June 16, 2024

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Truly Business

UBS likes Vietnam and claims its economy has ‘huge potential’

2 min read

Garment manufacturing unit staff doing the job in a factory in Hanoi, Vietnam on May 24, 2019.

Manan Vatsyayana | AFP | Getty Illustrations or photos

SINGAPORE — Vietnam’s financial outlook is good and has “massive probable,” according to UBS International Prosperity Management’s Kelvin Tay.

“Vietnam is a marketplace that we like,” Tay, regional main financial commitment officer at the agency, told CNBC’s “Squawk Box Asia” on Wednesday.

“It is an overall economy that we feel has massive probable,” Tay mentioned, incorporating that progress in the state is “outstripping” its frontier market place friends.

Vietnam was a single of Asia’s major-doing economies in 2020 and between the handful of nations around the world that managed to record expansion final yr as authorities globally scrambled in their struggle in opposition to the coronavirus pandemic. It noticed 2.9% expansion in 2020, narrowly edged out by the Taiwanese economy’s 2.98% progress.

In recent decades, the country has been considered as an alternative manufacturing hub for firms on the lookout to shift production out of China to keep away from becoming caught in the crossfire of tensions between Beijing and Washington.

The Vietnamese inventory sector is also viewing potent progress and is on track to grow to be greater than the Philippines in conditions of market place capitalization “sometime the center of this year,” according to Tay.

The VN-Index in Vietnam at first saw a sturdy start to 2021 but later on fell sharply as fears of a coronavirus resurgence weighed on trader sentiment.

So significantly in 2021, the index has risen about 1%, as of its Tuesday close.

Nevertheless, Tay acknowledged that hazards continue to be for those people searching to devote in Vietnam.

First of all, liquidity stays a problem, the main expenditure officer said.

In addition, he cautioned that Vietnamese authorities have been regarded to use currency controls as a financial plan selection.

“If the overall economy is not performing well they’re most likely to basically depreciate the Vietnamese dong sharply just to consider to promote the overall economy,” Tay mentioned.

Late final year, the U.S. Treasury Section labeled the region a forex manipulator.

“Those are the kinds of threats that you acquire when you make investments in a person of the frontier marketplaces,” Tay reported. “Of class, when you get your timing accurate … Vietnam is a single of the best performing marketplaces more than the past three to 5 several years.”

— CNBC’s Abigail Ng contributed to this report.

Correction: This write-up was updated to correctly reflect the movements in Vietnam’s VN-Index.

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