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| Over the years, Vietnam's economy has continued to gain market share in global manufacturing and exports, and has attracted a large amount of FDI. (Source: Vietnam Insider) |
The German-based online newspaper asiafundmanagers.com , which specializes in providing in-depth information on the Asian capital market, has just published an analysis by Ms. Shasha Li Mafli - Fund Manager of the Vietnam Prosperity Strategy Fund, part of the fund management company Eric Sturdza Investments, stating that "now is a good time to invest in Vietnam".
According to Ms. Shasha Li Mafli, Vietnam is undergoing rapid industrialization and urbanization, and is a direct beneficiary of the global trend of diversifying supply chains and manufacturing, thereby reducing dependence on China.
If the US-China strategic competition does not have a major shift, there is no reason for international corporations to reverse the “China+1” policy.
However, Vietnam is heavily dependent on the global economy and China. If the global economy and China's growth slow down, it will negatively affect Vietnam's growth rate.
Vietnam stocks have outperformed emerging markets since 2018. The main driver has been the government’s increased investment in infrastructure and the resulting increase in new disbursements for many key projects, with stocks in the materials and energy sectors benefiting. These sectors will continue to grow strongly and be re-rated.
In addition, over the years, Vietnam has continued to gain market share in global manufacturing and exports, and has attracted a large amount of foreign direct investment (FDI).
Retail and consumer stocks are currently a great investment opportunity as Vietnam has a young population, rising wages and a growing middle class. Another attractive sector is infrastructure as government investments are creating growth opportunities in materials and energy.
The real estate market also has many positive signals. In the long term, urbanization is driving demand for affordable housing in cities; industrialization is driving demand for industrial land and modernization of the retail sector is increasing demand for commercial real estate. In the past 6-8 months, interest rates have been reduced, thereby improving liquidity and boosting demand for real estate.
The Vietnamese government aims to upgrade its stock market to emerging market status by 2025 and increase market capitalization to 100% of GDP from the current 56%.
The government’s economic ambitions have influenced the development of financial markets. The State Bank of Vietnam has cut interest rates to boost the economy and hopes that pro-growth policies will continue to be implemented. Market liquidity has improved and trading volumes have increased.
At the fiscal level, public debt is 37% of GDP. This will allow the government to continue investing in infrastructure while FDI, especially in manufacturing, remains strong and has a positive impact on growth and employment.
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