Vietnam Market Watch: HSBC Growth Projections, Bank Hacking Attempts, and Obama’s Upcoming Trip to Vietnam
HSBC Projects Strong Growth in the Manufacturing sector
A report by HSBC states that Vietnam’s manufacturing industry is strong and will continue to grow. The bank stated that the country’s attractiveness as a manufacturing hub, which brought in a significant amount of FDI in 2015, should boost exports in 2016. The bank also forecast that production would remain steady in 2016, with a 10.7 percent pickup.
FDI investment has continued with U.S. $2.8 billion as of February – a 135 percent year on year increase. However, the bank did forecast inflation to rise by around 5.3 percent, which breaks the governments projected target. While inflation may prompt cautious behavior among investors, the projections of growth highlight Vietnam as a strong manufacturing hub for companies wanting to expand in the market.
Hacking Attempt on Tien Phong Bank Highlights Importance of Cyber Security
Vietnam’s Tien Phong Bank (TPBank) on May 15 announced that it thwarted a cyber-attack in the final quarter of 2015. The attack would have cost the bank around U.S. $1.13 million. However, no losses were reported to the bank or its customers. The hack targeted a vendor that was used earlier by TP Bank. The vendor was responsible for connecting the bank with SWIFT international transfers. TP Bank stopped using the vendor on SWIFT’s advice, who said that the vendor possibly infected with a malware.
While the attack was thwarted in time, it highlights the importance of cyber security. Vietnam has growing e-banking and m-banking markets. A number of companies in Vietnam use these services for offshore business. All companies that use domestic banking services in Vietnam should ensure that the bank has high safety standards and performs regular audits on their vendors. Companies that take such precautions mitigate the risks that similar cyber-attacks may pose.
Upcoming Visit could Open Several Economic Avenues
U.S. President, Barack Obama is scheduled to visit Vietnam from May 22 to May 25. Obama is expected to meet Vietnamese leaders to discuss issues such as the US-Vietnam Comprehensive Partnership. A number of issues will also be discussed with the business community in Vietnam.
The visit could also mark the end of the US ban on sales of lethal weapons to Vietnam, which was imposed after the war between the two countries in 1970. The lifting of the ban would boost business opportunities for American defense contractors such as Boeing, Raytheon, and Lockheed Martin. The visit will also discuss Vietnam’s role in the Trans Pacific Partnership (TPP), a deal that will boost trade between the US and Vietnam.
Dezan Shira & Associates believes that the visit may be used to push Vietnam to improve its labor and environmental standards so that it can come into line with TPP standards. If successful, the visit would open up several economic avenues in Vietnam, which bodes well for companies that are planning to invest or are currently operating in Vietnam.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
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