Day: May 16, 2023

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Vietnam becomes global production centre thanks to boom of foreign investment

Despite impacts caused by the COVID-19 pandemic, foreign direct investment (FDI) is still being poured into Vietnam, contributing importantly to turning the country into a new production hub of the world.

Registered capital, disbursement boom

Over the past five years, since Vietnam reviewed its 30-year foreign investment attraction, the FDI flow into the nation has not ceased increasing.

Statistics from the Ministry of Planning and Investment (MPI) show that from January 2018 to April 20, 2023, the registered FDI in Vietnam totaled 180 billion USD, equaling 40.3% of the accumulated investment capital over the last 35 years.

As of April 2023, Vietnam had attracted 37,065 foreign-invested projects with a total registered capital of 445.87 billion USD, with 279.8 billion USD of the total being disbursed.

HSBC, in its report on attracting foreign investment in ASEAN in the middle of last year, highlighted a boom in foreign investment into ASEAN, saying that Vietnam and ASEAN are the two markets receiving the most of foreign investment capital.

Over the last five years, the total FDI disbursement hit 107.47 billion USD, equaling 38.4% of the total disbursed capital over the past 35 years. About 19-20 billion USD of FDI is averagely disbursed every year during the reviewed period. A record of FDI disbursement was set in 2022 with 22.4 billion USD.

The quality of foreign investment into Vietnam has also improved significantly.

Becoming new production centre

According to Minister of Planning and Investment Nguyen Chi Dung, more and more multinationals and big investors have continuously invested in Vietnam. Economists said that the foreign-invested economic sector has made an important contribution to the added value of industrial products thanks to international economic groups’ investment in many large-scale projects which use high technology, and modern services.

Dozens of research and development (R&D) centres, innovation hubs, and technology incubators have been established, making it easier for domestic firms, especially small- and medium-sized enterprises, to connect with foreign businesses, they noted.

When it comes to success economic stories driven by foreign investment, Vietnam is a prominent example, HSBC said, highlighting that Vietnam turned itself into a rising star in global supply chains, gaining substantial global market share in such sectors as textiles, footwear and consumer electronics.

The bank also mentioned large-scale investments of Samsung, Pegatron, Foxconn, Luxshare, and Goertek, stressing that Vietnam is transforming itself into the world’s technology factory.

Not long ago, Quanta Computer of Taiwan (China) signed an agreement with the People’s Committee of the northern province of Nam Dinh on developing a large-scale computer production project in My Thuan Industrial Park, which is expected to have an investment capital of 120 million USD. This is Quanta’s 9th factory globally and the first in Vietnam.

Quanta is a MacBook manufacturing partner of Apple, so the appearance of this corporation in Vietnam means that Apple is continuing to shift its production to the Southeast Asian nation.

Foxconn, another partner of Apple, is also planning to set up a new factory in the central province of Nghe An, to expand its production in Vietnam after it successfully invested in the northern provinces of Bac Ninh and Bac Giang.

Samsung is a good example of the foreign investment scale in Vietnam. So far, the group’s total investment in the country has hit 20 billion USD.

Meanwhile, LG’s investment in Vietnam totaled 7.5 billion USD in the last five years. The group has continuously added capital to its factories – LG Display, LG Innotek, and LG Electronics.

Foxconn, Pegatron, Winston, Goertek, and Amkor have continuously increased their investment capital in Vietnam, including billions-USD commitments.

According to Christopher J Marriott, CEO of Savills Southeast Asia, Vietnam is considered one of the prominent destinations for high-value industries with production capacity that meets the expectation of international investors and technology corporations.

Last year also marked another important turning point when Lego Group of Denmark officially started construction of a project worth over 1.3 billion USD in Vietnam. Given that Vietnam has committed to cutting emissions to net zero by 2050, Lego’s first global carbon-neutral project is seen as a start of green investment in the Southeast Asian nation./.

Source: Vietnam News Agency

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Securities firms back to capital raising race

Many Vietnamese securities companies have returned to the capital raising race after the ups and downs of the stock market.

While none too significant, some companies have announced plans for capital raising through additional share issuances after the 2023 Annual General Meeting of Shareholders.

Particularly, Techcombank Securities JSC (TCBS) set a key plan of releasing private shares worth more than 10 trillion VND (426.3 million USD), with the issuance date starting from the end of the second quarter to the beginning of the thir quarter.

TCBS’s charter capital is now approximately more than 1.1 trillion VND. If the plan is completed, the company’s charter capital will increase to about 11.1 trillion VND, exceeding its equity to over 21 trillion VND and listing TCBS in the top securities companies with the largest equity in the industry.

According to TCBS, this is a strategic step to make the company become the largest technology asset management company in Vietnam in terms of equity, profit and operational efficiency in core areas.

Tien Phong Securities Corporation is also expected to issue another 200 million shares to double its charter capital, from 2 trillion VND to 4 trillion VND, with two options. One is to issue stock purchase rights for existing shareholders, while the other is through private placement. The implementation date is set to be in 2023 or the first quarter of 2024.

Meanwhile, shareholders of Viet First Securities Corporation just approved a capital increase plan, expected to triple its size to more than 2.4 trillion VND through private placement and share issuance at the ratio of 1:1. The securities firm plans to use the additional capital to serve proprietary trading and margin lending.

Vietcap Securities JSC also approved a plan to release more than 100 million shares to pay dividends at the rate of 30%, and 2 million ESOP shares at the price of 12,000 VND a share. Once the issuance is successful, the charter capital of VCI will rise to more than 5.38 trillion VND.

Similarly, VIX Securities JSC wants to issue more than 29 million shares to pay dividends for existing shareholders and more than 58 million bonus shares at the rate of 15%, if the issuance is successful, its charter capital will rise up to nearly 6.7 trillion VND.

Even though it has not been officially announced, the leading broker, VPBank Securities is expected to issue ESOPs through a private placement in 2023.

As the market has not yet been active and the liquidity remains at low levels, plans to mobilise new capital from existing shareholders become more challenging. Therefore, most securities companies choose to offer private placements or issue shares to pay dividends to increase charter capital.

From 2021 to early 2022, when the stock market was booming, issuing new shares was the main momentum of securities companies’ capital-raising strategies due to the sudden high demand from investors./.

Source: Vietnam News Agency

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National programme on cultural development approved

The National Master Programme on Development of Vietnamese Culture in the 2023-2025 period has been approved under a decision recently signed by Deputy Prime Minister Tran Hong Ha.

The programme covers all localities nationwide and a number of countries sharing long-standing cultural relations with Vietnam, focusing on the areas of cultural heritage, fundamental culture, performing arts, fine arts, photography and exhibitions, cinema, library, training, ethnic culture, culture for external relations, and cultural industry.

Major tasks and solutions put forth by the programme include completing the legal and policy system regarding culture; sustainably preserving and promoting national cultural values; improving the efficiency of cultural institutions; building a healthy cultural environment and enhancing the spiritual life of people.

At the same time, the programme will also concentrate on developing the contingent of artists and intellectuals, personnel training in cultural area, promoting Vietnamese cultural and art products with high values, spreading the image of Vietnam, and its people and culture to the world. Specifically, the programme will restore and preserve two cultural and natural heritages recognised by UNESCO; 15 special national relic sites that are seriously degraded, while giving urgent support to the repair of about 150 national relic sites.

National thematic museums and a national centre for artifact preservation will be established, while measures to step up the application of IT will also be implement to speed up digital transformation in protecting and promoting values of cultural heritages.

The Ministry of Culture, Sports and Tourism is in charge of collecting data and reporting the progress of the programme, while summarising and proposing solutions to tackle obstacles during the implementation of the programme.

Meanwhile, localities are assigned to ensuring capital and land areas for the construction of cultural works./.

Source: Vietnam News Agency

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Vietnamese women’s charms shine in France

Photos and items featuring the traditional and modern charms of Vietnamese women in everyday life and work have impressed visitors to an exhibition in Nantes city, France.

Co-organised by the Vietnam-Loire-Atlantique Friendship Association (AVLA) and the city hall of Nantes, the exhibition was part of the former’s ongoing festival marking the 50th anniversary of the two nations’ diplomatic relations. The festival, lasting until May 21, entails myriad activities including a film screening programme, and talkshows with Vietnamese origin writers, journalists, historians and artists. It showcased 60 photos by Thiery Beyne, a French photographer who spent seven years living in Vietnam, and a number of black and white shots taken by late local photographer Jean-Michel Nicolau.

Also on display were the portraits of 11 Vietnamese women from all walks of life by French journalist Sabrina Rouillé as well as clothes, working tools, and everyday objects used the group.

Founded in 1964 by Vietnamese alumni and locals in Loire-Atlantique, the AVLA aims at promoting solidarity with Vietnam and introducing the Southeast Asian nation to people and Vietnamese expatriates in France. Its activities cover art-cultural events and fund-raising campaigns for charity work./.

Source: Vietnam News Agency

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PH stocks index recovers, peso ends sideways

Risk appetite returned to the local bourse on Tuesday and allowed the main equities index to recover and the peso to end the day sideways against the US dollar. After starting the week on the red, the Philippine Stocks Exchange index (PSEi) ended the second trading day up by 1.01 percent, or 65.75 points, to 6,588.90 points. All Shares followed with a jump of 0.81 percent, or 28.26 points, to 3,519.36 points. Most of the sectoral indices also gained during the day, and these are the Holding Firms, 1.21 percent; Industrial, 1 percent; Property, 0.94 percent; Financials, 0.51 percent; and Services, 0.46 percent. Only Mining and Oil ended on the red after it dipped by 1.27 percent. Volume reached 2.7 billion shares amounting to PHP5.18 billion. Advancers led decliners at 94 to 91 while 53 shares were unchanged. ‘After the two consecutive selloffs, the local bourse was able to bounce today, settling at 6,588.90 points as the US market assess ongoing debt ceiling negotiations,’ said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales. Discussions between the White House and US lawmakers regarding the debt cap are on the critical stage, given that the world’s largest economy is said to likely default on its payments as early as June 1. On the local front, investors are on the wait-and-see stance for the rate decision of the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) on Thursday. Relatively, oil prices sustained its rise, with the Brent crude futures up by 1.4 percent to USD75.23 per barrel, and the West Texas Intermediate (WTI) by 1.5 percent to USD71.11 per barrel, ‘bolstered by the prospect of tightening supplies in Canada and elsewhere.’ On the other hand, the peso ended sideways against the US dollar at 56.03 from Monday’s 56.07. It started the day at PHP 55.97 to the dollar and traded between 56.22 and 55.97, bringing the day’s average to 56.117. Volume reached USD1.3 billion, up from the previous session’s USD1.28 billion. Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s performance to the likelihood of a pause in the BSP’s rate tightening moves and the possible cut in banks’ reserve requirement ratio (RRR). The MB will have its rate-setting meeting on May 18 and so far, it has increased the central bank’s key rates by 425 basis points since May 2022 to help address the rising inflation rate. With the rate of price increases declining for three consecutive months to 6.6 percent as of last April, some economists said this gives the central bank some leeway to keep rates steady. For Wednesday, the peso is seen to trade between PHP55.90 to PHP56.10 to a US dollar.

Source: Philippines News Agency

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Canada, PH to discuss maritime, defense cooperation

The Philippines and Canada are expected to deepen relations on defense and maritime cooperation during the upcoming visit of Canadian Foreign Minister Mélanie Joly. The Department of Foreign Affairs (DFA) on Tuesday said Foreign Affairs Secretary Enrique Manalo will be meeting Joly on May 19 where he will bring up cooperation on the said areas as well as the recent developments in the West Philippine Sea, the Asia-Pacific and Europe. The two top diplomats will also discuss enhanced trade and investment and cooperation in the energy sector, among others, the DFA said. ‘I welcome Foreign Minister Joly’s visit to the Philippines as an avenue to deepen our two countries’ collaboration based on our shared values, including democracy and adherence to a rules-based international order,’ Manalo said. ‘The Philippines and Canada’s continued cooperation shows how partnerships based on those shared values can withstand numerous challenges and obstacles. I look forward to discussing matters of mutual interest and benefit to our countries and I am optimistic that this meeting can build on our nations’ rich and storied friendship,’ he added. The anticipated meeting is the fourth visit of a Canadian Cabinet minister during the Marcos administration, which the DFA said indicates a ‘return to high-level engagements between the two countries.’ The visit came less than a year since Canada launched its CAD2.3 billion Indo-Pacific strategy that positions Manila as its important partner in the region. Last March, Canadian Minister of International Development Harjit Sajjan personally relayed to Manalo the intent to strengthen collaboration in building capacity, especially in humanitarian assistance and disaster relief (HADR), combatting illegal fishing, food security, agriculture and health. With Joly, the DFA said Manalo will also highlight the strong people-to-people ties between the two states, specifically the large Filipino diaspora in Canada. Data from the DFA showed there are almost a million individuals of Filipino descent in Canada, representing 2.59 percent of the country’s population. Bilateral ties between the two countries began in December 1949 when Canada established a trade mission in Manila.

Source: Philippines News Agency