Investment trust insider on Vietnam Enterprise – James Carthew: Lifting the VEIL on Vietnam’s conundrum
One of the more peculiar moves last year was the selloff of the Vietnamese market from March 2022 onwards. It was a clear demonstration of the separation of macroeconomics from stock market performance.
With GDP growth of 7.8% in 2022, on the face of it Vietnam is firing on all cylinders; and that outperformance of the wider global economy seems likely to continue for some time yet. That economic growth is feeding through into decent earnings growth for Vietnamese businesses, but despite offering growth in a world where recessionary fears have grown, the market trades on a marked discount to peers. This seems counterintuitive.
One of the causes of the weak market was a liquidity squeeze, as the government clamped down on property speculation. Vietnam has experienced property bubbles in the past and the government is wary of that happening again.
I recently talked to Thao Ngo, one of the fund managers of Vietnam Enterprise (VEIL). She remains enthusiastic about… read more here