Why Investors are Betting on Vietnam
Vietnam has recently been outperforming its regional peers for the first time in two years, and still have room to grow! They currently have a 15% gain and are expected to increase that number. Bloomberg News is anticipating 19% growth in 2017; if they are correct that will mean great profits for investors. There are many companies to invest in and the number of companies should grow throughout 2017. Investors are anticipating the stock markets behavior in Vietnam and gearing up for a new year and new profits.
Asia in general has been experiencing economic issues and political turmoil where Vietnam in particular has been successful. The Vietnamese government has set their goals for 2017 to grow 6.7% and Vietnam stocks have recently surpassed the Philippine Index in 2016. After the President of the Philippines spoke out negatively against the U.S., Filipino stocks have dropped dramatically. Thailand has felt lethal clashes and infected fraudulent trials since an army coup started in 2014.
Some of the attractive stocks to invest in would be the Hanoi Beer Alcohol Beverage Corp, Vietnam Dairy Products JSC, Vinatex among some others. These, and others, are great corporations that the government has recently started allowing foreigners, like institutional investors, to put money into.
The government has encouraged companies to put shares on the exchange which has diversified the stock market. The market is looking forward to adding Vietnam Airlines Corp. and Vietnam National Textile and Garment Group.
If the Vietnamese government increases the foreign ownership threshold above the current 30% in banks it could have a negative effect on their stocks. There is also a rumor President-elect Donald Trump will be abandoning the Trans-Pacific partnership which could also negatively affect Vietnam stocks. Vietnam economy is driven by exports and the assumption is with the United States dealing with trade barriers we might see the stocks drop. It is still a perfect time to invest in Vietnam since the government has increased the divestment process in huge corporations.
“Some new listings will attract enough excitement that the index can grow moderately, if there are no external trade shocks due to protectionist policies from the U.S.,” said Vajda.
