### Fuelled by Positive Economic Outlook, Consumer Confidence in Vietnam Reaches Record High
### Vietnam’s GDP Growth Strong in Q1 2024, Consumer Confidence on the Rise
### Decline in FMCG Sales Despite Positive Economic Outlook in Vietnam
### Vietnam: Rising Star in Indo-Pacific, Canadian Agency Reports
### Stock Market Gains Momentum in Vietnam, Positive Q1 Results
### Vietnam Seafood Exports Up 6% in First Four Months of 2024
### Weak Bank Reform in Vietnam to Facilitate Expansion Activities
### Vietnam Motor Show 2024 to Open in HCM City in October
### Mekong Delta: Global Food Basket Position Strengthened
### Trade Fair Showcasing Northern Rural Industrial Products Opens in Hanoi
### Belgium Workshop Highlights Business Opportunities in Vietnam
### EU, Netherlands Delegation Explores Investment Opportunities in Thai Nguyen
### International Autotech & Accessories Show Opens in HCM City
### Experts Urge Promotion of Digital Transformation in Logistics, E-commerce
### Hanoi Farm Produce Showcased in Australia
### Belgium Explores Business Opportunities in Vietnamese Market
Fuelled by a positive economic outlook, consumer confidence in Vietnam’s economic progress has rebounded to its highest level in over a year, according to a report by Kantar Worldpanel Vietnam.
Vietnam’s GDP expanded by a healthy 5.66 per cent in the first quarter of 2024, marking the strongest first-quarter growth since 2020. While slower than the previous quarter’s 6.7 per cent growth, this momentum indicates the country is on track to achieve its 2024 economic targets.
The report also reveals that as the underlying economic outlook remains positive, consumer confidence in an economic recovery has reached a five-quarter high. While concerns about household incomes have eased, worries about rising living costs, particularly due to the proposed electricity price increases, have emerged.
Despite improved consumer confidence, the first quarter of 2024 witnessed a subdued performance in take-home fast-moving consumer goods (FMCG) despite a boost from the Tet 2024 (Lunar New Year) holiday. Both urban and rural areas experienced a decline in FMCG volume during the first quarter of 2024, leading to an overall value setback in total FMCG despite slowing grocery inflation. This decline was primarily driven by the food and beverage sectors, with stricter enforcement of legislation on driving under the influence significantly impacting alcoholic purchases.
The decline in alcoholic beverage sales accounted for 30 per cent of FMCG loss, followed by dairy and packaged foods. Conversely, personal care and cooking aids witnessed growth in the festive season.
In addition, online gained significant short-term retail value share in the first quarter of 2024, and is steadily growing in the long term, positioning itself to be the future driver of FMCG expansion. In rural areas, large provisions stores and specialty stores have been growing in prominence over the years.
While FMCG value during the eight-week period around Tet 2024 declined compared to the previous year, it still surpassed the peak of the 2019-2022 period. Notably, a significant portion of this decline can be attributed to reduced beer value in both urban and rural markets during the festive season.
Vietnam – rising star in Indo-Pacific: Canadian agency
The Export Development Canada (EDC) has publicised an article “Doing business in Vietnam: Catch this rising star in the Indo-Pacific” in which, its author – international trade writer Carol Fragiskos emphasised that strategic location makes it an ideal logistics and distribution hub.
In his writing, Fragiskos said that Vietnam is called the Land of the Ascending Dragon. While its unique geographical shape may have inspired the original nickname, these days, it could be referring to its rapid economic growth
Based on data from World Economics, in the last 10 years, its compound annual growth rate has been more than 8%. Last year, Vietnam’s gross domestic product (GDP) grew by more than 5%, with forecasts for this year and next, sitting at 6% and 7%, respectively.
“With numbers like these, it’s no wonder EDC chose Vietnam for our next representation in the Indo-Pacific,” he wrote.
Scheduled to open in fall 2024, the in-market team will be led by Nathan Nelson, EDC’s first chief representative in Vietnam and innovation director for the Indo-Pacific.
In his new role, Nelson’s intention is clear: Double the amount of trade from Canada to Vietnam in the next five years.
According to the writing, Vietnam lies at the centre of the Indo-Pacific region. Located near major markets in Asia—with access to key global shipping routes—its strategic location makes it an ideal logistics and distribution hub. But it’s more than geography that makes this country a strong bet, Fragiskos emphasised.
He added that Vietnam’s middle-class growth is outpacing all others in the region. Though smaller than some of its neighbours, Vietnam’s population of close to 100 million is significant, especially considering that half are under the age of 30.
According to the International Labour Organisation, although minimum wages are rising, Vietnam’s labour costs are still lower than similar countries in the Indo-Pacific. As it shifts to higher-value industrial activities, it’s becoming an increasingly sought-after market for those with manufacturing interests.
The writer also stressed that politically stable, Vietnamese government is committed to economic reform and liberalisation. Its progressive foreign investment environment offers tax incentives and preferential rates in certain priority sectors and geographic areas. Perhaps more importantly, a transparent legal framework and predictable regulatory regime provide additional confidence for companies looking to do business in this market.
He added that Vietnam is investing heavily into infrastructure development. Committed to net zero by 2050, the country’s also looking to rapidly increase its renewable energy mix. Multiple nationwide projects are underway in green energy, waste management and sustainable urban development.
In addition, Vietnam has a healthy digital economy expected to reach 38 billion USD by 2025. Multiple sectors—including e-commerce, financial technology and artificial intelligence—have been boosted by initiatives that support innovation and entrepreneurship.
As a member of several bilateral and multilateral free trade agreements—including with China, India, the European Union and the Association of Southeast Asian Nations (ASEAN)—Vietnam is a country that’s wide open for business.
Canadian exporters have preferential access to this fast-growth market through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which eliminates tariffs and reduces barriers for 98% of exports to member states.
Vietnam is Canada’s largest trading partner in the ASEAN, with bilateral trade in goods totalling 14 billion CAD (10.2 billion USD) in 2023.
However, that trade is one-sided, with Canada’s exports to Vietnam under 1 billion CAD.
Nelson said as quoted in the writing that after a lot of market analysis, EDC can confidently say that Vietnam has something for everyone. It’s the new star in the Indo-Pacific, especially for companies looking to diversify beyond China.
Nelson also said that now is important time for Vietnam. The country has been investing heavily in infrastructure development and is already an incredible manufacturing hub. For those reasons, he’s focused on identifying which advanced manufacturing and infrastructure projects mesh closest with Canadian capabilities, so he can foster connections and build capacity.
Stock market gains momentum with improved liquidity and positive Q1 results
The stock market in Việt Nam is experiencing an upward momentum driven by improved liquidity and positive Q1 results, with experts cautiously optimistic about an increased cash flow.
Despite a relatively softer information flow, experts maintain an optimistic outlook for a potential breakout rather than a significant decline.
However, they cautiously acknowledge the possibility of market volatility in certain expensive sectors.
The VN-Index has displayed a robust upward trend, surpassing critical price levels of 1,190 – 1,200 points and 1,240 – 1,250 points.
An important development is the positive momentum of the VN-Index attracting cash flow back into the market from outside sources.
This has contributed to increased liquidity on the HCM Stock Exchange (HoSE), with average daily trading values rising from around VNĐ15 trillion per session to approximately VNĐ20 trillion per session. While liquidity has improved, it remains relatively low.
However, cash flow has been circulating effectively from large-cap stocks to small and medium-cap stocks, prolonging the upward momentum of the index.
Notably, stocks of large-cap companies such as Vietjet (VJC), Hòa Phát Group (HPG), Petrolimex (PLX), FPT Corporation (FPT), and Mobile World Group (MWG) witnessed price increases in the past week.
Nguyễn Thành Trung, Director of Investment Consulting at Thành Công Securities (TCSC), said: “When investors feel more confident and perceive reduced risks, they will return to the market. Therefore, in the short term, the market is expected to be more stable as the exchange rate has been well controlled and is no longer subject to significant fluctuations. With limited optimism in alternative investment channels, stocks are currently not overly valued.”
Statistics from securities companies reveal that investor deposit balances at these firms reached nearly VNĐ100.8 trillion by the end of the first quarter of 2024, representing an increase of over VNĐ21 trillion compared to the beginning of the year.
This marks the strongest quarterly growth in the past five years. Additionally, in April, there were 110,761 new securities accounts opened, indicating a considerable inflow of new funds waiting to be invested in stocks, given the less attractive nature of other investment channels.
Nguyễn Tuấn Anh, Chairman of the FinPeace Board of Directors, recognised that liquidity is expected to increase further when the VN-Index surpasses the threshold of 1,293 points, initiating a new uptrend. Conversely, a significant market decline may attract speculative cash flow seeking undervalued opportunities.
In the first quarter of 2024, SSI Research assesses that while certain industries like real estate, electricity, water, petroleum and gas are still experiencing a downward cycle, most other sectors are gradually recovering.
The overall financial health of businesses is improving, with many industry groups reporting positive profits. Additionally, some industries have reached their lowest point and are now returning to a growth trajectory.
According to SSI Research, business profits have likely surpassed the most challenging period and are entering a more stable growth phase.
Mirae Asset believes that the positive business results in the first quarter will generate momentum for growth throughout the rest of 2024.
With 395 companies listed on the HoSE disclosing their Q1 2024 financial results, the overall outlook presents a series of encouraging signals, particularly when compared to the profit growth targets set by listed companies for the year.
VNDIRECT maintains its profit growth forecast for HoSE-listed businesses in 2024 at 16-18 per cent compared to the previous year.
VNDIRECT said: “It is expected that the VN-Index will reach 1,300-1,350 by the end of 2024, corresponding to a target P/E ratio of 14-14.2 times.”
Offering advice to investors, Bùi Văn Huy, Director of DSC Securities HCM City Branch, suggests adopting a moderate investment approach and allocating remaining funds according to the global market trends and their impact on the domestic market. Investors should reserve a portion of their funds to remain prepared for various scenarios.
VN seafood exports up 6% in first four months
Việt Nam’s seafood exports during the first four months of the year reached US$2.7 billion, up 6 per cent, with exports of many products seeing positive growth in April.
According to the Việt Nam Association of Seafood Exporters and Producers (VASEP), the country’s seafood exports in April reached $700 million, up 4 per cent year-on-year.
Shrimp exports were in April were similar to that of the same month last year at around $285 million, the highest amount since the start of the year.
According to businesses, shrimp exports are recovering as the inventory stocks are falling and need to be refilled, but actual consumer demand has not shown signs of growth.
Average export prices are still lower than two years ago.
The US is considering recognising Việt Nam as having a market economy status, which is expected to remove the trade barrier of anti-subsidy taxes, which would help Vietnamese shrimp exporters.
Lê Hằng, communications director of VASEP, said that tra fish exports in April reached $168 million, up 13 per cent, which is a positive sign after tra fish exports dropped in February and March.
Exports to the US market are seeing positive signs after Vietnamese tra fish businesses partook in the Seafood Expo North America in Boston in March, she said, adding that they also participated in Spain’s Seafood Expo Global in April.
In addition to frozen tra fish fillet, they focused on promoting deep processed catfish products with high added value, garnering the attention of importers and visitors at the exhibitions.
Tuna exports in April were up 28 per cent, exports of squid and octopus were down 14 per cent, and shelled mollusks were up 14 per cent.
Lê Hằng said that Việt Nam’s tuna, squid, octopus and sea fish processing industries are all facing the shortage of raw materials. Domestic supply is not enough to fulfill demand, so they have to import from other countries.
Regulations from the EU and Việt Nam’s new regulations to tackle illegal, unreported and irregular fishing are further hindering local supply.
For example, Vietnamese importers are now expected to notify and declare documents 72 hours before docking for foreign ships or 48 hours for container ships, which many consider to be unreasonable.
They are also unclear about a new regulation on how exporters cannot “mix together” raw seafood materials that are imported with raw seafood materials that are harvested domestically in the same batch of exported goods.
Meanwhile, exports of crab in April surged 101 per cent, with China being the main market and live crab being the key product. Other products have strong potential in China due to its close location to Việt Nam, such as live lobster and sea cucumber.
Among the top five largest export markets of Việt Nam, Japan and Korea saw slight growth in seafood imports, while the others remained the same or even fell.
Exports to China have been dropping since February, as the country has many suppliers to choose from, with competitive prices.
According to seafood exporters, if the challenges surrounding importing raw seafood materials are alleviated, exports during the second half of the year will be more favourable.
Weak bank reform to facilitate expansion activities
A number of domestic banks are planning to restructure distressed zero-VND banks, but experts warn that the process is fraught with significant risks, such as rising non-performing loans and unresolved debts.
At a late April AGM, VPBank chairman Ngo Chi Dung addressed concerns regarding the bank’s involvement in restructuring a zero-VND bank – a financial institution under special control by the State Bank of Vietnam (SBV), acquired for zero due to their negative equity.
The financial landscape includes four such banks: OceanBank, CBBank, GPBank, and DongABank.
“From a strictly financial standpoint, most banks are reluctant to undertake such restructuring. However, VPBank’s participation is motivated by broader strategic goals,” Dung said.
Dung pointed out that the involvement of strategic shareholder SMBC has fortified VPBank with a substantial capital base, enabling its participation in the restructuring efforts.
“Although this restructuring does not offer immediate financial returns, it facilitates our expansion strategy. Notably, it allows us to pursue higher credit growth and potentially increase our foreign ownership limit beyond the current 30 per cent cap,” he explained.
Banks are generally capped at a 30 per cent foreign ownership limit, but with strategic investors, VPBank aims to elevate this threshold. Dung said that participating in the restructuring of zero-VND banks could enable it to extend foreign ownership, which is crucial for scaling operations and boosting capital.
In Vietnam’s challenging financial landscape, pivotal steps are being taken to restructure financially vulnerable institutions. Nguyen Thanh Tung, CEO of Vietcombank, announced that the bank has finalised its restructuring plan, which is now pending approval from the SBV. This move is part of a broader strategy to ensure seamless transitions and adherence to regulatory timelines.
“We have developed specific strategies to proactively ensure the transition is managed smoothly,” Tung said.
In preparation, Vietcombank is refining its network and evaluating its human resources to bridge any skill gaps, simultaneously establishing tailored training programmes to swiftly meet standards. Moreover, the bank has formed dedicated subcommittees to assist in the transfer of weak financial institutions.
“Transfers are planned for 2024. Over the long term, acquiring weaker banks opens doors for potential strategies such as share sales or mergers,” Tung explained.
Meanwhile, Nguyen Thi Phuong Thao, vice chairwoman at HDBank, stated at its AGM in late April that the bank is among four chosen by the SBV due to its strong financial health and effective operations.
“About 6-7 years ago, when we received the proposal from the SBV, we arranged and prepared to engage seriously. Accepting this role underlines the bank’s commitment and opens up transformative growth opportunities,” Thao said.
“Supporting this initiative allows HDBank to utilise additional favourable mechanisms to increase our annual credit growth limits, positioning us to become one of the top banks in the country within the next five years,” Thao added.
Luu Trung Thai, chairman of MB, views this as an opportunity to explore new developmental pathways, notably in credit growth and management capabilities.
“We are prepared for the assigned tasks, just awaiting government approval,” Thai reported at the bank’s AGM last month. “MB is engaging in various collaborative efforts aimed at supporting targeted commercial banks, with mandatory transfers expected to commence this year. Post-transfer, the weak bank will continue to operate independently under MB, with future options for merging or divesting after restructuring.”
While the final destinations for these banks remain undisclosed, Vietcombank is actively providing comprehensive support to CBBank, covering aspects of governance, technology, products, services, and branding.
Meanwhile, MB’s leadership has disclosed that the bank it is acquiring has accumulated losses of approximately $833 million, along with a non-performing loan ratio of 47 per cent. Among these institutions, OceanBank, acquired for zero, faces similar financial challenges.
The restructuring process, while beneficial, is complicated by significant risks, including the potential rise in non-performing loans, unresolved corporate bond debts, and challenges in achieving robust credit growth for production.
“Given the complexities and impending risks, the timing and execution of these transfer plans must be judiciously considered to mitigate any negative impacts on the broader banking system and the economy,” noted one financial sector expert to VIR.
At the SBV’s April report to the National Assembly, the recurrent use of phrases such as “finalising” and “submitting for approval” highlighted the sluggish progress in handling weak banks, a theme that has persisted over the years.
Vu Hong Thanh, Chairman of the National Assembly’s Economic Committee, expressed frustration with the slow progress of the restructuring project for the 2021-2025 period. “In addition to the four mandatory acquisition banks, now including SCB, we are spending a significant amount of money daily to support these struggling banks, which is proving to be very costly,” Thanh remarked.
Vietnam Motor Show 2024 to open in HCM City in October
The Vietnam Motor Show (VMS) 2024, the biggest annual exhibition in the automotive and motorcycle industries, will open in HCM City in October.
The show, which is jointly organised by the Vietnam Automobile Manufacturers’ Association (VAMA) and the Vehicle Importers’ Vietnam Association (VIVA) at the Sài Gòn Exhibition and Convention Centre (SECC), will gather leading brands who will display the latest technologies and products.
The brands that are so far confirmed to join the show include Ford, GAC, Honda, Isuzu, Mitsubishi, Skoda, Subaru, Suzuki, Toyota, Volkswagen and Volvo.
For the first time, booths displaying motorbikes from Honda, SYM and Yamaha Motors will be set up at the exhibition.
The exhibition will also feature the participation of hundreds of brands in various supporting industries, accessories, spare parts, and related sectors, meeting all the needs of car enthusiasts as well as solutions for owning cars and motorcycles in Việt Nam.
With the theme “Technology and Environment”, VMS 2024 is expected to become an attractive playground with diverse, classy, and fresh experiences for car enthusiasts.
The organisers aim to create channels for interaction with consumers and authorities. Together, they strive to bring the latest smart technologies, especially environmentally friendly ones, in the automotive and motorcycle industries.
According to the organiser, this year’s VMS will also emphasise the development of green, clean energy solutions,