The key message of our Investor letter is as follows: Vietnam’s political and economic future is exceptionally bright, and the country is heading toward success with strong foundations. Given these conditions, the Vietnamese stock market is clearly undervalued, and its risks to returns potential look extremely attractive.
Besides the long-term good visibility, there are tactical variables that should be considered in short-term allocations:
- Tariff decisions concerning Vietnam by the Trump administration are expected in early April. A deal with Trump could turn the foreign investors’ this year’s net selling in Vietnam into net buying.
- FTSE will publish a statement in early April regarding the progress of Vietnam’s market status review.
- The stock exchange’s KRX trading platform to go live in early May.
- Q1 earnings reports will begin to come out during April.
There are a couple of interesting observations related to the recent wave of sell-offs in U.S. tech stocks. The heavy selling in the U.S. has not dragged down global equity markets in general, but instead, these waves have involved reallocations toward Asia and Europe. The U.S. dollar has consistently strengthened whenever financial market uncertainty has increased. However, in recent months the dollar has, unusually, weakened against major currencies.