Vietnam Macroeconomic Report Q3/2016
For the first 6 months of 2016, the world’s economy continued to show the recovering trend although the rate was low and ununiform between regions and there were many uncertainties and vulnerability. However, big economies in the world all showed the positive recovering signs such as the improvement in America’s unemployment rate in May 2016, the increase in Chinese imports. Besides, the Japanese and European economies showed negative signs as it recovered slowly, export decreased and these regions continued to loose the monetary policies, indenting growth, inflation, and exports.
The the Brexit caused short-term shock to the global financial market as the global’s stock decreased by 5% (equivalent to USD 2,080 billion ) on June 24th 2016, Pound and EUR depreciated strongly in relative to USD. In long-term, the exit of the UK from EU will have the negative impact to every country with close trade and investment relation with EU and increase the volatility in the global economy.
Vietnam’s economy for the first 6 months of 2016 showed many achievements, such as: Growth of the Vietnam’s economy for the first 6 months of 2016 was 5.52%, lower than 2015 due to the impact of natural condition but the growth momentum gradually improved; inflation remained at low level, CPI of 6 months increased compared to the same period; Exports continued to grow compared to 2015; FDI capital disbursement increased compared to the same period, consumption was still positive and ratail sales continued to grow well with main contribution coming from retail activities. However, the economy revealed some drawbacks such as the high public debt and budget deficit which even showed the increasing trend; solving bad debt was slow and incomprehensive; industrial production industry still struggled compared to the last year, etc.
About the activities of the financial and capital market for the first 6 months of 2016, there were some positive signs such as the potential growth in credit, stable liquidty, decreasing interest rate, exchange rates and foreign currency market was stable compared to the end of 2015. Governmental capital funding through bonds also showed the high result with total capital for the first 6 months equaled to 75% of the year’s plan, the stock market also showed positive trends compared to regional and world’s market. Besides, the State Bank of Vietnam also enacted policies supporting the operation of commercial banks through 3 circulars (no.6,7, and 8), hence positively affecting the firm’s ability to access capital.
The participation of Vietnam into FTAs, such as AEC, TPP, EVFTA, etc. in recent time will be the chance to incent the exports due to tariff reduction as well as taking advantages from supporting forces, attracting FDI from the outsides. However, domestic companies will have to face competition as well as strict technical barriers imposed by importing countries.
M&A activities occured actively in the first 6 months of 2016 with trades focused on retail, consumer’s, real estate, and banking. From the beginning of the year till the end of July 14th 2016, Vietnam had have 399 M&A with total value of up to 4.04 billion USD and average value of 11.9 million USD. Specifically, the real estate and retail segments witnessed many M&A projects with the involvement of foreign investors. The equitisation of state companies, the promoted disinventment of SCIC will be a positive element creating the enormous supply for M&A activities in the upcoming time.
Generally, economic indicators are all estimated to shift positively in the 2 last quarters of 2016 due to impacts from the world’s market as well as governing policies of the government, added by the crop element and economic agreements comming in to practice will be the driving force for the Vietnam’s economy to continue to grow in upcoming time.
The the Brexit caused short-term shock to the global financial market as the global’s stock decreased by 5% (equivalent to USD 2,080 billion ) on June 24th 2016, Pound and EUR depreciated strongly in relative to USD. In long-term, the exit of the UK from EU will have the negative impact to every country with close trade and investment relation with EU and increase the volatility in the global economy.
Vietnam’s economy for the first 6 months of 2016 showed many achievements, such as: Growth of the Vietnam’s economy for the first 6 months of 2016 was 5.52%, lower than 2015 due to the impact of natural condition but the growth momentum gradually improved; inflation remained at low level, CPI of 6 months increased compared to the same period; Exports continued to grow compared to 2015; FDI capital disbursement increased compared to the same period, consumption was still positive and ratail sales continued to grow well with main contribution coming from retail activities. However, the economy revealed some drawbacks such as the high public debt and budget deficit which even showed the increasing trend; solving bad debt was slow and incomprehensive; industrial production industry still struggled compared to the last year, etc.
About the activities of the financial and capital market for the first 6 months of 2016, there were some positive signs such as the potential growth in credit, stable liquidty, decreasing interest rate, exchange rates and foreign currency market was stable compared to the end of 2015. Governmental capital funding through bonds also showed the high result with total capital for the first 6 months equaled to 75% of the year’s plan, the stock market also showed positive trends compared to regional and world’s market. Besides, the State Bank of Vietnam also enacted policies supporting the operation of commercial banks through 3 circulars (no.6,7, and 8), hence positively affecting the firm’s ability to access capital.
The participation of Vietnam into FTAs, such as AEC, TPP, EVFTA, etc. in recent time will be the chance to incent the exports due to tariff reduction as well as taking advantages from supporting forces, attracting FDI from the outsides. However, domestic companies will have to face competition as well as strict technical barriers imposed by importing countries.
M&A activities occured actively in the first 6 months of 2016 with trades focused on retail, consumer’s, real estate, and banking. From the beginning of the year till the end of July 14th 2016, Vietnam had have 399 M&A with total value of up to 4.04 billion USD and average value of 11.9 million USD. Specifically, the real estate and retail segments witnessed many M&A projects with the involvement of foreign investors. The equitisation of state companies, the promoted disinventment of SCIC will be a positive element creating the enormous supply for M&A activities in the upcoming time.
Generally, economic indicators are all estimated to shift positively in the 2 last quarters of 2016 due to impacts from the world’s market as well as governing policies of the government, added by the crop element and economic agreements comming in to practice will be the driving force for the Vietnam’s economy to continue to grow in upcoming time.
EXECUTIVE SUMMARY
1. GLOBAL MACROECONOMIC SITUATION
1.1. Economic growth
Figure 1. America’s economic growth
Figure 2. Japan’s economic growth, 2011-2016
Table 1. Forecast for the conomic growth in Europe, 2016 - 2017
Figure 3. Internal trade of ASEAN, 2015 – 6/2016
Figure 4. EUR/USD and JPY/USD fluctuations in the first 6 months of 2016
Figure 5. CNY/USD fluctuations in the first 6 months of 2016
Figure 6. Some foreign currencies’ situation before and after Brexit
Figure 7. Global trade from the first quarter of 2014 to the first quarter of 2016
Figure 8. Import market structure in the first quarter 2016 by region
Figure 9. Export market structure in the first quarter 2016 by region
Figure 10. Top 10 biggest exporting countries in the first quarter 2016
Figure 11. Top 10 biggest importing countries in the first quarter 2016
1.2. Commodity market
Table 2. Price of global goods in 2016
Table 3. Expected price of global goods 2016
Figure 12. Global gold price movement, 11/2014 – 7/2016
Figure 13. Global crude oil price movements
2. VIETNAM’S MARKET
2.1. Economic growth
2.1.1. GDP
Figure 14. GDP growth by quarter, 2014 – Q2/2016
Figure 15. Nominal GDP, 2014 – Q2/2016
Figure 16. Nominal GDP structure
Figure 17. Average GDP per capita, 2001 – 2016e
2.1.2. Production
Figure 18. The index of industrial production and Purchasing Managers’ Index
Figure 19. Agriculture, forestry, and fishery production value, 6 months/2015 - 6 months/2016
Figure 20. Retail growth
Figure 21. Total retail sales of consumer’s goods and services, excluding price factors (% over the same period)
2.1.3. Consumption
Figure 22. Consumer Confidence index
Figure 23. Consumption and inventories of processing, manufacturing industries
2.1.4. Investment
Figure 24. Growth of social investment in 6 months from 2011-2016 (%)
Figure 25. Social investment structure in 6 months of 2016
Figure 26. Social investment in 6 months from 2011 - 2016
Figure 27. Capital distribution in the central area
Figure 28. Business situation in 6 months from 2014-2016
Figure 29. FDI, 2013 – Q2/2016
Figure 30. FDI attraction in 6 months of 2016 by industries
2.1.5. Import – Export
Figure 31. Export – Import by quarter 2014 - 2016
Figure 32. FDI contribution to export and import
Figure 33. Top 10 most exported goods in June 2016
Figure 34. Exports structure, first 6 months of 2016
Figure 35. Vietnam’s main exporting markets in first 6 months of 2016
Figure 36. Imports structure in the first 6 months of 2016
Figure 37. Top 10 most imported goods in first 6 months of 2016
Figure 38. Export market structure in first 6 months of 2016
2.1.6. CPI
Figure 39. Monthly CPI fluctuation 2014 - 2016
Table 4. CPI in the first 6 months of 2016 by category
2.1.7. Monetary policies
Figure 40. Total means of payment
Figure 41. VND/USD Exchange rates
Figure 42. Current requirements on required reserves
2.1.8. Fiscal policies
Figure 43. National budget revenue in the first 6 months of 2016 (% over the same period)
Figure 44. National budget expense in the first 6 months of 2016 (% over the same period)
Figure 45. Vietnam’s public debt, 2011-2016
Figure 46. Weight of government’s debt and debts guaranteed by government 2011 - 2016
Figure 47. Paying public debt (% total budget revenue) 2011-2015
Figure 48. Public debt of some countries by 24/4/2016
Figure 49. Borrowing plan of the government 2016 (billion VND)
2.1.9. Banking system
Figure 50. Credit growth, 2001-6/2016
Figure 51. Interbank interest rates, 1/2016 - 6/2016
Figure 52. The rate of credit extension out of capital mobilization, 6/2015 - 5/2016
Figure 53. Bad debt ratios of financial institutes, 2010 – 3/2016
Figure 54. Bad debt ratios by banking group, 2010-2014
Figure 55. Source structure to resolve bad debt of listed banks in 9 months/2015
Figure 56. Source structure to resolve bad debt of unlisted banks in 9 months/2015
Figure 57. Bad debt ratio in commercial and national banks, 2010- 9 months of 2015
Figure 58. The Basel adopting progess in some countries by the end of 2015
Table 5. The restructuring situation of banks
Figure 59. Operating results of the banking system, 2010-2015
Figure 60. Banking asset structure, 2015
2.2. Trade agreements and legal documents
2.2.1. Business method
2.2.2. Newly issued legal documents
Table 6. Roadmap of applying special consumption taxes for automobiles
2.3. Activities of invesment channels
2.3.1. Bonds
Figure 61. Primary bond market
Figure 62. Bond issuance structure in the primary market
Figure 63. Bond issuance term
Figure 64. Bond yields movements in the first 6 months of 2016
Figure 65. Secondary bond market
Figure 66. Bond trading by foreign investors
Figure 67. The value of corporate bonds issued, 2010 – 2016
2.3.2. Stocks
Figure 68. The volume and value of transactions by month on HOSE
Figure 69. Stocks movements
Figure 70. VN-Index price fluctuations
Figure 71. Average value of transactions
Figure 72. The volume and value of transactions by month on HNX
Figure 73. HNX-Index price fluctuations
2.3.3. Commodity market
Figure 74. Domestic gold price movements
Table 7. Gasoline price fluctuations, 2015 – 6/2016
Figure 75. Gasoline price fluctuations, 2015 – 6/2016
2.4. M&A activities
Figure 76. The number and value of M&A deals, 2006 - 7/2016
Figure 77. Number of transactions and average transaction value in some countries, 2015
Figure 78. Number of state-owned enterprises equitized, 2011 - 5/2016
Figure 79. Equitization under managing units in the first 6 months of 2016
Figure 80. Capital mobilization, Q1/2016
2.5. Risks and forecasts
2.5.1. Risks
Figure 81. Salt – marsh situation, 4/2016
2.5.2. Forecasts
1. GLOBAL MACROECONOMIC SITUATION
1.1. Economic growth
Figure 1. America’s economic growth
Figure 2. Japan’s economic growth, 2011-2016
Table 1. Forecast for the conomic growth in Europe, 2016 - 2017
Figure 3. Internal trade of ASEAN, 2015 – 6/2016
Figure 4. EUR/USD and JPY/USD fluctuations in the first 6 months of 2016
Figure 5. CNY/USD fluctuations in the first 6 months of 2016
Figure 6. Some foreign currencies’ situation before and after Brexit
Figure 7. Global trade from the first quarter of 2014 to the first quarter of 2016
Figure 8. Import market structure in the first quarter 2016 by region
Figure 9. Export market structure in the first quarter 2016 by region
Figure 10. Top 10 biggest exporting countries in the first quarter 2016
Figure 11. Top 10 biggest importing countries in the first quarter 2016
1.2. Commodity market
Table 2. Price of global goods in 2016
Table 3. Expected price of global goods 2016
Figure 12. Global gold price movement, 11/2014 – 7/2016
Figure 13. Global crude oil price movements
2. VIETNAM’S MARKET
2.1. Economic growth
2.1.1. GDP
Figure 14. GDP growth by quarter, 2014 – Q2/2016
Figure 15. Nominal GDP, 2014 – Q2/2016
Figure 16. Nominal GDP structure
Figure 17. Average GDP per capita, 2001 – 2016e
2.1.2. Production
Figure 18. The index of industrial production and Purchasing Managers’ Index
Figure 19. Agriculture, forestry, and fishery production value, 6 months/2015 - 6 months/2016
Figure 20. Retail growth
Figure 21. Total retail sales of consumer’s goods and services, excluding price factors (% over the same period)
2.1.3. Consumption
Figure 22. Consumer Confidence index
Figure 23. Consumption and inventories of processing, manufacturing industries
2.1.4. Investment
Figure 24. Growth of social investment in 6 months from 2011-2016 (%)
Figure 25. Social investment structure in 6 months of 2016
Figure 26. Social investment in 6 months from 2011 - 2016
Figure 27. Capital distribution in the central area
Figure 28. Business situation in 6 months from 2014-2016
Figure 29. FDI, 2013 – Q2/2016
Figure 30. FDI attraction in 6 months of 2016 by industries
2.1.5. Import – Export
Figure 31. Export – Import by quarter 2014 - 2016
Figure 32. FDI contribution to export and import
Figure 33. Top 10 most exported goods in June 2016
Figure 34. Exports structure, first 6 months of 2016
Figure 35. Vietnam’s main exporting markets in first 6 months of 2016
Figure 36. Imports structure in the first 6 months of 2016
Figure 37. Top 10 most imported goods in first 6 months of 2016
Figure 38. Export market structure in first 6 months of 2016
2.1.6. CPI
Figure 39. Monthly CPI fluctuation 2014 - 2016
Table 4. CPI in the first 6 months of 2016 by category
2.1.7. Monetary policies
Figure 40. Total means of payment
Figure 41. VND/USD Exchange rates
Figure 42. Current requirements on required reserves
2.1.8. Fiscal policies
Figure 43. National budget revenue in the first 6 months of 2016 (% over the same period)
Figure 44. National budget expense in the first 6 months of 2016 (% over the same period)
Figure 45. Vietnam’s public debt, 2011-2016
Figure 46. Weight of government’s debt and debts guaranteed by government 2011 - 2016
Figure 47. Paying public debt (% total budget revenue) 2011-2015
Figure 48. Public debt of some countries by 24/4/2016
Figure 49. Borrowing plan of the government 2016 (billion VND)
2.1.9. Banking system
Figure 50. Credit growth, 2001-6/2016
Figure 51. Interbank interest rates, 1/2016 - 6/2016
Figure 52. The rate of credit extension out of capital mobilization, 6/2015 - 5/2016
Figure 53. Bad debt ratios of financial institutes, 2010 – 3/2016
Figure 54. Bad debt ratios by banking group, 2010-2014
Figure 55. Source structure to resolve bad debt of listed banks in 9 months/2015
Figure 56. Source structure to resolve bad debt of unlisted banks in 9 months/2015
Figure 57. Bad debt ratio in commercial and national banks, 2010- 9 months of 2015
Figure 58. The Basel adopting progess in some countries by the end of 2015
Table 5. The restructuring situation of banks
Figure 59. Operating results of the banking system, 2010-2015
Figure 60. Banking asset structure, 2015
2.2. Trade agreements and legal documents
2.2.1. Business method
2.2.2. Newly issued legal documents
Table 6. Roadmap of applying special consumption taxes for automobiles
2.3. Activities of invesment channels
2.3.1. Bonds
Figure 61. Primary bond market
Figure 62. Bond issuance structure in the primary market
Figure 63. Bond issuance term
Figure 64. Bond yields movements in the first 6 months of 2016
Figure 65. Secondary bond market
Figure 66. Bond trading by foreign investors
Figure 67. The value of corporate bonds issued, 2010 – 2016
2.3.2. Stocks
Figure 68. The volume and value of transactions by month on HOSE
Figure 69. Stocks movements
Figure 70. VN-Index price fluctuations
Figure 71. Average value of transactions
Figure 72. The volume and value of transactions by month on HNX
Figure 73. HNX-Index price fluctuations
2.3.3. Commodity market
Figure 74. Domestic gold price movements
Table 7. Gasoline price fluctuations, 2015 – 6/2016
Figure 75. Gasoline price fluctuations, 2015 – 6/2016
2.4. M&A activities
Figure 76. The number and value of M&A deals, 2006 - 7/2016
Figure 77. Number of transactions and average transaction value in some countries, 2015
Figure 78. Number of state-owned enterprises equitized, 2011 - 5/2016
Figure 79. Equitization under managing units in the first 6 months of 2016
Figure 80. Capital mobilization, Q1/2016
2.5. Risks and forecasts
2.5.1. Risks
Figure 81. Salt – marsh situation, 4/2016
2.5.2. Forecasts
