Vietnam Economic News: 7 - 14.6.2024
Summary of Vietnam Economic News: 7 - 14.6.2024
---
Summary of Vietnam Economic News: 7 - 14.6.2024 ---
VIETNAM PLANS RAISING SPECIAL CONSUMPTION TAX ON ALCOHOLIC DRINKS TO 100% BY 2030
Reuters News – 14 June 2024
Vietnam's Finance Ministry has proposed to hike a special consumption tax on alcoholic drinks to 100% by 2030, the ministry said, a move that may further hurt the country's beverage industry. Under the draft proposal which is pending lawmakers' approval, the special consumption tax on beer and strong liquor will be raised to 70%-80% by 2026 and gradually increase it to 90%-100% in 2030, compared with the current 65%. "Alcoholic drinks and beer prices will increase by 20% in 2026, compared with 2025," the finance ministry said in the proposal, adding that prices would continue to increase by 2%-3%, depending on inflation. "Levying high tax rates is necessary to help reduce consumption of alcoholic drinks," it added. Vietnam's beer industry, dominated by four major brands -Dutch Heineken, Danish Carlsberg and local Sabeco and Habeco - has already been hit by the country's strict drink and driving law, under which the alcohol content limit for drivers is zero since 2019. Heineken Vietnam Brewery, the country's beer market leader with a 37.6% share, recorded a 24% decline in total consumption last year, according to a May report from FPT Securities. Sabeco, accounting for 34.4% of the market, also posted a 12.6% fall in consumption. On the contrary, Carlsberg's domestic consumption rose by 8%, it added. Last year, the beer industry's revenue decreased 11% and profits decreased by 23%, according to estimations of the Beer - Alcohol - Beverage Association. Shares in Sabeco fell by 3.66% on Friday morning after the ministry's proposal. A Sabeco spokesperson declined to comment but said it would contribute the company's opinion to the Beer - Alcohol - Beverage Association as a member of the Association. Carlsberg and Heneiken did not immediately respond to Rueters' requests for comment. The finance ministry also proposed a hike in special consumption tax on soft drinks and cigarettes.
VIETNAM PRESIDENT IN MEETING WITH US AMBASSADOR CALLS FOR STRONGER DEFENCE, ECONOMIC TIES
Reuters News – 13 June 2024
Vietnam's newly elected president To Lam on Thursday called for a strengthening of ties with the United States, the government said. Vietnam has been seeking to boost relations with Washington as part of its "bamboo diplomacy" as it tries to navigate rising global disputes and maintain economic growth. In a meeting on Thursday with the U.S. ambassador to Hanoi, Marc Knapper, Lam said the two countries should gradually expand cooperation in defence and security, the government said in a statement. Lam, who was elected state president three weeks ago, said Vietnam and the U.S. should also boost economic ties and promote high-level visits. Vietnam's exports to the U.S. in the first five months of this year rose 22% from a year earlier to $44.4 billion, representing 28% of its overall exports in the period, according to the government's customs data. On Tuesday, in a meeting with Chinese ambassador to Hanoi, Xiong Bo, Lam said it was important that South China Sea maritime disputes between the two countries were managed well and each country's interests were respected. Vietnam and China have been embroiled in a years-long maritime dispute in the South China Sea. Vietnam's foreign ministry last week said it was deeply concerned over the presence of a Chinese survey vessel in Vietnam's exclusive economic zone. Lam and other Vietnamese leaders are expected to receive Russian President Vladimir Putin in Hanoi next week, but the visit has not yet been officially announced
VIETNAM STOCKS RECLAIM 1,300 MILESTONE, INVESTOR SENTIMENT UPBEAT
Vietnam News – 12 June 2024
Vietnam's benchmark stock index topped 1,300 points at the close on Wednesday, its highest level in more than two years, as other Asian equity markets were mixed ahead of a decision by the Federal Reserve on interest rates. Vietnam's main index (VNI), which has a market capitalisation of around $205 billion, has risen nearly 15% this year, outshining its regional peers. "VNI is expected to hit strong resistance level at 1,310 - 1,315 points," said a broker at VNDirect Securities. "The benchmark index had failed to reach the 1,300 mark multiple times in the past two years. Investor sentiment now has been upbeat as the market has crushed a big obstacle." However, overseas investors continued to offload investments in Vietnam's main bourse, the Ho Chi Minh Stock Exchange, with a net 588 billion dong ($23.11 million) on Wednesday, official data showed. Reuters reported that foreign investors had reduced their securities holdings by nearly $2 billion since early 2023 despite the bourse's positive performance, with the largest outflows recorded during weeks of political upheaval. The Vietnam index lost a third of its value in 2022 as a crackdown on property lending hammered confidence in a market dominated by banks and real estate firms. It rose 12% in 2023 and lenders have been the main drivers of gains as profits surge and investors bet the worst is over. ($1 = 25,440.0000 dong)
ADB SIGNS $80-MLN LOANS WITH VIETNAM'S LPBANK TO BOOST LENDING
Reuters News– 7 June 2024
The Asian Development Bank (ADB) and Lien Viet Post Joint Stock Commercial Bank (LPBank) on Wednesday signed a financing package of up to US$80 million to expand access to finance for women-owned small and medium-sized enterprises (WSMEs) in Vietnam. The financing comprises a $30 million loan from ADB’s ordinary capital resources and $50 million in syndicated parallel loans. These include $30 million from the Export–Import Bank of China, a Chinese state-owned bank dedicated to promoting the People’s Republic of China and $20 million from the ILX Fund, an Amsterdam-based asset manager focused on supporting the sustainable development goals in emerging markets. ADB acted as the mandated lead arranger and bookrunner for the entire financing deal. “By providing access to finance and tailored advisory services, our partnership with LPBank will empower women entrepreneurs in Vietnam to thrive and contribute to the country’s economic growth,” said ADB Director General for Private Sector Operations Suzanne Gaboury. “Working with development partners like the Export–Import Bank of China, ILX and We-Fi, we aim to mobilise capital for private sector development that makes a meaningful difference to women-owned businesses in Vietnam.” SMEs account for 40 per cent of Vietnam’s gross domestic product and half of all employment. Access to commercial finance is a challenge, particularly for women borrowers who often face constraints such as lack of collateral, low financial literacy, higher risk perception by banks and limited awareness among banks of the potential of the women’s market. The financial package will help LPBank design new products and procedures to enhance its support to WSMEs. A $750,000 performance-based grant funded by We-Fi will incentivise LPBank to expand its services to female borrowers and implement advisory support services for WSMEs. “Supporting SME customers in accessing capital is always an important strategy that LPBank prioritises. With this loan package, LPBank not only has more potential in providing effective financial solutions for customers but also shows the efforts in supporting WSMEs, especially where they are in great need of capital to recover from the pandemic and to further develop their business,” said LPBank Vice-Chairman Le Minh Tam.