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Insights With Topics: Vietnam


2024 Market Outlook - Part 3:  Emerging ASEAN equities – enjoying faster growth with lower inflation than other EM markets in 2024, and the standout growth story in Vietnam
Emerging ASEAN is one of the most compelling investment stories of 2024 – offering what is now an uncommon combination of growth and undervaluation. Having come to the end of its rate hiking cycle, with economic growth very much intact, Emerging ASEAN now benefits from tailwinds from a cyclical transition to stimulus amidst solid structural growth fundamentals. Vietnam in particular moved early and decisively in 2023 towards stimulus and its market is now favourably positioned with a PE to 2-year earnings CAGR ratio of only 0.36. In this article our Senior Advisor Say Boon Lim and Portfolio Manager Alex Chu discuss more about the fundamental growth drivers for this under-covered region, and how the end of the US rate hike cycle and the current valuation offer attractive opportunities for global and emerging markets allocators looking for uncorrelated alpha.
Dec 18, 2023
Emerging ASEAN is one of the most compelling investment stories of 2024 – offering what is now an uncommon combination of growth and undervaluation. Having come to the end of its rate hiking cycle, with economic growth very much intact, Emerging ASEAN now benefits from tailwinds from a cyclical transition to stimulus amidst solid structural growth fundamentals. Vietnam in particular moved early and decisively in 2023 towards stimulus and its market is now favourably positioned with a PE to 2-year earnings CAGR ratio of only 0.36. In this article our Senior Advisor Say Boon Lim and Portfolio Manager Alex Chu discuss more about the fundamental growth drivers for this under-covered region, and how the end of the US rate hike cycle and the current valuation offer attractive opportunities for global and emerging markets allocators looking for uncorrelated alpha.
Dec 18, 2023

Emerging ASEAN – Fast Track To 2030
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023
While many other economies have bounced back to trend growth, the latest IMF forecast shows that collectively the Emerging ASEAN-5 will likely have the strongest growth outlook among the major market/regional groupings. The IMF forecasts suggest that Emerging ASEAN-5 will likely grow its collective nominal GDP by 56% between 2022 and 2028, and will grow its nominal GDP from 72% of Japan’s GDP in 2022 to 92% by 2028. Their expected gain will be way ahead of those estimated for the Developed Market economies of the US, Euro Area and Japan. In this article, our Senior Advisor Say Boon Lim discusses the growth trajectory and drivers for opportunities in ASEAN, and why ASEAN is well placed to gain alpha while US is entering its final phase of the rate hike cycle.
Nov 20, 2023

2022 Market Outlook (Part 2) - Repositioning for Global Shifts
In the US the “triple peaks” in economic growth, earnings growth and policy stimulus will likely result in much lower returns for US equities in 2022. The persistently high inflation – which will likely run hotter in the US than Europe and Japan – is already causing greater volatility as US equities are put on tenterhooks over the timing and magnitude of rate hikes. Meanwhile US Dollar could weaken on inflation rather than strengthen on higher Treasury yields. On the other hand, Emerging Markets, usually do better during periods of Dollar weakness but this time we could see a new twist - this favours China, supported by easier financial conditions. On top of all these, how is the Omicron Virus going to impact the global markets and what are the implications for global asset allocations in 2022? Why ASEAN would be a good diversification within Emerging Markets? Further to Part 1 of our 2022 outlook piece earlier, in this Part 2 sequel our Senior Advisor Say Boon Lim laid out the scenarios and discussed how we can reposition for the global shifts accordingly to address the transition to tightening and pivot from US equities.
Dec 16, 2021
In the US the “triple peaks” in economic growth, earnings growth and policy stimulus will likely result in much lower returns for US equities in 2022. The persistently high inflation – which will likely run hotter in the US than Europe and Japan – is already causing greater volatility as US equities are put on tenterhooks over the timing and magnitude of rate hikes. Meanwhile US Dollar could weaken on inflation rather than strengthen on higher Treasury yields. On the other hand, Emerging Markets, usually do better during periods of Dollar weakness but this time we could see a new twist - this favours China, supported by easier financial conditions. On top of all these, how is the Omicron Virus going to impact the global markets and what are the implications for global asset allocations in 2022? Why ASEAN would be a good diversification within Emerging Markets? Further to Part 1 of our 2022 outlook piece earlier, in this Part 2 sequel our Senior Advisor Say Boon Lim laid out the scenarios and discussed how we can reposition for the global shifts accordingly to address the transition to tightening and pivot from US equities.
Dec 16, 2021

2022 Market outlook (Part 1) – Reconfiguring for opportunities in China and Asia in the new normal
After the smooth sail in 2020, 2021 has been a challenging year for investors with heightened volatility across global markets. Asia Pacific ex-Japan equities, Emerging Asia and in particular China had a good start until mid-February, but then returned all the gains and stayed largely flat on increasing regulatory headwinds in China, extended COVID-lockdowns in southeast Asia, threats of power crunch and credit defaults among Chinese property developers. On the contrary, benchmarks like S&P500, Nasdaq and Euro Stoxx 50 all reached new highs during the year, and Nikkei 225 hit its highest point in three decades. Meanwhile, the divergence in the fixed income markets went the other way, as global fixed income market suffered a mid-single-digit percentage loss in return, while China sovereign bonds bucked the trend with a high-single-digit percentage gain. Where do we go from here? Is the Omicron virus going to reset the path to 2020? And how do we decipher impacts of the Fed tapering, inflation and interest rate expectations, and economic growth and policy trends in China? In this article, our Partner & Co-CIO David Lai assesses the world economics and markets current standings, focusing on China and Asia, and discusses how to reconfigure for new opportunities that arise into 2022 as a year of the new normal.
Dec 8, 2021
After the smooth sail in 2020, 2021 has been a challenging year for investors with heightened volatility across global markets. Asia Pacific ex-Japan equities, Emerging Asia and in particular China had a good start until mid-February, but then returned all the gains and stayed largely flat on increasing regulatory headwinds in China, extended COVID-lockdowns in southeast Asia, threats of power crunch and credit defaults among Chinese property developers. On the contrary, benchmarks like S&P500, Nasdaq and Euro Stoxx 50 all reached new highs during the year, and Nikkei 225 hit its highest point in three decades. Meanwhile, the divergence in the fixed income markets went the other way, as global fixed income market suffered a mid-single-digit percentage loss in return, while China sovereign bonds bucked the trend with a high-single-digit percentage gain. Where do we go from here? Is the Omicron virus going to reset the path to 2020? And how do we decipher impacts of the Fed tapering, inflation and interest rate expectations, and economic growth and policy trends in China? In this article, our Partner & Co-CIO David Lai assesses the world economics and markets current standings, focusing on China and Asia, and discusses how to reconfigure for new opportunities that arise into 2022 as a year of the new normal.
Dec 8, 2021

Pressing on from the unprecedented 2020: Outlook 2021 (Part 3 – ASEAN)
Outperformer from first news of successful vaccines. Emerging ASEAN has been one of the best performers among major global equity indices since the start of November. And that was likely due to the region’s high economic leverage to normalisation after the distribution of COVID-19 vaccines and its high trend GDP growth rates relative to other Emerging Market economies.
Dec 24, 2020
Outperformer from first news of successful vaccines. Emerging ASEAN has been one of the best performers among major global equity indices since the start of November. And that was likely due to the region’s high economic leverage to normalisation after the distribution of COVID-19 vaccines and its high trend GDP growth rates relative to other Emerging Market economies.
Dec 24, 2020

RCEP: implications of the world’s biggest trade pact
A major global trading and geopolitical event happened last week, attracting relatively little commentary from a media more preoccupied with US politics and the pandemic.
Nov 24, 2020
A major global trading and geopolitical event happened last week, attracting relatively little commentary from a media more preoccupied with US politics and the pandemic.
Nov 24, 2020

ASEAN: The China Plus One Solution
Given the trade tensions and looming risks of de-globalisation, it is likely that China will embark on a different growth path in the aftermath of COVID, and increasingly rely on domestic demand to drive growth. This structural shift holds significant implications for EM Asia. In fact, ASEAN replaced the European Union as China’s biggest trading partner in 1Q20. And as a result of the increased tension and US protectionist measures targeting China, and pressure for MNCs to choose which one they side with under the pretext of protection against production disruptions in China, ASEAN and notably Vietnam are clear winners. But a more nuanced picture is closer to the truth. That is, the shifts in supply chains are more likely to be gradual than dramatic.
May 18, 2020
Given the trade tensions and looming risks of de-globalisation, it is likely that China will embark on a different growth path in the aftermath of COVID, and increasingly rely on domestic demand to drive growth. This structural shift holds significant implications for EM Asia. In fact, ASEAN replaced the European Union as China’s biggest trading partner in 1Q20. And as a result of the increased tension and US protectionist measures targeting China, and pressure for MNCs to choose which one they side with under the pretext of protection against production disruptions in China, ASEAN and notably Vietnam are clear winners. But a more nuanced picture is closer to the truth. That is, the shifts in supply chains are more likely to be gradual than dramatic.
May 18, 2020

Postcard from Vietnam: Updates on market, macro and various with reopening underway
Vietnam government has started a gradual and orderly reopening since April 23rd, though the macro data was still weak as expected due to the lockdown around the world. After initially keeping the goal for 5% GDP growth this year the government revised growth target last week to a two-scenario range of 4.4%-5.2% if major trading partners can control the outbreak by end of Q3 and 3.6%-4.4% if by Q4. How are things doing in Vietnam at the moment? Is it the time to position for recovery? Here is a quick update on the various.
May 18, 2020
Vietnam government has started a gradual and orderly reopening since April 23rd, though the macro data was still weak as expected due to the lockdown around the world. After initially keeping the goal for 5% GDP growth this year the government revised growth target last week to a two-scenario range of 4.4%-5.2% if major trading partners can control the outbreak by end of Q3 and 3.6%-4.4% if by Q4. How are things doing in Vietnam at the moment? Is it the time to position for recovery? Here is a quick update on the various.
May 18, 2020

Consumption story of Vietnam
Market has been focusing on the export side of Vietnam and how it will benefit from the trade war in the past few months. Of course, that is happening and more foreign companies from garments, furniture, packaging to electronics are setting up their factories in Ho Chi Minh, Honai, Bac Ninh, Thai Nguyen, etc. We, however, think it is worthwhile to consider another side of the growth story here: domestic consumption. The continuing economic growth, rising of middle class, and increasing urbanization will all help consumption to grow significantly in Vietnam ahead.
Aug 26, 2019
Market has been focusing on the export side of Vietnam and how it will benefit from the trade war in the past few months. Of course, that is happening and more foreign companies from garments, furniture, packaging to electronics are setting up their factories in Ho Chi Minh, Honai, Bac Ninh, Thai Nguyen, etc. We, however, think it is worthwhile to consider another side of the growth story here: domestic consumption. The continuing economic growth, rising of middle class, and increasing urbanization will all help consumption to grow significantly in Vietnam ahead.
Aug 26, 2019

Is Vietnam the next target in the trade war?
Vietnam is seen as the country benefited from the trade war between China and the US. Samsung is assembling half of its mobile phone in Vietnam and Apple is also beginning to start the production in the nation, so it is not surprising if your next iPhone will be made in Vietnam. Investors are enthusiastic about the bright prospects of Vietnam as major upcoming world factory, but Trump’s recent critics lead to a concern if this Southeast Asian country may become the next victim of trade war. We will elaborate further about the trade situation of Vietnam at the moment, the outlook in near future, and the market reaction in this article.
Jul 31, 2019
Vietnam is seen as the country benefited from the trade war between China and the US. Samsung is assembling half of its mobile phone in Vietnam and Apple is also beginning to start the production in the nation, so it is not surprising if your next iPhone will be made in Vietnam. Investors are enthusiastic about the bright prospects of Vietnam as major upcoming world factory, but Trump’s recent critics lead to a concern if this Southeast Asian country may become the next victim of trade war. We will elaborate further about the trade situation of Vietnam at the moment, the outlook in near future, and the market reaction in this article.
Jul 31, 2019

A better way to access the up and coming “Superstar” of Asia: Vietnam
Vietnam is increasingly spoken about as one of the biggest beneficiaries of the trade war and as a market to watch going forward. However, the tools to access Vietnam remain limited. On July 18 (subject to final approvals) we will list the MSCI Vietnam strategy to make it easier for investors to access this dynamic and fast growing market.
Jul 4, 2019
Vietnam is increasingly spoken about as one of the biggest beneficiaries of the trade war and as a market to watch going forward. However, the tools to access Vietnam remain limited. On July 18 (subject to final approvals) we will list the MSCI Vietnam strategy to make it easier for investors to access this dynamic and fast growing market.
Jul 4, 2019