UAE based investors are discovering the investment opportunities that the Vietnam capital markets offer. The Middle East Investment Summit (MEI Summit), which held on Nov.4-5 provided a forum for a number of senior local banking and investment companies to learn more about how the Vietnam stock market offers long-term advantages for investors, as the Government prepares a new round of reform initiatives designed to revitalise the development of its capital market.
Kevin Snowball, CEO of PXP Vietnam Asset Management (PXP) one of the participants in the two-day summit said the Socialist Republic of Vietnam has been one of the fastest growing economies in Asia, with Ho Chi Minh City, home to over seven million people, recognised as its commercial hub. Trade between the UAE and Vietnam exceeded $24 million in 2010.
“Vietnam is one of the very few markets offering significant potential for superior returns in times of deteriorating global macroeconomic conditions,” he said. “We would not be surprised to see the Vietnamese market double within three years, potentially trebling in five. It will be investors with this kind of long-term perspective who will realise the advantage.
“The Vietnam equity market is currently suffering from the uncertainty created by the likely level of non-performing loans within the banking sector. But PXP Vietnam is advising clients to look beyond the uncertainty and see the opportunity. The fact that the authorities have recognised the problems is a positive thing; it is a first step to their resolution and we anticipate progress to be made towards firm and decisive action during the current month-long meeting of the National Assembly, due to conclude on Nov.21.”
Snowball said that the MEI Summit brought together experts from the investment arena to discuss a wide range of opportunities from Harnessing the Power of Islamic Finance in the Aftermath of the Arab Spring to Magnetic Growth to Uncovering New Horizons of Opportunities in Non-Developed Markets.
He also adds that many global institutions such as HSBC have an eye firmly focussed on Asia’s equity frontiers and in a recently published report reinforce PXPs view that with reforms under way, coupled with the country’s young hardworking population and proximity to China, things bode well for the future.
“PXP’s flagship fund - PXP Vietnam Fund - has recorded year-to-date Net Asset Value growth of 25.4 per cent. This compares with just 11.5 per cent growth experienced by the benchmark Vietnam Index over the same period. PXP was Vietnam’s first pure equity-specialist investment manager.
“The immediate outlook for the Vietnamese economy may be a period of slower growth,” he said, “with GDP growth for 2012 expected to be a little over 5 per cent, somewhat lower than the 7 per cent per annum experienced on average over the previous decade, but a reasonable performance given the global macro environment. PXP Vietnam believes share valuations remain at the low end of the historic trading range and that the market retains significant upside potential in the medium to long term.
From Gulf Today