Vietnam Business & Weather Briefing (June 7): Large-scale Rain Likely to Last Until June 11

Business Briefing

Gold rate

The domestic gold price was listed by DOJI Group at VND 68.5 million per tael (buying) and VND 69.4 million per tael (selling). The difference between buying and selling gold at DOJI is 900,000 VND/tael.

Rate exchange rate

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,057/USD on June 7, down VND 5 from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND 23,748/USD, and the floor rate is VND 22,365/USD.

The opening-hour rates at commercial banks also dropped. At 8:30 am, Vietcombank listed the buying rate at VND 23,015/USD, and the selling rate at VND 23,325/USD, both down VND 10 from the rates at the end of June 6. BIDV also reduced both rates by VND 5, listing the buying rate at VND 23,045/USD and the buying rate at VND 23,325/USD.

Photo: Nikkei Asia

Export news: US waives tariffs on solar panels from Vietnam

US President Joe Biden in June 6 declared a 24-month tariff exemption for solar panels manufactured in four Southeast Asian countries, including Vietnam, in an effort to promote clean energy production in the country. The White House said in a statement that the tax waiving applies to solar panels imported from Vietnam, Cambodia, Malaysia, and Thailand to ensure the US has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing scales up.

The US President also activated the Defence Production Act (DPA) to boost solar panel production in the US. The White House emphasized that clean energy technologies now play an important part in reducing energy costs for homes, thus minimizing risks to the electricity supply in the country. The US has set the target of tripling domestic solar manufacturing capacity by 2024, from 7.5 gigawatts to 22.5 gigawatts, enough to enable 3.3 million households to switch to solar each year.

Photo: VnEconomy

Stock news: Vietnam’s stock market upgrade to bring in billions of dollars

Vietnam’s stock market upgrade from frontier emerging status would bring in billions of dollars from foreign investors. General Director of VinaCapital Don Lam gave the remarks at a discussion session under the Vietnam Economic Forum on June 5. In the past months, the benchmark Vn-Index underwent a strong correction phase, but Lam noted the downtrend is only short-term, calling for investors to stay calm and have confidence in the market.

Last week, the liquidity in the Ho Chi Minh Stock Exchange averaged around VND16 trillion (US$700 million) but plunged to below VND13 trillion ($560 million) in Friday’s session. According to Lam, the market is under pressure from both internal and external factors, including the volatile global economy with high inflationary pressure, the Russia-Ukraine conflict, and the US rate hike. Meanwhile, the local authorities' moves to restore order in the stock market against recent acts of market manipulation have also negatively impacted investors’ sentiment.

Lam noted investors are having a huge interest in the Vietnam market, but to ensure its sustainable and stable development in the long term, the key factor would be to upgrade the market at the soonest time possible. He suggested key factors would be to have liquidity of $2-3 billion per day, high transparency in market operation, and expanding foreign ownership limit. Lam added the market also needs more products, which means the Government should continue to accelerate the privatization of state-owned enterprises, along with the formulation of a legal framework for the operation of independent pension funds, and encourage individual investors to join specialized investment funds.

Vice-Chairman of the State Securities Commission of Vietnam (SSC) Pham Hong Son noted the capital market has fully developed and operated with stock, bond, and derivative markets. The size of the capital market expanded by an average of 28.5% per year during the 2016-2021 period, reaching 134.5% of the GDP in 2021, a 3.5-fold increase from that in 2015 when the stock market was estimated at 93.8% of the GDP, and the bond market at 39.7%. Son, however, acknowledged the rapid development pace of the capital market has posed multiple risks, especially stock price manipulation. This comes from the fact that public companies have not fully complied with requirements on information disclosure, and individual investors lack understanding of the market.

Photo: VGP

Weather Forecast

June 8-9: The National Center for Hydro-Meteorological Forecasting forecasts in the mountains and midlands of the North, there will continue to be moderate rain, and thunderstorms, some places will even have very heavy rain. The North and North Central deltas will have showers and thunderstorms in the evening and at night.

June 10-12: This large-scale rain is likely to last until June 11 or 12. Heavy rain is concentrated in the mountains and midland of the North. During thunderstorms, there is a possibility of tornadoes, lightning, hail, and strong winds. Particularly in Hanoi, until June 11 there will be showers and thunderstorms, with heavy rain locally.

Vietnam Business & Weather Briefing (June 6): Reference exchange rate down, Rain continues Vietnam Business & Weather Briefing (June 6): Reference exchange rate down VND 7, rain lasts until June 11 in the North.

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