It’s been a good year for frontier markets, though some have done better than others. One success story has been Vietnam.
Hanoi’s domestic VNI equity index is up 17 percent. That compares well with stock markets in other Asian frontiers – Sri Lanka has gained only 3 percent, Bangladesh is down 1 percent on the year and Mongolia has plunged more than 20 percent, hurt by a restrictive foreign investment law.
Vietnam has also done well compared with more developed Asian markets, many of which have suffered both from talk of Fed tapering and from a slowdown in China. Thai and Indonesian stocks are up only 2-3 percent this year and Malaysia has risen 6 percent.
Min-Hwa Hu Kupfer, chairperson of equity fund Vietnam Holding, says the pace of Vietnam’s economic recovery and slowing inflation are helping the market:
The economy is recovering, though it’s below its long-term average of 7 percent. Inflation had been double-digit, it was reduced to single digits through 2012.