Banking and Finance News
Gap between Vietnam bank deposits and loans issued gets wider
The gap between what is being lent by Vietnamese banks and what is being deposited by the general population is getting wider, according to VN Express. At Vietcombank, for example, the publication notes that loans grew by 8 percent but deposits grew by just 2 percent in the first half of this year.
This could be symptomatic of a much bigger problem in that banks are being pressured to lend in order to meet a 14 percent credit growth target set at the beginning of the year which may be contributing to rising bad debts.
One analysis of 29 of Vietnam’s biggest banks earlier this year, found that 27 had recorded an increase in bad debt by the end of June. Between them, there was VND 46,719 billion or US$1.86 billion in bad debts, an increase of 20.8 percent compared to the end of 2023.
Outstanding T-bills slow to a trickle, reverse repos still riding high
Outstanding treasury bills have fallen to just under US$400 million on a weakening US dollar which saw the State Bank of Vietnam halt new issuances last week. That said, it still continues to distribute funds to local banks through open market operations with US$2.14 billion in reverse repos outstanding.
See also: Vietnam Dong Tracker: Daily Updates.
Outstanding reverse repos to Vietnam banks
| Issued | Length | Maturing | VND* | US$ | % p.a. |
| 26-Aug | 14 | 9-Sep | 5,980.59 | $241,737,672 | 4.25 |
| 27-Aug | 14 | 10-Sep | 14,989.65 | $605,887,228 | 4.25 |
| 28-Aug | 14 | 11-Sep | 1,768.46 | $71,481,811 | 4.25 |
| 29-Aug | 14 | 12-Sep | 5,573 | $225,272,029 | 4.25 |
| 30-Aug | 14 | 13-Sep | 5,000 | $202,101,455 | 4.25 |
| 4-Sep | 14 | 18-Sep | 11,875 | $480,000,000 | 4.25 |
| 5-Sep | 14 | 18-Sep | 7,790 | $314,872,272 | 4.25 |
| Total | 52,977.06 | 2,141,352,467.37 |
*billions
Outstanding T-bills
| Issued | Days | Maturing | VND | US$ | % p.a. |
| 22-Aug | 14 | 5-Sep | 4,700 | $189,975,748 | 4.20 |
| 23-Aug | 14 | 6-Sep | 5,000 | $202,093,775 | 4.15 |
| Total | 9,699.80 | 392,069,523.36 |
*billions
Car news
Vietnam car maker reports profit fall of 6 percent in first half 2024
Vietnam’s Thaco Auto, which manufactures and assembles cars for a number of big-name brands including Kia, Mazda, and Peugeot has announced first-half profit-after-tax in the first half of the year of VND 1,100 or US$44 million, Tuoi Tre has reported. This represents a 6 percent decline over the first half of 2023.
From a peak in 2022 of VND 7.4 trillion or US$298.3 million, Thaco has seen its profits continue to fall. This has been attributed to a decline in car sales on the back of broader economic challenges in Vietnam. This is, however, only one part of much bigger changes in Vietnam’s car market as new trade agreements pull down tariffs on imports and trade remedies against cars imported from China into the US and EU see Chinese car makers search for new markets.
See also: What’s Going On with Vietnam’s Car Market in 2024?
Energy news
Japan’s Toyo Solar limits Vietnam solar panel production on trade investigation
Japan’s Toyo Solar is reducing its solar panel output at its Vietnam-based affiliate Vietnam Sunergy from 2.5 gigawatts this year to just 1.9 in response to a US trade investigation into solar panels from Vietnam, the company has said in a press release. The company will wait for preliminary investigation results before making further moves, the company goes on to say.
New central Vietnam coal power plant set for trial run next month
The first turbine in the 1,320-megawatt Vung Ang II thermal power plant project in the north-central Vietnamese province of Ha Tinh is set to begin a trial run next month, according to The Investor. The US$2.4 billion project is expected to begin commercial operation in July of 2025.
Intellectual property news
US IP group claims ‘stunning victory’ over Vietnam-based video piracy network
The Hanoi police department, in collaboration with the Alliance for Creativity and Entertainment or ACE, shut down a network of video piracy websites connected to the Fmovies brand, according to an ACE press release. The network was reportedly receiving 384 million monthly visits, the organisation goes on to say.
Of note, this isn’t the first time an illegal streaming website has been shut down in Vietnam only to reappear days later under a slightly different domain name. Popular illegal streaming site Phim Moi has been shut down repeatedly since 2021 but is still alive and well. Likewise, Fmovies appears to be back online already under a slightly different domain name.
See also: How to Start a Business in Vietnam: Intellectual Property Protection
Name confusion in fake milk case sparks response from Netherlands dairy in Vietnam
The arrest of the head of the Dutch Milk Company for allegedly selling counterfeit powdered milk is creating headaches for the Netherlands’ FrieslandCampina Vietnam Company which sells long-life milk in Vietnam under the Dutch Lady brand. The suspect company and the Dutch Lady milk brand are unrelated, a representative of FrieslandCampina had to make clear amid confusion among consumers, according to Tuoi Tre.
Investment news
Vietnam adds an additional US$2.5 billion in registered FDI in August
Vietnam added another 431 foreign direct invested projects to its 2024 tally in August, along with just over US$2.5 billion in additional capital commitments, according to data from Vietnam’s Ministry of Planning and Investment. The biggest gains were in manufacturing and processing which added 134 new projects and US$1.51 billion.
See also: Vietnam Foreign Direct Investment Tracker: Last Update July 2024
Manufacturing news
Vietnam Purchasing Managers Index records 2.3 point fall in August
The S&P Global Vietnam Purchasing Managers’ Index recorded a 2.3-point fall in August, from 54.7 in July to 52.4 a month later, according to a press release from the firm. This does, however, signal the continued expansion of Vietnam’s manufacturing sector for the fifth month in a row.
Key findings from the survey include:
- Customer demand has been rising with price stability helping to secure new orders;
- Input costs and selling prices continued to increase but inflation cooled;
- Lower oil prices reduced shipping costs;
- Purchasing activity increased at its fastest pace since May 2022;
- There was a fall in employment with some temporary contracts coming to an end;
- Backlogs continued to grow for the third month in a row on account of the reduced size of the workforce; and
- Sentiment dropped among survey respondents but was still overall optimistic.
Real estate news
Debt creeps up in Vietnam’s real estate sector
Vietnam’s real estate developers have collective outstanding debts of at least VND 245,640 billion or US$9.7 billion, about 2.5 percent of Vietnam’s GDP, according to data collated by Tuoi Tre. The data came from the financial reports of 80 of Vietnam’s biggest real estate developers but excludes its biggest real estate developer, VinGroup. The publication goes on to point out that this is a 10 percent increase over the start of the year and a 52 percent increase over the end of 2022.
Though reports of an imminent recovery of the real estate sector have become common in local media, these rising debt levels would suggest there is still a long way to go.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked
Retail news
Cheap Chinese imports weighing on Vietnam’s small retailers
Small retail businesses in Vietnam are struggling to stay afloat due to competition from cheap Chinese imports sold online, according to reports in Tuoi Tre. This is partly reflected in a fall in stalls operating at local markets. For example, Thu Duc market has a capacity of 936 stalls but only 572 are currently open, according to the publication.
This has become a common narrative over the last year or so and looks to be linked to a downturn in the Chinese economy which is seeing Chinese manufacturers look for new markets abroad. Whereas Vietnam has benefited from its proximity to China with respect to developing its own manufacturing industry as firms look to diversify their supply chains out of China, its proximity also means that it is much easier for Chinese manufacturers to access its consumer market.
Stock market news
Foreign traders net-sell US$65.6 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$65.6 million worth of stocks by the close of business on September 5. This brings the total net withdrawn from the market by foreign traders to just over US$2.65 billion year to date.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND* | US$ | VND* | US$ | VND* | US$ |
| 28/8 | 1,411 | $57,033,145 | 1,524 | $61,600,647 | -113 | -$4,567,502 |
| 29/8 | 1,788 | $72,271,625 | 1,903 | $76,919,968 | -115 | -$4,648,343 |
| 30/8 | 1,568 | $63,379,143 | 1,502 | $60,711,399 | 66 | $2,667,745 |
| 4/9 | 1,595 | $64,470,493 | 2,369 | $95,755,861 | -774 | -$31,285,368 |
| 5/9 | 2,747 | $111,034,762 | 3,433 | $138,763,137 | -686 | -$27,728,375 |
| Total | 9,109 | $368,189,168 | 10,731 | $433,751,011 | -1,622 | -$65,561,843 |
*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.