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Vietnam News Roundup: May 3 to May 9

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Aviation news

Vietnam aviation regulator investigating high airfares

The Civil Aviation Authority of Vietnam has reached out to consumers who believe they have been overcharged for airfares, VN Economy has reported. Airfares are regulated in Vietnam with price caps over which ticket prices cannot go. It’s not clear if there has been a breach of these regulations but high-airfares are currently being covered extensively in local media. Of note price caps on ticket prices have been raised as one key issue facing local airlines.

See also: Vietnam’s Airline Industry Turbulence: Unpacked

Banking and finance news

No new contagion risk from SBV support of distressed bank: Fitch Ratings

Reuters reported earlier this year that the State Bank of Vietnam–the SBV–had been injecting cash into Saigon Commercial Bank which was at the centre of Vietnam’s biggest bank fraud ever. This intervention was to the tune of about US$24 billion. Fitch Ratings, however, has said that it is maintaining its current rating of Vietnam’s banking sector arguing that:

  • The intervention speaks to the SBV’s willingness to step up and support distressed banks;
  • The support is loan-based and could be recovered if assets tied to the aforementioned fraud are recovered; and
  • There have been no ‘sudden share price movements, deposit flight or regulatory response’ among other major banks.

Vietnam’s forex reserves could be dangerously low

The State Bank of Vietnam has spent an estimated US$500 to US$700 million of its foreign exchange reserves over the last few weeks in an attempt to prop up the dong, The Investor has reported. This estimate came from WiResearch which also estimated Vietnam’s forex reserves to be at around US$90 billion–Vietnam’s imports were just over US$30 billion in April and based on these estimates, Vietnam’s forex reserves would now be below the three months’ worth of imports recommended by the International Monetary Fund.


Of note, the SBV is also continuing to use treasury bills to suck up some of the excess liquidity in the market.

SBV open market operations, outstanding loans

IssuedLengthMaturingVNDUS$% p.a.


SBV open market operations, outstanding treasury bills

IssuedLengthMaturingVNDUS$% p.a.


Currency news

UOB says Fed rate hike will see dong appreciate by year-end

Singapore’s United Overseas Bank–or UOB–has said that it expects the dong to appreciate between now and the end of the year, The Investor has reported. This is reflected in UOB’s Quarterly Global Outlook 2Q24 which suggests that a recovery in China will likely strengthen the local currency as well as ‘recovery momentum in the external trade and manufacturing sectors’.

See also: The Dong’s Wild Ride: Unpacked 2024

Economy news

Vietnam’s non-market economy status has US hearing

The US Department of Commerce has held a hearing into Vietnam’s application to have its non-market economy status revoked, Reuters is reporting.

Opponents of the change said that Vietnam was being used to circumvent trade barriers on Chinese goods and that claims Vietnamese workers were permitted to organise freely and independently were false. Human Rights Watch released this statement outlining key arguments supporting this claim which is a worthwhile read: Vietnam: False Claims on Labor Rights.

See also: Unpacked: Vietnam’s Non-Market Economy Review 

Energy news

MoIT acknowledges Vietnam unlikely to reach 2030 offshore wind target

The Ministry of Industry and Trade–the MoIT–has said it is unlikely that Vietnam will meet its offshore wind power target of six gigawatts by 2030, The Leader is reporting. With all of the various departments and ministries that need to coordinate to make offshore wind a reality, MoIT has said it is unlikely said target will be reached. That said, MoIT has put together a draft of a pilot project so there is still some forward momentum.

See also: Vietnam’s Offshore Wind Power Holdup: Unpacked

Gold news

State Bank still struggling to make gold auctions work 

Vietnam held its second successful gold auction for the year this week, however, the State Bank of Vietnam–the SBV–only managed to sell 3,400 SJC gold bars out of 16,800 up for grams, Tuoi Tre has reported.  Of note, multiple gold auctions have been announced in the last few weeks but have been cancelled due to a lack of interest. 

It’s not clear what the SBV is trying to achieve. On the one hand, it has publicly announced that gold auctions aim to increase supply and drive down the price to be more in line with world gold price. On the other hand, however, it is setting its price relative to the current market price in Vietnam–ostensibly looking to make a profit and reduce the price of gold incrementally. However, with huge demand and only a very limited supply entering the market, this looks to be making the situation worse with gold prices currently higher than before the auctions started.

For more information see: The Gold Price in Vietnam: Explained 2024

Investment news

Vietnam adds US$3.14 billion in foreign direct investment commitments in April

Vietnam pulled in an additional US$3.14 billion dollars worth of foreign direct investment commitments bringing its total for the year to US$9.27 billion. In terms of the countries making the biggest investments in April, it was Japan, then Korea, followed by Tawan with US$437 million, US$417 million, and US$416 million, respectively. It was, as per usual, the manufacturing and processing sector that was the stand-out performer pulling in a whopping US$2.23 billion as more foreign firms look to make use of Vietnam’s huge low-cost workforce, among other things.

See also: How to Open a Factory in Vietnam: Ultimate Guide 2024

Media news

Vietnam ranks 176th on World Press Freedom Index

Vietnam has come in seven to last on the Reporters Without Borders World Press Freedom Index beating out Eritrea, Syria, Afghanistan, North Korea, Iran, and Turkmenistan. The report notes that Vietnam is the fourth biggest jailer of journalists in the world.

For background on how Vietnam’s censorship regime works see: Vietnam News Media Regulations: An Overview

Stock market news

Serious doubts raised re: new stock trading system

Vietnam’s new KRX stock trading system which was slated to begin operating on May 2 but has been delayed, is not up to scratch according to sources quoted by The Investor. Of note, one ‘representative of… a securities company’  told the publication that:

“The testing process still has many errors, and there is no guarantee that serious errors or even data loss will not occur when the system officially runs”.

Of note, Vietnam’s current trading system does not have the technical capabilities to meet several criteria for a stock market upgrade from frontier to emerging. Hoping for an upgrade this year, the aforementioned challenges will need to be addressed pretty soon.

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

Foreign investors net withdraw more than US$82 million

Foreign traders on the Ho Chi Minh City Stock Exchange have continued to withdraw from the local bourse. Over the last five trading sessions, a huge US$82 million was withdrawn with US$66.9 million withdrawn on Thursday alone. This is the second-biggest net withdrawal in a single day this year. That said, the VN-Index still jumped a little over 27 points since last Friday so there are still opportunities to be found.

See also: How to Open a Trading Account in Vietnam: Technical Guide 2024 

Foreign investor trading activity, last five trading sessions to May 9


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