KTFA:
Henig: Vietnam’s retail sales forecast to reach 350 billion USD by 2025
08:00 | 06/02/2023
The scale of the domestic retail market is expected to increase from 142 billion USD at present to 350 billion USD by 2025, contributing 59 per cent of the national GDP, according to the Ministry of Industry and Trade (MoIT).
Last year, the total revenue from retail sales of goods and services rose 21 per cent, exceeding the target of 8 per cent.
A survey by Vietnam Report showed that over 53.8 per cent of total retail firms enjoyed similar and higher business results compared to the pre-pandemic level.
Experts held that growth of retail sales is being supported by rise in income and the strong recovery of the tourism sector as well as relevant sectors such as transport and accommodations, as well as the effectiveness of inflation control measures.
There are signs of vibrant retail activities as many foreign investors have announced their plans to return after COVID-19.
Recently, Thailand’s Central Retail said that it will pump an additional 20 trillion VND (852.87 million USD) into the Vietnamese market in the next five years, pushing its investments in Vietnam in the 2022-2026 period to 65 trillion VND. With this plan, Central Retail will raise their coverage from 40 localities currently to 55.
Meanwhile, Japanese giant retailer Aeon Group plans to build another megamall in Hanoi, raising its total trade centres in Vietnam to 20.
In 2023, four trade centres are scheduled to be launched – Central Premium Plaza, Vincom Megamall Grand Park, Sunrise City Central and Emart 2 with a total area of over 116,000 sq.m.
Many experts predicted that this year, retailers will expand their selling channels, bringing their products to different trading platforms to optimise online retail channels.
Vietnam’s total retail sales of goods and services in January was estimated at 544.8 trillion VND, up 5.2 per cent from the previous month and 20 per cent as compared with the same period last year, according to the General Statistics Office (GSO).
The office explained that the hike was attributed to the growing consumption demand as Tet (Lunar New Year), the biggest and longest festival in the Southeast Asian nation, fell in the month.
Of the total, the retail sales of goods were 435.4 trillion VND, a year-on-year rise of 18.1 per cent, with the biggest increase seen in garments (27 per cent).
Source: VNA LINK
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Henig: Market expected to move in a narrow range this week
February, 06/2023 – 08:15
The market needs a period of accumulation in a narrow range to create a solid foundation before a new uptrend can be created.
HÀ NỘI — The Vietnamese stock market struggled following the Tết holiday, but liquidity improved as selling pressure increased, reflecting investors’ desire for profit-taking. However, experts remain positive about the market’s development in the future.
The market benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) ended last week at 1,077.15 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) was at 215.28 points.
For the week, both indices recorded a weekly loss, with the former losing 3.6 per cent and the latter down 2.5 per cent.
Trading value on the main exchange HoSE increased by 23.1 per cent compared to the previous five trading sessions to nearly VNĐ66.65 trillion (US$2.8 billion), corresponding to a 25.1 per cent gain in trading volume to over 3.6 billion shares.
Similarly, the trading value on the HNX also advanced by 38.6 per cent to VNĐ6.9 trillion, equivalent to a 40 per cent increase in trading volume to 469 million shares.
The market’s correction caused most of the stock industries to decline. Of which, financial stocks dipped the most with 4.8 per cent in market capitalisation, followed by realty and information technology stocks.
Foreign investors were net buyers on both exchanges last week, worth more than VNĐ1.8 trillion, supporting the overall market. In terms of net volume, they bought Hoà Phát Group (HoSE: HPG) most with 39.7 million shares.
Others were fund certificates FUEVFVND and Sacombank (STB) shares with 13 and 12.9 million units, respectively.
On the contrary, Sieu Thanh Corporation (ST8) was sold the most with 6.4 million shares.
Analysts from Saigon – Hanoi Securities JSC (SHS) said that last week was a strong correction week for the market as the VN-Index dropped more than 40 points during the week and closed at 1,077.15 points. The market has entered a correction week after four weeks of consecutive gains since the beginning of 2023.
However, SHS believes that the market is in a recovery phase after escaping the downtrend but failing to establish an uptrend immediately. The market needs a period of accumulation in a narrow range to create a solid foundation before a new uptrend can be created.
In the short term, SHS believes that last week’s correction was predictable and necessary to accumulate more, and the recovery wave may not be over. And after the correction period, the VN-Index may still reach the level of 1,150 points, the securities firm added.
The current phase of the market is in a recovery wave with a wide range after a downtrend, and gradually the market will fluctuate less and less to accumulate. However, in the accumulation phase, more and more medium- and long-term investment opportunities will form, especially in the group of strong stocks that are less affected by the recent downtrend and those that recover earlier and tend to break the peaks.
Meanwhile, VCB Securities Company (VCBS) said that the short-term risks of the VN-Index will be reduced temporarily.
It is highly likely that the market will continue to fluctuate in a narrow range and that there will be a clearer divergence among groups of stocks in the coming sessions. In that case, the rebound of demand might help the VN-Index jump after touching the MA20 crossover area.
“Investors can disburse capital with a proportion of 10-15 per cent for large-cap banking ticker symbols, and that tends to lead the general market to recover,” said VCBS.
— VNS LINK
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Henig: E-wallet market in Việt Nam estimated to reach 50 million users by 2024
February, 06/2023 – 08:53
The modern e-wallet market in Việt Nam is surging and is expected to reach 50 million active users by July 2024, experts said.
HCM CITY — The modern e-wallet market in Việt Nam is surging and is expected to reach 50 million active users by July 2024, experts said.
In a report, Robocash Group said: “the modern e-wallet market in Việt Nam is booming with 90 per cent of the market falling on three wallets: Momo, Moca and ZaloPay.”
The country is seeing tough competition, given that there are 40 electronic wallets in operation, the report said.
Robocash Group estimates that by July 2024, the e-wallet market will have 50 million active users, 100 million by May 2026, and 150 million by July 2030.
In addition to the already mentioned wallets, there are three other major competitors including ShopeePay (AirPay), ViettelPay and VNPT Pay. The top six already account for 99 per cent of the market.
According to a Decision Lab study, at the end of 2021, 56 per cent of the Vietnamese population that had an e-wallet use Momo. The portion is 17 per cent for Shopee Pay, 14 per cent for Zalo Pay, 8 per cent for ViettelPay, 2 per cent for Moca and 1 per cent for VNPT Pay.
Robocash analysts observed that over the past four years, the number of active users has increased by an impressive 330 per cent, from 12.3 million to 41.3 million.
About 57 per cent of the country’s adult population actively uses e-wallets, in contrast to just 14 per cent at the end of 2018, which is considered significant penetration.
The Vietnamese e-wallet market can compete with traditional or digital banking, Robocash said, adding that the current six super apps mentioned above have unlimited potential to attract new customers not only within Vietnam itself, but also beyond its borders.
By July 2030, the market share of active users will likely be distributed as follows: Momo 47.3 per cent, ViettelPay 30.2 per cent, ZaloPay 16.5 per cent, VNPT Pay 5.6 per cent, Moca 0.4 per cent.
— VNS LINK
Henig: Durian prices hit record high as demand surges
February, 06/2023 – 08:16
Durian is being purchased by traders in Mekong Delta region for VND150,000-190,000(US$6.4-8.1) a kilogramme, three times higher than the same period last year and the highest level ever.
TIỀN GIANG — Durian is being purchased by traders in Mekong Delta region for VNĐ150,000-190,000(US$6.4-8.1) a kilogramme, three times higher than the same period last year and the highest level ever.
The reason for the high price of durian is that durian is still off-season and supply is low. Meanwhile, strong demand is coming from the Chinese market as well as domestic markets.
Huỳnh Tấn Lộc, director of the Ngũ Hiệp Durian Co-operative in Tiền Giang Province’s Cai Lậy District, said the prices of the fruit have increased sharply since the beginning of this year.
The country’s largest durian producing province has more than 17,000ha of the fruit, mostly in the Cai Lậy, Cái Bè and Châu Thành districts and Cai Lậy Town.
The orchards have an average yield of 20-25 tonnes per hectare and farmers harvesting now can earn VNĐ1-1.5 billion ($43,000-64,000) per hectare, the highest of any speciality fruit, according to the provincial Department of Agriculture and Rural Development.
But their output is not large because it is the off-season, it said.
Trần Minh Kha, a trader from Cần Thơ City, said after a week of buying durian in Tiền Giang, he still did not have enough quantity to meet demand as the price of his inventory continued to increase every few days.
Nguyễn Thị Hạnh, a trader from HCM City, said that she has had to pay a commission fee for brokers who can help her buy durian.
“This is the first time I pay commissions for brokers. However, there are still not enough durians to supply my partners,” she said.
Every day, she can only buy about 16-17 tonnes of durian while the demand is up to hundreds of tonnes, Hạnh said.
In 2022, durian export turnover was at nearly $400 million, and of that, $300 million to China.
According to the Việt Nam Fruit and Vegetable Association, Vietnamese durian has many competitive advantages in the Chinese market. Both Thailand and Philippine durian exports are seasonal, while Vietnamese durians have year-round exports.
In addition, the distance to transport durian from Vietnam to China only takes about one and a half days, which ensures fresh fruit and cheaper shipping costs than competitors’ goods.
Currently, the price of Vietnamese durian sold in China is still much cheaper than Thailand and the Philippines durian, so it is popular with the majority of people in this country.
– VNS LINK
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Henig: Việt Nam’s industrial production to rise 6.6 per cent in 2023: S&P Global
February, 06/2023 – 08:03
Việt Nam is predicted to record a rise of 6.6 per cent in industrial production in 2023, according to S&P Global Market Intelligence.
HÀ NỘI – Việt Nam is predicted to record a rise of 6.6 per cent in industrial production in 2023, according to S&P Global Market Intelligence.
S&P Global noted the Vietnamese manufacturing sector continued to face challenging business conditions in the opening month of 2023. Production and new orders continued to decline. That said, there were some signs of improvement in demand as new business fell at a softer pace, helped by a renewed expansion in new export orders.
The S&P Global Việt Nam Manufacturing Purchasing Managers’ Index (PMI), released on February 1, posted 47.4 in January, up from 46.4 in December but still pointing to a solid monthly deterioration in the health of the manufacturing sector.
January data signalled a further marked decline in manufacturing production, albeit one that was slightly softer than seen in December. Lower new orders were often behind falling output, with some firms indicating that customers had sufficient stock holdings and so didn’t need to purchase at present.
Total new orders were down for the third month running in January as demand conditions remained challenging. That said, there were some signs of improvement, particularly with regard to new export orders which rose for the first time in three months. As such, total new business fell at a modest pace that was the softest in the current period of decline.
The cost of raw materials, alongside falling workloads, meant that some firms lowered their purchasing activity again in January. Some signs of improvement in demand conditions encouraged other manufacturers to expand input buying, so that overall purchasing activity was broadly unchanged. Declines in the purchasing of inputs in previous months, however, led to a reduction in stocks of purchases.
Business confidence improved to a three-month high amid hopes that demand conditions will strengthen over the course of the year, feeding through to growth of output. The relaxation of pandemic restrictions in the mainland China was another factor behind the positive outlook. More than half of the respondents were optimistic that production will rise over the next 12 months, according to S&P Global.
Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “Although demand conditions for Vietnamese manufacturing firms remained challenging at the start of 2023, leading to further declines in output, new orders and employment, there were some more positive signs from the latest PMI survey. One of the main positives in January was a renewed expansion in new export orders, with the decline in total new business softening as a result.
“The loosening of COVID-19 restrictions in Mainland China, plus signs that downturns in Europe and the US may be less severe than feared, provided optimism that growth in Việt Nam could be around the corner. Indeed, business confidence improved to a three-month high at the start of the year. S&P Global Market Intelligence is forecasting a rise in industrial production of 6.6 per cent in 2023,” he added.
VNS LINK
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Henig: Expressions of trust in Vietnam’s business environment
06:00 | 06/02/2023
(VEN) – Representatives of foreign organizations and diplomatic missions praise the Vietnamese Government’s efforts to promote economic recovery and development in 2022 and expect Vietnam will continue bouncing back in 2023.
Agustaviano Sofjan, Indonesian Consul General in Ho Chi Minh City: Vietnam remains an attractive destination
Despite the COVID-19 pandemic, Vietnam remains an attractive investment destination thanks to its strategic geographic location and appropriate economic development policies. Vietnam is improving its connectivity to global supply chains through participation in various free trade agreements (FTAs) including the Regional Comprehensive Economic Partnership (RCEP) Agreement that involves Indonesia. This is an important factor connecting the two countries to the global market.
Vietnam and Indonesia see good prospects for bilateral trade growth in 2023 and ensuing years. The two countries set a target of US$15 billion for 2028.
Matsumoto Nobuyuki, Chief Representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City: Many Japanese companies want to increase Vietnam investment
Japanese companies want to invest in labor-intensive industries and are interested in fields with high added value, such as automobile and electrical equipment.
The Japanese Ministry of Economy, Trade and Industry is encouraging Japanese companies to diversify global supply chains and is willing to support these efforts. So far, many companies have registered to participate in the program. Some 103 projects have been implemented, 41 of which are related to Vietnam and cover three sectors: metal processing, health services, and electrical equipment. Vietnam can attract more Japanese investment in these sectors.
Alex Tatsis, Economic Section Chief at the US Consulate General in Ho Chi Minh City: Enhancing supply chain adaptability
Vietnam is the 10th largest trading partner of the United States. Supply chains are the focus of the Indo-Pacific Economic Framework for Prosperity (IPEF). Within the IPEF, the US will coordinate with partners like Vietnam to identify fields and products that are important to national security, the recovery ability of the economy, as well as people’s health and safety, taking joint action to enhance the recovery ability in these fields, generate jobs and create economic opportunities for major industries.
The US supply chain linkages with Vietnam will help it promote exports to other markets all over the world more strongly in 2023 and ensuing years. This is why the US is helping Vietnam enhance its role in global supply chains in the long term. Specifically, the US is intensifying trade facilitation and helping enhance the private sector’s competitiveness, especially for small and medium enterprises. The Linkages for Small and Medium Enterprises (LinkSME) Project funded by the US Agency for International Development (USAID) helps Vietnamese SMEs improve manufacturing capacity, access financial resources and promote digital transformation, enabling their participation in global supply chains for the mutual interests of the two countries.
Alexander Nowakowski, Third Secretary of Economic Affairs, Polish Embassy in Vietnam: Trade is a top priority
The Polish business community is boosting trade promotion and investment cooperation with Vietnamese companies in the fields of farm produce and food processing to take advantage of the EU-Vietnam Free Trade Agreement (EVFTA) and other FTAs.
The EVFTA has removed 71 percent of tariffs for Vietnamese exports as soon as it took effect. The remainder will be eliminated within seven years, creating favorable conditions for Vietnamese goods to enter the Polish market in particular, and the EU market in general.
A small country in Middle Europe, Poland is said to have successfully developed a market-driven economy, while maintaining socioeconomic stability. It is one of the fastest-growing economies in the EU. Trade with Poland will facilitate Vietnamese goods’ access to the EU market with 500 million consumers.
Jean Jacques Bouflet, Vice Chair of the European Chamber of Commerce (Eurocham) in Vietnam: Looking towards green exports
The Vietnamese economy is recovering strongly after the pandemic, creating an impetus for 2023 growth. Domestic companies have taken advantage of FTAs to boost exports. However, to compete in the EU market, Vietnamese businesses should abide by strict environmental regulations to meet the demand for green, sustainable goods.
The EU has committed to open, sustainable trade, coping with global challenges based on principles while maintaining competitiveness. The EVFTA with a Chapter on Trade and Sustainable Development will help increase Vietnam’s exports to the EU. However, to make the most of the trade deal, Vietnamese companies should look towards green, sustainable growth.
Green exports, i.e., export of low-carbon, environmentally friendly products, is a promising way for nations wishing to separate economic growth from environmental degradation.
Ngoc Thao LINK
