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Deep Dive into emerging market equities

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Deep Dive into emerging market equities: Good time to invest in the sector during pandemic – or not?

Investment Week, 15 October 2020
Matthew Read is a senior analyst at QuotedData

Vietnam is punching way above its weight. And it may well surge ahead with renewed confidence in the post-Covid world.

Economically, it is small compared to many Asia neighbours. You could fit more than 50 Vietnamese economies inside a China-sized GDP, for example. Yet it would be a mistake to dismiss Vietnam as just another niche ‘frontier’ opportunity.

According to the International Monetary Fund, Vietnam will have the fastest-growing economy in Asia this year and among the top ten countries globally. The per capita GDP level starts from a fairly low base at under $9,000 (16% of that of the UK). Yet when China was at an equivalent stage, its economy doubled in size in just six years. Vietnam sits at a significant inflection point.

Figure 1 highlights this low starting point with the huge potential for growth while figure 2 shows how it is building pace relative to other more developed economies such as the UK and the US.

Vietnam is moving out of a second wave of Covid infections. In its first wave, Vietnam proudly held a record for zero deaths. Numbers of deaths following the second wave are still happily very low, well under 50, especially for a population of nearly one hundred million.

The country has been able to employ strict control measures and strong messaging on the back of its centralised societal structure and culture.

Read more here

 

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