Last year, the stock market of Vietnam outshined the counterparts of various other emerging economies and a similar trend is expected through the current year. When various economic performance indicators of Thailand and Indonesia were deteriorating, Vietnam’s were shining brighter. There are expectations for the Vietnamese market to outperform its neighboring countries’ in the current year. More than a third of the 700 companies listed in the stock exchange have their stocks traded at a price to earnings ratio between 6 and 7, while others feature a dividend yield of over 9%. Some companies even have a cash position that is almost as high as the market capitalization. Several factors have pointed towards a healthier economy. The Vietnam Ho Chi Minh Stock Index (VN-Index) turned out to be one of Southeast Asia’s top performers last year. The trade deficit of the country showed continuous improvements and a strong inflow of Foreign Direct Investment (FDI) greatly favored the economy. Strong growth was seen in the manufacturing sector as foreign direct investment reached over $20 Billion last year and more than 70 percent of it was invested into the manufacturing sector. Reasonable labor costs coupled with a stabilizing local currency are expected to further increase the foreign investment. The stable growth rate, respectable levels of FDI and low inflation rates have helped the manufacturing sector developed greatly when compared to other economies such as Indonesia and India, which have a slower growth rate due to the high rates of inflation. The economy of Vietnam is expected to grow at a rate of over 6.2% in the current year as it registered a growth of around 5.8% last year. The inflation rates are also expected to remain below 5%. Various economists have claimed this to be a healthy growth rate for an economy like that of Vietnam. One of the major factors that have been affecting growth adversely over the years is the presence of nonperforming loans and bad debts in the banking system. In order to recover these debts, the government employed the services of the state-owned Vietnam Asset Management Company, which recovered large amounts of debts from various defaulters. The government is expected to give more powers to the Asset Management Company in order to clean up the banking system of nonperforming loans. The bad debt ratio is expected to fall down to 3% by the end of this year. With the economy on the rise for past few years and the trend expected to continue into future, Vietnam is a business opportunity to get high returns on your investment. Buy VND is an online currency provider that offers delivery of the Vietnamese Dong in various countries across the world.

• published: 31 Jan 2015
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