Some "Vietnamese News" Posted by Samson 12-6-2021
KTFA:
Samson: Việt Nam continues to meet US Treasury criteria for not being labelled a currency manipulator
6th December, 2021
Việt Nam continues to meet the US Treasury's criteria for not being labelled a currency manipulator, according to the US Treasury.
In its latest report on forex and macro-economic policies of big trade partners of the US, the Treasury found that no major trading partners during the year through June 2021 sought to manipulate their currencies for a trade advantage or for preventing effective balance of payment adjustments.
Việt Nam and Taiwan (China) have met all three criteria on trade and current account surpluses and foreign exchange market interventions. However, the department said it would continue to work with Việt Nam and Taiwan to address US concerns.
The Treasury said it was "satisfied with the progress made by Việt Nam to date" and would continue engagement started in May with Taiwan.
Earlier in April, the US Treasury announced in a similar report that the US had removed Việt Nam from the list of economies it considered currency manipulators as there was insufficient evidence to conclude the country was manipulating its exchange rate in the reviewed period in line with the Omnibus Foreign Trade and Competitiveness Act of 1988. LINK
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Samson: Moody’s upgrades Việt Nam Prosperity Bank (VPBank’s) rating to Ba3
4th December, 2021
Global credit rating firm Moody’s Investors Services has upgraded Việt Nam Prosperity Bank (VPBank)’s foreign currency deposits from B1 to Ba3 which is equal to the country’s rating with positive outlook.
Moody's BCA ratings reflect the independent intrinsic strength of the issuer. This credit rating is assessed based on the macro-environment, financial profile and qualitative assessment factors.
In addition to upgrading the BCA rating, Moody's also upgraded VPBank’s long-term local and foreign currency deposit ratings, rising to Ba3.
VPBank's credit rating was announced after the bank completed the sale of a 49 per cent stake at its VPBank Finance Company Limited (FE Credit) to SMBC Consumer Finance Co Ltd (SMBCCF), a wholly-owned subsidiary of Japan’s Sumitomo Mitsui Financial Group, Inc (SMBC Group) at the end of October. Moody's assessed that the capital sale brought about a significant improvement in the bank's credit profile. Notably, according to Moody's methodology, the bank's capital adequacy ratio (CAR) increased from 11.4 per cent at the end of September 2021 to 13.5 per cent at the end of October 2021.
In addition to the improved capital base, the bank's outstanding business results in recent months, despite the negative impact of COVID-19 on the economy, were also highly appreciated by Moody's. The business results in the third quarter of the year showed that VPBank's consolidated before-tax profit reached more than VNĐ11.7 trillion (US$513 million), up 24.9 per cent over the same period last year. The parent bank's pre-tax profit alone reached VNĐ10.8 trillion, representing 75.2 per cent year-on-year increase. The bank's total consolidated operating income reached VNĐ33.2 trillion, increasing 17.3 per cent over the corresponding period last year. Its consolidated return on assets (ROA) and return on equity (ROE) indices continued to be among the top of the market, reaching 2.8 per cent and 21.6 per cent respectively.
Moody's believed that VPBank's capital capacity will continue to be stable, as the bank has clearly demonstrated its plan to use capital obtained from the FE Credit deal to promote growth and seek new business investment opportunities. In addition, the assets scale will be further expanded thanks to the profit growth from business activities.
“VPBank's asset quality and profitability will remain stable over the next 12-18 months,” Moody's said in the announcement, emphasising the belief that VPBank's asset quality will be well under control as Việt Nam's economy recovers and vaccination rates increase.
The upgraded ratings from a prestigious international credit rating agency like Moody's in the context that Việt Nam's economy has suffered heavy impacts from the outbreak of the COVID-19 pandemic, has demonstrated confidence of international organisations in VPBank's capital base and development plan this year and in the future.
This also contributes to strengthening VPBank's position, while further enhancing its ability to mobilise capital from reputable financial institutions. LINK
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Samson: Remittances to Việt Nam to grow despite pandemic
6th December, 2021
The World Bank and the Global Knowledge Partnership on Migration and Development (KNOMAD) forecast that remittances to Việt Nam are estimated at US$18.1 billion in 2021.
As such, the country will be the eighth largest remittance recipient in the world and the third largest in the Asia-Pacific region this year. This will the fifth consecutive year that Việt Nam remains in the top ten in terms of remittances, with $13.8 billion in 2017, $15.9 billion in 2018 and $17.2 billion in 2019.
According to Nguyễn Hoàng Minh, deputy director of the State Bank of Vietnam (SBV) in HCM City, remittances to HCM City – the country’s largest remittance recipient – were estimated to reach US$6.2 billion in the first eleven months of this year, against $6.1 billion for the whole of 2020. This year the city is expected to get around $6.5-6.6 billion worth of remittances, mainly from the US, Australia, Canada and the EU.
Minh attributed the rise to HCM City implementing social distancing to prevent the COVID-19 pandemic, so overseas Vietnamese transferred more greenbacks to support their relatives in the city.
Though there aren't complete statistics on the remittance’s destination, the amount of remittance poured into social security support was higher than previous years. The remaining remittance source was invested in production and business. Minh noted the strong remittance inflow into Việt Nam amid the pandemic has had positive impacts on the foreign exchange market.
A stable US dollar and Vietnamese đồng exchange rate would continue to facilitate the Government’s policies favoring businesses and people affected by the pandemic, he said.
Around two million people hailing from HCM City live abroad, and last year they sent home US$6.1 billion, up 15 per cent from 2019, before the pandemic struck. Banks have been making investments to improve remittance services and launching promotional programmes to attract more of them.
Việt Nam received US$17.2 billion worth of remittances last year, the third highest in the East Asia and Pacific. The remittances to the country have grown at an average of 6 per cent annually.
According to estimates from the World Bank’s Migration and Development Brief released recently, remittances to low- and middle-income countries are projected to have grown a strong 7.3 per cent to reach $589 billion in 2021. This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 per cent despite a severe global recession due to COVID-19. LINK
Vietnam : Trade revenue expected to hit new record high in 2021: MoIT
4th December, 2021
Despite the lingering effects of the pandemic, the Ministry of Industry and Trade forecasts that Việt Nam’s total trade value this year may reach a new record of between US$640 - 645 billion, with a slight trade surplus.
The ministry attributed the results to the great efforts of the business community in overcoming the difficulties of the COVID-19 pandemic to maintain and restore production. In particular, major industries such as textiles, garments, leather and footwear are on track to achieve their business targets earlier than expected, despite the pandemic.
From now until the end of the year, all industries have an opportunity to try and regain a growth rate close to before the pandemic broke out. Industries with high exports, such as phones, electronics, machinery and components, are likely to post export growth rates of between 15 per cent and 25 per cent this year, it said.
According to the ministry, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Việt Nam-EU Trade Agreement (EVFTA) have had positive effects on the national export activities, especially in markets that did not have free trade agreements with Việt Nam before. Thanks to the CPTPP, which came into effect three years ago, the exports of goods to Canada, Mexico and Peru have all grown by between 25 – 30 per cent per year.
The EVFTA, which went into effect one year ago, is a bilateral commitment with incentives and long-lasting value. At present, 20 per cent of local enterprises have taken export tax incentives from the EVFTA with EUR.1 certificates of origin (C/O). For shipments to the EU worth less than 6,000 euros, local enterprises are allowed to self-certify origin. This helps ensure smaller businesses do not have to spend time applying C/O, while still being able to enjoy tax incentives.
Right now, the biggest difficulty facing local enterprises is a shortage of labour. Southern-based enterprises are facing many difficulties in facilitating a return for workers who have left the region, without which they can not restore 100 per cent of their production capacity.
Due to the impact of the COVID-19 pandemic, the cost of raw materials and logistical services is increasing across the globe. These factors will put pressure on production costs for domestic businesses.
In addition, if localities do not fully comply with the Government's Resolution 128/NQ-CP, which provides temporary guidance on the "Safe adaptation, flexibility and effective control of the COVID-19 pandemic", or must facilitate pandemic prevention measures beyond what is necessary, it could cause further instability and affect the psychology of the local businesses and the confidence of investors. The ministry hopes that the pandemic prevention measures strike the right balance between ensuring people's safety and not affecting the production and trade activities of businesses.
Việt Nam’s trade value surged 22.3 per cent year-on-year in the first 11 months of this year to exceed $599.1 billion, according to the General Statistics Office. The country exported commodities worth nearly $299.7 billion in the past 11 months, up 17.5 per cent from a year earlier. In the period, there were 34 commodities with export turnover of over $1 billion, accounting for 93.5 per cent of the total export value.
In its latest report on November 30, Standard Chartered projected Việt Nam’s export turnover to record an annual average growth of 7 per cent per year, hitting $535 billion by 2030.
The "Future of Trade 2030: Trends and markets to watch" also forecasts that the global exports will almost double from $17.4 trillion to $29.7 trillion over the next decade. Việt Nam is considered an important market contributing to the growth of the global trade, it said.
It also found that 41 per cent of global businesses currently operate or plan to invest in Việt Nam within the next five to 10 years. This shows that Việt Nam will be one of the important motivations of global trade growth in the next 10 years.
The US and China will continue to be Việt Nam's largest export markets, respectively accounting for 26 per cent and 19 per cent of the Southeast Asian country’s total export turnover by 2030.
According to the study, Việt Nam is an emerging manufacturing powerhouse with expanding international trading relationships. LINK