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Headlines:
Southeast Asia’s Growth Champion Flexes
FTSE Upgrade Finally Arrives
Trade Surplus $19.6 Billion
Semiconductor Push Picking Up Speed
Infrastructure Blitz Through to December
Banks Feel Credit Squeeze
Energy: Wind Power Gold Rush Continues
IFC Rush Job
Tax Reforms to Cut Red Tape
Foreign Capital Keeps Coming
Ag Exports Stay the Course
Southeast Asia’s Growth Champion Flexes
The economy has exploded 8.23% in Q3, the fastest rate in the region, and a result that’s pushed YTD GDP to 7.85%. Manufacturing jumped 10.8%, exports are up 16% (despite US tariffs), and FDI has topped $21.3 so far. That’s a five-year high. UOB has upgraded FY forecasts to 7.7% and the government still says it’s going to beat 8%. Industrial production grew 9.2%, retail sales climbed 12.7%, and 18,000 new companies were registered in October alone. We wish we could say everyone else is the region was taking notes, but that doesn’t seem to be the case yet.
Read more: VnEconomy (FDI totals), Vietnam News (new businesses), UOB (growth forecast), VIR (export strength), VnEconomy (production index)
FTSE Upgrade Finally Arrives
FTSE Russell confirmed the change in label for the local bourse from frontier to secondary emerging market by September next year. As a result, 28 stocks will be added to global indices. The country will make up 0.04% of the Global All Cap index and 0.22% of the Emerging Index. Dragon Capital wants foreign ownership limits raised to 100% in most sectors.
Read more: Vietnam News (FTSE upgrade), Vietnam Insiders (market rebound), The Investor (reform proposals)
Trade Surplus $19.6 Billion
Foreign trade is so far $762.44 billion – reasonably balanced between exports of $391 billion against imports of $371.4 billion. October shipments alone totaled $42.05 billion, up 17.5%. Manufacturing represented nearly nine-tenths of exports. China was the supplier of almost half ($150.9 billion) of the import total. The US reconfirmed 20% tariffs instead of the threatened 46%; the finer details are still being worked out as negotiations continue. Agricultural exports this year are heading for $70 billion, seafood is already at $9.31 billion (see last article).
Read more: VIR (trade totals), Business Times (regional ranking), VnEconomy (agricultural exports), StratNews (US agreement)
Semiconductor Push Picking Up Speed
Prime Minister Pham Minh Chinh promised “all possible support” for semiconductor investors during recent meetings with SEMI (Semiconductor Equipment and Materials International) executives. The country has a semiconductor industry development strategy that it has mapped out through 2030. Plans are for the first chip manufacturing facility in 2026. Da Nang has approved an $8 million project to develop computing infrastructure for chip design and AI research. The Semiconductor sector has brought 170 FDI projects so far, including some from global companies like SAP, Marvell, and Qualcomm, who have set up offices and R&D centers. The SEMI executives said that they were optimistically confident, but said that tighter regulations, simpler procedures, and improved infrastructure were still needed to complete the ecosystem.
Read more: Vietnam News (SEMIExpo event), Vietnam News (PM commitment), VnEconomy (Da Nang project), OpenGovAsia (industry strategy)
Infrastructure Blitz Through to December
The government is racing to wrap up 3,000 km of expressways and 1,700 km of coastal roads by December 19, with ground-breaking and inauguration ceremonies planned. The Cat Lai, Long Hung, and Phu My 2 bridges connecting Dong Nai and Ho Chi Minh City will need $1.85 billion in total investment; wrap-up is expected for 2028. Metro Line No. 2 construction is scheduled to start on January 15. The line is expected to have 11 km of track and nine underground stations. Bac Ninh Province began compensation payments for the Gia Binh International Airport, a $7.5 billion project that will cover 1,884 hectares. Hai Phong is still working on the setup of a 5,300-hectare economic zone that will need in the neighborhood of $13 billion in investment.
Read more: VnEconomy (expressway deadline), VnEconomy (bridge projects), VnEconomy (metro construction), Vietnam News (airport development)
Banks Feel Credit Squeeze
Credit growth reached 20.55% year-over-year in October, a figure that’s uncomfortably in excess of the central bank’s 16% cap. Total lending is expected to reach 145% of GDP by year-end. Fitch Ratings says the leverage is increasing systemic vulnerability in banking. Several banks have raised deposit rates and tried to introduce incentives to bring more cash. The State Bank of Vietnam used open market operations up to $9,240 billion through October to support liquidity. Banks have sold $12.28 billion in bonds through September.
Read more: Trading View (credit growth), VIR (liquidity pressure), VIR (forex trading)
Energy: Wind Power Gold Rush Continues
Tokyo Gas invested in Truong Thanh Duyen Hai Wind Power to build out a 48,000kW nearshore wind farm in Vinh Long. Shizen Energy started up a 40-MW wind power plant, and REE got authorization to survey more than 7,090 hectares of marine area for its 10 GW Nam Bo offshore wind project. Gia Lai announced the Hon Trau Wind Power Plant’s first phase, with nearly $1.84 billion in investment, scheduled for completion by Q4 2029. SolarBK partnered with Thailand’s Banpu NEXT and Amata to develop 227MW of rooftop solar systems in industrial parks, and that rollout will start early next year. Messer and PVChem are going to invest $37 million in an industrial gas plant using cold energy from LNG terminals to reduce emissions.
Read more: VIR (Tokyo Gas), VIR (REE project), VnEconomy (Gia Lai), Vietnam News (solar partnership), GasWorld(Messer plant)
IFC Rush Job
The International Financial Center in Ho Chi Minh City and Da Nang, is still grinding forward. The Ministry of Finance is working to finalize legal measures, with the guidance of a national steering committee led by the Finance Minister and State Bank Governor overseeing development. Total investment for the Ho Chi Minh City project is estimated at $7 billion. Construction is expected to take five years.
Read more: Vietnam News (timeline), VnEconomy (government directive), VIR (unicorn potential), VnEconomy(December launch)
Tax Reforms to Cut Red Tape
The National Assembly is looking at laws to reduce 348 administrative procedures and simplify 1,703 others. A new Tax Management Law will bring about automation for refunds and help support other issues of the digital economy. An Investment Law review has eliminated 25 conditional business lines, as well as removed approval requirements for outbound ventures valued under $800,000.
Read more: VnEconomy (tax law), VIR (investment law), Vietnam News (tax portal), Vietnam News (income tax)
Foreign Capital Keeps Coming
A Foxconn subsidiary has ponied up $150 million to buy out 100% ownership of SAIGON STEC, bringing their total investment in the company to $310 million. SK Telecom is expanding data infrastructure with plans to increase capacity at its Ulsan site to 1GW and building a data center in partnership with SK Innovation. Accelerated Infrastructure Capital signed an MoU to build a 200MW data center campus that will cost up to $2 billion. Oji Holdings will invest nearly $104 million in a liquid packaging carton plant in Dong Nai province. That plant should be able to fire up operations in 2028. Indonesian firm Sari Murni acquired Bibica from The PAN Group for an undisclosed amount, and Nam Long has sold a 15.1% stake in Dong Nai Waterfront City to Tokyu Corporation.
Read more: Investing (Foxconn), Telecoms Tech (SK Telecom), VIR (Oji Holdings), VIR (Bibica acquisition), The Investor (Nam Long)
Ag Exports Stay the Course
Coffee exports rose; robusta prices are up 2.6% to $4,648 per metric ton, thankfully Typhoon Kalmaegi spared most of Vietnam’s coffee-growing region. Production for the coming season will be up a little more than 9%. Pepper exports hit $1.39 billion in ten months, up 25.4% in value year-on-year, with average prices at $6,628 per ton for black pepper and $8,683 per ton for white pepper. Fruit and vegetable exports totaled $7.05 billion in ten months, up 14.4% year-on-year. Durian was a star, bringing almst $2 billion in Q3.
Read more: Trading View (coffee), VIR (Mexico), Trading View (pepper), Fresh Plaza (fruits), VnEconomy (emissions plan)
That’s it for this week!
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