Vietnam Stocks Emerge From Slump; Overhauls Pay Dividends as Peers in Developing Economies Struggle
HANOI--When Vietnam's decadelong economic boom ended in 2009, Nguyen Huynh Diep lost about $50,000. A novice investor in the country's stock market, Mr. Diep said he saw the value of many of his holdings slump.</br></br>Now, though, he is back on the trading floors of Hanoi's stock brokerages, picking up bargains when he can as Vietnam's economy begins to heat up again after a long and often painful thaw. "The market's back up this year," the 40-year-old Mr. Diep said. "And I keep buying more stock."</br></br>Vietnam's main stock-market index is up 16% this year, according to FactSet, one of the best performers among emerging markets. In comparison, the MSCI Emerging Markets Index, which tracks 21 countries, is down 3.7% year to date.</br></br>This strong showing has come amid worries over future growth rates in China and the expectation that the U.S. Federal Reserve eventually will end its bond-buying program--at its meeting last week, the Fed kept the asset purchases intact--with expectations that this would send interest rates higher, prompting investors to pull money out of emerging markets from Brazil to Indonesia and put that cash back to work in developed economies. Over the past several years, low interest rates and easy-monetary policies in the developed world sent investors on a hunt for higher-yielding assets in emerging markets.</br></br>The difference between Vietnam and more troubled emerging markets is that Vietnam's boom ended in 2009. That has given the country more time to put in place overhauls to help strengthen its economy, while some of its peers faced pressure to put their houses in order only during this year's selloff.