Vietnam Stock Market Breaks Record High, Drawing Attention

Economic Normalization and MSCI EM Inclusion Expectations
Vietnam Fund Returns Also Soaring

[Asia Economy Reporter Minji Lee] Amid growing concerns that the economic downturn in emerging countries may be prolonged due to the impact of COVID-19, the Vietnamese stock market is reaching record highs. Thanks to this, the returns of funds invested in Vietnam are also soaring.

On the 26th, the VN Index of the Ho Chi Minh Stock Exchange in Vietnam closed at 1248.53 as of the 23rd, rising about 5% since the beginning of this month. On the 20th, it even reached an intraday high of 1286.32, setting a new record. This is analyzed to reflect the stock market as concerns over the spread of COVID-19 decreased due to strong quarantine measures and the economic growth forecast was raised. The International Monetary Fund (IMF) projected Vietnam's economic growth rates for this year and next year at 6.5% and 7.2%, respectively.

Emerging countries are facing difficulties in securing COVID-19 vaccines compared to advanced countries such as the United States, making economic recovery uncertain this year as well. Over the past three months, the 12-month forward earnings per share (EPS) growth rate was revised upward by about 9% in developed markets, but emerging markets only saw a 6.3% increase.

Meanwhile, Vietnam is analyzed to have the greatest opportunity for economic normalization among major emerging countries. Hyungrae Kim, a researcher at NH Investment & Securities, said, "Last year, Vietnam's nominal GDP surpassed that of Singapore and Malaysia, the dominant countries in the ASEAN region," adding, "With the listing of Vingroup's automobile brand ‘VinFast’ on the U.S. stock market, the VN Index is showing strength." Expectations for inclusion in the Morgan Stanley Capital International Emerging Markets Index (MSCI EM) are also factors that encourage further rises in the index.

As the VN Index shows an upward trend, Vietnam funds, which had been sluggish for a long time, are also recording high returns. According to financial information provider FnGuide, the ‘NH-Amundi Vietnam Leverage Fund,’ which tracks twice the volatility of the ‘VN30 Index’ and others, posted a 33% return since the beginning of the year, the highest among overseas equity funds. Most Vietnam funds ranked high in returns, with ‘Korea Investment KINDEX Bloomberg Vietnam VN30 Futures ETF (33%),’ ‘Samsung Vietnam Fund (26%),’ and ‘Korea Investment Vietnam Growth Fund (19.81%)’ leading the pack.

This content was produced with the assistance of AI translation services.