Vietnam stocks near record on reform hopes, trade deal optimism
The government is undertaking its biggest administrative overhaul in decades to shrink bureaucracy as Prime Minister Pham Minh Chinh pushes for more than 8 per cent economic growth this year. A trade deal that cut US tariffs on the nation's goods to 20 per cent from 46 per cent in April also clears an overhang for the market.
The moves have driven a 19 per cent rally in the Vietnam Ho Chi Minh Stock Index this year, putting the market well ahead of its South-east Asian peers. More gains could follow if Vietnam secures an upgrade to emerging-market status by FTSE Russell.
'Never before have we seen such strong reforms in Vietnam,' said Tyler Manh Dung Nguyen, chief market strategist at Ho Chi Minh City Securities. 'I would allocate more in Vietnam right at the beginning of these changes.'
The government is cutting red tape and unnecessary costs to redirect funds to development projects, part of its aim to achieve high-income status by 2045. Its pro-growth policies are luring investors back to the country, reversing sentiment after global funds withdrew a net US$3.18 billion from local stocks last year.
Foreign investors bought US$411 million of Vietnamese shares on a net basis in July, the second month of inflows this year, while selling their holdings in Malaysia, Indonesia and the Philippines.
A NEWSLETTER FOR YOU
Friday, 8.30 am Asean Business
Business insights centering on South-east Asia's fast-growing economies.
Sign Up
Sign Up
Conglomerate Vingroup JSC, lender Vietnam Joint Stock Commercial Bank for Industry and Trade and Hoa Phat Group JSC are among the biggest gainers on the index this year as investors bet on major beneficiaries of the country's strong growth.
The economy expanded 7.52 per cent in the six months to June, according to Vietnam's statistics office, supported by a surge in manufacturing as foreign buyers raced to avoid higher tariffs on sales to the US.
'We became more positive since May as valuations started to look compelling given the forecast earnings growth of about 15 per cent and price-earnings multiples of 10 times in 2026,' said Christopher Leow, chief executive officer at Principal Asset Management in Singapore.
Investors are expecting a FTSE reclassification of Vietnam's market to take place as soon as September, which the index compiler projects may draw up to US$6 billion in capital inflows. That would give another boost to the benchmark, which is less than 2 per cent away from its all-time high in January 2022.
To be clear, Vietnam's growth outlook remains clouded by a potential slowdown in global growth in the second half of the year. Uncertainty over a 40 per cent US tariff on goods deemed to be transshipped through the South-east Asian nation also weighs on local businesses.
Still, the bullish case for Vietnam is hard to ignore.
'What makes Vietnam stand out globally is that it's almost inconceivable it won't become a much bigger economy', and returns on invested capital are much higher than in many other countries, said Johannes Loefstrand, portfolio manager at T Rowe Price who manages a frontier markets fund with its largest allocation in Vietnam. BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
2 hours ago
- Straits Times
Malaysia cuts growth forecast on tariff volatility
Bank Negara Malaysia now sees the economy expanding by 4 per cent to 4.8 per cent, lower than its previous forecast of 4.5 per cent to 5.5 per cent. KUALA LUMPUR - Malaysia's central bank lowered its growth projection for 2025 as it contends with the fallout from US President Donald Trump's tariffs. Bank Negara Malaysia now sees the economy expanding within the range of 4 per cent to 4.8 per cent, lower than its previous forecast of 4.5 per cent to 5.5 per cent. It also trimmed its inflation forecast this year to 1.5 per cent to 2.3 per cent, from 2 per cent to 3.5 per cent, amid a moderation in cost and demand outlook. 'The updated growth projections account for various tariff scenarios, ranging from a continued elevation of tariffs to more favourable trade negotiation outcomes,' Bank Negara said in a statement on July 28. 'This forecast remains subject to uncertainties surrounding the global economy, both on the downside and upside.' Favourable trade negotiation outcomes, pro-growth policies in major economies, continued demand for electrical and electronic goods, and robust tourism activity could raise Malaysia's export and growth prospects, it added. The revised forecast comes as Malaysia seeks to lower US tariffs to less than 20 per cent, after Mr Trump increased a threatened levy on the South-east Asian country to 25 per cent. The country has until Aug 1 to conclude negotiations, and is optimistic of reaching a deal. Bank Negara said Malaysia is facing external headwinds from a position of strength, pointing to resilience in the economy based on advanced estimates in the second quarter. Domestic demand will continue to support growth going forward, it said. Top stories Swipe. Select. Stay informed. Singapore Tanjong Katong sinkhole backfilled; road to be repaved after LTA tests Singapore MRT platform screen doors at 15 underground stations to undergo renewal Singapore 'Medium risk' of severe haze as higher agricultural prices drive deforestation: S'pore researchers Singapore Jail for former pre-school teacher who tripped toddler repeatedly, causing child to bleed from nose Singapore Police statements by doctor in fake vaccine case involving Iris Koh allowed in court: Judge Singapore Authorities say access to Changi intertidal areas unaffected by reclamation, in response to petition Singapore SMRT reports unauthorised post on its X account, says investigation under way Singapore No change to SIA flights between S'pore and Cambodia, S'pore and Thailand, amid border dispute Inflationary pressure from global commodity prices is expected to remain limited, contributing to moderate domestic cost conditions, the central bank said. The impact of local policy measures is also likely to remain contained, it added. BLOOMBERG
Straits Times
6 hours ago
- Straits Times
Thai, Cambodian leaders set for peace talks nudged by Trump
Earlier on July 27, Cambodia and Thailand each said the other had launched artillery attacks across contested border areas. Thai and Cambodian leaders are set for talks on July 28 to halt the deadliest clash between the neighbors in more than a decade, with the US sending mediators after President Donald Trump used tariffs threats to press for a ceasefire. Thailand's Acting Prime Minister Phumtham Wechayachai and Cambodian Prime Minister Hun Manet are scheduled to meet in Kuala Lumpur at 3pm local time , according to Thai government spokesman Jirayu Houngsub. The gathering will be at the office of Malaysian Prime Minister Anwar Ibrahim, who's facilitating the dialogue in his role as the chair of the Association of South-east Asian Nations (Asean). The first talks since clashes began on July 24 come within 48 hours of Mr Trump saying Thai and Cambodian leaders had agreed to 'quickly work out a ceasefire.' After separate calls with Mr Phumtham and Mr Hun Manet on July 26, Mr Trump had threatened that Washington will not do a trade deal with either country as long as the fighting continued. Secretary of State Marco Rubio said US officials are on the ground in Malaysia . China, the top trading partner for both the South-east Asian nations and a major backer of Phnom Penh, is due to participate in the talks, officials from Cambodia said. 'Both President Trump and I remain engaged with our respective counterparts for each country and are monitoring the situation very closely,' Mr Rubio said in a statement. 'We want this conflict to end as soon as possible.' Mr Trump's tariff threat set off a flurry of diplomatic activities on July 27 with Mr Anwar eventually getting the two sides to agree to meet. Mr Rubio also spoke to the foreign ministers of Thailand and Cambodia and urged them to immediately de-escalate tensions while offering US help in future talks. Speaking to reporters just before meeting with European Commission President Ursula von der Leyen on July 27, Mr Trump acknowledged the phone calls with the two leaders. Top stories Swipe. Select. Stay informed. Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15 Singapore Tanjong Katong Road sinkhole did not happen overnight: Experts Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide Singapore Science Journals: Lessons from weird fish sold in Singapore's wet markets World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war Asia Displaced villagers at Thai-Cambodian border hope to go home as leaders set to meet for talks 'I called the prime ministers of each and I said, 'We're not going to make a trade deal unless you settle the war.' A lot of people killed,' Mr Trump said. 'And I think by the time I got off, I think they want to settle now.' With Mr Trump's Aug 1 tariff deadline looming, trade-reliant Thailand wants to avoid antagonising the US president, especially as its officials have been holding talks to lower the steep 36 per cent planned levy on its exports. Mr Trump has claimed credit for helping halt border clashes earlier this year between India and Pakistan by leveraging trade measures, and is now applying similar pressure in South-east Asia. 'When all is done, and Peace is at hand, I look forward to concluding our Trading Agreements with both!,' Mr Trump said on Truth Social after speaking to Thai and Cambodian leaders on July 26. Thailand's trade talks with the US have included offering expanded access for American goods in an effort to narrow a US$46 billion trade surplus with Washington. Neighboring Indonesia, the Philippines, and Vietnam have already secured trade deals with the US in recent weeks. Thailand and Cambodia should not have needed the pressure from Mr Trump, and should have turned to Asean as a natural middle ground to mediate the conflict well before US intervention, said Mr Fuadi Pitsuwan, a lecturer in international relations at Thammasat University in Bangkok. 'In the end, Trump will likely frame the situation as a win: he enforced a ceasefire while securing leverage' to impose punitive tariff rates, he said. Despite the economic stakes, Thailand has taken a firm stance ahead of talks on July 28. Officials say any ceasefire must be tied to bilateral resolution of the dispute, the withdrawal of troops, and a halt to the use of lethal weapons. Cambodia, by contrast, has said it is open to an unconditional cessation of hostilities. The talks are 'intended to listen to all proposals that could contribute to restoring peace,' Mr Houngsub said. 'The Thai government remains committed to defending the nation's sovereignty and territorial integrity. Every square inch of it.' The conflict, which escalated from months of simmering border tension, has killed more than 30 people and displaced over 150,000 civilians on both sides. Thailand has reported 22 fatalities, including eight soldiers, while Cambodia has confirmed 13 deaths, including five military personnel. Heavy artillery fire continued Sunday across their 800km border, with both sides accusing each other of targeting civilians. Thailand has responded by deploying F-16s and Swedish-made Gripen fighter jets to strike Cambodian military positions. Thailand and Cambodia share a history of border disputes, though relations have remained largely stable since a deadly 2011 clash that left dozens dead. The last major flare-up centered on the Preah Vihear temple, a historic flashpoint rooted in colonial-era disagreements. Much of the current dispute stems from maps drawn on differing interpretations of early 20th-century Franco-Siamese treaties, which defined the border between Thailand and Cambodia, then part of French Indochina. BLOOMBERG
Straits Times
7 hours ago
- Straits Times
Tariffs, Duterte risks loom as Philippines' Marcos charts last years in power
Mr Ferdinand Marcos Jr will likely push his plans to build over 8 trillion pesos (S$179 billion) worth of flagship infrastructure programmes, with three years left in his term. MANILA – Fresh from tariff talks with US President Donald Trump, Philippine leader Ferdinand Marcos Jr is on July 28 set to unveil plans to boost growth as he starts the second half of his single six-year term beset with economic and political risks. Mr Marcos will use his annual speech to Congress to push welfare and infrastructure programs as he steers the South-east Asian economy through global trade tensions. He's also likely to call for national unity after his rival, Vice-President Sara Duterte, on July 25 successfully thwarted efforts to disqualify her from office and the 2028 elections. 'We will be talking about the social projects of the government for people in need,' Mr Marcos said on July 22 of his upcoming fourth State of the Nation Address. 'We will talk about the programs that we have initiated and will continue to promote and endorse.' The speech comes days after Mr Marcos returned from the US, where he secured a modest tariff cut to 19 per cent which his government hopes to further reduce ahead of Mr Trump's Aug 1 deadline. His economic managers have tempered economic growth targets in 2025 due to the potential impact of Mr Trump's levies on the global economy. Still, the Marcos agenda faces hurdles after his allies had a disappointing performance in May's midterm elections, while Ms Duterte is now free of the threat of an impeachment trial at the Senate. 'Duterte allies in the Senate and even VP Duterte are expected to be obstructionists,' said Mr Arjan Aguirre of the Ateneo de Manila University's political science department. Mr Marcos 'will still pursue those basic services that are meant to pull his numbers up or make him popular to the public but, again, it will not be easy'. Here are the main things to watch for in the president's speech, scheduled for 4pm on July 28 (Manila time): Top stories Swipe. Select. Stay informed. Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide Singapore Workers used nylon rope to rescue driver of car that fell into Tanjong Katong Road sinkhole Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15 World Three dead, several injured after train derails in Germany World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war Asia Displaced villagers at Thai-Cambodian border hope to go home as leaders set to meet for talks Economic plans Mr Marcos will likely push his plans to build over 8 trillion pesos (S$179 billion) worth of flagship infrastructure programmes, with three years left in his term. He's also expected to highlight agricultural reforms, as lowering rice prices remains a focus for his administration. Those programs need funding, but new tax measures could be tougher to pass as Mr Marcos' popularity wavers. His government is expecting a wider fiscal deficit in 2025 compared to earlier projections. 'Pushing for broader tax measures might be more politically challenging now,' said Union Bank of the Philippines chief economist Ruben Carlo Asuncion. 'With midterm elections behind us and the clock ticking toward 2028, the window for passing complex tax legislation is narrowing.' Tariff threat The marginal US tariff reduction has frustrated some, including Mr Marcos' allies. But unlike its neighbours, Mr Marcos – who Mr Trump called a 'tough negotiator' – is opening up the Philippine market to a relatively limited number of US exports, such as cars, soy and wheat products and medicines, in a bid to protect domestic industries. 'The deal looks very lopsided for Washington's closest ally in Asean, though Manila seemingly put little on the table,' Mr Peter Mumford, South-east Asia practice head at risk consultancy Eurasia Group, said in a note on July 23. The Philippines is aiming to negotiate further with Washington to drop the tariff to 15 per cent, Manila's envoy to Washington Jose Manuel Romualdez told Bloomberg Television on July 24. 'We will continue to protect major domestic agricultural and manufacturing industries,' Philippine Trade Secretary Cristina Roque said in a statement. 'They are not included in our concessions.' Duterte duel The president's relationship with his vice-president broke down more than a year ago, and Ms Sara Duterte – who denied wrongdoing – was impeached earlier in 2025 for allegedly misusing public funds and plotting to assassinate Mr Marcos. On July 25, the Supreme Court said the impeachment complaint was unconstitutional, ending prospects of an August trial in the Senate. The political chasm between the country's two top politicians, who ran for office on a successful joint ticket in 2022, widened in 2025 when the Marcos administration turned over her father, former President Rodrigo Duterte, to the International Criminal Court. The elder Duterte denies charges he committed crimes against humanity during a war on drugs that killed thousands. And the Marcos government has signalled its openness to rebuild ties with the ICC severed during Mr Rodrigo Duterte's presidency. While Mr Marcos had long disavowed the impeachment effort, his deputy may not hear any call for unity. Even before her court victory, the vice-president was reportedly set to skip the speech for a second straight year. Online gambling A sector that Mr Marcos could pitch as a source for new taxes is the country's booming online gambling industry. The rise of Internet betting has raised alarm among lawmakers and Church leaders wary of gambling addiction, which could give the president reason to pitch regulations. The question is how far will Mr Marcos go to curb an industry that's also contributing to government coffers. There's a proposal to ban online gambling operations, while there are also suggestions to just limit access to it. In his 2024 speech, the president outlawed online casinos that catered to Chinese gamblers, amid claims it was involved in crimes including money laundering. China tensions Mr Marcos is also likely to affirm his efforts to safeguard the Philippines' rights in the South China Sea, which has seen him forge closer defense ties with like-minded nations as he pushes back against Beijing's expansive claims in the resource-rich waterway. During his first three years in office, the Philippines expanded the number of military bases that the US can access, ramped up drills with American troops and hosted US missile systems, which riled up Beijing, Manila's top trading partner. But the Philippines may have to weigh whether Mr Marcos' warmer ties with the US are paying off following the latest tariff deal. 'Washington's stiff tariffs risk undermining Marcos' US pivot, though Manila needs US security support given South China Sea tensions with Beijing,' Eurasia's Mr Mumford said. Bloomberg
