 1,300ha, mainly in
the districts of the Plain of Reeds (photo). However, the rearing of pangasius
fingerlings in the province remains spontaneous, with many potential risks.
For instance, the quality of fingerlings is not guaranteed, and farmers
discharge water directly into the environment, causing pollution and
spreading pathogens. Source:
VNA/VIR/SGT/VNS/VOV/Dtinews/SGGP |
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