KTFA:

Henig:  Vietnam:  Shares move higher as cash flow spurs market

July 11, 2023 - 17:17

HÀ NỘI — Vietnamese markets ended Tuesday higher as the injection of cash flow supported the market and outweighed the sell-off pressure.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) rose 0.24 per cent, to close the day at 1,151.77 points.

The breadth of the market was in positive territory, with 236 stocks up and 197 trading lower.

During the session, investors poured more than VNĐ19.1 trillion (US$803.4 million) into the southern market, equivalent to a trading volume of 936.9 million shares.

The VN30-Index also closed higher at 1,146.67 points, up 0.31 per cent. Sixteen stocks of the VN30 basket climbed, while 12 went down.

The VN-30 group performed positively and bolstered the market.

In the basket, banking stocks gained slightly, including Military Bank (MBB), Saigon-Hanoi Commercial JS Bank (SHB), Vietcombank (VCB), VietinBank (CTG), Tiên Phong Bank (TPB) and Vietinbank (CTG).

However, VPBank (VPB), Techcombank (TCB), and BIDV (BID) were still hit by selling forces, down 0.7 per cent, 0.2 per cent and 0.9 per cent, respectively.

The Vin family trio of Vingroup (VIC), Vinhomes (VHM) and Vincom Retail (VRE) - saw differences. VIC lost 0.2 per cent but VHM and VRE gained 0.2 per cent and 1.3 per cent, respectively.

“The market maintained momentum from the previous session and surpassed the resistance zone of 1,140 - 1,145 points of the VN-Index thanks to the low supply pressure in this area,” said Việt Dragon Securities Co.

“However, the bullish candles surpassing the resistance zone are still not really strong. Still, with this signal, it is likely that the market will maintain an uptrend in the near future but the movement will be slow and there will be a state of contention between supply and demand.

Therefore, investors still need to observe market movements to assess the cash flow. Currently, it is possible to hold or exploit short-term opportunities in stocks that are showing good technical signals from the accumulation base. However, for stocks that are still under selling pressure and have not performed well recently, it is still advisable to consider taking profits or reducing the weight to rebalance the portfolio.

On the Hà Nội Stock Exchange (HNX), the HNX-Index closed the trading day at 229.22 points, down 0.37 per cent. — VNS    LINK

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Henig:  Quảng Ninh Province exceeds investment capital goals six months early

July 11, 2023 - 10:42

Quảng Ninh Province demonstrated its ability to attract both domestic and foreign capital in the first half of this year, solidifying its position as a prominent economic development hub in the northern region.

HÀ NỘI — Quảng Ninh Province has achieved impressive results in both domestic and foreign investment attraction in the first six months of this year, solidifying its position as a prominent economic development hub in the northern region.

The province attracted VNĐ44 trillion (US$1.9 billion) worth of domestic capital, exceeding its target for the whole year by 2.4 per cent right in the first six months. This number also represented an increase of 29.8 per cent year-on-year.

Some notable projects include the Stavian Quảng Yên Petrochemical Plant, situated in the Quảng Yên Coastal Economic Zone, with a total expected investment capital of VNĐ36 trillion ($1.5 billion), and the construction investment project of Yên Hưng Liquid Cargo Port worth VNĐ792 billion.

Apart from domestic investment, Quảng Ninh has also successfully attracted $894 million in foreign direct investment (FDI), reaching 89 per cent of the target set by the provincial Party Committee's Resolution (minimum of $1 billion) and 74.5 per cent of the plan set by the provincial People's Committee ($1.2 billion).

The province has granted nine new FDI projects and planned to issue five additional projects with a total capital of nearly $800 million. Many of these projects belong to the "new generation" category, focusing on environmentally friendly processing and manufacturing industries that aim to reduce resource consumption.

Among the recent FDI projects is the approval of two factories by Foxconn Group in Sông Khoái Industrial Park, valued at $250 million. These projects are expected to create employment opportunities for nearly 2,000 local workers.

Hoàng Trung Kiên, head of the Management Board of Quảng Ninh Economic Zone, has expressed confidence in achieving the target of $1.2 billion from FDI projects.

In addition to traditional investors from mainland China, Hong Kong, Singapore and Japan, the province has attracted investment from Swedish investors for the first time. Autoliv Vietnam Company, with a total investment of $154 million, is establishing a project in Sông Khoái Industrial Park to manufacture safety products for export, with a capacity of 10 million products per year.

In recent years, Quảng Ninh has actively collaborated with ministries and regional leaders to promote investment activities and achieved remarkable results. The province has already implemented its Investment Promotion Programme for 2023 and is working on a scheme to attract prominent FDI investors to the region, with a particular focus on key industrial parks and economic zones such as Quảng Yên Coastal and Móng Cái Border Gate. The province prioritises eco-friendly manufacturing and processing industries.

Quảng Ninh is a leading coastal economic hub in the North. The province ranked fourth nationwide in terms of economic growth during the first half, with its economic growth rate (GRDP) reaching 9.46 per cent. — VNS    LINK

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Henig:  Carriers prepare to broadcast 5G to the masses

July 11, 2023 - 10:13

Viettel noted that it is on schedule to complete the mass 5G rollout. It has completed the construction of 282 stations, of which 265 are fully deployed.

HÀ NỘI — The Military Industry-Telecoms Group (Viettel) said it will broadcast 5G services on a large scale in the third quarter of this year.

Viettel has reportedly achieved revenue of VNĐ81 trillion (US$), equivalent to 101.2 per cent of its six-month plan.

Its profit reached VNĐ24.1 trillion, or approximately 102 per cent of the plan, and paid VNĐ21.6 trillion to the State budget.

Viettel has actively shifted 2G and 3G subscribers to 4G, bringing the ratio of 4G subscribers to nearly 78 per cent. It has also tested 5G services in 55 provinces and cities.

Viettel noted that it is on schedule to complete the mass 5G rollout. It has completed the construction of 282 stations, of which 265 are fully deployed.

Viettel is currently testing 5G capacity and is expected to broadcast to a wide area in the third quarter of this year.

VNPT, a major competitor of the military's own telecoms company, had a total consolidated revenue estimated at VNĐ26.32 trillion ($1.1 billion), of which the parent company's revenue is VNĐ18.6 trillion ($782 million) equaling 47.1 per cent of the year's plan.

VNPT's consolidated profit before tax was estimated at VNĐ2.2 trillion ($92 million) in the first six months of this year, of which the parent company's pre-tax profit reached VNĐ1.38 trillion ($58 million), equaling 49.7 per cent of the year plan.

MobiFone, another major player in the telecoms industry, saw revenue estimated at VNĐ13.5 trillion ($568 million) in the first six months of this year, reaching 89.3 per cent of the same period last year.

Its profit before tax was VNĐ1.56 trillion ($65 million), with contributions to the State budget estimated at VNĐ1.35 trillion ($56 million).

However, the two carriers have not given information about their 5G development plans for the last six months of the year. — VNS     LINK

Henig:  Hanoi’s economy on path to recovery

13:00 | 09/06/2023 Metropolis

In the first months of this year, Hanoi has focused on removing difficulties to and facilitating industrial production, export-import, public investment, and foreign investment attraction, according to a local official.

Such efforts paid off as the city’s index of industrial production (IIP) expanded 2.1% year-on-year in the first five months of this year. Processing and manufacturing went up 1.7%, electricity production and distribution was up 4.1%, and water supply and waste water treatment rose 8.3%, said Vice Chairman of the municipal People’s Committee Nguyen Manh Quyen.

Some sectors like beverage, tobacco and drug production, wood processing, and metal product manufacturing experienced significant year-on-year increases in the five-month period.

More than 13,000 enterprises were established in the city between January and May with a total registered capital of 125.9 trillion VND (5.35 billion USD), up 8% in number and 17% in capital.

Meanwhile, 1,500 businesses registered for dissolution, down 5%, and 12,600 others registered for temporary suspension, up 22%. Some 4,600 firms resumed their operations, a drop of 22%.

Despite the global economic crisis that has affected foreign investment attraction in general, Hanoi still lured nearly 156.4 million USD in May, with 43 new FDI projects worth 13.2 million USD, and 21 others adjusting their capital by 108 million USD. Foreign investment capital contribution and share purchases were valued at 35.2 million USD.

In the five months, the city attracted 1.86 billion USD in foreign investment, with 146 new projects valued at 48 million USD, and 71 others that had their capital adjusted by 200 million USD. A total of 114 foreign investors contributed capital and purchased shares worth 1.61 billion USD.

Notably, Japanese lender Sumitomo Mitsui Banking Corporation (SMBC) has completed a 1.5 billion USD deal to purchase a 15% stake in Vietnam’s VPBank in the biggest acquisition ever recorded in Vietnam’s banking industry.

Hanoi sees tourism as an economic spearhead. Therefore, it has rolled out various tourism stimulation programmes and built new tours and products, luring both domestic and foreign visitors. At the same time, it has stepped up the communications work to promote local tourism.

The capital city welcomed 1.71 million foreign tourists in the five months, nearly 10 times higher than that recorded in the same period last year, and 8.4 million domestic arrivals, a rise of 31.3% as compared with the same period last year. Total revenues from tourism were estimated at over 37 trillion VND, up 92.4% year on year.

Regarding employment, Hanoi generated jobs for 85,800 labourers, fulfilling 52.9% of the target, but down 11.5% year-on-year. The city decided to provide unemployment insurance for 30,400 people with funding of 855 billion VND.

The municipal People’s Committee is rolling out solutions with priority to the implementation of key projects and public investment disbursement.

Hanoi has urged investors, contractors, departments, agencies and districts to quickly handle obstacles in procedures and site clearance, considering those the leading criteria to evaluate the capacity of officials and performance of agencies and localities.

It has also resolved to decentralize administrative procedures, in an attempt to improve investor confidence.

Source: VNA   LINK

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Henig:  Vietnam’s economic locomotive begins to gather pace again

The business situation in HCMC is steadily becoming brighter, a senior executive at the Co.opmart supermarket chain says.

Nguyen Ngoc Thang, director of Co.opmart’s operations division, says he was not surprised the city’s economy grew by only 0.7% in the first quarter after seeing very weak sales at Co.opmart.

But it forced the Ho Chi Minh City Union of Trading Cooperatives (Saigon Co.op), which runs them, to act more vigorously.

Efforts to spur demand since April saw second quarter revenues rise by 6-7% year-on-year and 1-2% from the previous quarter.

The average spending by a shopper in May was VND500,000, nearly 30% higher than a year earlier.

"Promotions were launched at weekends, helping the average invoice value increase to VND0.8-1 million," Thang says.

When retailers such as Saigon Co.op saw sales improve, Ta Chu Van, director of Sen Ta Development & Service Trading Company, which produces and exports agricultural products, breathed a sigh of relief.

His sales to supermarkets in HCMC have improved in the past two months.

"We have run promotions and added many new and unusual products to meet market trends and demands," he says.

The weak global economy notwithstanding, Pham Quang Anh, founder and CEO of Dony Garment Company says, his firm has sustained its operations.

He says: "Our domestic orders have increased since it is the school uniform season. Foreign orders from existing customers have also increased.

Many businesses say they have seen a lot of hope in public investment disbursement, the city’s growth engine.

"There has never been a national-level project in the city that has moved so fast," Luong Minh Phuc, director of the HCMC Traffic Construction Investment Project Management Board, which is building Ring Road No.3, says.

Site clearance for the road is progressing rapidly, and work is ahead of schedule, he says.

The manager of an infrastructure investment company says the city is making great efforts to solicit investment in projects in the form of public-private partnerships.

"The pace of work is getting significantly faster."

These indicate that the city’s economy has basically recovered.

Retail sales of consumer goods and services were worth VND298 trillion (US$12.6 billion) in the second quarter, up 13% and 9% from the previous quarter and a year earlier.

Public spending in the second quarter was estimated at VND10.26 trillion, an 89% increase from the first quarter and 44% higher than in the same period of last year.

The spending in the first half of the year was up 44% year-on-year at VND15.7 trillion.

Thanks to all this, the city’s economy grew at 5.87% in the second quarter, taking the first half growth to 3.55%.

According to economist Tran Du Lich, this is spectacular growth, and higher than the national rate.

Online sales too have prospered in recent months, according to Nguyen Khac Hoang, director of the HCMC Statistics Office.

Thang says Saigon Co.op’s sales through its website rose sharply in both volume and value terms in the first half.

According to analysts, people spent more thanks to two main reasons, decreasing inflation and demand stimulus efforts by businesses and city authorities.

The city’s inflation was just 0.17% in June. The price rise has in fact been easing since the beginning of this year.

In recent months the city has organized a number of trade fairs, linking up with various provinces and cities to sell their goods.

With prices generally being steady, demand stimulus measures have proven effective.

Meanwhile, the services sector has been the largest contributor to growth in the first half, accounting for 86%, as it expanded by 4.96% year-on-year, according to the HCMC Statistics Office.

The city’s tourism revenues were the highest in the country: VND80.8 trillion, up 163% from the same period in 2019, the year before Covid broke out.

Over 18 million visitors came to the city, a year-on-year increase of 48% and 5% higher than in 2019.

"The growth partly came from the synchronicity between the city’s promotion programs," Tran Thi Bao Thu, head of marketing and communications at tourism company Vietluxtour, says.

A study by the General Statistics Office found that for every 1% increase in public spending, there is a 0.06 percentage point increase in GDP.

But in HCMC, the impact could be even greater.

After the economy hit rock bottom in the first quarter, Phan Van Mai, chairman of the city People’s Committee, decided that during difficult times the city has to focus on speeding up public spending.

So priority was given to public spending on key infrastructure projects such as Ring Road No. 3, metro lines 1 (Ben Thanh - Suoi Tien) and 2 (Ben Thanh - Tham Luong), the An Phu intersection, renovation of the Tham Luong - Ben Cat - Nuoc Len canal network, and widening of National Highway 50.

The city also added to its medium-term development plans some other projects such as sections 1 and 2 of Ring Road 2, renovation of the Xuyen Tam Canal, and construction of the Moc Bai - HCMC Highway.

The entire administration has become involved, many working groups have been set up and meetings are held every week to identify and remove obstacles.

These efforts paid off.

Spending in the first quarter had been only 4% of the year’s outlay of more than VND70 trillion. But by June 29 it had risen to 21% and was expected to rise to 23% the next day.

"Though we did not hit the target of 35%, we managed to spend more than VND14 trillion as against less than VND6 trillion in the same period last year," Mai said at a meeting held on June 29 to assess the city’s economic situation.

Along with the increase in public spending, efforts to revive the property market over the past few months have also had a positive effect.

The industry only accounts for 3.7% of the city’s economy, but has spillover effects.

When it is in good health, it has a positive impact on 40 other industries, and drives economic growth, according to the HCMC Real Estate Association.

Some property businesses in HCMC are on the path to recovery after the slump of the last year or so.

"Overcoming difficulties," Nguyen Van Dat, chairman of Phat Dat Real Estate Development Corp., said about the company’s situation at its annual general meeting on June 30.

He said during the difficult period at the end of 2022, facing pressure to redeem corporate bonds it had issued, it decided to sell assets worth VND3 trillion for just VND2 trillion.

Dat himself sold or mortgaged personal assets to raise money to help the company out of its difficulties.

But from now through next year its health would gradually improve because legal issues related to projects and short-term debts would be resolved, he assured.

The same holds true for many other property businesses, which are gradually getting out of the crisis that had engulfed them.

At a recent city government meeting, Mai said the real estate and bond markets had gradually recovered though there was a long way to go.

Fewer orders, weaker exports

Though its economy is recovering, HCMC still has some weaknesses.

The HCMC Institute for Development Studies had predicted that imports and exports would decline from May, and it has come true.

In the first half the city’s trade balance was negative, with both exports and imports decreasing year-on-year.

"Never before have we had such difficulty getting orders as now," the manager of a wood products company laments.

"We spared no efforts but only managed to get a few small orders."

Current production is mainly to meet old orders as global demand remains weak, he adds.

Analysts and business executives agree the city economy is likely to remain troubled since the world’s major economies, which are also its key trading partners, have seen recessionary pressures since the beginning of May.

Differences in monetary policy responses by major economies are causing exchange rate volatility, affecting the city’s trade.

Orders for many industries have decreased by 30-50%, even 70% in some cases. Only a few such as heavy engineering have sufficient orders.

"Orders have dwindled, there are few jobs, workers’ incomes have fallen, life has been difficult," Mai said on June 28 at a meeting with voters in the city’s District 4.

"All of these have put pressure on the city’s social security system."

The lack of exports has caused many workers to lose jobs or be furloughed.

Taiwanese shoemaker Pouyuen Vietnam, the city’s largest employer, said it was preparing to terminate the contracts of nearly 5,700 workers in June and July.

Anh at Dony says it is necessary to retain existing customers while waiting for the global economy to improve.

To achieve this, his company is forced to offer discounts of 5-7% to customers.

"At a good time an export order can fetch a profit of 5-7%. Now it is only 3%, even zero [on occasions], because input prices, transport costs and interest rates remain high."

A recent survey by the HCMC Union of Business Associations found some 95% of businesses faced losses and large inventories.

To achieve growth, companies have had to make tradeoffs.

To achieve its revenue targets this year Co.opmart has had to spend 15-25% more on stimulus programs.

Van at Sen Ta says: "Investment costs have skyrocketed, and so profits are not as expected."

Restaurant chain King Cua’s CEO Doan Thi Anh Thu says there is more footfall now than before, but revenues have not increased because the restaurants are offering new dishes at low prices "for us to sustain the prospects of expanding the chain and reaching the masses."

The city’s business environment is improving month after month, with the number of businesses pulling out of the market being lower than that of new ones since March.

However, in the first half, of every 10 enterprises in the market, six have suspended operations or quit altogether. This rate is high, according to Chu Thanh Tuan of RMIT University Vietnam.

Many businesses have had to settle for lower profit margins, down even to merely breaking even, to get orders or attract consumers. But it is surely not a long-term solution.

Measures and recommendations

According to experts, what need to be done immediately are to stabilize the bond market and help businesses get loans on easy terms.

Nguyen Phuoc Hung, vice chairman of the HCMC Union of Business Associations, suggests that bank lending interest rates should be reduced to below 8% from the unaffordable rates of over 10% now.

To continue to support businesses and sustain the recovery momentum amid the difficult export markets, the HCMC Institute for Development Studies says the city needs to focus on tapping the domestic market with promotions and linkages to stimulate demand and by combining trade and tourism and expanding consumer credit.

Lawmaker Tran Hoang Ngan says: "Stimulating the domestic market is extremely important at this time."

It is necessary to support businesses through a mechanism for linking them with banks and faster processing of tax, customs and fire prevention procedures by authorities.

Acceleration of public spending is also a good measure in the context that the city’s production and exports largely depend on overseas demand.

Nguyen Khac Hoang, director of the HCMC Statistics Office, says it is necessary to further quickly complete new works and projects, especially key ones for regional connectivity and with high spillover effects such as Metro No. 1, Metro No. 2, Ring Road 3, and the HCMC-Moc Bai Expressway.

"The city is actively disbursing public spending monies and soliciting investment. The whole apparatus is running at full speed."

At the meeting on June 29, Mai said if conditions are favorable and HCMC increases public spending, stimulates trade and tourism demand, facilitates exports, and resolves businesses’ problems in the second half of this year, its economy is likely to grow at 7%.

He points out that new policies rolled out by authorities will need time to have an impact, and so the city will have a good foundation to bounce back in the long term by making decisions now.

He wants the city to speed up key programs and projects such as Can Gio Port, the innovation center for startups, finalization of the plan to convert five industrial parks, and the VND10 trillion anti-flood project.

Though difficulties remain, HCMC has opportunities for growth, he adds.

Tuan of RMIT says HCMC should become the country’s economic locomotive by focusing on knowledge, new technologies and sustainable development.

A key to realizing that vision the National Assembly’s recent Resolution 98 on developing the city comprising more than 40 specific mechanisms and policies.

Ngan says these mechanisms will help the city have greater autonomy.

The entire political system is racing to implement Resolution 98 to aid the city’s economy, he adds.

At the meeting on June 29 Mai instructed departments and the city’s various districts to lay the groundwork for the implementation so that they could act immediately when the resolution takes effect on August 1.

Ngan adds: "HCMC contributes more than 25% of Vietnam’s budget, and so its recovery will have an impact on the entire country."

Story by Vien Thong, Duc Minh, Thi Ha
Graphics by Tat Dat    LINK

Henig:  Vietnam, France step up financial cooperation

09:39 | 12/07/2023 Vietnam and EU

Vietnamese Deputy Minister of Finance Vo Thanh Hung held a working session with French Minister Delegate for Industry Roland Lescure in Paris on July 10.

At the event, Hung said the Vietnamese Ministry of Finance (MoF) highly evaluated the French ministry’s role in providing the French Government’s official development assistance (ODA) for Vietnam's socio-economic development.

France is now the biggest bilateral donor in Europe for Vietnam while Vietnam is the second largest recipient of French ODA capital. From 1993-2022, France committed to supplying around 18.4 billion USD in ODA loans to Vietnam through the French Treasury and the French Development Agency (AFD), with a focus on transportation (railway), water supply and drainage, climate change, energy and green growth.

Hung wished to learn from France's experience in the State budget settlement and State financial report making. He believed that the French ministry will work together with the MoF to successfully hold technical support activities for 2023-2024, and France will assist Vietnam in strengthening its capacity and gradually bringing Vietnam's public financial management closer to international practices.

Lescure, for his part, also shared major reforms that France is making, including pension reform (raising the retirement age to 64 by 2030) to ensure a more sustainable pension system for the country and to draw more people to the workforce for economic growth.

He affirmed that Hung’s visit will contribute to further reinforcing close ties between Vietnam and France.

In the afternoon of the same day, Hung paid a working trip to the headquarters of the AFD’s Expertise France.

Receiving the Vietnamese official, AFD Director Philippe Orliange recalled the content of a meeting between the Vietnamese Finance Minister and the French Ambassador in Hanoi last November, which included a proposal related to France's support for the ministry in establishing a green budget.

Orliange pledged to assist Vietnam in the project, considering it a priority of the AFD, and believed that the project will help the ministry with its modernisation efforts to meet the goal of achieving net zero emissions by 2050.

CEO of Expertise France Jérémie Pellet said Vietnam is the only country in Southeast Asia where Expertise France has established an office.

About Vietnam's concerns over challenges in green finance initiatives such as building a carbon market, proper use of public and private funding, and enhancing the Government's action capacity, Pellet said Expertise France is ready to share France’s experience and urge the European Commission (EC) to assist Vietnam in this field, and introduce Vietnam's model to other countries in Southeast Asia.

He expressed the readiness to cooperate with Vietnam in this green finance project and hoped that it will meet the expectation of the MoF for sustainable development.

Hung believed that Expertise France, together with the MoF, will successfully hold technical support activities in 2023-2024, and help the Vietnamese side enhance the capacity of developing green finance policies, thus contributing to delivering on Vietnam's international commitments.

On the occasion, Hung and Orliange signed an agreement on enhancing the capacity of building green finance policies. Accordingly, the two sides will partner in areas such as strengthening the capacity of evaluating green tax policies, supporting the improvement of legal frameworks, improving the capacity of issuing green government bonds in the financial market, and improving research capacity in managing revenue from the carbon market.

During his visit from July 10-14, Hung is also scheduled to hold working sessions with the General Directorate of Public Finances, the French Treasury, the Finance Department of Montreuil city and lay a wreath at President Ho Chi Minh’s statue in Montreau park.

Source: VNA LINK