According to the latest data released by BSC Securities in Hanoi, Vietnam, many Vietnamese listed companies suffered significant exchange rate losses due to US dollar loans in the first half of 2024, while some enterprises achieved considerable exchange rate gains. This phenomenon reflects the diverse situations faced by Vietnamese enterprises amid fluctuations in the international financial market.

Exchange Rate Losses

The report indicates that Novaland was one of the companies suffering the largest exchange rate losses. With total US dollar loans exceeding 17.9 trillion Vietnamese dong (approximately $721 million), the company’s exchange rate loss in the first half of 2024 reached 834 billion dong. Vietnam Airlines followed closely, with US dollar loans exceeding 6.1 trillion dong and exchange rate losses of 1.2 trillion dong in the first half of the year.

Other companies reporting significant exchange rate losses include:

• Hòa Phát Group: Loss of 229 billion dong
• PV Power: Loss of 178 billion dong
• Mobile World Investment Corporation: Loss of 146 billion dong
• Bamboo Capital Group: Loss of 129 billion dong
• PC1 Group: Loss of 112 billion dong

These losses primarily stem from the large amounts of US dollar-denominated debt held by these companies, resulting in increased book losses as the Vietnamese dong depreciated against the US dollar.

Exchange Rate Gains

Not all companies suffered losses. Some enterprises achieved positive results in terms of exchange rates:

• Hoa Sen Group reported an exchange rate gain of 231 billion dong
• FPT Corporation gained 141 billion dong
• PetroVietnam Technical Services Corporation achieved a gain of 136 billion dong
• Nam Kim Group profited 73 billion dong
• PetroVietnam Ca Mau Fertiliser’s gain was 49 billion dong
• Vicostone (VCS) gained 43 billion dong

These companies’ exchange rate gains may result from successful implementation of foreign exchange management strategies or their business models having natural hedging effects during currency fluctuations.

Overall Economic Performance

BSC Securities’ report also points out that non-financial groups performed strongly overall in the first half of 2024. Net income increased by 14% year-on-year, mainly due to strong sales volume recovery in industries such as aviation, industrial services, retail, and steel.

The profit margin for these industries grew by 20% during the same period. Experts attribute this growth primarily to two factors: first, the decrease in input material prices reduced production costs; second, sales prices increased in industries such as steel, retail, fertilizers and chemicals, and telecommunications. The report also notes that while interest expenses decreased significantly, this positive impact was largely offset by exchange rate losses and other financial costs.

US Dollar Trends and Their Impact

The US Dollar Index (DXY) experienced a significant decline in July and early August 2024. This was mainly due to US economic indicators falling short of expectations. Specifically:

• US CPI rose 0.2% in July, compared to a 0.1% decrease in June. CPI increased 2.9% year-on-year.
• Core PCE (the Fed’s preferred inflation indicator) increased only 0.1% month-on-month and 3.3% year-on-year.
• US non-farm employment growth decreased from a revised 179,000 in June to 114,000 in July.
• The unemployment rate rose to 4.3%, the highest level since October 2021.

These factors led to a weakening of the US dollar, which in turn affected the USD/VND exchange rate. As of August 26, the USD/VND exchange rate had decreased by 2.3% compared to June 30. Notably, on August 28, the official exchange rate broke through the psychological barrier of 25,000 dong per US dollar.

Several financial institutions have offered their views on future exchange rate trends:

BSC expects that the continued decrease in interest expenses will support business performance growth in the third and fourth quarters of 2024. They believe that exchange rate losses may decrease as the exchange rate stabilizes.

VNDirect predicts that the USD/VND exchange rate may remain around 25,000 dong from now until the end of the year.

VDSC provides a slightly different perspective. They note that while the weakening US dollar has led to a faster-than-expected decline in the exchange rate, demand for US dollars is expected to rise at the end of the third quarter and the beginning of the fourth quarter. VDSC anticipates the USD/VND exchange rate to be around 25,000 dong per US dollar by the end of 2024, up about 3% from the previous year.

Key Points:

1. In the first half of 2024, many Vietnamese listed companies suffered huge exchange rate losses due to US dollar loans, with the highest reaching 834 billion dong.
2. Some enterprises achieved exchange rate gains, with the highest reaching 231 billion dong.
3. Non-financial groups’ overall net income increased by 14% year-on-year, with profit margins growing by 20%.
4. The USD/VND exchange rate has recently declined, breaking through the 25,000 dong/USD barrier in late August.
5. Experts have varying predictions for exchange rate trends in the second half of 2024, but generally expect fluctuations around 25,000 dong/USD.

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