VIETNAM BUSINESS NEWS SEPTEMBER 28 VietNamNet
VIETNAM BUSINESS NEWS SEPTEMBER 28 – VietNamNet https://bentoncountynewsnow.com/vietnam-business-news-september-28-vietnamnet/
A corner of Binh Duong city. (Photo: VNA)
Global growth investor Warburg Pincus with headquarters in New York, the US, has decided to invest in a cross-border e-commerce project in the southern province of Binh Duong.
Covering 75 hectares, the project will include high-tech factories, warehouse, customs bonded warehouse, showrooms and offices.
The southern industrial hub of Binh Duong is a popular destination for foreign investors. As of September 15, the province was home to 4,069 foreign-invested projects with total registered capital of nearly 39.6 billion USD. Binh Duong is currently ranked 2nd in the country in attracting foreign direct investment, after Ho Chi Minh City.
It has attracted 2.6 billion USD in the first nine months of 2022. The US currently ranks 13th out of 65 countries and territories that have invested in the province with 131 projects, worth 1.3 billion USD.
Commercial banks raise deposit rates after SBV’s adjustment
Many commercial banks have increased interest rates for Vietnamese dong deposits over the past few days after the State Bank of Viet Nam raised its policy rate by 100 basis points last Thursday.
Vietnam Prosperity Commercial Joint Stock Bank (VPBank) has sharply increased deposit interest rates for short terms. Specifically, customers who deposit at VPBank for a term of 2-5 months will enjoy a ceiling interest rate of 5 per cent per year for savings of VND10 billion or more, up 1 percentage point. As for deposits from VND3 billion to less than VND10 billion, the interest rate is 4.9 per cent per year. The rate of 4.8 per cent per year is for deposits from VND300 million to less than VND3 billion.
At Saigon-Hanoi Commercial Joint Stock Bank (SHB), the deposit interest rate for terms of less than one month has also increased to a maximum of 0.5 percentage point per year. The rate for deposits from one month to less than six months has also increased by 0.8-0.9 percentage point per year to range from 4.38-4.9 per cent per year.
Many other banks, such as Asia Commercial Joint Stock Bank (ACB), Vietnam Import-Export Commercial Joint Stock Bank (Eximbank), Bac A Commercial Joint Stock Bank (Bac A Bank), Viet Capital Commercial Joint Stock Bank (Viet Capital Bank) and Kien Long Commercial Joint Stock Bank (Kienlongbank), have also adjusted up the deposit interest rate for many terms, especially terms of less than six months.
Meanwhile, large-sized State-owned banks in the Big 4 group, including Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Joint Stock Commercial Bank for Industry and Trade of Vietnam (VietinBank) and Bank of Agriculture and Rural Development of Vietnam (Agribank), have not yet made a new adjustment. Currently, the highest interest rates listed by these banks range from 5.6-5.8 per cent per year for online deposits and 5.6 per cent per year for over-the-counter deposits. Their interest rates for short terms under six months are at 3.1-3.4 per cent per year.
Maybank Investment Banking Group (Maybank IBG) forecast after last week’s adjustment, the SBV would keep the deposit interest rate unchanged from now until the end of 2022.
According to Maybank IBG, the SBV’s policy rate hike last week would not significantly affect the economic recovery. Maybank IBG maintains its GDP growth forecast of 8 per cent for Viet Nam for 2022 and 6 per cent for 2023, respectively.
VCCI proposes abolishing excise tax on gasoline
The Vietnam Chamber of Commerce and Industry (VCCI) has proposed the Ministry of Finance consider abolishing the special consumption tax on gasoline to cushion the impact of the steep global fuel price rises.
Tax reduction is a good solution, but eliminating the special consumption tax on gasoline should be considered a necessary measure to reduce the negative impact of global fuel price surges in the long term, said VCCI.
Experts believed that it was not reasonal to impose a special consumption tax on gasoline. Gasoline is an essential consumer product and widely used in production and daily life, while this tax should only be levied on non-essential goods to discourage consumption, such as cigarettes, alcoholic beverages and luxury cars.
Currently, fuel is subject to four taxes, namely import, environmental protection, special consumption and value added taxes. The special consumption tax on fuel is 10%.
Previously, the Ministry of Finance asked for feedback on a draft resolution of the National Assembly on halving both the special consumption tax and the value added tax on fuel, receiving firm support from the VCCI.
According to the draft resolution, the excise tax and value added tax would be reduced by 50% and 20-50%, respectively, based on the decision of the National Assembly and the actual conditions. The tax reduction period is expected to last six months from the effective date of the resolution.
The Ministry of Finance estimated that state budget revenue would drop by VND7.5 trillion to VND12 trillion due to the reduction of the two fuel taxes in six months.
Japanese firm to buy 2.1 million FTS shares
Japan’s SBI Financial Services Co., a company related to Ueno Taro, who is a board member at FPT Securities JSC, has registered to buy 2.1 million FTS shares.
The transaction will be conducted from September 29 to October 27, the local media reported.
After the purchase, the Japanese firm will raise its ownership in FPT Securities, which trades its FTS shares on the Hochiminh Stock Exchange, to 22.51%, or 43.9 million shares.
Each FTS share is priced at VND31,000, so SBI will spend some VND65.1 billion on the purchase.
SBI, the largest shareholder of FTS, had bought some 1.2 million FTS shares between June 28 and July 12.
In the first half of the year, FPT Securities JSC reported over VND578 billion in revenue, inching down 2% year-on-year, and VND365.5 billion in pre-tax profit, a year-on-year decrease of 15%.
Hanoi holds trade fair to promote OCOP products
A week-long event to introduce and sell goods under the ‘One Commune, One Product’ (OCOP) programme is taking place at the centre of culture, information and sports of Hanoi’s Thanh Tri district.
OCOP goods are highly localised products, often food, that come from one small specific area.
So far, Hanoi has recognised 1,649 OCOP goods, including four products rated five stars, 1,098 others rated four stars, and 534 rated three stars. They include 1,071 food, 35 beverage, 17 herbal, 492 handicraft, and 34 fabric and apparel products. The capital city is taking the lead nationwide in terms of the numbers of OCOP products and five-star OCOP products.
The city houses 1,350 craft villages, accounting for the largest number of such villages in the country. These places are home to 47 out of 52 traditional crafts of Vietnam. Among them, there are 313 accredited by Hanoi People’s Committee as craft villages and traditional craft villages.
The capital city, meanwhile, has over 9,900 agricultural and food products with QR code serving their traceability.
Vietnam emerges as winner from era of deglobalisation
UK media outlet the Economist has recently published an article highlighting huge advantages enjoyed by Vietnam in the era of deglobalisation.
The article outlines that since 2000, Vietnamese GDP has grown at a faster rate than that of any other Asian country bar China, averaging 6.2% annually.
It has lured major foreign firms in droves, starting with apparel makers such as Nike and Adidas seeking low-skilled labour, before eventually booming into electronics and higher-value goods which create better-paid jobs for more highly-skilled workers. In 2020, electronics made up 38% of the country’s goods exports, up from 14% of a far smaller total back in 2010.
The Economist points out that the trade war between the US and China, which initially started in 2018 has been a factor behind this. In 2019 the country produced nearly half of the US$31 billion-worth of American imports that had moved from China to other low-cost Asian countries.
Apple’s largest suppliers, Foxconn and Pegatron, which make Apple Watches, MacBooks, and other gadgets, are building big factories in Vietnam and look set to join the ranks of the country’s largest employers. Other major names include Dell and HP, with a focus on laptops, Google, with a focus on phones, and Microsoft, with a focus on gaming consoles.
All of which could lead to stronger growth and make millions of Vietnamese people better off. Vietnam aims to become rich, with GDP per capita exceeding US$18,000 by 2045, up from the current US$2,800. It hopes to do this partly by moving away from cheap garments to complex electronics which require greater investment and more skilled labour, the article notes.
Furthermore, the country is an enthusiastic member of over a dozen free-trade agreements, giving it easier access to scores of international markets. With the recent COVID-19 outbreak bought under control, the government has eased domestic travel restrictions and reopened all borders to tourism and trade exchanges.
According to the article, Vietnam offers advantages in terms of geographical blessings, such as more than 3,000km of coastline, massive infrastructure spending on things such as new roads, and its electronics cluster operating profitably.
However, there is much to be done if Vietnamese factories are to move farther up the value chain, says the article. Whilst foreign firms would love to buy more parts locally, which could be faster and more convenient than sourcing them from just over the border, they usually fail to find what they seek.
The article notes that Vietnam has many things working in its favour, including a young workforce. If Vietnam is to grow as rich as China, let alone...
