This week’s Vietnam news roundup covers the latest tourism and industrial production numbers, the increase to the minimum wage that kicked in Monday, the new start dates for several key laws, approval of a Value-Added Tax reduction to the end of the year, foreign trader stock market transactions, and more…
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Banking and Finance News
State Bank open market operations as of COB July 4
The State Bank of Vietnam has continued to issue treasury bills to suck up excess liquidity in the economy. There are currently US$5.6 billion worth of T-bills outstanding as of the close of business on July 4. Also of note, the State Bank has outstanding loans to local banks to the tune of US$1.56 billion.
See also: Vietnam Dong Tracker: Daily Updates.
Outstanding loans
| Issued | Length | Maturing | VND (billions) | US$ | % p.a. |
| 27-Jun | 6-Jan | 4-Jul | 7,000 | $274,994,607 | 4.50 |
| 28-Jun | 6-Jan | 5-Jul | 20,000 | $785,699,607 | 4.50 |
| 1-Jul | 6-Jan | 8-Jul | 4,240 | $166,568,400 | 4.50 |
| 2-Jul | 6-Jan | 9-Jul | 1,604 | $63,013,140 | 4.50 |
| 3-Jul | 6-Jan | 10-Jul | 1,737 | $68,244,331 | 4.50 |
| 4-Jul | 7 | 11-Jul | 5,178 | $203,400,445 | 4.50 |
| Total | 39,759 | 1,561,920,530 |
*billions
Outstanding T-bills
| Issued | Length | Maturing | VND (billions) | US$ | % p.a. |
| 10-Jun | 27-Jan | 8-Jul | 2,100 | $82,498,500 | 4.25 |
| 11-Jun | 28 | 9-Jul | 1,300 | $51,070,500 | 4.25 |
| 12-Jun | $28 | 10-Jul | 600 | $23,571,000 | 4.25 |
| 13-Jun | 28 | 11-Jul | 2,650 | $104,105,250 | 4.25 |
| 14-Jun | 28 | 12-Jul | 700 | $27,499,500 | 4.25 |
| 17-Jun | 28 | 15-Jul | 2,650 | $104,105,250 | 4.25 |
| 18-Jun | 28 | 16-Jul | 5,150 | $202,317,750 | 4.25 |
| 19-Jun | 27-Jan | 17-Jul | 6,450 | $253,388,250 | 4.25 |
| 20-Jun | 27-Jan | 18-Jul | 7,550 | $296,601,750 | 4.25 |
| 21-Jun | 13-Jan | 5-Jul | 8,900 | $349,636,500 | 4.25 |
| 24-Jun | 13-Jan | 8-Jul | 10,150 | $398,742,750 | 4.25 |
| 25-Jun | 13-Jan | 9-Jul | 25,000 | $982,125,000 | 4.30 |
| 26-Jun | 13-Jan | 10-Jul | 4,630 | $181,889,550 | 4.50 |
| 27-Jun | 13-Jan | 11-Jul | 9,200 | $361,422,000 | 4.50 |
| 28-Jun | 13-Jan | 12-Jul | 6,100 | $239,638,500 | 4.50 |
| 1-Jul | 13-Jan | 15-Jul | 12,300 | $483,205,500 | 4.50 |
| 2-Jul | 13-Jan | 16-Jul | 13,850 | $544,097,250 | 4.50 |
| 3-Jul | 13-Jan | 17-Jul | 14,100 | $553,918,500 | 4.50 |
| 4-Jul | 14 | 18-Jul | 9,550 | $375,171,750 | 4.50 |
| Total | 142,930 | $5,615,005,050 |
*billions
Car news
VinFast CEO launches affiliate company in Vietnam to buy, lease, sell electric cars
VinFast CEO Pham Nhat Vuong has announced that a new company has been established in Vietnam, in which he holds a 90 percent stake, to buy, sell, and lease electric vehicles. The company, FGF Trading and Services–in which FGF stands for For Green Future–has been established ostensibly to run a second-hand market for electric vehicles.
Of note, Vietnam’s car market has not been performing particularly well of late. Car sales were down 7 percent year on year at the end of May, according to the Vietnam Automotive Manufacturers Association. This is, at least in part, due to a broader economic downturn with consumers tightening their belts rather than splurging on big-ticket items like cars.
See also: Vietnam’s Automotive Industry 2024: Foreign Investor Cheat Sheet.
Economy news
Vietnam statistics office finds second quarter GDP growth at 6.93 percent
Vietnam’s General Office of Statistics has found that Vietnam’s GDP grew at 6.93 percent in the second quarter of 2024 compared to the second quarter of 2023. This brings the country’s growth rate for the first half of the year to 6.42 percent.
The GSO estimates that the agriculture, forestry and fishery sector grew by 3.34 percent, the industrial and construction sector grew by 8.29 percent, and the service sector grew by 7.06 percent. This is broadly reflected in Vietnam’s top ten individual-item exports in the first five months of this year which registered an average growth rate of 14.9 percent compared to 2023.
See also: Vietnam’s Economy in the First Half of 2024: Unpacked.
Education news
Beleaguered HCMC international school suspended by city Education Department
The Ho Chi Minh City Education Department has suspended operation of the American International School Vietnam–known by its acronym AISV–due to questionable finances and a lack of staff. This is the latest in a series of setbacks for the school after teachers went on strike earlier this year over unpaid salaries.
Of note, it is not unusual for Vietnamese firms that have run out of money to hold out for as long as possible by selling assets and cutting staff. Furthermore, it is not unusual for them to be allowed to do so, with a firm not considered insolvent until its debts are over 90 days past due. That said, many firms often go well beyond 90 days.
See also: Insolvency in Vietnam 2024: Unpacked.
Energy news
South Korean minister offers Vietnam support on nuclear energy
Nuclear power for Vietnam has been raised again, this time by the South Korean Minister of Trade, Industry, and Energy Ahn Duk-Geun, and a Vietnam-South Korea business forum in Seoul. The minister has suggested that South Korea could provide support for Vietnam should it choose to pursue it.
See also: Nuclear Power in Vietnam: Unpacked 2024
Vietnam issues a decree on direct power purchase agreements
Vietnam has issued a decree on Direct Power Purchase Agreements–or DPPAs– clearing the way for businesses to buy power directly from power generators. The decree has been a long time coming and has been touted as a critical component to developing Vietnam’s electricity network.
Per the decree, high volume power users will negotiate directly with power generators on supply and price. They will then be able to transfer power either through private lines or through the public grid. On the latter, agreements will need to include a payment for using public infrastructure to the state power provider EVN.
See also: Electricity in Vietnam: Foreign Investor Cheat Sheet 2024
Labour News
Vietnam minimum wage was approved and kicked in Monday
An increase to Vietnam’s minimum wage has been officially approved by Vietnam’s Central Executive Committee. The 6 percent increase kicked in from July 1, this year.
Vietnam minimum wage from July 1, 2024
| Monthly | Hourly* | |||
| Region | VND | US$ | VND | US$ |
| 1 | 4,960,000 | $195 | 25,306 | $0.99 |
| 2 | 4,410,000 | $173 | 22,500 | $0.88 |
| 3 | 3,860,000 | $152 | 19,694 | $0.77 |
| 4 | 3,450,000 | $136 | 17,602 | $0.69 |
See also: Minimum Wage in Vietnam 2024: Your Questions Answered.
Manufacturing news
Vietnam Purchasing Managers Index jumps on increase in new orders
S&P Global’s Vietnam Purchasing Managers’ Index has jumped to 54.7 up from 50.3 a month earlier. This is on the back of a sharp rise in new orders that S&P says experienced the highest growth since the index began, aside from the very first month it went online.
Of note, whereas this is good news for the manufacturing industry and Vietnam’s economy more broadly, as the import of raw materials increases it is likely more US dollars will be needed. This means increasing pressure on the local currency which is already strained.
See also: The Dong’s Wild Ride: Unpacked
Vietnam Industrial Production Index gains 10.9 points in June
Vietnam’s Industrial Production Index recorded a gain of 10.9 points in the twelve months to June of 2024. This is the fourth consecutive month that an increase has been recorded.
The biggest gains were in: services related to printing, rubber and plastic goods manufacturing, and plastic goods manufacturing. Conversely, the biggest falls were in the production of batteries and accumulators, natural gas exploitation, and the production of toys and games.
See also: Vietnam Industrial Production Index Tracker 2024
‘Limited investment support’ in Vietnam sees big name FDI go elsewhere: MPI
Intel, LG Chemical, AT&S, Samsung, and SMC have decided against large-scale investments in Vietnam on the back of ‘limited investment support’, according to the Ministry of Planning and Investment–the MPI–and quoted in The Investor, the official mouthpiece of the government-backed Vietnam Association of Foreign Invested Enterprises. The MPI has also said it is concerned that if no new incentives program is introduced it may lose some Samsung production lines to India and LG may suspend a US$5 billion investment in electronics manufacturing in Vietnam.
Real estate news
Vietnam property market reform laws’ start date moved up to August 1 this year
Vietnam’s new Land Law, Housing Law, Real Estate Business Law, and Law on Credit Institutions are all set to come into force on August 1 after being approved by the National Assembly last Saturday.
Whereas some elements of these laws were already in force, the bulk of the reforms contained therein were not due to kick in until January 2025. These laws, however, have been slated as a cornerstone of the recovery of Vietnam’s real estate industry which, although showing some signs of improvement, is still floundering.
See also: Vietnam’s Law on Land 2024: Foreign Investor Cheat Sheet.
Stock market news
Vietnam high-profile stock market manipulation trial to kick-off in June
Trinh Van Quyet, former Chairman of the Board of Directors of embattled real estate developer FLC Group, is set to go on trial on July 22. This is set to be one of the most high-profile cases of stock market manipulation in recent times.
For background, Quyet was arrested for stock manipulation back in March 2022 along with a number of accomplices. They were alleged to have made around VND 723 billion or about US$28.4 million by manipulating the stock price of his own company, FLC, as well as a number of other stocks.
Prior to Quyet’s arrest, FLC had been a major real estate developer in Vietnam. The company had properties all over Vietnam as well as an airline–Bamboo Airways–with Quyet at one point reportedly a US dollar billionaire. Well known in Vietnam–idolised by some for his business savvy–his arrest drew a lot of media coverage and his trial likely will too.
See also: Vietnam’s Real Estate Market Recovery 2024: Unpacked.
More than half of Vietnam securities firms failing to meet disclosure requirements
Just 54 percent of Vietnam securities firms, according to a Vietnam Association of Financial Executives report, are meeting information disclosure standards. This is a significant fall from 80 percent last year.
Information disclosures on the Ho Chi Minh City Stock Exchange have been cited by key stock market index makers FTSE Russell and MSCI as one criterion holding the local bourse back from being upgraded from frontier to emerging.
The irony here is that these securities firms stand to probably benefit the most from a stock market upgrade.
See also: Vietnam’s Stock Market Upgrade Opportunity: Unpacked.
Foreign traders net-with draw US$122.1 million from local bourse
Foreign traders have continued to sell down their positions in the Ho Chi Minh City Stock Exchange. In total, just over US$122.1 million was withdrawn from the market over the last five trading sessions to the close of business on July 4. This brings the total net withdrawn from the market by foreign traders to just shy of US$2.13 billion so far this year.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND* | US$ | VND* | US$ | VND* | US$ |
| 28/6 | 1,814 | $71,262,990 | 2,986 | $117,305,010 | -1,172 | -$46,042,020 |
| 1/7 | 1,321 | $51,895,485 | 2,111 | $82,930,635 | -790 | -$31,035,150 |
| 2/7 | 1,694 | $66,548,790 | 1,731 | $68,002,335 | -37 | -$1,453,545 |
| 3/7 | 1,333 | $52,366,905 | 1,866 | $73,305,810 | -533 | -$20,938,905 |
| 4/7 | 1,014 | $39,834,990 | 1,590 | $62,463,150 | -576 | -$22,628,160 |
| Total | 7,176 | $281,909,160 | 10,284 | $404,006,940 | -3,108 | -$122,097,780 |
| *billions | ||||||
Source: www.hsx.vn
Tax news
Vietnam Value Added Tax cut extended to end of the year
Vietnam’s National Assembly has approved an extension of the 2 percent Value Added Tax reduction until the end of the year. The extended tax cut is expected to save consumers and businesses roughly VND 4 trillion or US$157 million a month between now and the end of December.
See also: Value Added Tax in Vietnam 2024: Quick Read.
Tourism news
Vietnam records 8.8 million tourist arrivals to May
Vietnam’s tourism arrivals reached 8.8 million between January and June of this year, an increase of 58.4 percent over the same period in 2023. That said, month on month June saw a decline in tourist numbers of about 9 percent. This is notable in that June is the peak summer travel period for the northern hemisphere.
See also: Vietnam Tourism Tracker 2024
The week ahead
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