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US and EU buyers to choose Vietnam as sourcing destination in 2021

US and EU buyers to choose Vietnam as sourcing destination in 2021

12.05.2021

Global supply chains will turn to Vietnam, India and Turkey for more diverse sourcing.

US and other global buyers continue to choose Vietnam as one of the leading sourcing countries this year as they are seeking to diversify their buying away from China.

The latest report, conducted by Qima, a provider of supply chain compliance solutions, showed that roughly a third of global buyers and 38% of US-based buyers named Vietnam as a place they intend to increase sourcing from 2021.

A traditional first choice for buyers diversifying away from China, Vietnam saw its popularity among Western buyers grow by leaps and bounds over the past few years – a trend that has remained in effect so far in 2021.

The data showed a 16% year-over-year increase in demand for inspections and audits in Vietnam in the first quarter (Q1). It was a third consecutive quarter of growth that had initially begun as a post-lockdown rebound in mid-2020.

The growth was more than just a return to pre-pandemic levels, as the Q1 inspection demand has doubled compared to Q1 2019, according to the report.

The inspection surge in Vietnam is in line with the findings of the QIMA global sourcing survey, where 43% of US-based respondents cited Vietnam among their top three buying geographies as of early 2021, doubled from 2019.

Vietnam is not the only country in the region to benefit from expanded business volumes. Qima data on inspection and audits demand in Southeast Asia showed double-digit growth across the board, fueled by the renewed interest from American and European brands alike.

The report was conducted on more than 700 businesses with international supply chains.

Source : The Hanoitimes

Photo : File

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Vietnam’s PMI in April 54.7

Vietnam’s PMI in April 54.7

11.05.2021

Vietnam’s PMI reading hit highest level since November 2018.

Vietnam’s Purchasing Manager Index (PMI) of the manufacturing sector increased to 54.7 in April — the strongest improvement in operating conditions of the manufacturing sector since November 2018. The sharp improvement in the manufacturing sector was driven by rising domestic and overseas demand. While the recent spike in new virus cases globally could affect the global recovery pace, rapid vaccination rollouts in the US and the control of COVID-19 in China (the top two markets that account for nearly half Vietnam’s exports) should help to partly support Vietnam’s export-oriented manufacturing sector.

Source. VCSC

Photo: VNHAM

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Two more Japanese-made metro trains arrive in Ho Chi Minh City

Two more Japanese-made metro trains arrive in Ho Chi Minh City

11.05.2021

The second and third trains of Ho Chi Minh City’s metro line No. 1 have reached a seaport in the southern metropolis after a nine-day journey.

The trains were transported by the Kaisa cargo vessel, which docked at Khanh Hoi Port in District 4 at around 6:00 am on Monday.

The ship began its voyage at the Port of Kasado in Japan on May 1.

After being unloaded from the ship, the second and third trains will be transported by road from the port to the Long Binh depot of the metro line in Thu Duc City on May 11 and 13, respectively.

They will then be installed on the T1 track at the depot for trial operations.

This is a very important milestone of the metro project, marking the official transition from construction and installation to trial operations, said the municipal Management Authority for Urban Railways.

To date, three out of the metro line’s 17 trains, consisting of 51 carriages, have been delivered to Vietnam from Japan, with the first arriving at the port on October 8, 2020.

The next trains will be brought home in the coming time and the line is expected to be put into commercial operation next year.

Each train has three carriages and can carry a total of 930 passengers, including 147 seated and 783 standing guests.

The metro line is 19.7 kilometers long, including 2.6 kilometers of underground railways and 17.1 kilometers of elevated tracks.

The route runs from Ben Thanh Market in District 1 to Suoi Tien Theme Park in Thu Duc City through three underground stations and 11 stops above the ground.

The maximum speed is 110 kilometers per hour along the elevated section and 80 kilometers an hour underground.

About 84.44 percent of the workload of the project, which started in August 2012, has completed so far, Tien Phong newspaper reported.

The project costs more than VND43.7 trillion (US$1.9 billion), most of which has come from Japan’s official development assistance (ODA).

Source: Tuoi Tre News

Photo: Tuoi Tre News

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Banks want central bank to hike credit growth quotas as economy rebounds

Banks want central bank to hike credit growth quotas as economy rebounds

10.05.2021

Nguyễn Xuân Dương, chairman of Hưng Yên Garment Corporation, said his company expects its turnover to increase by 5-10 per cent this year, a higher rate than before the COVID-19 pandemic broke out.

It has received orders for until July, he revealed.

Dương’s is just one of many companies in a number of industries in Việt Nam and the world experiencing a strong recovery as the COVID-19 pandemic is hoped to be controlled in many countries thanks to vaccines.

This led to a sharp increase in demand for bank credit to import raw materials, pay salaries and expand production, Dương said.

SeAbank, for instance, said loans outstanding grew by 14.3 per cent year-on-year in the first quarter to VNĐ111.05 trillion.

Vietcombank chairman Nghiêm Xuân Thành said his bank achieved credit growth of 3.69 per cent, its highest rate in several years.

Nguyễn Hoàng Linh, general director of MSB, said his bank’s credit growth was 9 per cent.

According to data released by the General Statistics Office, as of March 19 overall banking credit was up 1.47 per cent, 2.16 times the rate a year earlier.

Because of the rapid credit growth in recent months, the managements of several banks believe growth for the full year is likely to top 14 per cent, much higher than the central bank’s estimations of 7-8 per cent or 10 12 per cent.

Analysts attribute this possibility to businesses’ expectation of a strong economic recovery this year and keenness therefore to step up their activities.

Besides, lenders have achieved digital transformation and reduced deposit interest rates, which have helped them significantly cut costs and cost of funds, thus enabling them to lend at low interest rates.

Credit growth expansion

To fully tap the opportunities created by the economic recovery and expand lending, banks want the central bank to soon enlarge credit quotas.

Nguyễn Đình Tùng of OCB said liquidity in the banking system was so plentiful that lenders had had to reduce deposit mobilization by cutting interest rates.

They want to pump the money into the economy as soon as possible and several have already tabled ambitious credit growth targets at their annual general meeting this year for shareholders’ approval.

Notably, some are twice, thrice or even four times the quotas they have been allocated by the central bank.

Vietcombank for instance expects to have its credit growth quota adjusted upward from 10.5 per cent to 14 per cent.

VIB was allotted a quota of 8.5 per cent but its shareholders approved a target of 31 per cent.

Its chairman, Đăng Khắc Vỹ, said he believed the new target would be approved by the State Bank of Việt Nam since it was always ready to adjust credit growth limits based on market developments.

Analysts agreed with him, saying the central bank’s allocation is aimed at both ensuring there is adequate credit to serve the economy’s needs and controlling the quality of credit, thus precluding bad debts.

It also assigns the annual credit growth quota for each bank by taking into account the macro picture of the entire banking system and money supply and inflation targets set by the Government.

Banks have got used to the central bank’s flexibility in fixing the quotas based on their credit quality and ability to achieve credit growth and the economy’s funding requirements.

Economist Dr Lê Xuân Nghĩa said it was time for the central bank to think of removing the credit quotas since they pose obstacles to businesses including the banks themselves.

Retail sales recover 

According to a recent report by the General Statistics Office (GSO), revenues from retail sales and services in the first quarter of the year were over VNĐ1,291 trillion (US$56 million), a year on year increase of 5.1 per cent.

In March they rose 9.2 per cent to VNĐ322.8 trillion following an 8.2 per cent increase the previous month.

This marked the 10th straight month of growth in retail trade and the fastest pace in three months amid strengthening consumption as the economy recovered further from the COVID-19 shocks in the first quarter.

Sales were up in most categories compared to a year ago. Even the travel category saw somewhat of an improvement, falling by only 34.6 per cent as against 60.8 per cent.

As a result, retail sales made up the bulk of total trade and service revenues at more than VNĐ1,033 trillion, or 80.1 per cent, up 6.8 per cent.

Revenues from accommodation and catering services were worth VNĐ124 trillion, down 3 per cent. Revenues from other services were estimated at VNĐ130.8 trillion, up 3.9 per cent.

Income from tourism was only VNĐ3.1 trillion, down 60.1 per cent.

Analysts said the retail segment had begun to recover since the COVID-19 pandemic was brought under control, becoming one of the strong areas of the economy.

Last year too the retail market had achieved good growth because of the Government’s quick control of the pandemic.

The GSO said retail sales of goods had been worth nearly VNĐ4 quadrillion ($172.8 billion), 6.8 per cent up from 2019.

The retail market had maintained double-digit growth for five years before 2020, and is all set to reach $200 billion in the next two years if its growth continues.

According to the Ministry of Industry and Trade, retail sales of goods and services registered high growth in Hải Phòng, Cần Thơ, Hà Nội, Đà Nẵng, and Đồng Nai.

Source : VNS

Photo : File

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Vingroup to stop production of smartphones and TVs

Vingroup to stop production of smartphones and TVs

09.05.2021

Hanoi – Vingroup is to halt the production of TVs and smartphones to focus on the development of its Internet-of-Things and Infotainment for VinFast cars, according to a press release by the country’s largest conglomerate on May 9.

„Production of smartphones and smart TVs is no longer able to deliver breakthroughs and added-value for consumers. We have decided to instead invest in the development of smart vehicles, smart home and smart city solutions, areas in which we are confident we can deliver excellent customer experience and value,“ said Vingroup’s Vice President and CEO Nguyen Viet Quang.

VinSmart’s factories, however, will continue their production on current models of smartphones and TVs until their life cycle is completed before going through reconfiguration.

Owners of Vingroup’s smartphones and TVs are still entitled to the same after-sales services and warranty, the group also promised to continue its software support for their products.

The group is set to shore up its capacity in the production of electronics, battery cells and electric engines. Vinhomes Smart City and Vinhomes Ocean Park are among the latest of the group’s ventures into smart home solutions.

Announced in June 2018, VinSmart has since sold 19 smartphone and five TV models. The brand has made headlines by breaking into the top three of the most popular phones in Vietnam with a market share of 16.7 percent, which is mostly made up of affordable models, as reported in April 2020. There have been signs of slowdown by the end of 2020 as the group only announced one new model since.

 

Source : VNS/VNS

Photo : File

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HSBC: foreign investors hard to ignore Vietnamese stock market for longer

HSBC: foreign investors hard to ignore Vietnamese stock market for longer

07.05.2021

Vietnam is frontier equity market which has been interested in and liked, with its turnover now almost the same level as Singapore and far more than Malaysia and Indonesia, according to a report by HSBC.

The report said a record 113,000 new domestic trading accounts were opened last March, taking the total to 3.02 million.

Average trading value per session was estimated at US$725 million in April, much higher than $596 million in the previous month. One year ago, this figure just stopped at $130 million.

As a result, the Vietnam market turnover is now almost at the same levels as Singapore and far more than Malaysia and Indonesia.

The VN-Index is up 12.4 percent since the beginning of this year, outperforming all the major regional benchmarks, and it has breached the psychological barrier of 1,200 for the first time, a level it failed to reach during previous bull markets in 2007 and 2018.

The effective containment of COVID-19 has led to a strong rebound in economic growth, and domestic liquidity has fueled the rally, which is being driven by new retail investors, the report noted.

HSBC believes that it will be difficult for foreign investors to ignore Vietnam for much longer for several reasons.

Vietnam offers a favourable risk-reward opportunity in one of the most resilient growth economies, it explained, adding that the Vietnamese market is getting deeper, broader and more liquid.

Foreign ownership limits (FOLs) are a key issue for foreign investors but HSBC argued it’s not a deal-breaker. Of the 30 major companies that make up the VN30 Index, 24 still have room available for foreign investors.

Stocks that have reached their FOL can be bought by paying a foreign premium. As they generate strong earnings growth but trade at cheaper valuations than their Asian peers, the premium doesn’t look excessive. Furthermore, policy reforms underway, although slow, are positive for the market.

Source: vietnamtimes.org.vn

Photo: VNHAM

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Vietnam becomes region’s largest gold market: WGC

Vietnam becomes region’s largest gold market: WGC

06.05.2021

Hanoi  – Vietnam is the largest gold market in Southeast Asia, according to a recent study of the World Gold Council (WGC).

The WGC also announced the country among the top 10 markets in the world, saying consumer demand for gold in Vietnam reached 39.8 tonnes in 2020, higher than the demand of 37.6 tonnes in Indonesia and 9.4 tonnes in Singapore.

The study of 2,000 local investors in March last year also said gold is the top asset class for 68 percent of Vietnamese investors while the outlook for the precious metal was positive, adding 81 percent of people who bought gold considered buying more. The average rate for buying more gold is 45 percent globally.

According to the WGC, demand for gold in Vietnam is still very high as Vietnamese people believe gold helps fight inflation and currency fluctuations, helping investors feel secure in the long run. At the same time, new demand for gold also arises by buying gold on digital platforms or through available channels such as a bank.

In the study, 76 percent of respondents were in favour of opening a gold investment account at a bank to support and formalise the gold market.

„Research shows demand for gold in Vietnam is strong and there is support to develop new investment products such as buying gold through digital platforms or opening a gold investment account,“ Andrew Naylor, director in charge of ASEAN at the World Gold Council, said.

Ending yesterday, SJC gold price was bought at 55.2 million VND (2,379 USD) and sold at 55.6 million VND (2,396 USD) per tael. Compared with gold prices listed on the global site of Kitco at 1,785 USD per ounce (2,142 USD per tael), each tael of gold in Vietnam was 254 USD higher than the world price.

Source: VNA/VNS

Photo: File

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US, European buyers pivot away from China, toward Vietnam

US, European buyers pivot away from China, toward Vietnam

05.05.2021

Demand for Vietnamese products is increasing among U.S. and European buyers, many of whom are seeking to diversify their buying away from China, a survey has found.

Forty three percent of U.S. companies said earlier this year that Vietnam was among their top three choices of source, twice the rate seen in 2019, according to a survey by Qima, a provider of supply-chain-compliance solutions.

The ratio in Europe was 25 percent, up 11 percentage points, it said.

„The appetite for Vietnam sourcing is far from satisfied and is poised to redefine the sourcing landscape in 2021,“ the survey said.

It said 38 percent of U.S. buyers named Vietnam among countries from whom they planned to buy more this year. The ratio was 28 percent among European buyers and 33 percent globally.

Demand for inspections and audits in Vietnam in the first quarter rose 16 percent year-on-year, showing that Vietnam remains a first choice for Western buyers diversifying from China, the survey said.

This was the third consecutive quarter of growth since beginning as a post-lockdown rebound in mid-2020, it said.

The most popular product category sourced from Vietnam was adult garments, accounting for 56 percent of all inspections in the country, the survey said.

The survey polled over 700 businesses with international supply chains.

Source: vnexpress.net

Photo: File

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Vietnam’ FDI recordly rises in four months of 2021

Vietnam’ FDI recordly rises in four months of 2021

04.05.2021

Over four months of 2021, Vietnam’s investments abroad, including newly and additionally-registered capital during the opening four months of the year reached USD545.9 million.

Throughout the reviewed period, a total of USD142.8 million was invested in 18 new projects, representing a rise of 2.7 times, while USD403.2 million was added to existing investments, up 25.5 times from last year’s corresponding period, according to Communist Party of Vietnam Online Newspaper.

As of April 20, the total amount of foreign investment poured into the country, including newly registered and adjusted capital, along with shares purchased by foreign investors, had reached USD12.25 billion, representing an annual fall of 0.7%.

Of the figure, 451 new projects were licensed with registered capital of USD8.46 billion, a decline of 54.2% on-year in terms of the number of projects and a rise of 24.7% iin the registered capital. In addition, 263 operational projects moved to adjust their investment capital with an additional sum of USD2.75 billion, down by 10.6%.

FDI disbursement during the first four months of the year reached approximately USD5.5 billion, an increase of 6.8% against the same period from last year.

Vietnam recorded US$5.5 billion of foreign investment in the first 2 months of 2021

Vietnam attracted around 5.5 billion U.S. dollars of foreign investment in January and February this year, down 15.6 percent against the same period last year, the country’s General Statistics Office reported.

Specifically, Vietnam licensed 126 new foreign direct investment (FDI) projects with total registered capital of over 3.3 billion U.S. dollars, down 74.8 percent in quantity and 33.9 percent in capital year on year, according to Vietnam Insider.

Over the two months, foreign investors also spent 543.1 million U.S. dollars buying shares and contributing capital to Vietnamese firms, down 34.4 percent year on year.

“Despite the impact of COVID-19, Vietnam corded positive growth in key areas. According to our data, foreign investors have invested heavily in manufacturing, processing, real estate, and electricity production and distribution.” Sophie Dao, Partner of Global Business Services, an investment consulting firm told Vietnam Insider.

In the context of the Covid-19 epidemic continuing complicated developments in the world, as of 20th January 2021, Vietnam attracted more than 2 billion USD of foreign investment capital, including registered capital, adjust investment capital and total value of capital contribution, went down 62.2% over the same period in 2020, that was one of the positive signs of the economy in 2021. The Investment Law of 2020 has some changes compared to the 2014 Investment Law, making it difficult for localities to issue new investment registration certificates and adjust investment capital.

According to local media, a total of 2.5 billion U.S. dollars of FDI was disbursed in the period, up 2 percent against the first two months of 2020, said the office, adding that 71.8 percent were for the processing and manufacturing sector, 15.6 percent for the real estate, and 6.1 percent for the electricity, gas, hot water, steam and air conditioner production and distribution.

So far this year, the foreign-invested sector has earned US$ 38.07 billion from exports, up 34 per cent year-on-year, and making up 76.1 per cent of the nation’s total export turnover.

At the same time, it spent US$ 31.6 billion on imports, up 31.2 per cent year-on-year, and accounting for 66.6 per cent of the country’s total import value. That resulted in a trade surplus of nearly US$6.5 billion.

Among 46 countries and regions with newly licensed investment projects in Vietnam during the period, Japan was the largest source of registered capital with nearly 1.5 billion U.S. dollars, followed by Singapore with 861.1 million U.S. dollars and China with 374.9 million U.S. dollars, said the office.

Source : vietnamtimes.org.vn

Photo : VNHAM

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Vietnam-UK FTA takes effect, protects intellectual property, grants access to public procurement

Vietnam-UK FTA takes effect, protects intellectual property, grants access to public procurement

03.05.2021

A free trade pact between Vietnam and the UK came into effect on Saturday, paving the way for 99 percent of tariffs to be eliminated after six years and for the kingdom to join a separate Trans-Pacific deal.

“Today marks an important symbolic step in this partnership as the Vietnam-UK Free Trade Agreement enters into force,” both countries said in a joint statement.

Vietnam and the UK have a strong and growing bilateral trade relationship and share a strategic commitment to global trade, the free flow of capital, and investments, according to the statement.

The Southeast Asian country’s share of total UK trade doubled between 2011 and 2020.

The free trade agreement covers £5.1 billion (US$7 billion) in trade and provides a platform to grow trade and investment, as well as certainty to UK and Vietnamese businesses.

Trade in goods ranging from clothing and footwear to seafood and pharmaceutical products can continue uninterrupted, as the accord secures access to staged tariff reductions between Vietnam and the UK.

“The deal locks in the 65 percent of all tariffs that have already been eliminated on Vietnam-UK trade,” the joint statement reads.

“This will increase to 99 percent of tariffs after six years.

“This includes eliminating tariffs for UK exporters of machinery, mechanical appliances, and pharmaceutical products.”

The preferential tariffs of the free trade pact will provide identical opportunity for Vietnam to increase exports of key products such as phones and components, garments, footwear, and fish to the UK.

Vietnam will continue to receive duty-free tariff quotas for its 14 products, including rice, with improved market access.

Trade in services can continue to flourish since Vietnam has not only opened additional sub-sectors to UK service providers, but also made commitments deeper than those outlined in the WTO – offering the UK favorable access to the Vietnamese market.

Sub-sectors that have higher commitments under the agreement include financial services, telecommunications, and education services.

Both sides are committed to a high level of protection when it comes to intellectual property rights.

The pact also maintains access to public procurement markets in Vietnam, thereby allowing UK firms more opportunity to bid for public procurement contracts.

It also serves as a stepping-stone toward the UK’s membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which has been effective since December 30, 2018.

Vietnam supports and welcomes the UK’s application for accession to the CPTPP, as it is London’s priority, according to their joint statement.

“This will bring us closer to the CPTPP’s vision of advancing economic integration and supporting the liberalization of trade and investment globally,” the statement reads.

According to the Canadian government’s estimation, the full implementation of the CPTPP will help 11 member countries including Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam create a trade bloc equivalent to 495 million consumers and 13.5 percent of global GDP.

In September, Vietnam and the UK signed a refreshed bilateral strategic partnership agreement, which will sit alongside and complement their free trade accord.

The UK said it is committed to deepening its engagement in the Indo-Pacific as an energetic and dependable partner in the growing prosperity of the region, where Vietnam is a key partner.

Source :Tuoi Tre News

Photo : File