This week’s Vietnam news roundup covers the latest FTSE Russell HoSE review, credit growth developments, and import-export news.
Aviation news
Vietnam aviators to be short up to 26 jets over summer: CAAV
The Civil Aviation Authority of Vietnam–the CAAV–is forecasting that Vietnamese airlines could be short up to 26 jets over the summer, VN Express is reporting. This is on the back of maintenance issues with some jet engines. This is impacting airlines all around the world which are scrambling to secure additional jets to make up for those grounded which is pushing up prices.
This could further impact the recovery of Vietnam’s airline industry which has been battling a number of challenges over the past couple of years, see: Vietnam’s Airline Industry Turbulence: Unpacked
Banking news
Credit growth in Vietnam just 1 percent for first quarter 2024
Vietnam’s credit growth for the first quarter of 2024 was just 1 percent, according to Deputy Governor of the State Bank, Dao Minh Tu, and reported by VN Express. This is a far cry from where it was at the same time last year–2.56 percent–and does not bode well for the State Bank’s target of 15 percent credit growth for the year.
Of note, Truong Van Phuoc, former acting Chairman of the National Financial Supervisory Commission, is quoted in this article as saying:
“We absolutely do not make the trade-off of pushing interest rates higher to maintain exchange rates, because that is the most expensive trade-off.”
If this is to be the case, that only really leaves treasury bills and foreign currency reserves in the State Bank’s exchange rate management tool kit.
Vietnam consumer finance firms record broad business downturn
The consumer finance market in Vietnam has taken a dive with most of the big players recording losses or sharp falls in profits in 2023, Doanh Nhan Vietnam is reporting. Outstanding debt to the sector, according to Nguyen Quoc Hung, General Secretary of the Vietnam Banking Association, is down VND 60 trillion or about US$2.4 billion.
This speaks to a broader downturn in consumer sentiment toward profligate spending and borrowing. Credit growth has slowed to a trickle in the economy overall in the last year or so and there are few signs it will pick up any time soon.
Treasury bills issuances slow
Whereas US$2.41 billion worth of State Bank treasury bills matured in the last week, just US$690 million new treasury bills were issued.
Last year, the State Bank also engaged in a series of treasury bill issuances to relieve some pressure on the dong that only came to an end when soft jobs data out of the US saw the dollar drop in early November. The latest update out of the US this time around, however, is stronger than expected inflation, announced on Wednesday, which could see the US could keep interest rates higher for longer.
Outstanding T-Bills COB April 11
| Issued | Length | Maturing | Bidders | Winners | VND | US$ | % p.a. |
| 15/03 | 28 | 12-Apr | 12 | 11 | 15,000 | $600,240,000 | 1.38 |
| 18/03 | 28 | 15-Apr | 12 | 12 | 15,000 | $600,235,998 | 1.4 |
| 19/03 | 28 | 16-Apr | 13 | 10 | 10,000 | $400,160,000 | 1.35 |
| 20/03 | 28 | 17-Apr | 11 | 11 | 15,000 | $600,240,000 | 1.34 |
| 21/03 | 28 | 18-Apr | 11 | 11 | 15,000 | $600,240,000 | 1.32 |
| 22/03 | 28 | 19-Apr | 6 | 6 | 14,700 | $588,235,200 | 1.70 |
| 25/03 | 28 | 22-Apr | 7 | 7 | 7,200 | $288,115,200 | 1.69 |
| 26/03 | 28 | 23-Apr | 4 | 3 | 3,700 | $148,059,200 | 1.9 |
| 27/03 | 28 | 24-Apr | 8 | 8 | 8,700 | $348,139,200 | 2.2 |
| 28/03 | 28 | 25-Apr | 6 | 6 | 4,600 | $184,073,600 | 2.5 |
| 29/03 | 28 | 26-Apr | 5 | 3 | 2,300 | $92,036,800 | 2.49 |
| 01/04 | 28 | 29-Apr | 3 | 2 | 500 | $20,008,000 | 2.40 |
| 03/04 | 28 | 1-May | 4 | 1 | 300 | $12,004,800 | 1.90 |
| 04/04 | 28 | 2-May | 3 | 1 | 200 | $8,003,200 | 2.40 |
| 05/04 | 28 | 3-May | 2 | 2 | 600 | $24,009,600 | 2.70 |
| 06/04 | 28 | 4-May | 10 | 8 | 3,200 | $128,051,200 | 2.90 |
| 09/04 | 28 | 7-May | 7 | 4 | 3,850 | $154,061,600 | 2.90 |
| 10/04 | 28 | 8-May | 5 | 5 | 4,000 | $160,064,000 | 2.90 |
| 11/04 | 28 | 9-May | 5 | 5 | 5,600 | $224,089,600 | 3.50 |
| Total | 129,450 | $5,180,067,198 | |||||
| *billions |
Economy news
AMRO report finds Vietnam GDP likely to grow at 6 percent in 2024
The ASEAN Macroeconomic Research Office has released its Annual Consultation Report Vietnam – 2023 which forecasts a GDP growth rate of 6 percent this year.
Other key takeaways from the report include:
- The expansion is predicted to be off the back of increased exports and increased foreign direct investment;
- Risks for the economy are mostly external–the performance of the economies of Europe the USA, and China;
- There is a skilled labour shortage in Vietnam; and
- Vietnam’s estimated foreign reserves at the end of 2023 were US$89.7 billion.
The report argues for:
- Stronger liquidity buffers for banks;
- Lower loan concentration limits and debt-to-value ratios;
- Credit growth targets to be phase out;
- Greater consolidation in the banking industry; and
- Improved disclosure requirements and investor protections in the bond market.
Energy news
Electricity shortages on the cards for northern Vietnam this summer
Northern Vietnam’s electricity consumption could increase by as much as 17 percent this summer, however, the supply of electricity is slated to have added only 10 percent, VN Express is reporting. Of note, last year, power shortages cost Vietnam an estimated US$1 billion.
Gold news
Vietnam gold stores are running out of gold
Gold stores have been applying limits to how much gold a single customer can buy on the back of higher prices and lower supplies–some have even run out of gold entirely, according to VN Express.
There are a few reasons why this might be:
- The arrest of a local gold smuggler made national news last week–less supply equals more demand;
- The world gold price has been steadily rising; and
- Buyers are ‘impatient’, according to Tuoi Tre.
Of note, the Vietnam Gold Business Association–the VGBA–is pushing for more imports suggesting that three gold firms be allowed to import up to 500 kilograms of gold each year. The supply shortage is estimated to be about 20 tons.
See also: The Gold Price in Vietnam: Explained 2024
Real estate news
HCMC-based real estate tycoon sentenced to death on fraud charges
Truong My Lan, the head of property developer Van Thinh Phat was sentenced to death this week convicted of a number of charges including embezzling US$12.5 billion. Local news coverage is more or less all the same, see: Vietnam property tycoon Truong My Lan sentenced to death in multi-billion dollar fraud case. In the international press the BBC had some pretty good analysis, see: Truong My Lan: Vietnamese billionaire sentenced to death for $44bn fraud.
Vietnam construction material makers stills struggling to find buyers
A number of construction materials firms reported losses last year and are now asking for government support, specifically more large scale infrastructure projects, Doanh Nhan Vietnam is reporting.
This is not a good sign for the real estate industry in that construction firms, presumably in the know, are not banking on the industry to buy up their goods.
There was also a similar story in Tuoi Tre but it focuses specifically on the cement industry. Cement accounted for about US$1.3 billion worth of Vietnam’s exports in 2023.
Stock market news
Vietnam misses latest FTSE Russel stock market upgrade deadline
FTSE Russel has released its March country classification upgrade update with Vietnam holding its position on the firm’s watch list. The assessment is more or less the same as its September assessment with no key changes made to the operation of Vietnam’s stock trading ecosystem in the last six months. That said, a draft amendment to Circular 120 is currently being circulated that, if passed, should see a stock market upgrade increasingly more likely.
The next FTSE Russel country classification review is due in September.
See also: Vietnam’s Stock Market Upgrade Opportunity: Unpacked
Foreign investors continue to net-withdraw from local bourse
A total of US$16.6 million worth of stocks on the Ho Chi Minh Stock exchange were net sold by foreign investors over the last five trading sessions. This brings the total net-sold this year to US$660 million.
Foreign trading data, last five trading sessions
| Buy | Sell | Change | ||||
| Date | VND* | US$ | VND* | US$ | VND* | US$ |
| 5/4 | 1,971 | $78,871,536 | 1,949 | $77,991,184 | 22 | $880,352 |
| 8/4 | 1,414 | $56,582,624 | 1,569 | $62,785,104 | -155 | -$6,202,480 |
| 9/4 | 1,809 | $72,388,944 | 1,538 | $61,544,608 | 271 | $10,844,336 |
| 10/4 | 1,663 | $66,546,608 | 2,270 | $90,836,320 | -607 | -$24,289,712 |
| 11/4 | 1,702 | $68,107,232 | 1,650 | $66,026,400 | 52 | $2,080,832 |
| Total | 8,559 | $342,496,944 | 8,976 | $359,183,616 | -417 | -$16,686,672 |
| *billions | ||||||
Trade news
USA continues to be top destination for Vietnam exports
Vietnam’s General Department of Customs has released March import-export data showing the USA continues to be Vietnam’s biggest export market. Just under US$8.97 billion worth of goods were shipped across the Pacific in March. This was almost US$4 billion higher than number two on the list, China.
Top 10 Vietnam export markets, March 2024, US$
| Destination | March | YTD |
| United States of America | 8,968,094,737 | 25,772,076,256 |
| China | 5,152,609,353 | 13,108,011,347 |
| South Korea | 2,194,217,304 | 6,364,395,721 |
| Japan | 2,072,286,159 | 5,689,963,792 |
| Hong Kong | 1,302,420,110 | 2,944,995,682 |
| Netherlands | 1,183,605,259 | 2,941,031,535 |
| India | 666,791,117 | 2,101,316,513 |
| Thailand | 630,111,757 | 1,981,687,597 |
| United Kingdom | 638,133,251 | 1,902,803,524 |
| Germany | 650,581,476 | 1,902,651,582 |
See also: Vietnam’s Imports and Exports, March 2024: Snapshot
Next week
Next week will see a public holiday in Vietnam for Hung Kings Commemoration Day. This will be one of two holidays scheduled for April. The second will be at the end of the month for Labour Day and Reunification Day and is shaping up to be five days from April 27 to May 1. Of note, things tend to slow down on either side of public holidays in Vietnam.