News Bulletin 60 - Week 4, April 2021

Interesting news out of Vietnam this week was VinFast's plan to issue their shares on the US stock exchange to raise usd2 billion. New airline in Vietnam Bamboo Airways is also considering an IPO in the US to raise usd200 million. The plan by these companies to raise money overseas is an indication that access to capital in Vietnam has hit a ceiling and there is now real demand to raise bigger and faster capital in overseas capital markets, whether its in the US, UK, Singapore or Hong Kong. The challenge obviously is for these companies to be compliant with regulatory requirements to list overseas, where regulations are much more stringent.

Vietnam News last week reported that domestic electronic firms need to invest and enhance its manufacturing capabilities.  This is especially important and an opportunity for the local producers to join FDI supply chain now that many global electronics companies are investing in and moving to Vietnam.  Vietnam is now home to leading global electronic behemoths such as Samsung, LG, Canon and Intel.

The past week spotlight

Foreign investment flow pumped heavily into Vietnam

In the first four months of this year, foreign investment flows still poured strongly into Vietnam, with a total capital of US$10.13 billion, an increase of 18.5 percent year-on-year. This is a positive signal, promoting economic development in the context that the whole country has been joining hands to prevent the Covid-19 pandemic.

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

1. Securities firms report improved results in Q1

Recently released financial reports show the earnings of securities companies were positive in the first quarter of 2021.

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2. Nội Bài Airport expected to see record passenger traffic in coming holidays

Nội Bài International Airport in Hà Nội is predicted to serve a record 75,000 passengers per day during the upcoming National Reunification Day (April 30) and May Day holidays.

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3. HCMC approves two transport projects worth over VND12 trillion

The People’s Council of HCMC this morning, April 22, approved two transport projects worth over VND12 trillion in total, which would be constructed between 2021 and 2025. The pre-feasibility studies of the two projects, including the An Phu Intersection in Thu Duc City and the renovation of the Tham Luong, Ben Cat and Nuoc Len canals, were approved by the HCMC Evaluation Council on April 20.

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4. Domestic electronic firms urged to enhance capacity, improve linkage with FDI

Enhancing the linkage between domestic and foreign-direct-investment (FDI) electronic enterprises can be an important solution to promote the development of this industry which is now dominated by the FDI sector.

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5. E-commerce workforce downsized due to COVID-19

The proportion of enterprises with employees specialised in e-commerce decreased significantly last year compared to previous years, according to the Việt Nam E-Commerce Index 2021 by the Việt Nam E-Commerce Association (VECOM).

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6. Foreign firms register trademark protection for Vietnamese rice in U.S.

Four foreign companies have registered trademark protection for Vietnam’s ST25 rice in the U.S., which may choke off Vietnamese food exporters tapping the market later, according to Vu Ba Phu, director of the Trade Promotion Department under the Ministry of Industry and Trade.

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7. Vietnam an attractive destination for Northern European firms: ScandAsia

High economic growth and strong investment in infrastructure are among the reasons for Northern European businessmen to consider when choosing to invest in Vietnam, according to an article recently published on the site ScandAsia, which covers Nordic news and business promotion in Asia.

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8. Experimental tax program for apartment lessors proposed

The HCMC Tax Department has proposed to collect taxes from individuals and organizations that rent out apartments. The Department also wants to prevent financial loss by managing the leasing, collection of land use fees, registration fees, and personal income tax in real properties.

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9. Vietnam firms again dream of listing on foreign stock exchanges

Vietnamese companies are once again contemplating listing abroad amid their growing demand to raise funds and hopes of popularizing their brands’ globally. Recent reports that companies like VinFast and Bamboo Airways are considering listing their shares in the U.S. show they have achieved a certain level of maturity and want to establish their brands globally, Le Dat Chi, deputy department head of the School of Public Finance, University of Economics Ho Chi Minh City, said.

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10. Vietnamese aviation has huge room for expansion

The Airports Corporation of Vietnam (ACV) has invested heavily in airport infrastructure development as Vietnam’s aviation market boasts huge potential for expansion, according to an official from the corporation.

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