In case you missed it…
What to Watch Now Google Has An Office in Vietnam
Last week, Google announced it had opened an office in HCMC. This has been a long time coming and this makes Google one of the first big cross-border service providers to do so. That said, the operating environment Google is entering is complicated and with this in mind, this article unpacks a few of the challenges Google might face… Read More »
Banking and Finance News
State Bank returns to selling US dollars from reserves
The State Bank of Vietnam has resumed selling US dollars from its reserves to prop up the local currency. A total of US$200 million worth were sold on Wednesday. In its November Forex Report, the US Treasury put Vietnam’s foreign exchange reserves at US$84.1 billion as of the end of June and therefore they should be sitting around US$83.9 billion (not counting any gold sales made since the end of June).
Of note, the three months worth of imports that the IMF recommends countries have in reserves now stands at 100.1 billion based on an average of Vietnam’s imports for the first 11 months of this year.
Furthermore, the bank has also continued to use treasury bills to suck up some of the excess cash in the market. As of the close of business Thursday there were US$3.09 billion outstanding. There were also reverse repurchase agreements outstanding to the tune of US$196.4 million.
See also: The Vietnamese Dong’s Wild Ride: Unpacked
Car news
Finnish ETF increases stake in key Vietnam Mercedes-Benz distributor
Finland’s PYN Elite fund has increased its holding in Vietnam’s Haxaco, a key Mercedes-Benz distributor. The fund now holds 6.8 percent of the company up from 4.8 percent.
Of note, the Mercedes-Benz factory in Ho Chi Minh City has had a challenging time extending its lease, at points suggesting that they might even have to consider closing up shop in Vietnam. This was followed by reports that Mercedes-Benz has set-up a new company that would be focused on importing vehicles and speculation that it might be shifting how it operates in Vietnam.
With this in mind, this decision by PYN may speak to its reading of the situation and what it might be expecting moving forward.
See also: What’s Going On with Vietnam’s Car Market in 2024?
Coffee news
USDA release half-year Vietnam Coffee Report
The United States Department of Agriculture has released its half-yearly report on Vietnam’s coffee industry.
Of interest is a section on coffee stocks toward the end that details how farmers store coffee at warehouses and sell it to the warehouse owners when they need cash. However, it notes that warehouse owners often sell coffee without the farmer’s consent in the hopes prices will drop by the time they do decide to sell with the warehouse owner pocketing the difference. The report notes that over the last year as prices spiked some warehouses owners sold too early and subsequently had to take a loss or even went bankrupt.
Also of note, is that 85 percent of Vietnam’s coffee exports are low-value green beans as opposed to higher value processed coffee products.
See also: Coffee in Vietnam: Industry Overview
Economy news
Former Trump security advisor spruiks Vietnam-US trade potential
Former security advisor to Donald Trump, Robert C. O’Brien has penned an op-ed suggesting that Vietnam could play an increasingly important role in US trade. In it, he basically suggests the US should increase its engagement with Vietnam in order to counter China’s influence in the region which is not really a new argument.
Of interest, however, is that it was cited by Eric Olander of the China Global South Project in an editorial in which Olander uses O’Brien’s article to catapult into a comparison of the economic might and abilities of Vietnam versus China. This takes place under the banner “Sorry, Vietnam is NOT Going to Be the “Next China””. To be clear, O’Brien never said this. What he did say was that “Vietnam Could Be America’s Next Great Trade Partner”.
That said, neither article offers too much by way of a new perspective. However, arguably, what O’Brien is thinking, as a former Trump advisor, might offer some insight into what the new administration’s approach might be.
Education news
Vietnam international school shuttered on failed land purchase
Saigon Star International School has been forced to vacate its premises after it failed to make payments as part of a deal to acquire the property on which it currently operates.
This is significant in that it is another in a series of international school closures on poor financial management. Of note, Green Shoots International School in Hoi An closed down last year leaving parents out of pocket and the American International School Vietnam (AISV) in Ho Chi Minh City was also closed down earlier this year.
A big part of the problem looks to be these international schools offering hefty discounts for upfront payments that in hindsight have been insufficient to cover their expenses. This was more or less what happened at AISV and looks to be the same case for Saigon Star per this article from Tuoi Tre.
See also: Education in Vietnam
Media news
Vietnam’s already relatively small press set to get smaller under consolidation plan
As part of its restructuring, the Government of Vietnam is looking to reduce the number of news outlets in Vietnam by 19 magazines, 10 newspapers and five television stations. This is in order “to improve the quality and effectiveness of information and propaganda in the press, so that each press agency is stronger,” according to Lao Dong.
Firstly, the absence of local press analysis of this change, given that it seems likely at least some jobs will be lost with few alternative job options for journalists, speaks volumes to the challenges the industry faces in and of itself. Specifically, the heavy restrictions on what can and cannot be published diminish both the quality of news media and subsequently the reputation of the local press.
That said, there has been some analysis from Nguyen Khac Giang and Dien Nguyen An Luong published in Fulcrum in which they essentially argue that this will lead to less diversity of points of view in an environment in which diversity is already fairly restricted.
See also: Vietnam News Media Industry Overview 2024
Stock market news
Foreign traders continue to exit market, net-sell US$54.6 million
Over the last five trading sessions to the close of business on December 19, foreign investors net-sold US$54.6 million worth of HCMC Stock Exchange stocks. This is in line with months of mass withdrawals from the exchange by foreign investors. Specifically, foreign traders this year have net-sold just shy of US$3.56 billion.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VNDbns | US$ | VNDbns | US$ | VNDbns | US$ |
| 13/12 | 1,345 | $52,822,779 | 1,374 | $53,961,708 | -29 | -$1,138,930 |
| 16/12 | 1,253 | $49,209,622 | 1,458 | $57,260,677 | -205 | -$8,051,055 |
| 17/12 | 1,206 | $47,363,770 | 1,875 | $73,637,702 | -669 | -$26,273,932 |
| 18/12 | 1,050 | $41,237,113 | 1,056 | $41,472,754 | -6 | -$235,641 |
| 19/12 | 1,418 | $55,689,740 | 1,898 | $74,540,992 | -480 | -$18,851,252 |
| Total | 6,272 | $246,323,024 | 7,661 | $300,873,834 | -1,389 | -$54,550,810 |
Source: Vietnam Stock Market Tracker
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.