Ignoring the Emergence of Risky Vietnam

The Wall Street Journal, which purports to inform investors about the global markets, continues to ignore the world’s 13th most populous country.  The newspaper reports today that “the riskiest stocks in the riskiest markets” are among the biggest winners in Asia this year, but the report pretends one of the world’s best performing markets doesn’t exist: Vietnam.

The Journal highlights Thailand, Philippines, and Malaysia, whose benchmark stock indices are up 22%, 24%, and minus 1%, respectively.  Those markets have reported small cap gains of 36%, 28%, and 7%, while the small cap increase in India is 54%.

In those markets, investors are said to be optimistic more gains will come as strong company fundamentals continue to attract capital.  The story also highlights political and economic developments in those countries.

Typical of the Journal, however, the newspaper doesn’t inform its readers that the Vietnam has two centers for trading public equities, one in Hanoi and one in Ho Chi Minh City (Saigon).  The benchmark VN Index, based on a sample of stocks in the Saigon market, as of Sept. 23, has increased 21% so far in 2014.

Investors who pay attention to Vietnam are aware of stabilizing economic and political developments that are likely to portend further gains, especially in the long run.

From the perspective of New York City, Vietnam may be a relatively high-risk investment — as is a bet on small cap public equities in Malaysia, Philippines, Thailand, India, and Indonesia.  But there’s a difference between a risky investment opportunity and a nonexistent one.


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