Following the footsteps of Japan, the Republic of Korea (RoK) and China, Vietnam may be the next Asian tiger, said Chris Wolf, co-chief investment officer of Cogo Wolf Asset Management.
“If you look at the horizon now, it looks like Beijing in its heyday. It's construction cranes everywhere,” Wolf said in an article on Investor's Business Daily on August 18.
Vietnam's young work force has a 90 percent literacy rate but earns less than its Chinese counterparts, Wolf said, adding that his firm plans to invest 1 to 2 percent of its 100 million USD in assets into the first Vietnamese stock listed on the New York Stock Exchange - the Vietnam ETF.
He quoted Vietnam’s State Bank Governor Nguyen Van Giau as saying in a recent statement that Vietnam's gross domestic product may expand between 5 to 5.2 percent this year thanks to stimulus plans, compared to the 3.9 percent growth in the first half of the year.
Foreign investors are attracted by Vietnam's “highly skilled labor force, young population, relatively low labor costs, and a sense of enthusiasm and entrepreneurship,” Mark Sidel, a law professor at University of Iowa who used to help in legal reform programmes in Vietnam, was also cited by the daily as saying.
However, the daily added that as a fledgling Asian tiger and categorised as a frontier market, Vietnam may not be suitable for those with weak stomachs due to “the threat of high inflation, a general lack of infrastructure and corruption may present significant hurdles to continued growth” and the fact that “the recent global investment crisis may derail continued growth of this early-stage emerging economy”./.