News Bulletin 64 - Week 4, May 2021

The authorities in Vietnam continue to deal with the latest outbreak of Covid19, especially in the northern region. The current outbreak is particularly taking place in industrial zones with the Bac Giang province especially hit hard. Bac Giang province recently announced the suspension of four industrial zones there, including ones that have suppliers producing Apple related products. Apple suppliers like Foxconn Technology Group and Luxshare-ICT were among those that have had to temporarily close their factories.

In investment news, S&P Global Ratings maintained Vietnam’s sovereign credit rating while raising its outlook from “stable” to “positive”.  The big news coming out of Vietnam last week was the announcement of Alibaba Group and Baring Private Equity Asia investing usd400 million into The CrownX, which consolidates Masan Group’s interests in Masan Consumer Holdings and VinCommerce.  The investment amount is significant and is another big foray of unicorn Alibaba into Vietnam and its retail market specifically.

The past week spotlight

Alarming statistic: 13,000 businesses withdraw from market each month

In the first quarter of 2021, the number of businesses withdrawing from the market was higher than the number of newly established ones. The Covid-19 pandemic continues to affect production and business activities in Vietnam.

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

1. Great opportunity for Vietnam's semiconductor industry

From the constantly increasing demand of the global supply chain, the semiconductor sector has become more exciting and has become a field that receives a lot of favor. When manufacturing industries slowed down due to the current shortage of microchip supply, new opportunities for Vietnam opened up, and the semiconductor industry is now forecast to enter a new "golden time".

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2. Japan's ENEOS increases stake in Petrolimex

Japanese energy giant ENEOS Corporation has registered to buy another 25 million shares of fuel distributor Petrolimex to increase its ownership to 4.87 percent. The deal will be completed between May 24 and June 22 via order matching, and take ENEOS’s holding to 63 million shares.

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3. Reasons behind the $400 million investment in The CrownX of Masan

The latest $400 million is just the initial capital in the broad plan of Masan Group to develop its tech-enabled retail and consumer system and expand its reach to serve consumers nationwide.

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4. Locals step up M&A retail strategy with foreign players

More local players are shaking hands with foreign companies to develop their retail arm in Vietnam, especially through the M&A channel.

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5. Expert: Vietnam’s FTAs driving up exports-imports

Vietnam’s exports and imports rose over 24 percent year-on-year in the first quarter, driven by the country’s free trade agreements (FTAs), an expert has said.

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6. Japanese beverage firm helps coffee growers in Vietnam

Japanese beverage company Kirin Holdings is stepping up support for coffee growers in Vietnam, amid a growing consumer demand for sustainable products.

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7. S&P raises Vietnam’s outlook to 'positive'

S&P Global Ratings has maintained Vietnam’s sovereign credit rating but raised its outlook from "stable" to "positive" thanks to the country’s effective measures to contain Covid-19.

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8. VN e-commerce platforms may lose home ground

At the end of 2019, Adayroi announced its closure, ending the expectation that Vietnamese e-commerce firm could compete with foreigh rivals. This showed that local businesses cannot compete with foreign competitors in this fierce battle.

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9. Industrial zones placing Apple suppliers temporarily suspend operation

The northern province of Bac Giang announced suspending the operation of four industrial zones amid a resurgence of COVID-19 in the northern region.

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10. Manufacturing industries face difficulties due to shortage of chips

The shortage of electronic chips is causing difficulties for businesses and electronics manufacturers as chipsets are used in most electronic products and technological devices.

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