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Vietnam News Roundup: April 26 to May 2

Banking and finance news

State Bank considering reduced reserve requirements for buyers of distressed banks

The State Bank of Vietnam–the SBV–has floated the idea of allowing financial institutions that take over distressed banks under the SBV’s ‘special supervision’ to benefit from reduced reserve requirements, Vietnam News is reporting. This comes on the back of challenges offloading a number of distressed banks, most recently Saigon Commercial Bank which has reportedly been receiving billions of dollars in SBV support.

Rate cut in Vietnam likely: Fitch Solutions

Fitch Solutions has said it is expecting a cut to interest rates in Vietnam this year, according to an article published on its website. It reaches this conclusion based on the belief that the 6 to 6.5 percent target for GDP growth for the year is unlikely and that inflation will be below 4 percent. It says this will likely happen in July when it believes the US Federal Reserve will start cutting rates.

Bank of America expects dong to slide another 1 percent

The Bank of America–BoFA–is expecting the Vietnamese dong to slide by another 1 percent by the end of the year, CNBC has reported. According to the publication, the BofA made the assessment based on “Vietnam’s political instability following the second presidential resignation in two years as well as difficulty in its property sector”.

For more background on what’s happening within the local currency see: The Dong’s Wild Ride: Unpacked

SBV open market operations, outstanding loans

IssuedLengthMaturingVNDUS$%
22/04146-May8,563$337,039,6944.00
23/04147-May36,000$1,417,042,4064.25
24/04148-May25,051$986,051,9884.25
25/04149-May25,000$984,057,1064.25
26/041410-May23,192$912,888,4934.25
02/0579-May559$21,986,6004.25
Total118,364$4,659,066,288

*billions

SBV open market operations, outstanding treasury bills

IssuedLengthMaturingVND (billions)US$%
05/04283-May600$23,617,3802.70
06/04284-May3,200$125,959,3602.90
09/04287-May3,850$151,544,8552.90
10/04288-May4,000$157,449,2002.90
11/04289-May5,600$220,428,8803.50
12/042810-May8,600$338,515,7803.50
15/042813-May2,800$110,214,4403.59
16/042814-May550$21,649,2653.59
17/042815-May5,500$216,492,6503.59
19/042817-May4,250$167,289,7753.73
22/042820-May3,550$139,736,1653.73
23/042821-May2,150$84,628,9453.73
24/042822-May1,400$55,107,2203.75
25/042823-May400$15,744,9203.50
26/042824-May3,900$153,512,9703.75
02/052830-May2,100$82,660,8303.75
Total52,4502,064,552,635

*billions

Economy news

Consumer price index gains 4.33 percent year-on-year

Vietnam’s General Statistics Office has released its consumer price index data from April finding a 4.33  percent increase compared to April of last year. The biggest increases were in education, other goods and services, and housing and construction materials. 

Vietnam’s Consumer Price Index, April 2024, summary

M-O-MY-O-Y
Food and food services-0.134.32
Drinks and tobacco0.092.60
Garments, hats, shoes0.121.80
Housing and construction materials0.215.97
Household equipment and appliances0.111.37
Traffic1.954.24
Post and telecommunication-0.17-1.50
Education-2.938.31
Culture, entertainment and tourism0.031.94
Other goods and services0.276.23
Total0.074.33

Intellectual property news

Vietnam remains on US intellectual property infringement watchlist in 2024

The Office of the United States Trade Representative has released its annual 401 Report which assesses intellectual property protections around the world. Vietnam has maintained its position on the body’s watchlist with a lack of prosecutions and weak law enforcement, the report says.

Investment news

New registered FDI in Vietnam reaches US$9.27 billion

Vietnam’s General Statistics Office has released its Report on the Socio-Economic Situation in April and the First Four Months of 2024 in which it says new foreign direct investment commitments have reached US$9.27 billion, an increase of 4.5 percent over the first four months of last year.

Furthermore, it states that disbursed foreign direct investment has reached US$6.28 billion for the year so far.  

Manufacturing news

Vietnam’s PMI improved but only marginally

S&P Global’s Purchasing Managers Index or PMI has found that Vietnam’s manufacturing sector grew in April but only slightly, per a press release from the firm. The key manufacturing index registered 50.3 up from 49.9 in March.

The survey also found that:

  • The jump in the index was fueled by a rebound in new orders;
  • The new orders were fueled by reduced selling prices in response to requests for discounts from buyers;
  • Oil and shipping prices pushed up input prices; and
  • Firms downsized their workforces in response to lower demand.

Vietnam’s industrial production index registers a 6.3 percent increase

Vietnam’s General Statistics Office has released its industrial production data from January to April finding a 6.3 percent increase over April of last year. Of the four categories the GSO tracks, ‘production and distribution of electricity, gas, hot water, steam and air conditioning’ recorded the biggest increase of 11.3 percent.

Vietnam’s Industrial Production Index, April 2024, summary

M-O-MY-O-Y
Mining-4.0-6.8
Manufacturing and processing1.17.0
Utilities (gas, electricity etcetera)1.911.3
Water1.36.6
Average0.86.3

Political news

Chairman of Vietnam’s National Assembly resigns

Vuong Dinh Hue, the Chairman of the National Assembly has resigned after barely two years at the post, VN Express is reporting. The reasons put forward are vague, as they often are, however, it is likely connected with the arrest of his assistant, Pham Thai Ha, on charges of ‘abusing his position and power to influence others for personal gain’.

Start-up news

New report on tech startups in Vietnam finds funding dives in 2023

Funding in startups in Vietnam was down 17 percent to US$529 million last year according to a report by Dove Ventures. The big winners were healthcare and education startups which recorded increases of 391 percent and 107 percent respectively.

Stock market news

New Vietnam stock exchange trading system delayed again

Last week, it was reported that the Ho Chi Minh City Stock Exchange’s new KRX trading system would go online on May 2. This has since been delayed by the State Securities Commission–the SSC–according to Bloomberg. The SSC’s reasons are that the Ho Chi Minh Stock Exchange has failed to provide evidence trading firms are ready for the new system and also that it hasn’t consulted all relevant stakeholders.

Of note, the KRX going live is almost ten years past due. It is also slated to be crucial to seeing the local bourse upgraded from a frontier market. For more information see: Vietnam’s Stock Market Upgrade Opportunity: Unpacked

Foreign investors continue to net withdraw from the HoSE

Foreign traders on the Ho Chi Minh City Stock Exchange have continued to net withdraw from the market. Monday through Wednesday the markets were closed but between Friday of last week and Thursday of this week, foreign traders managed to net-with draw a total of US$29.8 million.

Foreign investor trading activity, last five trading sessions to May 2

BuySellChange
DateVND*US$VND*US$VND*US$
23/41,745$68,687,2142,041$80,338,454-296-$11,651,241
24/42,500$98,405,7502,743$107,970,789-243-$9,565,039
25/42,214$87,148,1322,674$105,254,790-460-$18,106,658
26/42,230$87,777,9292,118$83,369,351112$4,408,578
2/51,685$66,325,4762,554$100,531,314-869-$34,205,839
Total10,374$408,344,50012,130$477,464,699-1,756-$69,120,199
*billions

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