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How Can Vietnam Sustain High-Quality FDI Growth in the Semiconductor and High-Tech Sectors?

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Vietnam’s foreign direct investment (FDI) attraction continues to show impressive growth in July, with a marked increase in the quality of FDI capital flows due to a strategic focus on careful project selection. This was highlighted by Minister of Planning and Investment Nguyen Chi Dung at a recent Government meeting.

The Ministry of Planning and Investment’s Foreign Investment Agency reported that by the end of July, Vietnam had attracted more than $18 billion in registered FDI capital, marking a 10.9 percent increase compared to the same period in 2023. Disbursed FDI capital also saw a significant rise, reaching over $12.55 billion—an 8.4 percent increase from last year, and the highest volume of disbursed FDI in the January-July period over the last five years.

Experts from various international organizations anticipate that this momentum will continue, with projections for even greater disbursed FDI capital in the near future. This growth is largely attributed to Vietnam’s improved business environment, the execution of major infrastructure projects, and the increasing interest of foreign investors in the semiconductor industry.

Minister Dung emphasized the government’s ongoing efforts to attract high-quality FDI, particularly in large-scale, high-tech projects within the processing, manufacturing, electronics, and semiconductor sectors. The development of the semiconductor industry is especially promising, with the National Innovation Center (NIC) collaborating with both domestic and international partners to create microchip design training programs. This initiative is seen as a critical step toward Vietnam mastering semiconductor technologies.

Sophie Dao, Senior Partner at GBS, an investment consulting firm in Vietnam, expressed optimism about the country’s FDI outlook. She commented, “Vietnam’s strategic focus on high-quality, high-tech FDI projects, coupled with a strong commitment to improving infrastructure and the business environment, is key to maintaining this upward trajectory. The government’s proactive approach in reducing administrative burdens and fostering innovation in the semiconductor industry positions Vietnam as a highly attractive destination for global investors.”

In Dong Nai province, the Industrial Zones Authority (DIZA) reported over $1 billion in FDI in the first seven months of the year—46 percent higher than the planned target. The newly licensed projects are primarily in semiconductor manufacturing, electrical and electronic components, and mechanical engineering, all meeting advanced technology criteria and avoiding industries known for environmental pollution or labor-intensive practices.

Similarly, Vo Van Minh, Chairman of the Binh Duong Provincial People’s Committee, stressed the importance of continued administrative reforms and infrastructure improvements, particularly in linking airports, seaports, and major provinces with industrial centers. He also underscored the need for enhanced energy infrastructure, including the development of renewable energy projects that align with the requirements of high-tech industries and environmental protection goals.

Sophie Dao added, “The emphasis on sustainable development and renewable energy is particularly commendable. By focusing on these areas, Vietnam not only attracts high-quality FDI but also ensures that its growth is aligned with global trends in environmental sustainability.”

Vietnam Economic and Financial updates for August 13, 2024

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Foreign Exchange Market:

On August 12, the State Bank set the central exchange rate at VND 24,256/USD, a decrease of 4 VND compared to the end of last week’s session. The spot buying and selling rates remained stable at VND 23,400/USD and VND 25,450/USD, respectively. In the interbank market, the closing rate was VND 25,130/USD, an increase of 25 VND from August 9. On the free market, the exchange rate fell sharply, with the buying rate dropping by 125 VND and the selling rate by 195 VND, trading at VND 25,540/USD and VND 25,640/USD.

Interbank Money Market:

On August 12, the average offering interest rates in the Interbank VND market remained unchanged for overnight (ON) terms but saw a decrease of 0.03 – 0.06 points across other terms up to 1 month, with rates as follows: ON at 4.40%, 1-week at 4.50%, 2-weeks at 4.62%, and 1-month at 4.74%. The Interbank USD offering rates remained steady for ON and 1-month terms, while the 1-week and 2-week terms saw a slight decrease of 0.01 points, trading at: ON 5.30%, 1-week 5.34%, 2-weeks 5.39%, and 1-month 5.43%. In the secondary government bond market, yields remained stable for 3-year and 15-year terms but decreased for other maturities, closing at: 3-year 1.91%, 5-year 1.96%, 7-year 2.25%, 10-year 2.73%, and 15-year 2.92%.

Open Market Operations:

The State Bank of Vietnam (SBV) offered VND 7,000 billion on the mortgage channel with a 7-day term and an interest rate of 4.25%, with VND 6,999.99 billion successfully bid and VND 13,668.54 billion maturing. The SBV also issued 14-day bills, bidding at an interest rate of 4.25%, with VND 8,100 billion successfully bid and VND 10,850 billion maturing. As a result, the SBV withdrew a net amount of VND 3,918.55 billion from the market through open market operations. The total volume of bills circulating in the market stood at VND 94,299.5 billion, while the mortgage channel had VND 49,949.01 billion in circulation.

Stock Market:

The stock market saw fluctuations yesterday but ended on a positive note as buying pressure returned, boosting indices. The VN-Index rose by 6.64 points (+0.54%) to 1,230.28 points, the HNX-Index gained 1.39 points (+0.61%) to 230.77 points, and the UPCoM-Index increased by 0.20 points (+0.22%) to 93.0 points. Market liquidity was low, with a trading value exceeding VND 15,400 billion. Foreign investors were net buyers with less than VND 45 billion across all three exchanges. According to the Vietnam Bond Market Association (VBMA), July 2024 saw 33 private corporate bond issuances totaling VND 31,387 billion and 1 public issuance worth VND 395 billion. Over the first 7 months of 2024, there were 175 private issuances worth VND 168,433 billion and 12 public issuances worth VND 14,586 billion. In July, companies repurchased VND 32,094 billion in bonds before maturity, marking a 17% increase from the same period in 2023. For the remainder of 2024, approximately VND 121,854 billion in bonds are expected to mature, with real estate bonds making up the largest share at VND 51,603 billion, or 42%.

International News:

A recent report from UBS Bank (Switzerland) using data up to July suggests that the probability of a recession in the US is now at 53%, down from 60% a few months ago. However, UBS emphasized that although the recession risk is decreasing, the US economy is still weakening, with growth expected to slow from around 3% in 2023 to 1.5% this year.

The German Federal Statistical Office (Destatis) reported that the country’s Wholesale Price Index (WPI) increased by 0.3% month-over-month in July, following a 0.3% decline in the previous month, surpassing the forecasted 0.2% rise. Year-over-year, the WPI in Germany saw a slight decrease of 0.1% compared to the same period in 2023.

Exchange Rate on August 12:

• USD = 0.915 EUR (-0.14% day/day); EUR = 1.093 USD (+0.14% day/day)
• USD = 0.783 GBP (-0.04% day/day); GBP = 1.276 USD (+0.04% day/day)
• GBP = 1.168 EUR (-0.10% day/day); EUR = 0.856 GBP (+0.10% day/day)

Stay informed with the latest economic and financial developments in Vietnam, brought to you by Vietnam Insider. Our updates provide in-depth analysis and insights into key market trends, currency fluctuations, stock market performance, and significant policy changes that impact the country’s economic landscape. Whether you are an investor, business professional, or simply interested in Vietnam’s economic progress, our updates are designed to keep you ahead in a rapidly evolving financial environment.

Tether to Fight Celsius’ $3.3 Billion ‘Shakedown’ Litigation

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On Friday, Celsius asked a U.S. court to order Tether to relinquish a total of 57,428.64 bitcoin.

Tether, the company behind USDT, the world’s largest stablecoin by market capitalization, said it will defend itself against what it called “shakedown” litigation brought by bankrupt crypto lender Celsius.

On Friday, Celsius asked the U.S. Bankruptcy Court of the Southern District of New York to order Tether to relinquish a total of 57,428.64 bitcoin (BTC) or award the “present value of all Bitcoin,” some $3.3 billion at today’s price, according to a court filing.

“This lawsuit incredibly now seeks the return of approximately US$2.4 billion worth of BTC from Tether, despite the BTC being liquidated at Celsius’ direction and with Celsius’ consent at June 2022 prices,” Tether said in a statement on its website. Tether did not say how it calculated the $2.4 billion figure.

The case concerns a loan agreement between Celsius and Tether that allowed Celsius to borrow stablecoins “to operate certain critical aspects of its business,” according to the lawsuit. In the filing, Celsius alleges that when the market crashed in mid-2022, in the “ninety-day period prior” to Celsius’ bankruptcy filing, Tether insulated itself from the impending bankruptcy by making “preferential and fraudulent transfers” of bitcoin.

“Specifically, on several occasions, Tether demanded, and received, a significant amount of new, incremental collateral to improve its position in the impending bankruptcy,” according to the lawsuit.

“This baseless lawsuit is trying to claim that we should give back the bitcoin that were sold to cover Celsius’ position,” Tether CEO Paolo Ardoino said in a post on X. “There are plenty of flaws in the claimant’s filing and we’re very confident in the solidity of our contract and our actions … This lawsuit will be fought till the end. It’s important to set an example on behalf of the entire industry that shameless money grabs will not work.”

Celsius argued that in June 2022, Tether “applied Celsius’s Bitcoin against obligations owed to it for an average price of $20,656.88 each—considerably less than Bitcoin’s market closing price on June 13th, $22,487.39.”

“Thus, these preferential and fraudulent transfers of Bitcoin should be avoided, and the Bitcoin or its value should be recovered for the benefit of Celsius’s estate,” the filing said. It also demands $100 million in damages for breaches of contract.

According to Tether, when the market crashed, the agreement required “Celsius to post additional collateral to avoid the liquidation of its BTC” and “when Celsius chose not to post additional BTC it directed Tether to liquidate the BTC collateral Tether held.”

Tether also said that the consolidated equity of the Tether Group was nearly $12 billion as of June 30, so “even in the most remote scenario in which this baseless lawsuit will get somewhere, Tether token holders will not be impacted.”

Celsius’ bankruptcy is officially closed after a court approved a reorganization plan in November.

Canto Blockchain Suffers Two-Day Outage Amid Consensus Issue

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The Canto team said a fix will be deployed on Monday at 12:00 UTC.

Layer-1 blockchain Canto has been offline since Saturday following a “consensus issue.” The CANTO token initially dropped by 21%, before recovering over the course of the weekend.

Data from Etherscan shows that three transactions were processed on Aug. 10 and no activity has taken place since then.

“Canto chain is currently experiencing an issue with consensus that has caused the chain to halt,” Canto said in an announcement on X. “An upgrade to address this issue will be carried out on Monday, August 12 UTC 12:00. All funds are safe. Once the chain resumes, users will be able to access all activities as usual.”

Canto experienced a period of explosive growth after going live in August last year, and total value locked (TVL) surged to more than $200 million in March as investors flocked to a series of DeFi services like lending, staking and liquidity provision.

On-chain activity has rapidly subsided since then, with TVL dropping to just $13.7 million, according to DefiLlama. The CANTO token is also down by 83% since May 24.

Cruising in Ha Long Bay and Lan Ha Bay Among World’s Most Exciting Experiences

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Tripadvisor has recently announced the top 25 most exciting boat experiences worldwide this year, with cruising in Ha Long Bay and Lan Ha Bay making it to the top 3.

Tripadvisor, a leading global travel review organization, released the list as part of its annual Travelers’ Choice Best of the Best Things to Do awards.

The experience of cruising and exploring Lan Ha Bay in Hai Phong City and Ha Long Bay in Quang Ninh Province ranked third on the list.

Cruising on Ha Long Bay and Lan Ha Bay is in the top 3 most exciting experiences in the world.

Tripadvisor describes the 2-day, 1-night cruise as an experience that allows travelers to explore serene destinations with crystal-clear waters, stunning rock formations, and smooth white sandy beaches.

Visitors can engage in activities such as snorkeling and kayaking. The 2-day, 1-night tour is priced at approximately $161 per person (over 4 million VND), including all services and meals.

Ranking 19th on the list is the experience of basket boating in the Bay Mau Coconut Forest or Cam Thanh Coconut Forest in Hoi An City, Quang Nam Province. On this journey, travelers can enjoy the fresh countryside air, escaping the hustle and bustle of urban life.

@Znews

Vietjet to Receive 10 New Aircraft by the End of 2024

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In the context of a global aviation market facing aircraft shortages and increasing travel demand, Vietjet is set to add 10 new-generation aircraft to its already advanced fleet.

A representative of the airline stated that the new aircraft are expected to be delivered starting in August, with most being the latest A321neo ACF models from Airbus. In 2019, Vietjet became the first airline in the world to operate the A321neo ACF (Airbus Cabin Flex).

The A321neo ACF features an improved cabin design that meets standards for seat size and spacing, providing passengers with an enhanced flying experience. These aircraft also contribute to at least a 16% reduction in fuel consumption, a 75% decrease in noise, and a 50% reduction in emissions.

The new aircraft are expected to be delivered from August.

Recently, Vietjet signed a contract to purchase 20 new-generation wide-body A330neo (A330-900) aircraft from Airbus, valued at $7.4 billion. Passengers will soon be able to fly on Vietjet’s new A330neo aircraft on longer routes, offering a safer, more comfortable, and modern experience.

Vietjet currently operates a fleet of over 100 aircraft, including some of the most advanced, modern, and safe models in the world, such as the A320, A321ceo, A321neo – A321neo ACF, and A330. These aircraft are environmentally friendly and fuel-efficient, aligning with the airline’s goal of achieving net-zero emissions by 2050. Vietjet has transported 200 million passengers, including millions experiencing air travel for the first time.

Vietjet brings a fun and happy flying experience.

In the first half of 2024, Vietjet carried 13.1 million passengers, operating 70,154 safe flights. The airline reported consolidated revenue of VND 34,016 billion and a pre-tax profit of VND 1,311 billion for the first half of 2024, marking year-on-year growth of 15% and 433%, respectively, and exceeding the annual plan by 21%. Vietjet contributed VND 3,687 billion in direct and indirect taxes and fees to the state budget during this period.

With the 10 aircraft set to be delivered from now until the end of 2024, Vietjet will continue to expand its network domestically and internationally, with new destinations in Australia, India, China, Japan, South Korea, Indonesia, Thailand, Singapore, Malaysia, Laos, Cambodia, and more. The airline consistently meets the needs of passengers, providing joyful and happy flight experiences with a professional and dedicated crew. Vietjet’s safe flights connect countries, cultures, and continents, promoting economic development, cultural exchange, and tourism.

@Znews

Railway Begins Test Run of Saigon – Nha Trang Train Route

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Saigon Railway Transport Joint Stock Company announced that starting today (August 9), a new train on the Saigon – Nha Trang route and vice versa will be operated on a trial basis. The testing period is set for two months.

Railways put into testing new train on Saigon – Nha Trang route. Photo: VNA

Saigon Railway Transport Joint Stock Company (Vietnam Railways) is coordinating with Vietnam Rail Development Company Ltd. and Jinxin Group (China) to conduct a commercial trial run of the train on the Saigon – Nha Trang route starting from August 9. The trial will continue until October 7, with a frequency of one trip every two days. The train consists of seating cars, four-berth sleeping cars, a dining car, and a conductor’s car.

Specifically, train SNT6 departs from Saigon Station (Ho Chi Minh City) at 10:15 PM and arrives in Nha Trang (Khanh Hoa) at 8:05 AM. The stations that will handle passenger boarding and alighting include Saigon, Di An, Bien Hoa, Thap Cham, and Nha Trang. Meanwhile, train SNT3 departs from Nha Trang at 10:20 PM and arrives at Saigon Station at 9:15 AM, with stops at Saigon, Di An, Bien Hoa, and Nha Trang.

For the first five round trips, passengers will receive a 5% discount on current ticket prices. Additionally, the railway sector continues to offer discounts of up to 15%, such as a 5-15% discount for passengers who purchase tickets 10 or more days in advance (not applicable for four-berth sleeping compartments); a 3-12% discount for group bookings of 11 or more people; and a 5-10% discount on return tickets.

@Thesaigontimes

Hanoi Recognizes Four New Tourist Sites

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The Hanoi People’s Committee has recently issued a decision including four new tourist sites, including the Quan Thanh Temple Special National Monument, the Voi Phuc Temple Special National Monument, the Ngoc Island – Truc Bach tourist site, and the Kim Lan tourist site, according to VNA.

The People’s Committee has assigned the Ba Dinh District People’s Committee to manage, exploit, and develop the Ngoc Island – Truc Bach tourist site (Truc Bach Ward, Ba Dinh District), the Quan Thanh Temple Special National Monument (Quan Thanh Ward, Ba Dinh District) District), and the Voi Phuc Temple Special National Monument (Ngoc Khanh Ward, Ba Dinh District).

The Kim Lan Commune People’s Committee (Gia Lam District) is responsible for managing, exploiting, and developing the Kim Lan tourist site in accordance with the Tourism Law and related legal documents.

Quan Thanh Temple is located on the old Co Ngu Street, now Thanh Nien Street, Quan Thanh Ward, Ba Dinh District. This is one of the ancient “Thang Long Tu Tran”, next to Bach Ma Temple, Voi Phuc Temple and Kim Lien Communal House. Photo: Vuong Loc

A representative from the Hanoi People’s Committee stated that tourism in Hanoi is experiencing strong growth. The city is currently focused on investing in, protecting, and preserving tourist sites and historical monuments to diversify and enrich tourist attractions and meet the increasing demands of visitors.

According to the Hanoi Department of Tourism, in the first seven months of this year, the total number of tourists visiting Hanoi is estimated to have reached 16.44 million, an 11.8% increase compared to the same period in 2023. Of this, international tourists are estimated to have reached 3.43 million. Total revenue from tourism is estimated at over VND 63,602 billion, an 18.9% increase compared to the same period in 2023.

@SGtiepthi

Ho Chi Minh City Generates Over VND 108 Trillion from Tourism in the First 7 Months

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According to the Ho Chi Minh City Department of Tourism, tourism revenue in the first seven months reached 67.5% of the 2024 annual target, an increase of 15.4% compared to the same period in 2023.

International visitors to Ho Chi Minh City recorded an increase of 30.3% over the same period. Photo: Linh Huynh.

On the morning of August 9th, the Ho Chi Minh City Department of Tourism held a conference on tourism development in the first half of 2024 in District 7.

According to published data, in the first seven months of the year, Ho Chi Minh City welcomed 3,075,256 international visitors, up 30.3% from the same period in 2023, achieving 51.3% of the annual target.

Domestic tourists to Ho Chi Minh City were estimated at 20,082,159, an increase of 7.6% compared to the same period in 2023, reaching 52.8% of the 2024 target.

The Department of Tourism, in collaboration with businesses, tourism experts, the People’s Committee of Thu Duc City, and other districts, has released the “Ho Chi Minh City Tourism Product Guide,” continued to develop community-based tourism models in Thieng Lieng islet, promoted the “Moonlight Battle Zone” night tour program, and maintained the “Tour of National Architectural Heritage – Ho Chi Minh City Hall” program.

Many sightseeing and experience activities are loved by tourists when coming to Ho Chi Minh City such as getting their nails done, going on motorbike tours, going on river boats, and visiting the Ho Chi Minh City People’s Committee. Photo: Linh Huynh.

As of now, Ho Chi Minh City has developed 17 waterway tourism products, including 7 regular waterway product groups and 20 new product groups introduced to both domestic and international visitors. The number of tourists traveling by waterway to Ho Chi Minh City has increased by approximately 10-20% compared to the same period last year.

Recently, Ho Chi Minh City has regularly organized tourism stimulus programs and events, attracting nearly 100 tourism and service businesses to participate. Additionally, the city has strengthened tourism promotion activities through the Ao Dai Festival, Waterway Festival, Ho Chi Minh City Tourism Day, and regular promotional and tourism marketing activities in countries such as Germany and Japan.

In the near future, Ho Chi Minh City will focus on qualitative tourism development, emphasizing revenue growth rather than just counting visitor numbers. The city will also advise the People’s Committee of Ho Chi Minh City to approve the “Ho Chi Minh City Tourism Development Strategy to 2030,” implement the Smart Tourism and Waterway Tourism Development Project, and enhance tourism management, training, and development cooperation efforts.

@Znews

MSB Announces 30% Dividend Payout, Offering Significant Returns to Shareholders

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Vietnam Maritime Commercial Joint Stock Bank (HoSE: MSB) has announced that August 29, 2024, will be the final registration date for shareholders to exercise their right to receive dividends for 2023. The dividends will be paid in shares at a rate of 30%.

MSB plans to increase its capital by issuing new shares as dividends, utilizing retained earnings based on the audited financial statements as of December 31, 2023, after allocating funds in accordance with legal requirements. The issuance rate is set at 30% of the total outstanding shares, meaning shareholders will receive 30 additional shares for every 100 shares they own. This move will result in the issuance of an additional 600 million shares, making MSB the bank with the highest dividend payout this year.

Following this capital increase, MSB’s total outstanding shares will rise to 2.6 billion, bringing the bank’s new charter capital to VND 26,000 billion.

The State Bank and the State Securities Commission have already approved this capital increase proposal. This boost in charter capital is expected to strengthen MSB’s financial capacity, enhance its competitiveness, and support its business development and risk management strategies. Moreover, it will serve as a strong foundation for accelerating the bank’s digitalization and sustainability efforts.

In its recently announced second-quarter business results, MSB reported stable growth across key indicators. As of June 30, 2024, the bank’s total assets surpassed VND 295,500 billion, marking a 10.69% increase compared to the end of 2023. Individual credit growth reached 12.41%, while customer deposits and valuable papers rose by 15% and 64%, respectively, compared to the end of the previous year. MSB’s consolidated total net income (TOI) for the first half of the year amounted to VND 7,031 billion, reflecting a 10% year-over-year increase. The bank also recorded a consolidated pre-tax profit of nearly VND 3,690 billion, up 4% from the same period last year, achieving 54% of its annual profit target.

Beyond its financial growth, MSB remains committed to its sustainable development strategy, integrating environmental, social, and governance (ESG) factors into its operations. The bank regularly publishes a Sustainable Development Report, which details its progress in “greening” its operations and outlines specific goals for each year. MSB was among the first banks in the market to release such a report, with the inaugural edition published on September 15, 2023, covering its 2022 activities.

The June 2024 report highlighted a reduction in the bank’s carbon emissions in 2023 compared to the previous year, along with commitments and actions aimed at achieving long-term sustainability goals. MSB views this report as a key communication tool for conveying the impact of its business activities on the economy, environment, and society, and it plays a crucial role in enhancing the bank’s market position.

MSB’s focus on sustainability is also evident in its risk management frameworks, green financial solutions for customers, and environmentally friendly internal practices. The bank has recently received several ESG awards in recognition of these efforts.

As a reputable listed organization, MSB prioritizes effective investor relations to maximize shareholder value. Additionally, the bank has made significant contributions to the State budget, totaling over VND 4,362 billion in the past three years, ranking it among the top 10 banks with the largest budget contributions.

Hanoi Enhances Public Transport by Linking Bicycles, Buses, and Metro Lines

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The city is grappling with traffic overload, as nearly 400,000 new personal vehicles hit the streets each year. To address this, Hanoi is prioritizing the expansion and integration of its public transportation system. The goal is not just to introduce new transit options but to create seamless connections between them for greater convenience.

Currently, Hanoi operates two urban railway lines: Cat Linh – Ha Dong and the elevated section of Nhon – Hanoi Station, which together serve more than 700,000 passengers daily. To enhance connectivity, the city has developed dedicated bicycle lanes and established multiple bus routes that link these railway lines.

Truong Minh Son, a student, shared: “For the past two years, the Lang Street station on the Cat Linh – Ha Dong line has been my main way of getting to school. Combining public bicycles with the train has cut my travel time from nearly an hour to just 20 minutes.”

In addition to bicycles, buses are a popular option for commuters. Currently, 36 bus routes connect to the Nhon – Cau Giay Station section of the railway, with stops conveniently located near train station entrances and exits. This setup is particularly beneficial for vulnerable groups. Ho Van Minh Nhat, another student, noted: “The connection between trains and buses is incredibly convenient. It not only makes commuting easier but also encourages the adoption of public transport.”

Pham Dinh Tien, Head of Operation Planning at the Hanoi Public Transport Management and Operations Center, stated: “We are exploring and piloting inter-connected electronic tickets via mobile apps and contactless payment methods. This will allow people to use multiple forms of public transportation without having to pay separately for each one.”

Hanoi plans to build 14 urban railway lines by 2035. This ambitious project aims to create a robust public transportation network, serving as a key solution to curb traffic congestion and reduce environmental pollution.

Why Risk Management Is Important for Forex Trading Success

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Sometimes, things do not go according to plan, and the world of trading is no different. That’s why a significant part of your foreign exchange (forex or FX) trading strategy should involve developing a well-thought-out risk management strategy. Risk management strategies help you identify and mitigate potential outcomes that could damage your portfolio.

Why Is Risk Management So Important?

Risk management is the backbone of long-term trading success. It involves identifying, assessing, and mitigating potential risks to protect capital and minimize losses. Even the most promising strategies can lead to bad results without proper risk management.

Trading occurs in a high-pressure environment filled with uncertainty and constant surprises. That’s why it is essential to adopt a set of rules and policies that help mitigate these variables. Risk management provides a structured approach to handling the inherent uncertainties of trading, helping to safeguard your capital and maintain emotional stability. Here are some crucial reasons to consider a solid risk management strategy:

Longevity in the Market: Traders who focus on risk management are more likely to stay in the game longer. This allows you to accumulate experience and better understand market dynamics.
Stress Reduction: A well-thought-out risk management strategy reduces the emotional stress associated with trading. Knowing that you have a plan in place to limit losses can make it easier to stay disciplined.
Sustainable Growth: While aggressive trading strategies can lead to quick profits, they can also result in significant losses. A risk-managed approach aims for steady, sustainable growth, which is more conducive to long-term success.
Learning and Adaptation: Each loss becomes a learning experience rather than a catastrophic setback.

Risk Management Trading Strategies

Detailed risk management techniques are subjective and should be tailored to your unique personality, strengths, weaknesses, account size, and goals. While each trader should have a specific system, common principles apply to all traders. Following a few key guidelines is important to building a comprehensive risk management strategy.

Set Realistic Goals

What are your trading expectations relative to your account size? For forex trading in Singapore, consider both local market conditions and global factors that may impact your strategy. Your immediate goal should focus on growing your portfolio sustainably, paving the way for achieving your larger objectives. Set a realistic goal that doesn’t pressure you in terms of position sizing, screen time, or growth pace. This approach should support both your personal development and allow you to enjoy a balanced lifestyle.

Position Size

Adjust your position size based on the likelihood of your trade’s success. Use higher leverage for trades with a higher probability of success and lower leverage for trades with lower probabilities. Leverage allows you to amplify your positions using borrowed funds, serving as a key risk management tool. You’ll know you’ve chosen the right position size when you feel comfortable holding it, with minimal anxiety, even when in your risk zone.

Risk Reward Ratio

A fundamental guideline is to establish a minimum risk-reward ratio that is attainable and consistent with your strategy’s win rate. Remember that if you hold out for a more favorable entry point, you may miss some trades, but those that do trigger will likely offer a much better risk-reward ratio and a higher success rate. Adhering to a disciplined risk-reward ratio approach can lead to more efficient trading, a higher success rate, reduced stress, and quicker clarity on the outcome of your trades.

Portfolio Diversification

Portfolio diversification in forex mainly involves trading different currency pairs. Traders typically select pairs from major, minor, and exotic categories. Major pairs, like EUR/USD and GBP/USD, are highly liquid and influenced by global economic factors. Minor pairs, such as EUR/GBP and AUD/USD, often exhibit more volatility due to regional economic conditions. To diversify effectively, traders need to understand the correlations between different currencies.

For example, the Australian dollar (AUD) and the New Zealand dollar (NZD) often move together (positively correlated), while the U.S. dollar (USD) and the Japanese Yen (JPY) tend to have an inverse relationship (negatively correlated).

Using Appropriate Market Orders

Market orders are automated tools that can help you open, close, or secure profits on a trade based on specific conditions. For instance, stop-loss orders should be a critical component of your risk management strategy due to the market’s constant activity and price changes. They safeguard your capital by automatically closing a position if the price moves beyond a predetermined level. Consider the currency pair’s typical daily price swings and recent volatility to set stop-loss levels effectively. Other valuable order types include trailing stops, taking profits, and limiting orders.

The Cornerstone of Forex Success

Risk management is not just an aspect of forex trading; it’s the foundation of long-term success because it allows traders to protect their capital and steer the uncertainties of financial markets. This disciplined approach ensures a more resilient and adaptable trading practice, positioning you for enduring success in the forex market.

Bitcoin Bulls Revisit $100K Year-End Target as BTC Spikes Over $62K

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“Regardless of the next 60 days, the bull market will continue along traditional four-year cycle lines with solid gains in October and November,” one trader said.

Bitcoin (BTC) briefly spiked over $62,000 before retreating during the Asian morning hours on Friday as the broader market rallied to reverse a steep rout from earlier in the week. The recovery has some bitcoin bulls revisiting their $100,000 year-end target.

U.S. markets rallied on Thursday with the S&P 500 marking its best day since November 2022 and the tech-heavy Nasdaq 100 rising 3.1%. This helped reverse losses from a Monday rout, which saw major losses across stock indexes and cryptocurrencies.

BTC jumped 7.2% in the past 24 hours, one of its biggest single-day percentage gains in recent months. The move liquidated nearly $100 million in shorts, or bearish bets, on bitcoin-tracked futures. The $100 million liquidation was the fourth largest hit for bitcoin bearish bets this year.

Some market watchers attributed the gains to favorable stock market sentiment and expectations of BTC mirroring its past market cycles.

“Now that the Bank of Japan has indicated they will not raise interest rates further — and Jump Trading will run out of coins to sell, just like Germany did a few weeks ago — I do not see the price going much below $50,000 (other than a quick wick), perhaps ever again,” Transform Ventures founder Michael Terpin told CoinDesk in an email Friday.

“Regardless of the next 60 days, the bull market will continue along traditional four-year cycle lines with solid gains in October and November,” he added.

“If Trump wins, a rush of new buyers could take the bitcoin price over $100,000,” Terpin said, adding that the six months after the halving have had pullbacks — and this fifth bitcoin cycle is no exception. “October and November are historically strong months for bitcoin, especially in the year of the halving and the year after,” he said.

BTC’s rise revived gains among major tokens. Ether (ETH) and toncoin (TON) surged 10%, Solana’s SOL and Cardano’s ADA rose 5%. XRP slightly dropped after a 17% surge on Thursday, likely on profit taking.

The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by capitalization, minus stablecoins, zoomed 5.35%.

Coinbase Takes Aim at CFTC’s Definition of ‘Gaming’ in Proposed Prediction Market Rules

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Coinbase argues the definition is vague, and urges the CFTC to make determinations on a contract-by-contract basis rather than broad categorization

Proposed rules by the Commodities Futures Trading Commission (CFTC) regarding prediction markets should be withdrawn because they exceed the commission’s statutory authority and ignore the positive impact of prediction markets on the economy, Nasdaq-listed crypto exchange Coinbase wrote Thursday in a letter to Commissioners.

“We firmly believe that this all-or-nothing approach to the treatment of event contracts is not consistent with the promotion of responsible innovation and growth in regulated, transparent markets with appropriate safeguards to protect market integrity and protect customers,” Coinbase’s Chief Legal Officer, Paul Grewal, wrote in the letter.

In May, the CFTC published a proposal on event contracts (prediction markets) that defined “gaming” as betting on outcomes of political contests, awards, or athletic events. This proposal had the support of three Democratic commissioners, CoinDesk reported at the time, who cited concerns over market integrity and the agency’s role.

In Thursday’s letter, Coinbase wrote that it objects to the CFTC’s broad definition of “gaming,” arguing that it unfairly restricts valuable event contracts by categorically banning them without considering their individual public interest merits.

“If adopted, the rule would capture contracts as “gaming” that by any common understanding are not, in fact, gaming,” Coinbase wrote, arguing that this is inconsistent with “legislative history related to gaming, neither of which suggest that gaming should extend beyond sporting events”.

Coinbase gave one use case for prediction markets for sporting events: a vendor hedging the costs of printing t-shirts in anticipation of a team winning a championship by taking a position in favor of that team’s loss.

The exchange complained in the letter that the Commission equates speculation with gaming but fails to distinguish between market speculation and actual gambling in its proposal.

“Few would agree that elections or professional awards such as Nobel Prizes or Academy Awards are granted through a process that should generally qualify as games, yet these are the examples presented as constituting such a definition,” Coinbase continued.

The proposal would also ban contracts on war, terrorism, and assassination.

Polymarket offers several contracts about geopolitical outcomes that would fit into this category, such as one that asks bettors if Iran will launch military action against Israel by next week in response to Israel’s assassination of Hamas’ leader in Tehran.

These may be useful for forecasting world events, and Coinbase argued that the CFTC is overlooking what it calls the significant benefits of prediction markets. Coinbase cites research showing that prediction markets can efficiently aggregate information and outperform traditional forecasting methods.

Instead, Coinbase proposes that the CFTC withdraw the broad, categorical ban on event contracts and continue evaluating them on a contract-by-contract basis, considering the public interest merit of each prediction market category.

“We urge the CFTC to withdraw this proposal and work alongside academic, industry, and policy stakeholders to develop a more balanced approach that promotes innovation while protecting the public interest,” Coinbase’s Chief Legal Officer Paul Grewal posted on X.