Foreign investors' exposure to Vietnam
Foreign investors' exposure to Vietnam, one of the fastest growing economies in Asia, has increased. Today, Vietnam is a key manufacturing hub. Heightened tensions between China and the United States, and China's strict zero-Covid policy, have forced multinational corporations to open factories in Vietnam to diversify their risk. In terms of stock investing, the Vietnam stock market was among the top performers globally in 2021. However, risk-off sentiment seen across the world has pushed Vietnamese equities to fall in 2022 with valuation metrics slumping to decade-lows. How can foreign investors gain exposure to the Asian country and what are the key risks involved? Here we take a look at how to invest in the Vietnam stock market.
Vietnam is one of the fastest growing economies in Asia. The country has become an attractive destination for foreign investors due to its stable political environment, low labor costs, and high growth prospects. In recent years, Vietnam has benefited from growing US-China tensions as companies such as Apple (AAPL), Nike (NKE), and Samsung (SMSN) have diversified their manufacturing facilities away from China and into Vietnam. Vietnam's single-party system has given investors confidence in political stability and certainty. The Vietnamese government has actively promoted the entry of foreign investment by offering incentives, reforming regulations, and participating in several free trade agreements. While Vietnam has made positive steps in opening up its economy to the world, investing in Vietnam stocks for foreigners is still restrictive. Vietnam has foreign ownership limits in place for its domestic companies. These limitations vary from one industry to another.
For stocks, foreign investors need to open accounts with brokerages in Vietnam to trade stocks listed on the Ho Chi Minh City Stock Exchange (HOSE) directly. Foreigners are also required to open a bank account in Vietnam and acquire a securities trading code in order to start trading Vietnamese stocks. Then all you need to do is send us an email at email@example.com and we will take care of the rest.