Vietnam has made changes to help foreign investors enter the country’s economy, but rampant corruption and basic human rights violations may be keeping most from setting foot in the country. The country-related exchange traded fund (ETF) is faltering on the inauspicious news about the country’s currency.
The biggest driver in Vietnam’s economy is export growth, writes Joshua Ritchie for MintLife. The country benefits from having a young and ambitious population to add to the future growth of the country. Additionally, Vietnam is rich in natural beauty and offers a large tourism industry. Various tax incentives have also been implemented to lure producers and entrepreneurs to Vietnam.
The Legatum Prosperity Index found that the country restricts personal freedoms and companies that want to enter the country may have a hard time dealing with the autocratic government. The Transparency International’s Corruption Perceptions Index ranked Vietnam at 120 out of 180 countries on a list of the world’s most corrupt countries.
Still, the Communist Party is loosening state controls on the economy to help boost the standard of living and attract more foreign investors, reports Kathy Chu for USA Today.
Recent news that the Vietnamese dong may depreciate led the Market Vectors Vietnam ETF (NYSEArca: VNM) to trade a few points down, notes The ETF Professor for Benzinga. A Credit Suisse report maintains a bearish outlook on Vietnam. After this month’s losses, the VN Index is now valued at 9.6 times estimated earnings, which has made the Index the worst performer in the world for August, according to Bloomberg. [Vietnam ETF: Can It Survive Debt Downgrades?]
For more information on Vietnam, visit our Vietnam category.
Max Chen contributed to this article.