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A Brief History of Startups in Vietnam: Unpacked 2024
A culture of ingenuity along with big appetites for risk has seen Vietnamese entrepreneurs slide seamlessly into the global start-up scene. But start-ups require capital and the capital flowing into Vietnamese startups has slowed considerably post-pandemic. With this in mind, this article runs through what’s changed, how it’s changed, and what might happen next… Read More »
Aviation news
Airlines in Vietnam down to just 160 aircraft operational
Vietnam’s airlines have just 160 aircraft left in operation, 70 less than they had in 2019 pre-pandemic, according to Quality and Life Magazine. This is putting upward pressure on ticket prices which have come under increasing scrutiny this year. That said, they are regulated by the government which has investigated and reportedly failed to find evidence of price gouging… Read More »
HCMC to Hanoi among busiest flight routes in world
In August, there were 977,858 seats available on flights between Ho Chi Minh City and Hanoi making it the fourth busiest domestic air route in the world, according to data from OAG Aviation Worldwide. This is despite reports that Vietnam’s airlines were down to just 160 aircraft on the back of engine problems, lease defaults, and general fleet downsizing.
Of note, the local airline industry has faced a number of challenges since COVID, particularly recovering from pandemic border closures which grounded most of their aircraft. Foreign investment and expertise could be one possible solution, however, investment in airlines in Vietnam is capped at 34 percent which can make influencing key decisions challenging.
See also: Vietnam’s Foreign Ownership Limits: Transport and Logistics
Banking and Finance News
State Bank halts T-bill issuances on weaker dollar
The State Bank of Vietnam didn’t issue any treasury bills this week for the first time in months with pressure on the local currency easing. There are, however, still US$1.2 billion worth of T-bills still outstanding as of the close of business on August 29. Also of note is that the State Bank has continued its open market operations issuing reverse repos to local banks worth US$2.2 billion since August 22. Of note, the State Bank has started issuing reverse repos for 14 days as opposed to seven days as had been the standard practice.
See also: Vietnam Dong Tracker: Daily Updates.
Outstanding reverse repos to Vietnam banks
| Issued | Length | Maturing | VND* | US$ | % p.a. |
| 22-Aug | 7 | 29-Aug | 8,941.63 | $359,390,040 | 4.25 |
| 23-Aug | 7 | 30-Aug | 16,999.99 | $683,278,898 | 4.25 |
| 26-Aug | 14 | 9-Sep | 5,980.59 | $240,377,256 | 4.25 |
| 27-Aug | 14 | 10-Sep | 14,989.65 | $602,477,503 | 4.25 |
| 28-Aug | 14 | 11-Sep | 1,768.46 | $71,079,536 | 4.25 |
| 29-Aug | 14 | 12-Sep | 5,573.23 | $224,004,276 | 4.25 |
| Total | 54,253.55 | 2,180,607,510 |
*billions
Outstanding T-bills
| Issued | Days | Maturing | VND | US$ | % p.a. |
| 15-Aug | 14 | 29-Aug | 3,900.00 | $156,752,310 | 4.25 |
| 16-Aug | 14 | 30-Aug | 4,150.00 | $166,800,535 | 4.25 |
| 19-Aug | 14 | 2-Sep | 2,300.00 | $92,443,670 | 4.25 |
| 20-Aug | 14 | 3-Sep | 4,999.90 | $200,960,481 | 4.20 |
| 21-Aug | 14 | 4-Sep | 5,000.00 | $200,964,500 | 4.20 |
| 22-Aug | 14 | 5-Sep | 4,700.00 | $188,906,630 | 4.20 |
| 23-Aug | 14 | 6-Sep | 4,999.80 | $200,956,461 | 4.15 |
| Total | 30,049.70 | $1,207,784,587 |
*billions
Car news
Vietnam Mercedes-Benz factory could close altogether on licence extension delays
Further to reports last week that the Mercedes-Benz factory in Ho Chi Minh City was having problems getting its licence extended, this week it was reported that the factory may need to cease operations altogether if said extension is not granted by August 31, according to Tuoi Tre. The news outlet cites a letter sent to the Prime Minister by Mercedes-Benz Group AG which is currently operating the factory.
See also: Vietnam’s Automotive Industry: Foreign Investor’s Guide 2024
Economy news
World Bank ups GDP growth forecast for Vietnam in 2024
The World Bank has released its August 2024 Taking Stock Report in which it forecasts GDP growth in Vietnam of 6.1 percent this year. This is a significant bump from a forecast of just 5.5 percent in the bank’s April Taking Stock Report.
This revised projection is based on:
- Expected slower export growth in the second half of 2024 after a bumper first half;
- That there are signs of recovery in Vietnam’s real estate market on the back of a thawing in the corporate bond market and the implementation of the new Land Law;
- Stabilising domestic demand with improved investor and consumer sentiment; and
- An expected small current account balance surplus.
See also: Vietnam’s Economy in the First Half of 2024: Unpacked
Education news
MPS on the hunt for burned APAX investors
Vietnam’s Ministry of Public Security has announced that it is looking for investors in EGroup, most well-known for its chain of English centres APAX Leaders, that may have been defrauded by Nguyen Ngoc Thuy, the head of the firm, Dau Tu Online has reported. The former Shark Tank star has been detained since March for the alleged ‘fraudulent appropriation of property’ through a number of suspect financial manoeuvres.
See also: How to Start an English Centre in Vietnam: Ultimate Guide 2024
Energy news
Norway off-shore wind developer to exit Vietnam on regulatory delays
Norwegian energy firm, Equinor, which was looking at developing offshore wind in Vietnam, is set to close its office in Hanoi, Reuters has reported. It’s not clear why it has chosen to do so, however, Reuters does point out that several offshore wind farm developers have scaled back their operations due to delays to necessary regulatory reforms.
See also: Vietnam’s Offshore Wind Power Holdup: Unpacked
Food and beverage news
Emu eggs selling in Vietnam for up to US$40 a piece
Australian emu eggs are reportedly being sold in Vietnam for up to VND 1 million or US$40 a piece, VN Express has reported. One trader told the newspaper she had sold about 700 eggs to dealers in Hanoi, Danang, and Ho Chi Minh City.
Of note, importing goods into Vietnam for foreign firms can be tricky. Not only are there a number of technical and legal requirements that need to be met, but a myriad of free trade agreements has made navigating tariffs and trade restrictions complex. In this light, understanding the nuances of importing goods into Vietnam, can make the difference between a foreign firm’s success or failure.
For more information see: How to Start an Import Business in Vietnam: Ultimate Guide 2024
South Korean Choco-pie maker expecting Vietnam dividend over US$78 million
South Korea’s Orion Holdings is expecting a dividend this year from its Vietnamese subsidiary of about US$78 million, according to The Korea Economic Daily. The company is possibly most well-known for its Choco-pies which have become a mainstay on ancestral altars all over Vietnam.
Of note, on average, Vietnamese consume 5.2 kilograms of snack foods per person per year, slightly higher than the global average of five kilograms. Vietnam’s snack food market is also projected to reach US$3.9 billion this year, with a compound annual growth rate of 8.15 percent from 2024 to 2029, according to Statista.
Gambling news
Extension proposed for casino pilot program allowing Vietnamese bettors
Vietnam’s Ministry of Finance has proposed extending a pilot program at a Phu Quoc casino that allows Vietnamese to gamble, VN Express is reporting. The Ministry has also proposed a similar three-year pilot for a new casino planned for Van Don in Quang Ninh, though it’s not clear when this new casino may be operational.
See also: Gambling in Vietnam: Foreign Investor Quick Read 2024
Hospitality news
Vietnam’s VinPearl issues new US dollar bonds in Singapore at 9.25 percent
VinPearl, the hospitality arm of Vietnam’s Vingroup, has repurchased US$284 million worth of bonds issued at a coupon rate of 3.25 percent in 2021 and maturing in 2026, and issued a further US$150 million worth of bonds at 9.5 percent maturing in 2029, according to an announcement made to the Singapore Stock Exchange. The bonds are fully exchangeable into shares of Vingroup.
Mining news
Vietnam rare-earths war heats up with Chinese SOE throwing hat in mix
Vietnam’s chairman of the Commission for the Management of State Capital at Enterprises, Nguyen Hoang Anh, has met with Ao Hong, the chairman of the Chinese state-owned enterprise the China Rare Earth Group–CREG–to discuss cooperating on rare earth extraction and processing in Vietnam, The Investor has reported. Hong told Nguyen that CREG has expertise in extraction, processing, and export of rare earths suggesting the firm could build an entire supply chain in Vietnam (being more than just a mine a crucial part of Vietnam’s rare earths strategy).
See also: Vietnam’s Rare Earth Partnership Contenders: Unpacked
Stock market news
Foreign traders net-sell US$37.8 million in HoSE shares
Foreign traders have returned to net-selling Ho Chi Minh Stock Exchange Stocks. In total, foreign investors sold just under US$37.8 million worth of stocks by the close of business on August 29. This brings the total net withdrawn from the market by foreign traders down slightly to just over US$2.58 billion year to date.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND* | US$ | VND* | US$ | VND* | US$ |
| 23/8 | 1,559 | $62,660,731 | 1,637 | $65,795,777 | -78 | -$3,135,046 |
| 26/8 | 1,397 | $56,149,481 | 1,787 | $71,824,712 | -390 | -$15,675,231 |
| 27/8 | 1,243 | $49,959,775 | 1,487 | $59,766,842 | -244 | -$9,807,068 |
| 27/8 | 1,411 | $56,712,182 | 1,524 | $61,253,980 | -113 | -$4,541,798 |
| 27/8 | 1,788 | $71,864,905 | 1,903 | $76,487,089 | -115 | -$4,622,184 |
| Total | 7,398 | $297,347,074 | 8,338 | $335,128,400 | -940 | -$37,781,326 |
*billions
Source: www.hsx.vn
The week ahead
There are a handful of events coming up this week. For more information see the: Doing Business in Vietnam: Events Directory 2024
Also, Vietnam is a dynamic market that is changing rapidly. To keep updated to date with the business environment and how it is evolving make sure to subscribe to the-shiv.