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Banking and Finance News
Vietnam bank lowers foreign ownership limit below Aussie bank’s current holding
Vietnam International Bank or VIB has announced it will lower its foreign ownership limit from 20.5 percent to 4.99 percent. This is of interest in that the Commonwealth Bank of Australia currently owns 19.7 percent of the company–It’s not clear what this might mean for the Commonwealth Bank nor why the bank made this decision.
It could be to give local shareholders greater control over what the Commonwealth Bank does with its stake–It will not be able to negotiate a sale with another overseas bank itself but rather will need to work through its local partners.
That said, it could also be that the bank wants to diminish the influence of foreign banks on its local operations. This wouldn’t be unusual–a number of foreign banks have dipped their toes in Vietnam’s banking industry only to find it to be a challenging environment in terms of its unique management practices that sometimes conflict with their own.
See also: Banking in Vietnam: Industry Overview 2024
State Bank open market operations as of COB June 13
The State Bank of Vietnam has continued to issue treasury bills to suck up excess liquidity in the economy. There are currently US$2.8 billion worth of T-bills outstanding as of the close of business on June 13. Also of note, the State Bank has outstanding loans to local banks to the tune of US$117 million.
Outstanding loans
| Issued | Length | Maturing | VND* | US$ | % p.a. |
| 10-Jun | 7 | 17-Jun | 894.57 | $35,160,448 | 4.50 |
| 11-Jun | 7 | 18-Jun | 1,530 | $60,131,256 | 4.50 |
| 13-Jun | 7 | 20-Jun | 551 | $21,644,878 | 4.50 |
| Total | 2,975.16 | 116,936,581.19 |
*billions
Outstanding T-bills
| Issued | Length | Maturing | VND* | US$ | % p.a. |
| 17-May | 28 | 14-Jun | 3,100 | $121,843,330 | 3.75 |
| 20-May | 28 | 17-Jun | 800 | $31,443,440 | 3.85 |
| 21-May | 28 | 18-Jun | 500 | $19,652,150 | 3.90 |
| 22-May | 28 | 19-Jun | 650 | $25,547,795 | 4.00 |
| 23-May | 28 | 20-Jun | 750 | $29,478,225 | 4.20 |
| 27-May | 28 | 24-Jun | 200 | $7,860,860 | 4.20 |
| 29-May | 28 | 26-Jun | 5,150 | $202,417,145 | 4.25 |
| 30-May | 28 | 27-Jun | 4,900 | $192,591,070 | 4.25 |
| 31-May | 28 | 28-Jun | 16,250 | $638,694,875 | 4.25 |
| 3-Jun | 28 | 1-Jul | 8,450 | $332,121,335 | 4.25 |
| 4-Jun | 28 | 2-Jul | 6,150 | $241,721,445 | 4.25 |
| 28-May | 35 | 2-Jul | 3,700 | $145,425,910 | 4.20 |
| 5-Jun | 28 | 3-Jul | 3,160 | $124,201,588 | 4.25 |
| 5-Jun | 28 | 3-Jul | 5,800 | $227,964,940 | 4.25 |
| 5-Jun | 28 | 3-Jul | 4,900 | $192,591,070 | 4.25 |
| 10-Jun | 28 | 8-Jul | 2,100 | $82,539,030 | 4.25 |
| 11-Jun | 28 | 9-Jul | 1,300 | $51,095,590 | 4.25 |
| 12-Jun | 28 | 10-Jul | 600 | $23,582,580 | 4.25 |
| 13-Jun | 28 | 11-Jul | 2,650 | $104,156,395 | 4.25 |
| Total | 71,110 | 2,794,928,773 |
*billions
Corruption news
Esports match fixing highlights breadth of corruption sports in Vietnam
A total of 32 players and coaches have been suspended from the Vietnam Championship Series of the video game League of Legends after allegations of match-fixing surfaced. The allegations came to light back in March and saw the competition put on hold while an investigation took place.
Professional sports leagues in Vietnam have struggled to develop on the back of limited investment and low pay for sports players which has resulted in players developing side hustles like match-fixing. Notably, the Vietnamese Premier League was voted the third most corrupt soccer league in the world back in 2016, and not much has been done to clean up Vietnamese soccer since–As recently as February, five players were charged for match-fixing.
This speaks to the proliferation of corruption in Vietnam and serves as a reminder of just how heavily embedded it can be in Vietnamese society and business more broadly.
See also: Corruption in Vietnam: Cheat Sheet 2024
Energy news
Vietnam solar productions slows on end to antidumping moratorium
A moratorium on antidumping duties on solar panels shipped from Vietnam to the US has ended with two key suppliers signalling they will be slowing down production in Vietnam as a result. China’s Longi Green Energy Technology and Trina Solar, specifically, have said they will be reducing their output from factories in Thailand and Vietnam.
At the crux of the problem with said solar panels is the argument that Chinese goods are being finished in Vietnam and shipped to the US to get around antidumping and countervailing duties on these goods coming out of China. This is having broader implications beyond solar panels as well. Of note, it has also been a key argument against Vietnam’s redesignation from a non-market economy to a market economy by the US Department of Commerce.
See also: Unpacked: Vietnam’s Non-Market Economy Review
Gold news
Reports Vietnam to allow gold imports later this year may have been premature
Huynh Trung Khanh, Vice President of the Vietnam Gold Trading Association, was quoted by Reuters earlier this week as saying that Vietnam will allow gold imports later this year. He has since made overtures to correct the record, telling local media he only expected this to happen but that he was not aware of a decision from the State Bank either way.
Of note, there was a similar situation last month whereby Reuters reported that the state power provider had asked a key Apple supplier to reduce its power consumption, however, the state power provider later came out and said this wasn’t accurate.
It should be noted that government ministries and departments and state-owned enterprises generally do not respond to requests for comment from foreign media. With this in mind, a simple solution might be to reform this practice.
Labour news
Adidas, New Balance suppliers struggling to find workers in southern Vietnam
Vietnam Samho, which makes shoes for big international brands like Adidas and New Balance, is struggling to find factory workers for its southern Vietnam factory, VN Express is reporting. It currently needs about 1,500 workers but has only managed to recruit about 300 in the last two months.
Some of the challenges raised in this article, with respect to hiring workers, are that workers have more job options other than factory work, workers no longer need to move to population centres with many manufacturing operations opening in tier two cities and provinces, and workers that moved back to their hometowns during the COVID-19 pandemic have still not returned on the back of the general uncertainty that the pandemic created.
Stock market news
Securities accounts in Vietnam reach almost 8 million
Vietnam now has 7.87 million registered stock trading accounts with local brokerages, according to data from the Vietnam Securities Depository and Clearing Corporation. In May, 132,220 new accounts were opened or 4,265 per day on average but this is not necessarily a good thing.
In September MB Securities closed 543,753 inactive accounts it had on file. Vietnam’s Stock Market Development Strategy, however, targets 9 million accounts by 2025 and 11 million accounts by 2030. With these targets in mind, and the clock ticking, it would seem counterintuitive to close any more accounts even if they are not being used. In this light, these latest numbers from the VSDCC don’t really say much.
See also: How to Open a Trading Account in Vietnam: Technical Guide 2024 (it’s much harder for foreigners).
Vietnam shares, cash worth US$119.5 million to be liquidated in BlackRock ETF exit
US investment firm BlackRock has announced it will liquidate its iShares Frontier and Select EM ETF. About 29 percent of the fund is invested in Vietnamese stocks and cash both in the Hanoi Stock Exchange and the Ho Chi Minh City Stock Exchange. Those investments were worth about US$119.5 million as of June 10.
This is in line with a broader exodus from Vietnam’s stock markets of foreign investors. Since the start of the year, just shy of US$1.58 billion has been withdrawn by non-Vietnamese investors for a number of reasons like exchange rate pressures, higher returns elsewhere, and general uncertainty with respect to the local economy.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign traders net-withdraw US$213.4 million from HoSE
Foreign traders have continued to sell down their positions in the Ho Chi Minh City Stock Exchange. In total, just over US$213.4 million was withdrawn from the market over the last five trading sessions to the close of business on June 13. This brings the total net withdrawn from the market by foreign traders to US$1.64 billion so far this year.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND* | US$ | VND* | US$ | VND* | US$ |
| 7/6 | 1,244 | $48,894,549 | 1,721 | $67,642,700 | -477 | -$18,748,151 |
| 10/6 | 1,275 | $50,112,983 | 2,381 | $93,583,538 | -1,106 | -$43,470,556 |
| 11/6 | 1,179 | $46,339,770 | 3,024 | $118,856,203 | -1,845 | -$72,516,434 |
| 12/6 | 1,818 | $71,455,217 | 2,406 | $94,566,146 | -588 | -$23,110,928 |
| 13/6 | 1,645 | $64,655,574 | 3,059 | $120,231,854 | -1,414 | -$55,576,280 |
| Total | 7,161 | $281,458,092 | 12,591 | $494,880,441 | -5,430 | -$213,422,349 |
| *billions | ||||||
Source: www.hsx.vn
Tax news
Tax from cross-border service providers possibly hindering local office requirements
Cross-border service providers–Facebook, Apple, and Netflix, for example–have contributed to Vietnam’s state coffers to the tune of VND 4 trillion or about US$157.4 million from the start of January to May 15 of this year. This is part of an initiative to tax firms without local offices that was launched in 2022.
This is perhaps most interesting in the context of Vietnam’s Cybersecurity Law. Specifically, the law requires foreign firms to open a local office, which many of them have simply not done, hence, paying the aforementioned tax as a cross-border service provider. That said, enforcing the law would likely mean banning these cross-border service providers until they comply and forgoing millions of dollars in tax revenue. It’s not clear that all key decision-makers would be on board with this action.
Trade news
Increased dependence on coal-fired power spurs coal imports increase in May
May customs data has shown that Vietnam imported 6.5 million tons of coal in May representing a 10 percent increase in coal imports over April. This is in line with reports that Vietnam is ramping up its coal-fired power production to stave off the electricity shortages northern Vietnam experienced over the summer months of 2023.
Of note, the price it is paying to its key suppliers has varied widely over the first five months of the year. Its most expensive coal imports have come from China averaging US$302 per ton versus its cheapest coal imports from Laos which have cost US$68 a ton by the same metric. On average, it has paid US$166 per ton. See data.
Vietnam car sales increase in May, but down year-to-date
Car sales in Vietnam hit 21,769 units in May of this year–excluding Mercedes-Benz, Hyundai, Tesla, Nissan and a handful of other car makers–representing a 13 percent increase over May of last year, according to the Vietnam Automotive Manufacturers Association. Overall, however, for the year-to-date, car sales were down 7 percent over the same period in 2023.
See also: Vietnam’s Automotive Industry 2024: Foreign Investor Cheat Sheet
The week ahead
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