Vietnam to drive ASEAN market growth in 2014

Fund manager Barings has predicted that Vietnamese growth will be behind a market recovery in South-East Asia in 2014.

Barings said that Vietnam’s stable economy, positive trade balance and exports that grew by 15.4% in 2013 will boost the wider region. It added that Vietnam has seen strong foreign direct investment, estimated to be over $10 billion annually for the last five years. This includes manufacturers like Samsung building smartphone plants in Vietnam, while the state-supported Vietnam Asset Management Company has been set up to help banks start lending to boost the economy.

Barings ASEAN investment manager, SooHai Lim, commented: “Vietnam is a market we like this year, and one of our biggest overweight holdings versus the benchmark. Barings believes that the resurgence in Vietnam will help drive a wider recovery in the ASEAN region. While markets in Indonesia, Thailand and the Philippines declined in the second half of last year, in 2014 so far, those markets have recovered.”

He added that the second half of 2014 should see cyclical and political headwinds abate. In addition, the presidential election in Indonesia could be positive for investors, while the evolving political situation in Thailand is also important for investors. Another positive factor is a move to increase infrastructure investment to support economic and population growth.