Market Vectors Vietnam ETF (NYSEArca: VNM) has rallied 25% in just one month and government intervention to help boost the economy should bolster this performance in 2013.
“We are very encouraged to see that the government is very committed to stabilizing the economy, and that is what we continue to see going into 2013,” Trinh Nguyen, general director and chief investment officer at Manulife Asset Management (Vietnam) in Ho Chi Minh, said in a recent report. [Vietnam Readies First ETF]
For the new year, Vietnam is waving goodbye to inflation and a rise in foreign exchange reserves has helped buoy the local currency. The government is working on encouraging foreign investment by raising the cap on foreign ownership in local companies to more than 49%. It also will widen the daily trading band for share prices to 7% from 5%, beginning Tuesday, report Vu Trong Khanh, Daniel Inman and Mark Cranfield for The WSJ.
“There’s optimism that corporate earnings will be good this year as the government appears to be more determined to take action to boost the economy, especially with inflation cooling,” Le Thi Hai Duong of BIDV Securities said. [International ETFs That Help Diversify]
In 2012, Vietnam’s economy grew 5.03%, the slowest pace in 13 years. The Vietnamese economy is expected to grow about 5.5% this year, while the Central Bank is taking steps to quell inflationary pressure, reports Bloomberg News.
The VNindex was up 18% in 2012, and is keeping pace with Southeast Asian counterparts such as Thailand and the Philippines. [Vietnam ETF Slides on Banking Scandal]