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Stock market 2021: records broken

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Covid-19 posed difficulties to many people in 2021, but not to securities investors. They earned big money as the VN Index climbed to new highs.

Stock market 2021: records broken

The number of newly securities accounts is increasing

Historic peaks

‘Booming’ was the word analysts use to describe the Vietnamese stock market in 2021, with sharp rises in the VN Index, liquidity and number of investors. The peak of 1,300 points, 1,400 and 1,500 occurred.

A new record was made in the last week of November when the VN Index for the first time hit the threshold of 1,500 points, despite bad news about the appearance of Omicron.

In 2020, the Vietnamese market was listed among the top 10 countries with the strongest resilience and recovery during the pandemic. In 2021, the market continues growing in line with the upward trend in the world.

However, it also saw sharp decreases in some trading sessions. The latest occurred on December 3, when the index dropped by 39 points to 1,443 points. Prior to that, declines were seen in mid-July and late August, from 40-50 to 73 points each session.

In Vietnam, the expectations on the stock market remain relatively high. PYN Elite believes that the bailout for economic recovery worth VND800 trillion for 2022-2024 may push the VN Index to 2,500 points by the end of 2024.

Strong liquidity

Just two years ago, the trading value of VND10 trillion per session was just a faraway dream. But the dream has become real and the trading value per session was even much higher.

On November 20, 2021, for example, VND56.3 trillion, or $2.4 billion worth of shares were traded. More and more trading sessions with trading value of $1-2 billion have been reported recently.

The figure of $1 billion (VND23 trillion) is a very high liquidity level if compared with the VND6.2 trillion in 2020 and VND18 trillion in H1 2021.

Securities companies’ reports show that people injected much more money into securities companies in 2021.

The liquidity has been increasing sharply as the stock market has become an attractive investment channel for people who have idle money. Also, the fixing of technical problems at HOSE was behind the high liquidity.

Prior to that, in April, investors complained that the stock market fell into a bad situation as their orders could not be implemented properly, while electronic boards showed wrong figures. As a result, they had to buy or sell blind.

In Vietnam, the expectations on the stock market remain relatively high. PYN Elite believes that the bailout for economic recovery worth VND800 trillion for 2022-2024 may push the VN Index to 2,500 points by the end of 2024.

In early July, the HCM City Stock Exchange (HOSE) began using a new trading system provided by FPT, the Vietnamese largest information technology group, which is capable of dealing with 3-5 million orders per day, or triple the old system.

New investors

For new investors, securities are considered a stable investment channel. The Vietnamese stock market’s size has grown and is no longer just a channel for small ‘surfing investors’.

As many as 1.3 million securities accounts were opened in the first 11 months of the year, which was equal to the total accounts opened in the last three years combined.

According to the Vietnam Securities Depository (VSD), the number of newly registered securities accounts was 221,314 in November 2021 alone.

Experts attributed the soaring number of new securities accounts to low bank deposit rates, the Government’s tightened control on corporate bonds and economic recovery in the new normal.

The goal of having 10 percent of population investing in securities is no longer a faraway dream.

Analysts say that with the current market entry rate, the target of having 5 percent of population investing in securities by 2025 set by the Government may be attainable soon. The total domestic securities accounts have reached 3.8 million.

In November alone, nearly 221,000 accounts were opened, the highest figure in the 21-year operation of the Vietnamese stock market.

The record high number of new investors and the amount of capital pumped into the market have balanced supply and demand as foreign investors sell more than buy. Individual investors had a net purchase of VND84 trillion in the first 11 months.

Businesses with high capitalization value

Four listed companies on HOSE have a capitalization value exceeding $10 billion, namely Vingroup, Vietcombank, Vinhomes and Hoa Phat.

In June, the HCM City bourse named 20 businesses with market capitalization value of over $1 billion. In late November, the figure was 45.

As of November 2021, HOSE had reported total capitalization value of VND5.7 quadrillion, or $245 billion, equal to 91.41 percent of 2020 GDP. The capitalization of the stock market has soared, reaching the $330 billion threshold.

In 2021, the capital mobilized through the share market was nearly VND80 trillion, which was four times higher than the year before.

Foreign investors

Foreign investors sold more than they bought in 2021 with a net sales of VND62 trillion. This was a record high which was four times higher than their net sales in the entire year of 2020.

Foreign investors’ net sales were seen at the beginning of 2020, when Covid-19 broke out. This was also the trend in Asian markets, with the net sale of tens of billions of dollars in South Korea, Taiwan and Thailand.

In Vietnam, a number of stocks with sharp price increases saw considerable net sales, including Hoa Phat, VP Bank, Vinamilk, Vingroup and VIetinBank.

Foreign investors sold more stocks than they bought though the Vietnamese market still has not been upgraded from frontier to emerging status.

The number of accounts owned by foreign investors had hit 38,000 as of September 2021. 

Duy Anh

Source: https://vietnamnet.vn/en/feature/stock-market-2021-records-broken-805150.html

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Vietnam central bank to raise policy rates by 100 bps

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Vietnam’s central bank announced on Thursday it would raise its policy rates by 100 basis points, in a rare monetary tightening move aimed at keeping inflation under 4% this year.
Effective Friday, the refinancing rate will be raised to 5.0% and the discount rate to 3.5%, the State Bank of Vietnam (SBV) said in a statement on its website.
The move followed this week’s rate hike by the U.S. Federal Reserve and similar steps taken by central banks around the region as prices rise across the world. Vietnam’s prime minister had earlier on Thursday urged the central bank to reconsider policy rates.
Can Van Luc, an economist with the Bank for Investment and Development of Vietnam and an advisor to the government, said the rate hike “is in line with the global trend and is expected to help better control inflation in Vietnam.”
“I don’t think this will affect Vietnam’s official economic growth target of 6.0%-6.5% for this year,” Luc said. “GDP growth is actually expected to be 7.0%-7.5% this year.”

Vietnam’s consumer prices in August rose 3.6% from end-2021. The government has targeted inflation at below 4% this year.
The dong currency fell for nine consecutive sessions to 23,700 per dollar, the lowest since at least 1993, according to Refinitiv Eikon data.
The daily reference rate set by SBV was recorded at 23,316 dong per dollar on Thursday, the weakest since at least 2005, data showed.
SBV Governor Nguyen Thi Hong said earlier on Thursday that Vietnam’s biggest economic challenge at present was to keep inflation under control.
The bank on Thursday also said it would raise caps on interest rates of dong-denominated deposits from Friday, by 0.3-1.0 percentage points, depending on maturities.

Source: https://tuoitrenews.vn/news/business/20220922/vietnam-central-bank-to-raise-policy-rates-by-100-bps/69204.html

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Chinese mushrooms branded with Vietnam’s VietGAP logo on sale at Bach Hoa Xanh

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Ho Chi Minh City-based grocery chain Bach Hoa Xanh has been selling made-in-China mushrooms in the guise of quality local goods bearing Vietnamese Good Agricultural Practices (VietGAP) tags, according to an investigation by Tuoi Tre (Youth) newspaper.

Investigative journalists from Tuoi Tre found that Dong A Trading and Production JSC, based in Linh Dong Ward, Thu Duc City, a district-level unit under Ho Chi Minh City, had been allegedly providing mislabeled products to Bach Hoa Xanh.

In order to bear the VietGap label, fruits and vegetables must be grown using methods that ensure the safety and cleanliness of the products.

In a statement sent to Tuoi Tre on Wednesday, Bach Hoa Xanh said it immediately ceased the sale of all products supplied by Dong A and asked the company to check the quality, origin, and supply process of its products.

The grocery chain also issued an apology to customers.

“Bach Hoa Xanh’s aim is to comply with regulations on the product traceability and ensure clear origins for its products,” the chain said.

“In this case, Bach Hoa Xanh understands the importance of better controlling the origin and quality of commodities.

Vegetables are imported from China to Hoc Mon wholesale market in Ho Chi Minh City. Photo: Bong Mai / Tuoi Tre

Vegetables are imported from China to Hoc Mon wholesale market in Ho Chi Minh City. Photo: Bong Mai / Tuoi Tre

“Bach Hoa Xanh purchased only mushrooms from Dong A. On June 8, 2022, we signed a contract with Dong A to use their products for up to three percent of the mushrooms sold in our stores.

“After this case, Bach Hoa Xanh will work with all of our other suppliers to better control our product sources.”

Bach Hoa Xanh claims the most important criteria it evaluates when purchasing products are quality, hygiene, and safety.

Imports sold in its stores also meet Vietnam’s requirements, including having their origins and quality verified by and registered with relevant agencies.

Fake and smuggled goods are prohibited from hitting the shelves.

Bach Hoa Xanh claims its current policy is not to compromise with suppliers who skirt these regulations.

Violations come to light

With an abundant supply and prices as low as half of what Vietnamese products sell for, masquerading Chinese produce as ‘grown-in-Vietnam’ is becoming commonplace at supermarkets and convenience stores looking to improve their bottom lines.

Last month, Tuoi Tre reporters went undercover as Dong A Company workers and discovered that the issue of fraudulent produce stretches beyond the produce sold at a single grocery store chain.

During their investigation, the undercover reporters noticed a small mushroom processing room at the Dong A facility that had been sectioned off from the primary vegetable processing area.

Inside the room, workers were replacing packing branded by a company named ‘Ready Food’ with new labels and tags that included the words ‘fresh’ and other Dong A insignia.

These ‘new’ 300-gram trays of sundry, oyster, king oyster, and enoki were filled with produce that had been sourced from China and given ‘fresh from farm to table’ stickers together with a VietGap logo issued by the Vietnamese Ministry of Agriculture of Rural Development.

Elsewhere in the mushroom processing room, 125-gram bags of white linhzhi mushrooms labeled as ‘made in China’ that had been imported and distributed by Loi Hao Gia Co. Ltd. were repackaged into new 150-gram trays, renamed as ‘beech mushrooms’ and given stickers claiming the products were ‘Fresh Vegetables’ and ‘fresh from farm to table.’

Any traces of these products’ Chinese origins were removed.

The fact that these mushrooms had all originated in China was corroborated by a veteran Dong A worker.

Another Dong A worker told the Tuoi Tre reporters that these relabeled and repackaged mushrooms were to be delivered to Bach Hoa Xanh grocery stores.

Sure enough, while the reporters were still on-site at the Dong A facility, a green truck bearing the Bach Hoa Xanh label pulled up to the loading dock where workers wearing shirts that read ‘Toan Tin (Fully Trusted) Logistics’ began loading the truck with mushrooms.

Fully Trusted Logistics JSC is an arm of Mobile World Investment Corporation, the operator of Bach Hoa Xanh.

Workers replace the packaging of Chinese seafood mushrooms with plastic bags featuring a Dong A Trading and Production JSC logo. Photo: Bong Mai / Tuoi Tre

Workers replace the packaging of Chinese seafood mushrooms with plastic bags featuring a Dong A Trading and Production JSC logo. Photo: Bong Mai / Tuoi Tre

Dong A claims a pillar of its mission is ‘Spreading Dong A’s spirit – connecting the community, and being an important part in the supply chain of agricultural products in Vietnam to increase the value of and ensure the sustainable development of Vietnamese agricultural products.’

The reporters followed the truck to Bach Hoa Xanh’s central warehouse on Tran Dai Nghia Street in Binh Chanh District, Ho Chi Minh City, where the Dong A-branded mushrooms were unloaded.

An employee at the warehouse said the products were destined for Bach Hoa Xanh’s retail stores.

As part of their investigation, the Tuoi Tre reporters visited a mushroom stall run by Loi Hao Gia in Thu Duc wholesale market.

Gia’s stall specializes in enoki, seafood, king oyster, brown and white lingzhi, and fresh shiitake mushrooms.

According to staff, all of these mushrooms had been imported from China.

“Only the [food suppliers’] packaging is theirs. They buy our mushrooms and replace the packaging and labels to make them their own,” one staff member claimed.

Consequences an afterthought

Ho Chi Minh City’s Thu Duc and Hoc Mon wholesale markets have recently seen a huge inflow of vegetables from both China and from across Vietnam.

These products include napa cabbages, cabbages, onions, carrots, and turnips, and most seem to have had their stamps and labels tampered with.

At Thu Duc wholesale market, relabeling is so rampant that stall owners occasionally remove and replace Chinese labeling in plain sight.

According to H., a trader at Thu Duc wholesale market, the wholesale price for Chinese onions is just VND15,000 (US$0.63) per kilogram compared to nearly double for onions grown in Da Lat, a greens hub of Vietnam.  

In addition to their lower prices, Chinese onions can also be stored for up to two weeks. Da Lat onions, on the other hand, have a shelf life of about five days.

“Only three to four percent of traders choose Da Lat greens. Most mainly sell [China-originated] produce,” H. shared, pointing out that Chinse cabbages, for example, are bigger and have better coloring.

H. also noted that Chinese and Da Lat cabbages both sell for about VND15,000 per kilogram but consumers prefer the Chinese because of their longer shelf life – six days versus three days.

After taking mushrooms from Dong A Trading and Production JSC, a Bach Hoa Xanh truck transports the products to the grocery chain’s central warehouse in Binh Chanh District, Ho Chi Minh City. Photo: Q.B. / Tuoi Tre

After taking mushrooms from Dong A Trading and Production JSC, a Bach Hoa Xanh truck transports the products to the grocery chain’s central warehouse in Binh Chanh District, Ho Chi Minh City. Photo: Q.B. / Tuoi Tre

Linh, a vendor at Hoc Mon wholesale market, noted that the packaging for the carrots, potatoes, onions, and fruits sold at the market all displays Chinese labeling, but when they are distributed to wet markets unpackaged, sellers there can easily dupe customers into believing they were cultivated elsewhere.

“Vietnamese people don’t like poor-quality Chinese agricultural products, so most sellers say their products were farmed in Da Lat, the U.S., or Japan,” Linh said.

“This also lets them sell their produce for double or triple the price.”

Chinese agricultural products overwhelm Vietnamese market

According to Thu Duc wholesale market representatives, about 550 metric tons of Chinese goods are brought into the market each night.

Many of these products, such as potatoes, carrots, napa cabbages, garlic, grapes, and pears, are sold at the market throughout the entire year.

Their prices are also considerably cheaper than their counterparts grown in other countries. 

Chinese apples, for example, cost VND35,000 ($1.5) per kilogram while U.S. gala apples sell for VND75,000 ($3.2) per kilogram.

In addition, Chinese and Korean pears are sold at VND35,000 and VND65,000 ($2.8) per kilogram, respectively.

Another case in point is garlic, which fetches VND25,000 ($1.1) per kilogram if grown in China but VND300,000 ($12.7) per kilogram if planted on Vietnam’s Ly Son Island.

The price of Da Lat pink potatoes is double that of Chinese yellow potatoes, at VND28,000 ($1.2) and VND14,000 ($0.59) per kilogram, respectively.

While the supply of many local goods, such as Vinh Chau red onions, Da Lat white onions and carrots, and Hanoi cauliflowers, fails to meet demand, Chinese products are abundant and fetch low prices.

Chinese red onions cost just VND25,000 ($1.1), Chinese white onions and carrots VND15,000, and Chinese cauliflowers VND35,000.

Committing violations

As per Decree 43/2017/ND-CP, organizations and individuals must take responsibility for labelling products, including secondary labels, in an honest, clear, and accurate manner which shows the nature of the products, according to a Ho Chi Minh City lawyer.

Imported goods with improper labels may feature secondary labeling but the original tags need to remain intact on the packaging.

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Source: https://tuoitrenews.vn/news/business/20220922/chinese-mushrooms-branded-with-vietnams-vietgap-logo-on-sale-at-bach-hoa-xanh/69191.html

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Asia Coffee-Vietnam market tepid ahead of new crop season, low supplies in Indonesia

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Coffee trading remained subdued in Vietnam this week due to a lack of beans, with traders awaiting the new crop season that starts next month, while supplies begun to dwindle in Indonesia at the end of harvest there.

Farmers in the Central Highlands, Vietnam’s largest coffee-growing area, sold beans COFVN-DAK at 46,900-47,200 dong($1.98-$1.99) per kilograms, down from last week’s 47,000-48,200 dong range.

“Trade is muted now as everyone is waiting for new beans,” said an exporter based in Ho Chi Minh City.

“We are assessing the current situation ahead of the harvest amid stronger dollar, raising freight rates, higher production costs.”

Traders in Vietnam offered 5% black and broken-grade 2 robusta COFVN-G25-SAI at a discount range of $200-$250 per tonne to the November contract.

Another trader said coffee growing area was bracing for more rains but rains at the time helped pick off weak cherries from the cherry before the harvest.

November robusta futures on ICE LRCc2 settled down $10, or 0.4%, at $2,226 per tonne on Wednesday.

In Indonesia’s Lampung province, discounts for Sumatran robusta beans were unchanged this week, local traders said.

One trader offered $140 discount to the November contract, while another offered $50-$60 discount to the October and November contracts.

“Volume of beans has started to come down as harvest has ended, while local buyers are still trying to buy more beans,” one of the traders said.

Source: https://tuoitrenews.vn/news/business/20220922/asia-coffeevietnam-market-tepid-ahead-of-new-crop-season-low-supplies-in-indonesia/69199.html

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