News Bulletin 59 - Week 3, April 2021

Big news last week was the United States removing Vietnam from the list of currency manipulators. This is a big relief for Vietnam as it was facing the prospect of US sanctions. Both countries can now move on and increase cooperation in trade and investments.

There were also more positive news relating to direct foreign investments in Vietnam, particularly relating to the US and Japan. Bloomberg reported that the massive stimulus plan and pent up demand in the US will benefit exporters to the US with Vietnam on the top of the list. It was also reported that Vietnam is now Japan's fifth largest consumer market with exports in agricultural, forestry, aquatic and food products from Japan to Vietnam reaching almost USD500 million, an increase of 17% from prior year.

The past week spotlight

Vietnam Q1 GDP grows 4.5% on rising exports to US

First-quarter growth remained the same as the fourth quarter last year, which stood at 4.48%. However, this year's first quarter was up from the 3.68% recorded in the first quarter of 2020.

While the economy is booming, relations with the U.S. are a cause for concern. Vietnam was designated as a currency manipulator by the U.S. Treasury Department in December 2020. As a result of the U.S.-China trade war and other factors, the U.S. trade deficit in goods with Vietnam ballooned to about $70 billion in 2020.

See full details here

Let’s look at some other related financial and business news during the past week:

1. US removes Vietnam out of list of currency manipulators

The US Treasury has removed Vietnam and Switzerland from the list of countries labeled as currency manipulators, reversing a decision of the administration under President Trump last December.

See full details here

2. First-quarter growth fairly impressive

Although economic growth in this first quarter was slower than the scenario set out in Resolution No. 01/NQ-CP dated January 01, 2021, Pham The Anh, chief economist from the Vietnam Institute for Economic and Policy Research under Hanoi National University’s University of Economics and Business, shares why this growth was truly encouraging.

See full details here

3. Vingroup eyes $2 bln from VinFast IPO in US

Vietnam’s largest private company, Vingroup, is considering an initial public offering of shares in its auto subsidiary VinFast in the U.S. to raise around $2 billion. The IPO could take place as soon as this quarter, and could raise up to $3 billion, Bloomberg reported, citing sources.

See full details here

4. Coming U.S. Economic Boom Seen Boosting Vietnam Most in Asia

A surging U.S. economy on the back of massive stimulus and pent-up demand will benefit exporters in Asia, with Vietnam receiving the biggest windfall, according to Bloomberg Economics.

See full details here

5. From manufacturing to retail: Japanese investors’ appetite in Vietnam sees shift

Vietnam has around 1.5 million births a year, 70 percent more than Japan, and the number is projected to grow. Japanese companies are eyeing the retail sector in Vietnam, hoping to take advantage of a growing middle class and rising incomes.

See full details here

6. United States sets sights on Vietnamese investment

US capital inflows to Vietnam are expected to grow this year following the high hopes set on vaccination and upcoming direct flights between both countries.

See full details here

7. Vietnam boasts largest renewable energy complex in Southeast Asia

Vietnam now possesses the largest renewable energy farm complex in Southeast Asia, generating a total power output of up to one billion kWh per year, after the debut of a wind power plant in south-central Ninh Thuan Province on Friday.

See full details here

8. Vietnam becomes Japan’s fifth-largest consumer market

Vietnam has become Japan’s fifth-largest consumer market, with an average growth rate of 15-17 percent per year, according to the Japanese Ministry of Finance’s statistics. 

See full details here

9. Vietnam becoming an R&D hub for global tech giants

Samsung Electronics is building a $220-million R&D center in Hanoi, and U.S. chip company Qualcomm has set up its first R&D facility in Southeast Asia in Vietnam.

See full details here

10. Trading volumes on Vietnam’s capital markets have reached record levels. Here’s why

In 2020, the Vietnam Securities Depository counted 2.7 million domestic individual accounts, a record jump of 16.8% versus 2019. The trend has continued this year, with 86,000 trading accounts opened in January alone, higher than any month in 2020. Low rates and a pandemic usher new traders into Vietnamese stocks. Stocks emerge as new asset class for those who once favored cash and real estate, according to the Nikkei.

See full details here