Vietnam Business & Weather Briefing (Oct 25): Fertilizer Exports Set a New Record

Vietnam Business & Weather Briefing (Oct 25): Central bank revises up interest rates by 1% from October 25, Ho Chi Minh City property retail market to recover.
October 25, 2022 | 17:27

Business Briefing

Gold rate: VND 66.3 million/tael (buying) - VND 67.32 million/tael (selling)

Reference exchange rate: VND 23,703/USD

Finance news: Central bank revises up interest rates by 1% from October 25

Export news: Fertiliser exports set a new record

Market news: HCM City property retail market to recover

Weather Forecast

Hanoi and northern provinces are cold at night and early in the morning. The area from Thua Thien Hue to Binh Thuan will have heavy rain.

Business Briefing

Gold rate

On the morning of October 25, the price of SJC gold in Hanoi and Da Nang was listed at VND 66.3 million/tael (buying) and VND 67.32 million/tael (selling). In Ho Chi Minh City, SJC gold was bought at a similar level but sold for VND 20,000 less.

DOJI gold price in Hanoi was bought at VND 66.2 million/tael and sold for VND 67.2 million/tael. In Ho Chi Minh City, DOJI gold was bought at VND 66.25 million/tael and sold for VND 67.2 million/tael.

Reference exchange rate

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,703/USD on October 25, up VND 3 from the previous day. With the current trading band of +/-5 percent, the ceiling rate applied to commercial banks during the day is VND 24,888/USD, and the floor rate VND 22,517/USD.

The opening-hour rates at commercial banks slightly increased. At 8:35 am, BIDV listed the buying rate at VND 24,608/USD and the selling rate at VND 24,888/USD, both up VND 3 from October 24. Vietcombank kept both rates unchanged at VND 24,575/USD (buying) and the selling rate at VND 24,885/USD (selling).

Vietnam Business & Weather Briefing (Oct 25): Fertilizer Exports Set a New Record
Photo: Zing

Finance news: Central bank revises up interest rates by 1% from October 25

The State Bank of Vietnam on October 24 decided to revise several interest rates by 1%, starting from October 25. Accordingly, the refinancing interest rate will be set at 6% per year, rediscount at 4.5%, and overnight inter-banking lending rate at 7%.

The maximum interest rate for non-term and one-month deposits in VND is capped at 1% annually and for 1-6 month deposits, 6%. Deposits of 1-6 months at people’s credit funds and micro-finance organizations will enjoy an annual interest rate of 6.5%. Meanwhile, the maximum short-term lending interest rate in VND at credit institutions for the capital demand for the number of economic sectors increased to 5.5%, and those at people’s credit funds and micro-finance organizations to 6.5%.

Vietnam Business & Weather Briefing (Oct 25): Fertilizer Exports Set a New Record
Photo: Zing News

Export news: Fertiliser exports set a new record

Fertilizer exports have set a new record, as the nine-month revenue was already USD 300 million higher than last year’s figure, the Dau tu (Vietnam Investment Review) reported. In the first nine months of 2022, the country shipped nearly 1.39 million tonnes of fertilizer worth USD 886 million abroad, soaring 45.4% in volume and 166% in value from a year earlier, according to the General Department of Vietnam Customs.

The surge in revenue was attributed to rising global export prices, which averaged USD 637.7 per tonne in the period under review, up 83% from the same period of 2021. Last year, the country earned USD 559 million from exporting 1.35 million tonnes of fertilizer, respectively up 64% and 16.4%.

After nearly one year of strong fluctuations in the global market due to political and economic uncertainties, fertilizer prices have shot up, and many Vietnamese producers have grasped this chance to promote overseas shipments. Export prices posted sharp growth due to the COVID-19 pandemic in 2020 and 2021, especially since the beginning of 2022 as a result of the Russia - Ukraine conflict, Dau tu noted.

Besides, as domestic demand stands at about 11 million tonnes each year while factories in Vietnam are licensed to produce over 29 million tonnes annually, businesses have been working to seek markets and boost exports. The rise in export volume since the start of this year has also been fueled by China’s export reduction and Western countries’ sanctions against Russia – a leading fertilizer exporter in the world, the newspaper pointed out.

Vietnam Business & Weather Briefing (Oct 25): Fertilizer Exports Set a New Record
Photo: Zing News

Market news: HCM City property retail market to recover

The Ho Chi Minh City commercial property market has returned to its growth trajectory from before the Covid-19 pandemic thanks to the retail and services sector as well as an increasing number of foreign visitors to the city, experts said. A report from the city’s Department of Industry and Trade affirmed that one year after the Covid-19 pandemic, local industries are back on track. Many sectors have reached positive growth.

The department informed that the city’s total retail sales and services in the first nine months of 2022 reached VND 466 trillion (USD 177 billion), up 21% over the same period a year ago. During this period, international visitors hit 1.87 million, 16.4 times higher than the same period last year. About 70% of those visitors came from Asia.

Thanks to these positive signals, the property market has recovered. Real-estate services firm Cushman & Wakefield said that the occupancy rate of the whole market reached 93%, and the total accumulated supply of shopping malls, department stores, and commercial units reached 1 million sq.m. The average rental price is USD 48.3 per one sq.m each month, up 5.6% over the same period last year.

The building speed for new retail supply is still quite low. From 2017 to 2019, HCM City saw an average of 80,000 sq.m being supplied to the market every year; but in the past three years, there has been no new supply recorded. However, future retail projects are on the rise, with approximately 140,000 sq.m of floor space currently under construction.

In its latest quarterly report, CBRE said that HCM City recorded improved vacancy rates in both CBD and non-CBD areas compared to the previous quarter. According to CBRE, the occupancy rate in the third quarter in the central area reached nearly 93.8%, up 1.0 percentage points quarter-on-quarter.

Meanwhile, the vacancy rate of the non-CBD area of HCMC was 11.4%, down 1.2 percentage points quarter-on-quarter. However, compared to the same period last year, the vacancy rate recorded an upward trend of 4.3 percentage points year-on-year in the CBD.

Thanh Pham, associate director, the research and consulting department at CBRE Vietnam, said, “the asking rent in the CBD area is still high with upward momentum, especially in prime locations as foreign retailers are entering and expanding their businesses in the Vietnamese market. Vacancy rates tend to decrease slightly in non-CBD areas as some brands shift towards non-CBD areas and shopping centers are changing the tenant’s category to match the shopping demand and brand expansion after Covid-19.”

CBRE reported positive growth in the number of leasing inquiries, especially those focusing on categories such as food and service (F&B), fashion & accessories, and lifestyle, which account for nearly 87% of the total number of requested inquiries. The food and beverage (F&B) sector continue to rank first in the number of total leasing inquiries with a 26% quarter-on-quarter increase since the beginning of 2022.

In Q3/2022, in the central area of District 1, famous brands such as McLaren, Beverly Hills Polo Club, ViinRiic Galeries De Parfumes, Maestro, De Obelly, and Sohee entered the market. In September 2022, Decathlon was also officially opened at Van Hanh Mall, District 10. Thanh Pham said, “the asking price in the prime area of the city will continue to increase in the coming time. With the increasing interest of foreign retailers in the Vietnamese market, brands need to seize the opportunity for presence expansion.”

In addition, as rising inflation will have a negative impact on consumer spending, leading retailers are forecasted to face more pressure and their revenues might not be as high as expected. Regarding future supply, HCM City is expected to receive one new mall by the end of this year with the 35,000 sq.m Thiso Shopping Center in Thu Duc city, and 144,000 sq.m in the period of 2023-2024.

Weather Forecast

October 26: Hanoi and northern provinces are cold at night and early in the morning, the highest temperature is 28 Celcius degrees, and the lowest in the mountains is below 15 degrees. The area from Thua Thien Hue to Binh Thuan will have heavy rain. The Central Highlands will have scattered showers and thunderstorms, with moderate to heavy rain. During thunderstorms, there is a possibility of tornadoes, lightning, and strong wind.

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Valerie Mai

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