Monthly Newsletter – December 2024

Dear valued clients and friends,

Each month we provide a market overview and pick out the M&A transactions, investment activities, regulation updates, and event highlights that we find relevant to your businesses to help you make informed decisions, solve problems, or gain a new perspective.

Our expertise, experience, and in-depth understanding of the market also have assisted many of you in augmenting the right strategies, finding suitable targets, connecting with prominent investors and entrepreneurs, and closing successful deals. So stay informed with us to make the right decisions for your businesses and investments!

MARKET OVERVIEW
In November 2024, Vietnam’s socio-economic situation continued its positive recovery trend. Overall, the first 11 months saw significant achievements, surpassing the same period last year across most sectors. The agriculture, industry, and service sectors all recovered and developed well. Notably, the industrial production index in November increased by 2.3% compared to October and 8.9% year-over-year, resulting in an 8.4% growth rate over the 11 months. Total retail sales of goods and consumer service revenue rose by 8.8% during the period. The Purchasing Managers’ Index (PMI) for November reached 50.8 points, indicating continued expansion in production and orders. Macroeconomic stability persisted, with inflation under control and key economic balances maintained, alongside a substantial surplus. The average Consumer Price Index (CPI) for 11 months increased by 3.69%. Exchange rates and interest rates remained relatively stable, while total credit growth reached nearly 12%. ASART maintains its GDP growth forecast for Vietnam in 2024 at 6.5%, with the possibility of further positive outcomes.


Source: GSO, ASART analysis

Inflation and Interest Rates
The Consumer Price Index (CPI) in November increased by 2.65% compared to the previous month and by 2.77% compared to the same period last year. The main factors contributing to the 0.13% increase in the CPI in November 2024 compared to the previous month include higher electricity prices, rental costs, and housing maintenance materials. The average CPI for the first 11 months of 2024 increased by 3.69% compared to the same period last year, indicating a high likelihood of achieving the goal of keeping inflation below 4.5%.

Since the beginning of November, several banks have raised deposit interest rates, including Agribank, Techcombank, MB Bank, VIB, BaoVietBank, BacABank, GPBank, CBBank, VietBank, among others. The increases have mainly been seen in terms of deposits under 1 year, while longer-term deposits, such as 12-month and 24-month, have seen little change. Overall, deposit interest rates have remained stable. As for lending rates, the average 12-month rate for commercial banks has reached 5%, up by 0.14 percentage points from the beginning of the year. Meanwhile, the lending rate for state-owned commercial banks remains unchanged at 4.7% per year, which is 0.26 percentage points lower than at the start of the year. While rates remain stable, there is growing pressure for an increase due to rising credit demand at the end of the year and liquidity pressures from exchange rates and the money market.


Source: GSO, ASART analysis

Trade Activities
In November 2024, Vietnam’s total trade value is estimated at USD 66.4 billion, an increase of 9% compared to the same period last year. Exports are projected at USD 33.7 billion, up 8.2% year-on-year, while imports are estimated at USD 32.7 billion, reflecting a 9.8% year-on-year increase. As a result, the trade balance for October 2024 recorded a surplus of USD 1 billion.

For the first 11 months of 2024, preliminary total import and export turnover reached USD 715.6 billion, an increase of 15.4% compared to the same period last year, with exports rising by 14.4% and imports by 16.4%. The trade balance recorded a surplus of USD 24.3 billion.


Source: GSO, ASART analysis

Investment and M&A
In November 2024, total Foreign Direct Investment (FDI) inflows into Vietnam reached USD 4.12 billion, accounting for 13.1% of the country’s total investment in the first 11 months of the year. By the end of November, total registered FDI in Vietnam approached USD 31.4 billion, marking a 1% increase compared to the same period in 2023, while the actual disbursed capital from FDI projects was estimated at approximately USD 21.68 billion, reflecting a 7.1% increase.

FDI M&A activities (share purchases) continued to decline sharply in the first 11 months, recording 3,029 transactions with a total capital contribution of USD 4.06 billion, down 39.7% compared to the same period last year.


Source: GSO, ASART analysis

Exchange Rate
The VND/USD selling exchange rate (Vietcombank) remained stable at the end of November, rising slightly from 25,450 to 25,463, an increase of 0.05% compared to the beginning of the month. This stability is attributed to the flexible monetary policies of the State Bank of Vietnam (SBV), which reactivated the treasury bill channel to absorb excess liquidity and stabilize the value of the domestic currency. By early December, the outstanding treasury bills sharply decreased to only VND 33,655 billion, significantly lower than the peak of VND 100,000 billion in October.


*Ask rate on the last day of the month
Source: Vietcombank, ASART analysis

M&A SPOTLIGHTS

Vietnam Energy – Shizuoka Gas Co., Ltd. of Japan reached an agreement to acquire a 25% stake in My Son-Hoan Loc Viet Solar Energy JSC (MSHLV) from energy developer Hoan Loc Viet JSC (HLV), aiming to expand its presence and enter the renewable energy sector in Vietnam. Agriculture – Summit Agro International Ltd (SAI), a subsidiary of the Sumitomo Corporation, has invested in acquiring a 49% stake in Hop Tri Investment Joint Stock Company, a manufacturer and distributor of crop protection products, fertilizers, and public health products.

The World Packaging – Switzerland-based Amcor Plc agreed to buy U.S. peer Berry Global for USD 8.43 billion in an all-stock deal, creating a consumer and healthcare packaging giant with combined revenues of USD 24 billion. Food & Beverage – Blackstone has reached an agreement to acquire Jersey Mike’s Subs, the popular sandwich chain, in a deal valuing the company at approximately USD 8 billion, including debt. Pharmaceutical – Cencora announced plans to acquire Retina Consultants of America from private-equity firm Webster Equity Partners for USD 4.6 billion, strengthening its position in the specialty medicines market.

RELEVANT NEWS & INFORMATION

Vietnam Vietnam strengthens bilateral relations and diplomacy – During a call on November 11, U.S. President-elect Donald Trump gladly accepted General Secretary To Lam’s invitation to visit Vietnam, and invited him to visit the U.S in return. – At the invitation of Chinese Premier Li Qiang, Prime Minister Pham Minh Chinh led a high-ranking Vietnamese delegation to attend the 8th Greater Mekong Subregion Cooperation Summit. – The President of the Socialist Republic of Vietnam led a high-level Vietnamese delegation on an official visit to the Republic of Chile, an official visit to the Republic of Peru, and will attend the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week. – President Luong Cuong’s official visit to Peru, marking 30 years of diplomatic ties, aims to strengthen economic cooperation and reaffirm Vietnam’s role in APEC, especially in preparation for APEC 2027. – Vietnam and Brazil elevated their relationship from a bilateral trade partnership to a strategic partnership. – Vietnam and Malaysia have officially upgraded their relationship to a Comprehensive Strategic Partnership, focusing on fostering cooperation in emerging areas such as green economy, technology, education, human resource development, labor, culture, sports, tourism, and defense…, aiming to achieve sustainable development goals. Vietnam secures major global investments – A recent delegation of over 45 German businesses explored investment opportunities in Dong Nai, attracted by the province’s strategic location, robust infrastructure, and supportive investment environment. – Hai Phong has attracted 12 new investment projects totaling USD 1.8 billion. Notably, LG Group (South Korea) expanded its project in the Trang Due Industrial Park, adding an additional USD 1 billion in investment. – CPG Public, a leading renewable energy company in Thailand, has invested USD 130 million in wind power plants in Gia Lai. Other public information – The State Securities Commission (SSC) is actively collaborating with a delegation from FTSE Russell and Morgan Stanley to work towards upgrading Vietnam’s stock market. Meanwhile, statistics from HoSE reveal that, since the beginning of the year, foreign investors have net withdrawn VND 85,000 billion, equivalent to over USD 3.3 billion, highlighting challenges in attracting and retaining foreign capital. – Vietnam’s digital economy is projected to reach USD 36 billion in 2024, with e-commerce and travel leading the growth. – The Governor of the State Bank of Vietnam stated that while lending interest rates have recently declined, it would be challenging for commercial banks to further reduce rates due to high economic risks and potential fluctuations in the exchange rate. – The Ho Chi Minh City People’s Committee approved a plan to make the city ASEAN’s leading healthcare hub by 2030, focusing on building advanced medical infrastructure, improving healthcare workforce quality, and promoting medical tourism. The city aims to achieve 23 doctors, 40 nurses, and 42 hospital beds per 10,000 residents by 2030. – The Politburo has agreed to establish a comprehensive international financial center in Ho Chi Minh City and a regional financial center in Da Nang, with specific policies and appropriate supervisory mechanisms, to be implemented from now until 2030. – The Central agrees to restart the Ninh Thuan Nuclear Power Plant Project. – The Ministry of Finance has announced plans to abolish the VAT exemption for low-value goods imported through e-commerce platforms to prevent the practice of splitting orders to evade taxes.

The World Global landscape – Donald Trump defeated Kamala Harris to become the 47th President of the United States. – The Fed has decided to reduce interest rates by 0.25% to a range of 4.5%-4.75%. This is the second rate cut this year, aimed at maintaining economic stability and controlling inflation. – The Bank of England (BoE) lowered the interest rate to 4.75% on November 7, following a drop in September inflation to its lowest level in three years.

EVENT HIGHLIGHTS

AMCHAM’S ANNUAL THANKSGIVING TURKEY SHOOT GOFT TOURNAMENT AND LUNCH!

WE’RE PROUD SPONSORS OF AMCHAM’S ANNUAL THANKSGIVING TURKEY SHOOT GOLF TOURNAMENT AND LUNCH!
Although we’re a bit late in sharing this, we couldn’t miss the opportunity to reflect on the wonderful memories and connections made. This event is always a highlight of our year, bringing together our community for a day of fun, networking, and giving thanks. The tournament was not just about golf, it was about strengthening our bonds with clients, friends, and fellow businesses.

At ASART, we believe in the power of community and the importance of fostering relationships. This event perfectly shares our values and our commitment to supporting local business chamber initiatives that make a difference.

Thank you to everyone who joined us and made this event special. We look forward to seeing you all again next year!

REFLECTING ON VIETNAM CFO SUMMIT 2024: ESG IN M&A TRANSACTIONS

ASART had the privilege of joining the Vietnam CFO Summit 2024, a remarkable gathering of financial leaders, experts, and decision-makers addressing key challenges and opportunities in today’s dynamic business landscape.

In Panel Discussion #1, our CEO and Head of Mergers & Acquisitions, Binh Le Vandekerckove, sharing valuable insights into the rising importance of ESG (Environmental, Social, and Governance) factors in M&A transactions.

“ESG factors are increasingly influencing M&A transactions, affecting valuation, due diligence, and risk assessment. Companies with strong ESG practices are seen as less risky and more sustainable, potentially leading to higher valuations, while poor ESG performance may lead to discounts due to regulatory or reputational risks. During due diligence, buyers assess the environmental, social, and governance practices of target companies. After acquisitions, aligning ESG practices can create long-term value. Additionally, growing investor demand and tightening regulations around ESG are pushing companies to focus more on these factors in M&A strategies.”

At ASART, we believe in empowering businesses to thrive through informed, innovative strategies. This summit was an excellent platform for knowledge sharing, collaboration, and shaping future financial practices.

Let’s continue building a sustainable and prosperous future together!

ASART NAMED OUTSTANDING M&A ADVISOR IN VIETNAM FOR THREE CONSECUTIVE YEARS!

ASART has overcome countless barriers, prejudices, gender inequality, and industry monopolies to proudly stand as a trusted leader in the market for many consecutive years!

Receiving this prestigious award from Deputy Minister of MOIT Nguyen Duc Tam and Editor-in-Chief Le Trong Minh at the Vietnam M&A Forum 2024 is a true honor for our firm.

Thank you to our clients, investors, partners, colleagues, and friends for your unwavering trust. Last but not least, a special shoutout to our incredible team for their dedication and hard work!

+84 28 3821 6166

contactus@asart.com.vn

44th floor, Bitexco Financial Tower, 2 Hai Trieu, Ben Nghe, District 1, Ho Chi Minh City, Vietnam

Disclaimer 
This newsletter is of a general nature. It is for information purposes only. It is not intended to serve as advice or recommendation, or to address the circumstances of any entity, individual, or matter. No one should rely and/or act on the information presented without appropriate professional advice from ASART. ASART accepts no liability for the content of this newsletter, or for the consequences of any actions taken based on the view and information provided. Where it contains statements, estimates, and projections with respect to the anticipated future performance of Vietnam, markets, companies and related figures, such statements, estimates, and projections may or may not prove to be correct. There is no representation nor guaranty made on the accuracy and completeness of the content presented. Any person or entity who uses this newsletter to form a discussion, decide, or perform any actions must satisfy themselves as to all relevant matters including all the information and statements contained in this newsletter, and must rely upon their own enquiries, investigations, judgments and not upon the information and statements contained herein. ASART does not accept responsibility for any information contained herein and disclaims all liability to any entity, person, and matter arising out of or in connection with this newsletter.

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