Business
Vietnam to be Asia's best-performing market
Having returned 52% in 2017, Vietnam is on track to be Asia`s best-performing market for a second year in a row, assessed Bloomberg in its latest article.
The Vietnam Stock Index is already up 22%. Since January, foreigners have purchased more than US$440 million of local shares, after scooping up a record US$1 billion last year.
In the first quarter, its economy expanded by 7.4%, the fastest pace in a decade, while the government is targeting double-digit export growth this year.
Foreigners are also keen to own meaningful stakes in Vietnam's key beverage, oil and financial firms.
Authorities gained about US$4.8 billion last year via a stake sale in Saigon Beer Alcohol Beverage Corp. (Sabeco); this year the government plans to sell 6.5 times more shares than it offered in 2017, Deputy Prime Minister Vuong Dinh Hue said in an interview with Bloomberg Television in January.
Vietnam stock market is currently considered as frontier market, but the country's liquidity is better than the Philippines, which is classified as an emerging market, Bloomberg said.
Traders say it should be poised for inclusion in the MSCI Emerging Markets Index, which is tracked by funds with more than US$1.6 trillion in assets under management.
Vietnam is currently the third-largest country in the MSCI Frontier Markets Index.
However, there remain risks in Vietnam's stock market. The 15 stocks on the MSCI Vietnam Index, which should benefit the most should this bet pay off, are very pricey. The gauge trades at 30.5 times 12-month trailing earnings; the broader Vietnam Stock Index is at a more reasonable 21 times.
Vietnam's stock market is also becoming less insulated from macroeconomic events, reducing the appeal of portfolio diversification for global fund managers. Earlier this year, the correlation of weekly returns between Vietnamese and U.S. stocks shot up to 67%, a sharp reversal from a relationship that at times has been negative.
Vietnam exceeded most of the government's expectations in 2017, with full-year growth of 6.8%. The country set the target for GDP growth rate at the minimum of 6.7% in 2018, requested the Prime Minister Nguyen Xuan Phuc at a regular government meeting on April 2.
The economy also posted its strongest first-quarter growth in 10 years, expanding 7.38% annually in January-March, according to the General Statistics Office. Notably, agriculture saw a significant increase of more than 4%, doubling that of the same period last year.
Industry - construction are considered the driving force for economic growth with increasing rate of 11%. Additionally, the average consumer price index is kept under control at 2.82%.
Vietnam's stock market is on the rise.
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Foreigners are also keen to own meaningful stakes in Vietnam's key beverage, oil and financial firms.
Authorities gained about US$4.8 billion last year via a stake sale in Saigon Beer Alcohol Beverage Corp. (Sabeco); this year the government plans to sell 6.5 times more shares than it offered in 2017, Deputy Prime Minister Vuong Dinh Hue said in an interview with Bloomberg Television in January.
Vietnam stock market is currently considered as frontier market, but the country's liquidity is better than the Philippines, which is classified as an emerging market, Bloomberg said.
Traders say it should be poised for inclusion in the MSCI Emerging Markets Index, which is tracked by funds with more than US$1.6 trillion in assets under management.
Vietnam is currently the third-largest country in the MSCI Frontier Markets Index.
However, there remain risks in Vietnam's stock market. The 15 stocks on the MSCI Vietnam Index, which should benefit the most should this bet pay off, are very pricey. The gauge trades at 30.5 times 12-month trailing earnings; the broader Vietnam Stock Index is at a more reasonable 21 times.
Vietnam's stock market is also becoming less insulated from macroeconomic events, reducing the appeal of portfolio diversification for global fund managers. Earlier this year, the correlation of weekly returns between Vietnamese and U.S. stocks shot up to 67%, a sharp reversal from a relationship that at times has been negative.
Vietnam exceeded most of the government's expectations in 2017, with full-year growth of 6.8%. The country set the target for GDP growth rate at the minimum of 6.7% in 2018, requested the Prime Minister Nguyen Xuan Phuc at a regular government meeting on April 2.
The economy also posted its strongest first-quarter growth in 10 years, expanding 7.38% annually in January-March, according to the General Statistics Office. Notably, agriculture saw a significant increase of more than 4%, doubling that of the same period last year.
Industry - construction are considered the driving force for economic growth with increasing rate of 11%. Additionally, the average consumer price index is kept under control at 2.82%.
