Jan 182013

Regular readers will know that I’ve long been optimistic about Vietnam. For most of that time, the market has resolutely declined to play along, so 2013 has been a pleasant surprise so far – the VN Index is up almost 20% since the start of the year.

However, it remains to be seen if those gains will stick. There’s still plenty for policymakers to do in terms of sorting out the economy’s many problems (FT Beyond Brics has a quick primer), although they seem to be making some progress and deals like Mitsubishi UFJ’s recent agreement to buy a 20% stake in VietinBank can be see as a long-term vote of confidence.

And despite the slowdown in growth, there is the odd spot of good news – exports were up almost 20% year-on-year in 2012, reflecting the country’s improving position in manufacturing, as Capital Economics notes: Continue reading »

Jan 122013

There was an interesting story in the German press a week ago claiming that the North Korean authorities had asked some German specialists to help develop a framework for attracting foreign investors. From Der Spiegel’s English site:

According to an article to be published on Saturday by the daily Frankfurter Allgemeine Zeitung, the communist regime in Pyongyang is preparing to open up the country’s economy to foreign investors. Moreover, it has enlisted the assistance of German economists and lawyers to lay the groundwork for the move.

“There is a master plan,” one of the economists involved in the plan told the paper. “They want to open up this year.” The FAZ did not identify the economist, but noted that he works at a respected German university and that he had advised other governments in Asia in the past.

Whether comes to anything is another matter, although news there suggests some tentative steps towards change. In terms of what might happen, this is worth noting: Continue reading »

Oct 272012

As scheduled, Thailand joined Singapore and Malaysia on the Asean Trading Link last week. Going by news coverage and a couple of conversations I’ve had, Thai investors and brokers seem to be more enthusiastic about the project than anybody else.

That’s understandable – the historical ties between Malaysia and Singapore mean that anybody from one country who was keen to invest in the other could do so fairly easily and at reasonably low cost. But while there are  brokers in Thailand who can already access other Asian markets, the link promises to make it a bit easier and cheaper for local investors there to invest in neighbouring countries – and, going the other way, also hopefully increase interest from foreign investors in Thai stocks. Continue reading »

Nov 252011

Vietnam has proved to be a terrible investment over the last four years. Widely seen as the “next Asian tiger” in the middle of the decade, an article in the FT today shows how attitudes have changed. Here’s a sample:

The government’s focus on breakneck growth at the expense of economic stability has led to growing inequality, soaring inflation, a lack of confidence in the currency and fears of a banking crisis.

Domestic overheating, coupled with the deterioration of the global economy, has forced many investors, foreign and Vietnamese, to revise their view of the country’s prospects. Deep-seated problems, such as corruption, poor education and infrastructure bottlenecks – all often overlooked by investors in the boom years – have moved into sharp focus.

And with inflation driving wages higher but labour skills not advancing as quickly, fresh questions are arising. Among them is whether Vietnam’s Communist party can force through painful reforms needed to ensure they avoid the “middle-income trap” ensnaring the likes of Malaysia and Thailand, whose economies are a source of cheap labour but not yet makers of higher-value products.

Continue reading »