Vietnam Economic News: 31.8 – 7.9.2024
Summary of Vietnam Economic News: 31.8 - 7.9.2024
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Summary of Vietnam Economic News: 31.8 - 7.9.2024 ---
VIETNAM'S EXPORT, INDUSTRIAL PRODUCTION GROWTH SLOWS IN AUGUST
Reuters News – 6 September 2024
Growth in key economic indicators for Vietnam's trade-driven economy moderated in August, government data showed on Friday, but remained at robust levels as a stronger global electronics cycle supported activity. Exports rose 14.5% in August from a year earlier to $37.59 billion, led by shipments of textiles and machinery, and imports increased an annual 12.4%, the General Statistics Office (GSO) said in a report. While solid, both growth rates were below those seen in July, when exports rose an annual 19.1% and imports surged 24.7%. That led to the monthly trade surplus widening to $4.53 billion August from $2.12 billion in July. A similar trend was seen in industrial production, which increased 9.5% in August from a year earlier, slower than a revised 11.1% expansion in July, the GSO reported. "The ongoing upturn in the global electronics cycle will continue to post solid exports and industrial production growth figures for the rest of the year," Oxford Economics said in a report. However, it noted that domestic sectors of the economy were subdued compared to pre-pandemic levels as challenges from the banking and real estate sectors remained. Retail sales rose 8% in August from a year earlier, slower than a 9.4% increase in July, the statistics office said. Inflation slowed sharply to an annual 3.45% in August for 4.36% in July, to be comfortably below the 4.5% ceiling set by the government for this year. Vietnam hosts major manufacturing operations of large multinationals, and is an important exporter of smartphones, electronics and garments. Foreign investment inflows rose 8% in the January-August period compared to a year earlier, easing from an 8.4% increase in the January-July period. There were also signs of a slowdown in future investments, with growth in foreign investment pledges slowing to an annual 7% for the January-August period from 11% in January-July.
ITALY TURNS TO VIETNAM AND MEXICO FOR AUTO PART EXPORTS TO COUNTER GERMAN WEAKNESS
Reuters News – 6 September 2024
Italy is looking to Vietnam and Mexico as it seeks alternative export markets for its production of automotive components, in anticipation of weaker demand from Germany amid the Volkswagen crisis, an Italian minister said. "We are aware of the situation Germany is facing in the automotive industry," Foreign Minister Antonio Tajani on Friday told reporters on the sidelines of the TEHA business forum, adding Italian auto part exports could be impacted. "That's why we are studying to see which could be the markets where we could strengthen Italy's presence," he said, citing Vietnam and Mexico. On Monday, Volkswagen - Europe's top car maker by revenue and long a symbol of Germany's industrial might - said it would prematurely end a job security programme in place since 1994 and set the stage for plant closures in Germany. Germany is the largest market for Italy's auto components industry, with exports worth 5.2 billion euros ($5.8 billion) last year, according to Italian automotive lobby group ANFIA. ($1 = 0.9006 euros)
VINFAST'S STRATEGIC ADVANTAGES IN EUROPEAN ELECTRIC VEHICLE INDUSTRY
Dow Jones Newswires German – 6 September 2024
Amidst a geopolitical and economic landscape fraught with uncertainty in Vietnam, VinFast, the Vietnamese electric vehicle manufacturer, is positioning itself for success with a diversified strategy. By offering a range of products and targeting multiple markets, the company is creating a unique advantage in the rapidly evolving automotive industry. The company has been actively expanding its global reach, with recent milestones including the opening of new dealerships in the Philippines and the Middle East, the delivery of its first electric vehicles in Indonesia, and the groundbreaking of a new assembly plant. Regarding the EU market, VinFast has partnered with Bosch, a leading global supplier of automotive technology, to enhance the charging experience for its European customers. Additionally, VinFast has entered into a partnership with Mobivia, a prominent European automotive repair and maintenance brand. This agreement expands access to a comprehensive aftersales service network for VinFast customers in France and Germany. Mobivia's 1,200 service centers offer high-quality services, including warranty processing, maintenance recommendations, and the provision of new equipment and accessories. By carefully preparing a comprehensive service system and charging infrastructure before officially entering the European market, VinFast has demonstrated its commitment to supporting its customers and facilitating a smooth transition to electric vehicles.
VIETNAM RAISES $103 MLN IN GOVT BOND AUCTION; 5-YR COUPON AT YEAR'S HIGH
Reuters News – 4 September 2024
Vietnam's State Treasury raised 2.56 trillion ($103 million) in a government bond auction on Wednesday, less than the $326 million raised last week, with the coupon on the 5-year bonds hitting the highest level this year. The auction uptake was lower than last week, with 21.3% of the offer sold compared with 67.4% sold at the Aug 28 auction, a filing to the Hanoi Stock Exchange showed. The Treasury sold 200 billion dong of 5-year bonds, out of 500 billion offered, with a coupon of 1.98%, and 1.15 trillion dong of 10-year bonds, out of 7 trillion offered, with a coupon of 2.71%. It also sold 750 billion dong 15-year bonds, out of 4 trillion offered, with a 2.90% coupon, and 464 billion dong of 30-year bonds, out of 500 billion offered, with a 3.10% coupon. Vietnam is seeking to raise 400 trillion dong from government bond sales this year, mainly to fund its public investment – a key driver of economic growth. It has raised 239 trillion dong from the sales so far in 2024, according to exchange data. On the corporate front, Vietnamese banks dominated the list of corporate bond sellers last week, according to data from the exchange. The largest corporate bonds sellers last week included Tien Phong Bank, BIDV, Asia Commercial Bank and Vietnam International Bank. ($1 = 24,840 dong)
FITCH AFFIRMS VIETNAM ELECTRICITY AT 'BB+'; OUTLOOK STABLE
Dow Jones Institutional News – 31 August 2024
Fitch Ratings has affirmed Vietnam Electricity's (EVN) Long-Term Foreign-Currency Issuer Default Rating at 'BB+'. The Outlook is Stable. EVN’s rating is equal to the Vietnam sovereign rating (BB+/Stable) under Fitch's Government-Related Entities (GRE) Rating Criteria, reflecting a very high likelihood that EVN, as an integrated state utility, would receive government support, if needed. EVN's 'bb' Standalone Credit Profile (SCP) reflects its position as the owner and operator of Vietnam's electricity transmission and distribution network, and its 37% share of Vietnam's power generation capacity as of end-2023. Fitch Rating Agency expects EVN's financial profile to be stronger relative to its SCP assessment. The SCP is constrained by the uncertainty associated with timely review of tariffs and cost pass-through mechanism under the regulatory framework. EVN is not planning to issue senior unsecured notes in the upcoming year.