Day: December 30, 2023

Hanoi: Vietnam’s stock market is set to grow in a stable, safe, healthy, effective and sustainable fashion under a freshly-approved strategy.

Deputy Prime Minister Le Minh Khai on December 29 signed Decision No. 1726/QD-TTg approving the stock market development strategy until 2030.

The strategy also aims to improve risk resistance for the market, making it an important medium and long-term capital mobilisation channel for the national economy.

Green, sustainable finance tools will be promoted, digital transformation will be stepped up in the sector, and international integration will be enhanced to narrow development gaps between the domestic stock market and those in developed countries.

According to the strategy, stock market capitalisation would equal to 100% of GDP by 2025 and 120% by 2030. Outstanding bonds would represent at least 47% of GDP by 2025 and 58% by 2030.

The proportion of Government bonds held by non-banking investors would rise to 55% by 2025 and 60% by 2030. The number of stock trade
rs would reach 9 million by 2025 and 11 million by 2030.

Among the important targets set in the strategy are upgrading the market from a frontier to an emerging market in line with international rating organisations’ standards by 2025, and joining the group of four major stock markets in the Association of Southeast Asian Nations (ASEAN) by 2025.

To that end, the strategy put forth a range of solutions such as strengthening the management, supervision and inspection capacity of relevant forces, and increasing supplies and raising their quality.

The strategy also mentioned the issuance of a variety of terms of government, government-guaranteed and local government bonds; encouraging businesses to issue a variety of bond types suitable to their capital mobilisation needs; and promoting green bonds to create more capital mobilisation channels for the budget and enterprises, and attract investors to sustainable economic development.

It emphasised the approach to international practices regarding accounting an
d auditing standards, and applying International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), thus improving transparency and efficiency of information provision to investors.

The role and responsibility of credit rating organisations in the corporate bond market should be enhanced, towards requiring bond issuers to be rated, the strategy said./.
Source: Vietnam News Agency

Hanoi: The value-added tax (VAT) for most of goods and services will be cut by 2% from January 1, 2024.

The government has issued Decree No. 94/2023/ND-CP regulating VAT reduction policy in line with the National Assembly’s Resolution No. 110/2023/QH15 dated November 29, 2023.

The decree reduces VAT for groups of goods and services which are currently subject to the tax rate of 10% to 8%, except for telecommunications, financial activities, banking, securities, insurance, real estate trading, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, and chemical products.

The VAT reduction will be applied to all stages, including import, manufacturing, processing and trading.

Decree No. 94 will take effect from July 1 until June 30, 2024./.
Source: Vietnam News Agency

Hanoi: The central bank has warned people to take caution when trading gold amid the strong fluctuations of the precious metal.

Dao Xuan Tuan, Director of the State Bank of Vietnam (SBV)’s Department of Foreign Exchange Management, noted that the bank has prepared measures to stabilise the domestic gold market, referring to the increase of SJC-branded gold bullion supply.

The central bank always closely monitors market developments and is ready to take solutions to stabilise it in order to minimise the impacts of gold price fluctuations on exchange rates, inflation and macroeconomic stability, he affirmed.

It will continue coordinating with the Ministry of Public Security and other relevant ministries and agencies to intensify inspections over gold business, Tuan continued.

The price of gold bullions in Vietnam had skyrocketed over the past weeks, even peaking at 83 million VND (3,419 USD) per tael. The difference between domestic and world gold prices has continuously expanded in recent days, reaching ne
arly 20 million VND per tael at certain moments.

Given this, Prime Minister Pham Minh Chinh has issued a dispatch asking for measures to strengthen the management of the domestic gold market.

He ordered relevant agencies to work with the SBV to immediately roll out measures to strictly handle violations, especially smuggling, manipulation and speculation, ensuring a stable, transparent, safe, healthy and effective domestic gold market./.
Source: Vietnam News Agency

Hanoi: Commercial banks have spent trillions of Vietnam dong to buy back bonds before maturity in the last months of this year.

Specifically, the Orient Commercial Joint Stock Bank (OCB) recently bought back all 500 billion VND (20.6 million USD) of bonds in circulation before maturity, according to an announcement from the Hanoi Stock Exchange (HNX). The bond lot, which was issued on December 15, 2021 with a term of three years and fixed interest rate of 3.2% per year, was a non-convertible bond, had no guarantees and did not include warrants.

Previously, OCB bought back all 14 bond lots, which were issued in 2021 and 2022, ahead of schedule with a total par value of 12.4 trillion VND.

At Lien Viet Post Commercial Joint Stock Bank (LPBank), all two bond lots (code: LPBH2124014 and LPH2124015), which were issued in December 2021 with a term of three years, were also settled ahead of schedule. With a face value of 1 billion VND per bond, the total value of the bonds repurchased by LPBank was up to 2 trillio
n VND.

In addition, LPBank has just received notice from HNX about the delisting of bond coded LPB121035. The reason for cancellation is that the listed bonds are fully redeemed by the issuer before maturity. This is the bond lot worth more than 1.38 trillion VND that was issued on December 30, 2021 with a term of seven years.

In July this year, LPBank spent more than 4.1 trillion to buy back four bond lots before maturity.

Similarly, the International Commercial Joint Stock Bank (VIB) also repurchased three bond lots before maturity with a total value of 1.5 trillion VND. All the three bond lots had a term of seven years and a face value of 1 billion VND per bond.

Since the beginning of this year, VIB has had 17 pre-mature bond buybacks with a total value of up to 6 trillion VND.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) also repurchased 3 bond lots ahead of maturity with a total value of 1.3 trillion VND in the last two months of this year.

However, after the buybacks,
some above banks have recently announced the successful bond issuance worth trillions of dong.

In particular, OCB successfully issued 2 trillion VND in the bond lot coded OCBL2326015 on December 14 this year.

Similarly, VIB on December 12 this year also issued 790 billion VND of VIBL2330005 bonds with an interest rate of 8% per year and seven-year term.

Not only OCB or VIB, Vietcombank also plans to issue 3 trillion VND of bonds via private placements in December 2023 with a maximum term of six years and a floating interest rate.

According to financial analysts, the main motivation for banks to buy back bonds before maturity was low credit demand amid positive capital mobilisation and abundant liquidity of the banking system this year. Therefore, banks found themselves sitting on mountains of cash. In an attempt to reduce capital redundancy and optimise capital efficiency, banks had little choice but to use their excess money to buy back bonds.

Dr. Nguyen Huu Huan, head of the HCM City Economics Universi
ty’s Department of Financial Markets, said the bond repurchase seems to be one of the banks’ measures to solve the problem of low capital disbursement and sluggish loan demand.

Data from the Ministry of Finance showed as of December 25 this year, the volume of pre-maturity corporate bond repurchase was 230.2 trillion VND, an increase of 5.8% compared to the whole year of 2022.

According to Vietnam Bond Market Association (VBMA) data, the total value of issued corporate bonds by the end of November 2023 was 247.59 trillion VND, including 28 public offerings worth 27.07 trillion VND and 210 private placements worth 220.52 trillion VND. Of which, the banking industry accounted for the majority with nearly 120.06 trillion VND, equivalent to 48.6% of the total issuance value since the beginning of this year./.
Source: Vietnam News Agency

Hanoi: Vietnam would import 71,835 tonnes of raw tobacco under tariff quota for 2024 set in a freshly issued circular by the Ministry of Industry and Trade (MoIT).

Raw material import tariff quotas are assigned by the method specified in the Government’s Decree No. 69/2018/ND-CP dated May 15, 2018, detailing a number of articles of the Law on Management Foreign Trade, Circular No. 12/2018/TT-BCT dated June 15, 2018 of the MoIT detailing a number of articles of the Law on Foreign Trade Management, and Decree No. 69/2018/ND-CP dated May 15, 2018 of the Government detailing a number of articles of the Law on Foreign Trade Management.

The above quota is allocated to traders who are licensed for producing cigarettes by the MoIT and are in need of raw tobacco for production of cigarettes with a certain percentage of imported raw tobacco certified by the ministry.

Circular No. 39/2023/TT-BCT will take effect from February 22, 2024 to the end of the year./.
Source: Vietnam News Agency

Hanoi: Hanoi has been assigned to collect over 408 trillion VND (16.8 billion USD) in State budget revenue estimates in 2024, the highest level in the country.

Director of the Hanoi Tax Department Vu Manh Cuong said that the department commits to closely coordinating with other departments, agencies, and districts to strictly implement the directions of the Ministry of Finance, and Hanoi People’s Committee regarding State budget collection.

The State budget revenue of Hanoi as of December 28 topped 405.2 trillion VND or 114.8% of the projection, up 23.8% compared to the same period last year, according to the municipal Department of Finance.

In 2023, the Hanoi Tax Department and tax agencies completed about 17,280 inspections, adding neatly 10 trillion VND to the State budget./.
Source: Vietnam News Agency