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State Bank has pumped US$24 billion into SCB to keep it afloat
The State Bank of Vietnam–the SBV–has pumped about US$24 billion into Saigon Commercial Bank–or SCB–to keep it afloat, Reuters is reporting. SCB was at the centre of a fraud scandal worth upwards of US$12 billion. The mastermind of the fraud, Truong My Lan, has since been convicted and given a death sentence. The authorities are now trying to track down all of the missing money.
The State Bank is both buying and selling treasuries at the same time
On Wednesday the State Bank of Vietnam bought VND 5,671.97 or US$223 million worth of treasuries from five sellers. It also sold another VND 5,500 billion or US$216 million to five buyers. In terms of keeping the exchange rate steady, these two transactions essentially cancel each other out.
Furthermore, the bank is charging interest of 4 percent on the treasuries it has sold but paying only 3.49 percent on the treasuries it has bought. Of note, the interbank interest rate is now at 4.94 percent.
Outstanding treasury bills as of COB April 18
Date | Buy/Sell | Length | Maturing | VND | US$ | % |
22/03 | Sell | 28 | 19-Apr | 14,700 | 578,625,810 | 1.70 |
25/03 | Sell | 28 | 22-Apr | 7,200 | 283,408,560 | 1.69 |
26/03 | Sell | 28 | 23-Apr | 3,700 | 145,640,510 | 1.9 |
27/03 | Sell | 28 | 24-Apr | 8,700 | 342,452,010 | 2.2 |
28/03 | Sell | 28 | 25-Apr | 4,600 | 181,066,580 | 2.5 |
29/03 | Sell | 28 | 26-Apr | 2,300 | 90,533,290 | 2.49 |
01/04 | Sell | 28 | 29-Apr | 500 | 19,681,150 | 2.40 |
03/04 | Sell | 28 | 1-May | 300 | 11,808,690 | 1.90 |
04/04 | Sell | 28 | 2-May | 200 | 7,872,460 | 2.40 |
05/04 | Sell | 28 | 3-May | 600 | 23,617,380 | 2.70 |
06/04 | Sell | 28 | 4-May | 3,200 | 125,959,360 | 2.90 |
09/04 | Sell | 28 | 7-May | 3,850 | 151,544,855 | 2.90 |
10/04 | Sell | 28 | 8-May | 4,000 | 157,449,200 | 2.90 |
11/04 | Sell | 28 | 9-May | 5,600 | 220,428,880 | 3.50 |
12/04 | Sell | 28 | 10-May | 8,600 | 338,515,780 | 3.50 |
12/04 | Buy | 7 | 19-Apr | 10,000 | 393,622,606 | 4.00 |
15/04 | Buy | 7 | 22-Apr | 12,000 | 472,343,664 | 4.00 |
15/04 | Sell | 28 | 13-May | 2,800 | 110,214,440 | 3.59 |
16/04 | Buy | 7 | 23-Apr | 12,000 | 472,344,845 | 4.00 |
16/04 | Sell | 28 | 14-May | 550 | 21,649,265 | 3.59 |
17/04 | Buy | 7 | 24-Apr | 5,672 | 223,261,785 | 4.00 |
17/04 | Sell | 28 | 15-May | 5,500 | 216,492,650 | 3.59 |
Total | 37,228.00 | 1,465,379,704 | ||||
*billions |
Economy news
Maybank Securities forecasts Vietnam GDP growth of 5.8 percent in 2024
The local arm of Malaysia’s Maybank, Maybank Securities, is predicting GDP growth for Vietnam of 5.8 percent in 2023. The financial firm says that pressure on the dong is coming from the local gold price being out of step with the world gold price and that this should stabilise when ‘local authorities identify regulatory issues and close legal loopholes’ without specifying what they might be. Maybank is also expecting the exchange rate to be allowed to increase up to 4-5 percent over the rate on March 29.
ADB forecasts GDP growth for Vietnam in 2024 highest in SEA
The Asian Development Bank is forecasting GDP growth this year of 6 percent for Vietnam, the equal highest with the Philippines in Southeast Asia. Full report: Asian Development Outlook April 2024
GDP Growth Southeast Asia, ADB April 2024
2022 | 2023 | 2024 | 2025 | |
Southeast Asia | 5.7 | 4.1 | 4.6 | 4.7 |
Brunei Darussalam | -1.6 | 1.4 | 3.7 | 2.8 |
Cambodia | 5.2 | 5 | 5.8 | 6 |
Indonesia | 5.3 | 5 | 5 | 5 |
Lao People’s Democratic Republic | 2.5 | 3.7 | 4 | 4 |
Malaysia | 8.7 | 3.7 | 4.5 | 4.6 |
Myanmar | 2.4 | 0.8 | 1.2 | 2.2 |
Philippines | 7.6 | 5.6 | 6 | 6.2 |
Singapore | 3.8 | 1.1 | 2.4 | 2.6 |
Thailand | 2.5 | 1.9 | 2.6 | 3 |
Timor-Leste | 4 | 1.9 | 3.4 | 4.1 |
Vietnam | 8 | 5 | 6 | 6.2 |
Gold news
State Bank of Vietnam to start auctioning gold
The State Bank of Vietnam–the SBV–intends to undertake a series of gold auctions in an attempt to bring down the price of gold. The gold price in Vietnam is currently trading at a 13 percent premium to the world gold price.
This will be the first time the State Bank has released more gold onto the market in over a decade. The last time it underwent a series of gold auctions was in 2013 during which it auctioned off almost 70 tons of gold. Of those tons, 30 were brought up by credit institutions to settle gold positions, with just 40 left to be sold into Vietnam’s gold market.
Of note, the SBV has asked the Ministry of Finance to smooth out the process for importing gold suggesting it may intend to start importing more gold, too.
See also: The Gold Price in Vietnam: Explained 2024
HCMC gold stores take holidays amid pending inspection of operations
A number of gold stores in Ho Chi Minh City have announced long holiday closures just after it was announced that the HCMC General Department of Market Management would be auditing the operations of gold stores in the city. The city intends to inspect gold stores on the hunt for counterfeit goods and to ensure that the origin of gold sold in stores is legitimate, as in not smuggled.
Manufacturing news
Vietnam’s Vinfast first quarter results show little improvement
Vietnam’s Vinfast has continued to haemorrhage money, reporting a loss in the first quarter of 2024 of US$618.3 million, according to a filing with the US Securities and Exchange Commission.
Key takeaways
- It delivered 9,689 EVs;
- This was down from 13,513 in the fourth quarter of 2024; with
- 56 percent of vehicle deliveries made to related parties (most to Xanh GSM).
- The firm’s net loss was VND 14,841,877 million or US$618.3 million.
Vinfast North Carolina factory delayed
Vinfast’s planned North Carolina factory has been delayed pending approval of plans for a much smaller factory, The News Observer has reported. The car maker has not been as successful as it had hoped, hence the smaller factory. It has, however, continued to maintain that the factory will be online in time to qualify for the more than a billion dollars worth of tax incentives.
See also: This breakdown of the tax incentives Vinfast is receiving in North Carolina
Media news
Netflix has been told to remove its video games from the app store in Vietnam
Vietnam’s Ministry of Communication–the MIC–has told Netflix it will need to stop advertising its video games on its platform and that it will need to remove them from the Apple App Store and Google Play store by April 15, according to a statement on its website. It says that Netflix has not been licensed to provide video games in the country and therefore the firm is breaching Vietnam’s Decree 72/2013/ND though it does not specify which part of the Decree.
Of note, the MIC has been pushing cross-border service providers to establish offices in Vietnam but few firms have yet compiled. Local offices would provide the MIC greater control over the content that is disseminated with an office to raid in the event a firm breaches its guidelines. TikTok, one of the few that has opened a local office, found itself subject to an audit last year by the MIC. The ministry found a number of breaches of a range of rules and regulations dishing out a number of penalties.
As of COB April 18, games were still available through the Netflix app in Vietnam.
Stock market news
Vietnam’s VN-Index drops 60 points in a day, biggest one-day fall in two years
Vietnam’s VN-Index took a dive on Monday losing 4.7 percent wiping about US$10 billion from its market capitalization. As far as analysis goes, Tuoi Tre is carrying comments from Tran Hoang Son, the strategy director at VPBank Securities Market. He cites geopolitical tensions that have pushed the US dollar up and added pressure to the dong.
Foreign investors net-withdraw US$113 from HoSE
In line with the rest of the market, foreign investors net withdrew US$113.3 million over the last five trading sessions. This brings the total new-withdrawn from the market by foreign traders to US$764.5 million. Note that Thursday the 18th was a public holiday and markets were closed.
Foreign investor trading activity, last five trading sessions to April 18
Buy | Sell | Change | ||||
Date | VND* | US$ | VND* | US$ | VND* | US$ |
11/4 | 1,702 | $66,994,635 | 1,650 | $64,947,795 | 52 | $2,046,840 |
12/4 | 7,130 | $280,653,199 | 7,859 | $309,348,316 | -729 | -$28,695,117 |
15/4 | 1,880 | $74,001,124 | 3,150 | $123,991,245 | -1,270 | -$49,990,121 |
16/4 | 2,909 | $114,504,931 | 2,848 | $112,103,830 | 61 | $2,401,100 |
17/4 | 1,676 | $65,971,215 | 2,668 | $105,018,616 | -992 | -$39,047,402 |
Total | 15,297 | $602,125,103 | 18,175 | $715,409,803 | -2,878 | -$113,284,699 |
*billions |
Real estate news
Plans to speed up implementation of Vietnam’s revised Land Law
Vietnam’s revised Law on Land was slated to come into force on January 1, 2025, however, key decision makers are pushing for the National Assembly to move the start date up to as soon as July 1 of this year. This looks to be in an effort to give the real estate sector, which has been struggling over the last two years, a jolt.
See: Vietnam’s Real Estate Market Recovery 2024: Unpacked
The week ahead
Next week should see the release of foreign direct investment data from the Ministry of Planning and Investment. This will likely reflect strong growth in line with what Vietnam has experienced already this year.
There will also be a five-day weekend starting from April 27 and lasting until May 1. This will likely see things slow down next week as workers prepare for their extended breaks.
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