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Tag: Vietnam

  • Nike could run out of Vietnamese sneakers

    Nike could run out of Vietnamese sneakers

    The shutdown of two contract manufacturers in Vietnam due to Covid-19 could worsen Nike’s sneaker supply problems, a market research company has warned.

    The fact that South Korea’s Changshin Vietnam and Taiwan’s Pou Chen Corp in HCMC have stopped operating since last week “may exacerbate the supply chain disruptions that the company has had to deal with,” S&P Global Market Intelligence said in a report.

    Vietnam accounted for 49 percent of U.S. seaborne imports linked to Nike and its products in the second quarter, it said.

    Nike said in fiscal 2020 contract factories in Vietnam made roughly 50 percent of its branded footwear.

    There is a refocusing on China, the report said, pointing out that in the second quarter of this year, growth of U.S. seaborne imports linked to Nike from Vietnam was 6.6 percent year-on-year while it was 54.6 percent for China.

    A Nike spokeswoman said in an emailed statement: “We continue to work with our suppliers to support their efforts in response to the dynamic and unprecedented nature of Covid-19.”

    HCMC has recorded over 39,500 Covid-19 cases since April 27.

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  • Nearly 8,000 Vietnamese farmers take to online sales

    Nearly 8,000 Vietnamese farmers take to online sales

    Nearly 8,000 Vietnamese farmers started trading on e-commerce platforms in the first six months, up 191 percent year-on-year, as authorities pushed the development of the digital economy.

    The total value of agriculture produce on e-commerce platforms in the period tripled to VND944 billion ($41 million), according to a Ministry of Information and Communications report.

    It stated this was the result of the ministry and municipal authorities pushing postal companies to partner with e-commerce platforms to help distribute produce.

    This year, Vietnam’s lychees became the first agricultural produce to be exported to Europe via a domestic e-commerce platform.

    Minister of Information and Communications Nguyen Manh Hung said e-commerce and logistics is the future of the postal sector, thanks to technology paving the way.

    Vietnam’s digital economy is forecast to grow by 29 percent annually from 2020 to $52 billion by 2025, according to a study by Google, Temasek Holdings and Bain & Co.

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  • Vietnam pledges not to devalue currency in agreement with US Treasury

    Vietnam pledges not to devalue currency in agreement with US Treasury

    Vietnam has pledged not to deliberately weaken its dong currency, reaching an agreement with the U.S. Treasury to make its monetary and exchange rate policies more transparent.

    The agreement, announced in a joint statement by Treasury Secretary Janet Yellen and State Bank of Vietnam Governor Nguyen Thi Hong after a virtual meeting on Monday, follows months of U.S. pressure on Vietnam over its currency practices and ballooning U.S. trade surplus.

    The Trump administration in its final weeks had declared Vietnam a currency manipulator and had threatened to impose punitive tariffs on imports from Vietnam.

    Vietnam, which benefited from the shift of U.S. supply chains away from China amid a tariff war, saw its goods trade surplus with the United State jump 25 percent in 2020 to $69.7 billion despite the Covid-19 pandemic. Vietnam is a growing source of U.S. imports of furniture, electronics, computers and apparel.

    In the joint statement, Vietnam confirmed its commitment under International Monetary Fund rules “to avoid manipulating its exchange rate in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage and will refrain from any competitive devaluation of the Vietnamese dong.”

    The Vietnamese central bank said the focus of its monetary policy framework is “to promote macroeconomic stability and to control inflation.”

    But the central bank agreed to “improve exchange rate flexibility over time,” allowing the dong to move in line with the development of the country’s markets and economic fundamentals, and to further modernize and make more transparent its monetary policy and exchange rate framework.

    The Treasury said it would inform other U.S. government agencies about the agreement to address U.S. concerns.

    “I believe the State Bank of Vietnam’s attention to these issues over time not only will address Treasury’s concerns, but also will support the further development of Vietnam’s financial markets and enhance its macroeconomic and financial resilience,” Yellen said in the statement.

    The Treasury under Yellen in April removed a “currency manipulator” label from Vietnam that had been imposed by the Trump administration last December. But the Treasury said that Vietnam, along with Taiwan and Switzerland, had tripped its thresholds for the designation under a 2015 law.

    The department at the time said it would commence “enhanced engagement” with Hanoi to correct the situation, which led Vietnam’s foreign currency intervention and global current account surplus to exceed 2 percent of its GDP.

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  • Taxi firm Vinasun continues to remain in the red

    Taxi firm Vinasun continues to remain in the red

    Taxi operator Vinasun reported a loss of VND66 billion ($2.87 million) for the second quarter, its sixth consecutive quarterly loss as Covid-19 continued to wreck its business.

    Revenues were VND150 billion, the lowest since the company listed on the stock market in 2008.

    Before the fourth wave of Covid began at the end of April Vinasun had said its financial structure was “stable and healthy” and it hoped to increase market share in the recovering market by investing in 500 new cars to take its fleet size to 3,368 by the end of the year.

    It targeted revenues of VND1.05 trillion this year, up 4 percent from 2020, and expected to reduce its losses to VND79 billion from VND210 billion last year.

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  • Electric cars fail to get charged up without policy support

    Electric cars fail to get charged up without policy support

    A lack of policies promoting battery production and building a charging station network is preventing the electric car market in Vietnam from hitting the road running.

    At the end of March, automaker VinFast began accepting pre-orders for its first electric cars. More than 4,000 orders were placed on the very first day.

    The company has requested several incentives for electric vehicle development, including scrapping special consumption tax and registration fees on electric cars for five years.

    Some brands have imported electric and hybrid vehicles into Vietnam earlier.

    In August last year, Toyota started selling its first hybrid cars in Vietnam with low fuel consumption, giving 100 km for 4.6 liters of fuel.

    Mitsubishi also distributed its i-MiEV cars in Vietnam in 2017 and installed charging stations in some localities. However, after 10 years of making efforts to distribute them to many different markets, the company has stopped manufacturing the vehicles now.

    Last year, around 1,000 electric and hybrid vehicles were sold in Vietnam, with the latter accounting for 99 percent. The figure for gas powered vehicles was over 296,000 units.

    The Ministry of Industry and Trade said in a recent report to the government that there has not been real support policy for electric cars.

    Apart from VinFast which is manufacturing the vehicles, foreign brands like Honda, Toyota and Mitsubishi have mostly been importing electric vehicles without any concrete plan to make them in Vietnam.

    Experts say that the lack of a systemic policy to support the industry concerning the manufacturing of battery, the development charging infrastructure, prices and emission.

    “Batteries need to have high durability and have quick charge function, while the charging station network should be widespread. These factors are what missing in Vietnam’s electric car industry,” said an expert in the auto industry who asked not be identified.

    VinFast is set to tackle these challenges with plans to set up over 2,000 charging stations nationwide by the end of this year.

    The industry ministry report said that prices for electric vehicles are not enticing enough compared to fuel vehicles.

    A 15 percent special consumption tax on electric cars, compared to 30-50 percent on fuel cars, is not enough to bring electric car prices down to an attractive level to customers, it said.

    Another challenge is electric vehicles will still be using coal-fired and oil-fired electricity which has high emission, as renewable energy is not stable and has high price tag, the it added.

    Dau Anh Tuan, head of the Vietnam Chamber of Commerce and Industry’s legal department, proposed that cars be applied a special consumption tax based on how much carbon dioxide they release into the environment, which will help encourage people to switch to electric vehicles.

    Policies should focus on supporting Vietnamese companies to make electric vehicles, not foreign ones, he added.

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  • Vietnam Embassy requests hastening nonstop Bamboo Airways flight to US

    Vietnam Embassy requests hastening nonstop Bamboo Airways flight to US

    The Vietnam Embassy in the U.S. expects further favorable conditions from US agencies for Bamboo Airways to operate its inaugural non-stop flight connecting Vietnam and the States.

    In the official dispatch on July 9, the embassy expresses its gratitude to the Department of Homeland Security, Department of State, and Federal Aviation Administration for supporting and facilitating flights to repatriate thousands of Vietnamese citizens stranded in the U.S. due to the Covid-19 pandemic.

    While international commercial flights remain suspended, Bamboo Airways has been granted permission to conduct charter flights to transport goods and passengers to the U.S., the foreign mission of Vietnam emphasized.

    Regarding the plan, the embassy requests continued support from all concerned parties. On Nov. 6, 2020, Bamboo Airways was licensed to conduct flights connecting the States and Vietnam by the U.S. Department of Transport. On June 23, 2021, the airline submitted the necessary documents to the Federal Aviation Administration of the U.S. to complete procedures for its first charter flight.

    “The embassy would appreciate it if the relevant U.S. agencies could consider all the submitted documents by the Bamboo Airways on June 23 at their earliest convenience,” the dispatch stated.

    In fact, Bamboo Airways was officially designated to exploit charter flights to the U.S. in May 2021. The airline has acquired slots to conduct regular non-stop flights from Ho Chi Minh City to San Francisco and Los Angeles.

    As of now, Bamboo Airways has fulfilled technical requirements to conduct non-stop charter flights to the U.S. with its wide-body Boeing 787-9 Dreamliner fleet, approved by the Civil Aviation Authority of Vietnam.

    The airline is rushing to establish a representative office in the U.S., in cooperation with San Francisco International Airport and Los Angeles International Airport.

    According to a Bamboo Airways representative, the carrier is working with U.S. agencies to complete procedures for its first non-stop flight to depart at the end of July or early August.

    Bamboo Airways has officially entered into cooperation with the International Air Transport Association (IATA) to pilot the digital health passport IATA Travel Pass, marking significant progress in the airline’s preparation for international routes reopening. Besides, the carrier is implementing Covid-19 vaccinations for all employees and related affiliates, creating perimeter protection for seamless operation. Bamboo Airways’s Covid-19 prevention process is considered the most comprehensive and effective, achieving an absolute level of 7/7.

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  • HSBC sees challenges to Vietnam economy in H2

    HSBC sees challenges to Vietnam economy in H2

    HSBC expects Vietnam’s economy to face challenges related to foreign exchange and interest rates in the second half of this year.

    Ngo Dang Khoa, head of global markets at HSBC Vietnam, said recent outbreaks of Covid-19 have sparked worries about production being interrupted for a long time, which would affect the country’s recovery.

    “With many industrial parks being closed down and social distancing prolonging, growth momentum in the third quarter, in particular, will surely face many challenges.”

    Social distancing to prevent the disease from spreading has affected consumer outlook and the recovery of services and tourism, while the new coronavirus mutants and slow vaccination would delay the reopening of borders to foreign investors and tourists, he said.

    “It is necessary to adopt timely fiscal and monetary policies to safeguard the economy.”

    It would be difficult to maintain a stable dong-U.S. dollar exchange rate in the second half unlike in the first mainly because of Vietnam’s trade deficit, inflation worries and the possible rise in U.S. interest rates, he said.

    He predicted the exchange rate to be VND23,100 to the dollar by year-end.

    Asian countries including Vietnam have yet to see inflationary pressure, but if prices continue to increase, it might have to increase interest rates, he said. Vietnam should not increase interest rates too early or too quickly since its economy has been severely affected by the pandemic, he said.

    HSBC recently revised upward its forecast for Vietnam’s economic growth next year to 6.8 percent from the earlier 6.5 percent but lowered it to 6.1 percent from 6.6 percent for this year.

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  • Vietnam Airlines plans cargo carrier in Covid-19 response

    Vietnam Airlines plans cargo carrier in Covid-19 response

    National flag carrier Vietnam Airlines plans to form a cargo carrier as part of efforts to shore up its business that has been hard hit by Covid-19 outbreaks.

    The carrier has converted seven passenger planes into cargo carriers – five wide-bodied Airbus A350s and two narrow-bodied A321s, Vietnam Airlines chairman Dang Ngoc Hoa said at its annual shareholders’ meeting Wednesday.

    In June, its cargo transport revenue, which normally accounts for 10 percent of the total, surpassed that of passenger transport.

    According to Vietnam Airlines CEO Le Hong Ha, the airlines has considered establishing a cargo carrier for years, but the time was not considered opportune.

    Over the past two years, and especially in recent months, cargo transport has generated bigger revenues, so Vietnam Airlines is considering the plan more seriously, Ha said.

    Chairman of retail company Imex Pan Pacific Group, Johnathan Hanh Nguyen, has asked for permission to establish a cargo airline named IPP Air Cargo with an investment of $100 million, but the national aviation authority has informed the transport ministry that it will not recommend the establishment of any new carrier until 2022, given the pandemic situation.

    Budget airline Vietjet has re-configured 4 Airbus A321s to transport cargo.

    Meanwhile, foreign express delivery giants like DHL and UPS have increased flights and payloads to transport goods to Vietnam by air.

    According to a transport ministry report sent to the government, the proportion of cargo transport in local airlines’ total revenues in one year amid the Covid-19 outbreaks tripled against the pre-pandemic period.

    In the first half of this year, Vietnam Airlines racked up losses of some VND9.823 trillion (nearly $427.1 million). It has estimated consolidated losses of VND14.526 trillion this year, up nearly 30 percent against last year, and consolidated revenues of nearly VND37.4 trillion, down 11.6 percent.

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  • Supermarkets find customers hoarding goods to resell

    Supermarkets find customers hoarding goods to resell

    Some customers have taken undue advantage of its price stabilization program to buy large volumes of goods and resell them at higher prices, leading supermarket chain Saigon Co.op says.

    The Saigon Union of Trading Cooperatives said the unethical hoarding has resulted in frequent shortages of some goods, especially chicken eggs. To deal with the problem, it has had to set limits for the number of eggs each customer can buy at a time.

    Similarly, supermarket chain MM Mega Market has set a maximum limit of 30 eggs per customer.

    Nguyen Nguyen Phuong, vice director of the HCMC Department of Industry and Trade, told reporters Monday that over the past few days, prices at supermarkets and convenience stores have been fairly stable, but some individuals have bought groceries in large volumes for stocking and alleged reselling.

    Relevant organizations have talked to the individuals about the hoarding, and if they continue their unfair practice, market management agencies would handle the issue, he said.

    According to Saigon Co.op, prices of vegetables, fruits, meat, eggs, milk, and rice in its supermarkets have remained unchanged, though those in the markets outside increased sharply.

    Regarding goods orders placed online, Saigon Co.op has delivered over 70 percent, and it is speeding up delivery.

    HCMC imposed its second 15-day citywide social distancing order starting last Friday as the current epicenter seeks to curb the spread of Covid-19.

  • Auto sales surge 40 pct

    Auto sales surge 40 pct

    Auto sales in the first six months rose 40 percent year-on-year to 150,481 units, according to Vietnam Automobile Manufacturers Association (VAMA).

    Passenger vehicles saw sales rise 37 percent in the period, while commercial vehicles grew 48 percent and special-purpose vehicles, 68 percent.

    Local brand Truong Hai Auto Corporation retained the top spot with 51,685 units, up 51 percent.

    Toyota saw sales growing 16 percent to 29,239 units, while the figures for Mitsubishi were 45 percent and 14,915 units.

    Honda and Ford made up the rest of the top five.

    The best-selling car model in the first six months was the hatchback VinFast Fadil, followed by two sedans, Hyundai Accent and Toyota Vios.

    Last year sales had fallen by 8 percent to 296,634 units as the Covid-19 pandemic badly affected the economy, hitting people’s incomes and discretionary spending.

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  • Vietcombank H1 profit surges 35 pct

    Vietcombank H1 profit surges 35 pct

    State-owned lender Vietcombank reported a VND14.8 trillion (nearly $643.5 million) profit in the first half of the year, up more than 35 percent year-on-year.

    A senior Vietcombank official who did not want to be named said Monday that the rise in profit can be attributed to a 60 percent year-on-year increase in non-interest income, mainly from services.

    In the first half of the year, the bank made bancassurance revenues of some VND500 billion.

    In its first-half review meeting held late last week, Vietcombank said that as of late June, its outstanding loans rose over 9.8 percent against late 2020 to VND920 trillion.

    The credit growth of more than 9.8 percent approaches the ceiling rate of 10.5 percent set by the State Bank of Vietnam for the whole year, so Vietcombank has proposed that the central bank increases it to 14 percent.

    Its bad debt ratio increased from 0.6 percent early this year to 0.91 percent by the end of the second quarter, due to the Covid-19 outbreak.

    The Vietcombank official said profit growth in 2021 is projected to be lower than the first half surge as credit growth has approached the ceiling rate, and the bank plans to continue to lower lending interest rates in the second half. Its bad debts are likely to increase further because of the pandemic.

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  • Thai energy firm BCPG signs Laos wind power sale with Vietnam

    Thai energy firm BCPG signs Laos wind power sale with Vietnam

    Thai renewable energy firm BCPG Pcl on Tuesday said that its consortium had signed a 25-year agreement to deliver wind energy from a 600-megawatt project in Laos to Vietnam.

    An agreement between Vietnam’s electricity firm EVN and Impact Energy Asia Development (IEAD), of which BCPG holds a 45 percent stake, will supply electricity through a 500-kilovolt transmission line from Laos to Quang Nam province in Vietnam.

    Impact Wind Investment, backed by Japan’s Mitsubishi Corporation, holds a 55 percent stake in IEAD.

    Construction on the Monsoon Wind Project will commence in 2022 with commercial operations targeted for 2025. It would be the Association of Southeast Asian Nations’ largest wind farm, BCPG said in a statement.

  • Government to keep 65 pct stake in banks, airport operators

    Government to keep 65 pct stake in banks, airport operators

    The government will retain minimum ownership of 65 percent in state-owned banks and airport operators that privatize from now through 2025.

    It will keep a similar rate in large mining companies.

    The rates will be 50-65 percent in airlines and water utilities, basic chemical production and fuel importing companies.

    But companies that have a bearing on national security, such as landmine producers and map makers, will not be privatized.

    Others, where it will continue to own 100 percent, are power transmission and national grid management, currency printing and gold bullion production.

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  • Banking sector eyes growth potential

    Banking sector eyes growth potential

    Vietnam Report JSC recently announced the nation’s Top 10 prestigious and effective public companies for 2021 with six banks including Vietcombank, ACB, VPBank, VIB, MBBank and Techcombank.

    Over the past two years, these banks have been recognized by economists and investors for their financial strength and communication capacities, their growth potential, level of sustainable development, quality of corporate governance and the positions in the industries.

    By the end of June 10, the banking industry accounted for 34 percent of HCMC Stock Exchange market capitalization with stock prices growing 18 percent in one month, 40 percent in three months, and 77 percent in six months, respectively.

    According to analysts, the above-mentioned banks have helped the banking industry affirm its position as one of the major pillars of Vietnam’s economy as the sector has contributed to regulating financial supply and demand for businesses and individuals, especially in the context of the economy being challenged by the Covid-19 pandemic.

    A JP Morgan report showed Vietnamese banks offer the best combination of growth and return on equity (ROE) in ASEAN at 18 percent, double that of other countries in the bloc.

    According to analysts, there are three growth drivers for the strong growth of the banking industry in the medium and long-term including the strength of the local economy, self-improvement and digital transformation.

    According to the World Bank, though Vietnam has been affected by the Covid-19 pandemic, the local economy still boasts many positive achievements, demonstrating its sustainable internal strength.

    Meanwhile, Vietnam is among the few economies predicted to grow positively in the coming years with major drivers being domestic production, along with consumption and exports. The banking industry, with its role as a financial support for the whole economy, is also forecast to continue growing in resonance with the national economy.

    At the same time, Vietnam’s population is expected to reach 120 million by 2050, an increase of over 20 percent compared to the present, with the middle-class proportion to double from 13 percent to 26 percent by 2026. That will open up golden opportunities for banks especially those that have considered retail business a core area.

    Currently, Vietnam International Bank (VIB), Asia Commercial Bank (ACB), Saigon Thoung Tin Commercial Joint Stock Bank (STB), Vietnam Prosperity Joint Stock Commercial Bank (VPBank) and Military Commercial Joint Stock Bank (MBBank) are recognized as five leading private banks with top retail loans.

    Notably, VIB and MBBank rank top with a compound growth rate of 49 percent and 31 percent respectively over the past five years. VIB is also considered the leading retail bank as its outstanding retail balance accounts for over 86 percent of the total outstanding balance, of which over 95 percent of retail loans have collateral.

    The banking industry has been experiencing positive changes in recent years. The dynamic business model, effective application of digital transformation and significant improvement in internal strength have brought impressive business results.

    In addition, the State Bank of Vietnam has accelerated the application of international risk management standards. That has contributed to improving the transparency of information, enhancing the prestige of local banks to domestic and international investors.

    The below table, sourced from audited financial reports of relevant banks from 2016 – 2020, mentions key financial indicators that clearly show the top six banks obviously stand out from median industry performance.

    Banks % ROE % ROA % CIR % NPL & VAMC % CAR CAGR Profit before tax 2016-2020 (%)
    VIB 29.6 2.2 40 1.7 10.1 70
    ACB 24.3 1.9 42 0.6 11.1 55
    VPB 21.9 2.6 29 3.4 11.7 27
    VCB 21.1 1.4 33 0.6 9.6 28
    MBB 19.1 1.9 39 1.1 10.4 31
    TCB
    18.4
    		3.1 32 0.5 16.1 41
    Industry median 18.8 1.6 39 1 10.8 39

    Quickly embracing digital transformation

    The banking sector’s strong growth in recent years is also attributable to the endless efforts of local banks in quickly embracing digital transformation. The banks that have actively participated in digital transformation will meet the increasing needs of customers while launching new products and services to both better serve their clients and increase business efficiency.

    Among them are VIB, MBBank and Techcombank, which have launched digital product packages like digital accounts, bank cards and completely free digital banking services to better facilitate customers.

    Amid the Covid-19 pandemic, digital solutions offered by these banks have assisted customers to make transactions and conduct basic banking services online instead of visiting branches or transaction offices.

    Analysts said banks that have a clear digitalization strategy will soon boost their market share and quickly lead the sector in terms of growth rate and quality of services. This has happened in markets like the U.S., Australia and Singapore.

    They added with the three above-mentioned growth drivers, sustainable development with many distinctive imprints of the six banks in the Top 10 is expected to be a bright spot for the banking industry and the Vietnamese economy in future.

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  • Covid shuts HCMC’s biggest wholesale market

    Covid shuts HCMC’s biggest wholesale market

    HCMC’s biggest wholesale market, Binh Dien, which has a growing number of Covid-19 cases linked to it, will shut down on Tuesday.

    Authorities in District 8, where it is situated, said they made the decision after the infection began to spread to other areas from the market. As of July 4, 56 Covid-19 cases have been found to have linkage with Binh Dien market.

    From 8 a.m. no goods can be delivered, and by 8 p.m. all the stocks have to be liquidated.

    The closure will continue until further notice.

    Vendors are starting to change their sales method, instead of meeting customers in the market they will deliver directly to them, market managers said, adding that they have set up a website prior so customers can buy from it.

    With Hoc Mon Wholesale Market shut last week, two of the three major wholesale markets are closed in the country’s Covid epicenter, which has over 6,900 cases confirmed in the latest wave.