Vietnam's Economic Success: A Testament to Private Sector Growth and Investment

Vietnam's Economic Transformation

Over the last three decades, Vietnam has embraced the private sector, launched a stock market, and benefited from significant inward investment by large multinational corporations. This strategic approach has resulted in an impressive annual economic growth rate of 7-8 per cent.

Recognition by International Media

The UK’s Daily Mail has hailed Vietnam as one of the world’s economic success stories. According to the publication, Vietnam's economic policies and substantial foreign investments have made it an exciting investment opportunity for fund managers and British investors. As a result, many Asian investment funds now include Vietnamese companies in their portfolios. Additionally, three specialist high-risk trusts invest exclusively in Vietnamese companies, both listed and unlisted, with their shares traded on the London Stock Exchange.

Impact of COVID-19 and Economic Resilience

Like the rest of the world, Vietnam's economy was hampered by the COVID-19 pandemic and subsequent lockdowns. However, as restrictions have been lifted, the economy is back on track. This year’s growth is projected to be stable at 1.5 per cent, but forecasts indicate a return to pre-pandemic high growth rates next year.

Stock Market Performance

Despite the challenging economic conditions, Vietnam's stock market has risen by more than 30 per cent this year, showcasing the best performance across Asia. Experts predict a similar trend next year as corporate profits recover significantly. The country’s growing stock market is also expected to benefit from the reclassification from a "frontier" market to a full-fledged emerging market. If this reclassification occurs, it will attract large international investors, driving up prices further.

Investor Confidence

Investor Waverton, particularly fund manager Brook Tellwright, highlights Vietnam as one of the most popular stock markets in Southeast Asia, alongside Indonesia and the Philippines. Tellwright expects a strong economic recovery next year, which should improve corporate profits and advance the stock market. Emily Fletcher, co-manager of the investment trust Black Rock Frontiers, concurs, noting that Vietnam's "explosive" economic growth leading up to the pandemic has created significant opportunities for Vietnamese companies. She anticipates continued substantial economic acceleration as the country lifts COVID-19 restrictions.

Manufacturing Sector Opportunities

The ongoing US-China trade war has prompted many companies to seek alternative manufacturing locations. Vietnam has emerged as a suitable solution due to its advantageous geographic position and skilled workforce. The country’s resilience during the COVID-19 pandemic further supports its attractiveness as an outsourcing destination for manufacturing.

Reference: UK Daily Mail