Vietnam is poised to become Asia’s fastest growing economy as the VN Index rebounds from a record 66% drop last year.  The 161 companies on the exchange are worth $16 billion, less than the market value of Yahoo.  Vietnam’s 9-year-old stock market is on the move toward significantly increasing its capitalization.  The Vietnamese Government has acknowledged that the development of Vietnam’s stock market is an important component to raising capital and elevating the emerging market-based economy.  They understand that structural  improvements are needed to make the market more and more attractive to investors.  Overseas fund managers are starting to take notice.  The VN Index rallied 60% in the second quarter, the best performer in Asia and second in the world to Ukraine’s PFTS Index, which jumped 78% according to Bloomberg.  The VN Index is up 42% this year, the world’s 9^th-best performer.

Investing in Vietnam can be very risky and many would say it’s premature. Vietnam is very vulnerable to the global economy and any drop in exports.  There may be an excess of exuberance and the market’s recent gains may not last.

Nevertheless, Vietnam is a dynamic, emerging market that should no longer be ignored. So, I’ll be doing the research on how investors can play the developing Vietnamese market.  Watch this space for more on Vietnam.

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