In case you missed it…
How Well Prepared Is Vietnam for a Trump Presidency?
Most analysis in Vietnam of Trump’s election has centred around two key recurring themes: an increase in import tariffs in the United States as a direct impact on Vietnam; and, a likely stronger US dollar as a result of said tariffs and subsequently increased pressure on the dong. This article looks at how Vietnam might respond… Read More »
Banking and Finance News
State Bank governor lowers expectations of interest rate cut
The Governor of the State Bank of Vietnam has said that it will be difficult to see further interest rate cuts in the near future with credit demand increasing and the risk of increased pressure on the exchange rate too great, Hanoi Moi has reported.
Conversely, Business Forum Magazine is carrying details of a recommendation from Vietnam’s National Economics University–or NEU–to the government that the state bank should ‘urgently’ reduce lending rates. Specifically, the NEU is calling for a half-a-percent cut. It also says deposit insurance rates and reserve ratios should also be reduced, and that agricultural loans should be made available at zero-percent.
On that note, Nguoi Quan Sat, has covered the 10 percent credit growth reported by the Governor that has been achieved so far this year. The target for the year is between 14 and 15 percent, however, the governor has dampened expectations, commenting that the economy’s ability to absorb more capital is low.
See also: It’s Time to Talk About Vietnam’s Credit Growth Policy…
Bond activity cools in October as demand for capital subsides
There were 21 corporate bond issuances through private placements, valued at VND 19,678 billion or US$787.12 million, alongside four public offerings worth VND 1,800 billion or US$72 million in October, according to Vietnam Bond Market Association data. Over the year-to-date, 316 private placements have been completed, totalling VND 304,000 billion or US$12.16 billion, and 15 public offerings reached VND 28,854 billion or US$1.15 billion.
A couple of big names issuing bonds in October include VinFast which raised VND 6,000 or US$236.2 million and VietJet which raised VND 2,000 or US$78.7 million. Both companies did so through private placements.
See also: Vietnam’s Financial Sector: An Overview
State Bank open market operations: Repos up but T-bills languish
The State Bank of Vietnam has continued to intervene in the currency market with US$954.7 notably this is down to about US$3 billion worth outstanding this time last week. There were also reverse repurchase agreements outstanding to the tune of US$3.07 billion.
Of note, Vietcombank, generally considered the benchmark bank for commercial foreign currency rates, was selling US dollars for VND 25,502 a piece Wednesday, a new peak for the year. Conversely, it was buying US dollars for 25,180.
Dan Tri has contextualised this with black market prices. On the unofficial market US dollars were being bought for VND 25,570 and sold for VND 25,670, according to the publication.
Using Vietcombank as a reference point with a selling price of VND 25,502 and a black market buying price of VND 25,570, should someone choose to buy US dollars at Vietcombank and then sell them on the black market, the gain would be .27 percent.
See also: Vietnam Dong Tracker
Car news
VinGroup, group CEO commit collective US$3.35 billion to VinFast
VinGroup, one of Vietnam’s biggest conglomerates, has committed to lending its electric vehicle making subsidiary VinFast VND 35 trillion or US$1.38 billion, with the group’s CEO Pham Nhat Vuong committing a further VND 50 trillion or US$1.97 billion, between now and 2026.
Thanh Nien has reported that this is a back-up option to be utilised if the company cannot find capital sources elsewhere. It also notes that existing debt owed to VinGroup will be converted into shares of VinFast.
Nguoi Quan Sat, has placed this development in the context of VinFast becoming the “best-selling car brand in the Vietnamese market” alongside “achieving many significant successes in the international market”. That said, on the former, the bulk of vehicles VinFast has sold in Vietnam have been to its affiliate taxi company Xanh GSM. On the latter, it’s not clear what these successes are with VinFast’s North Carolina factory put on hold on the back of a poor reception in the US.
Dan Tri, however, whether intentional or not, raises questions about the commitment from Vuong to commit his “own money” (Dan Tri’s inverted commas) on account of 63 percent of VinGroup being owned by Vuong and affiliated shareholders. The publication estimates this to be worth about VND 97.3 trillion or US$3.84 billion with Vuong’s personal share worth VND 28 trillion or US$1.1 billion.
Of note, it has also been reported this week that VinFast will be spun off into a separate company from VinGroup.
See also: Media Relations in Vietnam: Lessons from VinFast
e-Commerce news
E-commerce packages from unregistered firms to be stopped at Vietnam border
Vietnam’s General Department of Customs has issued a dispatch directing customs officers to halt processing of e-commerce purchases from companies that are not registered with the Ministry of Industry and Trade.
Saigon News is saying that packages that don’t have details of the e-commerce platform from which they originated will be prohibited entry–it’s not clear how customs will distinguish between unregistered e-commerce platforms and packages from family or friends or platforms that are not required to be registered.
On that note, VN Express, carrying the same story, notes that companies that need to register are only those with Vietnamese domain names, that are in Vietnamese, or that conduct more than 100,000 transactions a year in Vietnam.
With this in mind, this latest dispatch may be very challenging to implement.
That said, there has been pressure on the authorities to protect domestic businesses from cheap imports from abroad in the wake of Temu’s high-profile market entry. In this context, this move looks to be more designed to allay some of those concerns rather than necessarily crackdown on unregistered e-commerce platforms.
See also: Temu in Vietnam: What’s Fair in Free Trade?
Electricity news
Vietnam power output up 10.6 percent January through October
Vietnam’s state power provider Electricity Vietnam has reported total electricity produced and imported in October 2024 to 25.96 billion kilowatt hours. This brings the total electricity produced and imported for the first ten months of the year to 258.7 billion kilowatt hours, reflecting a 10.6 percent increase over the first ten months of 2023.
The bulk of this power has been produced by burning coal which accounted for 48.7 percent, down slightly from 49.6 percent in September. Coal was followed by hydropower which provided 29.5 percent of Vietnam’s electricity supply in October.
Of note, earlier this year EVN made the decision to prioritise coal power production and store water in hydropower reservoirs for when coal power was at its peak, in order to shore up the power supply after blackouts in northern Vietnam last year.
See also: Can Vietnam Ever Quit Coal?
Vietnam’s energy mix 2024
| H1 | Q3 | October | ||||
| Power Source | kWh bns | % of total | kWh bns | % of Total | kWh bns | % of total |
| Coal-fired thermal | 126.3 | 56.9 | 115.3 | 49.6 | 125.99 | 48.7 |
| Hydropower | 39.25 | 18.9 | 65.57 | 28.2 | 76.31 | 29.5 |
| Renewable energy | 32.2 | 13.7 | 30.1 | 13 | 32.88 | 12.7 |
| Gas turbine | 19.2 | 8.6 | 17.2 | 7 | 18.46 | 7.1 |
| Imported electricity | 3.8 | 1.7 | 4 | 1.7 | 2.03 | 0.8 |
| Total | 151.4 | 99.8 | 232.1 | 99.8 | 255.67 | 98.8 |
Source: Electricity Vietnam
Health and fitness news
Calls for crackdown on bogus health claims in advertising grow louder
Vietnam’s Ministry of Health, in a report to the National Assembly has said the regulations on its end for regulating supplements and non-traditional medicines (often referred to as ‘functional foods’ in Vietnam) are sufficient and has instead called for greater penalties for advertising unproven health claims and counterfeit goods, Thanh Nien is reporting.
Nguoi Lao Dong has looked at this issue by breaking down several key cases of content creators selling goods online with fake health claims that have led to adverse health outcomes for consumers. A weight-gain milk promoted by TikTok influencer Dinh Thi Cuong, for example, received a number of complaints that it didn’t work and that it had in fact caused ‘diarrhoea, bloating, nausea’.
Conversely, Dan Tri has produced a long form piece looking at the techniques and tactics organisations selling these goods use. This includes using images of legitimate hospitals, doctors, and nurses without permission; and setting up fake hotlines for support from fake doctors and nurses. It also has comments from the Vietnam Functional Foods Association which laments the misuse of the term ‘functional foods’ for fake products, presumably because this damages legitimate actors in the industry (though it doesn’t say this explicitly).
Indeed, advertising of supplements and traditional medicines with questionable health claims is rife in Vietnam. This is despite restrictions already in place that limit what claims can and cannot be made. In this context, it doesn’t look like it’s the size of the penalties that is the problem, but rather enforcement of the law.
See also: Vietnam’s Supplements Market: Overview
Media news
Vietnam floats tax breaks for press agencies to boost struggling media industry
Vietnam’s Deputy Prime Minister and Minister of Finance Ho Duc Phoc has put to the National Assembly that corporate income tax breaks should be extended to newspapers and digital news. The current rate is 20 percent, however, the Minister has proposed reducing this to ten percent.
Tuoi Tre notes that news outlets have struggled in recent years on the back of greater proliferation of social media and subsequently a diversion of advertising funds to this new medium. It mentions that the revenue of some major news outlets has fallen considerably (see table below).
The publication goes on to stress the importance of the press in Vietnam.
“Press agencies do not operate simply as businesses but perform a particularly important task. That is to propagate the Party’s guidelines and the State’s policies and also to orient public opinion to strengthen people’s trust, fight against negativity in society, and refute the false arguments of hostile forces.”
See also: Vietnam News Media Industry Overview
New Vietnam Decree adds enhanced digital media regulations, ruffles feathers
Vietnam’s National Assembly has passed a law that will add additional regulations to social media networks including verifying the identity of Vietnamese users, collecting and storing their information, as well as enhancing content monitoring and compliance in line with government regulations. The new Decree takes effect from December 25 this year.
Of note, the new Decree has sparked interest from abroad on the grounds that it will largely apply to cross border service providers and looks a lot like it is designed to crack down on anti-government speech, and this is probably true.
However, it’s also worth noting that social media has become central to a huge amount of trade in Vietnam. Selling goods (and a lot of goods) through Facebook, Tik-Tok, and homegrown messaging app Zalo has become very common. Collecting taxes from vendors using these platforms, however, has been challenging–or at least in the local press it has been portrayed as such–not to mention they have also become a key means to sell supplements with bogus health claims as well as to raise funds through any number of scams.
What’s more, stipulations in this Decree are not particularly new either but rather fit in line with a number of other similar regulations that have been implemented over the last few years. That is not to justify these changes, simply to provide some additional context beyond the obvious.
See also: Key Internet Services Regulations in Vietnam 2024
Real estate news
Concerns grow about real estate debt being carried by Vietnam’s banks
At the end of September outstanding debt in the real estate industry was up 9.15 percent since the end of 2023 and this is raising concerns that risks, that have been prevalent over the last couple of years in the housing industry may be shifting to the banking industry.
24 Hour Money is carrying comments from Le Xuan Nghia, a member of the National Monetary Policy Advisory Council, in which he has suggested that growing real estate debt is putting the safety and sustainability of the banking industry at risk.
REA Times is carrying similar comments from Dinh The Hien, an economic expert, who also suggests that this growing debt could also indicate that Vietnam’s banks have relaxed their lending criteria.
Both articles seem to stem from the National Economics University policy paper mentioned earlier with respect to interest rates that was submitted to the Prime Minister on November 1.
See also: Real Estate in Vietnam: Industry Overview 2024
Mixed feelings on Vietnam land rent changes with local media canvassing broad opinions
A conference Saturday organised by the Ho Chi Minh City Business Association has produced some very mixed media coverage with key takeaways for media firms in attendance varying widely.
Nguoi Lao Dong, for example, has led with comments from Dao Quang Duong the Deputy Head of the Land Economics Division, Department of Natural Resources and Environment, who has said that the department has not received any negative feedback on the most recent land price list. (Prices are much higher than in the past with regulations capping growth removed as part of the new Land Law which kicked in at the start of August).
Conversely, Saigon News is carrying comments from To Ngoc Ngoi, General Director of Saigon Forest Products Production, who has estimated the new price list has increased the company’s land rent by 30 percent.
On the same topic, but not the same event, Dai Doan Ket has calculations from the Ministry of Construction that suggest the new land price list will increase housing costs by between 15 and 20 percent–Basically, several taxes and fees are determined as a percentage of the land value. Ergo, with increase in the land valuations these fees and taxes will rise too eventually being passed on to home buyers.
See also: Real Estate in Vietnam: Industry Overview
Stock market news
Foreign traders net-sell another US$152.2 million of HoSE stocks
Over the last five trading sessions, to the close of business on November 14, in total, foreign investors net-sold US$152.2 million worth of HCMC Stock Exchange stocks. This raises the total net-sold from the market by foreign traders this year to US$3.25 billion or US$3.75 billion over the last 12 months.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND | US$ | VND | US$ | VND | US$ |
| 8/11 | 856 | $33,700,787 | 2,024 | $79,685,039 | -1,168 | -$45,984,252 |
| 11/11 | 940 | $37,007,874 | 1,897 | $74,685,039 | -957 | -$37,677,165 |
| 12/11 | 996 | $39,212,598 | 1,605 | $63,188,976 | -609 | -$23,976,378 |
| 13/11 | 1,518 | $59,763,779 | 1,693 | $66,653,543 | -175 | -$6,889,764 |
| 14/11 | 1,570 | $61,811,024 | 2,527 | $99,488,189 | -957 | -$37,677,165 |
| Total | 5,880 | $231,496,063 | 9,746 | $383,700,787 | -3,866 | -$152,204,724 |
*billions
Source: Vietnam Stock Market Tracker
Transport news
Vietnam Transport Ministry seeks one year extension on new HCMC airport
Vietnam’s Ministry of Transport has gone to the National Assembly requesting an extension of the deadline for Ho Chi Minh City’s second airport which is currently under construction in Long Thanh. At the same time, the Ministry is also asking for permission to add a second runway to the first phase of the project.
Notably, some local news outlets have connected these two requests. Nguoi Lao Dong, for example, has drawn the conclusion that adding the new runway will mean the project will need to be delayed.
That said, Phap Luat has reported that the extension is required as a result of delays caused by the bidding process. Though it doesn’t go into detail, somewhat ironically, at least one of the problems with the bidding process was that in a first round of bidding none of the applicants met the bidding criteria, with key firms in contention raising issues about the timeline for the project in that they believed it to be short.
See also: Vietnam’s Aviation Industry: Overview
Data, reports released this week
There has been a slew of new data released as is pretty standard this time of the month. Analysis will be forthcoming in the near future, but for the time being here is the raw data:
- Vietnam Tourist Arrivals Tracker: October Update [data set]
- Vietnam Car Sales Tracker: October Update [data]
- Vietnam Imports Tracker: October Update [data set]
- Vietnam Exports Tracker: October Update [data set]
A couple of new reports too:
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.