2013-12-08 00:39:19 - Fast Market Research recommends "Vietnam Shipping Report Q1 2014" from Business Monitor International, now available
There are signs that the Vietnamese economy is on the right track with latest data published by the General Statistics Office (GSO) released in October 2013 showing that the Vietnamese economy expanded by 5.1% in the first nine months of the year, closely in line with our forecast for real GDP growth to come in at 5.3% for 2013. Heading into 2014, the country's shipping sector looks in decent shape too, with healthy growth expected both in terms of tonnage and box throughput at the country's two major ports.
However, we believe that tight credit conditions, due to the lack of progress in resolving the country's banking sector woes, will keep Vietnam's economic growth subdued over the coming quarters. Overall, we
are happy to maintain our forecast for real GDP growth to come in at 5.3% and 6.0% for 2013 and 2014, respectively.
The Port of Ho Chi Minh City is comfortably Vietnam's outperformer in terms of total tonnage throughput, but it is the Port of Da Nang that will see the largest year-on-year (y-o-y) growth this year (7.00% compared with a forecast 6.06% at Ho Chi Minh City).
Full Report Details at
Headline Industry Data
* 2014 tonnage throughput at the Port of Ho Chi Minh City is forecast to grow 6.06% to 41.22mn tonnes.
* 2014 tonnage throughput at the Port of Da Nang is forecast to increase 7.00% to 5.15mn tonnes.
* 2014 container throughput at the Port of Ho Chi Minh City is forecast to rise 10.0% to 4.22mn twenty-foot equivalent units (TEUs).
* 2014 container throughput at the Port of Da Nang is forecast to increase 9.43% to 173,000TEUs.
* 2014 total trade real growth is forecast to increase 5.30%
Key Industry Trends
Vinashinlines Completes Sale Of 90% Of Fleet - Vietnamese shipping company Vinashinlines announced in October that a huge 90% of its vessels, including Diamond Way and Sea Eagle, have now been sold, adding that a number of the carriers had been purchased for prices above their original valuation, Hellenic Shipping News reported. Vinashinlines' bankrupt parent company Vinalines has revealed plans to reduce it operations, after reaching agreements with crediting organisations and assessing industry demand.
Vinashin To Axe 14,000 Employees - Vietnam Shipbuilding Industry Group (Vinashin) is to dismiss some 14,000 of its workforce by the end of 2013 as it seeks to restructure its operations following years of trouble for the company, which was established in 2005 after the merger of 200-odd shipping companies. The company plans to retain around 8,000 positions at the end of its restructuring process from more than 26,000 employees at present. However, Vinashin did not disclose any details regarding what it will do with more than 4,000 current workers unaccounted for or when the restructuring is concluded.
Berths At Cai Mep-Thi Vai Up For Lease - Two berths at Vietnam's first state-built seaport, the Cai Mep-Thi Vai international port in Ba RiaVung Tau province, are to be leased for a period of 30 years, official sources announced in the third quarter of 2013. The Vietnam Ports Association has set the annual price at US$219.5mn for Cai Mep and US$130.5mn for the Thi Vai terminal.
Key Risks To Outlook
The risks to our outlook on the Vietnamese dong are evenly skewed. Although we see a slowdown in regional economic activity over the coming quarters, Vietnam remains in an early stage of its economic upswing. Thus, we believe that Vietnam is in a much better position to weather the slowdown relatively well compared to its regional peers, and we could continue to see a mild pickup in export growth and a general improvement in economic conditions in 2014. Such a scenario would present scope for the SBV to allow for a mild appreciation in the Vietnamese dong. However, we also see risks that further delays by the government in implementing banking sector reforms could undermine confidence in the economy. As FDI inflows begin to wane, this could result in diminishing support for the currency.
A number of Vietnamese shippers are currently on the rocks due to a failure to adequately strategise, according to Dan Tri International (DTI), writing in July 2013. Appropriate mid-to-long-term management plans are not being put in place, DTI reported, citing a Vietnam Maritime Administration report, while ageing fleets were also cited as being detrimental to the sector's growth.
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