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Tag: Vietnam

  • Vietravel Airlines to get three more planes in Q3

    Vietravel Airlines to get three more planes in Q3

    Vietravel Airlines is expecting to expand its fleet to six by adding three more aircraft in the third quarter following a plan set out from the early days of its establishment.

    The move in association with a recruitment program slated for May in Ho Chi Minh City aims to help the carrier be ready for its market expansion targets.

    The airline, which debuted in late 2020, is currently operating six domestic routes connecting Hanoi, Ho Chi Minh City and major tourist destinations of Da Nang, Phu Quoc and Quy Nhon, along with two international ones connecting Hanoi, HCMC and Bangkok.

    It is also partnering with a company from the Republic of Korea to provide 11 charter flights on the Daegu-Cam Ranh route in the period from March 28 to May 7 with one flight every five days.

    As of the first quarter of 2023, Vietravel Airlines had operated over 11,600 flights safely and carried close to 2.5 million passengers, with an average occupancy rate of 93.7%.

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  • Stock dives to 5-week low

    Stock dives to 5-week low

    Vietnam’s benchmark VN-Index dropped 0.63 percent to 1034.85 points Tuesday, lowest in five weeks.

    The index closed 6.51 points lower after losing 1.55 points on Monday.

    Trading on the Ho Chi Minh Stock Exchange (HoSE) increased by 3% to VND9.42 trillion ($401.14 milllion).

    The VN-30 basket, comprising the 30 largest capped stocks, saw 27 tickers lose.

    MSN of conglomerate Masan Group fell 2.7%, followed by HDB of HDBank and NVL of property developer Novaland Group, both with a 2.1% drop.

    STB of Ho Chi Minh City-based lender Sacombank lost 2%, and PDR of Phat Dat Real Estate Development closed 1.9% lower.

    Only two blue chips gained. HPG of steelmaker Hoa Phat Group rose 1.9% and VCB of state-owned lender Vietcombank went up 0.5%.

    Foreign investors were net sellers to the tune of VND139.72 billion, mainly selling VIC of private conglomerate Vingroup and STB of Ho Chi Minh City-based lender Sacombank.

    The HNX-Index at the Hanoi Stock Exchange, where mid and small caps list, was down 1.00% while the UPCoM-Index at the Unlisted Public Companies Market was up by 0.12%.

  • Five motorbikes sold in Vietnam every minute

    Five motorbikes sold in Vietnam every minute

    Over 634,000 motorbikes were sold in Vietnam in the first three months, translating to almost five units every minute.

    The figure dropped by nearly 16% year-on-year, according to the Vietnam Association of Motorcycle Manufacturers, which comprises Honda, Yamaha, Piaggio, Suzuki and SYM.

    The motorbike sales figure was 7.3 times that of cars, showing that two-wheelers remain Vietnam’s dominant means of transport.

    In ASEAN, Vietnam ranks second only to Indonesia in motorbike sales with Honda accounting for roughly 80% of the market share.

    Earlier this month Honda hiked the prices of most motorbikes following an increase in costs with the biggest increase being of VND2 million ($85).

  • Hanoi speculative villa prices down 40%

    Hanoi speculative villa prices down 40%

    Amid rising interest rates, Hanoi’s cash-strapped villa investors are slashing prices by up to 40% to lure customers.

    Loi spent VND32.5 billion (nearly $1.4 million) on a 180-square meter villa near Ring Road No. 3.5 in mid-2022.

    He paid for the house with a bank loan and VND11 billion of his own money hoping his investment’s price would double in two years.

    Two months later, the real estate market went silent. He put the villa for sale at a discount of 15%, but found no buyers. Early this year, he finally sold the villa for only VND23 billion.

    But despite all this, Loi is still considered a lucky investor, according to Tien, a local real estate broker in the urban area surrounding the villa project Loi bought into.

    “Many other investors of villas at the same project haven’t found any buyers at all even after lowering their prices 15-30%.”

    According to Tien, since late last year, many investors in the project, most of whom took out bank mortgages to pay for the villas, have slashed their prices 20-30% to cut losses.

    One investor has recently sold a 150-square meter villa for only VND17 billion, incurring a loss of VND8 billion.

    Brokers at the Hinode Royal Park urban area are trying to sell villas at prices of VND6-7.5 billion, down 40% against last year.

    Tu, also a broker, said she sold two villas at the Nam An Khanh urban area in Hoai Duc District for VND23.5 billion each early last year, but the price of the same properties has dropped over 30% to VND16 billion now.

    Villa offering prices at many other large-scale projects, including the Ha Do Charm Villas and An Lac Green Symphony, have decreased 25-30% over the past year.

    Most of the villas are being bought and sold by speculators, and many of them have been abandoned.

    According to real estate consultancy Savills Vietnam, the average villa price on the secondary (resale) market was VND22 billion in the first quarter of this year, 17% lower than the properties’ primary market (original) prices.

    As a result, some investors have leaned deeper into the secondary market and many have become speculators.
    Experts have also asserted that this is one major reason that the primary market has been so stagnant, with the absorption rate falling to the lowest level in the past seven years.

    Do Thu Hang, senior director of advisory services at Savills Vietnam, has predicted that liquidity in the villa market is likely to improve, but only for villas bought as homes, not investments.

    After construction of Ring Road No. 3.5 and Ring Road No. 4 is completes, over 80 property projects along the major new arteries will attract more buyers, she said.

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  • Techcombank chairman says property loans given only for legally sound projects

    Techcombank chairman says property loans given only for legally sound projects

    Techcombank’s real estate loan portfolio might be big but most are personal loans or to develop projects that do not face legal issues, its chairman, Ho Hung Anh, said.

    At the lender’s annual general meeting on April 22 he said since the property developments have full legal status, even “in the current difficult period for the property market, these projects are being implemented.”

    Masterise, one of Techcombank’s clients, is proceeding with its projects normally and its construction is on schedule, he noted.

    As of the end of last year loans to the property and construction sectors represented 29% of Techcombank’s loans outstanding.

    The bank also has exposure to these sectors in the form of corporate bonds, which make up 6% of its total assets.

    “The bond market will recover,” Anh said, assuring that when this happens, Techcombank’s growth would resume very quickly.

    Last month ratings agency Moody’s Investors Service downgraded the long-term deposit and issuer ratings of Techcombank because of its high exposure to the struggling property sector.

    Techcombank targets pre-tax profits of VND22 trillion (US$932.2 million) this year, down 14% from 2022, and a bad debt ratio of below 1.5%.

    Its outstanding loans are expected to surge 15% to more than VND510 trillion by the end of the year.

    The bank does not plan to pay dividends this year.

  • Vincom Retail profits nearly triple in Q1

    Vincom Retail profits nearly triple in Q1

    Mall operator Vincom Retail has reported after-tax profits of VND1.02 trillion (US$43.4 million) for the first quarter, a 2.7-fold rise year-on-year, amid a recovery in consumption.

    It was 23% up quarter-on-quarter, the company’s consolidated financial statements showed.

    Vincom Retail reported revenues of VND1.94 trillion in the first quarter, an increase of 42%, with its mall business accounting for VND1.9 trillion.

    The company targets profits of VND4.68 trillion on revenues of VND10.35 trillion for this year, up 69% and 41% from 2022.

    Vincom Retail, a subsidiary of conglomerate Vingroup, plans to open a mall each in Ho Chi Minh City and the northern province of Ha Giang, increasing its total number to 85 in 45 cities and provinces.

  • Global minimum tax will hurt Vietnam investment

    Global minimum tax will hurt Vietnam investment

    The proposed global minimum tax would weaken the international business environment in Vietnam by eliminating preferential tax policies for foreign direct investment (FDI), said Samsung Vietnam CEO Choi Joo Ho.

    The global minimum corporate tax rate of 15% on profits would remove exemptions and reductions that much of Vietnam’s FDI relies on, Ho told a conference Tuesday.

    The new tax is slated for 2024 but has not yet been approved in Vietnam. It is still under consideration in the country.

    However, the regime was approved by 136 countries in 2021.

    It is considered the deepest overhaul of cross-border tax rules in decades. The overhaul aims to ensure that tech giants such as Apple and Google will not have an unfair advantage by booking their profits in low-tax countries such as Ireland.

    The tax would apply to multinationals with total revenues of at least EUR750 million ($819 million) in two of the preceding four years.

    This means that such a company investing in a foreign country would have to be taxed by that country by at least 15%.

    The U.K., Japan, Korea, and the E.U. will impose the tax next year.

    Vietnam is considering the policy and Deputy Prime Minister Le Minh Khai has asked the Ministry of Finance to evaluate the situation and decide if Vietnam should collect the tax.

    Samsung CEO Choi said the new tax would force foreign companies currently enjoying tax incentives in Vietnam to pay the global minimum tax rate of 15% in the country where the parent company exists.

    Thus such profits obtained in Vietnam would be collected by the tax authorities of another country (not Vietnam) through the exercise of the right to tax the profits, he said.

    This additional payment of tax would create a financial burden for businesses, affecting financial planning and business strategies, and directly reducing the competitiveness of products made in Vietnam, he said.

    “The Vietnamese government needs to make assertive decisions in the process of responding to the global minimum tax,” he said.

    Attending the conference, Minister of Finance Ho Duc Phoc acknowledged that tax incentives would no longer have much effect on FDI revenue in Vietnam if the global minimum tax were applied.

    According to data from his ministry more than 70 businesses in Vietnam are likely to be negatively affected by the tax if it is applied in 2024.

    Dang Ngoc Minh, Deputy Director of the General Department of Taxation, said that in Vietnam, about 335 projects with registered capital of over US$100 million in manufacturing and processing industries are enjoying corporate income tax incentives with rates of lower than 15%.

    On the list are Samsung, Intel, LG, Bosch, Sharp, Panasonic, Foxconn, and Pegatron, with registered capital accounting for nearly 30% of total FDI in Vietnam, or about US$131.3 billion.

    All the above major companies are likely to be negatively affected by the global minimum tax, said Minh.

    What to do?

    Samsung CEO Ho said that in order to maintain FDI Vietnam needs to develop monetary support mechanisms to supplement incentives for businesses that will lose preferential policies if the new tax rate is applied.

    Tang Pham, Deputy General Director of Tax Consulting at EY Vietnam, said many countries such as India and Thailand have directly supported businesses with cash.

    “The trend of shifting incentives is being considered by many countries,” she said.

    She said that cash support or direct offset against tax obligations that meet Organization for Economic Co-operation and Development (OECD) standards could encourage businesses to increase investment. Such measures could help to maintain investment efficiency when imposing a new tax.

  • Rice export prices on the rise

    Rice export prices on the rise

    Vietnam’s rice export prices grew 9.2% year on year to $532 per tonne in the first quarter of 2023, said the General Department of Vietnam Customs.

    The price increase was attributed to a surge in the proportion of high-quality rice such as fragrant, glutinous, and specialty rice.

    High-quality rice is accounting for 50% of the total export volume and sold at $600-1,000 per tonne at present.

    Experts predicted that favourable conditions will remain for rice export and prices will stay good in the short term as the share of high-quality rice is increasing and global economic and political uncertainties are boosting food stockpiling demand.

    Vietnam exported 1.79 million tonnes of rice, earning $952 million between January and March.

  • Gold prices increase

    Gold prices increase

    SJC gold price gained 0.15% to VND67.1 million ($2,857.39) per tael Monday afternoon.

    Gold ring price rose 0.18% to VND56.65 million per tael. A tael equals 37.5 grams or 1.2 ounces.

    Globally gold rose on Monday as the dollar eased slightly. Still, prices were off one-year highs hit last week, as mixed economic data prompted investors to reassess the U.S. Federal Reserve’s interest rate hike trajectory.

    Spot gold was up 0.5% at $2,012.62 per ounce. U.S. gold futures rose 0.4% to $2,024.70.

    The dollar index was 0.1% lower, making bullion cheaper for overseas buyers.

    Gold is likely to trade with “positive bias but can see some initial correction…a major downfall” in prices is not expected as uncertain global economic and geopolitical tensions support its safe-haven status, said Hareesh V, commodity research head, Geojit Financial Services.

  • Buy2Sell Vietnam opens two new showrooms in Hanoi, HCMC

    Buy2Sell Vietnam opens two new showrooms in Hanoi, HCMC

    Buy2Sell Vietnam established two new showrooms in Vincom Mega Mall in Hanoi and SC Vivo City in Ho Chi Minh City last month.

    The Hanoi showroom is on the 1st floor of Vincom Mega Mall Times City and the HCMC showroom on the 3rd floor of SC VivoCity.

    Buy2Sell Vietnam plans to expand its new showroom chain to more than 100 stores in shopping centers in Southeast Asia during 2024-2030.

    Thousands of cosmetics, F&B, houseware, and appliances products… are exclusively distributed and displayed at these stores.

    All products are directly imported from over 60 countries, including the U.K., France, the U.S., Italy, Switzerland, Australia, Korea, and Japan.

    Vang Online is a high-end imported beverage distribution brand under Buy2Sell, specializing in wine and spirits, introducing numerous international premium beverage brands to the Vietnam market.

    In Vietnam, Buy2Sell is renowned as one of the first B2B e-commerce platforms focused on distributing imported goods since 2015, especially from brands yet to enter the market.

    Besides Vincom Mega Mall and SC ViVo City, Buy2Sell has invested in establishing its store chains at other top-tier shopping centers, including Lotte Mart (part of Lotte Korea Group).

    Buy2Sell has also invested in its online e-commerce platform, playing its role as a bridge for international brands to access the Vietnamese market more easily.

    Vincom Mega Mall Times City covers more than 230,000 m2 of various spaces including retail, food courts, supermarket and other entertainment venues, which is developed by Vingroup.

    SC VivoCity covering an area of around 62,000 m2 is developed by Mapletree, a major real estate investment, development, and fund management company in Asia.

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  • WinMart’s loss triples in 2022

    WinMart’s loss triples in 2022

    WinCommerce, the operator of WinMart retail chain, saw its loss tripling from 2021 to VND445 billion ($18.97 million) last year.

    Since being acquired by Masan Group from Vingroup in 2019, WinCommerce has not been able to turn a profit.

    Its revenues declined 5% to VND29.37 trillion last year. Its equity rose marginally to VND3.98 trillion, and debts were at VND14.32 trillion.

    WinCommerce is Vietnam’s biggest retailer in terms of number of outlets. It had 3,268 WinMart+ stores and 130 WinMart supermarkets by the end of December.

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  • Vietnam Railways eyes profit in 2023

    Vietnam Railways eyes profit in 2023

    Train operator Vietnam Railways expects to earn a profit this year after posting losses in three previous years due to the impact of Covid-19.

    The company predicts a post-tax profit of VND3 billion ($127,960) and a revenue of over VND6.5 trillion.

    In the first quarter this year subsidiary Hanoi Railways served over 800,000 passengers and recorded VND300 billion in revenues. Both figures went up 200% year-on-year.

    Its other major subsidiary, Saigon Railways, also saw revenues rise 147% to VND360 billion and passenger numbers grow 136% to 660,000.

    Vietnam Railways attributed the rise to increasing demand and discounts of 50%-65% during days with low bookings. Other types of discounts for groups of four and large tourist groups also contributed to higher ticket sales.

    Vietnam Railways started to see signs of recovery last year after two years of difficulties due to Covid-19. It saw revenue rising 14% to VND7.7 trillion, and saw losses dwindling from VND1.33 trillion in 2020 to VND130 billion last year.

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  • Southern house prices down 30%

    Southern house prices down 30%

    The price of townhouses and villas in the South have dropped 10-30% year-on-year amid record-low sales in the first quarter of 2023.

    The prices in Dong Nai Province plunged 15-20%, even 25-30% in some cases, as cash-strapped investors have tried to cut losses, according to a survey.

    Many investors lowered their selling prices for villas in the province’s Bien Hoa City by VND4-5 billion ($169,000-211,000) per unit in late March, down from VND21-23 billion in early January.

    Some struggling investors said they slashed prices by VND5.5 billion per villa, accepting losses of 30%, including taxes, brokerage fees, and bank loan interest.

    Van, a real estate broker in the province’s Nhon Trach District, said that even though she had dropped her prices 15-20% by March, she still sold less than one townhouse a month in the first quarter of this year, compared with 5-7 units a month over the same period in 2022.

    According to the survey, average prices for houses in rural districts of Ho Chi Minh City and the neighboring province of Long An dropped some 10%, and few transactions have been completed so far this year.

    Property service provider DKRA Vietnam said houses in the South saw prices decrease by an average of 10% in the first quarter.

    Property consultancy JLL Vietnam said the sale of houses in Ho Chi Minh City dipped 91.7% against the fourth quarter of last year, and by 98.3% against 2022’s first quarter.

    In the first quarter of 2023, only 19 houses were sold, JLL Vietnam said, noting that most buyers and investors are adopting a wait-and-see approach.

    Real estate developers are cautious about launching new products amid economic uncertainty and lingering legal issues, especially as demand is forecast to remain weak through mid-2023 and the property market continues to face economic difficulties, according to JLL Vietnam.

    Vo Hong Thang, R&D vice director at DKRA Vietnam, said that despite the price drop, many buyers are waiting to fish the bottom or are too cautious about investing in real estate as the market is so quiet. This has resulted in record low liquidity this first quarter, he said.

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  • Samsung says Vietnam is ‘global manufacturing hub’

    Samsung says Vietnam is ‘global manufacturing hub’

    Samsung considers Vietnam a global manufacturing hub and wants to make it a center of research and innovation, the South Korean giant’s CFO, Park Hark Kyu, has said.

    In a meeting with Prime Minister Pham Minh Chinh Thursday, he said he highly regarded Vietnam’s investment and business environment. Samsung wants to make Vietnam the “center of centers” for research and development.

    Last year the company set up an R&D center in Hanoi and provided training to ensure there would be more Vietnamese in its leadership ranks.

    Over 2,000 engineers work at the center.

    The number of level 1 and 2 Vietnamese suppliers in Samsung’s global supply chain has increased tenfold since 2014, from 25 to 257.

    Park also spoke to Chinh about the use of “made in Vietnam” products, and the global minimum tax.

    Chinh hailed Samsung’s business activities in Vietnam as helping shift the country’s economic structure, promoting exports and creating millions of jobs.

    Last year Samsung’s profits in Vietnam topped US$4.6 billion. It has invested $18 billion in the country so far, and is planning to increase it to $20 billion.

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  • Vietnam edtech startup receives $15M investment

    Vietnam edtech startup receives $15M investment

    MindX, a startup that offers training in technology and programming, has received a US$15 million investment from a group of international funds in the Series B round.

    The funding round was led by Singaporean fund Kaizenvest, which has invested in many famous startups in the field of education technology (edtech), including unicorns Byju’s and upGrad in India, and Yola English Center in Vietnam.

    The other participating investors are Thai education group Aksorn, Japanese human resources group Mynavi, and venture capital funds like Wavemaker Partners and Beacon Fund.

    MindX, founded in 2015 in Hanoi, specializes in technology training for people of various age groups. It has centers in many cities, and also provides training online.

    In November 2021 it had raised $3 million in a Series A round.

    Sandeep Aneja, the founder of Kaizenvest, said the demand for learning technology in Vietnam and Southeast Asia is increasing.

    “This investment is commensurate with the market potential and our belief in today’s growing demand for technology learning.”

    Nguyen Thanh Tung, MindX’s co-founder, and CEO, said being equipped with skills and critical thinking to apply new tools and technologies is the way for Vietnam to have a pioneering generation of innovation, considering how technology is constantly evolving today.

    With the new funding, the company plans to expand its scale and portfolio of products and services and optimize the user experience and data systems.

    MindX is also partnering with more than 200 firms in countries like Singapore, Australia, and Thailand, allowing the world to access Vietnam’s highly skilled digital workforce.

    The $15 million represents one of the largest amounts raised by edtech in Vietnam this year.

    According to the e-Conomy report by Google and Bain&Company, investments for startup projects in Vietnam went down to $0.7 billion in the first half of 2022.

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