Vietnam, one of Asia’s best-performing economies, outpaced China with 2.9 percent economic growth in 2020. China’s economy grew by 2.3 percent last year, according to official figures released by the Communist Party of China.
UBS Global Wealth Management regional chief investment officer Kelvin Tay told CNBC’s “Squawk Box Asia” on Wednesday that Vietnam’s economic outlook is positive and the firm is “happy to invest in the market,” U.S. financial media outlet CNBC reported. Kelvin Tay said on CNBC’s “Squawk Box Asia” Wednesday that Vietnam’s economic outlook is positive and the company is “happy to invest in the market.
According to Kelvin Tay, Vietnam has “tremendous potential” and its growth is “outpacing” that of other emerging market countries.
According to Tay, Vietnam’s stock market has also seen strong growth and is expected to surpass the Philippines in market capitalization “sometime in the middle of this year.
Vietnam’s stock market started 2021 strongly, but then fell sharply as investor sentiment was dampened by fears of a renewed outbreak of a Communist virus.
As of Tuesday’s close (Feb. 8), the Vietnamese stock market has fallen 1.87 percent since the start of 2021. However, this appears to be about to change, with the Vietnamese index up nearly 3 percent as of Wednesday morning (Feb. 9) local Time.
In recent years, Vietnam has been seen as another manufacturing hub for companies looking to move production out of China to avoid getting caught in the crossfire of U.S.-China tensions.
However, Tay also acknowledged that risks remain for those looking to invest in Vietnam.
First, liquidity remains a challenge; second, Vietnamese authorities are using currency controls as a monetary policy option.
Tay said, “If the economy does not perform well, they may devalue the VND significantly to stimulate the economy.”
Late last year, the U.S. Treasury Department listed Vietnam as an exchange rate manipulator.
Tay believes that by investing in an emerging market, one takes such risks, but with the right timing, Vietnam has been one of the best performing markets in the past three to five years.
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