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Enterprise

Here are the reasons why foreign investors want to invest in Vietnam

by Son Bui January 20, 2021

Thai investors focus on sustainability in Vietnam, in addition to impressive growth in the number of projects and registered capital, many Thai investors place sustainability as their top concern when investing in Vietnam.

Data from the Ministry of Planning and Investment shows that, in 2020, Thailand has 40 new registered projects, 23 registered capital adjustment projects and 100 capital contribution and share purchases in Vietnam with total registered capital of nearly $1.8 billion. This number is double that of 2019 and nearly seven times that for the period 2015-2020, VNExpress reported.

Since the establishment of diplomatic ties in 1976, the economic relationship between Thailand and Vietnam has developed endlessly. Direct investment flows from Thailand into Vietnam have continuously increased by an average 13 percent per annum over the past 10 years.

Currently, Thailand is one of the nine biggest investors in Vietnam with a total accumulated investment capital of $12.8 billion by the end of 2020, equivalent to 603 projects. Thai investors are interested in a variety of fields in Vietnam, mainly processing and manufacturing, clean energy and real estate.

With strong potential, investment capital flows from the Golden Temple country have contributed to an important source of capital for domestic development investment, which contributes to GDP growth and state budget revenues, increases the proportion of exports, technology advancements through technology transfer and labor productivity growth.

Besides, with a similar culture, Thai businesses boast a friendly and sociable working environment, which is highly appreciated by many Vietnamese employees.

In addition, a number of large corporations from Thailand are also concerned about the sustainability of their investment in Vietnam. SCG is ranked No.1 sustainable business in the world in Building Materials Field according to Dow Jones Sustainability Indices (DJSI) for 2020.

In Vietnam, SCG is one of three enterprises, together with the Ministry of Natural Resources and Environment of Vietnam, to sign an agreement to establish Public Private Collaboration (PPC) towards Circular Economy in plastic waste management in February. This cooperation aims to share knowledge, transfer technology, raise public awareness and promote innovation and creativity to solve the problem of plastic waste on a national scale.

“Collaboration of all sectors is a crucial element to make the circular economy a reality. In order to achieve the circular economy, government-driven infrastructure development, stringent regulations, and strict waste management will not be enough to enact change,” said Thanapat Kaweetraiphop, commercial director, Long Son Petrochemicals, a subsidiary of SCG.

Accordingly, one of the programs under PPC implemented by LSP in Vietnam is waste-segregation at source, piloted for the first time at Long Son primary schools 1 and 2.

In addition, SCG also ensures its subsidiaries always follow the corporate’s philosophy. Recently, SCG Concrete Roof (Vietnam), a subsidiary of SCG in Vietnam, received the Top 100 Sustainable Companies in Vietnam by CSI (Corporate Sustainability Index) Award, a reputable ranking system by Vietnam Business Council for Sustainability (VBCSD) in 2020.

“In order to obtain this award, CRVC had made continuous investments in product innovations and state-of-the-art manufacturing facilities, in tandem with on-going improvement in operations to help preserve the environment as well as provide better working conditions to employees, and the lives of surrounding communities,” a SCG representative said.

“With sustainable direction, Thai investors are companions who go along with Vietnam in a long journey of future development,” he stressed.

Another business unit representative for sustainable development from Thailand may include Super Energy Corporation Company, which invested $457 million in four solar power projects in Binh Phuoc Province.

By the end of 2019, the group had made an agreement to invest or buy assets in six wind power projects in Vietnam with a total capacity of 600 MW and total investment value of $58.4 million.

Most recently, Banpu Group – a Thai integrated energy solutions company officially signed an agreement to purchase the Mui Dinh wind power plant project, worth about $66 million.

In addition to the goal of contributing 6,100MW of clean electricity to the national grid system by 2025, the group also committed to reducing CO2 emissions of nearly 700,000 tons per year, equivalent to more than 40 million planted trees, according to VNExpress.

By Tam An

January 20, 2021 92 views

Enterprise

Singapore-based firm invests in Vietnam wind power projects

by Son Bui January 19, 2021

Clime Capital, the Singapore-based investment management company focused on accelerating the low carbon transition in Southeast Asia, today announced that the Southeast Asia Clean Energy Facility (SEACEF) has finalised an investment facility with Levanta Renewables Pte Ltd, a renewable energy company with a portfolio of development projects in Vietnam.

The investment is committed for a portfolio of three early-stage onshore wind power projects, with a combined capacity of up to approximately 330 MW. With Levanta Renewables’ projects mostly located in Vietnam’s Central Highland region, wind power developments in this region promise to open new wind corridors with more modest wind speeds and better transmission access.

The SEACEF investment will help advance the portfolio at a time when the future price of wind power beyond 2021 has not yet been confirmed by the government of Vietnam which risks causing a slowing down of private sector investment into the sector. The initial funding will support installation of met masts to analyse and confirm the wind resource, advance critical regulatory permits, and confirm environmental and social viability.

Electricity consumption in Vietnam is forecast to rise by 8% a year from 2021 through the end of the decade[1]. Energy infrastructure that will meet this demand while also driving the country’s progress toward net zero by the year 2050 will require a substantial transition to renewable sources. The country possesses highly attractive potential for both onshore and offshore wind power, with positive policy support including amongst the lowest feed-in tariffs in the world. Successful early-stage developments would unlock significant progress to accelerate the advancement of the renewable energy sector in Vietnam.

Mason Wallick, Managing Director, Clime Capital, said, “We are excited at this opportunity to provide critical capital at a key stage in the development of these promising projects in Vietnam. This is what SEACEF is designed to do – our investments catalyse the private sector.”

Sudhir Nunes, Co-Founder and Managing Director at Levanta Renewables, said, “Vietnam’s potential for wind power is a key element of its plans to double the use of renewable energy to meet rapidly growing electricity demand in the next decade and to reduce greenhouse gas emissions toward halting global warming by 2050. Levanta’s pioneering developments in the Central Highlands and Coastal regions aim to demonstrate the region’s viability as a wind power corridor – and thanks to this timely investment, we are well positioned to secure the required development capital funding from a top-tier global strategic investor.”

With an initial focus on Indonesia, Vietnam, and the Philippines and managed by Singapore-based Clime Capital, the South East Asia Clean Energy Facility (SEACEF) is backed by leading international climate foundations and investors.

January 19, 2021 144 views

Finance

Here are the best investment opportunities for you in Vietnam this year

by Son Bui January 16, 2021

There are investment opportunities all around you. But what is an investment opportunity? Simply put, it’s any vehicle you can use to make money with your money.

You’re probably familiar with the simplest investment opportunity: a savings account. You get interest for having money in the account. But it’s likely not very much – just a few pennies every month. In Vietnam, traditional investment channels such as stock or real estate markets are set to continue to be the focus for investors in 2021. The question is, whether stock market or gold can maintain their strong growth when the Covid-19 still lingers.

There are absolutely many opportunities for you in Vietnam.

Attractive gold and stock markets

In the last half of 2020, gold prices on the world market surged by 45% and became one of the best investment channels with strong returns, especially as the Covid-19 pandemic wreaking havoc on the world’s economy.

Huynh Trung Khanh, a senior consultant at Singapore-based World Gold Council, expected a bright outlook for the gold market in 2021. “There is a high possibility that the gold price could soon return to US$2,000 per ounce, mainly thanks to stimulus programs adopted by governments around the world,” Mr. Khanh told Hanoitimes.

“A hike in gold prices in the world market would lead to higher domestic prices,” he asserted.

Nevertheless, gold investors last year also went through heart dropping moments when the price after reaching its all-time peak of US$2,075/ounce in August but then plunged to a new low.

“Gold prices at that time were largely dependent on the global pandemic situation, in which a surge in infection cases would cause hikes in prices, while a roll-out of vaccine helps stabilize the price,” added banking expert Nguyen Tri Hieu.

2020 was also a successful year for investors in the stock market. Since the benchmark Vn-Index hit its March rock-bottom with 25% slump, the index has been on a strong rise from 600 to over 1,000 by late December, up 63%.

The Vn-Index ended the last trading session of the year at 1,103.87, a 142.88 increase or 14.87% against early 2020, making Vietnam’s stock market one of the world’s best performers. Vietnamese investors have opened 270,400 new accounts to invest in equities during the past 11 months, bringing the total to 2.7 million, with more than 300,000 accounts set to be opened this year. The 41,200 new accounts opened in November was the highest monthly figure ever.

In 2021, the Vn-Index is set to surpass the 1,200-mark, thanks to the central bank’s current easing monetary policy to stimulate economic growth; a high economic prospect with estimated GDP growth of 6.5%; the revised Securities Law subject to take effect on January 1, 2021 with more support for investors; and the global Covid-19 vaccination programs.

Real estate market heats up

Meanwhile, the property market heated up in the fourth quarter of 2020 after staying low for previous three quarters. A recovery of the economy will almost certainly raise the property prices, which is the reason for investors to bet on real estate in anticipation of the eventual containment of the Covid-19 pandemic.

At present, real estate investors have opportunities to access loans with low interest rates and flexible payment structure of up to 30 years.

The real estate market in 2021 is expected to receive more tailwinds in the form of favorable pieces of legislations that became effective since the start of this year, including the revise Investment Law, the revised Construction Law, and new instructions for the implementation of the Land Law.

The focus in 2021 is forecast to continue to be industrial real estate, given the ongoing trend of manufacturers moving out of China to other countries, including Vietnam, noted a report from Savills Vietnam.

Money pouring into banks

While interest rates continue to go down, with the rate for deposits with maturities of one to two months at all-time low of 2.55% per year, bank deposits remain a safe investment channel for the majority of public. This is one of the main factors for banks’ profit to stay positive despite a difficult Covid-19 ravaged year.

“The room is limited for banks to further cut interest rates, so investors do not need to worry for a possibility of still lower interest rates at the moment,” added Mr. Hieu.

In addition to traditional investment channels, experts pointed to new options such as crypto currencies or foreign exchange trading (forex), but warned such activities are not legally recognized in Vietnam, and thus are exposed to high risks, according to the Hanoi Times.

January 16, 2021 496 views

Enterprise

How these Vietnamese dairy producers getting export licenses to China

by Son Bui January 12, 2021

Another two Vietnamese dairy producers have been approved for exporting their products to China with new transaction codes by the Chinese General Administration of Customs, the Ministry of Industry and Trade reported on January 11.

According to the Ministry, Binh Duong Nutifood Nutrition Food JSC is now permitted to export sterilized milk, modified milk and flavored fermented milk products to China. Meanwhile, Truong Tho Dairy Factory, a member of Vietnam’s largest dairy company Vinamilk, is licensed to ship to the neighboring country sterilized milk, modified milk, sweetened condensed milk and other condensed milk products.

So far, China has granted transaction codes to seven Vietnamese dairy companies and factories, including TH True Milk, Hanoimilk, Bel Vietnam, Nutifood, and three Vinamilk factories, Vietnam News Agency reported.

China is the biggest milk importer in the world. In 2019, the country imported 39.43 million tonnes of milk and milk products. Of which, imported fresh milk was about 750,000 tonnes and milk powder was 650,000 tonnes.

The United Nations Food and Agriculture Organization predicted that the demand for milk and milk products of this market would increase around 45 percent by 2025.

In 2020, Vietnam recorded export turnovers of approximately 281.5 billion U.S. dollars, up 6.5 percent year-on-year, and import turnovers of over 262.4 billion U.S. dollars, up 3.6 percent, with a trade surplus of 19.1 billion U.S. dollars, the highest in the past five years, according to the General Statistics Office.

Specifically, Vietnam gained nearly 50.9 billion U.S. dollars from exporting phones and components, down 1 percent; roughly 44.7 billion U.S. dollars from electronic goods, computers and components, up 24.4 percent; around 29.5 billion U.S. dollars from garments and textiles, down 10.2 percent; and nearly 16.6 billion U.S. dollars from footwear, down 9.6 percent.

The United States remained Vietnam’s biggest importer with turnovers of 76.4 billion U.S. dollars, tailed by China with 48.5 billion U.S. dollars and the European Union with 34.8 billion U.S. dollars, said the office.

Source: News Agency

January 12, 2021 277 views

Finance

Vietnam stock market: VN-Index continues hot streak

by Son Bui January 7, 2021

On Thursday, January 07, 2020 the VN-Index closed up 1.2% and reached a 32-month high as the recent influx of cash on HOSE continued with trading turnover hitting USD737.4mn.

Large cap stocks performed particularly well as the VN30 Index advanced 1.5% with 23 of its 30 components increasing.

Banks VCB (+1.9%) and TCB (+4.2%) were the top two contributors to the day’s gain. Fellow banks CTG (+2.6%), HDB (+4.5%) and MBB (+2.4%) also advanced.

NVL (+6.9%) soared to the daily trading ceiling, hitting a nearly 26-month high; GAS (+2.5%) has increased 7% thus far this week; GVR (-1.6%) was the top contributing decliner for the second straight day.

Highlights

Vietnam Gas Trader CNG Posts Net Profit of $2.24M in 2020 CNG Vietnam JSC (HOSE: CNG), 59% held by PetroVietnam Gas Corporation (PV Gas, HOSE: GAS), said its net profit dropped 38% y/y to VND52 billion ($2.24 million) in 2020, exceeding the full-year target by 7%. Its revenue reached VND2.21 trillion in 2020, beating the whole-year plan by 3%, the local newswire NDH reported. In 2021, CNG plans to continue to develop and expand the market to dominate the market share. (NDH)

Reporting by VCSC

January 7, 2021 406 views

Enterprise

Opening the doors for big business in Vietnam with amended investment law

by Son Bui January 7, 2021

Together with the Law on Enterprises, the new Law on Investment took effect on January 1, with the latter aiming at creating a favorable legal framework to support and promote investment activities and economic development, while also making sure that previous overlaps and inconsistencies are reduced.

The new Law on Investment 2020 officially came into effect at the beginning of this month, as Vietnam is currently part of 14 bi- and multilateral free trade agreements, each with their own commitments to open markets. However, the new law, in addition to the important task of simplifying administrative procedures on investment and business to minimize costs for investors, must also meet requirements of state management, especially when it comes to foreign investment.

Considering these requirements, lawyer Le Dinh Vinh, director of Vietthink Co., Ltd. said, “The new investment rules must solve the legal unification issues”, as the previous overlaps of laws have been “a rather painful story”, with many projects at the same time being subject to the laws on investment, enterprises, land, environment, housing, planning, and so forth.

The Vietnam Chamber of Commerce and Industry (VCCI) previously commented on the issue and proposed to amend more than 10 overlapping articles in between these laws.

For instance, Article 9 of the new Law on Investment now stipulates five market access conditions for foreign investors. These conditions include the ratio of foreign investors’ ownership in charter capital in enterprises and economic organizations, the allowed form of investment, the scope and geographical area, the investor’s required capacity in several industries, and participating partners.

The new law also revises the nature of foreign-invested enterprises (FIEs) to be considered as domestic ones when investing in other businesses. The permissible threshold for foreign investors (in FIEs that qualify as domestic ones) has slightly decreased to less than 50 per cent compared to the previous law, in which this threshold was placed at 51 per cent.

Innovative changes

The Law on Investment 2020 has made an important step forward as 12 conditional business lines have been reviewed and abolished, 19 occupations amended, and six more sectors added, including essential industries like the clean water business.

However, according to lawyer Vinh, this also poses “challenges for the Vietnamese state management agencies as the country has joined many new-generation free trade agreements (FTAs), each with a series of commitments to open markets on different levels.”

For the first time in Vietnam, the Law on Investment 2020 is establishing the principle of equality in market access between domestic and foreign investors, except for those industries where legal restrictions are in place.

“This stems from Vietnam’s aspiration of international integration which requires us to implement the commitments in FTAs,” Vinh said.

Nguyen Van Phi, marketer at Taiwanese MiTac Vietnam Co., Ltd., told VIR that the new law pays more attention to equality between enterprises, besides simplifying procedures for FIEs. “The positive changes in the new law will help FIEs access better markets,” said Phi, as he expressed his hopes that “the new Law on Investment will offer more incentives for foreign investors and enable a smoother business environment, particularly during the pandemic.”

Execution matters

Vietnam has made great efforts to improve the legal framework for doing business. The government has also issued a draft decree guiding the implementation of the law as well as more details on how foreign investors can be treated as domestic ones.

Nguyen Thanh Hai, lawyer at Baker McKenzie Vietnam, commented that though the new law is more transparent, its implementation could still be challenging.

“In November, US investors and businesses wrote a nearly 60-page document on the draft decree. It addresses major issues attracting the attention of foreign investors, such as investment protection and the conditions for overseas enterprises to apply simplified procedures – both of which present huge problems,” Hai noted.

He referred to the conditions for investment registration procedures, in which the conditions will be far easier if the enterprise has a maximum ownership rate of 50 instead of 51 per cent previously. Though the 1-per-cent change is small, it is very important for foreign firms. However, it remains to be seen whether businesses that currently own 50.9 per cent have to reduce their ownership rate to less than 50 per cent to enjoy the same conditions as a domestic enterprise or must follow procedures like a foreign one.

In another example, the investment registration procedures for rooftop solar systems attract the interest of many foreign investors, including US ones, particularly since the prime minister signed Decision No.13/2020/QD-TTg to encourage solar power development in Vietnam, which allows private investors in projects under 1MW. This policy applies to both domestic and foreign businesses. However, the process of issuing investment certificates for foreign enterprises takes three months, much longer than for domestic ones.

In many cases, when foreign companies register a business that is related to generating and selling electricity, they must still wait for departments and agencies to consult with relevant ministries, such as the Ministry of Industry and Trade. “Although the law is very transparent, collecting comments from other agencies and ministries take too long and is thus lessening opportunities for foreign investors,” Hai argued.

Following the changes of the Vietnamese legal system, especially with regards to economic laws, attorney Tran Huu Huynh, chairman of the Vietnam International Arbitration Centre, has seen comments saying that the current laws are not very transparent, uniform, or reasonable.

Huynh, who has criticized many laws and is also one of the members of the drafting committee of the Law on Enterprises 1999, as well as the Law on Investment 2005, found that the business segment especially suffers from inconsistencies and a lack of transparency. Vietnam uses a law implementation index as a criterion for international integration. But according to the VCCI, the implementation of laws is always weaker than the legislative part.

However, Huynh thought that this situation is increasingly being improved in the direction towards faster improvement, larger scale, and more pronounced efficiency.

“I think there are three basic factors that make me believe that law enforcement is getting better,” he said. “First is Vietnam’s innovation policy that aims at increasing competitiveness. Second, our nation’s approach to integration, with the investment and business environment being reformed following the demands of the people and enterprises. And lastly, the legislative part which will be accelerated and improved with the ever-increasing maturation of experts, business community, and associations.”

@ VIR

January 7, 2021 277 views

Life

Vietnam will be among the most outstanding performers in the region this year: HSBC

by Son Bui January 6, 2021

Vietnam posted the fastest growth in Asia in 2020 and will once again be among the most outstanding performers in the region this year, according to the Hong Kong Shanghai Banking Corporation (HSBC).

In its latest “Asia Economics Quarterly” report, HSBC said despite unprecedented challenges, Vietnam has strongly overcome the pandemic crisis. With a population of over 95 million, the country has managed to flatten the COVID-19 curve much sooner and keep the infection tally at around 1,400 thanks to swift and effective prevention efforts by State agencies.

Though the 2020 GDP growth of 2.91 percent was the lowest in the recent decade, it was still assessed as a big success and among the world’s highest considering the complicated development of the COVID-19 pandemic.

Inflation decelerated from 3.9 percent in the first three quarters to 1.5 percent in November compared to the same period of 2019 thanks to normalized good prices and declined oil prices.

HSBC researchers expressed their belief that Vietnam will benefit from tech-led recovery, sustained FDI inflow, and many free trade agreements signed.

However, they still slightly revised the country’s 2021 growth forecast down to 7.6 percent, from the previous estimate of 8.1 percent, due to a prolonged recovery in the tourism industry.

They held that although the country is now ready to outpace other countries in the region in 2021, there remain risks to its economic recovery.

Many obstacles still exist in the tourism sector, HSBC said, noting though the worst may have passed after the second quarter, tourism-related services like accommodation and transportation are still in a bleak situation as a result of cross-border travel restrictions.

The second wave of COVID-19 infections in late July was swiftly brought under control, but it could make the Government more prudent in reopening borders and attracting international visitors. A meaningful tourism recovery is unlikely in the time ahead until effective vaccines are available and there is a global integrated approach to international tourism, according to HSBC.

By VNA/ Vietnam Plus

January 6, 2021 455 views

Enterprise

Why we need more renewable energy?

by Son Bui December 30, 2020

29 global fashion brands say green energy will boost No. 3 textile exporter

Fashion brands including H&M and Nike are pressing Vietnam to move ahead with a renewable energy purchase program as companies come under increasing pressure to meet their sustainability goals, Nikkei Asia has learned.

A consortium of 29 brands sent a letter to Vietnamese Prime Minister Nguyen Xuan Phuc this month urging the country to introduce direct power purchase agreements (DPPA) between private buyers and sellers of renewable energy. Currently, energy users can only buy electricity through the national utility or through small-scale projects such as rooftop solar panels.

International clothing brands, which rely heavily on Asian garment factories, are under pressure from shareholders and consumers to reduce emissions in their supply chains. Renewable energy in Vietnam — the world’s third-largest textile exporter — is key to those companies hitting their emission targets.

“Without the DPPA we believe renewable energy development will plateau and fall short of meeting the growing energy needs of Vietnam’s industries,” the consortium warned in the Dec. 15 letter, seen by Nikkei.

The consortium — which includes the second-biggest U.S. mega-retailer, Target, U.K. handbag maker Mulberry and Swiss sports brand Mammut — said it had hoped Vietnam would launch a planned DPPA pilot in 2020, but that has not happened. The national utility, Electricity Vietnam (EVN), has a monopoly on the country’s power grid, but DPPAs would allow private producers to sell wind and solar power through the grid.

PVH Corp., parent of Calvin Klein, Tommy Hilfiger and others, also signed the letter and told Nikkei it aims “to drive the fashion industry toward net-zero emissions in line with the goals of the Paris Agreement.”

Another signatory, Sweden’s H&M, told Nikkei that shoppers and brands expect factories and stores to be environmentally sustainable.

“The success of the DPPA pilot in Vietnam will also send important signals across the region as to the possible national actions available to meet the renewable energy requirements,” the fast-fashion retailer said.

The consortium’s request follows a similar move in Cambodia this summer when a group of international companies sent a letter to the government warning that the kingdom’s embrace of coal would make it “less attractive” as a production base for foreign brands.

Vietnam relies on renewable energy for about 10% of its power supply, a number it hopes to double by 2030. The communist country already has the most solar capacity in Southeast Asia, according to energy consultancy Wood Mackenzie, and says it is building the region’s biggest solar farm.

The government is drafting regulations for a roughly two-year pilot program to trial direct purchases. Lawyer Vaibhav Saxena expects the program will kick off in 2021. Private lawyers say preparations have dragged on because of the technical and legal complexities of bringing corporate energy producers onto a grid that has long been run by EVN.

One important purpose of the pilot program is to help Vietnam find a balance between how much electricity can be supplied by the state-owned utility and by the private sector.

“It is a win-win position, I would say, for Vietnam,” Saxena, a foreign counsel at the law firm Vilaf in Hanoi, told Nikkei.

He added that Vietnam needs the direct-purchase contracts because supply is not keeping pace with demand. The country had planned to have 60 gigawatts of total power capacity by 2020, but the World Bank said in January it had reached just 47 GW.

In its letter, the fashion consortium also argued that adding more energy options will give Vietnam an edge over its neighbors.

“Implementing the DPPA will allow industry in Vietnam to reach 100% renewable energy targets years ahead of other countries in the region, helping Vietnam build a strong comparative advantage as companies make decisions about where to source products,” the group said. The consortium also includes New Balance, French athletics brand Salomon, Ralph Lauren, Ireland’s Primark and VF Corp., a major supplier for buyers from JanSport to Timberland.

Vietnam continues to rely on coal as its biggest power source, though Hanoi, as a party to the Paris accord on climate change, has pledged to cut emissions of greenhouse gases up to 25% by 2030.

A campaign linked to the Paris Agreement, called the Fashion Industry Charter for Climate Action, urges members to achieve net zero emissions by 2050. The companies that signed the letter to Vietnam’s prime minister are members of the charter, as well.

Domestic players say the country is already making headway on green energy. Andy Nguyen, founder of the renewable energy company VES, said he is building what will be Southeast Asia’s biggest solar rooftop project, for an international beverage company that he declined to name.

“There are people who are willing to invest, and there’s a benefit,” Nguyen said in an interview. “It’s real — it’s not just a discussion or negotiation anymore.”

By LIEN HOANG, Nikkei staff writer | Contributing writer Shaun Turton contributed to this article.

The featured photo taken on 23 April, 2019 shows solar panel installations and a wind turbine at the Phu Lac wind farm in southern Vietnam’s Binh Thuan province. (AFP Photo)

December 30, 2020 322 views

Finance

Vietnam’s stock market market closed in downbeat mood on Christmas Eve 2020

by Son Bui December 25, 2020

Trading in the local stock market ended in negative territory today, December 24, with the benchmark VN-Index on the Hochiminh Stock Exchange shedding over 11 points.

With the number of losers more than quadrupling that of winners by 367 to 88, the main index fell 11.38 points, or 1.05% against the previous session at 1,067.52. Turnover on the southern bourse contracted with volume and value declining 7% and 5% at over 757 million shares worth more than VND14 trillion, including over VND1.1 trillion worth of shares traded in block deals.

In the group of bluechips, low-cost carrier VJC and brewery firm SAB rose slightly by 0.33% and 0.5%, respectively; while real estate developer VIC moved sideways. The remaining stocks in the group were losers, with bank stocks being the worst performers. For instance, lenders CTG and VPB dropped 1.6% each, their fellows BID, TCB, ACB, EIB sank over 2%, and HDB lost more than 3%.

Losers with 1-2% decrease also included housing developer VHM, dairy firm VNM, retailer VRE, jewelry maker PNJ, and securities company SSI. Steelmaker HPG, consumer goods producer MSN, and technology firm FPT made slight falls by 0.1-0.8%.

Regarding market liquidity, lender STB reported a matching volume of over 29.3 million shares, its fellow TCB saw 26.1 million shares changing hands, followed by steelmaker HPG with 18.5 million shares, and lender MBB with over 16 million shares.

Among speculative stocks, good performers were ITA, SCR, MSB, FIT, BCG. Of them, industrial zone developer ITA ranked second on the southern bourse by liquidity with over 29.2 million shares traded.

On the northern bourse, the HNX-Index lost 2.62 points, or 1.38% over the session earlier at 187.63, with 36 stocks rising and 77 others falling, according to the Saigon Times.

December 25, 2020 291 views

Tech

Vietnam debuts National steering committee for cyber safety and security

by Son Bui November 30, 2020

The National Steering Committee for Cyber Safety and Security made its debut and convened its 1st meeting in Ha Noi on Tuesday under the chair of Prime Minister Nguyen Xuan Phuc who lead the Committee.

The meeting saw the attendance of three deputy heads of the Committee, namely Permanent Deputy Prime Minister Truong Hoa Binh, Deputy Prime Minister Vu Duc Dam, and Minister of Public Security To Lam.

The Committee reviewed cyber safety and security situation and commented on its work plans for 2020 and 2021 and the next five years, Vietnam government portal (VGP) reported.

The participants also gave opinions on several other issues.

Concluding the meeting, PM Phuc tasked members of the Committee and the Ministry of Public Security as the standing agency of the Committee, and relevant ministries and agencies to expeditiously take measures to protect cyber safety and security as the country is preparing for the organization of the 13th National Party Congress and the election of deputies to the 15th National Assembly and deputies to the People’s Council at all levels for the tenure 2021-2026.

The Government chief requested provinces and centrally-run cities to quickly establish their own subcommittee for cyber safety and security.

He also named several tasks that must be carried out immediately to meet the requirements of the current situation, accoding to VGP.

November 30, 2020 349 views

Life

Vietnam records up to 16,000 foreigners buy housing last few years

by Son Bui November 23, 2020

About 16,000 foreigners have bought housing in Vietnam since July 2015, mostly from China, the Republic of Korea, Japan, Taiwan (China), and Singapore, the Ho Chi Minh City Real Estate Association (HoREA) estimates.

It cited figures from 17 major property businesses in the country as showing that 12,335 foreigners have bought housing from them since July 2015.

As many as 10,020 people, or over 81 percent of the total, bought housing in HCM City.

The association said the number of apartments bought by foreigners, equivalent to some 0.85 percent of units in commercial housing projects, is still not large and the property market for foreigners has not expanded to any great extent.

Also read: Things you need to know about buying property in Vietnam as a foreigner

Given this, it proposed authorities allow foreigners to purchase or own condo-tels, tourist villas, and shop-tels, while those wishing to invest in resort tourism projects must do so via financial investment under the Investment Law.

Here is the summary the most important information to take note of Vietnam’s new law to foreign ownership of property

Foreigners can buy properties by simply possessing a tourist visa
There’s no cap to the amount of properties you can buy
Foreigners are restricted to buying a maximum of 30% of the units in condominiums and cannot own more than 10% of the properties in a landed project
Foreigners can now buy houses, but only 250 of the houses in a given ward (division).

As a foreigner in Vietnam, if finding it challenging to buy a property and obtain title documents, you should contact a lawyer or talk to an agent. GBS can be a good choice.

November 23, 2020 533 views

Trending

“There is no reason for Vietnam to continue to organise F1 race”

by Son Bui November 4, 2020

Experts believe Vietnam’s capital city of Hanoi should stop the organisation of Formula 1 race in the long-term to focus on economic recovery.

Prioritise all resources for economic recovery

The economic benefits and the opportunity to promote the national image from holding a “billion dollar tournament”, the F1 race, have been lost because of the devastation of COVID-19. But that is not all.

Nobody really knows the answer to the question when the pandemic will end. Even when a vaccine is found, most economies around the world say that it will take at least five years to fully recover from the damage caused by the pandemic, according to Mr. Carmen Reinhart – chief economist of World Bank. In particular, although Vietnam is considered a “bright spot” for disease control, it could take years to recover from the global recession.

This is also the findings of a draft document submitted to the 13th Congress of the Party at the end of October, stating that: “The impact of the COVID-19 pandemic is likely to have a negative effect to the 5-year plan from 2021 to 2025”. Therefore, one of the priority targets during this period is focusing on recovering the economy. All resources should be concentrated on this mission.

In just the first eight months of the year, 68,900 businesses closed because of COVID-19. Meanwhile, according to the survey results of the Private Economic Development Research Board (under the Advisory Council for Administrative Procedure Reform of the Prime Minister), 2 per cent of the businesses had dissolved; 20 per cent of the businesses had stopped operating and 76 per cent of the businesses were still operating but cannot balance revenues and expenditures.

According to experts, it is not possible to estimate the economic impact of the COVID-19 because the pandemic was so unpredictable. These losses are “a very deep cut that can not stop bleeding and does not know when to heal”. The economy is a seriously wounded body that is slowly exhausted from the loss of a life source, and it is necessary to immediately have powerful drugs to rescue.

Continuing to hold the billion-dollar race will be wasteful and offensive

Experts believe that any resources saved at this time are extremely valuable. This resource will be a life jacket helping many businesses and the economy overcome the COVID-19 “storm” and for the economy. As a result, the tremendous expenditure on short-term entertainment events such as the F1 with the investment can reach hundreds of millions of dollars – only in line with stable economic conditions before COVID-19. Organising the event this year or in the following years is not only too wasteful, but also offensive.

“There is no reason for Vietnam to continue to organise F1 race to cause further damage to the resources of the business. If businesses do this, they will not only weaken their financial capacity, but also reduce the ability to contribute to the economy” said National Assembly Member Le Thanh Van.

Meanwhile, from an economic perspective, Prof. Tran Dinh Thien, member of the Prime Minister’s advisory group, said that stopping F1 is compared to ‘cutting losses’ in securities which requires actions immediately and not only 1-2 years, but at least 7-10 years for the economy to recover.

“The main focus right now is concentrating on a new objective: blocking the loss trend to reduce losses. Furthermore, it is to devote resources to other priority objectives, solving the problem for survival,” explained the former Director of the Vietnam Economic Institute.

Also one of the first experts to voice support for the cancellation of F1, Prof. Ts. Dinh Trong Thinh (Institute of Finance) believes that investing in the F1 race will need a huge amount of investment while the effects are difficult to measure because of COVID-19.

“Stopping the F1 race is not about losing the opportunity but taking a step back to preserve the force, especially in preparation for the decisive period to revive the economy when Covid-19 officially passes,” Prof. Dinh Trong Thinh emphasised.

Further analysing the impact of stopping the F1 race, the expert of the Institute of Finance said that Hanoi and the event participants suffered when they spent large investment costs. However, if you look at it more broadly, in the long run, this is a decision that can’t be made differently.

“When businesses are exhausted, they have to spend tightly to overcome losses and maintain operations, Vietnam needs to use resources carefully, avoid wasting money and create policies to motivate enterprises to develop, especially large enterprises which have widespread effects to the economy,” the financial expert advised.

From the above analysis, experts agreed, Hanoi should stop the organisation of Formula 1 race in the long-term to focus on economic recovery, avoiding continuing to cause unforeseen losses.

This story was first posted on Vietnam News

November 4, 2020 695 views

Trending

EuroCham, VCCI work together to support the implementation of the EU-Vietnam Free Trade Agreement

by Son Bui October 23, 2020

The European Chamber of Commerce (EuroCham) and the Vietnam Chamber of Commerce and Industry (VCCI) have today established a new bilateral forum to support the smooth and successful implementation of the EU-Vietnam Free Trade Agreement (EVFTA).

This new forum, known as the EU-Vietnam Business Council (EUVBC), will bring together representatives of the European and Vietnamese business communities to share insights and discuss common challenges in the implementation of this historic free trade agreement.

First envisioned after the signing of the EVFTA in Hanoi in 2019, its establishment has received high-level support from former EU Trade Commissioners Celia Malmstrom and Phil Hogan as well as Vietnam’s Minister of Industry and Trade Tran Tuan Anh.

Founded on 22 October 2020 at the VCCI headquarters in Hanoi, the launch featured speeches from VCCI Chairman Dr. Vu Tien Loc, EuroCham Chairman Mr. Nicolas Audier, and the EU Ambassador to Vietnam H.E. Mr Giorgio Aliberti. It also attracted an audience of business leaders from Vietnamese and European enterprises, as well as ambassadors from across the European Union.

Jointly led by the chairmen of EuroCham and VCCI, the board of the EUVBC will also include eight other members – with four from each chamber of commerce. The EUVBC will also establish a number of working groups for companies in similar sectors, connecting Vietnamese and European enterprises to build stronger relationships and increase knowledge-sharing in specific industries, while also helping to smooth the path for the effective implementation of the EVFTA.

The Council will publish regular papers on the progress of the implementation of the EVFTA, and meet with high-level representatives of the European Commission in Brussels and the Vietnamese Government to share updates from companies on the ground.

In force since 1 August, the EVFTA is the most comprehensive and ambitious free trade agreement ever signed between the EU and a developing nation, and just the second FTA signed with an ASEAN member state. Now it has entered into force, 65 per cent of EU exports to Vietnam are tariff-free, along with 71 per cent of Vietnam’s exports to the European Union. This will rise to almost 99 per cent over the next decade, giving Vietnamese enterprises privileged access to Europe’s large consumer market and EU business better access to Vietnam’s fast-growing sectors and industries.

“Throughout the past years, the Vietnam Chamber of Commerce and Industry (VCCI) and the European Chamber of Commerce in Vietnam (EuroCham) have been side by side, effortlessly promoted the process of negotiation, review, exchange information on the signing of the EU – Vietnam Free Trade Agreement (EVFTA). We are delighted and grateful for the determination made by the Government of Vietnam and the EU authorities over the past years for the signing of the two Agreements” Vu Tien Loc, Chairman of VCCI told the Inside Out

“The EU – Vietnam Business Council was established from the desire to support the Vietnamese business community to “enter the EVFTA highway”. On that highway, Vietnamese businesses are sure to face many difficulties. It is inevitable to feel nervous, but that will not be the reason for them to not “going to the highway”. The Council will represent the voices of Vietnamese and EU businesses in the EVFTA implementation, and acts as a bridge to bring opinions of businesses to the Government and relevant agencies of both Vietnam and the EU.

Thank Eurocham for your joint efforts with us. Thank you for the trust and support of the business community. I believe you make good use of this Agreement.” Loc added

“The EVFTA is a once-in-a-generation free trade agreement. Over the next decade, it will help to boost trade and investment between Vietnam – one of the world’s fastest-growing and most attractive markets – and the European Union, the world’s largest trading bloc. It is a true ‘win-win’ for companies and consumers on both sides.

“Now the EVFTA has entered into force, it is up to business communities on both sides to make it a success and to ensure that our enterprises and societies can both unlock its full potential. EuroCham is proud to establish this new forum with VCCI, and to reaffirm the strong and effective relationship between our two chambers at the beginning of this new chapter of EU-Vietnam trade and investment relations.” Nicolas Audier, Chairman of EuroCham, added.

By Bui Thanh Son (son2537@gmail.com) @ This story was first posted on the Inside Out

October 23, 2020 543 views

Finance

South Korea’s Hyundai Card is set to acquire a 50 percent stake in a Vietnamese financial firm for $42m

by Son Bui October 28, 2019

The Korean credit issuer Hyundai Card has struck a deal that allows it to buy half of total shares at the consumer finance firm FCCOM, member company of the Maritime Joint StockCommercial Bank (MSB) for nearly $42 million.

The deal will help the foreign credit card issuer expand its business in Vietnam, where consumer lending is booming on high domestic consumption, Yonhap News Agency reported.

The deal is expected to complete in the first quarter of 2020and the post-merger company will start operating in the second half of 2020.

“The entry into the Vietnamese market has a significant meaning in that it will mark Hyundai Card’s first direct entry into a foreign market,” Hyundai Card told Vietnam Insider.

“Vietnam is one of the world’s fastest growing markets. Its market for individual loans is currently growing at an annual average of 60percent, with the number of credit card holders surged 27 percent on-year to7.4 million last year.” according to Hyundai Card.

The Korean firm also plans to explore other markets in Southeast Asia, the Deal Street Asia reported.

Hyundai Card’s officers will be responsible for the finance while MSB staff will take care of sales and operations in the post-merger business.

In addition to consumer lending, FCCOM will also cover other sectors such as credit card issuance, automobile financing and corporate financing, which is expected to support the operation of two automobile firms Hyundai andKia Motors in Vietnam.

Before Hyundai Card, some Korean finance firms had enteredVietnam. In 2017 Lotte Card bought out Techcom Finance and launched its unit Lotte Finance in late June 2019. In early 2018, Shinhan Card acquired Prudential Vietnam for 150million USD. The merged business started operating in May 2019.

Aside Korean investors, Japanese firms have appeared on theVietnamese consumer lending market such as Credit Saison and Shinsei Bank, which have formed joint ventures with HDBank and Military Bank.

October 28, 2019 199 views