Friday, February 16, 2007

Vietnam - Big Goals for 2007

The Ministry of Trade in Vietnam has big goals for 2007. They expect export growth to rise by a minimum of 17.4 percent this year and are actually aiming for growth in excess of 20 percent. Strong exports are good for GDP and the government has set a 2007 GDP growth rate of 8.5 percent.

In an interview with VietNamNet Bridge Minster of Trade Truong Dinh Tuyen explains where he expects to see export growth to come from:

http://english.vietnamnet.vn/biz/2007/02/665055/

In a nutshell:

He expects exports of the following products to rise -

1) Industrial and mechanical products like small engines and boats
2) Apparel Exports
3) Seafood and Farm Produces

And exports of these products to fall -

1) Crude Oil
2) Coals
3) Rice

But be careful of capital controls!

There have been reports today that Vietnam may want to impose capital controls to tame the roaring stock market and the hot speculative capital that is rushing into the country. The stock market rallied 144 percent in 2006 and is up 46 percent this year. The government's fear is that local investors will be burned in the market pulls back.

Although total foreign participation in the [Vietnamese] stock market is still about one-third, most of the in-demand and big-cap stocks are approaching or at their respective foreign investor limit" of 30 percent or 49 percent, depending on the sector, Credit Suisse said. In addition, average daily equity trading volume tripled in the past two months, it said.

From:
http://www.chicagotribune.com/business/yourmoney/chi-0702160145feb16,0,2159215.story?coll=chi-business-hed

If Vietnam opts to follow in the footsteps of Thailand who imposed penalties on foreign investors withdrawing assets within a year this past December, we could see a pullback in Vietnamese stocks. When Thailand announced the capital control, the Bangkok stock index fell 15 percent in one day.

If this happens, I will be looking for cheap investments!

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