Vietnam
The Doi Moi Report 31-May-2022
Top 3 Company Headlines
SeaBank plans minority stake sale to foreigners (Bloomberg 26-May)
Vietnam Airlines risks delisting after 9 straight quarterly losses (Nikkei Asia 23-May)
Vinfast IPO may be delayed to 2023 on market uncertainty (Reuters 11-May)
Top 3 Macro and Risk Headlines
Biden launches trade agreement with 12 Asian nations (FT 23-May)
Vietnam & Japan agree to boost trade & security ties (Reuters 01-May)
Q1 reports reflect economic recovery (Vietnam Economic News 26-May)
The Doi Moi's View
Lockdowns and factory closures in Southern Chinese cities are causing supply chain disruptions, prolonging the recovery of the manufacturing sector. The Russian invasion of Ukraine also risks food security as grain and cereal import prices rise. The war has brought Vietnam’s long standing political and economic ties with Russia, and new-found alliances with the West to an inflection point, with the country agreeing closer trade ties with the US, Australia, and New Zealand. This comes at a time when the country is bolstering security agreements with Japan and the UK. Both are largely seen as a bid to provide a comprehensive trade and defence framework to counter CCP aggression in the South China Sea. Short-run domestic economic prospects appear strong but investors should be wary of the geo-political situation surrounding the country.
Fun Fact: HCM City presents first floating fruit festival with trimmings (Vietnam News 26-May)
The Doi Moi Report 30-Apr-2022
Top 3 Company Headlines
Masan Group $65m Trusting Social stake (Bloomberg 28-Apr)
VinFast files for US IPO to fund shift to electric vehicles (FT 07-Apr)
MB Bank to sell 49% of Cambodia Unit to Shinsei (Bloomberg 23-Apr)
Top 3 Macro and Risk Headlines
Vietnam stocks nearing record high (Bloomberg 07-Apr)
Power supply under strain from high coal prices (Nikkei Asia 28-Apr)
Vietnam crafting carbon market to make polluters pay (Nikkei Asia 06-Apr)
The Doi Moi’s View
The Vietnamese economy continues to rebound strongly following Covid-led industry shutdowns. Key sectors such as manufacturing and tourism have performed strongly as restrictions have been lifted and as cases decline.
Vietnam remains vulnerable rising coal prices. It relies on it for the manufacturing sector. The govt is proactively trying to mitigate the effects of the crisis. Power conservation measures remain highly probable soon.
Fun Fact: There will be a patriotic concert to celebrate Reunification Day (Vietnam News 29-Apr)
The Doi Moi Report 31-Mar-2022
Top 3 Company Headlines
VinFast to build North Carolina factory (Bloomberg 29-Mar)
FLC, Bamboo Airways chairman arrested for market manipulation (Reuters 29-Mar)
Eximbank and Japan's SMBC end 14-year alliance (Nikkei Asia 19-Mar)
Top 3 Macro and Risk Headlines
GDP growth accelerating on vaccines, manufacturing (Bloomberg 29-Mar)
Imminent power shortage, calls for energy-saving (Reuters 30-Mar)
China announces South China Sea drills near Vietnam coast (Nikkei Asia 06-Mar)
The Doi Moi’s View
Vietnam has experienced a strong economic bounce back following a wave of Covid-19 infections in late 2021. Q1 GDP growth is on track to meet its 6.0-6.5% target. Medium term shocks threaten to frustrate the recovery. Investors should remain cautious, watching how the short and medium-term shocks play out, whilst keeping an eye on long-run political and security developments.
Fun Fact: An Italian model has found fame on a Vietnamese reality TV show (Vietnam News 31-Mar)
The Doi Moi Report 28-Feb-2022
Top 3 Company Headlines
Samsung $920m factory investment (Nikkei Asia 17-Feb)
Vingroup lost $1bn in manufacturing on poor sales of gasoline cars (Nikkei Asia 09-Feb)
JERA JV & Exxon Mobil 4.5GW LNG power project (Nikkei Asia 27-Feb)
Top 3 Macro and Risk Headlines
Feb trade deficit at $2.33bn after imports jump (Reuters 28-Feb)
Fuel shortage as hundreds of retailers run dry (Bloomberg 23-Feb)
Ho Chi Minh City's labour woes threaten global supply chains (Nikkei Asia 01-Feb)
The Doi Moi’s View
Vietnam continues lifting Covid-19 restrictions with entry curbs for international flights ending in early March. This is expected to mark the revival of the tourism sector. Vietnamese manufacturers face output challenges owing to pandemic led long-term labour shortages and rising oil prices. In response, the government has vowed that there will be no more factory closures, that it will increase oil imports, and offer businesses tax cuts to offset cost increases. Following the invasion of Ukraine by Russia, a long-term ally of Vietnam, the government and state media have refrained from their usual pro-Russia tone. For investors, this is important since it indicates Vietnam wants to avoid confrontation with the West and will likely not be caught by sanctions.
Fun Fact: The northern mountainous province of Tuyên Quang will host an international hot air balloon festival aimed at boosting tourism after pandemic (Vietnam News 18-Feb)
The Doi Moi Report 31-Jan-2022
Top 3 Company Headlines
VinFast to go all-electric in push to become global automaker (FT 06-Jan)
Vingroup reports first-ever loss (VN Express 29-Jan)
HSBC commits $12bn green financing for Vietnam (VN Express 25-Jan)
Top 3 Macro and Risk Headlines
Govt approve $15.4bn economic stimulus package (Reuters 11-Jan)
Exports up 19%, record trade surplus with US (Reuters 13-Jan)
Top oil refinery cuts processing, cash squeeze (Bloomberg 24-Jan)
The Doi Moi’s View
Vietnam has lifted the majority of Covid-19 restrictions following a large December Omicron surge. The move from suppressing Covid-19 to living with Covid-19 is deemed necessary to revive economic growth and dissuade multinationals from moving manufacturing operations elsewhere. The govt continues with its expansionist fiscal policies, including stimulus packages, tax cuts and financial assistance to hard hit industries. Early evidence of recovery is suggested by manufacturing output growth hitting a 9-month high and a stock-market rebound. Short and mid-term economic outlooks are better. Long-term, Vietnam must continue with policies favourable to manufacturing.
Fun Fact: An artist, Nguyen Tan Phat, marked the Lunar New Year with hundreds of carved tigers (Reuters 25-Jan)
The Doi Moi Report 31-Dec-2021
Top 3 Company Headlines
Lego $1bn new factory (FT 08-Dec)
Mizuho invests in MoMo, market cap $2bn (Bloomberg 20-Dec)
Vingroup plans US IPO for automaking arm Q4 2022 (Nikkei Asia 04-Dec)
Top 3 Macro and Risk Headlines
GDP growth slows to 2.58% in 2021 (Nikkei Asia 29-Dec)
World Bank $221.5m loan (VietNamNet 28-Dec)
Pledged FDI over $31bn in 2021 (Vietnam News 29-Dec)
The Doi Moi’s View
Vietnam continues to battle recurrent Covid-19 outbreaks, hitting record case numbers on 22-Dec. The Doi Moi expects further manufacturing disruption. If poorly managed, this risks permanent capital flight to other regional manufacturing hubs.
GDP growth is at a 30-year low but World Bank and HSBC analysts predict a return to growth rates exceeding 6% in 2022. Political tensions with key trading partners may impede this. The EU and US issued fresh warnings over illegal fishing and currency manipulation. The short and mid-term economic outlooks are uncertain due to Omicron related risks, but should be softened by inflows from the foreign expansion of large Vietnamese conglomerates (including Vingroup and VinFast).
Fun Fact: A Vietnam War veteran launched an “affordable” Tomahawk Wagyu gold-leaf covered steak at the Golden Beef restaurant in the Dolce Hanoi Golden Lake Hotel (Reuters 10-Dec)
The Doi Moi Report 31-Jul-2021
Top 3 Company Headlines
VinFast starts operations in N.America & Europe (Reuters 12-Jul)
Vingroup pre-tax profits up 34% (VN Express 31-Jul)
Nike could run out of sneakers made in Vietnam after Covid-19 spike (S&P Global 19-Jul)
Top 3 Macro and Risk Headlines
Govt to keep 65% stake in banks, airport operators (VN Express 08-Jul)
Biggest cities tighten restrictions as Covid-19 cases surge (Reuters 23-Jul)
CPI increase lowest since 2016 (Vietnam News 30-Jul)
The Doi Moi’s View
Covid-19 cases are increasing. Clothing and microchip supply chains face production constraints. This risks capital flight to China. The govt is supporting industries heavily hit by the pandemic and providing subsidising consumer goods and utilities. This is the reason for low 2021 CPI growth.
Internal economic indicators remain strong, suggesting strong long term investment prospects. The short and mid-term situation relies on the government getting a grasp on the current outbreak and swiftly lifting restrictions.
Fun Fact: Vietnam is the world’s largest exporter of cashew nuts (Business Insider 19-Jul)
The Doi Moi Report 30-Jun-2021
Top 3 Company Headlines
Vietjet to sell up to 15% stake (Nikkei Asia 29-Jun)
3 banks pledge interest-free loans to prop up Vietnam Airlines (Reuters 21-Jun)
Amazon courts Vietnam merchants in Alibaba's backyard (Nikkei Asia 16-Jun)
Top 3 Macro and Risk Headlines
GDP up 6.6% in April-June despite COVID-19 outbreaks (Nikkei Asia 29-Jun)
World Bank to lend $321m for development programs (VnExpress 30-Jun)
Stocks set to rally further despite virus resurgence (Bloomberg 02-Jun)
The Doi Moi's View
Vietnam is experiencing strong export led GDP growth despite Covid-19 outbreaks. Stock market performance also remains strong and the Dong stable. However, slow vaccine rollout threatens mid-term economic prospects and heavy government intervention has already been required to prop-up key industries such as aviation. Proposed tax increases on securities, multinationals, and big-tech may decrease Vietnam’s attractiveness to FDI at a time when domestic manufacturing operations are already being shifted to China to avoid the impact of Vietnamese factory shutdowns. Caution is advised as Vietnam battles its current Covid-19 surge.
Fun Fact: Trần Nguyễn Trâm Anh debuts in multinational K-pop music group Beauty Box (Vietnam News 29-Jun)
The Doi Moi Report 31-May-2021
Top 3 Company Headlines
Alibaba leads $400m Masan investment (FT 18-May)
Vingroup to close VinSmart electronics unit to focus on EVs (Bloomberg 09-May)
Hoa Phat buys Roper Valley iron ore mine (Reuters 31-May)
Top 3 Macro and Risk Headlines
Govt says new Covid-19 outbreak threatens stability (Reuters 09-May)
Manufacturing could return to China as Covid-19 cases spike in Vietnam (CNBC 24-May)
US says tires from Vietnam subsidised by undervalued currency (Reuters 24-May)
The Doi Moi’s View
Vietnamese economic activity has stagnated following first large scale domestic scale Covid-19 outbreak. Slow vaccine progress and factory closures prompt calls for manufacturing operations to be returned to China. Despite US-Vietnam tensions appearing to cool last month currency manipulation accusations have quickly resurfaced. While stock predictions and inward tech investment earlier in the month were strong, economic disruption looks more likely for the next few months.
Fun Fact: Books printed in Ho Chi Minh City will mark “Uncle Ho’s” birthday (Vietnam News 20-May)
The Doi Moi Report 30-Apr-2021
Top 3 Company Headlines
SK Group buys $410m, 16.3% VinCommerce (Reuters 06-Apr)
VinFast considering $2bn US IPO (Bloomberg 12-Apr)
Vingroup $500m 1st international bonds sale (Reuters 02-Apr)
Top 3 Macro and Risk Headlines
Dong policy resumes now manipulator label dropped (Bloomberg 17-Apr)
New PM and president for next 5 years (Nikkei Asia 05-Apr)
Coming US economic boom boosts Vietnam most in Asia (Bloomberg 13-Apr)
The Doi Moi’s View
Vietnam appointed a new leader with continuing commitment to long term open market policies. Tensions with the US remain high but are subsiding.
The pandemic is under control but Vietnam is seeking international help in vaccine procurement so it can reopen borders to trade and tourism. Proactive govt support of domestic industry has helped Vietnam weather the storm of the pandemic, positioning it for a strong boom as life returns to normal.
Fun Fact: Red-crowned cranes have returned to the Mekong Delta (Vietnam News Apr-29)
The Doi Moi Report 31-Mar-2021
Top 3 Company Headlines
Bamboo Airways $2.7bn market cap at listing (Bloomberg 18-Mar)
Vingroup & Foxconn in talks over electric cars (Nikkei Asia 22-Mar)
VinaCapital, GS Energy to invest $3bn in LNG power plants (Reuters 22-Mar)
Top 3 Macro and Risk Headlines
Q1 GDP grows 4.5% on rising exports to US (Nikkei Asia 29-Mar)
FDI rises to $4.1bn in Q1 (Reuters 22-Feb)
US, Vietnam interests ‘aligned’ amid some tensions, says US envoy (Bloomberg 05-Mar)
The Doi Moi's View
Vaccination rollout begun this month with regulators approving the Sputnik V and AstraZeneca vaccines. This brings hope Vietnam can open its borders for summer tourists. US trade tensions have continued to subside with US exports driving GDP growth. A number of new US-Vietnam joint ventures have been announced regarding AI and electric vehicles. Proactive government support of domestic industry has helped Vietnam weather the storm of the pandemic, positioning it for a strong boom as life returns to normal.
Fun Fact: A large pink bull in Củ Chi District is catching the attention (Vietnam News 26-Feb)
The Doi Moi Report 28-Feb-2021
Top 3 Company Headlines
California grants VinFast license to test autonomous EVs (Bloomberg 08-Feb)
Mitsubishi pulls out of coal plant amid climate concerns (Nikkei Asia 25-Feb)
Vietjet's shift to cargo earns it a profit in 2020 despite Covid-19 (Nikkei Asia 01-Feb)
Top 3 Macro and Risk Headlines
Capital meant for Myanmar may go to Vietnam and Cambodia (Nikkei Asia 27-Feb)
State Bank of Vietnam cuts FX intervention frequency (Reuters 22-Feb)
Vietnam exchanges approved to use circuit breakers (Bloomberg 05-Feb)
The Doi Moi's View
Vietnam faced a turbulent month with fresh lockdowns following a rise in UK variant Covid-19 infections. Swift govt action allowed most manufacturing and agriculture to continue as normal. The Ministry of Health expedited vaccine approval with the country set to receive 150m doses this year.
Vietnam is winning more trade as China-US trade tensions persist and after Burma enacted marshal law. The central bank committed to refrain from manipulating the value of the dong. This shows commitment to cooperation in international trade. The strong start to the vaccine rollout is raising investor confidence and Vietnam continues to hold itself out as an attractive FDI destination.
Fun Fact: Buffalo tours in Hội An are proving popular (Vietnam News 26-Feb)
The Doi Moi Report 31-Jan-2021
Top 3 Company Headlines
Intel increases chip investment by nearly 50% (Nikkei Asia 27-Jan)
Vingroup $303.6m bonds for phones & autos units (Reuters 25-Jan)
MoMo e-wallet raises $100m (Bloomberg 13-Jan)
Top 3 Macro and Risk Headlines
Party chief re-elected (Bloomberg 31-Jan)
US says Vietnam's currency actions “unreasonable” but holds off tariffs (Reuters 16-Jan)
Stock market overloaded by surge of new investors, index jumps (Reuters 06-Jan)
The Doi Moi’s View
Vietnam enters 2021 with strong stock market performance driven by returning capital. Vietnamese investors are pulling overseas investments due to poor growth and low interest rates in the West. The re-election of communist party chief signals commitment to an open economy and will likely sustain current levels of FDI. The US will not enact tariffs following currency manipulation investigations signaling a welcome decline in US-Vietnam trade tensions as Biden takes office. These factors will further drive stock market gains and returning Vietnamese investors will profit.
Fun Fact: Vietnam’s tallest Buddha statue was inaugurated in Binh Phuoc (Tuoi Tre News 25-Jan)
The Doi Moi Report 31-Dec-2020
Top 3 Company Headlines
ManuLife to buy Aviva's Vietnam unit; enters into bank distribution pact (Reuters 14-Dec)
Oil trader Gunvor deal to supply LNG to Vietnam (Reuters 08-Dec)
Vietnam Airlines to issue $346m in shares to support recovery (Nikkei Asia 29-Dec)
Top 3 Macro and Risk Headlines
2020 growth slips to 30-year low due to COVID-19 (Nikkei Asia 27-Dec)
Economy expands 4.48% in 4Q on manufacturing (Bloomberg 05-Dec)
Vietnam & Britain sign free trade deal (Reuters 29-Dec)
The Doi Moi's View
Vietnam closes out the year with strong manufacturing-driven Q4 GDP growth of 4.48%. GDP growth forecast for 2021 is 6.5%. US-Vietnam trade tensions remain. The US Treasury declared Vietnam a currency manipulator and Trump expressed concern over the country’s trade surplus. The central bank responded by pledging to work with the US. Trade tensions with China also remain following the imposition of a 25% tax to deter Chinese steel dumping. Vietnam is also expected to be the foremost beneficiary of supply chain movement from China over the course of 2021. The central bank pledges to continue a flexible monetary policy for 2021 to maintain inflation, and the govt expected to continue providing aid to Covid-19 affected business.
Fun Fact: Ho Chi Minh City is seeking UNESCO heritage recognition for the Củ Chi Tunnels (Viet Nam News 14-Dec)
The Doi Moi Report 30-Nov-2020
Top 3 Company Headlines
Vietnam Airlines $293m govt bailout (Reuters 10-Nov)
Foxconn $270m for production expansion (Nikkei Asia Review 15-Nov)
Vietjet & UPS start US-Asia cargo service (Nikkei Asia Review 13-Nov)
Top 3 Macro and Risk Headlines
Vietnam emerges as sole SE Asia economic winner (Nikkei Asia Review 19-Nov)
Typhoon Molave caused est. $430m damage (Bloomberg 01-Nov)
PM says pandemic cost $8.6bn budget revenue (Bloomberg 03-Nov)
The Doi Moi’s View
Vietnam continues to outperform regional counterparts throughout the pandemic. EU exports have been robust since the free trade deal. Stock prices responded positively to the prospect of a Biden presidency. It’s hoped this will end tense US trade relations and investigations into manipulation of the dong. Trade diversion from China continues. Biden is expected to keep Trump’s tough stance.
Fun Fact: Law student Đỗ Thị Hà was crowned Miss Việt Nam 2020 (Viet Nam News 21-Nov)
The Doi Moi Report 31-Oct-2020
Top 3 Company Headlines
Vingroup profits up 42% (VN Express 30-Oct)
PetroVietnam Oil posts $15.8m loss (VN Express 29-Oct)
Vietjet posts $39.8m loss (VN Express 29-Oct)
Top 3 Macro and Risk Headlines
Vietnam’s stocks erase 2020 losses amid economic optimism (Bloomberg 23-Oct)
Typhoon Molave hits after deadly floods (CNN 28-Oct)
US launches currency manipulation inquiry against Vietnam (FT 30-Oct)
The Doi Moi’s View
Vietnam remains an attractive investment destination with the World Bank predicating 3% GDP growth. The stock market remains strong with many businesses moving manufacturing operations from China e.g. Apple. Short/mid-term uncertainty has been cast by the US probe into Vietnamese currency manipulation. The outcome and likelihood of future measures will become clearer after the US election.
As tensions with the US tighten however, the country has been strengthening its defence and trade relationships with Japan and the EU. Vietnamese oil and aviation are among some of the poorest performing industries but this is expected in the face of Covid-19.
Fun Fact: A 7.1kg baby has set a newborn weight record in Vietnam (VietnamNet Global 17-Oct)
The Doi Moi Report 30-Sep-2020
Top 3 Company Headlines
Vinfast buys GM Holden's testing centre (Reuters 09-Sep)
Pegatron to invest $1bn in Vietnam plant (Reuters 22-Sep)
Vingroup considers refocusing & selling schools & health units (Reuters 15-Sep)
Top 3 Macro and Risk Headlines
Interest rates cut to aid economic recovery (Bloomberg 30-Sep)
Q3 GDP 2.6% growth from rising exports (Nikkei Asia Review 29-Sep)
Trump administration to launch currency probe (Bloomberg 30-Sep)
The Doi Moi's View
Vietnam swiftly suppressed its second Covid-19 wave. Restrictions on movement and trade are now being lifted. Economic growth is attributed to rising export demand including facemasks and PPE. Vietnam is the largest exporter of facemasks.
Vietnam held trade talks with the UK and backed it to join the TPP. However, Vietnam faces unsettling global tensions on two fronts 1) with China over the South China Sea 2) with the US over currency manipulation. Investors should remain wary. China is a force of political might in the region and the US is Vietnam’s largest export market.
Fun Fact: The Hà Nội Theatre Festival began on Saturday 26-Sep (Vietnam News 25-Sep)
The Doi Moi Report 31-Aug-2020
Top 3 Company Headlines
Vietnam Tech Company Accuses TikTok of Copyright Violation (Bloomberg 29-Aug)
PetroVietnam subsidiary to drill in Cambodia (Vietnam News 29-Aug)
Vietinbank $130m bonds (Vietnam+ 28-Aug)
Top 3 Macro and Risk Headlines
Three-Decade economic boom comes to a sudden halt (Bloomberg 25-Aug)
Exports Rise 2.5% in Aug.; Inflation Slows to 3.18% (Bloomberg 29-Aug)
FDI commitments down 14% in 8 months (Vietnam News 28-Aug)
The Doi Moi’s View
Vietnam is facing a second Covid-19 wave and is reintroducing lockdown measures as a response. Manufacturing and tourism have taken huge hits this quarter as recessions grip export markets. Vietnam risks trade tensions with the US. The central bank has been accused of purposefully devaluing the dong in 2019. This follows previous accusations of false labeling of Chinese goods. The US is Vietnam’s largest export market and protectionist measures threaten Vietnam’s ability to swiftly recover from the pandemic.
Fun Fact: A new project on preserving Vietnamese folk arts launched in HCM City (Vietnam News 31-Aug)
The Doi Moi Report 31-Jul-2020
Top 3 Company Headlines
Vingroup makes 1st 5G smartphones under Vsmart brand (Reuters 06-Jul)
New airlines blocked until 2022 despite market duopoly (Nikkei Asian Review 07-Jul)
SK Innovation becomes operator of oil block 16-2 offshore (Reuters 23-Jul)
Top 3 Macro and Risk Headlines
World Bank: investment needed to spur 35-year low growth (Bloomberg 30 -Jul)
Vietnam speeds up big projects to heal economy from pandemic (FT 01-Jul)
Stocks slump possible new Covid-19 outbreak (Bloomberg 24-Jul)
The Doi Moi's View
Vietnam is experiencing its first wave in locally transmitted cases since April. Fears of a nationwide outbreak and tensions with China over the South China Sea are currently hampering stock market performance. Manufacturers have seen high rates of order cancellation as consumer spending from global export markets declines. The govt has been proactive in commissioning large infrastructure projects to try and kick-start growth. Vietnam remains relatively well positioned to recover as global consumption habits return to normal. The EU-Vietnam free trade deal and rising tensions between the West and China will divert some trade to Vietnam.
Fun Fact: The Vietnam Culture Arts Exhibition Centre has an exhibit celebrating Vietnam’s younger artists, aged 18-35, as part of the Vietnam Young Artists Festival (Vietnam News 30-Jul)
The Doi Moi Report 30-Jun-2020
Top 3 Company Headlines
KKR-led consortium $650m Vinhomes investment (Nikkei Asian Review 17-Jun)
Sharp’s energy unit build 45MWsolar farm (Bloomberg 30-Jun)
Techtronic Industries to invest an additional $650m (Reuters 23-Jun)
Top 3 Macro and Risk Headlines
Vietnam’s economy unexpectedly expands (Bloomberg 29-Jun)
Vietnam’s National Assembly approves new EU trade deal (Bloomberg 08-Jun)
Foreign investors return to Vietnam stocks on lockdown success (Bloomberg 15-Jun)
The Doi Moi View
Vietnam experienced 0.36% GDP growth in Q2 despite predictions of a 0.9% contraction. With much of the economy reopened and no Covid-19 deaths, Vietnam is an attractive destination for FDI. The Vietnamese stock market continues as a top performer throughout the pandemic. Supply chain disruption in China has also led many firms to move manufacturing operations to Vietnam. This ought to continue now the EU-Vietnam FTA has been ratified. As pressure mounts from the EU and Japan to resume flights to the country, Vietnam must continue taking steps to avoid a large-scale outbreak.
Fun Fact: Vietnamese 10 year old schoolgirl, Nguyen Doi Chung Anh, has been creating art inspired by the chaos of Covid-19 (Reuters 12-Jun)
The Doi Moi Report 31-May-2020
Top 3 Company Headlines
Bamboo Airways $2bn GE order (Bloomberg 14-May)
Eaton new distributor partnership with Elite JSC (Vietnam Economic News 14-May)
VPBank confident of beating 2020 profit target (Vietnam News 30-May)
Top 3 Macro and Risk Headlines
Interest rates cut to shield the economy (Bloomberg 12-May)
Vietnam is Asia’s best stock market performer in May (Bloomberg 27-May)
EU trade pact to support Covid-19 recovery (Reuters 19-May)
The Doi Moi’s View
Vietnam is successfully handling the pandemic. Lockdown measures were eased and much of the economy resumed. Vietnamese manufacturing has suffered less than its neighbors. Food security risks have subsided and agricultural exports have resumed. Stock market performance is a sign of comparative stability.
Vietnam remains one of the best positioned Asian economies. If looming global recession comes it is vulnerable to reduced manufacturing demand and FDI.
Fun Fact: International Children’s day will see a variety of shows performed in HCM City, with singing, dancing and theater performances containing elegant costumes and live animals (Vietnam News 29-May)
The Doi Moi Report 30-Apr-2020
Top 3 Company Headlines
VietJet lenders agree loan repayment delays (Bloomberg 18-Apr)
Pou Chen (TT:9904) asked to halt operations (Bloomberg 12-Apr)
PetroVietnam says Q1 net profit likely halved to $188.5mn (Reuters 05-Apr)
Top 3 Macro and Risk Headlines
April CPI down 1.54% (Vietnam News 30-Apr)
Vietnam stocks become world’s best after extreme turmoil in March (Bloomberg 14-Apr)
Vietnam looks for economic rebound after mass quarantines (Bloomberg 26-Apr)
The Doi Moi’s View
The CPI falls is due to dwindling consumer spending in the midst of Covid-19. However, early social distancing measures, mass testing, closing of boarders, increased PPE production and food stockpiling have kept the economy more afloat than most. The WHO has praised Vietnam’s strong response to the virus.
April’s 15% stock market rebound has made Vietnamese stocks the best performing worldwide. The IMF predicts 2020 GDP growth of 2.7% when many will see contractions. As Vietnam prepares to reopen large sectors of the economy, investors should pay attention. Vietnam may experience a similar Covid-19 spread as seen elsewhere, but the power of hindsight and data may allow them manage economic fallout better.
Fun Fact: 30-Apr saw online celebrations marking 45 years since the end of the Vietnam war (Nikkei Asian Review 29-Apr)
The Doi Moi Report 29-Feb-2020
Top 3 Company Headlines
Samsung flies phone parts to Vietnam after Coronavirus hits supply chain (FT 17-Feb)
Bamboo Air plans $5bn order of Boeing’s giant new jets (Bloomberg 17-Feb)
Electronic retailer Nguyễn Kim acquired by Central Group (Viet Nam News 28-Feb)
Top 3 Macro and Risk Headlines
Vietnam orders loan interest rate cuts for virus-hit firms (Bloomberg 24-Feb)
Customs exports plunge 17.4% as Coronavirus spreads (Bloomberg 12-Feb)
EU free trade deal to be ratified (Reuters 12-Feb)
The Doi Moi’s View
Vietnam entered February with a stock market slump, down 9.4% from a Nov-2019 high. This can be attributed to decreased export demand following global trade tensions and political uncertainty. Coronavirus has also hit Vietnamese trade, and has created huge costs to government in trying to mitigate the impact of being on China’s doorstep. Some relief has come from firms such as Samsung, Apple, Adidas Puma and Nintendo cutting Chinese operations and ramping up output in Vietnamese factories. Despite the stock market slump and impending threat of the Coronavirus, investors should stay positive for Vietnam’s long run outlook. A forecasted bounce back of Vietnam’s battered stocks has many analysts encouraging investors to rally around Vietnam, dubbing it “the favourite” for those seeking growth.
Fun Fact: Vietnam’s swift response to the Coronavirus has seen all patients cured; other nations are in touch with Vietnamese authorities looking to take a leaf out of their book (Al Jazeera 29-Feb)
The Doi Moi Report 31-Jan-2020
Top 3 Company Headlines
Apple partner Pegatron to open production in Vietnam (Bloomberg 21-Jan)
Heineken shares hit by Vietnam’s crackdown on drink-driving (FT 21-Jan)
Vingroup bumps airline to make way for auto projects (FT 14-Jan)
Top 3 Macro and Risk Headlines
Vietnam’s inflation surges to 6-Year high, exports plunge (Bloomberg 29-Jan)
EU lawmakers give initial backing to Vietnam trade deal (Reuters 21-Jan)
VN invests $3.97m abroad in January (Vietnam News 31-Jan)
The Doi Moi's View
Vietnam has made a strong start to 2020 with GDP growth predictions for the year exceeding 7%. Strong outward FDI from Vietnamese businesses will give rise to future inflows and will increase Vietnamese soft power globally. US trade threats to Vietnam appeared to have cooled for the time being, with China and the US signing a new free trade deal.
The coronavirus has brought a shroud of uncertainty for the immediate future, with numerous manufacturing firms closing operations. Slow-down in Chinese manufacturing in the wake of the virus has decreased primary sector demand from Vietnamese producers. The govt must act to restore inflation after January saw a rise to 6.43% in order to keep business confidence stable and continue to attract FDI.
Fun Fact: The Australian Consulate-General in Ho Chi Minh City organised a National Day celebration that brought together the Australian diaspora, alumni of Australian institutions, Vietnamese friends, and the broader community (Vietnam Economic News 18-Jan)
The Doi Moi Report 31-Dec-2019
Top 3 Company Headlines
Vingroup & Masan merger to create retail giant (Bloomberg 03-Dec)
Vinfast to invest $2bn to sell cars in America (Bloomberg 16-Dec)
Apple plan moving AirPods production to Vietnam (Vietnam News 27-Dec)
Top 3 Macro and Risk Headlines
7.02% GDP growth 2019, CPI at 3-year low (Bloomberg 15-Dec)
Trade surplus hits 4-year record (Bloomberg 30-Dec)
HCM City targets 7.6 per cent industrial growth in 2020 (Vietnam News 30-Dec)
The Doi Moi's View
Vietnam rounded off 2019 with 7.02% GDP growth, beating the country’s 6.8% target. Q4 saw slower growth than estimated, 6.97% compared to 7.48 a year earlier. A combination of waning demand from export markets and scrutiny from the US over false labeling is largely responsible. The government remains pro-active in mitigating false labelling. A probe on Vietnamese and Chinese manufactures was launched and four firms will be punished.
The general economic outlook is bright. Western businesses are expected to increase FDI inflows in 2020 e.g. Apple production move. This depends on how the US-Vietnam trade dispute unfolds. Trump still has Vietnam in his crosshairs and his next move cannot be predicted. Investors should be cautious, watch the market, and perhaps wait until trade tensions cool.
Fun Fact: A musical drama Ngẫm Kiều will be staged in Ho Chi Minh City in the New Year. The performance is based on a Vietnamese poem Truyện Kiều (The Tale of Kiều) which is thought to be one of Vietnam’s greatest literary works (Vietnam News 30-Dec)
The Doi Moi Report 30-Nov-2019
Top 3 Company Headlines
Military Bank said to seek $240m in stake sale (Bloomberg 08-Nov)
Citi & Lazada launch 1st e-commerce credit card (Vietnam Economic News 16-Nov)
PVN becomes new secretariat of ASEAN petroleum council (Vietnam News 30-Nov)
Top 3 Macro and Risk Headlines
Central Bank cuts deposit rate cap (Bloomberg 18-Nov)
Govt takes ‘drastic steps’ on fraudulent exports to US (Bloomberg 20-Nov)
World Bank gives Vietnam good report card (Vietnam Economic News 30-Nov)
The Doi Moi's View
Vietnam’s trade relationship with the US is uncertain. It has been falsely labeling of Chinese goods. The govt is cooperating with US after Trump described Vietnam as “almost the single worst abuser of everybody”. A 25% tariff on Vietnamese goods is expected to knock growth by 0.5%.
The wider economy remains sound. The World Bank predicts 6.5% growth over 2020 and 2021. Public debt to GDP ratio is down from 59.6% in 2016 to 54.9% in 2019. Continued reduction is still necessary for Vietnam to protect itself against downturns in export markets and increasing global trade tensions.
Fun Fact: Tetrapak is expanding a recycling program which teaches children how to break down, fold, and stick covers over carton openings for cost-efficient recycling (Vietnam Economic News 29-Nov)
The Doi Moi Report 31-Oct-2019
Top 3 Company Headlines
THP Beverage Group seeks $3bn strategic investment (Bloomberg 14-Oct)
VietJet poised to sign Airbus 20 plane deal (Bloomberg 31-Oct)
Samsung moves manufacturing from China to Vietnam (Financial Times 18-Oct)
Top 3 Macro and Risk Headlines
Vietnam hits Chinese & S.Korea steel with duties (Bloomberg 28-Oct)
October exports unexpectedly fall as coffee sales drop (Bloomberg 29-Oct)
Moody’s puts Vietnam on notice after delay in debt payment (Financial Times 09-Oct)
The Doi Moi View
Vietnam’s economy is vulnerable. Coffee exports fell 0.8% y-o-y despite a predicted 10% rise. Vietnam has been toppled by Brazil as world’s top Robusta coffee grower. US-Vietnamese trade tensions persist, causing regional trade conflicts. The new China & S.Korea steel tariffs are a response in turn to 400% US steel tariffs on Vietnam. The govt is under pressure to rebalance demand.
Investors should remain wary. Despite impressive growth and a pro-business administration Vietnam is still vulnerable to macro-economic shocks. Risks surrounding US-Vietnam relations are somewhat mitigated by the strength the EU-Vietnam free trade agreement which provides the country with stable export demand.
Fun Fact: Over the next three days Ho Chi Minh City is holding a contemporary dance festival, with teams from all over the world travelling to the city to take part (VOH Online 29-Oct)
The Doi Moi Report 30-Sep-2019
Top 3 Company Headlines
Bamboo Airways IPO (Bloomberg 24-Sep)
GIC leads $500m Vingroup investment (Bloomberg 09-Sep)
PetroVietnam good results despite falling oil prices (Vietnam Economic News 19-Sep)
Top 3 Macro and Risk Headlines
Central bank cuts rates (Bloomberg 13-Sep)
Growth forecasts upgraded as quarterly GDP beats 7% (Bloomberg 30-Sep)
Vietnam is a victim of its own success in the trade war (Bloomberg 17-Sep)
The Doi Moi's View
Vietnam continues with promising economic growth with GDP up 7.31% since Q3 2019. Related growth forecast upgrades suggest that sustainable driving forces are at play and Vietnamese businesses and financial institutions represent sound regional investment opportunities. Central bank rate cuts from 6.25% to 6% shows commitment to supporting Vietnamese industry amid global risks. It is important the government and the central bank sustain a pro-active approach to growth of the private sector in order to attract FDI. Strong central support of the market sector of the economy is vital. Other countries in the region remain sceptical in relinquishing controls over private industry. Unchanged from recent moths are the risks coming from increased US-Vietnam trade scrutiny from the White House. Vietnam has found itself cracking under Trump’s pressure, announcing a $5bn plan aimed at mitigating false labelling.
Fun Fact: Mooncake manufacturers in Vietnam have increased net output by 30% on last year in preparation for the upcoming mid-Autumn festival – many of which with healthier recipes and a new sustainable packaging initiative.
The Doi Moi Report 31-Aug-2019
Top 3 Company Headlines
Ride-hailing firm Grab plans major investment in Vietnam - top executive (Reuters 26-Aug)
UOB expands in Vietnam with Hanoi branch (Business Times 23-Aug)
Google to move Pixel smartphone production to Vietnam (NBC 28-Aug)
Top 3 Macro and Risk Headlines
Vietnam’s losing battle against trade abuses risks more Trump action (FT 21-Aug)
Vietnamese firms invest nearly $440m abroad (Vietnam News 31-Aug)
HCMC seeks special mechanisms to become int’l financial hub (VEN 19-Aug)
The Doi Moi's View
Vietnam continues to prove speculators right as it sustains economic growth. It's showing itself to be the most attractive location for FDI in the region. The govt announced plans to combat trade abuses regarding false labeling, end real estate money laundering, reduce the size of the hidden economy, implement a new tax collection scheme for businesses, and bring GDP calculation mechanism in line with global standards. This signals that the country is focused on sustainable economic growth based on honest enterprise and good trade practice. As the US-China trade was cools down, Trump’s irrationality makes it difficult to predict whether he’ll take his eyes off import tariffs altogether for the time being or refocus his sights on the ASEAN countries as he has done over the last few months.
Fun Fact: Popular fashion designer Trần Hùng will be the first Vietnamese designer to show off his collection at London Fashion Week September 2019 (Voice of Vietnam 29-Aug)
The Doi Moi Report 31-Jul-2019
Top 3 Company Headlines
PVN’s business result exceeds set target (Vietnam Economic News 20-Jul)
Nike supplier pivots away from Vietnam after exiting China (Bloomberg 14-Jul)
Prudential Vies With FWD for Vietcombank insurance deal (Bloomberg 22-Jul)
Top 3 Macro and Risk Headlines
US puts +400% tariffs on Vietnamese steel (Bloomberg 03-Jul)
Foreign currency reserves hit US$68bn in H1 (Vietnam Economic News 29-Jul)
Vietnam’s economy expands 6.71% in Q2 on exports (Bloomberg 28-Jul)
The Doi Moi's View
After benefiting from months of trade unrest between the US and China, Vietnam finally finds itself in Trump’s crosshairs. Being labeled a “trade abuser”, the US has placed 400% tariffs on imports of Vietnamese steel. This follows a 36% surge in imports from the nation since this time last year. The Vietnamese government has been increasing foreign currency reserves over the course of this year in order to combat exchange rate fluctuations arising from increased US protectionism hitting Vietnam, but this is unlikely to be enough. China’s trade war tactics won’t work for Vietnam. Being a much smaller and developing nation Vietnam has less means of retaliation against the mammoth US economy. The avoidance of an export disaster will rest upon good diplomacy and compromise from the government.
Fun Fact: The annual Vietnam-Japan cultural exchange took place on the 25th July in Da Nang. The event saw artistic performances, traditional food, demonstrations and games celebrating the friendship and trade links between Japan and Vietnam.
The Doi Mo Report 30-Jun-2019
Top 3 Company Headlines
AEON plans to quadruple sourcing from Vietnam (Japan Times 14-Jun)
AstraZeneca plans $220m investment (Vietnam Economic News 04-Jun)
2 Vietnam startups plan $30m merge deal (Bloomberg 10-Jun)
Top 3 Macro and Risk Headlines
Vietnam & EU to sign EVFTA (Vietnam News 25-Jun)
Central bank unveils pro-active monetary policy Q2 2019 (Vietnam Economic News 20-Jun)
Vietnam GDP grows on trade war gains (Financial Times 28-Jun)
The Doi Moi View
The EU has signed a free trade deal with Vietnam reducing tariffs on 99% of goods and services – their first with a developing country. We can expect a sustained increase in export demand from the EU, Vietnam’s second largest export market, as goods and services become more competitive. Increasing ties with the bloc will also signal the market that Vietnam’s economy is growing sustainably boosting FDI. As the US-China trade war continues, Vietnam is still benefiting from redirected investment.
The govt must be conscious that as the China situation cools down Trump’s administration is turning their protectionist focus to other countries in the region. The US is Vietnam’s largest export market.
Fun Fact: On 30-Jun, Hanoi hosted a cultural exchange with the Republic of Korea, aimed at boosting mutual understanding and friendship between the two nations. The event saw more than 80 artists from RoK dancing and performing rituals to express the philosophical message of Buddhism.
The Doi Moi Report 31-May-2019
Top 3 Company Headlines
Auchan's exit from Vietnam gets interest from potential buyers (Reuters 15-May)
Vietnam Airlines lists shares as state aims to revive divestment push (Nikkei Asian Review 05-May)
Equitisation of SOEs remains slow (Vietnam Economic News 11-May)
Top 3 Macro and Risk Headlines
Central bank to grant more autonomy to commercial banks (Vietnam Plus 16- May)
Drop likely in corporate income tax (Vietnam Economic News 29-May)
World Bank $125m for institutional reforms in HCM City (SGGP News 21-May)
The Doi Moi View
Following growth forecasts of 6.8% for 2019, DBS Bank has predicted that within the next decade Vietnam’s economy could overtake Singapore’s. This will rely upon on a continuation in the effective market centric reforms we’ve seen in recent years and sustained FDI inflows from North America, Europe and China. Whilst this report is promising, to affect the 6.4-6.5% GDP growth required year on year, the government will need to do more increase the contribution of private enterprise as a proportion of GDP. Vietnam SOEs, whilst profitable, currently dominate the country’s GDP with government being much slower to privatise than laid in out in their Q4 2018 economic strategy.
Fun Fact: On the 16-May, Vietnam celebrated the anniversary of the Buddah’s birthday, welcoming delegates from over 112 countries to partake in activities at the Tam Chuc Temple in Ha Nam province
The Doi Moi Report 30-Apr-2019
Top 3 Company Headlines
New incubator open in HCM City to facilitate German business in Vietnam (Vietnam Economic Times 03-Apr)
SK Group to buy $1bn stake in Vingroup (Vietnam Economic News 05-Apr)
Dung Quat refinery exceeds capacity by 7% earning $26mn in Q1 post-tax profits (Vietnam Plus 19-Apr)
Top 3 Macro and Risk Headlines
Hanoi reports 6.99% GDP growth in Q1 (Vietnam Economic News 02-Apr)
S&P raises Vietnam’s sovereign rating (Reuters 05-Apr)
CPI management poses challenge for state (Vietnam Economic News 19-Apr)
The Doi Moi's View
Vietnam’s economy finished Q1 with GDP growth slowdown amid softer global demand for manufactured products. FDI is still strong as the US-China trade war makes Vietnam an attractive regional alternative. One of the main challenges is administrative issues. HCM City and Hanoi have both announced administrative reform packages to further attract FDI through attractive regulatory environments and skilled labour pools. By targeting human capital these reforms aim to increase the size of the service sector in light of a pro-liberalisation April WTO report. Success will have long term supply side benefits. In order to sustain investment, the government must support business development in light of VIE critique. The govt must also address CPI and export demand shocks.
Fun Fact: On 30-Apr the Vietnamese celebrated Reunification Day, marking 44 years since the capturing of Saigon by North Vietnamese forces and the end of the Vietnam War