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Friday, October 12, 2018

KTFA: VIETNAM NEWS,12 OCT

KTFA: Vietnam News

Samson:  Vietnam's Central bank issues standard set for domestic chip cards

 11th October, 2018

It is expected that some 70 million magnetic strip ATM cards will be replaced by chip cards by 2020

The State Bank of Việt Nam (SBV) has recently issued a standard set for domestic chip cards for the first time to enhance safety and service quality of the country’s bank card operations.

The new standard set, which includes technical requirements for bank cards using contact and contactless chip technology in Việt Nam, is compatible with EMV standards as well as standards of international card organisations such as Visa, MasterCard, JCB and UnionPayThe new set will also help commercial banks switch from the current magnetic strip ATM cards to chip cards.

The SBV expects some 70 million bank cards with magnetic strips, which can be easily hacked due to weak security features, to be replaced by chip cards with EMV standards by 2020 as planned.

International card-issuing organisations have been asking Vietnamese banks to switch to chip cards that meet EMV standards to increase safety amidst growing card information thefts. Security experts have also warned that Việt Nam’s delayed transition to chip technology could put the country at risk of becoming a “haven” for card criminals from around the world as it is among the few countries where the use of magnetic swipe cards is still prevalent. 

Each chip card costs US$1.5-2.5, so Việt Nam’s leading card-issuing banks, such as Vietcombank with 14 million cards, VietinBank (13.7 million cards), Agribank (11 million cards) and BIDV (10.4 million cards), will have to spend nearly $50 million to make the transition.  LINK

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Samson: Vietnam fastest growing ASEAN economy : Standard Chartered Bank (SCB)

 8th October, 2018

Manufacturing and agriculture are likely to remain the primary growth drivers in the second half of the year

Standard Chartered Bank continues to expect Việt Nam’s robust GDP growth of 7 per cent in 2018, driven by strong FDI-supported electronics manufacturing and rising consumption.
Manufacturing and agriculture are likely to remain the primary growth drivers in the second half of the year.

The forecast is highlighted in the bank’s recently published Global Research report on Việt Nam entitled “Việt Nam – Fast, not furious, growth”.

Chidu Narayanan, Economist, Asia, Standard Chartered Bank, said: “Việt Nam expanded 7.1 per cent in first half of the year, moderating mildly in the second quarter after a record 7.4 per cent growth year-on-year in the first quarter, in line with our forecast. This is the first year since the global financial crisis that the second quarter growth has been slower than the first one; we believe this is a sign of a focus on sustainable growth over the medium term. We expect the second half of the year growth to remain robust, albeit mildly slower than in the first six months of the year.”

“Việt Nam is likely to remain the fastest-growing ASEAN economy in 2018 and 2019, as in 2017. We remain positive on Việt Nam’s medium term growth on strong manufacturing activity, as FDI inflows to electronics manufacturing remain strong.”

According to the latest macro-economic research report, manufacturing is projected to record another year of double-digit growth and agriculture growth will continue its recovery in the second half of the year, even as construction slows down on more modest growth in the real-estate sector. At the same time, electronics export growth is likely to stay robust, albeit lower than in 2017, leading to a trade surplus and supporting overall growth. The Bank maintains its views that FDI inflows will stay strong in 2018 and 2019-20, with registered capital of close to US$17 billion each year, and FDI inflows to the manufacturing sector, particularly electronics manufacturing, will remain high in the medium term.

The study also expects steady growth in services to support overall growth in 2018, led by strong domestic trading activity. The services sector, which makes up close to 40 per cent of the economy, is likely to remain robust in the second half of the year after rising by a steady 7 per cent year-on-year in the first six months of the year. The rise of the business process outsourcing (BPO) sector, aided by a young, well-educated, low-cost labour force, should support services sector growth in the medium term.

On the foreign exchange outlook, Standard Chartered economists raise their USD-VND forecasts to 23,400 by end-2018 and expect a small đồng depreciation in early 2019, before ending 2019 mildly stronger against the US dollar as positive domestic and external factors support the currency.   LINK

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