Stock market might not have more room to rise: experts
|The Viet Nam National Petroleum Group (Petrolimex)’s gasoline station. The company shares posted a gain of 8.1 per cent in market capitalisation last week. — Photo petrolimex.com.vn|
The market hit new highs last week with the liquidity exceeding VND1 billion each session. Analysts from securities firms expect strong and stable investment cash flows will continue to elevate the market this week, but it might not have more room to rise higher.
After a choppy trading week, the market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) closed the last trading session at 1,266.36 points, up 0.35 per cent. The index broke the record high of nearly 1,270 points last Wednesday.
For the week, the benchmark increased 0.54 per cent.
On the Ha Noi Stock Exchange (HNX), the HNX-Index ended the last session at 294.72 points, up 2.68 per cent. The index posted a significant weekly rise of 5.2 per cent.
According to Saigon – Hanoi Securities JSC (SHS), the VN-Index jumped last week with higher liquidity and was higher than the 20-week average. It showed that cashflow continued to run into the market and investors’ sentiment is positive.
After five weeks of struggling, the VN-Index finally finished the week above 1,250 points. However, foreign investors net sold a value of over VND3.6 trillion last week and this trend is expected to continue this week, barring the market rally.
The securities firm forecasted that the upward trend will continue this week but the room for rising higher is limited. Therefore, the VN-Index might continue to head for the 1,325 point-level. SHS suggested that investors can raise the proportion of short-term positions if the market corrects back to support level of 1,250 points.
Analysts from SSI Securities Corporation (SSI) said that after going up from the support zone of 1,200 points, the benchmark is heading back to the 1,286 point-level hit on April 20. The index is likely to face correction while approaching the resistance level of 1,286 points before falling back.
On the technical front, BOS Securities Corporation said that the VN-Index hasn’t broke the 1,270 point-level in the last trading session as the division between stocks is rising. This showed that the market’s potential supply force is at the resistance territory of 1,268 – 1,275 points.
But BOS still expected that the VN-Index might keep gaining points and move toward the old peak of 1,280 – 1,285 points, boosted by some large-cap stocks and mid-cap stocks in the coming sessions. And it is likely to struggle more during the rally.
Meanwhile, MB Securities JSC (MBS) saw that the country stock market is back to its upward trend thanks to stocks in the VN30 basket, which tracks 30 biggest stocks on HoSE. Both the VN-Index and VN30-Index are at their new highs. On the technical front, the market is still moving around 1,268 – 1,286 points. Therefore, the fluctuations will continue, MBS added.
Last week, the liquidity on both exchanges was at an average of VND24.6 trillion per session. On HoSE, the trading value rose 29.3 per cent week-on-week to over VND110.3 trillion, equivalent to a trading volume of nearly 2.7 million shares, up 20.6 per cent.
On HNX, the trading volume jumped 28.4 per cent to 609 million shares, worth over VND12.8 trillion, up 40.6 per cent.
The gas and oil sector rose the most in market capitalisation last week, up 7.1 per cent. It was followed by the banking sector and consumer goods, up 4.8 per cent and 4 per cent in market capitalisation, respectively.
MARD to set up a team to trade agricultural products amid pandemic
The Ministry of Agriculture and Rural Development (MARD) has decided to form an interdisciplinary working group to deal with issues related to the consumption of agricultural products, especially at border gates amid the COVID-19 pandemic.
At an online conference on Friday, MARD’s deputy minister Tran Thanh Nam said the team will be established among MARD, the Ministry of Industry and Trade (MoIT) and the Ministry of Finance.
MARD said agro-forestry-fishery production was recovering in the first four months while the consumption market has expanded with an estimated export turnover of US$17.15 billion, up 24.2 per cent compared to 2020.
In the first four months of this year, export turnover of agro-forestry-fishery products was estimated at more than $4 billion, accounting for 23.3 per cent of the total exports and growing 35.8 per cent compared to 2020.
The ministry wants the team to help localities with a lot of agricultural production, especially those with large areas of crops about to be harvested, and farmers, co-operatives and businesses to accelerate the consumption of agricultural products.
Nam suggested the MoIT and the Ministry of Foreign Affairs provide timely information on consumption markets and adjustments in import policies in other countries so Viet Nam can adapt.
“MARD will request the Chinese authorities to take timely measures to remove difficulties as well as co-ordinate and support to create the best conditions to promote economic growth and trade in goods,” he said.
Viet Nam has many seasonal agricultural exports that often face difficulties and consumption pressure during the harvest season. Many products such as lychee, longan and dragon fruit face the risk of being spoiled if there is any delay in the export process at borders as the cold storage logistics system is still limited.
Viet Nam has 48 cold storage facilities for preserving agricultural and aquatic products with a total storage capacity of 2 million tonnes of products, however, they cannot meet the needs of preserving agricultural and aquatic products to serve the demand from the Mekong Delta.
Nguyen Quoc Toan, director of the Department of Agricultural Product Processing and Market Development, said as most local lychees will be harvested soon, State management agencies, inter-sectoral forces, lychee growing localities and border provinces needs to develop multiple consumption plans for different scenarios.
Lychee production in 2021 in Bac Giang, Hai Duong and Hung Yen provinces has been estimated at 250,000 tonnes for this year and half of the figure was expected to be exported to the Chinese market.
Deputy chairman of Bac Giang Provincial People’s Committee Phan The Tuan said the province has built some scenarios for lychee consumption in each context of the COVID-19 pandemic. It has connected with businesses, trade centres, supermarkets and e-commerce sites to consume the products.
Tuan asked MARD and the Plant Protection Department to send staff to the province to assist in procedures to export lychees to Japan. He also asked MoIT to help businesses, distribution units and wholesale markets in consumption, asking the Government Office and the Ministry of Foreign Affairs to help Chinese traders buy lychees.
Phan Van Chinh, director of the Import-Export Department, MoIT said: “China is currently the main export market of Viet Nam’s agricultural products of lychee, longan and dragon fruit. To reduce the pressure of goods circulation on border provinces exporting to this market, it is necessary to strengthen measures to support border trade activities, facilitate customs clearance procedures, and avoid stagnant goods in border provinces with China.”
To find the output for Hai Duong lychee, the MoIT said it will work with the province to organise a conference to connect and promote the consumption of Thanh Ha lychee and typical agricultural products of Hai Duong Province in 2021 on May 18.
Rice exporters urged to utilise FTAs to boost declining shipments
Vietnamese rice exporters have been urged to play a more active role in utilising free trade agreements (FTAs) to which Vietnam is a party to boost falling exports.
The country exported 1.1 million tonnes of rice for 606 million USD in the first quarter of the year, down 30.4 percent and 17.4 percent, respectively, against the same period last year, according to the Ministry of Agriculture and Rural Development.
The two largest buyers of Vietnamese rice in the reviewed period remained China and the Philippines.
Despite the fall in volume, rice export prices jumped from January to March on account of high demand for food reserves around the world, said Tran Quoc Toan, Deputy Director of the Ministry of Industry and Trade (MoIT)’s Agency of Foreign Trade.
By the end of March, Vietnam’s rice price remained at a high of 547 USD per tonne, up 18.6 percent, or 86 USD, compared to a year earlier.
Rice exporters have been increasingly focusing on improving quality and traceability to meet the strict standards of markets such as the EU, the Republic of Korea (RoK), and the US, Toan said.
Vietnam has entered into various FTAs with strategic countries and regions, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and, more recently, the Regional Comprehensive Economic Partnership (RCEP) and the UK-Vietnam Free Trade Agreement (UKVFTA).
He said that in order to utilise FTAs and boost the global market share of Vietnamese rice at more competitive prices, the ministry will continue to coordinate with ministries, branches, and the Vietnam Food Association to help businesses effectively implement deals and make the most of markets such as the RoK and the EU.
The MoIT will adopt mechanisms and policies to remove technical and trade barriers, internalise international commitments, customs procedures, logistics, and credit, and focus on branding to create a foundation for rice exporters to exploit foreign markets, Toan said.
He also urged rice exporters and farmers to be more active in improving product competitiveness in terms of quality and price as well as building and protecting Vietnamese trademarks, so as to diversify markets and promote sustainable exports./.
Coal, hydro power to give way to renewables
Electricity of Vietnam (EVN) plans to mobilise 32 billion kWh of renewable energy, including 26.3 billion kWh of solar power, meaning the output of coal-fuelled and hydro-power plants will be reduced.
As of the end of April, 17,000 MW of solar power had been generated.
Nguyen Duc Ninh, Director of the National Power System Moderation Center (A0), said that thanks to the Government’s policy of prioritising renewable energy, especially solar power, the focus in recent years has changed towards reducing the generation of traditional electricity despite its low cost and stable quality.
Ninh said that, by 2025, EVN will cease importing electricity from China and reduce imports from Laos.
According to the EVN, however, the mobilisation at high levels of renewable energy at a common price of 9.35 per kWh will not optimise production costs and will create difficulties in operations due to the instability of such sources.
Reductions in thermal power generation will also cause economic losses, as investors have already signed power contracts with the State.
Nguyen Tien Thoa, former Director of Price Management under the Ministry of Industry and Trade (MoIT), said that EVN should advise the ministry on mechanisms for power mobilisation with varying scenarios.
At a recent meeting on the planning of national power development in the 2021-2030 period and vision to 2045, Deputy Prime Minister Le Van Thanh asked MoIT to gather ideas from ministries and sectors in the field.
EVN Deputy General Director Ngo Son Hai said it has proposed MoIT decide the percentage of solar power mobilised in the system to ensure safety in operations.
Economists Pham Chi Lan and Tran Dinh Thien also expressed concern about the mass transfer of solar power projects, saying that along with economic issues this may hit power security in the country as many projects are located in sensitive areas./.
Hyundai Thanh Cong recalls 23,578 Tucson cars for software update
Hyundai Thanh Cong Commercial Vehicle (HTCV), a joint venture between the Vietnamese Thanh Cong Group and the Republic of Korea’s Hyundai, on May 15 announced the recall of 23,587 Hyundai Tucson vehicles for fuse change and software update of the Anti-lock Brake System (ABS).
The recall is made for gasoline-powered model and turbo-diesel engine model. There are 3,213 imported vehicles from July 2015 to May 2020, and 20,374 domestically assembled units from August 2017 to December 2020.
According to Hyundai Thanh Cong, the cars may have problems with warning light, and ABS light on the dashboard. In several rare occasions, the hydraulic electric control will experience a short circuit.
The recall programme will begin from May 17.
Repair and change will be provided for Hyundai customers for free.
Hyundai Tucson is one of the favourite crossover models in the world, with 5 million units sold in only 13 years. The car was introduced in Vietnam in August 2015, and was assembled in the nation two years later.
Last year, more than 10,800 Tucson cars were sold in Vietnam. Meanwhile, nearly 2,700 vehicles were handed over to the customers in the first four months of 2021./.
US pork producers seek to penetrate deep into Vietnam market
The National Pork Producers Council of the US is seeking to diversify its pork export markets, and Vietnam is one of its targets.
More than 70 US lawmakers led by Representatives Ron Kind (D-Wisconsin), Darin LaHood (R-Illinois), Jim Costa (D-California) and Dusty Johnson (R-South Dakota) recently sent a letter to US Trade Representative Katherine Tai calling for enhanced access for US pork in Vietnam.
In their letter, the US lawmakers noted that Vietnam presents a tremendous opportunity for US pork exporters. Last year, they said Vietnam imported only 25,000 tonnes of pork from the US, while Mexico, the second largest importer of US pork, consumed 735,000 tonnes.
“While Mexico may be geographically closer, Vietnam’s roughly 96 million citizens consume 57 lbs. of pork per year compared to Mexico’s 31 lbs. Allowing US pork producers to fill this great demand provides the opportunity to increase the value of exports to Vietnam from the current US$54 million to a level closer to Mexico’s US$1.2 billion,” the lawmakers analysed in the letter.
Last year, Vietnam took an initial step forward in addressing the US pork tariff disadvantage when, from July-December 2020, it temporarily reduced its Most Favored Nation (MFN) tariff rates from 15% to 10% for frozen US pork products. As a result, US pork exports doubled during that timeframe, compared to the first half of the year.
“The surge in exports during the tariff reprieve, coupled with Vietnam’s growing population and cultural preference for high-quality pork, demonstrates that the United States is barely scratching the surface of its export potential to Vietnam,” the letter added.
The lawmakers voiced their support for Trade Representative Katherine Tai to engage Vietnam on the full range of trade issues, including lowering the MFN rates for US pork.
“Domestic pork producers need a level playing field to compete in this critical market, particularly after being devastated by trade retaliation and the global pandemic,” they concluded.
In a statement, the National Pork Producers Council (NPPC) appreciated the lawmakers’ move in recognizing the importance of the Vietnamese market to US pork producers, and stated Vietnam represents a significant opportunity for US hog farmers. NPPC President Jen Sorenson also stressed US pork producers are obstructed by tariff and non-tariff barriers, allowing global competitors to take advantage of the supply shortfall.
The NPPC said it will continue to seek enhanced market access to Vietnam, as well as the Philippines, another US pork consumer in Southeast Asia, which are in need of affordable, reliable sources of pork.
Thanh Hoa attracting more agriculture investment
Thanh Hoa Province has seen increasing investment in agriculture in the last five years, especially from big investors.
In late 2019, a joint venture between Gia Phu Agricultural Joint Stock Company and Master Good Group from Hungary inaugurated a modern poultry export and slaughter plant in the province, worth VND300 billion (US$12.9 million) with a capacity to slaughter 8 million chickens per year.
Other big firms have invested in agriculture projects in the northern province, showing their confidence in the local mechanisms, policies and investment environment.
According to the provincial Department of Agriculture and Rural Development, Thanh Hoa has attracted 176 investment projects, covering 3,700ha with a total investment of more than VND20 trillion in agriculture including seven foreign direct investment (FDI) projects with a total investment of nearly VND3.9 trillion
A representative of the department said: “The major projects are expected to completely change the lives of rural residents.”
According to the department, Thanh Hoa aimed to prioritise projects applying scientific and technological advances, associated with product processing and consumption, contributing to job creation for local workers.
It mentioned some projects that complete all production process in the province, including Vinamilk, which runs a farm with 16,000 cows with a total investment of VND1.6 trillion, as well as the dairy cow project with a scale of 20,000 cows with total investment capital of VND3.8 trillion of TH True Milk Company.
In addition, Singaporean Hope Co invested in a breeding farm project with a scale of more than 10,000 sows and production of 500,000 pigs with a total investment of more than VND1.1 trillion, while An Phuoc Import Export and Production Development Investment Joint Stock Company invested in a textile fibre factory project with a total value of VND628 billion.
Most recently, the department said Xuan Thien Group was completing investment procedures for 18 projects with a total registered capital of about VND32.4 trillion while the AVG Group plans to invest in a pork processing complex in Nghi Son Economic Zone with a total value of $1.4 billion.
A representative from the department told local media: “Agriculture is an investment channel with risks but full of potentials and advantages in the province.
“Thanh Hoa has determined that agriculture has many strengths and great development and created many policies to attract investment in this field,” he added.
He said the province ran annual investment promotion conferences to attract agriculture projects, which the province offers preferential mechanisms and policies.
Le Duc Giang, deputy chairman of Thanh Hoa Provincial People’s Committee, said the province has a very large agricultural land area with more than 900,000 ha with three ecological regions of mountains, plains and coastal areas, all with great potential.
Giang said though nearly 900 enterprises invest in agriculture, with more than 700 farms and about 2,000 co-operatives, there is still plenty of room to grow.
Phu Yen Province attracts billion-dollar resort project
The central province of Phu Yen is emerging as an attractive market for real estate investment, especially in large-scale hospitality projects.
Early last month Indochina Kajima, a joint venture between local property developer Indochina Capital and Kajima Corporation, a Japanese general contractor and property developer, completed the process of buying and restarting a US$1 billion resort real estate project at Bai Nom to be managed by world-famous brand Four Seasons.
Peter Ryder, general director of Indochina Capital, said it would be an iconic tourism project, one that would contribute to the development of Phu Yen into a world-class resort “paradise.”
“We believe that, inspired by beautiful nature, this project will be recognised world-wide with many prestigious awards.”
Also in April the province saw the start of the construction of two luxury resorts, Xuan Dai Bay and Crystal Holidays Marina Phu Yen in Xuan Dai ward, Song Cau town.
Built by Everland Group at a cost of VND2.2 trillion ($95.1 million), they will provide nearly 1,000 hotel rooms and 200 villas to the hospitality market.
In recent years the province has promoted investment in infrastructure and tourism. The Tuy Hoa Airport has been upgraded and expanded to handle five million passengers a year and wide-bodied aircraft.
Last year the province attracted investment of VND8.8 trillion ($383.7 million) in 43 new projects.
Viet Nam earns $362 million from rice exports in April
The volume of rice exported last month is estimated at 700,000 tonnes with a value of US$362 million.
This brought the total volume of rice exported in the first four months of this year to 1.9 million tonnes, worth $1.01 billion, down 10.8 per cent in volume but up 1.2 per cent in value year-on-year.
The Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development reported that the Philippines was the largest rice consumption market of Viet Nam in the first three months of this year with 36.3 per cent market share.
The volume and value to the market reached 411,580 tonnes and $219.96 million, respectively, down 30.7 per cent in volume and 14.5 per cent in value year-on-year.
Markets with a sharp increase in rice export value in the three months were Ivory Coast with a 2.7 times rise and Australia with year-on-year growth of 66 per cent.
A market where the rice export value fell significantly was Mozambique (down 53.5 per cent). The average rice export price in the first three months reached $547.8 per tonne, growing 18.6 per cent over the same period last year.
Regarding the types of rice, in the first three months of 2021, the export value of white rice accounted for 39.3 per cent of the total turnover; jasmine rice and fragrant rice accounted for 36 per cent and sticky rice accounted for 22 per cent and other types of rice made up about three per cent.
On the world market, Viet Nam’s rice price reached $508 per tonne at the beginning of last month and fell to $488 per tonne at the end of the month.
The main reason is because the winter-spring crop has been harvested, therefore, the demand for raw materials dropped, waiting for the coming summer-autumn crop.
Poor weather conditions are forecast in many parts of the world this year, resulting in a decrease in food production in many countries, and demand for rice imports expected to increase this year.
The European market is forecasted to be livelier thanks to the EU – Viet Nam Free Trade Agreement (EVFTA), in which Viet Nam is an important rice trading partner.
ACB get nod to increase capital to over VND27 trillion
The State Bank of Viet Nam has given the green light for Asia Commercial Bank (ACB) to increase its charter capital by more than VND5.4 trillion (US$235 million), by issuing 540 million shares to pay dividends, equivalent to 25 per cent.
Upon completion, ACB’s charter capital will increase from VND21.6 trillion to more than VND27 trillion. The Bank said the increase in charter capital is aimed at increasing medium and long-term capital sources for credit extension and investment in Government bonds, as well as for renovation and investment in strategic projects in the coming years.
In the first quarter of this year, the bank’s pre-tax profit totaled VND3.1 trillion, 61 per cent higher than the same period of 2020. Undistributed post-tax profit reached more than VND10.3 trillion.
As of March 31, total assets were reported at VND449.5 trillion, up 1.1 per cent compared to the beginning of the year. Customer deposits decreased by 0.3 per cent to VND352.2 trillion.
Outstanding loans to customers increased by 4 per cent to VND324.3 trillion. The bank’s bad debt stood at VND2.95 trillion, an increase of nearly 61 per cent compared to the end of 2020.
HAGL Agrico plans revenue down by 20% this year
Hoang Anh Gia Lai International Agriculture Joint Stock Company (HAGL Agrico or HNG) has set a net revenue target of VND1.89 trillion (US$82.2 million) this year, down 20 per cent compared to 2020.
Pre-tax profit is expected to be modest at VND16 billion, down 66.7 per cent compared to last year.
Regarding the investment plan, HAGL Agrico plans to plant 1,000ha of banana trees in Attapeu province in Laos, in addition to maintaining good care of its of fruit tree cultivation areas in Viet Nam, focusing on management to increase productivity and ensure quality.
In the first quarter, HAGL Agrico’s net revenue reached VND259.8 billion, down 61 per cent over the same period in 2020. Profit after tax reached VND6.6 billion, up 136 per cent from VND2.8 billion in the first quarter of 2020. With this result, HAGL Agrico completed 13.7 per cent of the revenue plan and 31 per cent of the profit plan.
In 2020, HAGL Agrico’s net revenue reached VND2.38 trillion, up 31.14 per cent compared to 2019. Profit after tax reached VND21 billion.
According to a report on investment and project implementation in 2020, HAGL Agrico said that since 2016, the company had focused its business strategy towards growing fruit trees with the advantages of short harvest time, large consumer market and high economic efficiency.
The company still maintained a rubber garden for long-term goals, it said.
By the end of 2020, HAGL Agrico had planted fruit trees on 19,700 hectares, of which 8,794 hectares have been harvested with the main products being banana with 195,694 tonnes, mango with 1,250 tonnes and jackfruit with 536 tonnes. Rubber tree exploitation output in 2020 reached 7,913 tonnes.
In HAGL Agrico’s Extraordinary General Meeting of Shareholders held in January, the company announced plans for a private placement of shares to swap debt and supplement working capital.
The company plans to issue 550 million new shares to its creditor – Truong Hai Agriculture Joint Stock Company (Thagrico). Debt swap ratio is VND10,000 for each share. Along with that, HAGL Agrico also plan to issue more than 191 million shares to Thagrico to supplement capital for production activities and financial restructuring.
After completing the issuance of new shares, Thagrico will become the parent company of HAGL Agrico.
Masan denies mobilising investment in animal feed segment
Local food giant Masan denied news about its $1 billion capital mobilisation in animal feed published on Bloomberg recently.
Right after the US newswire disclosed the information a few days ago, local media cited a Masan representative as saying that the company had no plans to invest in the husbandry and feed industries.
Bloomberg on May 13 posted news that Masan is looking for solutions such as selling shares to its strategic partners to call for a $1 billion investment in the animal feed. The newswire stated that Masan has been working with its investment consultants to discover plans to introduce the animal feed segment, which will be under the management of its subsidiary Masan MEATLife.
In addition, the other source also revealed that Masan is considering staging an initial public offering (IPO) for its subsidiary managing the animal feed business. For now, talks were in the initial phase and no results have been reached yet.
Masan, to date, has denied commenting on information relating to the IPO.
The food manufacturer became known across Vietnam in 2019 when it officially acquired majority ownership in Vincommerce – local conglomerate Vingroup’s retail and agricultural subsidiary.
Amidst the COVID-19 resurgence, Masan announced opening 700 new VinMart+ convenience stores to raise the total number of outlets to 3,000 across the country.
The group recently published its financial report for 2021’s first quarter. It recorded VND19.977 trillion($868.5 million) in revenue, up 13 per cent on-year, and VND343 billion ($14.9 million) in after-tax profit, far better than the VND216 billion ($9.39 million) deficit in the past year.
Thousands of apartments stay empty in Vietnam
About 3,300 apartments and houses still remain empty or haven’t been approved for sale and rental in the first quarter of 2021.
Ministry of Construction’s report for Q1 show that 25,386 real estate transactions had been carried out successfully, a drop of 14% compared to the final quarter of 2020. About 3,300 apartments and houses remain empty or haven’t been put up for sale. In the northern region, 11,011 transactions were carried out successfully. There were 8,307 successful transactions in the central region and 6,068 transactions in the southern region. 5,571 of the transactions were in Hanoi and 3,449 were in HCM City.
The majority of them were affordable apartments and houses as the number of high-end residential real estate transactions sharply decreased.
According to the Ministry of Construction, the real estate market has been better compared to the Q1 and Q4 in 2020. Most of the empty real estate projects are in Phu Tho, Vinh Phuc and Ha Tinh provinces. Big cities like Hanoi and HCM City and provinces with fast urbanisation rates like Nghe An, Hung Yen and Lam Dong still saw a stable trading rate.
However, because of the Covid-19 pandemic, the tourism sector has been one of the hardest-hit sectors and other tourism projects have also been badly affected.
The number of the residential apartment projects reviewed by the Construction Management Department for building permit was 2,041, accounting for 36% of the total number in 2020’s Q4. There were 250 reviewed hometel projects while the number of tourist villa and officetel projects was both zero.
The number of the apartment that received building regulation approvals before they were put on sale by the Department of Construction Quality Assessment was 14,292, a drop of 39% on 2020’s Q4. The number of approved hometels was 884, an increase of 70%. The number of approved officetels and tourist villas both saw an increase and decrease. The number of approved office-tel was 452, while this figure in 2020’s Q4 was zero. The number of tourist villas was zero while it was 79 in 2020’s Q4.
RoK firms leasing more office space in Hanoi than in HCM City
Enterprises from the Republic of Korea (RoK) have been paying due attention to leasing office space in Hanoi, according to a recent survey by real estate consultants Savills Vietnam.
Office space leased by RoK enterprises in Hanoi is 60 percent higher than in Ho Chi Minh City. Samsung is the largest investor in Vietnam, primarily in the northern provinces of Bac Ninh and Thai Nguyen.
Japanese investors, meanwhile, lease the same amount of office space in the two cities.
Hoang Nguyet Minh, commercial leasing director at Savills Hanoi, said the capital welcomed three Grade A office projects in the fourth quarter of 2020 and first quarter in 2021 – Capital Place, with 93,000 sq.m, Thaiholdings Tower with 23,000 sq.m, and Leadvisors Tower with 18,000 sq.m.
Occupancy at Grade A buildings stood at over 80 percent in the period, she added.
As of the end of the first quarter of this year, the total office space available for lease in the market amounted to more than 2 million sq.m, a 10 percent increase year-on-year.
Grade A posted the highest growth, of 24 percent, while the figure for Grade B was 9 percent.
Meanwhile, Districts 2 and 7 and Thu Duc district in HCM City hold potential in office space.
Foreign direct investment (FDI) directly influences the number of foreign tenants and has been on the rise in recent years, except in 2020.
Vietnam attracted 38 billion USD in FDI in 2019 – the highest in a decade – then 28.5 billion USD last year. The figure for the first quarter was 10.13 billion USD, up 18.5 percent year-on-year.
Over 70 percent of tenants in Hanoi are local businesses and those from Japan, the Republic of Korea, the US, and Singapore, and the figure is predicted to continue to increase in the time to come.
Pork prices sharply drop in Vietnam
Pork prices in Vietnam have sharply fallen amid the country’s Covid-19 outbreak.
At this time of last year, pork prices in Vietnam were very high, but it is very different this year.
On Thursday, a kilo of pork was sold at VND64,000-69,000 at many markets in Hanoi, while the prices ranged VND67,000-75,000 in the central, Central Highlands and southern regions. The prices have dropped by VND23,000-26,000 per kilo on-year.
Nguyen Van Trong, deputy director of the Livestock Breeding General Department, said the volume of imported frozen pork has remained high. In the first quarter of this year, Vietnam imported up to 169,300 tonnes of meat, up 0.5% on-year, including 34,650 tonnes of pork, up 101% on-year.
In addition, pig breeders have continued increasing their livestock after being hit by African Swine Fever. Meanwhile, many farmers are worried about the impact of the Covid-19 pandemic, so they have been forced to sell pigs at even lower prices.
Feed prices have surged by 25-30% over the past months, which is among the causes forcing them to sell more pigs.
According to Trong, with pig prices of less than VND70,000 per kilo, it is impossible for breeders to make a profit.
To help ease difficulties for farmers, the Ministry of Agriculture and Rural Development have asked feed companies to stabilise the prices.
More banks collaborate with fintech firms to develop embedded finance in Vietnam
A growing number of banks and fintech firms are forming partnership to implement embedded finance in Vietnam.
Most recently, CIMB and Finhay have announced a partnership to issue a co-branded card on the Finhay app. The collaboration between CIMB Bank Vietnam and Finhay has given birth to the country’s first-ever 3-in-1 bank account that can be opened and maintained straight from the Finhay app.
Finhay users will be able to open a virtual account and co-branded Debit Card right on the Finhay app with eKYC solution by CIMB to take control with all-in-one spending, saving, investment, and more. With only a bank account and debit card, users can instantly invest, save, transfer, and withdraw money for free of charge with over 17,000 ATMs nationwide.
The co-operation between CIMB and Finhay is a typical story in the embedded finance trend where banking and financial institutions co-operate with fintech firms to bring diversified benefits to customers.
Previously, MoMo also cooperated with TPBank to deploy a postpaid package, allowing e-wallet users to borrow on the app. The trend of financial institutions shaking hands with fintech is increasingly strong.
According to experts, embedded finance is expected to transform the role of traditional financial products, making it contextual, convenient, and cost-effective. Instead of making finance a stand-alone function, it will be ingrained into the lifestyle of customers, whether it is making credit available at the point of sale or providing smart advice during a customer’s life event.
In reality, there is the growing popularity of embedded finance solutions around the world. For example, Apple’s collaboration with Goldman Sachs to produce Apple Card gave the tech giant an important financial tool embedded within the Apple ecosystem.
In Vietnam, recently, Doan Van Hieu Em, CEO of the Mobile World store chain revealed a plan to develop financial utilities embedded in his system. CEO Danny Le of Masan Group also announced the development of synchronous financial utilities in their WinMart stores after acquiring this system (VinMart) from VinGroup.
Embedded finance is not entirely new. The difference now is that the internet enables a fully integrated banking experience on a massive scale. Once this experience is built, it can be infinitely replicated thanks to existing fintech infrastructures.
Embedded finance is critical because it allows for professional and safe financial operations to be directly put into any platform.
The new wave of fintech innovation may come far away from the world finance industry. Perhaps the defining shift in consumer finance will be the transition of the Big Four banks and other legacy institutions in maintaining their customer contact channels.
Thomson Fam Siew Kat, CEO of CIMB Vietnam said, “For the next generation of young and modern consumers, banking will be something that you ‘do’ with your favourite brands rather than your chosen bank. Consumers and businesses will no longer see banking as a separate sphere or sector, and will instead come to expect that day-to-day financial tasks will be carried out within their favourite brand ecosystems. And if you’re a traditional bank, it’s time to start gearing up for a battle of your own – one that isn’t necessarily going to be on home turf.”
On the same note, Nghiem Xuan Huy, CEO of Finhay said, “In the world, embedded finance help people seamlessly and easily transfer funds from an account or any stored value account into something that is able to get profits in the market. This enabled banking activities to be built into almost other industries. There are relatively attractive changes in the embedded finance in the market. I don’t know how long that trend is going to go on, but it’s something that we’re starting to see demand for.”
Finance Ministry asks localities to enhance price stabilization
Due to the complicated Covid-19 situation, the Ministry of Finance has written to the governments of provinces and cities asking them to enhance price stabilization and management following Deputy Prime Minister Le Minh Khai’s directive on price governance in 2021.
The provinces and cities were tasked with monitoring the prices of products and items, mainly essential goods and medical equipment, in the local market to promptly stabilize prices in line with the prevailing regulations.
Besides, the localities should work with the relevant departments and ministries to facilitate goods transportation to avoid a spike in prices due to the shortage of goods or a plunge in farm produce prices because of oversupply and restricted transportation.
The provinces and cities were told to summarize obstacles and difficulties in their price management operations and report them to the Steering Committee for Price Management under the ministry for further guidance.
The ministry also ordered tight control over price declaration and the listing of Covid-19 fighting equipment and essential goods in provinces and cities, mainly localities hit by the disease, the local media reported.
In addition, the competent forces were told to regularly launch inspections into market prices and impose harsh sanctions on those violating price regulations.
The localities were also asked to update information about market prices and publicize prices to minimize the negative impacts caused by the price hike on the market and residents’ daily activities.
Animal feed prices surge up to 30% year-to-date
Domestic animal feed prices have surged 20-30%, equivalent to VND2,000-2,500 per kilogram, since the beginning of this year, causing huge losses for livestock farmers, said Deputy Minister of Agriculture and Rural Development Phung Duc Tien.
Early this month, many animal feed producers announced an increase of VND200-500 per kilogram in animal feed prices.
The animal feed prices of VinaFeed, Guyomarc’h-VCN, ABC Vietnam and Cargill rose by VND300 per kilogram, VND300-400 per kilogram, VND330 per kilogram and VND250-500 per kilogram, respectively. On May 5, C.P Vietnam also raised the prices of its animal feed products by VND400-700 per kilogram.
This is the seventh increase in animal feed prices since the beginning of this year. In the price rise announcements sent to their customers, animal feed producers attributed the hike to the soaring prices of raw materials for animal feed production. Besides, disruptions in the supply chain and the longer shipping time caused by the Covid-19 pandemic also contributed to the rise.
As animal feed accounts for 65-70% of the production cost for livestock farmers, the price hike has caused huge losses for farmers.
The owner of a chicken farm said last year, chicken prices dropped to VND15,000 per kilogram. Chicken prices have inched up since early this year but they cannot keep up with the hike in the animal feed prices. Chicken prices are currently ranging between VND19,000 and VND25,000 per kilogram, while production cost is estimated at VND27,000 per kilogram, causing losses of VND2,000-VND8,000 per kilogram for farmers.
Nguyen Van Ngoc, vice chairman of the Southeastern Livestock Association, said many farmers have withdrawn from the livestock industry due to losses.
Phan Hoa Binh, a farmer with over 20 years of experience in raising chickens in the southern province of Dong Nai, said he has closed all of his chicken farms due to mounting losses.
“I plan to lease my facilities to foreign companies. Only foreign invested companies with huge capital are able to survive in this industry,” he said.
According to the Department of Livestock Production under the Ministry of Agriculture and Rural Development, Vietnam produced 20.3 million tons of animal feed last year, including 8.9 million tons for pigs (43.8%), 10.7 million tons for poultry (53.7%) and 0.6 million tons for other animals.
The department predicted that animal feed prices will continue to edge up 5-10% in the second quarter of 2021.
Vietnam suggests China exempt Vietnam’s frozen products from Covid-19 tests
Vietnamese Minister of Industry and Trade Nguyen Hong Dien has written to the General Administration of Customs of China suggesting that the administration exempt Vietnamese frozen agricultural, aquacultural and food products from Covid-19 tests.
The Ministry of Industry and Trade also asked for coordination from the neighboring countries of Laos and Cambodia to ensure the smooth transport of goods through border gates and effective Covid-19 infection prevention and control at the same time.
The ministry’s Department for Asia and Africa Markets said amid the complicated developments of the Covid-19 pandemic, China, Laos and Cambodia have tightened control over the import of goods from Vietnam, with China requiring Covid-19 tests on Vietnamese frozen agriculture, aquaculture and food products before they enter China through the border gates.
These strict measures have affected the transport of goods between Vietnam and the three neighboring countries and caused troubles for Vietnamese exporters, farmers and producers.
Last year, many container trucks carrying Vietnamese farm produce were stuck at border gates with China, Laos and Cambodia after these countries temporarily halted imports from Vietnam due to the Covid-19 outbreak.
The Ministry of Industry and Trade said it will keep a close eye on the Covid-19 situation and the transport of goods through border gates to promptly address difficulties and avoid trade disruptions.
Vietnam exported goods worth some US$104 billion in the first four months of 2021, rising 28% compared with the same period last year. Exports to China soared 32.4% to US$17 billion, making China the country’s biggest importer. Exports to Cambodia rose 9% year-on-year to US$1.5 billion and those to Laos rose 12% year-on-year to US$203 million.
HCMC asks for more capital for two transport projects
HCMC has proposed that the Government allocate more capital from the State budget for the HCMC-Moc Bai Expressway project and component 1A of the HCMC Belt Road No. 3.
The municipal government said these are two key transport projects that connect the city with neighboring provinces.
The city will need VND5.9 trillion from the State budget for site clearance of the HCMC-Moc Bai Expressway project, which links the city with Tay Ninh Province.
Meanwhile, component 1A of the HCMC Belt Road No. 3, the section from Provincial Road No. 25B to the HCMC-Long Thanh-Dau Giay Expressway, needs some VND1.8 trillion from the State budget due to an increase in site clearance cost.
In a document sent to the Ministry of Planning and Investment, the People’s Committee of HCMC said the HCMC-Moc Bai Expressway project needs an investment of over VND13.6 trillion, which is VND2,527 billion higher than the pre-feasibility study in October 2019.
According to the municipal government, the site clearance cost for the project is now estimated at nearly VND5,118 billion, while it was initially estimated at just VND2,919 billion. Besides, the project will also comprise intersections between the expressway and the Belt Road No. 3 in Hoc Mon District and Provincial Road No. 8 in Cu Chi District, which were not included in the initial plan.
In an official dispatch signed recently by the prime minister, the Government plans to allocate VND13.926 trillion from the State budget for the city’s medium-term public investment in the 2021-2025 period, including VND6.957 trillion of domestic capital and VND6.968 trillion of official development assistance (ODA).
The domestic capital is used for the new HCMC Children’s Hospital, the HCMC Oncology Hospital’s second campus, the construction of the Saigon River’s left bank, the renovation of the Tham Luong-Ben Cat-Nuoc Len canals and the An Phu Intersection in Thu Duc City projects.
The ODA is used for seven projects such as the renovation of the Tau Hu-Ben Nghe-Doi-Te canals, environmental sanitation and green transport projects.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes
Phuc Long tea chain to open first US store
Phuc Long beverage chain will open its first store in the U.S. next month, following in the footsteps of other Vietnamese coffee brands that have branched out to other markets.
The store will be located in Garden Grove, California, the company said in a Facebook post.
Phuc Long has over 80 stores in Vietnam. It had recently signed a deal with conglomerate Masan Group to establish Phuc Long kiosks in over 2,200 VinMart+ conveniences stores.
Last month, TNI King Coffee chain opened its first store inside a mall in California.
Other Vietnamese coffee chains that have branched out to foreign markets include Cong Ca Phe with six stores in South Korea and two in Malaysia, and Trung Nguyen E-Coffee with a store in Laos.
Private enterprises lack internal strength and driving force to develop
How will Vietnam overcome challenges to realize its development plans? Nguyen Dinh Cung, former head of Central Institute for Economic Management (CIEM), shares his perspective with VietNamNet.
One of the great successes of economic reform in Vietnam since doi moi (renovation) is the establishment of a community of businesses from different economic sectors with many ownership modes. Vietnamese enterprises are operating under similar legal forms as in other market economies.
High in quantity, small in scale
In terms of quantity, enterprises in the private sector account for the overwhelming proportion, 97 percent, while SOEs (state owned enterprises) account for 0.38 percent and FIEs the remaining.
The enterprises employ 16 million workers. The workers in SOEs account for 7 percent, private enterprises nearly 60 percent and 33 percent in FIEs (foreign invested enterprises).
In terms of total assets, SOEs account for 28 percent, private enterprises 53 percent and FIEs 29 percent.
In terms of stockholder equity, SOEs account for 20 percent, non-state owned enterprises 56 percent and FIEs 24 percent.
In terms of net revenue, SOEs account for 14.5 percent, non-state owned 57 percent and FIEs 28.5 percent.
In terms of pre-tax profit, SOEs account for 21 percent. The figures are 36 percent for non-state owned enterprises and 43 percent for FIEs.
If considering financial efficiency, the ROE (return on equity) is 9 percent for SOEs, 4.5 percent for non-state owned enterprises and 15 percent for FIEs. Meanwhile, the profit to sale ratio is 5.6 percent for SOEs and FIEs, while it is just 2.4 percent for non-state enterprises.
The figures show that while private enterprises account for the overwhelming proportion, they mostly have small and micro scale, with very few enterprises having medium scale. They have low technology and low competitiveness.
Lacking inner strength and driving force to develop
This is attributed to several reasons:
First, the ratio of profit to revenue and to assets is too low. Stockholder equity is not high enough for re-investment and development. Therefore, most private enterprises have to rely on working capital from relatives and friends. Only a small part of the enterprises can access bank loans.
Most private enterprises lack capability to innovate and receive technology transfer, and lack the driving force to research, develop and renovate technology. In other words, private enterprises lack inner strength and motivation for development.
Second, one part of private enterprises doesn’t want to expand investment to become large enterprises.
This is attributed to unclear and overlapping laws which can be understood and implemented in different ways by different state management agencies. The bigger that enterprises become and the more business fields they cover, the higher legal risks they face, which may cause big losses or loss of all of their assets that had been created over decades.
|While private enterprises account for the overwhelming proportion, they mostly have small and micro scale, with very few enterprises having medium scale. They have low technology and low competitiveness.|
In this situation, there is no reliable and effective tool and institution, especially independent courts, capable of protecting their rights and benefits.
Third, another part of private enterprises wants to grow but cannot, because they cannot access resources for investment and development. Surveys have found that capital costs are too high. The inability to get enough capital and access land are the big barriers for private enterprises in this group.
Fourth, some of the hundreds of thousands of private enterprises are crony enterprises. The number of these enterprises is not high if compared with the total number of operating enterprises, but they appropriate significant resources and deprive business opportunities from authentic investors and businesses.
The enterprises of this kind contribute to creating an unfair business environment which lacks transparency; distort the allocation of national resources; and distort the value and constrict the business motivation of genuine businesses.
It is the enterprises of this kind that make it difficult for other enterprises to access resources and business opportunities. This is a major obstacle for the development of private enterprises.
Large private groups vulnerable
Vietnam now has some large-scale private enterprises, called economic groups. There are some similarities and differences between the economic groups and groups in some Asian economies prior to 1979 as follows:
The similarities include investment in multi business fields; reliance on bank loans; lack of transparency in administration and business; and relatively friendly relations with the government. They are big if compared with the size of the economies, and so they are not allowed to collapse.
Regarding differences, some foreign economic groups specialized in manufacturing, developed strong R&D (research and development), and expanded their business across the region and the world. They have had specific products and strong brands. Meanwhile, Vietnamese private economic groups mostly target the domestic market, focusing on real estate and consumer services. They still cannot develop and master technologies in their fields and don’t have global competitiveness.
It is obvious that Vietnam’s private economic groups are not as powerful as Asian private economic groups before 1979, and they are vulnerable. If the businesses collapse, it will take a longer time to recover them and the collapse may cause bigger losses to the national economy.
Therefore, developing the private sector, including economic groups, in a balanced, effective and sustainable manner must be a top priority task in the coming time.
It is necessary to amend unreasonable policies to help private enterprises increase their strength and overcome obstacles so they can feel secure to expand investment for development.
The 13th Party Congress Resolution has set specific goals for Vietnam’s socio-economic development.
By 2025, Vietnam would become a developing country with industry going towards modernization and income surpassing the lower average level.
By 2030, Vietnam would become a developing country with a modern industry and higher than average income.
By 2045, it would become a developed country with high income.
Nguyen Dinh Cung
Excited but anxious: Hanoi business owners reopen
Though they eagerly reopen after being closed for 27 days due to the Covid-19 outbreak, many Hanoi businesses are also worried about changing consumer behaviors.
Closed restaurants inside a shopping mall in Ha Dong District, Hanoi, June 20. Photo by VnExpress/Duc Minh.
After Hanoi authorities announced that indoor dining and hairdressing can resume on Tuesday, Bui Quang Hung, co-founder of barber shop chain 30Shine, showed his excitement with a post on social media saying, “see you Hanoians on Tuesday morning.”
He said the shops would open from 7.30 a.m. until late night to clear a backlog of almost a month.
“Men have to visit the barber once every three weeks on average because they feel irritated if their hair is one to two centimeters too long.”
There would be two or three times the usual number of customers for two weeks, he said based on his experience from previous waves.
But some other businesses are less hopeful.
Trieu Nguyen Quan, owner of the Goofoo Gelato chain of ice cream shops, does not expect many customers for 10 days after reopening since people are afraid of the pandemic.
Hoang Tung, CEO of fast-food restaurant chain Pizza Home, said the outbreak could cause him to lose a number of customers since people have adopted a new habit of eating at home.
To survive the stop-start nature of their business amid the pandemic, many have sought to improve their business model. Tung said Pizza Home has closed some stores that were not doing well but has expanded into home delivery and apps.
“The restaurants have to operate both online and offline, and must be prepared for the worst, which is closure, amid the pandemic.”
Goofoo Gelato too has managed to pull on thanks to online sales.
Quan said he plans to increase the number of outlets but only after vaccination. He said vaccination is the only way to make him feel secure and the ultimate solution for businesses to open and the economy to revive.
Around 2 percent of the population has received the first shot, and 0.1 percent has received both.
Vietnam has received delivery of around three million vaccine doses so far, and is expected to get over 120 million this year.
It seeks around 150 million in all to cover 70 percent of its population.
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