Cheap Chinese steel is flooding markets around the world causing headaches for local steel makers. This has led to anti-dumping investigations in a number of countries that look to have caught Vietnam in the crossfire. It is not, however, going quietly but launching its own anti-dumping investigations as well. In this context, this article looks at what has happened to Vietnam’s steel industry, how it is responding, and what that might mean moving forward… Read More »

Advertising news

Foreign firms warned against advertisements on restricted content

Vietnam’s Ministry of Information and Communication has warned two foreign content firms against showing advertisements on restricted content in Vietnam, Tuoi Tre has reported. The Ministry has recommended the two companies–Singapore’s RTB and France’s Daily Motion, a user-generated video platform–refer to the Ministry’s list of approved websites for advertising moving forward.

Banking and Finance News

State Bank of Vietnam starts buying up US dollars

The State Bank of Vietnam has moved to replenish its US dollar supply, announcing last week it intended to buy US$100 million worth of dollars. This would be its second US dollar purchase this month after buying US$150 million worth of dollars back on September 6, Vietstock has reported.

The SBV burned through about US$6 billion worth of its US dollar reserves this year in order to prevent the devaluation of the local currency. This brought its reserves down to around US$87 billion, several billion dollars shy of the three months worth of imports the International Monetary Fund recommends.

Based on Vietnam’s imports in August, which reached US$33.7 million, and the aforementioned IMF recommendation, Vietnam’s currency reserves should be around US$101.1 billion. This means it needs an additional US$13.7 billion worth of US dollars.

However, this may be problematic with Vietnam already on the US currency manipulator watchlist. It currently meets two of the three criteria. The third criteria relates to foreign currency purchases in eight out of 12 consecutive months, worth more than 2 percent of GDP–Vietnam’s GDP is around US$430 billion. Foreign currency purchases worth US$13.7 billion would therefore be about 3.19 percent of GDP.

State Bank open market operations slow to a trickle

The State Bank of Vietnam distributed just US$43.1 million in open market operations this week and didn’t issue any treasury bills with pressure easing on the local currency. As a result, there is just US$360 million outstanding to local banks.

Outstanding reverse repos to Vietnam banks

Issued	Length	Maturing	VND*	US$	% p.a.
5-Sep	13-Jan	19-Sep	7,789.94	$316,921,884	4.25
16-Sep	6-Jan	23-Sep	536.25	$21,816,517	4.00
17-Sep	6-Jan	24-Sep	524.09	$21,321,806	4.00
Total			8,850.28	$360,060,207

*billions

Car news

Vietnam VAMA car sales fall 14 percent August over July

The Vietnam Automobile Manufacturers’ Association–the VAMA–August sales report has found that vehicle sales of the group’s members decreased significantly in August over July, falling about 14 percent. That fall was mostly confined to passenger vehicles with commercial vehicles–trucks and buses–collectively rising by 2 percent.

Local media has suggested the fall in car sales may be connected to ‘Ghost Month’ on the lunar calendar which, this year, went from August 4 to September 2. During Ghost Month superstitious Vietnamese avoid making extravagant purchases–cars, for example.

US automotive manufacturer inaugurates second Vietnam factory

Polaris, a US auto manufacturer probably most well-known for its Indian motorcycles brand, has inaugurated its second factory in Vietnam, The Investor has reported. The factory covers 12 hectares and is estimated to have cost US$36 million. It has a capacity of 10,000 motorbikes and 30,000 motorbike engines each year.

Economy news

Typhoon Yagi estimated to have caused US$1.63 billion in damage

Vietnam’s Ministry of Planning and Investment has estimated the damage caused by typhoon Yagi at VND 40 trillion or about US$1.63 billion, VN Express has reported. The typhoon tore through northern Vietnam last week, causing damage in at least 26 provinces which account for about 41 percent of Vietnam’s GDP.

That said, there may be more costs to come with factories and manufacturing facilities damaged across the northern provinces–the Ministry is estimating that Vietnam’s economy could take a hit this year of .15 percent from typhoon Yagi.

Energy news

Vietnam Ministry officially tasked with researching nuclear power

Vietnam’s Ministry of Industry and Trade has been asked to review the power sources outlined in the Power Development Plan 8 and consider whether or not nuclear power can or should be added to the mix, VN Express has reported.

Of note, during Vladimir Putin’s brief two-day visit to Hanoi last week back in June, the Russian president oversaw the signing of a memorandum of understanding between Russia’s Rosatom State Nuclear Energy Corporation and Vietnam’s Ministry of Science and Technology. If realised, the agreement would see the former assist the latter to establish a Nuclear Science and Technology Center in Vietnam with a Russian nuclear reactor.

This has seen nuclear power becoming more common in public discourse. That said, there is still a long way to go before nuclear power can be realised in Vietnam.

Food and beverage news

Beer production in Vietnam falls .1 percent in August over July

Beer and malt production in Vietnam fell by .1 percent in August over July, according to Vietnam’s Industrial production Index. This is in contrast to beverage production overall which saw a 2.1 percent increase month-on-month buoyed by non-alcoholic beverages and mineral water, production off which was up by 5.5 percent over July.

That said, beer production year-on-year actually saw a slight increase of .2 percent. Though small, this will likely be a welcome sign for beer makers after July recorded a year-on-year decline in production of 5.4 percent.

Of note, Vietnam’s beer industry has been struggling since COVID on the back of a change in consumer behaviour, broader economic challenges that have reduced spending power, an increase in beer imports, and stronger enforcement of drink-driving laws.

Investment news

Trump golf course could be on the cards for northern Vietnam

Representatives of the Trump Organisation met with the Hung Yen People’s Committee Monday to discuss constructing a resort and golf course in the northern Vietnam province, The Investor has reported. It doesn’t, however, actually look like any definitive decisions were made.

Of note, historically Trump has been a popular figure in Vietnam. A Pew Research Centre survey in 2017, not long after Trump was elected president of the United States, found that Vietnam was just one of a handful of countries of the 37 surveyed where the majority of respondents had confidence in the real estate developer and reality TV star.

This was largely on the back of the robust approach Trump had taken toward China. The bluster with which he had threatened and cajoled Vietnam’s northern neighbour seemed to have struck a chord with many Vietnamese.

That said, it’s not clear that Trump’s presidency was necessarily a good thing for Vietnam, nor that a second Trump presidency necessarily will be either.

See also: The US Election and Vietnam: Unpacked (pre-Harris)

Media news

FIFA launches tender for World Cup 2026 media rights for Vietnam

The tender process for the Vietnam media rights to the 2026 World Cup has begun, according to a FIFA press release. The football organisation has requested interested parties submit their applications for an invitation to tender by October 15.

At this early stage it’s not clear how much the broadcast rights might cost, but in football-mad Vietnam they are likely worth a lot. Notably in 2018, Vietnam’s VTV broadcaster paid an estimated US$12 million and for the 2022 World Cup paid US$14 million.

Real estate news

Audits find broad inaccuracies in financial statements of several real estate firms

Several real estate firms in Vietnam have been found to have underreported their losses in the first half of 2024, Tuoi Tre has reported. The gaps between the self-reported financial statements and audited financial statements is quite big too.

For example, in financial reports compiled by Saigon Real Estate Corporation, VND 76.6 billion in revenue was reported, however, after audit that number was reduced to VND 60.2 billion. It also saw a self-reported profit of VND 2.4 billion become a loss of VND 23.4 billion.

Stock market news

Vietnam stock exchange pre-funding requirements to be lifted for foreign institutions

Vietnam’s Ministry of Finance has issued a circular that will lift pre-funding requirements for foreign institutional investors when it comes into force in November, per the State Securities Commision of Vietnam. The removal of these requirements was one of several issues listed by key stock market classification firms FTSE Russell and MSCI needed to see the local bourse upgraded from a frontier market to an emerging market.

Of note, the circular appears to only address foreign institutional investors and not foreign individual investors which account for about 42,446 registered trading accounts in Vietnam. Neither FTSE Russell or MSCI, however, appear to make a distinction between the two in terms of the need to remove pre-funding requirements. With this in mind, this latest announcement should be viewed with cautious optimism.

Foreign traders net-buy US$59.2 million in HoSE shares

Over the last five trading sessions, to the close of business on September 12, in total, foreign investors net-bought US$59.2 million worth of stocks on the Ho Chi Minh City Stock Exchange. This reduces the total net withdrawn from the market by foreign traders this year to US$2.65 billion.

Foreign trader activity, last five trading days

	Buy		Sell		Change
Date	VND*	US$	VND*	US$	VND*	US$
13/9	1,474	$59,967,479	1,546	$62,896,691	-72	-$2,929,212
16/9	1,278	$51,993,513	1,060	$43,124,510	218	$8,869,003
17/9	1,482	$60,292,947	957	$38,934,110	525	$21,358,838
18/9	1,925	$78,315,738	1,613	$65,622,486	312	$12,693,252
19/9	1,768	$71,928,428	1,297	$52,766,500	471	$19,161,929
Total	7,927	$322,498,105	6,473	$263,344,296	1,454	$59,153,809

*billions

Source: www.hsx.vn

Tax news

Cross-border service providers see jump in tax payments in Vietnam year-on-year

Technology firms like Facebook and Google that provide cross-border services in Vietnam have seen a jump in tax payable in Vietnam of 24 percent year-on-year, according to Vietnam’s General Department of Taxation. From the 106 cross-border firms registered to pay taxes, Vietnam collected VND 6.23 trillion or US$253.8 million.

Trade news

Coal imports shrink August over July

Vietnam’s coal imports in terms of volume fell by 23.7 percent, and in value by 18.3 percent in August over July, according to Vietnam’s General Department of Customs. Coal imports for the year, however, are still up by 32.7 percent in terms of value and 16 percent in terms of volume, year over year. In total, Vietnam has imported 45.9 tons of coal for US$5.72 billion.

Coffee exports up 5.5 percent August over July

Vietnam’s coffee exports climbed by 5.5 percent in August over July from US$381.2 million to US$402.2 million. Vietnam’s coffee exports for the year now stand at US$4 billion which is an increase 35.6 percent over the same period last year. That said, Vietnam has seen a decline in the volume of coffee exports of 12.1 percent year-on-year.

Electronics exports up 14.5 percent August over July

Vietnam’s exports of computers, electrical products, and spare parts and components thereof, climbed by 14.5 percent in August over July from US$5.9 billion to US$6.76 billion. Vietnam’s electronics exports for the year now stand at US$46.4 billion which is an increase 28.9 percent over the same period last year. This data does not include mobile phones.

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.

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