Frontier and emerging markets (Vietnam)

Dylan Waller

Nomadic Equity

Thematic (Sector/Industry)

Pakistan’s textile industry has a somewhat gloomy outlook, while the industry in other countries, particularly Vietnam, appears to be positioned to benefit at the expense of Pakistan.  Despite the country’s dependency on textile exports, Pakistan has still been a high growth country, with one of the best performing stock markets in Asia.  Investment in Pakistan certainly has its merits, but the textile industry in general should be avoided. Potential opportunity lies in the non value added…

Pakistan’s textile industry has a somewhat gloomy outlook, while the industry in other countries, particularly Vietnam, appears to be positioned to benefit at the expense of Pakistan.  Despite the country’s dependency on textile exports, Pakistan has still been a high growth country, with one of the best performing stock markets in Asia.  Investment in Pakistan certainly has its merits, but the textile industry in general should be avoided. Potential opportunity lies in the non value added…

Avoid Pakistan's Textile Industry: Look to Vietnam Instead

Vietnam's economy has a flurry of advantages to offer to investors, which perhaps makes it one of the most ideal locations for investment in Asia:<ul><li>Vietnam's stock market trades at a 30-40% discount to its peers in Asia.  Funds that utilize value investing have been very successful in Vietnam.</li><li>Annual GDP growth was most recently 7%, ahead of the 2015 economic plan, which planned for 6.2% YoY growth.  <a href="http://www.smartkarma.com/insights/vietnam-going-once-going-twice" target="_blank" data-smartkarma-citation="insights:146">Vietnam: going once, going twice...</a> </li><li>Retail sales growth has averaged at 21.8% between 2002 and 2015, and YoY retail sales growth in October was <a href="http://www.tradingeconomics.com/vietnam/retail-sales-yoy" target="_blank">13%</a>.</li><li>Inflation fell to 0% in <a href="http://www.tradingeconomics.com/vietnam/inflation-cpi" target="_blank">October of 2015</a>.</li><li>Growth in Vietnam is being catalyzed by its high export growth, and its relative advantage as a site for low cost manufacturing.  Due to Vietnam’s comparatively lower wages, exports in Vietnam have <a href="http://www.tradingeconomics.com/vietnam/exports" target="_blank">doubled in the past five years</a>.</li><li> Vietnam also took a very important step in September this year by removing the foreign ownership limitation in certain industries, a step that will promote a larger flow of FDI into the country as this new law is implemented by companies.  Foreigners have been willing to pay a premium of 20% to invest in companies like Vinamilk, that are fully held by foreign investors.</li><li> Franklin Templeton has recently announced its plan to invest $3 billion into Vietnam, a large accomplishment for a country’s stock market that is substantially smaller than its peers in Asia.</li><li> China’s devaluation of its currency in August created a flurry of currency devaluations throughout Asia, yet the Vietnamese dong has held its ground relatively well, with a<a href="http://www.bloomberg.com/quote/USDVND:CUR" target="_blank"> YTD depreciation of 5.14%.</a></li><li>Demographics are favorable, as over 50% of the population is under 30 years old.</li></ul>Locally managed investment funds offer stronger advantages for individual investors, as well as institutional investors utilizing a fund of fund approach.  Vietnam Holding Ltd. and VinaCapital Vietnam Opportunity Fund, both listed on the London Stock Exchange, are two funds for individual and institutional investors to strongly consider.

Vietnam's economy has a flurry of advantages to offer to investors, which perhaps makes it one of the most ideal locations for investment in Asia:Vietnam's stock market trades at a 30-40% discount to its peers in Asia.  Funds that utilize value investing have been very successful in Vietnam.Annual GDP growth was most recently 7%, ahead of the 2015 economic plan, which planned for 6.2% YoY growth.  Vietnam: going once, going twice... Retail sales growth has averaged at 21.8% between 2002 and 2015, and YoY retail sales growth in October was 13%.Inflation fell to 0% in October of 2015.Growth in Vietnam is being catalyzed by its high export growth, and its relative advantage as a site for low cost manufacturing.  Due to Vietnam’s comparatively lower wages, exports in Vietnam have doubled in the past five years. Vietnam also took a very important step in September this year by removing the foreign ownership limitation in certain industries, a step that will promote a larger flow of FDI into the country as this new law is implemented by companies.  Foreigners have been willing to pay a premium of 20% to invest in companies like Vinamilk, that are fully held by foreign investors. Franklin Templeton has recently announced its plan to invest $3 billion into Vietnam, a large accomplishment for a country’s stock market that is substantially smaller than its peers in Asia. China’s devaluation of its currency in August created a flurry of currency devaluations throughout Asia, yet the Vietnamese dong has held its ground relatively well, with a YTD depreciation of 5.14%.Demographics are favorable, as over 50% of the population is under 30 years old.Locally managed investment funds offer stronger advantages for individual investors, as well as institutional investors utilizing a fund of fund approach.  Vietnam Holding Ltd. and VinaCapital Vietnam Opportunity Fund, both listed on the London Stock Exchange, are two funds for individual and institutional investors to strongly consider.

Vietnam Fund of Fund Approach: VinaCapital Vietnam Opportunity Fund and Vietnam Holding Ltd.

Vietnam

Hang Xanh Motors Service JSC retails automobiles.

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Hang Xanh Motors Service Jsc (HAX VN)

Avoid Pakistan's Textile Industry: Look to Vietnam Instead

Pakistan’s textile industry has a somewhat gloomy outlook, while the industry in other countries, particularly Vietnam, appears to be positioned to...

Nomadic Equity

Vietnam Fund of Fund Approach: VinaCapital Vietnam Opportunity Fund and Vietnam Holding Ltd.

Vietnam's economy has a flurry of advantages to offer to investors, which perhaps makes it one of the most ideal locations for investment in...

Nomadic Equity

Price Gauge

52-week Range

Market Cap (USDm)

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