maandag 30 december 2013

Marc Faber Recommends Vietnamese Stocks

Remember Marc Faber recommending Vietnam? To go further on the case for investing in Vietnamese stocks in 2014, I wanted to point out several things.

First off, the savings rate in Vietnam is extremely high. We have 28% domestic savings rates and that's always a sign of a great economy. You can't produce and invest without savings.

Second, the inflation rate has come down from 20% in the past to 6% now. This will be great going forward as the dong (Vietnamese currency) will be stable going forward.

Chart 1: Vietnam CPI
To point to a correlation on this blog, we know that the currency valuation is correlated to the trade deficit of a country and indeed, when we look at the trade deficit in Vietnam, we can see that Vietnam recently went into a surplus. This also explains why the dong is so strong lately and why the inflation rate is coming down.

Chart 2: Trade Deficit Vietnam
To read further, go here.

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