"I randomly taped Monday's "Hello Vietnam" English speaking daily 30 minute newscast. The major business story was the opening of a major German pharmaceutical plant that was to not just satisfy domestic demand for their product but also produce enough for export to established markets like China, Japan, and the United States.

"No surprises there in my mind. It was an economic story or stories that did catch my attention. The government announced that maternity leave was being extended by two months to a total of six months after birth, add an extra month for twins. The locals were professing their approval. The second was a new policy that in effect lowers prices of existing apartment inventories which apparently are currently out of reach for purchase by most Vietnamese. Both consumers and those holding vast supplies of unsold inventories were to benefit. Does this constitute a meaningful change in governance? Is the recent snap to attention in Vietnamese equities related in your opinion or just early year bargain hunters buying a cheap market?

"Tourism was also mentioned, with loads of Russians and Chinese making up what appears to be a booming industry.

"Lastly, when I watch news or video clippings from around the world I look at the people whether they be protesting or docile to see how prosperous they appear. Vietnamese people today have a bit more meat on them than they did 40 years ago.

David Fuller's view Thanks for your insights; a word-perfect email, and I loved the last paragraph.

I am a stale bull of Vietnam (weekly & daily), having recommended it to Mrs Fuller for her ISA a few years ago, so it is a miracle that she is still with me.

Vietnam's stock market has been a serial underperformer for several years, although a brisk rally also occurred at the beginning of 2012 and this latest move sprang from a higher reaction low. There had been a significant currency devaluation and related inflation problems, but VND has steadied against the USD since February 2011.

The Yield peaked near 5.75% at the beginning of 2012 and is a respectable 4.25% today. The PER hit its low near 7.2 at the same time but has risen sharply to 12.8 today.

Vietnam experienced some banking scandals, leading to arrests and the government has recently discussed "forming a debt-asset management company to resolve bad bank loans", according to this article from Bloomberg which I have just noticed.


Foreigners have been the main buyers and the trend has accelerated recently, indicating that it is overheating, albeit from a low level. The government has done some positive things, in terms of lowering inflation and interest rates, but this is a weight of cash move, as you will see from the BBG article. I regard Vietnam as a speculative play but watch out if we see another downward dynamic from a high, as occurred near 500 for the Index last year.


My personal portfolio: Silver futures long trade increased - Encouraged by the rallies in PMs, I increased my silver (weekly & daily) position today because it is currently lagging. I paid $30.765 for the March contract, including spread-bet dealing costs.


Please note - Eoin resumes his contribution to Comment of the Day on Friday.