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Investors lose billions of VND as land prices keep rising

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A lot of real estate traders have missed opportunities to make huge profits because they decided to postpone purchasing plans, hoping that prices would decrease further.

The investors sought ‘bottom fishing’ opportunities as they thought prices would continue decreasing in the context of Covid-19.

Investors lose billions of VND as land prices keep rising

However, contrary to all predictions, the real estate prices have been staying firm or have increased slightly.

Nguyen Minh Tuan in Ba Dinh district in Hanoi heard earlier this year that a 100 square meter land plot in a new district with good infrastructure conditions was on sale. At that moment, the price was VND40 million per square meter.

The landlord wanted to sell the land urgently. However, Tuan cancelled the purchase because he thought the real estate prices would be cheaper in the future.

The price of the land plot soared to VND45 million per square meter. A local broker said the prices of all the land plots in the area have increased by 10-20 percent compared with earlier this year.

“If I had bought the land, I would have made a profit of nearly VND1 billion just after several months,” Tuan said.

Nguyen Mai Thanh in district 3, HCM City, also regrets her decision not to buy an apartment in district 8.

A lot of real estate traders have missed opportunities to make huge profits because they decided to postpone purchasing plans, hoping that prices would decrease further.

Thanh said she and her husband in April intended to buy the apartment of 60 square meters, priced at VND2 billion, because it was affordable and in good condition.

However, they finally decided not to buy the apartment after reading local newspapers which said that a lot of apartment projects would be open for sale in the future. They believed that the plentiful supply would force the market prices down.

In June, they could not find anything affordable for them. When they contacted the owner of the apartment in district 8, they found that the apartment was sold in April and could not be bought at a price below VND2.5 billion in June.

VARS reported that in Hanoi, the prices of affordable real estate products have increased slightly by 3-5 percent. Despite Covid-19, no real estate project developer has slashed their selling prices. At some projects, the developers have even pushed the prices up closer to the prices of mid-end products.

Batdongsan.com.vn also reported that the prices of land and apartments in HCM City are on the rise. Land in Thu Duc district is offered at VND54 million per square meter, up by 1.2 percent compared with earlier this year. Apartments are offered at VND33 million per square meter, up by 1.1 percent compared to late 2019.

Nguyen Hoai An from CBRE Vietnam, said properties are long-term investment products. It takes investors 2-4 years on average to acquire land, build apartments and launch products into the market. Meanwhile, the pandemic started just this year, a short time for investors to adjust the selling prices.

According to Trang Bui from JLL Vietnam, the semi-detached house market continues witnessing new price records. The selling price has increased to $5,277 per square meter, or VND121 million per square meter, up by 36 percent yearly and 5 percent quarterly.

The newly launched projects are offering prices higher than the average level. This once again affirms investors’ confidence in the purchasing power when there is a shortage.

Tran Khanh Quang, a real estate expert, believes that demand for real estate products for accommodation and investment remains very high. Real estate is considered a safe investment channel which can bring better profits than bank deposits, gold or securities.

“The real estate prices won’t decrease, especially in the eastern part. The prices of affordable and mid-end market segments will rise considerably thanks to good news,” Quang said.

He also believes that there are many opportunities for those who invest in high-end properties. It is the right time for investors with powerful financial capability to buy luxury properties to sell later when Covid ends.

The Economist also commented that while the pandemic has seriously hit the global economy, it hasn’t affected real estate prices.

Though prices are escalating, An from CBRE believes that there won’t be a ‘real estate bubble’, saying that foreign investors, when comparing the real estate prices in HCM City and regional cities, will see the great potential for growth in Vietnam’s real estate in both the market and price. 

Tran Thuy

Source: https://vietnamnet.vn/en/feature/investors-lose-billions-of-dong-as-land-prices-keep-rising-681500.html

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AES, PetroVietnam Gas to sign $1.4 billion LNG deal: Pompeo

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HANOI — AES Corp. will sign a deal with PetroVietnam Gas GAS.HM to develop a $1.4 billion liquefied natural gas (LNG) import terminal in Vietnam, U.S. Secretary of State Mike Pompeo said on Wednesday.

“Vietnam has given the green light to AES Corp., a company based in Virginia, to go forward with the project,” Pompeo said at a virtual Indo-Pacific Business Forum.

The deal will open the door for the import of billions of dollars worth of U.S. LNG to Vietnam each year, Pompeo said, describing it as a “real win-win situation”.

The forum, also attended by his Vietnamese counterpart Pham Binh Minh, comes as the United States ramps up its rhetoric against the regional influence of Chinese state firms.

“American companies adhere to the rule of law and transparency and have very high standards of quality for their products,” Pompeo said. “I say that because that’s quite a contrast with the Chinese state-backed companies.”

Vietnam is building numerous LNG-to-power plants, with the first to be operational by 2023, an ambitious move that could see LNG become a major energy source for its fast-growing economy.

Much of that will be imported from the United States, which wants to narrow its trade deficit with Vietnam, which widened to $44.3 billion in the first nine months of this year from $33.96 billion in the same period of 2019.

Also at Wednesday’s forum, Delta Offshore Energy formalised an earlier announced plan for a $3 billion agreement with Bechtel Corp., General Electric nd McDermott for the development of a 3.2-gigawatt LNG power plant in Bac Lieu province, the U.S. Embassy in Hanoi said.

Source: https://tuoitrenews.vn/news/business/20201028/aes-petrovietnam-gas-to-sign-14-billion-lng-deal-pompeo/57488.html

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VN-Index bounces back as trading cools down

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VN-Index bounces back as trading cools down

An investor looks at stock prices on a screen at a brokerage in Ho Chi Minh City. Photo by VnExpress/Quynh Tran.

After four consecutive losing sessions, the VN-Index rose 0.7 percent to 925.47 points Friday.

The benchmark index had continued its corrective momentum in the morning and early-afternoon sessions, falling by as much as 10 points before rebounding within the final hour of trading to gain around 14 points as buy orders for blue chips, especially VIC of Vingroup, piled in.

The Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based, was predominantly green with 225 stocks gaining and 181 losing. Total trading volume fell nearly 30 percent over the previous session to VND6.56 trillion ($282.15 million), on par with last month’s daily trading average.

According to analysts, after four sessions in which the VN-Index plunged a total of 4.39 percent, investors stopped trying to take profits and are now bottom-fishing, causing the market to rise again.

A restructuring of their portfolios by exchange traded funds like the VN Diamond ETF, the VNMVN30 and the SSIAM VNFIN Lead was also a reason for large movements during the at-the-close trading, which takes place within the final 15 minutes, they added.

The VN30-Index for the stock market’s 30 largest caps rose 0.66 percent, but only 11 stocks gained compared to 15 that lost.

Topping gains was VIC of private conglomerate Vingroup, HoSE’s largest cap, with 5.8 percent, contributing a 5.5-point gain to the VN-Index, according to data from brokerage VNDIRECT.

However, its subsidiaries, VHM of real estate developer Vinhomes and VRE of mall operator Vincom Retail, shed 0.3 percent and 1.2 percent respectively.

Other big gainers this session were spread among different sectors. KDH of real estate developer Khang Dien House rose 4.4 percent, PNJ of jewelry retailer Phu Nhuan Jewelry was up 4 percent, HDB of private HDBank, 2.5 percent, and MWG of electronics retailer Mobile World, 2.3 percent.

The remaining blue chips in the green, which included PLX of petroleum distributor Petrolimex, VPB of private VPBank, and VNM of dairy giant Vinamilk, rose between 0.7 percent and 2 percent each.

In the opposite direction, TCB of private Techcombank led losses with 2.1 percent, followed by POW of electricity firm PetroVietnam Power, down 2 percent, and STB of private Sacombank, down 1.5 percent.

All three of Vietnam’s largest state-owned lenders by assets slumped this session, with VCB of Vietcombank down 0.7 percent, BID of BIDV, 0.4 percent and CTG of VietinBank, 0.3 percent. MBB of mid-sized Military Bank kept its opening price.

An industry group which saw most of its tickers perform negatively was real estate and construction. In addition to VHM, TCH of Hoang Huy Group shed 1.1 percent, ROS of FLC Faros 0.9 percent, while NVL of Novaland kept its opening price.

Meanwhile, the HNX-Index for the Hanoi Stock Exchange, home to mid- and small-caps, was up 0.57 percent, and the UPCoM-Index for the Unlisted Companies Market gained 0.18 percent.

Foreign investors continued to be net sellers this session to the tune of over VND565 billion on all three bourses. The most net sold stocks were again MSN of food conglomerate Masan Group, which remained flat, and VNM of Vinamilk, up 1.1 percent.

Source: https://e.vnexpress.net/news/business/economy/vn-index-bounces-back-as-trading-cools-down-4181267.html

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Vietnam forecast to stay in top 10 remittance recipients in 2020

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In the East Asian and Pacific region, Vietnam ranked third after China and the Philippines.

Vietnam is forecast to remain the ninth largest remittance recipient globally with an inflow of US$15.6 billion in 2020, slightly declining from US$17 billion received in 2019 and accounting for 5.8% of its GDP, according to the World Bank’s latest data.

This was a fourth consecutive year that Vietnam remains in the top 10 ranking in terms of inbound remittance, with the figure being US$13.8 billion in 2017 and US$15.9 billion in 2018.

 Top Remittance Recipients in 2020. Source: World Bank. 

India claimed the top spot in the top 10 with an estimated of US$76 billion, followed by China with US$60 billion and Mexico with US$41 billion.

In the East Asian and Pacific region, in 2020, Vietnam is set to rank third after China and the Philippines (US$33.3 billion) – the world’s fourth largest recipient.

 Top remittance recipients in the East Asian and Pacific region, 2020.

According to the World Bank, remittance flows to low and middle-income countries (LMICs) are projected to fall by 7%, to US$508 billion in 2020, followed by a further decline of 7.5%, to US$470 billion in 2021.

As the Covid-19 pandemic and economic crisis continues to spread, the amount of money migrant workers send home is projected to decline 14% by 2021 compared to the pre Covid-19 levels in 2019.

The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.

“The impact of Covid-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances,” said Mamta Murthi, Vice President for Human Development and Chair of the Migration Steering Group of the World Bank. “The World Bank will continue working with partners and countries to keep the remittance lifeline flowing, and to help sustain human capital development.”

The declines in 2020 and 2021 will affect all regions, with the steepest drop expected in Europe and Central Asia (by 16% and 8%, respectively), followed by East Asia and the Pacific (11% and 4%), the Middle East and North Africa (8% and 8%), Sub-Saharan Africa (9% and 6%), South Asia (4%and 11%), and Latin America and the Caribbean (0.2% and 8%).

 Projected Growth of Remittances by Region, 2020.

Importance of remittances to amplify in 2020

The importance of remittances as a source of external financing for LMICs is expected to amplify in 2020, even with the expected decline. Remittance flows to LMICs touched a record high of US$548 billion in 2019, larger than foreign direct investment flows (US$534 billion) and overseas development assistance (about US$166 billion). The gap between remittance flows and FDI is expected to widen further as FDI is expected to decline more sharply.

Migrants are suffering greater health risks and unemployment during this crisis,” said Dilip Ratha, lead author of the Brief and head of KNOMAD. “The underlying fundamentals driving remittances are weak and this is not the time to take our eyes off the downside risks to the remittance lifelines.”

This year, for the first time in recent history, the stock of international migrants is likely to decline as new migration has slowed and return migration has increased. Return migration has been reported in all parts of the world following the lifting of national lockdowns which left many migrant workers stranded in host countries. Rising unemployment in the face of tighter visa restrictions on migrants and refugees is likely to result in a further increase in return migration.

“Beyond humanitarian considerations, there is a strong case to support migrants who work with host communities on the frontline in hospitals, labs, farms, and factories,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.

According to the World Bank’s Remittance Prices Worldwide Database, the global average cost of sending US$200 was 6.8% in the third quarter of 2020, largely unchanged since the first quarter of 2019. This is more than double the Sustainable Development Goal target of 3% by 2030. 

Despite being the cheapest, money transfer and mobile operators face increasing hurdles as banks close their accounts to reduce risk of non-compliance with anti-money laundering (AML) and combating terrorism financing (CFT) standards, stated the World Bank.

To keep these channels open, especially for lower-income migrants, AML/CFT rules could be temporarily simplified for small remittances. Further, strengthening mobile money regulations and identity systems will improve transparency of transactions. Facilitating digital remittances would require improving access to bank accounts for mobile remittance service providers as well as senders and recipients of remittances. Hanoitimes

Ngoc Thuy

Source: https://vietnamnet.vn/en/business/vietnam-forecast-to-stay-in-top-10-remittance-recipients-in-2020-685053.html

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