Henig: Hà Nội targets GRDP per capita of $36,000 by 2045
07:00 | 10/02/2023
As the country continues to develop, the government is focused on ensuring that the capital remains at the forefront of this progress, positioning it as a hub for commerce, culture, and innovation in the years to come.
Hà Nội is set to become a globally-connected city with high living standards and quality of life, according to a new plan that aims to raise the Gross Regional Domestic Product (GRDP) per capita to US$36,000 by 2045.
As the country continues to develop, the government is focused on ensuring that the capital remains at the forefront of this progress, positioning it as a hub for commerce, culture, and innovation in the years to come.
The average annual growth rate of GRDP is set to increase to 7.5-8 per cent by 2025 and 8-8.5 per cent by 2030. As a result, the GRDP per capita is expected to reach $8,500 by 2025 and up to $12,000-13,000 by 2030.
The figure is projected to reach $36,000 by 2045.
From 2026 to 2030, the processing and manufacturing industry will make up 20 per cent of the GRDP, the digital economy will make up 40 per cent of the GRDP, 80 per cent of the agricultural production value will use high technology, and labour productivity will increase by 7.5 per cent.
The urbanisation rate will reach 75 per cent by 2030.
By 2045, the city’s economic, cultural and social development will be comprehensive, unique and harmonious and at the same level as the capitals of developed countries.
The plan details were revealed after the Politburo issued Resolution 15/NQ-TW on the orientations and tasks for the capital city’s development until 2030 with a vision towards 2045 last April.
To fulfil these targets, the Resolution puts forwards key tasks and solutions, including continuing to raise awareness of the significant position, role and importance of the capital city; and developing the capital’s economy rapidly and sustainably based on restructuring the economy in connection with renewing growth models and mobilising all resources effectively.
It is also necessary to strongly develop the city’s culture in line with its role as a centre of education and training, science and technology, and healthcare while ensuring social security and welfare.
Other tasks include improving planning quality and promoting infrastructure construction, urban development and management. Furthermore, effective use of natural resources and environmental protection are key ones.
They also include ensuring national defence, security, social order and safety in all situations and promoting diplomacy, international integration and development cooperation to raise the position and prestige of the capital city.
The building and rectification of the Party and the political system must be increased for transparency and a stronger Party and political system, and legal systems must be completed in the capital with appropriate mechanisms and policies to meet the city’s development requirements in the new period.
The Politburo asked the Party Organisation, administration and locals of the capital city to stay united and determined to work with central ministries, sectors and agencies, as well as other localities, to implement the resolution effectively.
The Politburo underlined the need to make comprehensive adjustments to the Capital Law to meet the development requirements of the capital city in the new situation.
Under the action plan, the city will tighten cooperation with government ministries and agencies to implement the tasks of the capital city’s development strategy.
It will improve its coordination with provinces and cities throughout the country, especially with Hải Phòng and Quảng Ninh, to promote each other’s potential and advantages for mutual development.
Source: VNS LINK
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Henig: IMO: FDI stands for Foreign Direct Investment
HCM City hopeful of getting $4.5b FDI in 2023
February, 10/2023 – 08:22
HCM City will be able to attract US$4.1- 4.5 billion worth of FDI this year if the economic situation stabilises and inflation remains under controlled, according to its Department of Planning and Investment
HCM CITY — HCM City will be able to attract US$4.1- 4.5 billion worth of FDI this year if the economic situation stabilises and inflation remains under controlled, according to its Department of Planning and Investment
Phạm Tuấn Anh, deputy head of its Foreign Economic Relations Sub-Department, said last year, despite being the locality worst affected by the COVID-19 pandemic, the city attracted $3.94 billion, a 5.4 per cent increase from 2021 and the highest among the country’s 63 provinces and cities.
Notably, inflows changed direction and, instead of the property sector, went into technology and manufacturing, he said.
The global economy would continue to face challenges this year, and so the city could struggle to increase FDI much from last year, he pointed out.
If the economic situation stabilises and inflation remains under controlled, it could get $4.1-4.5 billion, he told chinhphu.vn.
As of January 20 FDI for the year was worth $179 million, or 74 per cent higher year-on-year.
Of this, $87 million went into 50 new projects, $55 million was spent on acquiring stakes in other companies and $37 million went into 20 existing projects.
Singapore ranked first with 12 projects and $77 million, followed by Taiwan with $3.2 million and Hong Kong with $2.2 million.
Anh said the city has difficulty attracting investment, especially in large manufacturing projects, because it has little land left.
So its FDI strategy involves attracting foreign investment not only directly but also into supply chains in the south whose headquarters and R&D, logistics, training and support centres are located in the city and production activities are carried out in neighbouring localities, he added.
— VNS LINK
Henig: Shares mixed on declining liquidity
February, 09/2023 – 16:55
Shares were volatile this week with up-and-down sessions intertwining amid rising investor caution about the market outlook.
HÀ NỘI — Shares were volatile this week with up-and-down sessions intertwining amid rising investor caution about the market outlook.
On the Hồ Chí Minh Stock Exchange, the VN-Index decreased 0.76 per cent to close Thursday at 1,064.03 points. The benchmark index increased 0.6 per cent in the previous session.
Liquidity declined from VNĐ12 trillion on Tuesday to VNĐ10 trillion on Wednesday and VNĐ9.2 trillion (US$389 million) on Thursday.
Billion-dollar-cap stocks dropped in the last trading minutes of the afternoon session, pushing the VN-Index down sharply, while overall market breadth was rather balanced with 235 stocks falling, 184 rising and 166 closing flat.
Vietjet (VJC) surprised the market with a loss of 5.7 per cent despite its earlier reporting an impressive recovery after COVID-19 with a year-on-year rise of 175 per cent in net revenue to VNĐ7.35 trillion ($313.4 million) and a profit of VNĐ902 billion in the last quarter of 2022.
Other big draggers included Vietcombank (VCB), Vietinbank (CTG), BIDV (BID), Techcombank (TCB), Masan Group (MSN), Mobile World Investment (MWG), Vinhomes (VHM), Vincom Retail (VRE) and Hòa Phát Group (HPG), each losing between 1.1 and 2.8 per cent.
With negative movements of many large-cap stocks, major industry groups including banking, real estate, iron and steel, securities, retail and beverages were among the worst performers on Thursday.
On the bright side, the oil and gas group gained value. The largest company by market value PV Gas (GAS) increased 0.8 per cent while PetroVietnam Drilling and Well Services (PVD) hit the ceiling price of 7-per-cent growth, Petrolimex Gas (PGC) was up 1.3 per cent.
According to Viet Dragon Securities Co (VDSC), the market’s decline was restrained with a support level of around 1,065 points for the VN-Index. Decreasing liquidity showed that supply pressure temporarily cooled down.
“However, the market’s ability to rally is still difficult as the cash flow is still cautious and the supply pressure gradually increases when the market rallies. It’s expected that the market will continue to fluctuate and probe at 1,070 – 1,080 points in the next trading sessions,” said VDSC’s market analyst Phương Nguyễn.
On the Hà Nội Stock Exchange, the HNX-Index increased for a second day, up 0.14 per cent to close at 210.91 points. The northern market’s index edged up 0.3 per cent on Wednesday.
Liquidity also declined here with more than 46 million shares worth VNĐ743 billion being traded, down 25.5 per cent in volume and 15.8 per cent in value compared to the previous session.
Foreign trading was mixed. Foreigners concluded as net sellers on HCM City’s bourse with a trivial value of VNĐ11 billion. They were net buyers but for a value of VNĐ5 billion on the Hà Nội exchange.
— VNS LINK
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Henig: Fertiliser prices likely to remain at high level in coming months
February, 10/2023 – 08:31
Gas and petrol prices greatly affect the production cost of fertiliser because gas prices account for about 80-90 per cent of the production cost of ammonia – an important input for urea and DAP fertilisers.
HÀ NỘI — Fertiliser prices in the coming months are forecasted to remain at a high level due to the global market’s continuing gas and petrol price fluctuations.
According to Phùng Hà, general secretary and vice chairman of the Vietnam Fertiliser Association, many experts in the fertiliser and finance world forecast that fertiliser prices are falling, but the possibility of them remaining at a high level remains.
Gas and petrol prices greatly affect the production cost of fertiliser because gas prices account for about 80-90 per cent of the production cost of ammonia – an important input for urea and DAP fertilisers. Therefore, fertiliser prices in the coming months will still fluctuate unpredictably.
According to a survey of some fertiliser companies and trading agents, the current fertiliser price is at VNĐ10.5 million per tonne of Phú Mỹ urea fertiliser and VNĐ19 million per tonne for potassium sulphate fertiliser, while DAP fertiliser price ranges from VNĐ17 to VNĐ25.5 million per tonne depending on the type.
Hà said that the fertiliser prices in 2021-2022 increased rapidly by VNĐ1-1.9 million per tonne. However, China has started to open up the market and has not been limited to exporting 29 types of fertiliser, so the supply of fertiliser in the world market has been abundant, and fertiliser prices have also started to cool down.
For fertiliser supply for the winter-spring crop 2022-2023, at present, the production capacity of urea at four factories under the Vietnam Oil and Gas Group (PVN) and the Vietnam Chemical Group (Vinachem) has reached 2.5 million tonnes per year, while the domestic demand is only 1.6-1.8 million tonnes each year.
The domestic supply of phosphate-containing fertiliser and NPK fertiliser is higher than the local demand. However, Việt Nam still has to import about 40 per cent of DAP fertiliser and all potassium fertiliser volume to meet the domestic demand.
Vũ Xuân Hồng, deputy general director of Lâm Thao Fertiliser and Chemical Joint Stock Company, said that to ensure the supply and reasonable price of fertiliser for farmers, the company prepared before the Tết holiday a large volume of raw materials for production within at least three months, such as SA, sulfur, potassium.
Lâm Thao expects to meet the supply for the agricultural production of the winter-spring crop 2022-2023 with over 30,000 tonnes of fertilisers of all kinds in store and a production output of nearly 2,000 tonnes of fertiliser per day, Hồng said.
According to Hồng, to keep stability in fertiliser prices for farmers, Lâm Thao has found input materials with good prices, such as SA imported from the Middle East and Africa and urea imported from domestic factories.
With these efforts, the market prices of Lam Thao’s fertiliser products are kept stable compared to the fourth quarter of 2022.
Besides that, Lâm Thao has had efforts to reduce the cost of transporting fertiliser in the context of higher gasoline prices and handling costs.
Accordingly, the company has diversified forms of transporting fertiliser, including using cheaper transport means such as railway, waterway, and river instead of road transport as before, Hồng said.
According to Hoàng Văn Hồng, deputy director of the National Centre for Agricultural Promotion, the centre works closely with localities to guide farmers in using fertilisers reasonably, economically and effectively. It also encourages farmers to increase the use of organic fertilisers. VNS LINK
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Henig: SBV has not tightened credit into real estate: deputy governor
February, 09/2023 – 07:58
Deputy Governor of the State Bank of Việt Nam Đào Minh Tú dismissed the recent rumours from some associations that the central bank has been squeezing loans for this sector.
HÀ NỘI — The State Bank of Việt Nam (SBV) has not tightened credit into the real estate sector, Deputy Governor of the State Bank of Việt Nam Đào Minh Tú confirmed in a meeting with Vietnamese banks and property developers on Wednesday.
Tú dismissed the recent rumours from some associations that the central bank has been squeezing loans for this sector, saying that there has been no new document or statement issued on the matter.
“The SBV has put a grip on credit into some high-risk sectors and segments in the real estate, such as speculative investment and high-end segments with great value, which has the nature of a bubble, potentially threatening the system’s safety,” Tú said.
He said the real estate sector is one of the key industries that have largely contributed to the country’s economic development.
However, the realty market has seen a growing supply and demand imbalance with an excess of high-end products, a lack of housing for middle- and low-income people, land fever in some localities and wrongdoings in the corporate bond market.
However, there is no tightening of credit in this sector, Tú reaffirmed.
The SBV’s data shows credit balance for real estate businesses accounted for 21.2 per cent of the total credit outstanding of the whole economy worth VNĐ25.8 quadrillion (roughly US$109 billion) as of December 31, 2022 – the five-year high and the highest proportion in all industries.
Loans focused on consumer demand and self-use with a proportion of 68.7 per cent of total outstanding loans, up 31.1 per cent over the past year, and credit to real estate business accounted for 31.3 per cent, up 11.5 per cent.
By segment, credit balance for housing needs accounts for 62.2 per cent, land use rights 20.7 per cent, industrial parks and export processing zones 2.7 per cent, social housing 0.7 per cent and other fields 13.7 per cent.
“Therefore, it can be seen that credit institutions are still providing credit to the real estate sector with high growth and large outstanding loans. Feasible projects and loan plans are still provided capital following regulations,” said Hà Thu Giang, director of SBV’s Department of Credit for Economic Sectors.
Giang said there is no separate ‘room’ for the real estate, as the credit limit for the whole system is set to suit inflation control, and there will be no shortage of credit at the beginning of the year.
Proposals of property developers
At the meeting, property businesses also raised the difficulties and problems of the real estate market, focusing on legal issues.
According to Lê Hoàng Châu, chairman of the HCM City Real Estate Association, ‘legal problems’ account for 70 per cent of the difficulties of real estate businesses in accessing credit loans.
Next is the risk of private corporate bonds becoming ‘bad debt’ or credit loans’ turning into bad debt groups’.
Châu explained this happens when a loan which is about to be due that, if not extended, will be classified as ‘bad’ debts, or businesses with overdue credit loans may be ‘jumped’ into a group of ‘worse’ debt. In addition, homebuyers now find it difficult to get credit.
Meanwhile, Phạm Thiếu Hoa, chairman of Vinhomes, proposed the SBV allow banks to finance purchasing, selling, depositing, and transferring contributed capital and shares in project investment companies and M&A activities.
At the same time, Hoa said that lending rates need to be adjusted in parallel with maintaining the collateral ratio as conventional loans for projects with a fully legal basis.
In addition, it is necessary to add specific mechanisms and policies for large investors and major projects with full legal stands to avoid the situation of ‘levelling’.
Lê Trọng Khương, vice chairman of Hưng Thịnh Group and general director of Hưng Thịnh Land, also said that raising capital from bond issuance is an excellent source of money for businesses. However, at present, this channel is at an impasse.
To solve this bottleneck, he proposed that the SBV expand the ‘credit room’ so businesses can access more capital for business and investment.
According to Khương, interest rates currently stand at a very high level, affecting the price of products sold in the market. He hopes SBV and commercial banks may devise plans to push it down to support businesses to create affordable products for people.
In the future, to tackle difficulties and obstacles for real estate businesses and individuals when accessing credit, Tú said the SBV would continue to operate monetary policies proactively and flexibly, in line with fiscal policy and other macroeconomic policies, to support the economy, including the real estate sector.
The monetary authority will guide banks to increase credit securely and efficiently, providing economic capital and focusing on viable loan plans with good sales and payment ability, particularly in the real estate sector.
— VNS LINK