Tuesday, July 10, 2012

Stock Market in Vietnam is outperforming other Asian Stock Markets

The stock exchange of Vietnam is located in Ho Chi Minh City and was founded in 2000, the business district is growing up with office towers such as the Bitexco Financial Tower which is the highest tower in the city.

The last few years were quite disappointing for vietnam's stock exchange,  but 2012 is under the sign of the recovery and the exchange is one of the top Asian performers this year just behind the Philippines.

The vietnamese State Bank has cut interest rate with its expansionary policy this year leading to the stability of the local currency the "Dong" and growth of the domestic economy.

What happened in the last few years?
Since its launch in 2000, the exchange was in steady growth, in 2005 another exchange in Vietnam was born in The Hanoi Stock Exchange mostly trading small-cap and OTC markets, after that a massive bubble took place until 2007 resulting in a massive crash of the market in 2008, indeed it fell more than 66% from 922 points to 316.

Since that time, the index was averaging around 500 points and was doing poorly compare to other exchanges, it was ranked the 3rd worst performing in the world in 2011.

This year, Fund managers from vietnam think that the market could peak around 600 by the end of the year despite concerns about macroeconomics factors.
"There is a psychological barrier at 500 points to be overcome" said Kevin Snowball CEO of an asset management firm in Vietnam, and the market could become bullish again and reach the peak of 2007 within 2 to 5 years.

Investors in the Vietnamese exchange are mainly locals with 90% of the trades, but it starts to interest more foreign investors as Vietnam is seen as a major manufacturing hub as China's labor is becoming more expensive.


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