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Tag: Vietnam

  • Bamboo Airways secures flight slots in London

    Bamboo Airways secures flight slots in London

    Bamboo Airways has got a slot allocated at London’s Heathrow Airport to fly six times a week from Hanoi and HCMC starting in May.

    The flights would be operated using the airline’s long-haul Boeing 787-9 Dreamliner aircraft.

    The carrier had stated its intention to fly to the British capital and Frankfurt in Germany in the first quarter of 2021, but was delayed due to the closure of Vietnamese borders to keep out Covid-19.

    It has announced plans to make an initial public offering this year and raise VND6.3 trillion ($2.73 million).

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  • Vietnam targets $10 bln worth of fruit, vegetable exports

    Vietnam targets $10 bln worth of fruit, vegetable exports

    A fruit and vegetable sector development plan approved by the government seeks to increase exports to $8-10 billion by 2030.

    Processed fruits and vegetables are expected to account for at least 30 percent of this, with two million tons expected to be shipped abroad, double the volume in 2020.
    The plan also seeks to attract investment to establish 50-60 medium and large-scale fruit and vegetable processing facilities with modern technologies that can compete in the international market.

    The government will offer incentives for such investment

    Existing fruit and vegetable warehouses and processing facilities will be upgraded, and farms, processing plants and distribution channels will be linked.

    Exports of fruits and vegetables fell by 13 porcent last year to $3.26 billion due to the impact of Covid-19, according to the Ministry of Agriculture and Rural Development.

    But exports to some countries with stringent quality standards, such as the U.S, South Korea and Japan, increased by 5-11 percent.

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  • Crude oil exports plunge as resource depletes

    Crude oil exports plunge as resource depletes

    Vietnam’s crude oil export is plunging, partly because of depleting resources. An industrialist says the situation can only improve after new fields come online in several years.

    Crude exports volume from January 1 to February 15 this year fell nearly 50 percent year-on-year to 354,700 tonnes, according to Vietnam Customs.

    Most of Vietnam’s oil and gas fields have been harnessed for over 20 years ago and run their course, said Hoang Ngoc Trung, deputy director of Petrovietnam Exploration Production Corporation Ltd.

    In the last five years, crude oil prices have been falling, which has affected investment in searching for new fields, he told the Tuoi Tre newspaper.

    The corporation’s output was 3.8 million tonnes last year, down marginally from 2019, and the figure is set to fall another 10 percent this year.

    However, Vietnam’s crude oil prices remain higher than the global average.

    The global average price of Brent crude oil last year was $41.8 per barrel, but Vietnam sold them for $43.7, 4.5 percent higher.

    In the first two months, Brent crude was $58.53 per barrel, compared to $59.94 percent in Vietnam.

    Trung said exploitation volume is set to recover in the next two or three years with several new fields such as Dai Hung and White Lion coming online.

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  • Vietnam Airlines on threshold of regular direct flights to US

    Vietnam Airlines on threshold of regular direct flights to US

    Vietnam Airlines is awaiting approval from the U.S. government to launch regular direct flights to the country to serve repatriation needs of the Vietnamese community.

    A representative of the national flag carrier told VnExpress that a large number of Vietnamese citizens living in the U.S. wish to return home, but the carrier has already operated all repatriation flights permitted by the U.S. authorities.

    From May to August last year, the carrier has carried out a total 12 repatriation flights as permitted by American aviation authorities to bring Vietnamese citizens home amid the complicated developments of the pandemic.

    The Board of Directors of Vietnam Airlines has just approved a plan to launch regular direct flights to the U.S., saying this is the appropriate time to do it using the wide-bodied Boeing Dreamliner. They expect that this move will help increase revenue and minimize financial damage inflicted by the pandemic.

    As soon as the carrier receives approval from the U.S. government, it will operate regular flights to repatriate Vietnamese citizens as well as carry foreign experts and diplomats wishing to enter Vietnam for work.

    Depending on the recovery of the aviation market and when the Covid-19 pandemic is contained, the airline expects to operate direct flights between Vietnam and the U.S. from 2022 onwards.

    The U.S. Federal Aviation Administration issued a Category 1 rating to the Civil Aviation Authority of Vietnam under its International Aviation Safety Assessment program in 2019, meaning it met safety standards to operate flights to the U.S.

    Vietnam Airlines also got the green light to operate direct flights from Hanoi and Ho Chi Minh City to several American destinations in September 2019. No such a flight under the permit has been scheduled to date.

    There are currently no non-stop routes between the two countries, and passengers have to transit through East Asia, the journey taking between 18-21 hours. A direct flight would bring the travel time down to 14-16 hours.

    Vietnam Airlines reported a loss of over VND11.1 trillion ($483 million) last year after the Covid-19 pandemic grounded all its international flights.

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  • Vingroup eyes $500 mln convertible bond issue in Singapore

    Vingroup eyes $500 mln convertible bond issue in Singapore

    Vietnam’s biggest private conglomerate, Vingroup, is seeking shareholders’ approval to raise $500 million by issuing international redeemable convertible bonds.

    The bonds will be issued this year and listed in Singapore, but will not be traded in Vietnam.

    The first-ever international bond issuance by Vingroup, which has interests in property development, automobiles and smartphones, will have a tenor of five years and a fixed or floating coupon rate or a combination of both.

    Interest will be paid biannually, and the bonds can be converted into shares of Vinhomes, Vingroup’s real estate subsidiary.

    However, Vingroup has the right to redeem the bonds at the end of the third year if the Vinhomes share is above a certain price.

    The money raised will be used to pay loans and pump up the capital of its subsidiaries.

    Vingroup has so far issued VND5 trillion ($217 million) worth of bonds in the domestic market.

    It has been pouring money into expanding its manufacturing business, which it has earmarked as a main focus in the coming years. It began selling its VinSmart phones in the U.S. earlier this year and plans to sell electric cars there next year.

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  • Rice price surges 18 pct

    Rice price surges 18 pct

    Vietnam’s rice price in the first two months surged 18.2 percent year-on-year to $547.9 per ton, but with lower volume in most markets.

    Total volume fell 29.4 percent to over 656,000 tons, according to Vietnam Customs.

    The Philippines remained the largest importer but with volume down 28 percent year-on-year to 256,000 tons.

    Other markets that saw volumes drop by double-digits include Malaysia (–75 percent), the United Arab Emirates (–56 percent) and E.U. (–23 percent).

    China claimed second place with a 140-percent increase to 159,200 tons.

    Strong rises in volume were seen in Taiwan, up 80 percent, and France, up 47 percent.

    Vietnam’s rice exports grew by 9.3 percent last year to $3.07 billion, according to the Ministry of Industry and Trade.

  • Aviation industry to suffer $649 mln loss

    Aviation industry to suffer $649 mln loss

    Vietnamese carriers could suffer a loss of more than VND15 trillion ($649 million) this year with the suspension of commercial international flights still in effect.

    The Vietnam Aviation Business Association says in a report sent to the Ministry of Planning and Investment that domestic airlines had already posted a loss of over VND18 trillion last year, with revenues plunging by VND100 trillion year-on-year.

    In the first two months of this year, domestic carriers transported just 66,600 international passengers, down 98.8 percent year-on-year.

    The association has repeated its request for credit assistance from the government.

    Budget airline Vietjet Air has asked for a credit package of VND4-5 trillion for the 2021-2023 period, with an interest rate of 4 percent.

    The association has also proposed reducing the environmental tax on fuel to VND900 – 1,000 per liter and extending deadlines for paying taxes, including corporate income tax, value-added tax, and personal income tax.

    Bamboo Airways has called for a refinanced, zero interest long-term loan of VND5 trillion from commercial banks.

    Earlier, the government approved a bailout package for national flag carrier Vietnam Airlines, with the State Bank of Vietnam (SBV) allowed to provide a refinanced loan of up to VND4 trillion at zero interest.

    Aviation was among the worst hit sectors in 2020. The number of air passengers declined by 43 percent to 66 million, while cargo transport was down 15 percent to 1.3 million tons.

    Insiders have said that it will take at least until 2023 for the aviation industry to recover to pre-pandemic levels.

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  • Vietnam pilots Mobile Money project for cashless payments

    Vietnam pilots Mobile Money project for cashless payments

    Vietnam’s Prime Minister Nguyen Xuan Phuc has given the green light for the Mobile Money pilot project, thereby allowing mobile phone subscribers to use their telecommunications accounts to make money transfers and payments up to a limited value for products and services strictly in Vietnam.

    This pilot project came into effect on 9 March 2021 and will be conducted over two years. It will be implemented nationwide, particularly in rural areas to improve access to financial services and encourage cashless payment via mobile devices.

    Businesses require licenses to provide intermediary mobile money services, as well as licenses for public mobile terrestrial telecommunications networks to tap on telecommunications network and data. Customers are required to register their mobile accounts with an identity card, citizen identification or passport and use mobile services for at least three consecutive months.

    This pilot project was first submitted to the Prime Minister for approval in May 2020, prompting Vietnam’s major telecommunications services providers like Viettel, VNPT and MobiFone to add payment as a line of business.

    Vietnam has a population of 129.5 million mobile subscribers, of which 43.7 million owns smartphones. This pilot will serve as a basis for the relevant authorities to develop legal regulations around the service in the country.

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  • Bright prospects seen for Vietnam property market

    Bright prospects seen for Vietnam property market

    Economic stability, positive investor sentiment, strong demand, and a diverse range of products are keeping the property market robust. The assumption that Covid-19 would cause the market to slump has proven baseless, and market research aftermarket research shows property prices increasing across the board.

    Vietnam’s bright economic prospects and strategies adopted by many major property developers also contribute to the market’s strength.

    According to the World Economic Outlook Report, a survey by the International Monetary Fund (IMF), in 2020 Vietnam’s economy grew at 2.4 percent, one of the four highest rates in the world. Its effective anti-epidemic strategy and economic growth are expected to be highlights this year too. Fitch Ratings forecast Vietnam’s GDP to grow at 7.5 percent even of there is a new outbreak.

    “Vietnam has well-controlled the pandemic, so we think the economy will recover when domestic demand bounces back,” Sagarika Chandra, head of Vietnam analysis at Fitch Ratings, said.

    Nguyen Xuan Thanh, a Fulbright University lecturer and member of the prime minister’s Economic Advisory Group, said the positive investor sentiment despite the Covid-19 crisis is driven by the stable economy and sound financial system.

    The belief that everyone would surely get vaccinated this year further strengthens investor sentiment, he said.

    “Stocks and real estate are still good investments.”

    The market has seen a geographic shift from areas such as HCMC. If in the past the most important southern market was Saigon, it is now its satellites such as Binh Duong, Dong Nai and Long An provinces and others with tourism potential such as Binh Thuan, Ba Ria – Vung Tau and Khanh Hoa.

    Bui Nguyen Huyen Trang, senior director for Vietnam at JLL, stressed the importance of property developers in construction and urban planning.

    “They must carefully study urban planning to create sustainable value for their large-scale projects.”

    During Covid-19 times, businesses with strong foundation, offering a wide range of products towards demand for home ownership would have more opportunities to succeed.

    The eastern part of Ho Chi Minh City is forecast to be a property hotspot, when Thu Duc City has been officially established, pushing housing prices in this area to record levels.

    With rapidly improving infrastructure that boosts regional connectivity, satellite towns and tourist cities in Binh Duong, Dong Nai, Ba Ria – Vung Tau, and Binh Thuan are of immense interest to investors.

    Terence Alford, director of capital markets and investment services at Colliers Vietnam, said developers tend to search for alternative locations to HCMC to increase value.

    They also focus on creating living spaces to not only increase choices for customers but also contribute to improving the quality of life, setting new trends and offering new life experiences.

    Novaland, a property developer, has recently released its financial report. In 2020 the company achieved profit after tax of VND3.91 trillion, 7 percent higher than it targeted and up 15.3 percent from 2019.

    Total consolidated revenues from sales of units and projects and services were VND8.6 trillion. As of December 31, 2020, Novaland’s total assets were worth VND144.54 trillion, an increase of 60.6 percent from a year earlier.

    In 2020 Novaland disbursements were allocated for M&A activities and project development. The company continues to raise funding from reputed financial institutions at home and abroad despite Covid-19, showing the trust in which it is held by partners.

    Novaland introduced new products in the last few months of 2020. Despite pandemic impacts, resort real estate projects such as the NovaWorld Phan Thiet and NovaWorld Ho Tram still drew great attraction.

    Experts do not foresee the property market crashing this year despite an increase in price levels, but instead expect it to remain strong due to strong demand, economic growth and stability and businesses’ clever strategies.

    In a recent report titled ‘Ready for a new cycle from 2021,’ VNDirect Securities Company said Vietnam’s property market has a seven-year cycle.

    In 2021 it is getting ready to enter a cycle of high growth amid positive factors such as amendments to the 2020 Construction Law and 2020 Investment Law and a forecast of solid economic growth this year.

    “The development of infrastructure and lower mortgage interest rates will have a direct impact on the real estate market. The upward trend in prices will continue due to the growing demand for housing,” VNDirect added.

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  • Nearly half of Vietnamese fear job losses due to automation

    Nearly half of Vietnamese fear job losses due to automation

    Forty-five percent of Vietnamese are worried about losing their jobs to machines in the future, a survey has found.

    Most respondents, 83 percent, think technology would change their jobs in the next 3-5 years, and 90 percent think that would happen in the next 6-10 years, according to the survey by global accounting giant PwC, which polled over 1,100 people in November and December last year.

    This poses a demand for enabling a future-ready workforce, it said.

    Dinh Thi Quynh Van, general director of PwC Vietnam, said: “While an upgrade or investment in technology can be immediate, equipping people with the right skills to meet the needs of the future, helping them thrive in the changing conditions of the digital world require time and constant effort.”

    The evolution of technology also caused for optimism, with 90 percent saying it would improve their job prospects in the future.

    In comparison, a 2019 PwC report said the global rate was 60 percent.

    Grant Dennis, chairman PwC Vietnam, said: “Our survey findings reflect the accelerated presence and influence of technology in the workplace and the pace of change that is to come in Vietnam.”

    Nearly nine out of 10 people said they are provided with opportunities to various extents to improve their digital skills at work, indicating that businesses are doing their part to meet the upskilling needs of their workforce.

    Some 93 percent of respondents said they are already making efforts to reskill and upskill to adapt to technological changes.

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  • Vietnam among world’s 10 largest aviation markets

    Vietnam among world’s 10 largest aviation markets

    Its effective pandemic response has seen Vietnam become the 10th largest aviation market with a week-on-week growth of 12 percent in domestic seat capacity.

    Vietnam registered an additional 117,000 seats between March 8-15, raising its total scheduled capacity to 1.07 million seats, according to data released Tuesday by British aviation analysis company OAG.

    Despite this impressive growth, the figure was still down 31.4 percent against the pre-pandemic level in January 2020, the company said.

    China is still the world’s largest aviation market, with over 16 million seats, followed by the U.S. and India. Indonesia and Japan rounded out the top five.

    “The recent steady if not earth-shattering increases in global capacity are very welcome and reflect as much optimism rather than confidence in the recovery process through the next few months,” OAG said.

    “There remain far too many variables for anyone to be really confident about the shape of a recovery, but vaccine passports and other initiatives are all helping to build some momentum.”

    Experts have suggested that Vietnam test “vaccine passports” on certain groups of entrants before adopting an official policy for the holders.

    Vietnam has recorded 904 cases in its latest Covid-19 outbreak since Jan. 28, but most of the 13 affected localities have gone through many days without any domestic transmission of the novel coronavirus.

    With the pandemic more or less contained, air travel demand has returned to normal, with many cities and provinces, including Hai Phong, Hanoi, Ho Chi Minh City, and Quang Ninh, allowing tourism services to resume.

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  • Alibaba has major ambitions for Vietnamese businesses

    Alibaba has major ambitions for Vietnamese businesses

    Chinese e-commerce giant Alibaba wants to have over 10,000 Vietnamese small and medium-sized enterprises selling on its platform by 2025.

    Its government relation and business development manager, Vu The Tung, who revealed this at a ceremony to sign a memorandum of understanding with the Vietnam Trade Promotion Agency on Tuesday, said his company would help Vietnamese businesses increase their exports by promoting their products.

    The two signatories have been running a training program since August last year to enhance Vietnamese businesses’ ability to participate in global e-commerce.

    Vu Thi Minh Thuy, manager of the agency’s information technology application center, said through the training program over 300 companies have been provided consultancy in online cross-border sales.

    Fifty agriculture, aquaculture, food processing, and packaging companies became ready to sell on Alibaba’s e-commerce platform after completing training in October, she said. The two sides hope to have 1,200 Vietnamese enterprises on the platform by the end of 2021.

    Deputy Minister of Industry and Trade Do Thang Hai, who hailed Alibaba’s support, said: “The Vietnam Trade Promotion Agency and Alibaba will continue to look for enterprises to take part in the training program, and create recognition for Vietnamese brands on Alibaba’s e-commerce platform. They are also planning to create an exclusive section for Vietnamese products on the Alibaba website.”

  • Leverage for Vietnam agricultural products to take off

    Leverage for Vietnam agricultural products to take off

    International integration offers Vietnam agri-products opportunities to scale the value chain, though with strict requirements. Vietnam typically exports eight types of agricultural, forestry, and aquatic products with an annual turnover of over $1 billion, many of which have achieved high positions in the global market.

    However, experts say Vietnam’s agricultural sector has yet to develop modern production methods due to its small scale and lack of technological applications. As a result, agricultural production has low productivity, competitiveness, and added value.

    To optimize the stages of the agri-product value chain, one solution is to remove bottlenecks in production and preservation. Also, food loss needs to be reduced, transportation costs optimized, and stable output markets found for agri-products.

    Economic experts say to boost the sustainable development of Vietnam’s agri-products, priority policies are needed for Mekong Delta, the nation’s rice basket.

    Government’s resolution No. 120 on the sustainable development of the Mekong Delta in response to climate change has a hundred-year vision with several distinct investment phases. Accordingly, priority must be given to investment in logistics and transport infrastructure, seen as the lifeblood of the economy.

    The government has approved a five-year $2 billion allotment for infrastructural development in the area.

    Nguyen Phuong Lam, director of the Can Tho branch of Vietnam Chamber of Commerce and Industry, said Mekong Delta has recently made heavy investments in infrastructure and diversified transportation means to improve the trade flow of agri-products.

    Once opened for traffic, Trung Luong-My Thuan Expressway is expected to significantly speed up product delivery.

    With regards to logistics, Lam said that for a long time, localities across the Mekong Delta have only focused on stages from the field to factory but paid little attention to those from the factory to port, shipping, packaging, and inspection despite their decisive role in the competitiveness of agri-products.

    “That is the reason why it is very important to develop logistics centers that are capable of handling all stages of agri-production from Mekong Delta to ports and consumption markets. This would reduce waiting times and cumbersome procedures.”

    Logistics companies are urged to resolve this pressing problem. Most recently, the first phase of Hanh Nguyen Logistics Center, a self-contained logistics hub for all agricultural export procedures, entered operation in southern Hau Giang Province. Situated in a prime location, the logistics center provides convenient access to the Mekong Delta and southeast region.

    Pham Tien Hoai, Hanh Nguyen Logistics CEO and board chairman of Tien Thinh Group, said, “After many years of supporting farmers, we want to create a breakthrough for them so their work is less strenuous and they achieve greater results.”

    The opening of a logistics center will connect all stages in the agricultural supply chain and open more markets.

    “Customers and farmers need only bring their products to the center, we will take care of the rest, from cleaning to preserving and irradiating. We also handle the transportation, customs clearance, exports, and financial procedures to find suitable markets for products,” Hoai added.

    The workshop titled “Logistics Leverage for Mekong Delta Agri-products” will take place by the end of March, with the participation of economic and logistics experts, along with representatives of leading agricultural enterprises.

    The initiative will raise many issues that hinder the resilience of Mekong Delta agri-products, offering comprehensive solutions to reach foreign markets.

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  • PG Bank merger plans collapse… again

    PG Bank merger plans collapse… again

    The proposed merger between PG Bank and HDBank is set to be called off, making it the former’s third failed merger bid in the last six years.

    The management of fuel distributor Petrolimex, which owns a 40 percent stake in PG Bank, has expressed disappointment in the delay in merging at the bank’s last two annual general meetings. Its earlier aborted merger bids were with state-owned VietinBank and Military Bank (MB).

    PG Bank announced in 2014 plans to merge with VietinBank. Bank mergers usually mean a larger bank acquiring a smaller one or two banks merging into one and acquiring a common identity.

    Vietnam saw its share of such deals at that time like SCB acquiring Tin Nghia Bank and De Nhat Bank, SHB acquiring Habubank and Western Bank merging with PVFC to form PVcomBank.

    But PG Bank wanted to keep its own brand and operate as “a bank within a bank,” something without precedence, and predictably the deal collapsed despite four years of talks.

    MB announced the same year that it was looking for potential acquisitions and PG Bank was one of its targets. The two held negotiations but no deal was signed.

    HDBank immediately came up with a merger proposal, but three years on the two have not been able to finalize a deal.

    The repeated failures have taken a toll on the bank. It has not been able to expand since 2014 since an expansion would affect the valuation.

    Its charter capital remains unchanged at VND3 trillion ($130 million).

    In 2019, it had said the delay in merging with HDBank was affecting its business and caused employee turnover to increase.

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  • ACB expects profits to top $460 mln

    ACB expects profits to top $460 mln

    Asia Commercial Bank has set itself a profit target of VND10.6 trillion ($460.8 million) for 2021, up 10 percent from last year.

    If it manages to achieve the target, it will join a select group of lenders to surpass the VND10 trillion mark comprising state-owned lenders Vietcombank, VietinBank, MBBank, Vietnam’s largest private bank Techcombank, and VPBank.

    It also targets growing its assets by 10 percent and credit by 9 percent and keeping non-performing loans under 2 percent.

    ACB plans to pay 25 percent dividends for 2020 and 2021 in the stocks.

    Its profit target is lower than forecasts by some securities companies. Vietcombank Securities expects ACB to achieve a profit of VND11.7 trillion, while KIS Vietnam, owned by Korea Investment & Securities Co., Ltd, said it is likely to top VND11.3 trillion.

    The expectations are based on its high credit growth in 2020 of 15.7 percent against 11 percent for the banking industry and a bancassurance deal it recently struck with Canadian insurance company Sun Life with an upfront fee of VND8.5 trillion.

    ACB’s profits rose by 27.7 percent last year to VND9.6 trillion.

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