The Opportunity in Vietnam’s Dragon Year

Today begins the year of the dragon in Vietnam, and that may signal the opportunity of the decade (actually 12 years) for international investors and businesses.  The reason is that the dragon represents luck, and the dragon year will bring optimism, consumer spending, a bull market, overall economic enthusiasm — and a baby boom. 

Many Vietnamese families want children born in the dragon year, and one survey finds more than twice as many pregnant women today than a year ago when the year of the cat began.  Lucky babies will bring a surge in business for companies that make products for children.

The last dragon year in Vietnam brought a relatively modest 8% increase in births, but a much bigger surge is likely now because both the demographics and the economy of Vietnam have changed dramatically since then; the majority of Vietnamese women are now at childbearing prime. 

This means it’s time to invest in companies like Vinamilk, the leading dairy producer in Vietnam, and one of the largest publicly traded companies; and Go Duc Thanh, a manufacturer of children’s toys.

Beyond babies, the year of the dragon promises to be a good one for investors in general because the optimism that accompanies luck in the Vietnamese zodiac  happens to coincide with economic conditions that point to a recovery after three years of sluggish returns on investment.  In other words, look for a booming Vietnamese stock market over the next few months.

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