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Vietnam News Roundup: May 17 to May 23

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Aviation news

Airlines are making just US$1 per passenger: Vietnam Airlines exec.

Airlines around the world make just US$1 per passenger, Deputy General Director of Vietnam Airlines, Dang Anh Tuan, has told a seminar in Ho Chi Minh City. Dang goes on to lament the razor-thin margins in the industry and attributes increased ticket prices to rising fuel prices and a stronger US dollar.

See also: Vietnam’s Airline Industry Turbulence: Unpacked

Ground broken on second terminal at Hanoi airport

A second terminal for Vietnam’s Noi Bai International Airport in Hanoi is underway with a groundbreaking ceremony last Sunday. The project is estimated to cost VND 5 trillion or US$196.5 million, will cover 6 hectares, and is scheduled to be completed by the end of 2025.

Of note, overcrowding has become a huge problem in Vietnam’s biggest cities. Tan Son Nhat International Airport in Ho Chi Minh City was built for 28 million visitors a year but welcomed 34 million arrivals in 2022. Similarly, Hanoi’s Noi Bai International Airport was built for 25 million visitors a year but was expected to finish 2023 with about 30 million arrivals.

Banking and finance news

Vietnam corporate bond issuances up 29.1 percent

Vietnam’s corporate bond issuances increased in April by 29.1 percent over March, with VND 13.94 trillion or US$547.8 million issued. This has brought the total bond issuances since the start of the year to VND 36,088 billion or US$1.42 billion. (Note that state media has reported these figures as trillions of dong rather than billions, however, this would put corporate bond issuance this year at over US$1.4 trillion or about three-and-a-half times Vietnam’s GDP).

See also: Vietnam’s Financial Sector: An Overview 2024

Total bad debt of 28 Vietnam banks up 14 percent at end March

The financial reports of 28 banks, analysed by Saigon Securities Corporation, have revealed that bad debts among those 28 banks have increased by 14 percent since the end of 2023. At the end of March, those bad debts totaled VND 224.14 trillion or US$8.8 billion.

Car news

Drivers avoid Vietnam smart car park on comparatively high prices

A smart carpark in central Vietnam’s Danang, after two months of being operational, has reached just 5 percent of its capacity. This is due to the high cost of parking relative to traditional parking lots, according to Nguyen Trung Nghia, Deputy Director of the Danang Department of Transport. 

Vietnam’s cities have a carpark problem. Built around motorbikes most cities are cramped with narrow streets and very little room to park a car. Car numbers, however, have continued to grow and as a stop-gap vehicles are being parked just about anywhere space can be found.

This, however, is unsustainable with the go-to solution, sidewalks, not built for the weight and cracking under the pressure. There also aren’t all that many sidewalks that are wide enough to accommodate a car with what space there is very close to, if not already, surpassing capacity.

In this context, more car parks, particularly more parking garages like the aforementioned smart car park in Danang are sorely needed. What this suggests, however, is that car owners may not be willing to pay for it and indeed there is a huge difference with drivers charged about US$4 a day to park on the pavement in Hanoi but the new carpark in Danang asking for US$1 per hour.

Vietnam’s Vinfast runs into more trouble in the US over unpaid rent

Vietnam’s first and only electric car maker is being sued in the US for unpaid rent. Real estate services firm SPG Center is reportedly chasing arrears from a rental agreement of US$356,000. Vinfast has denied the claim.

This comes amid revelations the firm is being sued by a real estate firm in California for unpaid rent and that the National Highway Traffic Safety Administration is investigating a car crash in California in which four people died when the VinFast car they were driving crashed into a tree.

See also: Insolvency in Vietnam 2024: Unpacked

Consumer news

Ultra-luxury smartphone firm adds another Vietnam retail store

Luxury smartphone operator Vertu has opened a second store in Vietnam’s Ho Chi Minh City. The store will sell high-end phones that retail for around VND 135 million, however, the firm’s highest-priced phone runs at VND 12.2 billion or US$479,000. Of note, Vietnam’s GDP per capita is about US$4,000.

Currency news

State Bank spends US$1.45 billion of forex reserves

The State Bank of Vietnam dropped another US$1.45 billion propping up the local currency, from Monday to Thursday of this week, according to ACB data. This brings the total spend since mid-April to US$2.95 billion.

See also: The Dong’s Wild Ride: Unpacked

State Bank open market operations as of COB May 23

The State Bank of Vietnam has continued to issue treasury bills to suck up excess liquidity in the economy. There are currently US$2.36 billion worth of T-bills outstanding as of the close of business on May 23. Also of note, the State Bank made loans to local banks to the tune of almost US$1.7 billion on Thursday alone.

Outstanding loans

IssuedLengthMaturingVND*US$% p.a.
17-May724-May111$4,338,5173.75
20-May727-May151$5,933,7574.25
21-May728-May2,737$107,479,7974.25
22-May729-May25,000$981,564,6074.50
23-May146-Jun43,064$1,690,792,4354.50
Total71,0632,790,109,113

*billions

Outstanding T-bills

IssuedLengthMaturingVND*US$% p.a.
26/042824-May3,900$153,124,1403.75
02/052830-May2,100$82,451,4603.75
03/052831-May4,600$180,607,9603.50
06/05283-Jun11,990$470,758,5743.75
07/05284-Jun7,200$282,690,7203.75
08/05285-Jun5,500$215,944,3003.75
08/05285-Jun5,550$217,907,4303.75
09/05286-Jun3,700$145,271,6203.75
10-May287-Jun3,700$145,271,6203.75
13-May2810-Jun1,500$58,893,9003.75
14-May2811-Jun550$21,594,4303.75
15-May2812-Jun200$7,852,5203.75
16-May2813-Jun650$25,520,6903.75
17-May2814-Jun3,100$121,714,0603.75
20-May2817-Jun800$31,410,0803.85
21-May2818-Jun500$19,631,3003.90
22-May2819-Jun650$25,520,6904.00
23-May2820-Jun750$29,446,9504.20
Total56,9402,235,612,444

*billions

Source: www.sbv.gov.vn 

Electricity news

Apple supplier Foxconn was asked to reduce its power use in Vietnam

Officials in Vietnam asked Apple supplier Foxconn, among other manufacturers in northern Vietnam, to voluntarily reduce their power use by 30 percent, ‘two people familiar with the matter’ told Reuters. This is after power shortages last summer cost Vietnam’s economy about US$1.4 billion, according to World Bank estimates.

Vietnam Electricity denies Apple supplier asked to reduce power use 

Vietnam’s state power provider, Electricity Vietnam or EVN for short, said reports it had asked Apple supplier Foxconn to voluntarily reduce its power use by 30 percent, were incorrect. It did not, however, elaborate on its claim other than to say ‘EVN has built power supply scenarios and implemented solutions’, according to Zing News.

That said, it was reported back in April that Northern Vietnam’s electricity consumption could increase by as much as 17 percent this summer. It was also reported that the supply of electricity has increased by only about 10 percent.

See also: Electricity in Vietnam: Foreign Investor Cheat Sheet 2024

Land news

New Land Law start-date slated for July with NA approval

The government has submitted amendments to the new laws on Land, Housing, and Real Estate Businesses, to the National Assembly requesting that they take effect from July this year. Previously the bulk of said laws were slated to kick in from January 1 2025.

Most submissions made by the government to the National Assembly are approved and this will likely be no exception. 

See also: Vietnam’s Law on Land 2024: Foreign Investor Cheat Sheet

Media news

Real estate news outlet fined, licence revoked for ‘misquoting sources’

CafeLand.vn, a popular real estate and business news website, has been fined VND 25 million or about US$1,000 for ‘misquoting sources’ and for ‘journalising’, according to Phap Luat. It has also reportedly had its licence to operate a website revoked for three months, however, as of writing the site was still online.

‘Journalising’ is the act of registering as a magazine or social media site, but then slowly transitioning to be more like a news outlet.

See also: Vietnam News Media Regulations 2024: An Overview

Political news

Vietnam lost another member of the politburo

Truong Thi Mai who was, until last Thursday, the Standing Secretary of the Secretariat, has resigned from her position. This was after it was revealed there were ‘violations and shortcomings’ in her work. Resignations among Vietnam’s leadership have become common of late with the president resigning in March and the Chairman of the National Assembly resigning just weeks ago.

Vietnam gained a new president, NA chairman

The former head of the Ministry of Public Security, To Lam, was confirmed as the new president of Vietnam. Tran Thanh Man was also confirmed as the new Chairman of the National Assembly. This completes a new look ‘four pillars’ in which security is arguably the priority

Stock market news

Foreign traders continue to withdraw from the HoSE

Foreign traders have continued to sell down their positions in the Ho Chi Minh City Stock Exchange. In total, US$123 million was withdrawn from the market over the last five trading sessions.

Foreign trader activity, last five trading days

BuySellChange
DateVND*US$VND*US$VND*US$
17/51,437$56,420,3562,230$87,555,598-793-$31,135,242
20/51,784$70,044,4782,606$102,318,336-822-$32,273,857
21/51,330$52,219,2582,060$80,880,956-730-$28,661,698
22/51,395$54,771,3272,255$88,537,163-860-$33,765,836
23/52,226$87,398,5482,156$84,650,16670$2,748,382
Total8,172$320,853,96711,307$443,942,218-3,135-$123,088,251
*billions

Source: www.hsx.vn 

See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024

September 2 possible start date for new stock trading system

The General Director of Saigon-Hanoi Securities, Nguyen Chi Thanh, has suggested either September 2 or around the Lunar New Year in 2025 as a possible launch date for the Ho Chi Minh City Stock Exchange’s new trading system. Nguyen says that the firm is still waiting on documentation and guidance from the exchange and that this is confusing investors. Ergo, traders are not ready.

The exchange has kept mum on the issue.

Of note, the KRX is a key piece of the puzzle needed to facilitate Vietnam’s upgrade from a frontier to an emerging market.

See also: Vietnam’s Stock Market Upgrade Opportunity: Unpacked.

Trade news

US agricultural exports scouting boost through trade mission to Vietnam

The United States Department of Agriculture is organising a trade mission in September for US agricultural producers to Vietnam. This is in line with broad efforts on the part of the USDA to boost agricultural exports to this rapidly developing economy.

Postponement of anti-dumping duties on Vietnam solar panels to end in June

A postponement of anti-dumping duties on solar panels entering the US from Vietnam will come to an end in June, the White House has said. The postponement was put in place in June of 2022 by the US President after the Department of Commerce found that Chinese solar panel producers were using Vietnam, Cambodia, Thailand and Malaysia as intermediaries to get around US import duties.

The week ahead

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.

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