The proposed transaction limits on each business partner of financial institutions in the draft circular about payment agents are unreasonable, according to the Việt Nam Chamber of Commerce and Industry.

Under the draft proposal, the transaction limit is VNĐ20 million (US$785) per customer per day and the limit for an agent is VNĐ200 million per day and VNĐ5 billion per month.

VCCI said that these limits are no longer appropriate to a modern economy and may cause disruption in the provision of services.

Specifically, VCCI pointed out that these limits have been applied since 2012, when the State Bank of Việt Nam approved the pilot implementation of payment agents.

After 12 years, the limits should be adjusted, taking into account the development of the market, increasing payment demand and the inflation rate, it said.

The VCCI added that restrictions should be adjusted based on the transaction demands in each local area where the agents operate, the scale of operations and their levels of risk.

It urged the State Bank of Việt Nam to amend the circular towards applying limits on new agents only. After that, banks and their business partners can renegotiate for appropriate transaction limits.

The current fees of banks on payment transactions are low, around 0.025-0.04 per cent. Under the draft, payment agents are allowed to collect fees not exceeding those of banks, meaning that agents can earn only VNĐ50,000 – VNĐ80,000 per day with the daily transaction limit of VNĐ200 million, which is too low to attract business partners.

The Chamber argued that there should be policies to encourage financial institutions’ business partners to open payment agents in rural, mountainous, remote, border and island areas of Việt Nam, to promote financial inclusion.

According to a survey of 124 central banks around the world by the State Bank of Việt Nam, 105 of them allow payment agents.

A pilot introducing payment agents started in 2014, the aim of bringing financial services to people who might not be able to easily access a bank and ended in 2023 due to not having a legal framework. 

Domestic gold prices shoot up after SBV’s gold auction halt

Domestic gold bar prices surged by VND600,000 per tael today, May 28, a day after the State Bank of Vietnam (SBV) announced to suspend future gold auctions, according to local media reports.

The Saigon Jewelry Company (SJC) in HCMC quoted gold bars at VND88.5 million per tael for buying and VND90.5 million per tael for selling, a VND600,000 increase from yesterday’s close and a VND1 million rise against the end of last week.

Currently, SJC gold bar prices are approximately VND18.3 million per tael higher than global prices. A tael equals 37.5 grams or 1.2 troy ounces.

Other gold companies also adjusted up their prices. Bao Tin Minh Chau and DOJI sold SJC gold bars at VND90 million per tael, an increase of VND300,000. Mi Hong set its gold selling prices at VND90.3 million, up by VND600,000 from the previous trading session.

The price of gold rings also saw an uptick. A tael of 24K rings at SJC increased by VND150,000 for both buying and selling, currently trading at VND75-76.6 million per tael.

After six successful auctions with a total of 48,500 taels of SJC gold bars (over 1.8 tons of gold) finding buyers, the State Bank of Vietnam announced on May 27 that it would stop gold auctions in the future.

A new plan to stabilize the gold market is expected to be implemented soon, with a projected start date being June 3. However, specific details of the plan have yet to be disclosed.

Asia Pacific dialogue discusses new trends, challenges in financial industry

Sustainable finance, ESG integration, digital transformation in the financial industry and regulatory developments were the main topics of discussion at the ACCA Asia Pacific Dialogue held by the Association of Chartered Certified Accountants (ACCA) in Hanoi on May 28.

The event gathered policymakers, industry experts, and high-profile speakers to engage in critical discussions shaping the future of finance and business in the Asia Pacific region.

Speaking at the opening ceremony, Chief Executive of ACCA Helen Brand OBE highlighted the Asia Pacific region as a dynamic, strategically vital hub – a bridge and a link between established powers and rapidly emerging players.

“I know we will hear much more discussion on these agendas across the ACCA Asia Pacific Dialogue 2024. This landmark event gives us a unique and powerful platform to exchange knowledge and foster regional collaboration. By uniting leaders from across the region, this event aims to spark thought-provoking conversations and cultivate valuable networking opportunities that will help to shape the future of economic growth and the accounting and finance profession across Asia Pacific,” said Brand.

Deputy Minister of Finance Vo Thanh Hung emphasised that in recent years, along with the process of innovation and international integration, the Vietnamese economy has developed strongly and is currently in the world's 40 leading economies, in the world’s top 20 countries attracting foreign investment and the world’s top 20 leading countries in terms of import-export turnover.

"We understand that building a solid foundation for economic co-operation and sustainable development requires consensus and common efforts from countries in the region. In the current context, co-operation in research and development of innovative financial solutions will help solve common challenges that countries in the region face and promote sustainable economic development,” said Hung.

“Therefore, I believe that promoting co-operation between countries in the fields of finance, accounting and auditing not only improves financial management efficiency, shares resources and promotes high quality human resource training but also creates favourable conditions for sustainable economic development," said Hung.

Hưng also suggested to complete the legal framework and improve human resource capacity in accounting and auditing on the basis of international practices is an essential requirement in the economic integration and development process of each country.

“It is necessary to develop training programmes that meet international standards and practical needs of the labour market, ensuring that practising accountants and auditors are equipped with the necessary professional knowledge and practical skills. At the same time, it is necessary to encourage co-operation between training institutions, businesses and international organizations to share experiences and learn advanced training methods,” added the MoF vice minister.

During the two-day event, participants will focus discussion on various topics, including sustainable finance, ESG integration, digital transformation in finance, regulatory trends and compliance; and the future of work in finance.

The Asia Pacific region is witnessing significant shifts driven by economic growth, technological innovation, and sustainability initiatives. The ACCA Asia Pacific Dialogue will delve into these trends, offering a comprehensive understanding of how they impact the finance sector and beyond.

Discussions will cover the rise of green finance, the impact of AI and automation, and the importance of ethical leadership in fostering a resilient and inclusive economy.

The forum also is an opportunity for speakers to address key issues and opportunities, providing invaluable perspectives on navigating the evolving business landscape.

The ACCA Asia Pacific Dialogue aims to foster a platform for innovative thinking and strategic dialogue among key stakeholders in the accounting and finance sector.

Pulkit Abrol, ACCA Asia Pacific Director, said, "The ACCA Asia Pacific Dialogue provides an unparalleled opportunity for the business and finance community in our region to come together, share knowledge, and explore innovative solutions to contemporary challenges. By facilitating these crucial discussions, we aim to empower professionals to drive positive change, enhance sustainability, and embrace digital transformation, ultimately contributing to the growth of the Asia Pacific economy." 

Hanoi welcomes 2.37 million tourists in May

The capital received 2.37 million tourists in May, marking an annual increase of 16.6%, as reported by the Hanoi Department of Tourism.

Among the arrivals, the number of international tourists stood at an estimated 496,500, up 46.7% compared to the same period from 2023. The total tourism revenue reached over VND9 billion, representing a rise of 23.6% from last year.

According to the department, Hanoi served a total of 11.55 million visitors in the first five months of this year, up 14% on-year.

The total number included 2.64 million foreign holidaymakers and 8.91 million domestic visitors, thereby showing increases of 51.9% and 6.1%, respectively, from last year, the department reported.

Total revenue made from tourists during the January to May period was estimated to be at more than VND45 billion, a rise of 23% over the same period from 2023.

Hanoi welcomed around 24 million tourists throughout last year, a remarkable annual growth of 27%.

This year the capital is aiming to receive approximately 27 million visitors, including 5.5 million foreigners, up 9.2% and 16.4% on-year, respectively. The total revenue from tourism is expected to reach around VND103.74 trillion, an annual increase of 11.1%.

Tall Building Forum discusses future of urban living

The European Chamber of Commerce in Vietnam (EuroCham Vietnam) and its Construction Sector Committee hosted the inaugural Tall Building Forum on May 28 in Ho Chi Minh City as part of efforts to explore the future of urban living.

The event was supported by the Council on Tall Buildings and Urban Habitat, brought together stakeholders from the construction industry and Government, as well as policymakers who were keen to discuss the challenges and opportunities of sustainable urban development in Vietnam.

The country’s rapidly growing cities face a critical challenge of balancing rapid growth with environmental stewardship. The Tall Building Forum confronted this challenge head-on, fostering a vibrant dialogue focusing on technologies and strategies aimed at ensuring that Vietnamese urban expansion is not only robust but also responsible.

In his opening address, Dominik Meichle, chairman of EuroCham Vietnam, championed international collaboration as a cornerstone to achieving these goals. "This forum represents a unique opportunity for Vietnam and Team Europe to come together to reimagine our cities. By working together, we can construct urban environments that are not only more impressive, but also more environmentally conscious,” he said.

This sentiment was echoed by Michel Cassagnes, chairman of EuroCham's Construction Sector Committee, who emphasised the shared responsibility for sustainable development, noting, "The future of our cities depends on our collective commitment to building smarter, not just bigger.”

He went on to praise the forum for paving the way for "approaches that benefit both our economies and our environment.”

He pointed out that numerous Government and industry leaders, including from The Global City, had enriched the discussion with their insights on cutting-edge technologies, sustainable building materials, and innovative design strategies. They largely concentrated on tackling pressing issues such as integrating high-rise buildings into existing urban landscapes, ensuring affordability and inclusivity, and minimising the environmental impact of tall buildings.

The commitment to sustainable urban development extends beyond the nation’s borders. In addition, EuroCham Cambodia will carry this momentum forward by hosting the 2024 edition of its established forum in Phnom Penh on 30 May, underlining the European business community's ongoing dedication to responsible growth and innovation across Southeast Asia, he added.

Meanwhile, Martin Brisson, executive director of EuroCham Cambodia, expressed enthusiasm for the upcoming forum, stating that "We are excited to host the Tall Building Forum once again, this time with our partners at EuroCham Vietnam. We will explore the importance of sustainability in modern construction, the regulatory environment for tall buildings, and the prospect of affordable tall buildings in the future.”

“We are also proud to be showcasing some of the finest work of Cambodia’s architectural students, who will display their designs at the forum as part of the Tall Building Design Competition," he stressed.

Hai Phong focuses on digital transformation in logistics

The fifth regional logistics forum, held in the northern port city of Hai Phong on May 28, addressed the crucial role of digital transformation in propelling growth of the Red River Delta's logistics sector.

The event was co-hosted by the Vietnam Chamber of Commerce and Industry (VCCI), the municipal People's Committee, the Department of Industry and Trade, the Business Forum magazine, the Vietnam Logistics Business Association (VLA), and the Hai Phong Logistics Association (HPLA).

VCCI President Pham Tan Cong highlighted the forum's national reach, noting its successful iterations across the Red River Delta, Southeast Vietnam, and the Mekong Delta. He emphasised the interest from policymakers, industry experts, and logistics players across the country.

Discussions at the event focused on identifying trends and challenges in digitalising logistics, exploring international best practices and analysing Vietnam's existing policies and mechanisms to support this transformation.

Nguyen Duc Tho, Vice Chairman of the municipal People's Committee, pointed out that Hai Phong, with its 1,000 strong logistics companies, has the potential to become a digital hub, not just for itself, but for the entire Red River Delta's economy.

The city's master plan outlines an ambitious expansion of its logistics network, aiming to reach 1,700-2,000 hectares by 2030 and further expand to 2,200-2,500 hectares by 2040.

National and regional strategies further emphasise the importance of digital transformation in logistics. The National Digital Transformation Programme prioritises logistics as one of eight key sectors, while the Ministry of Industry and Trade's Vietnam logistics service development strategy serves as a guiding light for businesses.

For the Red River Delta specifically, the Politburo's recent resolution targets developing Hai Phong and Quang Ninh into major maritime economic hubs by 2045, highlighting the crucial role of a robust and modern logistics sector./.

CT Group pitches hi-tech, sustainable projects to Binh Duong

CT Group, a leading Vietnamese multi-industry conglomerate, presented potential cooperation areas in the southern province of Binh Duong during a working session with Chairman of its People's Committee Vo Van Minh on May 28.

CT Group Chairman Tran Kim Chung highlighted the group's established track record, noting its foundation in 1992 and current presence in 12 countries through 62 member companies. He said it has built a reputation across 11 key sectors, including smart green urban development, infrastructure, environment, logistics, clean food and healthcare, artificial intelligence, drone, genetic and cellular technologies, renewable energy, quantum technology and semiconductor.

Chung outlined several specific projects CT Group envisions undertaking in Binh Duong. These initiatives include training and disseminating methods for automated greenhouse gas inventory, promoting and facilitating carbon credit trading, constructing hi-tech smart industrial parks for semiconductor manufacturing, and developing smart urban areas along major transportation routes.

Chairman Minh expressed his support for CT Group's proposals and committed to working closely with relevant departments and agencies to thoroughly discuss the projects in detail. He noted Binh Duong's ongoing transformation of several smaller industrial zones in Di An city into hi-tech hubs, creating a welcoming environment for CT Group's ventures.

Binh Duong wishes to draw more strategic investors, especially in the hi-tech sector, to enhance added value and propel sustainable development, he said, adding that CT Group’s projects align with the local socio-economic development strategy and the province will offer all possible support to them.

The guest further expressed his interest in collaborating with local universities and research institutes to develop relevant training courses.

Binh Duong has emerged as a major industrial hub in Vietnam, attracting nearly 41 billion USD in foreign direct investment, according to the provincial People's Committee./.

Ben Tre’s clam farming re-certified Marine Stewardship Council Standard

The clam farming sector of the Mekong Delta province of Ben Tre has received Marine Stewardship Council (MSC) certification, marking the third time it has met the organisation’s sustainability and management standards, Director of the provincial Department of Agriculture and Rural Development Doan Van Danh announced on May 28.

The certificate will be valid from May 23, 2024 to May 22, 2029. The MSC Fisheries Standard is used to assess if a fishery is well-managed and sustainable.

Earlier, the local clam farming sector received the MSC certificate in 2009 and 2016.

According to the department, being re-certified by the MSC is an advantage for Ben Tre to expand its consumption markets, and create community consensus on the sustainable development of the province's clam exploitation and management in the coming time.

It also shows great efforts and consensus of the communities of the three coastal districts of Ba Tri, Binh Dai and Thanh Phu in jointly exploiting and managing the clam farming sector.

In June, the department will hold a conference to award MSC certificates to seven cooperatives in the province, and introduce MSC-certified clam raw material areas to processing enterprises, said Danh./.

Deputy PM directs Ministry of Construction to coordinate and oversee social housing policy

Deputy Prime Minister Trần Hồng Hà has asked the Ministry of Construction to coordinate and oversee social housing projects.

Deputy Prime Minister Hà requested that the ministry take on a supervisory role in social housing, while compiling the draft of a decree on management and development of social housing held in Hà Nội on May 27.

Deputy PM Hà also asked the MoC to simplify the criteria for determining who should be allocated social housing, as well as conditions on renting and buying social housing.

At the meeting, Hà stated that the development of the decrees detailing implementation of the Land Law 2024, the Housing Law 2023 and the Real Estate Business Law 2023 are important for the public, businesses and state management agencies.

So, the Ministry of Construction needs to coordinate with the Ministry of Finance and the State Bank to study the mechanism for mobilising and using resources for social housing, for engaging with commercial housing project investors and to be the lead in looking at possible funding from commercial banks, who could give preferential credit packages for social housing, he said.

The decree needs to have planning and policies for the long term, to arrange land funds for both urban and rural areas and decide how allocate the State budget combined with other financial sources for social housing projects.

In addition, the Ministry of Construction should clarify who qualifies for social housing, set ways to encourage private investment in social housing projects and determine how social housing is inspected.

The Deputy Prime Minister also asked for regulations to ensure the rights of ethnic minorities and people in remote areas in terms of social housing, along with ensuring that there are regulations on social housing investment projects for the armed forces.

MoC reports that the draft of this decree will have detailed guidance on 18 contents of the 2023 Housing Law related to social housing policies.

At the meeting, Vice Chairman of Quảng Bình Provincial People's Committee Phan Phong Phú proposed adding regulations to encourage commercial housing investors to build social housing from the allocated land fund, instead of paying money into the budget.

Other ideas were to clarify the preferential credit policies, State management agencies' appraisal responsibilities for the social housing construction obligations of commercial housing project investors and arrange land funds in industrial parks to build workforce housing. 

FDI reaches US$11.07 billion in first five months of 2024

Foreign direct investment (FDI) into Việt Nam during the first five months of the year has reached US$11.07 billion, a 2 per cent increase compared to the same period in 2023, according to data from the Foreign Investment Agency under the Ministry of Planning and Investment (MPI).

Project actualisation among FDI projects was estimated at around $8.25 billion, a 7.8 per cent increase year-on-year.

By May 20, the Southeast Asian country hosted 40,285 projects with a total registered capital of $481.33 billion and a project actualisation of $305.43 billion, or 63.5 per cent of the total registered investment capital.

The FDI sector posted a trade surplus of $19.57 billion, including crude oil, and a trade surplus of $18.52 billion, excluding crude oil. Meanwhile, the domestic sector recorded a trade deficit of over $11.05 billion in the same period.

In terms of capital, manufacturing and processing led the pack with investment capital of over $7.43 billion, or 67.1 per cent of the sector's total investment, an increase of 11.9 per cent compared to the same period last year.

The property sector ranked second with a total investment of nearly $1.98 billion, or nearly 17.9 per cent of total registered capital, and an increase of 70.8 per cent year-on-year. Following were wholesale, retail, transportation and warehousing, with a total registered capital of over $856.4 million.

In terms of quantity, the manufacturing and processing industry led in the number of new projects with 35.9 per cent of all new projects, as well as capital adjustment, with 62.3 per cent of all projects. Meanwhile, wholesale and retail led in the number of capital contributions and shares purchased, at 43.4 per cent.

Singapore ranked first among 78 countries and territories with investment in Việt Nam during the period with nearly $3.25 billion, or 29.3 per cent of total FDI, up from 28.2 per cent in the same period last year. Hong Kong (China) ranked second with nearly $1.45 billion, accounting for 13.1 per cent and an increase of 220 per cent compared to last year.

Việt Nam's three other largest investors were China, Japan and South Korea, with China leading in the number of new investment projects with 28.3 per cent. 

Positive outlook for VN's steel industry in 2024: Major companies set for recovery, small businesses face output challenges

The steel industry in Việt Nam is expected to have a positive outlook for 2024, with major companies like Hoà Phát and Hoa Sen projected to experience significant recoveries, while small businesses may face challenges in finding output due to the recovery of steel prices and demand from large contractors.

According to Tiên Phong Securities (TPS), the outlook for the steel industry to the end of 2024 is largely positive. The domestic economy is showing signs of improvement, with construction projects resuming, feeding into a more vibrant steel consumption market after the Lunar New Year holiday.

Steel enterprises have seen smooth progress in the first quarter of this year. However, the consumption of construction steel in Việt Nam experienced a 20 per cent decline compared to the fourth quarter of the previous year, mainly due to weak demand from the real estate market.

Financial reports from steel industry enterprises in the first quarter of 2024 indicate improved business results after a volatile period. TPS estimates that the revenue of steel industry enterprises increased by 22 per cent to VNĐ68.8 trillion compared to the same period last year. Net profit also saw a significant increase of 571 per cent to VNĐ3.3 trillion. These positive results can be attributed to the strong growth in finished steel exports and stable input material prices.

Hoà Phát Group (HPG) continues to dominate the steel industry, contributing 88 per cent to the industry's after-tax profit ratio. HPG holds the largest market share in construction steel and steel pipe consumption, with 37.31 per cent and 24.59 per cent respectively. The success of HPG can be attributed to its hot rolled steel coil, which is in demand across various manufacturing industries. This product's market risk is relatively lower as it is not heavily dependent on specific consumer markets.

Looking ahead to the remainder of the year, TPS believes the overall picture is positive but there will be differentiation. Factors such as investments from the State budget, including large projects like the North-South Expressway and Long Thành airport, as well as continued demand from the real estate industry, will drive business prospects.

Large enterprises like Hoà Phát Group and Hoa Sen Group are expected to experience significant recoveries, while small businesses may struggle to find output.

In spite of the buoyant business environment, the valuation of steel stocks are currently relatively high compared to the industry average. The P/E ratio for the steel group is at 23.1, which is higher than the previous three years. Stocks of prominent companies like Hoà Phát Group, Nam Kim Group and Hoa Sen Group have shown strong fundamentals, due to improved sales, better productivity and increased exports of finished steel products.

While the overall outlook for 2024 is positive, experts warn that caution should be exercised in terms of valuation, as steel stocks are currently trading at relatively high levels compared to their historical averages. 

Pangasius exports show signs of recovery

Statistics from Việt Nam Customs show that pangasius export turnover in the first five months of this year is estimated at US$725 million, up 2 per cent over the same period last year.

According to the Việt Nam Association of Seafood Exporters and Producers (VASEP), the largest import market for Vietnamese pangasius currently is the US, followed by China, Europe and some South American markets.

The US is currently increasing imports of processed pangasius products, with value added 8.5 times compared to the same period last year.

Frozen pangasius fillets are still the main product of pangasius exports to the US. By the end of May, exports of frozen pangasius fillets to the US reached more than $120 million, up 19 per cent over the same period last year, accounting for 98 per cent of the total value of pangasius exports to the US.

Trương Đình Hòe, general secretary of the VASEP, said that consumers in the US are having higher demand for white fish products, especially pangasius from Việt Nam. Recently, a large number of Vietnamese businesses participated and introduced Vietnamese pangasius products at the North American Seafood Exhibition.

The advantage of Vietnamese pangasius is that it is delicious and suitable for a variety of preparation methods for American consumers such as fish sticks or fish burgers, he said.

In addition, the fact that white meat fish supplies to the US market are decreasing is also a positive sign for Vietnamese pangasius exports to the market.

“The US is considering recognising Việt Nam as a market economy, which has brought optimistic hope to many Vietnamese economic sectors, including the fisheries industry. It is expected that in July, the US will decide whether to recognise Việt Nam as a market economy or not. If Việt Nam's economy is recognised, this will be an advantage for Vietnamese businesses for eliminating or reducing anti-dumping taxes on seafood products,” Hòe said.

In the European market, pangasius export turnover to this market in the first five months of this year is estimated at $70 million, down 7 per cent compared to the same period last year because this market only became vibrant again since April.

Thu Hằng, an expert from VASEP, said that Germany has surpassed the Netherlands to become the largest pangasius import market in Europe.

VASEP also recorded growth in many European markets in Vietnamese pangasius imports, including Lithuania increasing by 215 per cent, Spain up by 69 per cent, Belgium up 62 per cent and Greece up 46 per cent.

The European market is receiving more attention because demand for white meat fish is on the rise. In addition to focusing on products with high added value, businesses need to focus on fulfilling the market's requirements, as well as on promotion and marketing.

Vietnamese seafood exports to Europe, including pangasius, will be affected by the global economy. Vietnamese export enterprises need to take full advantage of the incentives and advantages that the Việt Nam-Europe Free Trade Agreement (EVFTA) bring to participate more deeply in the European market.

Meeting the green standards of this market bloc on environmental protection and sustainable development is also crucial.

VASEP forecasts that Việt Nam's pangasius export prices will increase by 10 per cent in the third quarter of this year, due to a combination of fuel factors, logistics costs and bank interest rates decreases. This is an opportunity for the entire Vietnamese pangasius industry.

DPPA streamlining closer to acceptance

The business community has asked for relaxed regulations for large customers to be able to buy and sell electricity directly.

The latest draft direct power purchase agreement (DPPA) mechanism, set to be submitted to the government this week, outlines the two models of using private transmission lines or using the national grid.

The Ministry of Industry and Trade is pushing rooftop solar for self-consumption. Specifically, the draft on the DPPA mechanism stipulates that organisations and individuals using electricity produced from the 22kV voltage level, with an average monthly consumption of 500,000kWh, can participate.

Deputy Prime Minister Tran Hong Ha has asked for clarity on the appropriateness of regulations on customers with average monthly consumption of 500,000kWh. At the same time, there must be consideration on having a capacity limit between manufacturers and commercial services to ensure the rights and obligations of parties participating in the mechanism; and policies to encourage businesses to consume renewable energy to receive green credits.

A Vietnam Chamber of Commerce and Industry (VCCI) report published last week suggested that with direct electricity trading through private lines, the impact on the national electricity system is negligible, and so it should be expanded to all customers.

“The draft stipulates that customers who buy electricity directly must invest in grid infrastructure and have a team to manage and operate the grid. It should be left to the two parties to negotiate,” the report said.

Ngo Duc Lam, former deputy director of the Institute of Energy under the Ministry of Industry and Trade (MoIT), said that there are two details related to the application subjects that need attention.

“We should expand the subjects allowed to buy and sell electricity directly by lowering customers’ monthly electricity consumption, and we should not give specific figures on electricity consumption output to apply to this mechanism,” Lam said.

To encourage businesses to use more renewable electricity and to reach the goal of reducing net emissions, there needs to be a longer-term electricity trading mechanism, he added.

“Because in general, to have a truly competitive electricity market, it must still be open to those participating in direct electricity trading, regardless of whether customers are large or small,” he said.

DPM Ha stated in a meeting on May 14 that although the National Power Development Plan, the Law on Electricity, and other relevant documents all call for the creation of a competitive electricity market, the implementation has been far too sluggish because of the technical issues raised in the draft mechanism.

Conditions are more flexible now that certain previous requirements have been removed and specific criteria for choosing parties to take part in the pilot programme have been provided in the MoIT’s draft, Ha said.

Many investors, international organisations, and electricity customers have expressed interest in participating in the DPPA mechanism and hope that the government will soon issue the mechanism to help achieve sustainable development goals.

Samsung, Apple, Heineken, and Meta have all sent letters to the prime minister and the MoIT to show support for the DPPA mechanism, the ministry said.

The MoIT also said in its impact assessment report of the DPPA mechanism that 24 renewable energy projects with an installed capacity of more than 1,770MW want to participate. Some 17 projects with capacity at 2,835MW are considering participation conditions, and 26 projects responded that they did not want to participate.

DPM Ha also requested that it be necessary to clearly define the responsibilities of the MoIT, the Ministry of Natural Resources and Environment, and Vietnam Electricity on certification procedures and publicising information about businesses consuming clean and green electric energy to be granted credit.

Industrial park investors are also major customers, and the customer base must be expanded to include service providers and not simply manufacturers, Ha added.

Vietnam well-placed to remain strategic M&A leader

SCGJWD Logistics (SJWD), the logistics arm under Siam Cement Group (SCG), in early May announced that it is purchasing SCG International Vietnam Co., Ltd. (SCG Inter VN) for approximately $5.4 million.

The deal marks SJWD’s expansion in Vietnam’s fast-growing logistics industry. The company’s agreement to enter into the contract is set for this month. The expected closing date for the transaction is in June.

SCG Inter VN is a third-party logistics provider with over 10 years of experience in the logistics industry. It has established a network of service providers specialising in truck and container transport, offering logistics services across Vietnam and facilitating cross-border freight transport in Thailand, Cambodia, Laos, and China, as well as being an expert in warehouse management.

SCG Inter VN also offers logistics services for the Long Son Petrochemicals complex in Vietnam, which is operated by SCG Chemicals, the chemical arm of SCG.

“We expect to start recognising revenues from SCG Inter VN in the third quarter of 2024,” Eakaponng Tungsrisanguan, CFO of SJWD, told Bangkok Post.

Meanwhile, Japan’s Mitsubishi Materials Corporation Group (MMC Group) also reached a framework agreement with Masan High-Tech Materials to acquire H.C. Starck Holding (HCS).

MMC Group’s potential acquisition of HCS plays to its strengths in the mid-stream and down-stream tungsten value chain. The acquisition will provide MMC Group with access to HCS’ production hubs in Europe, North America and China as well as a comprehensive tungsten scrap recycling platform backed by proprietary intellectual property including 90 worldwide patents and another 53 patents in the application phase.

Meanwhile, the sale of HCS to MMC Group will help Masan High-Tech to focus on optimising its domestic operations. This agreement marks the next step in both parties’ business cooperation.

Vo Ha Duyen, chairperson of law firm VILAF, told VIR that challenges in the financial markets are likely to persist across certain domestic sectors in 2024 as investors grapple with the evolving global and domestic political and regulatory landscapes.

Despite this, the country will likely remain a key growth leader in Southeast Asia, largely thanks to the effective free trade agreements boosting its export industries.

“For 2024 and 2025, Vietnam is probably expected to experience robust merger and acquisition (M&A) activity in healthcare, financial services, and digital infrastructure. This growth is likely driven by an ageing population, heightened health awareness, and technological advancements such as fintech and digital banking,” Duyen said.

Additionally, the recent relaxation of foreign ownership restrictions in data centres and telecom services will further stimulate this trend. From an external perspective, the US Federal Trade Commission’s increased scrutiny of M&A transactions in the US may redirect more investors towards Asia, including Vietnam, Duyen added.

The energy sector likely also holds potential for M&A activities in Asia. However, Vietnam would need to accelerate the development of its legal framework surrounding energy investments to fully capitalise on this opportunity and rejuvenate investment flows within the sector, she added.

According to data by the General Statistics Office, foreign investors injected $929.6 million into 902 capital contribution and share purchase deals in January-April. For the form of capital contribution and share purchase by foreign investors, capital invested in transportation and warehousing activities reached $277.2 million, accounting for 29.8 per cent of the value of capital contribution.

The figure for sci-tech and professional activities stood at $228.7 million, accounting for 24.6 per cent. The remaining industry has $423.7 million, making up for 45.6 per cent.

Masataka "Sam" Yoshida, head of the Cross-border Division of RECOF Corporation, is also upbeat about the outlook of Vietnam’s M&A market. The company forecasts a stable but stronger growth of Japanese investments not only in the number of transactions but also in the transaction size, backed up with the increase in valuation of Vietnamese companies which have added value in their financial performances.

“The presence of Japanese investors may bring a new dimension of competition to the Vietnamese market, not just for local companies but also for foreign investors from Thailand, South Korea, and Singapore,” Yoshida said.

The strategic, long-term investment approach of Japanese firms, coupled with their technology and operational efficiency, sets a high benchmark for value creation and sustainable growth, he added.

“This not only challenges existing players to elevate their game to higher levels but also offers Vietnamese companies opportunities for technological and managerial enhancement.”

Ca Mau to invest VND20 trillion to boost shrimp industry

The Mekong Delta province of Ca Mau plans to invest VND20 trillion to develop its shrimp industry, aiming to increase export revenue to US$1.4 billion by 2025 and US$1.65 billion by 2030.

The People’s Committee of Ca Mau Province said on May 25 that it had approved a development plan for the shrimp sector in 2021-2030, with a vision to 2050.

Under this plan, the province will use advanced technology to enhance productivity and quality, making local shrimp competitive in global markets. The plan also addresses climate change and environmental protection.

Ca Mau aims to produce 176,000 tons of processed seafood by 2030, and establish two seafood complexes in Nam Can and Dam Doi districts, covering 190 hectares and 178 hectares, respectively. These complexes will provide housing and logistics for workers and experts.

The plan also focuses on shifting production towards value-added products, targeting 75-80% of exports in this category by 2030, while reducing the share of raw exports to 20-25%.

Ca Mau looks to maintain strong export markets while expanding to new ones. By 2030, it projects the EU will account for 17% of exports, Japan 20%, the U.S. 20%, and China and others 43%.

Vietnam is one of the world’s largest shrimp producers, with Ca Mau as its leading shrimp farming province. The province has 280,000 hectares under shrimp farming, part of its 303,000 hectares of aquaculture land. The shrimp industry contributes nearly 50% of Vietnam’s seafood export value, generating close to US$4 billion annually.

HCMC public capital disbursement remains slow

HCMC had disbursed over VND6.55 trillion of public investment capital as of mid-May, reaching just 8.3% of its 2024 plan, according to official statistics.

The plan for disbursing allocated capital this year is VND79.264 trillion. However, 925 projects worth VND16.4 trillion, or 21% of the allocated funds, have yet to see any disbursement, reported the State Treasury in HCMC.

Bui Nhat Toan, deputy director of the State Treasury in HCMC, expressed concern over the lower-than-expected disbursement rate, saying that the State Treasury is collaborating with the Department of Finance and the Department of Planning and Investment to advise the HCMC People’s Committee on accelerating capital disbursement.

Toan emphasized the need for enhanced efforts among treasury officials to speed up disbursement. This includes strict inspections and urging investors to complete necessary procedures, aiming to achieve a 95% disbursement rate by the end of 2024.

Developers of key projects must submit weekly progress reports. Projects facing delays will be closely monitored, with penalties for contractors found to cause delays.

Municipal departments are urged to support the disbursement effort. This involves speeding up compensation, resettlement support, and site clearance. They must also expedite the relocation of technical infrastructure and streamline project acceptance and payment procedures.

The State Treasury in HCMC recommended empowering task force leaders to resolve project-specific issues swiftly. There is also a call for stringent accountability measures for investors who frequently request project adjustments and extensions.

Online payments for public services soar

The inclination toward online payment for public services is steadily increasing in Vietnam, according to the National Payment Corporation of Vietnam (Napas). 

A Napas report shows that in the first quarter of 2024, the number of public service payments processed online increased by 153% and the transaction value increased by 129% compared to the same period last year. 

In 2023, these figures increased by 540% in terms of transaction volume and 149% in terms of transaction value compared to 2022. The method of paying for online public services through mobile money accounts will be expanded to increase convenience, simplicity and speed.

To process payments on the National Public Service Portal (dichvucong.gov.vn), the company completed the integration of online payment infrastructure for 63 localities and 21 ministries, departments and public service providers.

Citizens can pay online for a wide range of services, including taxes, land and property registration fees, traffic fines, court costs, voluntary family health insurance and social security premium payments, and individual tax returns and payments. 

Napas is actively using the National Public Service Portal and the VNeID app (developed and managed by the Ministry of Public Security), the two online payment channels for public services, to promote Stage 4 online public service payments for citizens. 

Napas continues to work with the Ministry of Public Security and relevant units to implement online payment of fees/charges for public services through the VNeID application. 

Recently, the Ministry of Public Security piloted online payment of criminal record certificate fees for citizens in Hanoi and Hue City. People can choose to pay with NAPAS cards from 44 banks/financial companies, through bank accounts from seven banks, or with the VietQR code through applications from other 37 banks. 

Nguyen Quang Minh, CEO of Napas, said that working with the Government Office, the Ministry of Public Security and related departments to build the payment infrastructure for online public services on the National Public Service Portal and the VNeID application is one of its important tasks. 

The introduction of modern, fast and secure online payment options for public services for individuals and businesses has been accelerated thanks to the network of payment infrastructure and resources that are readily available, Minh added.

The CEO hopes that the pilot results will serve as a basis for expanding online payment for more public services. This is in line with the government's goals for national digital transformation and the development of the digital economy, society and digital citizens.

C.bank not considering dropping credit growth quota for fear of rising bad debts

The State Bank of Vietnam (SBV) is not expected to abolish the annual credit growth quota mechanism due to concerns that the system may return to the interest rate competition, lending, and high non-performing loans seen before 2011.

In its report to the National Assembly, the SBV stated that starting in 2024, the credit "leeway" has been removed for branches of foreign banks. For other credit institutions, the SBV will gradually review and waive these limits, though some challenges remain.

The credit quota refers to the lending growth limits allocated to each bank by the SBV. These limits are calculated based on various inputs, including outstanding credit balances, ranking scores, and the sales of credit balances.

According to the SBV, the biggest challenge is that Vietnam's economy is heavily dependent on bank capital, a situation that has not changed. The pressure to balance capital to the economy continues to weigh on the banking system, posing risks of maturity mismatches and liquidity issues.

"Given the unique economic conditions of Vietnam, if banks increase credit growth without control measures, the system could return to the hot credit growth period seen before 2011," the SBV report stated.

The SBV is also concerned that this could lead to an increase in non-performing loans, threaten the safety of the banking system, and pose a risk of macroeconomic instability and inflation.

Therefore, maintaining the credit limit tool is deemed necessary by the SBV. "Removing this measure needs to be done cautiously, with a clear roadmap, and gradually in accordance with market conditions," the SBV said.

 However, during a recent discussion session at the National Assembly, Ha Sy Dong, Vice Chairman of Quang Tri Province, suggested that in the long term, the SBV should use interest rate tools to manage credit rather than growth limits.

The SBV also noted that if the credit growth allocation mechanism is abolished, control will be implemented through capital adequacy and operational indicators. To achieve this, the SBV has instructed credit institutions to restructure and handle bad debts and improve governance standards.

Before 2011, the credit-to-GDP ratio increased rapidly, leading to a race in deposit and lending interest rates and a surge in bad debts. Many banks faced liquidity risks, leading to macroeconomic instability.

This year, the SBV already allocated the credit limit to banks at the beginning of the year with a growth target of 15%. This approach differs from previous years when allocations were made in several stages based on banks' applications.

Việt Nam officially joins sustainable aviation fuel club

iệt Nam's recent venture into sustainable aviation fuel (SAF) marks a significant milestone not just for Vietnam Airlines (VNA) but for the entire Vietnamese aviation sector.

By completing flight VN660 from Singapore to Hà Nội using SAF, Vietnam Airlines has taken a bold step towards fostering greener practices within the industry.

SAF, derived from renewable and sustainable sources like used cooking oil and waste animal fat, offers a promising avenue for reducing greenhouse gas emissions in aviation. Its ability to meet stringent international aviation standards while significantly curbing emissions throughout its life cycle makes it a compelling alternative to traditional fossil fuels.

SAF's compatibility with existing infrastructure, resilience in various weather conditions, and potential to enhance flight performance underscore its viability as a fuel of the future. As the global aviation community increasingly commits to net zero emissions by 2050, SAF emerges as a pivotal solution in mitigating the industry's environmental footprint.

Việt Nam's dedication to sustainability, as demonstrated through its participation in international climate summits and commitments to achieving net zero emissions, aligns with broader global efforts to combat climate change.

The adoption of SAF by Vietnam Airlines not only exemplifies the nation's commitment to environmental stewardship but also positions it as a proactive player in the global transition towards greener aviation practices. 

HSBC Vietnam provides loan to Gemadept

HSBC Bank (Vietnam) Ltd. (HSBC Vietnam) and Gemadept Joint Stock Company (Gemadept) signed a Sustainable Linked Loan agreement yesterday as part of a strategy to access green capital for sustainable development.

This is the next step in logistics company Gemadept's development plans, also serving to reaffirm HSBC Vietnam’s role and efforts in supporting Vietnamese businesses to become more sustainable.

Port exploitation and logistics - Gemadept's specialty - are also key for sustainable development, acting as an important bridge in domestic and global trade.

The potential of the industry is highlighted by the continuous growth of imports and exports in recent weeks, demonstrated by a 15.5% increase of total import and export turnover in the first quarter of 2024.

This deal marked the first sustainable linked loan that HSBC successfully arranged for a Vietnamese enterprise in ports and logistics. To achieve this facility, Gemadept has gone through HSBC's credit management and approval process on sustainable finance, as well as building KPIs in its green and sustainable development strategy.

Gemadept will complete measurements of its ports and report on Scope 1, 2 and 3 GHG emissions, certified by Vinamarine Green Port Standards and set by the Vietnam Marine Division.

This sustainable linked loan marks a new chapter for both organisations’ strategic cooperation.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes