Business Briefing

Reference exchange rate

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,198/USD on July 13, up VND 15 from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND 23,893/USD, and the floor rate is VND 22,502/USD.

The opening-hour rates at all commercial banks decreased. At 8:27 am, Vietcombank listed the buying rate at VND 23,220/USD and the selling rate at VND 23,530/USD, both down VND 10 from July 12. BIDV also kept both rates unchanged, listing at VND 23,240/USD (buying) and VND 23,520/USD (selling).

Photo: Zing News

Real estate news: Firms facing new challenges

Limited capital and scarce supply, along with new regulations on property tax, are putting pressure on real estate businesses. With recently revised regulations to make the market more transparent, many real estate transactions have to declare a more reasonable taxable price under the guidance of tax authorities.

According to the Ministry of Finance, in the first five months of 2022, the amount of personal income tax collected from real estate transfer transactions reached 16 trillion VND, an increase of 68%. While this figure was 21 trillion VND for the whole year of 2021 and 16 trillion VND in 2020. However, this could significantly impact the real estate market because speculative activities will be more closely monitored, reducing the number of potential transactions.

According to SSI Securities Joint Stock Company (SSI), the amendment of the Land Law is still under consideration, and with more regulations on the issuance of bonds for investors, new supply from apartments and low-rise building projects will continue to be limited.

According to the Ministry of Construction, the number of licensed new commercial housing projects decreased by 59% in the first quarter of 2022. Due to the shortage of new supply, primary selling prices in key urban areas such as Hanoi and Ho Chi Minh City continued to increase. Meanwhile, the number of transactions in the second quarter of 2022 was recorded at 20,325, down 20% compared to the same period last year. SSI believes that to gain sustainable development for the property market, the real estate market in some provinces needs to cool.

In 2021-2022, due to the high demand for investment in real estate products, real estate prices in many areas nationwide increased significantly. Therefore, authorities in some localities have stopped licensing agricultural and residential land to be divided into many small land slots. That helps to cool the market and prevent housing bubbles. Meanwhile, selling prices at many urban projects in the suburbs have increased rapidly due to information relating to infrastructure development.

At the beginning of 2022, the Ministry of Transport announced the capital of more than 304 trillion VND for projects in the medium-term public investment plan for 2021-2025. The southern region will benefit most from this investment plan with many highways and international airport projects. Those have increased the price of many urban projects in the suburbs by 15-20% over the same period last year.

However, according to SSI Securities Corporation, up to 70-80% of home buyers are mainly investors, and most of them choose bank loans because the loans have many attractive incentives, including interest rate support, deferred payment for the first 1-2 years, guarantee in income for some products, loans value up to 80-90% of the loan, and loan term for buying housing up to 35 years. SSI also said that house selling prices continued to be anchored at a high level while liquidity in the secondary market decreased recently.

Photo: Zing News

Export news: CPTPP prompts Vietnam’s aquatic exports to Japan

Vietnam is eying great opportunities in exporting aquatic products to the Japanese market thanks to the high level of openness of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), according to insiders, according to VNA.

Nguyen Manh Dong, Third Secretary of the Vietnam Trade Office in Japan, said that apart from the Vietnam-Japan Economic Partnership Agreement (VJEPA), the two countries have also joined other trade deals such as the CPTPP and the Regional Comprehensive Economic Partnership (RCEP), which brings more chances for Vietnamese aquatic products in this market.

Japan’s commitments in the CPTPP for aquatic products are high, including the exemption of 65% of the total tax lines and cutting the remaining in a roadmap of 6-16 years, he added. The CPTPP allows Vietnam to import materials from 11 member countries to export to Japan with secured tax preferences, he added, holding that the deal brings great advantages for Vietnamese aquatic products in Japan in both origin and tax.

Currently, Japan is the third-largest market of the Vietnamese aquatic sector, with export revenue reaching 638.91 million USD in the first five months of this year, up 15.7 percent year on year, accounting for 13.6 percent of the total export revenue of the whole sector.

However, the Vietnam Trade Office representative reminded exporters to strictly follow food safety regulations when exporting aquatic products to this choosy market to protect their interest and the good image of the Vietnamese fisheries sector. He also advised domestic firms to try to keep their products’ price-stable to win the confidence of sensitive Japanese consumers.

Photo: Zing

Weather Forecast

July 14-15: The North will have showers and thunderstorms in some places, especially in Nam Son La, Hoa Binh and the Northeast region. The North Central will have showers and scattered thunderstorms. Meanwhile, the South is predicted to have heavy rain.

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