Wednesday, September 28, 2016

Vietnam economy continues to outperform


The Vietnamese economy is expected to remain an outperformer throughout Asia, delivering rapid rates of growth in gross domestic product. Manufacturing and exports continue to be the twin bright spots of the economy, reflecting Vietnam's continued competitiveness. However, upside risks to inflation and limited scope for fiscal and monetary easing weighs on the outlook in the near term.

The latest PMI survey shows that the manufacturing sector - the sector that attracts most FDI - continued to expand in August for the ninth straight month, even as some Asian countries and most Western economies have struggled to stay above the water line. Further, global headwinds notwithstanding, overseas demand for Vietnam's goods has been resilient. Similarly, Vietnam as an investment destination remains as attractive as ever.

Vietnam is going to be a long term winner. The demographics in Vietnam are positive and the country is rapidly urbanizing. The Vietnam Opportunity Fund is selling at a an almost 30% discount to NAV. You are basically buying a dollar worth of Vietnamese companies for $.70 cents. 

Would you rather buy into a growing country with decades of growth in front of it or the historically overvalued US market with $20 trillion in debt? I think the question answers it self. 

Latest report from the VOF.

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