Efforts to stimulate domestic consumer market continue as pandemic threatens exports
|The Ha Noi Department of Industry and Trade will organise five Vietnamese Goods Weeks this year to stimulate demand. Photo baodauthau.vn|
The Ministry of Industry and Trade will organise conferences to connect producers, suppliers and retailers, and events for producers and traders, especially small traders, to help take goods to residential areas, industrial parks and rural and mountainous regions, the Sai Gon Giai Phong (Liberated Sai Gon) newspaper reported.
It will help encourage consumption by fostering the evening economy and holding fairs and exhibitions of products and services. It continues to implement the ‘Vietnamese people give priority to using Vietnamese goods’ programme.
It will also promote the adoption of IT and foster e-commerce.
The Ha Noi Department of Industry and Trade will organise five Vietnamese Goods Weeks this year to stimulate demand.
To be held in the districts of Ha Dong, Hai Ba Trung, Nam Tu Liem, Quoc Oai, and Ba Vi, they will have around 100 standard booths each.
Companies and co-operatives will exhibit food products, textiles, footwear, consumer goods from One Product One Commune programmes from Ha Noi and other cities and provinces.
The department will subsidise booth costs by 50 per cent.
The city will also support localities and businesses in Ha Noi and elsewhere in selling agricultural and aquatic produce that face difficulties in selling due to the pandemic.
It will strengthen communications and promotions, create the best conditions for businesses to reach consumers and expand their market.
Products displayed and sold at the events will all be Vietnamese products with quality, food safety and traceability guaranteed.
To effectively implement the programme, the department has called on people’s committees of districts and towns to review all businesses and co-operatives to participate in the 2021 Vietnamese Goods Week of Ha Noi, especially agricultural produce that are difficult to sell and the One Product One Commune programme.
According to the newspaper, the Can Tho City Department of Industry and Trade also plans to organise a promotional month programme, possibly from April 10 to May 10.
It will seek the participation of businesses, supermarkets, commercial centers, convenience stores, restaurants, hotels and entertainment venues.
HCM City plans to focus on digitisation of industry and promotion of domestic tourism.
Deputy director of the city Department of Tourism, Bui Thi Ngoc Hieu, said her agency is stepping up digitisation, and the sector would continue its efforts to boost domestic tourism to drive the recovery of the industry.
Tourism co-operation and linkages between HCM City and the north-east, north-west and the central regions would also serve to boost domestic travel, she added.
VN-Index falls as selling pressure weighs market
Viet Nam’s stock exchange ended mixed on Thursday as the benchmark VN-Index reversed course to finish lower while the HNX-Index continued its rally.
On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index declined by 8.62 points, or 0.69 per cent, to 1,247.25 points. The index rose slightly 0.15 per cent in the morning trade. The market breadth was negative with 294 stocks dropping while 141 stocks climbed.
The market’s liquidity remained high as nearly 806.5 million shares were traded, worth over VND20.6 trillion.
The index successfully tested the support territory of 1,225 – 1,232 points and rebounded at the end of Wednesday’s trade. The move is expected to help the index continue to rise and head toward the resistance zone of 1,275 – 1,300 points in the short-term, Bao Viet Securities Company said in a daily report to customers.
“However, during this period, the market is likely to be dominated by some large-cap stocks, along with a strong division between groups of stocks,” the securities firm added.
April futures contracts expired yesterday and the event might have a huge impact on large-cap stocks in the VN30 basket.
The VN30-Index, which tracks the 30 biggest stocks in HoSE, fell 0.51 per cent to 1,284.2 points. Of the VN30 basket, 24 stocks declined while only five increased.
Stocks from banking, materials, utilities, information technology, retail, transportation and logistics posted poor performance on Thursday. Of which, top five stocks weighing the market were Vietcombank (VCB), JSC Bank For Investment and Development of Vietnam (BID), Investment And Industrial Development Corporation (BCM), Techcombank (TCB) and Vietnam Rubber Group JSC (GVR).
VCB posted the biggest loss in market capitalisation, down 1.22 per cent.
The losses were limited by gains in material stocks and real estate and construction sectors with Hoa Phat Group (HPG) leading the market’s rally, up 2.83 per cent, followed by Vingroup JSC (VIC), No Va Land Investment Group Corporation (NVL) and Vinhomes JSC (VHM).
On the Ha Noi Stock Exchange, the HNX-Index, meanwhile, climbed 0.44 per cent to 296.12 points despite falls in big stocks. The HNX30-Index fell 0.64 per cent to 443.82 points on Thursday.
During the session, local investors poured over VND3.2 trillion into the northern bourse, equivalent to a trading volume of 172 million shares.
Foreign investors still fled from both exchanges as they net sold a value of VND829.47 billion on HoSE and a value of VND13.25 billion on HNX.
FLC Group plans Bamboo Airways IPO in the U.S.
FLC Group, Vietnam’s multi-industrial conglomerates, is planning an initial public offering (IPO) of its airline, Bamboo Airways, in the United States that could raise about US$200 million, Reuters reported.
Bamboo Airways is planning to sell 5-7% of its share in the IPO this Q3 and seeking a valuation of at least US$4 billion after the listing.
“The IPO is a part of our efforts to expand services globally,” said FLC Group chairman Trinh Van Quyet. The airline has been working with an international auditing firm for the potential listing on the New York Stock Exchange.
Bamboo Airways last month announced it will list its share on the Vietnam Stock Exchange in Q3, however, Quyet told Reuters that “it was a backup plan, depending on market conditions”.
Bamboo Airways plans to increase its fleet from the current 30 to 40 by the end of this year, including two new Boeing 787-9 Dreamliners, Quyet added.
The airline is seeking to launch new routes to the U.S., Australia, Germany, Japan and the United Kingdom this year should COVID-19 pandemic improve.
It plans to conduct chartered flights to the U.S. in July, and launch non-stop commercial flights between Ho Chi Minh City and San Francisco in September, with an initial frequency of three flights per week.
This year, Bamboo Airways targets a 25% rise in pretax profit to VND500 billion.
Vietnam, Singapore beef up investment links in industry
Addressing the forum, General Director of the Trade Promotion Agency under the Ministry of Industry and Trade Do Ba Phu said he values Singaporean investor’s potential and predicted that investment flows from Singapore to Vietnam will rise sharply in the future.
Singapore was the largest investor in Vietnam last year, with nearly US$9 billion, accounting for 31.5% of the country’s total foreign investment.
It possesses advantages in investing in key industries where Vietnam is calling for investment, Phu said.
Tran Thu Quynh, Vietnamese Trade Counsellor in Singapore, briefed participants on production trends in Vietnam and the country’s priorities in attracting investment in industries in the 2021-2030 period, and told them of free trade agreements Vietnam has signed with foreign partners.
Douglas Foo, President of the Singapore Manufacturing Federation (SMF), who is also President of the Vietnam – Singapore Business Council, highlighted the significance of the forum, affirming that Singaporean enterprises are interested in the Vietnamese market.
In the context of COVID-19, with flight routes yet to restart between the two countries, opportunities for links like this forum will help Singaporean firms learn more about new investment opportunities in Vietnam, he said.
Vietnam adds eight more wharves this year
Eight wharves in Ba Ria-Vung Tau, Haiphong, HCMC, Dong Nai and Khanh Hoa have been listed in Vietnam’s wharf system, raising the country’s total number of wharves to 286 this year.
The number of wharves in the country’s wharf system rose by eight against the 2020 figure, according to the list of wharves at seaports in Vietnam recently announced by the Ministry of Transport.
Four new wharves in Ba Ria-Vung Tau comprise Hyosung Vina Chemicals, Military Defense 7, Southern petrochemical complex and Naval Team 129.
Besides, Haiphong City has MPC Port Wharf, while the list also named some other new ones, including Nam Van Phong Wharf in Khanh Hoa Province, Vinh Hung Wharf in Dong Nai Province and Ben Nghe Phu Huu Wharf in HCMC.
Among the 286 wharves in Vietnam, Haiphong City has 50, Vung Tau Province is home to 46 and HCMC has 42.
Other localities such as Can Tho, Dong Nai, Khanh Hoa and Quang Ninh have from 13 to 21 wharves, the local media reported.
Some other seaports in Quang Binh, Quy Nhon, Kien Giang and Dong Thap have some three or four wharves, while Quang Tri, Binh Duong, Tra Vinh, An Giang and Vinh Long have one wharf each.
Each year, Vietnam welcomes an average 120,000 ships, with a 16% growth in goods transport. In 2020, the volume of cargo transported through seaports reached 692 million tons.
Coffee exports fall by over 11% in Q1
In March alone, 145,000 tonnes of coffee were shipped abroad, bringing home US$275 million. The figures respectively rose 18% and 27.3% month on month, but declined 21.1% and 11% compared to the same period last year.
Despite a drop in both export volume and value, export prices still increased in Q1, the MARD said, noting that prices of Vietnamese coffee averaged US$1,897 per tonne in March, up 7.9% from the previous month and 12.8% year on year.
During Q1, average coffee export prices grew 6.8% from a year earlier to US$1,801 per tonne.
MARD statistics also showed that in the first three months, the country exported US$10.61 billion worth of agricultural, forestry and fishery products, up 19.7% year on year. Meanwhile, imports hit US$7.74 billion, up 44.7%.
That resulted in a trade surplus of US$2.87 billion for the agricultural sector during the period.
Wood industry seeks to crack down on disguised investment
Despite foreign-invested enterprises (FDI) businesses playing an important role in the local wood industry, a number of disguised businesses have taken advantage of legal loopholes to cause injury to the genuine domestic industry, say industry insiders.
A recent report released by the Vietnam Timber and Forest Product Association (VIFOREST) indicates that the domestic wood industry welcomed 63 new projects with total registered investment capital of approximately US$327.7 million by the end of 2020. In addition, 174 businesses decided to increase their capital and buy shares totaling US$244.8 million. These figures prove that the industry continues to represent a magnet for FDI attraction.
The report also outlines that FDI wood enterprises last year outperformed their local rivals in terms of exports, as 653 FDI enterprises raked in US$6 billion while 2,676 local firms earned only US$5.9 billion from exports.
This outperformance can largely be attributed to the difference in production scale, technological level, investment capital scale, and market approach, according to experts in interviews with Vietnam News Agency.
“Undoubtedly FDI businesses are part and parcel of the Vietnamese wood processing industry,” says Dr. To Xuan Phuc, senior policy analyst of non-profit organisation Forest Trends. “However, several disguised FDI activities are posing a real risk to the domestic industry.”
Elaborating on the tactics that a number of FDI businesses use, Do Xuan Lap, chairman of VIFOREST, says foreign traders entering a company in the country can sublease a factory and sign a contract in the form of technical staff.
They then inject money into production lines by importing timbers subject to US-imposed anti-dumping tax, and processing them in Vietnam before re-exporting the products bearing Made-in-Vietnam trademarks back to the US to enjoy tax preferences.
Another form of disguised investment is that foreign businesses do not sign contracts to lease land or hire employees in Vietnam. Instead, they hire Vietnamese people to run the business.
Nguyen Liem, vice president of the Wood Processing Association of Binh Duong province, describes the situation as serious and says it is hard to address the matter.
At present, the US represents the most important export market for the Vietnamese wood industry, with the products shipped to the US last year making up over 60% of the country’s total export turnover. This means any market fluctuations in the US will exert an impact on the entire industry as well as its set target.
Le Trieu Dung, head of the Trade Remedies Authority of Vietnam, says his agency has asked businesses and craft associations to increase inspection and oversight in terms of product origin, especially during the customs clearance process, in order to nip in the bud any trade fraud. The agency has also requested businesses not to aid and abet any behavior of trade fraud that injures domestic production.
Economists have advised local authorities to carefully inspect FDI projects and only accept projects with high-content technologies. This should be done whilst simultaneously strengthening connectivity among craft associations, domestic enterprises, and genuine FDI enterprises to tighten supervision activities which will prevent trade fraud and disguised investment activities.
Binh Phuoc proposed to take charge of HCMC-Thu Dau Mot-Chon Thanh expy project
The HCMC government has proposed the prime minister assign the Binh Phuoc government to take charge of executing the HCMC-Thu Dau Mot-Chon Thanh expressway project passing through HCMC and the Binh Duong and Binh Phuoc provinces, requiring an estimated investment of VND36 trillion, or roughly US$1.5 billion.
The city has also suggested the Government allocate capital from the State budget for the 2021-2025 period for the project, news site Vietnamplus reported.
The expressway project was initially designed to be 69 kilometers long but the Binh Phuoc government later proposed changing the direction of the route and increasing the length of the road to 70 kilometers. It will start in Binh Phuoc’s Chon Thanh District and end at the Go Dua Intersection in HCMC.
At a meeting in January, the prime minister assigned Binh Phuoc to develop the project under the public-private-partnership model and the Ministry of Planning and Investment to work with the relevant ministries and agencies to allocate capital from the State budget for the project.
In March, leaders of HCMC and Binh Phuoc agreed that the Binh Phuoc government would be in charge of constructing the expressway.
According to a report by the Binh Phuoc government, of the total investment required for the project, VND17 trillion or 47% will be sourced from the State budget and VND19 trillion will come from the investor.
The section in Binh Phuoc will be 11.5 kilometers long, have six lanes to be synchronous with the Dak Nong-Chon Thanh Expressway and need some VND3 trillion.
Meanwhile, the 1.5-kilometer elevated section in HCMC from the Go Dua Intersection to HCMC’s border line with the Binh Duong Province will also cost VND3 trillion.
The section passing through Binh Duong will have a length of 57 kilometers, including a 28-kilometer elevated section and 10 overpasses. The needed investment for the section will be some VND30 trillion.
The HCMC-Thu Dau Mot-Chon Thanh expressway is an important project to connect HCMC, Binh Duong and Binh Phuoc and create a driving force for the socioeconomic development of the southern key economic zone.
Vietnam to have first dual credit and debit card
The Viet Nam National Payment Joint Stock Company (NAPAS) and Vietinbank on Tuesday in Ha Noi signed a co-operation agreement for the launch of a dual credit and debit card – the first of its kind in Viet Nam.
The card will have one chip for a debit card and another for a credit card. The dual card aims to simplify administrative procedures for issuing cards for customers as well as to meet diverse consumption and purchasing demand.
The dual card is expected to launch in the third quarter of the year.
Speaking at the signing ceremony, Dam Hong Tien, director of the Vietinbank’s Retail Division, said: “Vietinbank has been a pioneer bank co-operating with NAPAS in developing the dual card to bring new and different experiences to cardholders. The dual card would have new payment conveniences with low cost and outstanding preferential treatment.”
Nguyen Dang Hung, deputy general director of NAPAS said: “The dual card is a unique domestic card available for the first time in Viet Nam, using the most advanced payment made-in-Viet Nam technologies. The card and multifunctional payment products will make an important contribution to promoting non-cash payment solutions in the country – a major policy of the Government.”
The deal is part of efforts from Vietinbank and NAPAS to provide creative, reliable and easy-to-use payment products.
Vietnam’s labour market to recover as half of companies look to increase headcounts
Vietnam’s employment market is expected to rebound as 50 per cent of companies in Vietnam are looking to increase their headcounts in 2021, according to the Talent Trends 2021 Report by Michael Page Vietnam.
The report also reveals that 58 per cent of those employed anticipate looking for new job opportunities, while another 34 per cent are passively open to new roles. Around 10 per cent expect a zero pay increase from their current salary for new job offers.
The insights in this report are derived from a regional survey that covers 12 Asia-Pacific markets. The responses came from over 5,500 businesses and 21,000 employees, of which 3,500-plus are directors or CXOs.
Mark Donnelly, director of Michael Page Vietnam says, “By all accounts, Vietnam has weathered the COVID-19 pandemic better than many of its neighbours in the region. Its tight and swift control of the situation not only kept the number of cases low by comparison, Vietnam’s economy, too, remained in a relatively good shape over 2020. While multinational companies based there were cautious on the recruitment front, domestic companies took the opportunity to ramp up their hiring activities and secure the best available talent.”
“Our Talent Trends 2021 report reflects vital market insights for the next 12 months ahead of us. Acquiring and retaining high potential talent will be crucial for future growth. We saw many businesses looking to prevent employee cuts and redundancies as much as possible during the pandemic. And several industries are already showing signs of a healthy recovery,” he said.
This was evident especially among Vietnam’s burgeoning technology sector. Startups and e-commerce, for example, operated unabated throughout the year, and hiring demands within those sectors were healthy.
In recent times, Vietnam’s efforts to position itself as a hub for software development also paid off in 2020, with markets like Japan, Hong Kong, China, and South Korea investing heavily into the country’s technology sector. Despite a slow year for manufacturing, Vietnam still saw a record year in terms of export surplus – a positive indicator for the road ahead.
Looking ahead, Vietnam is well-positioned to bounce back from the impact of COVID-19. In the meantime, businesses are well-advised to focus on employee engagement and well-being, ensuring that the entire organisation is poised for the recovery phase and beyond, according to Donnelly.
Vietnam has second highest rate of cryptocurrency use
Out of 74 countries in the Statista Global Consumer Survey, the second highest rate of cryptocurrency use in the survey was recorded in Vietnam while Nigerians were the most likely to say they used or owned cryptocurrency.
There has been a recent boom of cryptocurrencies (bitcoin) in Vietnam as investors realize the potential of this currency, while the government and experts have constantly been warning of possible risks, including Cybercrime. Cryptocurrency has not been recognized as a legitimate means of payment in Vietnam.
The price of bitcoin has risen to US$57,000 per Vietnamese dong. Moreover, with the emergence of new cryptocurrency Pi, the Vietnamese crypto market early 2021 saw a large influx of new investors.
Statista company’s survey of global customers has showed the second highest rate of cryptocurrency use in the survey was recorded in Vietnam just after Nigeria. With millions of dollars traded every month, bitcoin exchanges are prey to cybercriminals.
Mr. Chris Connell, Managing Director of Kaspersky Asia Pacific (APAC) region, said that there will be more new bitcoin virtual crypto currency investors in the Southeast Asia region adding that Vietnam is one of the leading countries in this transition; therefore, people should have more knowledge or understanding of security measures.
Deposits at banks modest due to low interest rates
Low deposit rates at commercial banks have resulted in a low growth of capital flows into banks, while the capital that has been poured into other sectors, such as insurance, real estate, bonds and securities, has surged.
According to the Department of Credit for Economic Sectors under the State Bank of Vietnam, in the first quarter of this year, the deposit growth reached only 0.54%, well below the credit growth of 2.93% and the average deposit growth of 2.28% in the first quarter of the past seven years, Lao Dong newspaper reported.
At present, the rate for savings of less than six months is 3%-4%. Meanwhile, tenors of six to less than 12 months and over 12 months enjoy a rate of 3.5%-5.5% and 4.6%-6%, respectively.
Although some banks have revised up their deposit rates by 0.1-0.4 percentage points, the banks’ average deposit rate in the first quarter remained some 2 percentage points lower than that in the same period last year.
If the trend continues, the banking system’s liquidity will no longer be ample this year, according to Bao Viet Securities Company.
Meanwhile, the General Statistics Office stated that capital had been injected into other sectors, with life insurance premium soaring 11%. Meanwhile, the securities market mobilized nearly VND55.6 trillion, surging 42% over the same period last year.
Pham Lam, vice chairman of the Vietnam Association of Realtors, attributed land fevers over the past few months partly to residents’ idle money and their expectations of higher prices of real estate products.
According to Dao Minh Tu, deputy governor of the central bank, as of mid-March, banks’ outstanding loans for the property sector grew 2.13%, higher than the current credit growth of 2.04%, despite the central bank’s close control over credit for the sector.
Yeah1 continues amassing deficit
Shifting to consumer services has yet to pay out for Yeah1 as its deficit grew by VND180 billion ($7.82 million) last year.
Yeah1 (HSX: YEG) has just published its financial report in 2020. After-tax losses increased by VND29billion($1.26 million), bringing its total losses last year to VND180 billion ($7.83 million).
Yeah1’s management board blamed the deficit on the VND44 billion ($1.9 million) it had to set aside as a provision for inventories that was added to the prime cost. Moreover, switching to consumer services last year (GIGA1 platform, a factory-to-end straight multi-channel trading platform ecosystem) cost the company many resources, leading to increased expenses.
Yeah1’s chairman Nguyen Anh Nhuong Tong told VIR that since late 2019, the company has rejuvenated and poured more capital into the new business. He explained that the first phase of the development last year demanded a large investment to build up bases such as human resources, goods, and business strategies.
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Yeah1 also stated that the COVID-19 impacts and the social distancing last year have been hampering its operations in key segments like media and digital platforms, as well as consumer services.
Regarding solutions for the consequences, Yeah1 will focus on developing the consumer system and extend co-operation with new partners from the second quarter this year. The management board also targeted to generate 20 per cent of the group’s profit from media and digital platforms in 2021.
Meanwhile, YEG stocks have been plunging for years. As of the morning of April 13, it was at VND27,300 ($1.19) per share, much lower than the VND49,800 ($2.17) in last August. Moreover, HSX has been constantly issuing warnings for the ticker due to its tremendous losses. As soon as YouTube announced stopping work with the group in March 2019, 35 per cent of Yeah1’s share value evaporated.
Last year also marked the co-operation between Yeah1 and local soft drink maker Tan Hiep Phat. Tran Uyen Phuong, general director of Tan Hiep Phat in 2020 spent about VND300 billion ($13 million) to own 6.05 million stocks, equivalent to 21.61 per cent of Yeah1 shares.
Bettering workplaces to retain talent
After a year of fluctuations in both business and human resources, many Vietnamese businesses are working to improve and establish a new working environment to attract more highly-skilled workers, while encouraging long-term employees with years of continuous attachment and dedication. However, many senior employees are also willing to say goodbye when they feel their rights and interests are not respected.
According to survey results on trends in human resources (HR) and the working environment carried out by Anphabe, difficulties in the job market in recent years have made it easier for employees to fall into uncertainty and anxiety.
The survey published in March, was carried out from the second quarter to the end of the third quarter of 2020 with 53,000 workers in Vietnam participating.
It shows that many workers expect to receive more attention, commitment, and leadership from business leaders, as well as become more empowered at work to increase the connection between employees and businesses. Some 60 per cent of employees in the survey said they will work harder and stick more closely to business practices if that business prioritises investment and improves operations.
Meanwhile, more than half of the participants do not intend to change jobs but are instead willing to accompany the company to overcome difficulties because they believe in the corporate vision and strategy. This is a reason for businesses to improve, restructure, and increase employee benefits to keep staff stable in the context of the growing labour market.
For many years in the top 10 sustainable businesses in Vietnam and last year receiving the title of outstanding enterprise for employees, Nestlé Vietnam is one example of a strong working environment for employees. Up to 85 per cent of the total 2,300 employees of the company are satisfied with the salary and benefit policies they are enjoying, and employee resignation rate ranges from 7.3 to 7.8 per cent, according to the company.
Truong Bich Dao, HR director of Nestlé Vietnam, said people are the most important factor for the company. Even in the difficult situation caused by COVID-19, the company has protected employee rights and incomes, raised salaries, and organised training courses for improving skills for employees, at a cost of over $780,000 per year.
Not only affirming to be one of the leaders in implementing optimal personnel policies and the best working environment, Nestlé Vietnam also pioneers commitments on women’s empowerment and gender equality with many activities aimed at the community, contributing to increased sympathy and a deeper connection between employees and businesses.
Nestlé Vietnam is not the only company that understands the importance of this, because in the list of 100 best workplaces in Vietnam over the years is typically the presence of other familiar businesses such as Vinamilk, FPT, Coca-Cola, Honda, Viettel, and SABECO, among others.
FPT strives to build an environment that attracts young and dynamic employees by always encouraging them to create, develop their talents, and support startup projects.
Chu Quang Huy, chief HR officer at FPT Corporation, previously shared, “FPT does not keep people with just salary or a remuneration policy. What we do is offer learning and practice. At FPT, everyone has the opportunity to express themselves, to be able to live as themselves, and to live in an environment of solidarity and teamwork.”
Meanwhile, the remuneration policy is not inferior to foreign companies, and the development and nurturing of financial personnel is the secret for Vinamilk to both ensure quality human resources and develop a team of successors for a new stage of development towards the goal of being in the top 30 dairy companies globally.
In addition to businesses that have received the trust of their employees by creating a culture of connection and development, many employees nowadays are also ready to leave their roles after years of working to find a better environment if they are unable to find a common voice on issues related to leadership and rights. There have been cases where employees organised mass resignations or sued the company when they felt their rights and interests were not respected.
The results of Anphabe’s Human Resources Happiness survey over the years show that Vietnamese employees are less and less attached to any one company, and this decline has been seen continuously over the past five years, from 71 per cent in 2016 to 53 per cent by 2020.
Up to 35 per cent intend to change jobs within the next year, an increase of 11.1 per cent compared to 2018. Just over 7 per cent of this group are employees who have made efforts but still want to leave, while the remaining 28 per cent belongs to employees who do not put in effort and actually cherish the intention to change jobs.
SBV continues tightening control over property loans due to credit growth
The central State Bank of Vietnam (SBV) has pledged to tighten control over credit for some risky sectors, including property, it was announced at a teleconference on credit activities held by the central bank on April 14.
As of March, credit had grown by 2.93% against the end of 2020 and by 1.3% year-on-year. The demand for credit is expected to rise in the coming months, said Nguyen Tuan Anh, head of the Department of Credit Policies for Economic Sectors at SBV.
Between January and February, credit for the agro-forestry-fishery sector and the industry and construction sector amounted to VND777 trillion, up 0.16%, year-on-year, and VND2,615 trillion, up 1.13%, respectively.
As for risky sectors, as of February, loans for the real estate sector had reached 1,835 trillion, up 2.13% against 2020, while credit for the securities business dropped by 6.9%.
Apart from the tight control over credit for risky sectors, including property, securities and Build-Transfer transport projects, the central bank also continued to enhance the credit risk management of consumer loans and lending for personal needs to ensure the safety of banking operations, Anh said.
As of March 15, real estate outstanding loans growth at 2.13% was higher than the banking sector’s credit growth rate, so the central bank has monitored and issued warnings to credit institutions.
Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said that since the beginning of 2021, credit for the property sector in HCMC had risen by 2%, with outstanding loans amounting to VND350 trillion, some 13.5% of the total outstanding loans.
Capital flows into the risky sector were controlled, the local media reported, citing Minh.
To enhance control over the risky sectors, risk management of BOT and BT transport projects and consumption, the central bank has adopted certain regulations, including applying the risk coefficient imposed on the real estate sector at 200% and on the securities business at 150% and revising up the risk coefficient on consumer loans worth VND4 billion or more.
Long An to build $59 million IP in Duc Hoa district
In light of Decision No.548/QD-TTg of the prime minister granting in-principle approval for the project to build Century Industrial Park (IP), the IP will be positioned in Huu Thanh commune in the southern province of Long An, with Hai Son Co., Ltd. acting as the developer.
Covering over 119 hectares, the project will be built at a cost of VND1.355 trillion ($58.9 million), VND400 billion ($17.4 million) of which is investor’s equity.
Construction time must not exceed 36 months from the date of land allocation, and the project’s operation duration will be 50 years from getting the approved investment proposal.
Under the decision, Long An People’s Committee was tasked to direct Long An Economic Zones Management Authority to guide the investor and ensure that the investment project and the investor’s equity contributions stay on schedule.
For its part, the committee must ensure the accuracy of information, statistics, and assessment in line with regulations, and guarantee the compatibility between the project’s implementation and approved plannings.
Earlier, via Official Letter No.1840/TTg-CN dated December 28, 2020 the PM approved the revised development planning of Long An industrial parks (IPs) to 2020, adding Long An’s three expanded IPs to the country’s IP development planning to 2020. Accordingly, Hoa Binh IP in Thu Thua district will be expanded by 49ha, Long Hau IP in Can Giuoc district by 90ha in the second phase, and Xuyen A IP in Duc Hoa district by 177ha in the third phase.
According to Long An Economic Zones Management Authority, the province will have about 1,500ha of additional cleared land in its IPs to cash in on rising foreign direct investment (FDI) flows into Vietnam in 2021. The sectors most appealing to foreign investors are textiles and garments, footwear, animal feed, poultry, seafood, food processing, beverages, and manufacturing.
According to Nguyen Thanh Thanh,director of Long An Economic Zones Management Authority, the presence of many IPs has played a huge role in driving local socio-economic development by contributing nearly VND3.9 trillion ($169.57 million) to state coffers and creating jobs for more than 148,000 workers.
According to the latest figures from the Long An Department of Planning and Investment, as of March 20, 2021, Vietnam lured in a total $10.13 billion in total committed FDI. The province took the lead nationwide with nearly $3.2 billion, accounting for nearly 32 per cent of the country’s total FDI volume during the period.
This late March, Long An granted an investment certificate to LNG Long An I and II gas power project of Singapore’s VinaCapital GS Energy Pte., Ltd.
The project has a capacity of 3,000MW, including two combined cycle gas turbine plants that possess a capacity of 1,500MW each, with registered investment capital totalling $3.1 billion. The project is expected to begin operation in December 2025.
Also in the first quarter of 2021, Long An granted investment certificates to 10 new foreign investment projects and six others requesting leave for capital expansion.
So far, the province is home to more than 1,100 foreign investment projects worth more than $9.17 billion in total committed value, 588 of which have already come on stream.
AppWorks leads $1 million round in Vietnamese healthcare booking app Docosan
AppWorks, a venture capital company that invests in Taiwan and Southeast Asia, has led an over $1 million funding round in Vietnam-based healthtech startup Docosan.
Established in January 2020, Docosan is an app for searching and booking appointments online with doctors 24/7, checking price lists and reviews by real patients. Docosan has helped 50,000 patients in Vietnam book appointments with physicians across 35 specialties within less than a year of operations.
“Many clinics are frustrated after spending large amounts on social media marketing because these networks’ vast, opaque user bases are difficult to harness to reach new patients,” Docosan’s CEO and co-founder Beth Ann Lopez said in a press statement.
“Docosan’s proprietary booking software provides doctors an easier way to manage bookings compared to the crowded waiting rooms, which people are increasingly wary of amid the pandemic,” she added.
In press statement, AppWorks partner Andy Tsai said, “We noticed Docosan’s potential early on because of its participation in the AppWorks Accelerator. Docosan’s founders demonstrated strong experience and dedication to the healthcare issues in the region. We are proud to be supporting Docosan’s vision of better healthcare access for all.”
The potential for healthtech startups is huge as the healthcare market will double in the next 7-10 years. Digital healthcare makes up less than 1 per cent of the total market size currently, a figure which is projected to skyrocket. Many healthtech startups are ramping up operations in Vietnam including eDoctor, Zoop Care, Doctor Anywhere, MedPro, and Jio Health.
A report by Fitch Solutions identified great promise in digital healthcare in light of the current challenges faced by public hospitals in Vietnam and the COVID-19 pandemic. Internet access is widespread and the country has seen rapid development in 4G and 5G mobile communications technologies.
Building on these foundations, the government of Vietnam is driving a digitalisation agenda in hospitals and clinics across the country. Smart solutions are being strongly encouraged that utilise big data, AI, cloud computing, and mobile technology to help alleviate Vietnam’s overcrowded public hospitals and increase the quality of care.
Divestment slow off the blocks for banks
Foreign investment in state-owned banks could quench the thirst for capital while assisting with consolidation, but major problems continue to hinder the process.
State-owned lender Agribank has been stuck for years with divestment efforts because its real estate assets could not be approved by the Ministry of Finance due to their large size and complex procedures.
“At the end of last year, the Ministry of Finance also made a comprehensive assessment on the equitisation goal of state-owned enterprises. Specifically, only about 28 per cent of enterprises were equitised, which means that nearly three-quarters did not meet the plan. The main issue is that many large corporations’ land use rights remain unclear, as can be seen in the cases of VNPT and Agribank,” explained Chu Manh Hung, deputy head of the Equitisation Department at Agribank.
“Since the equitisation plan during 2016-2020 has not been completed yet, Agribank will continue carrying out this task for the 2021-2025 period,” he added. “However, there are still major roadblocks hampering the process, associated with determining the value of land and affiliated enterprises.”
While Agribank has been constantly pushing the equitisation process, the complex valuation procedures have been a major obstacle slowing down progress. The bank also has to cope with the myriad challenges arising from its large number of affiliated enterprises, multi-level authorisations required, as well as delayed approval of land use schemes.
Agribank has a total of around 294 real estate properties with a total area of 2.6 million square metres, with diverse origins and incomplete legal documents. While these assets can help the bank’s equitisation value reach record levels and enhance its efficiency, they have also delayed divestment for years.
“Agribank currently has more than 100 land plots with unclear legal status. We hope to receive support from relevant units and agencies to quickly equitise this large volume of assets,” Hung told VIR.
Despite its ongoing equitisation, Agribank jumped 17 spots to rank 173rd in the recently-announced Brand Finance Banking 500 list for 2021, which featured the most valuable and strongest banking brands in the world.
As of December 31, Agribank’s total assets reached nearly VND1.57 quadrillion ($68.26 billion), with its capital exceeding VND1.45 quadrillion ($63 billion). According to Brand Finance, as governments scramble to stimulate economic growth in the face of the ongoing global health crisis, and profits and interest rates taking a hit, nearly two-thirds of the world’s 500 most valuable banking brands have recorded brand value losses.
As per Decree No.01/2014/ND-CP released in 2014 on foreign investors’ purchase of shares of Vietnamese credit institutions, a foreign strategic investor shall not hold more than 20 per cent of the charter capital of a Vietnamese credit institution. Foreign investors shall not hold more than 30 per cent of the charter capital of a Vietnamese commercial bank.
Besides Agribank, other local lenders have been enjoying the attentions of foreign partners looking to increase their footprint in Vietnam.
In 2019, a strategic co-operation between Vietnamese bank BIDV and South Korean KEB Hana Bank turned the former into the lender with the largest market capitalisation in Vietnam with around $1.73 billion. KEB Hana invested capital in exchange for a 15 per cent stake in BIDV, while BIDV received long-term technical assistance from the South Korean lender and its parent company, Hana Financial Group. The tie-up also quenched the bank’s thirst for capital as BIDV announced it has now satisfied Basel II requirements.
Elsewhere, Singapore’s sovereign wealth fund GIC in 2019 purchased over 94 million new shares and now owns a 2.55 per cent stake in Vietcombank. Mizuho, one of the largest Japanese financial services providers purchased an additional 16.6 million new shares to maintain its existing 15 per cent stake in the bank.
“The equity investment by GIC and Mizuho increases Vietcombank’s charter capital and creates a solid capital buffer for the bank to meet capital requirements under Basel II Accord as well as maintain its leading position in the Vietnamese banking sector,” a GIC representative stated.
Last year, the International Finance Corporation (IFC), a member of the World Bank Group reduced its stake in VietinBank by 1.5 per cent, following an earlier divestment.
The IFC and equity subsidiary IFC Capitalization Fund also reduced their combined ownership in VietinBank from almost 6.49 to 4.99 per cent last year, leaving more room for other foreigners.
Besides the IFC, Japanese financial institution Bank of Tokyo-Mitsubishi UFJ holds 19.73 per cent in the state-run bank. However, VietinBank has not signalled any new potential partnerships since IFC pulled out.
On the other hand, under Vietnamese regulations, state-owned enterprises (SOEs) must complete the sale of shares within four months of having their equitisation plans approved. This time limit may not be enough for overseas investors to conduct due diligence and negotiate representations and warranties, special rights, and other conditions for share acquisitions with the authority representing state capital in the SOE, according to ASCV Legal.
Creating basis to promote development of domestic market
In the first quarter of this year, ministries, sectorsand localities have actively implemented many solutions to remove difficulties for production and business activities, especially for the circulation and consumption of agricultural products in pandemic-hit regions.
These included programmes to build scenarios and plans to promote the consumption of agricultural and aquatic products in localities facing difficulties in the export and domestic consumption of their products.
Under the programme, the reserve capacity of frozen and cold storage warehouses was also reviewed towards the preparation of storage plans when necessary. In addition, related State management units have actively connected a series of distribution enterprises with localities to promote the consumption of large-yield and harvested agricultural products facing market difficulties.
For example, right after Hai Duong Province implemented social distancing from 0:00 on February 16, the Ministry of Industry and Trade directly worked with major distribution systems such as Central Group (BigCand Go! supermarket chain), Vincommerce (Vinmart and Vinmart + chain), BRG Retail (BRG Mart supermarket chain), MM Mega Market chain and others to purchase agricultural products from farmers, cooperatives andenterprises in the province.
As a result, although the COVID-19 pandemic, with its new variants, has developed complicatedly and spreadrapidly on a large scale in many localities, the domestic market was still guaranteed and has gradually recovered.
Total retail sales of consumer goods and services in March increased by 9.2% over the same period last year, showing the recovery of consumers’ demand. In the first quarter of this year, total retail sales of consumer goods and services also rose by 5.1% over the same period in 2020.
The Prime Minister issued Decision No. 386/QĐ-TTg on March 17 to approve the Project on Developing Domestic Market associated with the “Vietnamese people prioritise using Vietnamese goods” campaign in the 2021-2025period.
The project outlined four main groups of tasks to be performed, including boosting information and communication; developing a sustainable distribution system with priority given to Vietnamese goods; improving competitiveness for Vietnamese products and Vietnamese enterprises; and strengthening the inspectionof the market and protection of consumers.
This provides an important basis for State management agencies to continue the implementation of activities to promote domestic market development through various programmes such as “Proud of Vietnamese goods” and “The quintessence of Vietnamese goods”, contributing to promoting production, trading and consumption of Vietnamese goods
At the same time, such programmes will be combined with annual action programmes of ministries, sectors andlocalities to create a spillover effect nationwide.
Ca Mau Province calls for investment in marine economy
Leaders of Ca Mau Province and several companies made a field trip on April 14 afternoon to the Nam Can Economic Zone and the Song Doc coastal area where they are considering the development of sea ports and a fishery urban zone.
Earlier that morning, a meeting had been held for the Mekong Delta province’s leadership to introduce its potential to Nam Mien Trung Group, Tuan Chau Group and Ho Guom Group.
Ca Mau Province is currently conducting an ecological shrimp farming project with 1,000 hectares of forest-shrimp land. In addition, the province is expected to call for investment in eight fishery and high-tech agriculture projects.
In urban development, Ca Mau is calling for investment in 17 urban and housing projects, including seaports in Hon Khoai, Ong Doc and Nam Can, which were already approved by the central government.
Speaking at the working session, Nam Mien Trung Chairman Hoang Anh stated that the company is interested in both seaport and urban development and expects that the provincial leaders will create favourable legal conditions for investors.
Echoing Anh, Tuan Chau Chairman Dao Hong Tuyen said that if the procedures are processed quickly, the company can promptly commence construction of a coastal fishery city in Ca Mau.
For his part, Ca Mau Chairman Le Quan highlighted the province’s strengths in fish farming and marine economy while affirming that the province will do its best to assist investors with legal procedures.
Some coastal hotels report full occupancy as tourists are on the rise
Many hotels in Ba Ria-Vung Tau Province have reported full occupancy as the number of tourists is on the rise, though the holidays of April 30 and May 1 are still a while away, signaling good news for the tourism sector.
Nguyen Van Tuan, manager of Long Hai Hotel in Ba Ria-Vung Tau Province, told Lao Dong Online that over the past one year, the hotel saw few guests and its highest occupancy rate at a mere 20%. However, for some days last week, the number of tourists who booked rooms at the hotel surged, with the occupancy rate at 90%.
For April 17 and 18, the hotel is fully booked, and it is the first time since the coronavirus pandemic that the hotel is seeing some 100 rooms in total fully booked, Tuan said, adding that the hotel was fully booked three weeks ago for the Reunification Day, April 30.
Last weekend, many guests fully booked rooms at Vietsovpetro Ho Tram, said a representative of the resort.
Many hotels at sea tourist destinations near HCMC such as Ho Tram, Long Hai, Vung Tau and Mui Ne are seeing the number of guests soar on weekends.
Do Van Thuc, deputy director of Dat Viet Tour, said that the firm had received rising tour bookings on weekends.
Recently, Dat Viet Tour has been seeing an average 1,500 guests book weekend tours to the sea each week, some 200 kilometers from HCMC, he said.
Apart from this, since March, when the coronavirus outbreak was brought under control in Vietnam, Alo Limo, a transport firm, has become busier on weekends, said Le Gia Thanh Tam, a representative of Alo Limo.
Over the past few weeks, each week has seen some 10-15 groups of tourists book limousines for their trips, mainly to Dalat, Phan Thiet and Vung Tau, Tam said.
VNA to launch new air routes for summer vacation
From April 24 to August 31 this year, Vietnam Airlines (VNA) will launch six new domestic routes—Danang-Vinh, Phu Quoc-Can Tho/Nha Trang/Buon Ma Thuot/Hue/Thanh Hoa—and resume air services on two routes—Danang-Thanh Hoa, Can Tho-Buon Ma Thuot—to meet the surging travel demand brought on by the summer holidays.
The national flag carrier will operate four weekly flights on the Danang-Thanh Hoa, Phu Quoc-Can Tho/Nha Trang/Hue routes on Mondays, Wednesdays, Fridays and Sundays from April 24.
The Danang-Vinh, Can Tho-Buon Ma Thuot, Phu Quoc-Buon Ma Thuot/Thanh Hoa routes will have three weekly flights departing on Mondays, Wednesdays, Fridays and Sundays.
With an aim to promote the domestic tourism segment and contribute to the country’s socioeconomic growth after it was hit by Covid-19, VNA since May last year to date has opened 28 air routes, raising its domestic network to 67 routes.
Further, VNA is offering special ticket prices starting from VND99,000 per leg (equivalent to VND579,000 per leg including taxes and fees) to customers booking tickets for trips taken from April 24 to May 8 on these routes.
To ensure the safety and health of passengers and the community, VNA has been implementing Covid-19 preventive measures such as cleaning and disinfecting its fleet of aircraft and facilities, equipping its employees with protective gear and requesting passengers to make health declarations and undergo temperature checks before boarding flights.
Role as global manufacturing hub to fuel Vietnam’s growth: Oxford Economics
The UK’s forecasting and quantitative analysing company Oxford Economics has given positive assessments on Vietnam, highlighting the rising role of the country in the global manufacturing supply chains.
In a research released on April 13, the firm noted that Vietnam’s goods exports were up 6.9% in 2020, a moderation from 8.5% growth in 2019, but still a solid achievement given world trade fell 7.8%.
Vietnam also further strengthened its world market share to 1.6% of goods exports in 2020, up from 1.4% in 2019 and 0.5% in 2010, as a substantial rise in foreign direct investment (FDI) has increased the country’s role in global manufacturing supply chains.
According to Oxford Economics, Vietnam was able to take full advantage of the work-from-home-related global boom in demand for computers, other electronics, and furniture. These tailwinds will likely fade this year as an easing in restrictions will allow production in other countries to normalise, it said.
It expected Vietnam’s export manufacturing sector will be buoyed by a rebound in world trade this year. It forecast that as coronavirus-related restrictions are rolled back and vaccines become more widely available, world trade in real terms will surge nearly 10% this year.
This is in part because of the US’s US$1.9 trillion stimulus package, which will also likely bolster US demand for Vietnamese exports, it added.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes