Vietnam Stocks. Good Time To Buy?

[kyb789]

I keep reading about the Vietnam stock market and its great returns. Some recent reports expect it to grow 30% this year. But local reports speak of a sluggish economy and slow growth while they struggle with their own financial difficulties. Anyone invest? How would you invest from Thailand if you wanted to? I personally believe that the U.S. and western markets are saturated and the Asian markets are where we should be looking. Would love to hear other's opinions about Vietnam growth.

[el jefe]

Market Vectors Vietnam ETF.

NYSEARCA: VNM

[fletchsmile]

Not sure where you "keep reading" about "great returns". I suspect someone is basing that on 2013's start = up just under 20% and is one of the best performing equity markets globally in 2013. (Best of 17 countries I track personally, including Thailand)

To put into context:

- The SET outperformed the Ho Chi Minh index for each of the last 6 years, 2007-2012.

- Over 5 years VNINDEX is in negative territory.

- 2004/5/6/7 were very good years for Vietnam though.

There are ETFs you could use to invest, including mentioned above.

I bought some exposure by Lion Global Investors Vietnam Fund via Singapore about 5 years ago (SGD denominated). Out of over 43 investments still held 5 years later it ranks number 43! Down just over 40%. In addition to the market down around 25% in VND terms, there are also exchange rate losses as the VND currency has been thru troubled times. By comparison the Thai funds I have more than doubled in that time frame, plus have THB currency gains on top.

Looking forward, I see potential for Vietnam. As you say compared to western markets in particular. For a longer term investment I think it looks good, which is why I originally invested and why I didn't cut losses, plus its just a small speculative percentage of my portfolio.

For 2013, I expect VND to be much more stable. It's been stable around 20,850 vs USD for several months now. So that's one drag from previous years I no longer see as negative on.

Interest rates are also slowly coming down. You can get over 8% or so on fixed deposits. This could also be interesting if you think currency will be stable.

The banking sector had a tough 2012 and 2013 will also be a tough credit environment for banks and lending. The NPLs on bank's balance sheets as a sector are well documented as a risk. These will still be a drag on the economy, but there's reasonable growth forecasts for the economy.

For me, I'll be keeping the exposure, and am expecting a good year in 2013 relative to other equity markets. 2014 could be stronger still. Worth a small speculative part of an investment portfolio if you can tolerate volatile markets and have a longer term horizon. Higher risk/ higher reward. Another reason for me is several very good years in Thailand, where it's now my single largest country exposure, so I welcome the diversification.

Cheers

Fletch

Edited February 14, 2013 by fletchsmile

[kyb789]

Fletch, great input and thanks so much for the education to Newbee's like me.

[AyG]

One easy way to invest in Vietnam is with VinaCapital's Vietnam Opportunities Fund. It's a closed-end fund (investment trust) which trades on the London Stock Exchange.

Home page at http://www.vinacapital.com/index.php?l1=85&l2=92&l3=93&l4=108

Be aware, though, that it can be a very volatile. Over the last 12 months it's up 49%. The year before it was down 30%. Before that, up 41%, up 72%, down 76%. A real roller-coaster ride.

(Performance figures from http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=I1F61&univ=T.)

[qdinthailand]

Is high return your only criteria?

High return implies high risk. And never think that past performance is an indication of future performance.

That being said, you don't have to invest in a specific market if you want high return. You only need to swallow caution, be willing to risk your money chasing after high returns, and invest in specific stocks or segments in more easily accessible equities markets to achieve the same returns as found in the Vietnam market.

[Rancid]

Many markets are curently doing very well on low volume, dire economic news, money printing, ecomomic contraction, interest rate manipulation and high unemployment, hey why wouldn't they be going up? If you can pick the top then go for it, if not keep out of equities as there is another big hit coming, albeit it may take a while as the central bank fraudsters do their thing.

[davejones]

Many markets are curently doing very well on low volume, dire economic news, money printing, ecomomic contraction, interest rate manipulation and high unemployment, hey why wouldn't they be going up? If you can pick the top then go for it, if not keep out of equities as there is another big hit coming, albeit it may take a while as the central bank fraudsters do their thing.

What dire economic news? Asian economies are growing quite well. There are plenty of companies that are making shed loads of money, so there is every reason for their share prices to rise. I think you're mistaking what you read in the press for what's really happening in companies. These are boom times for many companies.

[davejones]

To the OP - it's not as easy making money from stocks as you seem to think it is. Just because you keep reading that stocks will go up 30% this year doesn't mean they will. It's never that easy.