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Paying For Vietnam’s High-Speed Rail: Unpacked
Vietnam’s Transport Ministry has said that Vietnam’s high-speed railway project connecting Hanoi and Ho Chi Minh City will utilise domestic finances and technology, as opposed to support from abroad. It is, however, expensive and financing it with even limited foreign support will likely be challenging… Read More »
Banking and Finance News
Top 10 Vietnam securities firms gain 2.67 percent market share Q3 2024
The top 10 securities trading firms in Vietnam added a collective 2.67 percent to their collective market share in the third quarter of 2024 compared to the second quarter of the year, according to Ho Chi Minh City Stock Exchange data. The top ten now account for 67.81 percent of the market up from 64.14 percent.
See also: Vietnam Securities Industry: Overview
Vietnam corporate bond issuances halve month-on-month in September
Vietnam’s corporate bond market saw 25 bond issuances–24 private and 1 public–worth a collective VND 23,800 billion, US$958 million, in September, according to data from the Vietnam Bond Market Association. This was a sizable fall compared to August in which a total of 45 bond issuances–43 private and 2 public–worth a collective VND 48,995 billion, US$1.99 billion were issued.
There were also a total of 26 announcements related to late interest payments made by corporate bond issuers in Vietnam, amounting to VND 239.4 billion or US$$9.6 million and two announcements concerning late principal payments, with a total value of VND 550.4 billion or US$22.2 million.
See also: Vietnam’s Financial Sector: An Overview
State Bank reverse repos slow to a trickle
There was US$109 million in reverse repose outstanding to local banks as of the close of business on October 10. Notably, this is a significant decline over the same time last week when there was US$1.5 billion outstanding. Notably, no new reverse repos have been issued since last Friday.
See also: Vietnam Dong Tracker: Daily Updates.
Outstanding reverse repos to Vietnam banks
Issued | Length | Maturing | VND* | US$ | % p.a. |
3-Oct | 7 | 10-Oct | 2,265.27 | $91,157,863 | 4.00 |
4-Oct | 7 | 11-Oct | 451.94 | $18,186,744 | 4.00 |
Total | 2,717.2 | $109,344,606.2 |
*billions
Economy news
AMRO lowers ASEAN growth forecast on Vietnam, Indonesia downward revisions
ASEAN+3 Macroeconomic Research Office–AMRO–has lowered its growth forecast for the ASEAN region from 4.8 percent to 4.7 percent after revising down the GDP growth forecasts of Vietnam and Indonesia by a tenth of a point each, according to the body’s ASEAN+3 Regional Economic Outlook Update, October 2024.
“The sharp but short-lived market adjustments that we witnessed in early August is a reminder of the risk of further spikes in financial market volatility. The potential escalation of protectionist policies following the US presidential election is another key risk for the region,” AMRO Chief Economist Hoe Ee Khor noted in a press release from the group.
Vietnam’s GDP hits 7.4 percent in Q3 2024
Vietnam’s GDP grew by 7.4 percent in the third quarter of 2024 compared to 2023, according to data from the General Office of Statistics. A total of 4.08 percent of Vietnam’s GDP this year has come from the forestry and fishery sector; with industry and construction accounting for a further 48.88 percent and the service sector accounting for the remaining 47.04 percent.
Vietnam’s Consumer Price Index falls to 2.63 percent
Vietnam’s Consumer Price Index slowed in September over August recording an increase of just 2.63 percent compared to August’s 3.45 percent. Overall CPI remained steady at 4.04 percent safely within the government’s target range for the year of between 4 and 4.5 percent. Core inflation, meanwhile, was hovering at 2.54 percent over September last year.
See also: Vietnam CPI Tracker
Vietnam risking “one-way connector” role in global trade: World Bank
The World Bank, in its East Asia and the Pacific Economic Update October 2024 increased its GDP growth forecast for Vietnam for this year from 5.5 percent in April to 6.1 percent in October. It did, however, also warn that this strong growth may not last.
“Countries like Vietnam have benefited from “connecting” major trading partners as global tensions rose, but the scope for playing such a role may be shrinking,” it says.
“Vietnamese firms exporting to the US saw sales grow almost 25 percent faster than those exporting to other destinations over the period 2018–2021. However, economies may now be limited to playing a “one-way connector” role.”
“While countries have been able to harness imports and investment from China to boost exports to the US, investment from the US has not boosted exports to China. Furthermore, the application of more stringent rules of origin may limit even the one-way connector role.”
The World Bank goes on to recommend “deep trade agreements with large trading partners” to ensure continued economic growth.
Vietnam growth risks ‘tilted toward the downside’: AMRO
The ASEAN+3 Macroeconomic Research Office–or AMRO–has issued a press release outlining key challenges for the Vietnamese economy found in its annual consultation visit to Vietnam last month. Specifically, it lists:
- Risks to growth are tilted towards the downside due to weaker-than-expected consumer demand in the U.S., a sharp growth slowdown in Europe, and slower growth in China.
- Vietnam’s export recovery is at risk due to potential changes in U.S. trade policy following the U.S. Presidential election.
- The financial sector faces rising credit risks from an uneven economic recovery and typhoon damages, with a loan moratorium program masking weak credit quality.
- Some developers struggle with debt repayment and refinancing due to delays in new real estate laws.
- Long-term challenges include inadequate infrastructure, insufficient skilled labour, and under-developed domestic supporting industries and MSMEs.
- Emerging risks include cyber threats, extreme weather, and a rapidly ageing population, impacting macro-financial stability.
See also: Vietnam’s Economy: Everything You Need to Know 2024
Electricity news
EVN Reports 10.9 percent increase in power output from January to September 2024
Vietnam’s state power provider Electricity Vietnam has reported that the total electricity produced and imported in September 2024 was 24.56 billion kilowatt hours. This brings the total electricity produced and imported for the first nine months of the year to 232.1 billion kilowatt hours, reflecting a 10.9 percent increase over the same period in 2023.
The bulk of this power has been produced by burning coal which accounted for 49.6 percent of Vietnam’s electricity supply in the third quarter of the year, though notably, this was down from about 57 percent in the first half of the year.
See: Can Vietnam Ever Quit Coal?
Investment news
Vietnam records additional US$4.25 billion in registered FDI
Vietnam added another 245 foreign direct invested projects to its 2024 tally in September, along with just over US$4.25 billion in additional capital commitments, according to data from Vietnam’s Ministry of Planning and Investment. The biggest gains were in manufacturing and processing which added 73 new projects and US$1.47 billion.
See: Vietnam FDI Tracker by Sector
Vietnam’s outbound investment still sluggish in September 2024
Vietnam’s overseas investment grew modestly by the end of September 2024, reaching US$177.4 million, though still only 42.6 percent of the same period in 2023, according to a press release from the Ministry of Planning and Investment. This represents a slight improvement from August’s US$147.3 million, where investment was just 35.4 percent of the 2023 total.
Vietnamese investors had launched 105 new projects and adjusted investment capital 18 times for the year to September, showing a small increase in activity. While the mining sector remained dominant, its share of investment dropped from 39.8 percent in August to 33 percent in September. Meanwhile, the electricity production and distribution sector accounted for 13.2 percent of total capital invested.
Tourism news
‘Destination Vietnam’ film campaign kicks into gear with Directors Guild of America event
Ho An Phong, Vietnam’s deputy minister of Culture, Sports, and Tourism, told an audience of 300 at a Director’s Guild of America event in California that Vietnam intends to simplify film permits, offer tax incentives, and provide industry support to studios that choose to make films in Vietnam, according to The Ankler.
Among the guests was Phillip Noyce who directed The Quiet American which was filmed in Vietnam two decades ago.
“For a country that’s struggled against and defeated major empires, you can expect that a film crew there is gonna fight with the same tenacious sort of attitude,” he told the crowd, “and they did. They would do anything — but with a high degree of creativity. And that was 20 years ago; it can only have got better since then.”.
Of note, however, is that the business environment in Vietnam has changed significantly since then in terms of regulatory oversight and censorship, both of which have proven key obstacles for foreign studios looking to make films in Vietnam.
See also: Why More Foreign Films Aren’t Made in Vietnam
Vietnam records 11 percent fall in tourist numbers September over August
Vietnam’s tourism industry welcomed 1.3 million tourist arrivals in September, a fall of 11.04 percent over August. The biggest falls were seen in visitors from Asia which were down 9.94 percent with 117,067 fewer Asian visitors in September. Visitors from Europe also saw a significant fall of about 30.99 percent, however, this was from a low base. Of note, these falls coincide with the end of the northern hemisphere’s summer holiday period.
See: Vietnam Tourist Arrivals Tracker
Trump Organisation signs MOU on golf course, hotel development in Vietnam
The Trump Organisation and Vietnam’s Hung Yen Investment Group which is owned by Vietnam developer Kinhbac, have signed a memorandum of understanding with respect to developing a golf course and hotel complex in Vietnam’s Hung Yen province. Kinhbac, in a press release, has said the total investment will be in the vicinity of US$1.5 billion.
Of note, it’s not clear that any of these funds will come from the Trump Organisation. The press release states that it will be developed by a ‘consortium of investors selected by the Trump Organization’ but not specifically the Trump Organization itself.
This latest development follows on from a meeting between Trump Organisation executives and provincial leaders in Hung Yen earlier this year.
See also: How to Open a Hotel in Vietnam: Ultimate Guide 2024
Stock market news
Vietnam stock market holds steady on FTSE upgrade watchlist, October review
FTSE Russell has released its country classification update for October with Vietnam maintaining its position on the firm’s watchlist. It does, however, note that reforms have been made with respect to removing pre-funding requirements for foreign investors per a circular issued by the Ministry of Finance back in September. These reforms are designed to meet FTSE’s ‘settlement cycle’ and ‘settlement costs’ requirements.
Of note, however, is that FTSE Russell goes on to say that Vietnam still needs to reform its registration process for new accounts and to come up with a way for foreign investors to more efficiently trade stocks when foreign ownership ratios are nearing their limits.
For more context see: Vietnam’s Stock Market Upgrade Opportunity: Unpacked
Foreign traders net-sell US$22.9 million in HoSE shares
Over the last five trading sessions, to the close of business on October 10, in total, foreign investors net-sold US$22.9 million worth of HCMC Stock Exchange stocks. This raises the total net sold from the market by foreign traders this year to US$2.63 billion.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked 2024
Foreign trader activity, last five trading days
Buy | Sell | Change | ||||
Date | VND | US$ | VND | US$ | VND | US$ |
4/10 | 969 | $39,001,862 | 1,543 | $62,105,133 | -574 | -$23,103,270 |
7/10 | 891 | $35,862,394 | 1,230 | $49,507,008 | -339 | -$13,644,614 |
8/10 | 1,471 | $59,207,162 | 1,586 | $63,835,866 | -115 | -$4,628,704 |
9/10 | 2,279 | $91,728,838 | 2,324 | $93,540,070 | -45 | -$1,811,232 |
10/10 | 2,159 | $86,898,886 | 1,655 | $66,613,088 | 504 | $20,285,798 |
Total | 7,769 | $312,699,142 | 8,338 | $335,601,165 | -569 | -$22,902,022 |
*billions
Source: www.hsx.vn
Trade news
Thailand launches anti-dumping probe into steel from Vietnam
Thailand has become the latest country to investigate hot-rolled coiled steel imports from Vietnam according to an announcement in Thailand’s Royal Gazette. Of note, Thailand’s steel imports from Vietnam are down by about half this year with just 111,884 tons of steel shipped to Thailand as opposed to 227,783 tons over the same period last year.
This adds to a growing list of investigations into steel imports from Vietnam that includes South Korea, India, and the European Union and comes as cheap Chinese steel floods markets around the world. Of note, there has been some suspicion that Chinese steel makers may be using Vietnam as an intermediary to circumvent trade tariffs in other countries on their own steel products.
See also: Can Vietnam Survive the Steel-Trade Wars?
Vietnam’s exports fall 9.8 percent September over August
Vietnam’s exports hit US$34.1 billion in September bringing the country’s total exports for the year to US$299.65 billion, an increase over 2023 of 15.4 percent. Of note, September’s exports were down about 9.8 percent over August which looks to be the result of Typhoon Yagi which hobbled a number of key manufacturing operations in northern Vietnam.
See also: Vietnam Exports Tracker
Vietnam’s imports top US$31.8 billion in September
Vietnam’s imports hit US$31.8 billion in September bringing the country’s total imports for the year to US$278.8 billion, an increase over 2023 of 17.3 percent. This growth has been buoyed in large part by increases in imports of machines, equipment, tools and instruments; fabrics; and plastics.
See also: Vietnam Imports Tracker
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.