Vietnam will be one of the best positioned markets in Asia-Pacific for the first half of 2024, along with India and Japan, CNBC cited analysts as saying.
Like the other two countries, Vietnam has benefited from the “China plus one” strategy with companies diversifying investments to help reduce their reliance on China.
The Southeast Asian country is expected to grow 6-6.5% in 2024 on the back of robust imports and exports, as well as stronger manufacturing activity.
Inbound foreign direct investment (FDI) to Vietnam reached $36.6 billion last year, up 32% year-on-year, according to official data.
Greater China, which refers to mainland China, Taiwan and Hong Kong, accounts for half of the new FDI inflows into Vietnam in 2023, reflecting the attractiveness of the Southeast Asian nation as a rising manufacturing hub, said Yun Liu, ASEAN economist at HSBC.
Now is the right time for investors to enter Vietnam stocks, suggested Andy Ho, chief investment officer of VinaCapital – one of the largest investment management firms in the country.
“Over the next six to 12 months, Vietnam will be a good market as valuations are inexpensive at about 11 to 12 times earnings for 2023. That’s about a 20% to 25% discount to the regional average,” Ho told CNBC.
“The average daily trading volume in Vietnam has gone from $500 million a year ago to about $1 billion daily today,” he said, elaborating that investment opportunities can be found in consumption, healthcare and real estate sectors.
When asked about Vietnam’s possible entry into MSCI’s list of emerging market economies, Tyler Nguyen, vice president and head of institutional equity sales at Maybank Securities Vietnam said, the frontier economy is still “at a very nascent stage” but “we might see good news in 2025.”