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