The VanEck Vectors Vietnam ETF (NYSEArca: VNM) is up more than 7% year-to-date and some market observers see strength in the fast-growing Southeast Asian economy.
Vietnam has enjoyed robust growth as investments and exports help support the economy. The country has brought in over 2,000 greenfield FDI projects between 2003 and 2014 as companies capitalized on the abundant and relatively cheap labor.
The Vietnamese government has also implemented reforms to attract investments. For instance, the country has cut corporate tax rate to 22% from 25%.
“Fitch Ratings has revised the Outlook on Vietnam’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to Positive from Stable and affirmed the ratings at ‘BB-‘. The ratings on Vietnam’s senior unsecured foreign- and local-currency bonds are also affirmed at ‘BB-‘,” said Fitch in a note out Thursday.
Vietnam is lifting foreign ownership limits because it is angling for a coveted but rare promotion to emerging markets status from the frontier markets classification from index provider MSCI.