As you may have read last week, the US Government announced that they will not impose tariffs on Vietnam. In today’s insight from Michael Kokalari, Chief Economist of VinaCapital, we highlight how this decision positively impacts the Vietnamese economy, market and currency. The Fourth Wave of Covid continues to be a challenge in Vietnam, especially in Ho Chi Minh City. Many experts believe the cases will peak in the next few weeks, though it is likely restrictions will be in place longer than that. The economy is being disrupted, but the secular trends absolutely remain in place and the corporate sector, including manufacturing, are working on solutions to keep their supply chains in place. We remain positive on the economy and the recent pullback in the market may be an attractive entry point for long term investors.
In today’s insight from VinaCapital’s Chief Economist, Michael Kokalari, we review drivers behind Vietnam’s resilient GDP growth in the first half of 2021 and how the Covid 4th wave will potentially impact the second half of the year. As you know, the VN Index returned 28% the first six months of the year, and has given back some of the gains over the last two weeks. Given the current Covid situation in Vietnam, we expect more market volatility in the near team, however our long term outlook for both the economy and the stock market remains positive. If you are a long term investor, the current market pullback may present an excellent opportunity to initiate or add to existing positions in Vietnam.
As you know, Vietnam is experiencing a fourth wave of Covid and cases have been increasing, especially in Ho Chi Minh City. In this piece from Michael Kokalari, VinaCapital’s Chief Economist, we update you on new restrictions that will be put in place in Ho Chi Min City and share why we remain optimistic about the near term and long term economic prospects for Vietnam, even with the new restrictions. Additionally, we continue to be positive on the stock market and view any pullback based on this fourth wave as a buying opportunity.
Foreign Ownership Limits (FOL) for Vietnamese equities continues to be a source of discussion with our existing clients and with investors who are making their first investment in Vietnam. The FOL rules in Vietnam have evolved since the stock market was launched 20 years ago, and while there have been updates to the policy in 2015 and more recently in January of 2021, questions remain. In today’s piece, we seek to explain the current FOL rules, implications and share insights on how FOL rules may evolve in the next few years.