Credit by Reuters/Issei Kato | Japan's Nikkei average outside a brokerage in Tokyo, Japan, on October 23, 2017
This Southeast Asian Country is the Top Performer in the Asian Stock Boom
ECONOMY Vietnam

This Southeast Asian Country is the Top Performer in the Asian Stock Boom

There’s no shortage of superlatives to describe this year’s rally in Asian stocks. Bloomberg reports a near 30 percent surge marks the biggest outperformance versus Europe and the U.S. since 2003 and 2009, respectively.

According to Asia Times, Asian region has what what the West lacks: buoyant growth, swelling middle-class consumer sectors, vast state assets that can be privatized and, in many places, bulging young populations.

Markets from India to Indonesia and South Korea have reached record highs, with the MSCI Asia Pacific Index rose to a record on December last year, surpassing its 2007 peak.

Image: MSCI Inc./Bloomberg
Image: MSCI Inc./Bloomberg

A frontier market is Asia’s biggest gainer in percentage terms this year: Vietnam. Its stock market has doubled in size over the past year, Bloomberg reports, fueled by state-owned company sales and listings, and a 47 percent gain in the VN Index.

According to Phạm Hồng Son, vice-chairman of the State Securities Commission of Vietnam (SSC), this surge is in part due to the Government’s specific policies and plans in accelerating the process of SoEs equitisation and divestment.

Image: Bloomberg
Image: Bloomberg

Vietnam News reports in the first nine months of 2017, 34 SOEs became equitised, with hundreds more to be listed in coming years. By the SSC’s estimation, thanks to these hugely valued companies, stock market capitaliation will be worth about 80 per cent of Việt Nam’s GDP by 2020.

There is a belief and a macro basis for the Vietnamese stock market’s bright future. After 17 years of development, it is now known as the fastest growing securities market in terms of scale and liquidity in ASEAN.

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