Vietnam Stock Market Leads the World

Investors from around the world are betting 2013 will be a break-out year for Vietnam’s economy.  Foreign capital largely accounts for the VN Index surging 17% so far this year — and 28% since December 1.

Vietnam’s 17% year-to-date growth dwarfs every stock index in the world except Argentina (also up 17%).  Vietnam not only leads other bourses in Asia; it’s growth YTD is 10 percentage points higher than every country in the world except Switzerland (up 10% YTD), Portugal (11%) and Italy (10%).

Why is Vietnam the hottest investment destination at the moment?  Partly because the country has stabilized after four rough years punctuated by a horrible 2012 in which banking crises and corruption scandals drove away investors, both domestic and international; and partly because Vietnam remains the world’s most attractive frontier market.

Despite the rapid rise in stock prices, Vietnam’s stock markets in Hanoi and Ho Chi Minh City appear to have plenty of room to grow.  The VN Index closed at 484 today, a big increase so far in January, but it remains at a level representing just a fraction of its all-time high of 1174 six years ago.  Moreover, even after the stock run-up, Vietnam’s overall P/E ratio is relatively low — just over 13, equal to China and Singapore and below Japan (28), Taiwan (23), India (17), South Korea (16), Thailand (18), and Malaysia (14).

There are easy ways to invest in Vietnam.  This blog will post some of them later this week.

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