Vietnam is not currently included in the major emerging markets indices but that status quo is set to change moving forward.
In fact, Shasha Li Mafli – the senior fund manager of Eric Sturdza Investments recommends investing in Vietnam over China, India, Malaysia, and other emerging markets as it is turning up as the “next dragon in Asia”.
Mafli sees now as a suitable time to park some capital in the South Asian country as it’s labour market, economic growth, and the government policy is currently in the “sweet spot”.
Additionally, stocks in Vietnam are quite inexpensive to own at writing as well, she added.
Vietnam will more than double its GDP per capita
Shasha Li Mafli likened Vietnam’s current economy to the economy of China some 15 years ago as she spoke with CNBC on Monday.
Continued strength in manufacturing, infrastructure development, and foreign direct investment flows together with a young population and a growing middle-income class will push the country’s GDP per capita from about $4,000 today to roughly $10,000 in the next few years, she noted.
Vietnam grew its economy by a whopping 6.42% in the first half of this year – a sharp increase versus 3.84% in the first six months of 2023. Foreign direct inflows, during the same period, increased by more than 13% to $15.19 billion, as per the country’s General Statistics Office.
More importantly, the International Monetary Fund (IMF) expects Vietnam to maintain growth at those levels, forecasting a 6.1% increase in its economy in 2024 as a whole. The nation itself is aiming for up to 7.0% economic growth this year.
Vietnam’s real estate sector warrants an investment
The fund manager recommended owning high growth Vietnamese stocks and ones showing resilience in an otherwise underperforming sector in her interview with CNBC.
A name that particularly pops out to her is Mobile World Investment – an electronics retailer she dubbed “one of the best companies in terms of growth and management quality.” She’s also bullish on PetroVietnam that analysts expect could climb another 19% from here.
Lastly, Shasha Li Mafli sees the real estate sector as “very undervalued” in Vietnam. The country’s property market is in its early innings and warrants an investment as it’s not struggling with oversupply like China.
Rapid urbanization will continue to lift demand for commercial, industrial, and residential real estate in Vietnam through the end of this decade, she argued. Note that projects are resuming and the government support is already starting to show up in evidence of recovery in Vietnam’s construction market.
The post Why this ‘next dragon in Asia’ could be a stronger investment than emerging markets appeared first on Invezz
