Vietnam

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