Vietnam’s Investors Encouraged by Lower Inflation

This year’s surge in Vietnam’s stock market has coincided with eased inflation as more economists and analysts are telling investors to expect rising corporate profits later this year.  Positive signs for business also include a temporary freeze on electricity rates, improved credit markets, and foreign capital inflows.

Vietnam reported its cost of living increased o.16% in March, the lowest month-to-month rise in nearly two years.  The government aims to bring annual inflation down into single digits after a year in which Vietnam led Asia with a 22% increase.

Meanwhile, despite a sharp pullback in stock prices early this week, several securities companies remain bullish, predicting a further increase in the VN-Index that has already risen about 30% so far in 2012.  Last week the VN-Index gained nearly 4%, led by natural resource companies and financials, and foreign investors continued to be net buyers, especially of bank stocks.

More on Vietnam inflation early in 2012

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