Good morning Vietnam!
Despite a negative start to the year, interest in Vietnam is starting to wake up. Growth is strong, incomes are rising and there is a trend to urbanisation, meaning that this frontier market is one to watch.
For some time now, the government has been talking about selling off a significant stake in state companies, and this seems to have found a new momentum. In 2017, the government announced it was looking at divesting from 406 state-owned enterprises, with 10 likely to occur in the next year. It’s expected that they will sell 30% or more of shares overall in a boost to get their local equity market on the map. The additional flows this would create can only help their macro picture, and this is especially important when Vietnam’s aim is to get upgraded from frontier to emerging market status.
The challenge right now, however, is liquidity. It’s a small market and most of the brokers with access to it are local. However, if the government genuinely divests enough shares to create compelling and sizeable investment opportunities, and the challenges accessing the market can be overcome, we feel this will be an interesting story to follow.
Funmi Akinluyi, APQ Global IAC Member