Vietnam viewed as appealing investment destination
VOV.VN - Asiafundmanagers.com (Germany) on February 29 cited a report from VanEck, an American investment management firm as saying that Vietnam could be an appealing investment for investors seeking growth exposure outside of traditional emerging markets.
In a recent in-depth market analysis report, VanEck analyzed Vietnam's transition from a "frontier market" to an "emerging market" and pointed out the reform steps that have helped Vietnam grow dramatically.
John Patrick Lee, product manager at VanEck, said “Vietnam’s economic reforms have created a virtuous cycle: reforms spurred exports, which in turn drove economic growth, leading to increased domestic demand. This trajectory has positioned Vietnam as a dynamic and integral part of the global economy, with a domestic market that continues to show robust growth potential.”
Lee also pointed out that Vietnam's economic growth is driven by a young and growing population, with more than 60% of the population under 30 years old and a literacy rate of over 90%. This advantage is driving domestic demand as the middle class grows with increased disposable income.
Compared to other emerging markets, Vietnam's private consumption to GDP ratio is at an average level.
High domestic demand helps Vietnam withstand external challenges, including protectionist policies from major trading partners such as the US and economic downturns from other countries such as China.
Regarding the stock market, VanEck believes that Vietnam is a new opportunity that investors should consider carefully.
Lee emphasized that despite macro shocks, including the COVID-19 pandemic and economic problems in China, Vietnam's stock market has still outperformed common emerging market benchmarks since 2018.
Lee also said he sees the biggest equity opportunities in financials, real estate and consumer staples.
