Monthly Newsletter – February 2025

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 augmenting the right strategies, finding suitable targets, connecting with prominent investors and entrepreneurs, and closing deals successfully. So stay informed with us to make the right decisions for your businesses and investments!

MARKET OVERVIEW
The year 2025 has begun on a promising note with positive signals from Vietnam’s economy. According to the latest report from the General Statistics Office (GSO), the Index of Industrial Production (IIP) increased by 0.6% compared to the same period last year, with the manufacturing and processing sector continuing to play a pivotal role, achieving an impressive growth rate of 1.6%. Additionally, the total retail sales of goods and consumer service revenue in January 2025 are estimated to reach VND 573.3 trillion, up 9.5% year-on-year, reflecting strong domestic purchasing power. Notably, the trade balance of goods recorded a significant surplus of USD 3.03 billion, further bolstering confidence in the economy’s recovery and sustainable development.

With positive signals from the domestic economy and favorable international conditions, ASART forecasts Vietnam’s economy will grow by 7.5% in 2025. The global trend of monetary easing will drive economic recovery, and Vietnam will benefit from its strong foundation in manufacturing, exports, and domestic consumption, further affirming its dynamic position in the region.


Source: GSO, ASART’s analysis

Inflation and Interest Rates
The nationwide Consumer Price Index (CPI) in January 2025 increased by 3.6% year-on-year, while core inflation rose by 3.1%. Nine groups of goods and services recorded price increases, including pharmaceuticals and healthcare services, transportation, food and dining services, beverages and tobacco, clothing – hats – footwear, housing – electricity – water – fuel and construction materials, household appliances and equipment, culture – entertainment – tourism, and other goods and services. The primary driver of these price increases was the surge in consumer demand during the Lunar New Year (Ất Tỵ) celebrations.


Source: GSO, ASART analysis

Overall, deposit interest rates remained at a low base in January with little fluctuation, while the interest rates of the Big 4 banks stayed at 4.7%.

Trade Activities
In January 2025, Vietnam’s total trade value is estimated at USD 63.2 billion, a slight decrease of 3.5% compared to the same period last year. Exports are estimated at USD 33.1 billion, down 4.3% year-on-year, while imports are estimated at USD 30.1 billion, a 2.6% year-on-year decrease. As a result, the trade balance for January 2025 recorded a surplus of USD 3.03 billion.


Source: GSO, ASART’s analysis

Investment and M&A
In January 2025, total foreign direct investment (FDI) into Vietnam reached USD 4.3 billion, recording an impressive growth of 83.5% compared to the same period last year. Of this, realized FDI was estimated at USD 1.5 billion, up 2% year-on-year.

FDI M&A (share acquisition) activities also showed strong recovery in January 2025, with 260 transactions and a total capital contribution of USD 322.9 million, marking a significant 70.4% increase compared to the same period in 2024, signaling a notable rebound after a period of slowdown.


Source: GSO, ASART’s analysis

Exchange Rate
The VND/USD selling exchange rate at Vietcombank in January slightly declined from 25,551 to 25,300, a decrease of nearly 1% compared to the beginning of the month. However, the exchange rate is expected to rise throughout 2025 due to policy shifts under U.S. President Donald Trump. Markets have adjusted their forecasts, anticipating fewer Fed rate cuts during Trump’s second term.

Trump’s previous statements, including imposing import tariffs (raising goods prices), cutting taxes for U.S. citizens, and deporting undocumented immigrants (a source of cheap labor), could drive up labor costs and increase inflation risks. This, in turn, may fuel speculation on the USD, further strengthening the greenback in the coming period.


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

M&A SPOTLIGHTS

Vietnam Energy – The British energy company EnQuest PLC has acquired Harbor Energy’s business in Vietnam, including a 53.125% equity interest in the Chim Sao and Dua production fields. F&B – Nutifood became the parent company of Kido Foods, the producer and distributor of Vietnam’s two leading ice cream brands, Merino and Celano. However, the deal only included the “body” of the company, while the “soul”—the ownership of these two brands—remained with KIDO Group. – Later, KIDO filed a lawsuit, and the court ruled to prohibit Kido Foods from using the Celano ice cream brand. Subsequently, at KIDO’s 2024 extraordinary general meeting of shareholders, the shareholders did not approve the transaction to sell a 24.03% stake in Kido Foods to Nutifood. Healthcare – Singapore-headquartered August Global Partners is investing in genomic testing company Gene Solutions through a proprietary funding round.

The World Energy – Constellation Energy will acquire 100% of Calpine, the largest U.S. producer of energy from low-emission natural gas, in a cash and stock transaction worth approximately USD 16.4 billion. Biotechnology – Johnson & Johnson has reached a USD 14.6 billion deal to acquire Intra-Cellular Therapiesv, a biotechnology company specializing in neuroscience. Pharmaceutical – Medical device maker Stryker Corp. agreed to purchase Inari Medical Inc. for about USD 4.9 billion to expand its offerings in the fast-growing area of treating blood clots in the legs and lungs.

RELEVANT NEWS & INFORMATION

Vietnam Vietnam strengthens bilateral relations and diplomacy – Vietnam and the Czech Republic upgrade their relationship to a strategic partnership. – Vietnam and Poland are set to become strategic partners in the near future. – Vietnam is aiming to join the Organisation for Economic Co-operation and Development (OECD). Vietnam secures major global investments – The Emerging Africa & Asia Infrastructure Fund (EAAIF), a Private Infrastructure Development Group (PIDG) company made a USD 20 million investment in CME Solar to support the company to develop a pipeline of rooftop solar projects for companies in Vietnam. – Taiwanese green energy company eTreego is planning to expand electric vehicle (EV) charging station infrastructure in Vietnam. – South Korea’s Kolon Industries has revealed it will invest 30 billion won (USD 20.5 million) in a tyre cord factory to scale up its manufacturing capacity in Vietnam.

The World – Chinese corporations are increasing their investments in Thailand as they prepare for Donald Trump’s second term. – U.S. President Donald Trump signed an executive order imposing a 25% tariff on imports from Canada and Mexico, while also increasing tariffs on imports from China by 10%. – President Trump announces private-sector USD 500 billion investment in AI infrastructure in the United States. – JPMorgan Chase is the last major U.S. bank to exit the NZBA climate alliance, following five other giants: Goldman Sachs, Wells Fargo, Citigroup, Bank of America, and Morgan Stanley. According to updates from NZBA, the departure of these members has reduced the total assets of the alliance by USD12 trillion.

EVENT HIGHTLIGHTS
ASART at CFO YEP 2024 – Connecting, Sharing & Striving for Success!
We were happy to join CFO VIETNAM Year End Party 2024 for its members. This special occasion allowed us to reflect on a challenging year, share valuable stories, and strengthen connections with CFOs and financial professionals.

We discussed the crucial considerations for businesses regarding 2024 tax finalization, offering practical and impactful guidance as we navigate the year ahead!

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contactus@asart.com.vn

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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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