Vietnam’s macro economy improving, bank reform implementation now the key

HO CHI MINH CITY - With strong support from the FDI sector, Vietnam looks set to enjoy another year of trade surplus, and with inflation no longer a concern this year, the Government has more room to stimulate the domestic side of the economy, according to the latest monthly newsleter of Vietnam Asset Management (www.vietnamam.com ).

VAM says that after the credit outlook upgrade by Fitch in early 2014, the credit rating upgrade by Moody in the last week of July has affirmed that Vietnam’s macro economy is indeed improving. 

“However, looking further afield, the recovery is not without challenges as banks still have to go through the most difficult phase of applying a much stricter debt classification standard, raising concern of higher NPLs,” VAM says.

“Nevertheless, given the long timeline that banks were given to get ready, we think the impact of the reforms will not be as dire as previously feared, and the success of  banking reform would be critical to  the economy’s sustainability.

“We remain optimistic and will continue our search for turnaround stocks that will benefit from the imminent economic recovery.”  (ATI).