Business
Why the stock market sell-off when VN’s economy is strong?
HCM CITY — The sell-off in the Vietnamese stock markets has been consistent with what has been occurring in global markets, though selling pressure was exacerbated by many new retail investors dealing with margin calls for the first time and a crackdown on firms that borrowed money to buy stocks.
None of this is however likely to have much impact on Việt Nam’s economic growth or on the aggregate earnings of listed companies, Michael Kokalari, VinaCapital’s chief economist, assured.
“In Q1 earnings surged by around 30 per cent year-on-year, and we expect the earnings of all of the companies listed on the Hà Nội and HCM stock exchanges to surge by nearly 30 per cent this year.”
Việt Nam’s benchmark VN-Index sold off 11 per cent last week and was down 21 per cent in the year to date at the end of last week after being nearly flat until March end, he said.
Meanwhile, Việt Nam’s economy is staging a strong recovery, which is driving robust earnings growth, meaning the primary catalyst for the sell-off is the ongoing drop in global stock markets and forced selling of stocks related to margin lending, he pointed out.
The number of retail stock investors has gone up nearly 70 per cent over the last 12 months and most of those new entrants to the market were enticed to open margin trading accounts with the lure of making quick profits, he said.
The correction in global markets triggered margin calls and many of these new investors simply abandoned their long positions, he said.
“We estimate that brokers’ outstanding balances have dropped by about 25 per cent from peak levels a few weeks ago. However, in addition to the forced selling of stocks prompted by margin calls on individual investors, there is an additional driver of stock margin related selling.
“Some local companies borrowed money with the stated purpose that the funds would ultimately finance real estate development and/or other projects, but the local business press has reported that certain firms then turned around and used the money to participate in the stock market.
“The Government is now cracking down on this misuse of funds, which is another source of forced selling of stocks.
“Furthermore, emerging and frontier stock markets will suffer from a 15 per cent year-on-year surge in the value of the US dollar because a strong appreciation in the [dollar] typically dissuades investors from investing in emerging/frontier stock markets.
“That said, Việt Nam’s economy is very strong, which helped propel 29 per cent earnings growth in Q1, which we believe will help the market weather the current global stock market turbulence.”
The VN-Index’s sell-off comes despite the compelling fundamental strengths of its stock market like a forward P/E ratio of 11.4 versus 21 per cent consensus earnings growth expectations this year and 30 per cent valuation discount versus Việt Nam’s regional peers, he said.
“There has been a fairly pronounced performance dispersion among the sectors of the stock market, which is generally attributable to fundamental factors, giving investors opportunities to take shelter in defensive sectors.”
He said three sectors stand out as pockets of relative strength, namely utilities, consumer discretionary and IT, the stock prices of which are being supported by strong Q1 results as well as other fundamental factors.
The earnings and stock price performances in the utilities sector are supported by a doubling of electricity production growth this year, while consumer discretionary stocks are benefitting from the ambitious expansion plans of some key companies in the sector, he said.
The IT sector’s earnings and stock price performance are being driven by a 30 per cent increase in the outsourcing revenues of FPT, the dominant player in the sector, and a near 60 per cent increase in its new outsourcing contracts in Q1, he said.
The earnings of materials companies soared by nearly 60 per cent year-on-year in Q1, driven by an eight-fold increase in the earnings of fertiliser companies and 45 per cent rise in consumer staples companies’ earnings, he said.
The value of the đồng is nearly unchanged year-on-year despite a 15 per cent surge in the US Dollar/DXY index.
“We believe the resilience of the Việt Nam đồng despite the sharp appreciation of the US dollar is an accurate indicator of the underlying strength of Việt Nam’s economy, which in turn should support the earnings growth and price appreciation of the market.” —
Source: https://vietnamnews.vn/economy/1193147/why-the-stock-market-sell-off-when-vns-economy-is-strong.html
China resumed outbound group tours to Vietnam on Wednesday by sending a group of 38 Chinese tourists to Vietnam through the Mong Cai-Dongxing international border gate linking the northern Vietnamese province of Quang Ninh with Guangxi Province.
The group will participate in a four-day-and-three-night tour in Ha Long City under Quang Ninh Province and Hanoi.
In total, 632 Chinese tourists entered Vietnam through the border gate on Wednesday.
Positive signals from Chinese guests
To facilitate the immigration process, several additional officials have been detached to the border gate.
Nguyen Thu Huong, vice-chairwoman of the People’s Committee of Mong Cai City in Quang Ninh Province, said that the arrival of the first group of Chinese visitors to Vietnam is a positive signal.
The city has asked relevant agencies to review infrastructure, equipment, and processes at the border gate, while working with their Chinese counterparts to prepare for the influx of Chinese tourists.
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| Chinese travelers pose for a photo at Mong Cai International Border Gate in Quang Ninh Province, northern Vietnam. Photo: Kim Oanh / Tuoi Tre |
The People’s Committee of Mong Cai City also asked travel companies to prepare to welcome groups of Chinese visitors via Mong Cai International Border Gate.
Mong Cai City has improved the quality of its existing tourism products and launched new ones, such as border tourism activities, shopping, and food tours.
Nguyen Van Thanh, head of the Bac Luan border station at Mong Cai International Border Gate, said that more border guards were dispatched to the crossing when the resumption of immigration and import-export activities between Vietnam and China was announced.
A tour guide for China’s Shenzhou Travel Company, which organized the tour for the first Chinese tourist group to Vietnam since the pandemic, said the company plans to take tourist groups to other localities in the Southeast Asian country, such as Da Nang and Khanh Hoa on the central coast.
On Wednesday morning, authorities in Mong Cai City offered flowers to the first group of Chinese visitors to enter Vietnam through Mong Cai International Border Gate.
Trade resumes
China relaxed its COVID-19 restrictions on January 8, but trade through the Mong Cai-Dongxing international border gate was not resumed until February 21.
Pham Duc Huyen, director of Ngan Minh Ngoc Co. Ltd., a company in Quang Ninh Province, said that import-export activities at the border gate have been ramped up since vehicles from both countries were permitted to travel through Mong Cai again.
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| Import-export activities have ramped up since vehicles from Vietnam and China were permitted to travel between the two countries. Photo: H.Viet / Tuoi Tre |
Hundreds of trailer trucks have passed through the Bac Luan II Bridge border gate each day since COVID-19 restrictions were relaxed.
According to a report by the management board of Mong Cai International Border Gate, over 234,200 metric tons of goods passed through the Bac Luan II Bridge border gate during the first week of this month, surging 108 percent over the same period last year.
Mong Cai City generated a trade turnover of US$244.64 million in the first two months of the year, inching up three percent year on year, including $153.06 million in exports and $91.58 million in imports.
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| A Chinese trader re-arranges goods at her booth at a market in Mong Cai City, Quang Ninh Province, northern Vietnam after shutting down the booth for several years due to the COVID-19 pandemic. Photo: H.Viet / Tuoi Tre |
China last week added Vietnam to a list of countries where its tour agencies are allowed to organize group tours to.
This is the second phase of the northern neighbor’s pilot program for resuming outbound group tours.
According to the General Statistics Office, Vietnam welcomed 5.8 million Chinese tourists in 2019, or some 30 percent of the country’s international tourist arrivals.
The Southeast Asian country set a target to welcome eight million foreign travelers this year.
Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!
China resumed outbound group tours to Vietnam on Wednesday by sending a group of 38 Chinese tourists to Vietnam through the Mong Cai-Dongxing international border gate linking the northern Vietnamese province of Quang Ninh with Guangxi Province.
The group will participate in a four-day-and-three-night tour in Ha Long City under Quang Ninh Province and Hanoi.
In total, 632 Chinese tourists entered Vietnam through the border gate on Wednesday.
Positive signals from Chinese guests
To facilitate the immigration process, several additional officials have been detached to the border gate.
Nguyen Thu Huong, vice-chairwoman of the People’s Committee of Mong Cai City in Quang Ninh Province, said that the arrival of the first group of Chinese visitors to Vietnam is a positive signal.
The city has asked relevant agencies to review infrastructure, equipment, and processes at the border gate, while working with their Chinese counterparts to prepare for the influx of Chinese tourists.
|
|
| Chinese travelers pose for a photo at Mong Cai International Border Gate in Quang Ninh Province, northern Vietnam. Photo: Kim Oanh / Tuoi Tre |
The People’s Committee of Mong Cai City also asked travel companies to prepare to welcome groups of Chinese visitors via Mong Cai International Border Gate.
Mong Cai City has improved the quality of its existing tourism products and launched new ones, such as border tourism activities, shopping, and food tours.
Nguyen Van Thanh, head of the Bac Luan border station at Mong Cai International Border Gate, said that more border guards were dispatched to the crossing when the resumption of immigration and import-export activities between Vietnam and China was announced.
A tour guide for China’s Shenzhou Travel Company, which organized the tour for the first Chinese tourist group to Vietnam since the pandemic, said the company plans to take tourist groups to other localities in the Southeast Asian country, such as Da Nang and Khanh Hoa on the central coast.
On Wednesday morning, authorities in Mong Cai City offered flowers to the first group of Chinese visitors to enter Vietnam through Mong Cai International Border Gate.
Trade resumes
China relaxed its COVID-19 restrictions on January 8, but trade through the Mong Cai-Dongxing international border gate was not resumed until February 21.
Pham Duc Huyen, director of Ngan Minh Ngoc Co. Ltd., a company in Quang Ninh Province, said that import-export activities at the border gate have been ramped up since vehicles from both countries were permitted to travel through Mong Cai again.
|
|
| Import-export activities have ramped up since vehicles from Vietnam and China were permitted to travel between the two countries. Photo: H.Viet / Tuoi Tre |
Hundreds of trailer trucks have passed through the Bac Luan II Bridge border gate each day since COVID-19 restrictions were relaxed.
According to a report by the management board of Mong Cai International Border Gate, over 234,200 metric tons of goods passed through the Bac Luan II Bridge border gate during the first week of this month, surging 108 percent over the same period last year.
Mong Cai City generated a trade turnover of US$244.64 million in the first two months of the year, inching up three percent year on year, including $153.06 million in exports and $91.58 million in imports.
|
|
| A Chinese trader re-arranges goods at her booth at a market in Mong Cai City, Quang Ninh Province, northern Vietnam after shutting down the booth for several years due to the COVID-19 pandemic. Photo: H.Viet / Tuoi Tre |
China last week added Vietnam to a list of countries where its tour agencies are allowed to organize group tours to.
This is the second phase of the northern neighbor’s pilot program for resuming outbound group tours.
According to the General Statistics Office, Vietnam welcomed 5.8 million Chinese tourists in 2019, or some 30 percent of the country’s international tourist arrivals.
The Southeast Asian country set a target to welcome eight million foreign travelers this year.
Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!
Source: https://tuoitrenews.vn/news/business/20230316/vietnam-welcomes-first-chinese-tourists-since-start-of-pandemic-via-northern-border-gate/72124.html
Business
UNIQLO to open in Binh Duong in spring/summer 2023
UNIQLO will begin recruiting local talent as it prepares to open its store in one of the region’s most exciting, high-growth economies.
With a strong GDP growth rate and located in the centre of the southern key economic region and next to HCM City, Binh Duong has become the industrial hub of the country with outstanding infrastructure.
UNIQLO’s store will open in AEON MALL Binh Duong Canary, one of the biggest malls with full utilities for different target audiences, especially families.
“Three years with three cities, 15 stores and UNIQLO Online is a remarkable journey for us thanks to the continued strong support from customers and local communities. Our entry into Binh Duong is the next exciting milestone for everyone at UNIQLO Vietnam. We look forward to introducing UNIQLO and our high quality, affordable LifeWear apparel in Binh Duong, and continue to make a positive contribution to the economy and communities where we operate,” said Osamu Ikezoe, General Director and Chief Operating Officer, UNIQLO Vietnam.
Source: Viet Nam News
Source: https://e.nhipcaudautu.vn/companies/uniqlo-to-open-in-binh-duong-in-springsummer-2023-3351265/
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