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Fundamental and Technical Analysis of Vietnam HOSE:VNINDEX 1. Fundamental Analysis The chart above illustrates Vietnam's GDP growth (VNFGDPG). The data clearly shows a significant decline after the COVID-19 crisis, indicating that Vietnam's economy was substantially impacted by the pandemic. Prior to COVID-19, GDP growth was relatively stable, but a sharp decline occurred during the pandemic, reflecting economic contraction. The recovery of the VNINDEX (Vietnam Index) after the COVID crisis serves as an indicator of the country's economic recovery and the financial market's response. 2. Technical Analysis The VNINDEX represents the movement of the Vietnamese stock market index, which has shown an upward trend in the long term. However, there are clear signs of corrections and recoveries over the past few years. Between 2018-2020, there was significant fluctuation, with a steep drop during the COVID-19 period (2020), followed by a recovery in the subsequent year. After 2021, the index has been rising, and it is currently facing resistance around the 1,287-point level, indicating a possible attempt to break through this resistance. The upward arrow symbol shown in the chart suggests a potential for the index to breach this level, which could indicate a continuation of the upward momentum. 3. Additional Insights for Analysis The recovery of the VNINDEX aligns with the broader economic recovery trend post-COVID-19. The steadiness of the VNFGDPG could point to other economic factors still influencing the country's growth. If compared with other countries in the region, how do you view Vietnam’s economy? When comparing Vietnam's economy to other emerging markets, especially in Southeast Asia (ASEAN) such as Thailand, Indonesia, the Philippines, and Malaysia, Vietnam stands out in several key areas: 1. Economic Growth Vietnam has maintained a relatively high GDP growth rate over the past decade compared to other countries in the region. Especially before the COVID-19 pandemic, Vietnam was recognized as one of the fastest-growing economies in the group. The Philippines and Indonesia also have robust economic growth, driven by the expansion of industries and foreign investment. Compared to Thailand and Malaysia, Vietnam’s economic growth has been more prominent. Both Thailand and Malaysia have experienced slower growth in recent years, particularly in sectors like tourism and exports, which were heavily impacted by the COVID-19 pandemic. 2. Industrial and Export Development Vietnam is regarded as a new manufacturing hub of Asia, especially in electronics, textiles, and heavy industries. Vietnam is a major exporter of these products, particularly to large trading partners like China, the U.S., and Europe, which has helped its economy recover quickly post-COVID. Indonesia is strong in energy and natural resources, being a major exporter of oil and natural gas in the region, while the Philippines has seen growth in information technology and business process outsourcing (BPO). On the other hand, Thailand and Malaysia face challenges due to their heavy reliance on tourism and decreased foreign investments. 3. Foreign Direct Investment (FDI) Vietnam has been a major destination for foreign direct investment (FDI), especially from companies shifting manufacturing out of China to avoid the U.S.-China trade war. This has driven strong growth in Vietnam’s manufacturing, technology, and construction sectors. The Philippines and Indonesia also attract FDI, particularly in mining, energy, and IT sectors, but challenges related to infrastructure and political stability make them slightly less attractive compared to Vietnam. Malaysia, while still receiving considerable FDI, has seen its growth slow in recent years, which makes Vietnam more appealing in comparison. 4. Challenges and Opportunities Opportunities: Vietnam has significant growth potential due to its large working-age population, low labor costs compared to other regional competitors, and economic policies that promote exports and foreign investment. Challenges: Infrastructure and bureaucratic inefficiencies remain obstacles to attracting further FDI when compared to countries like Malaysia, which has more developed infrastructure. 5. Impact of COVID-19 Vietnam has shown one of the fastest recoveries from COVID-19 in terms of GDP growth in the region, especially when compared to countries like Thailand, which relies heavily on tourism and was severely affected, and Indonesia, which struggled with controlling the pandemic in its initial stages. However, global economic uncertainties still pose challenges for all countries in this group. Conclusion: Vietnam stands out for its strong economic growth, industrial development, and substantial foreign investment, especially in the post-COVID-19 period. Compared to other countries in the region, Vietnam seems to be better positioned for recovery and continued growth. However, challenges related to infrastructure and political systems could slow its future expansion.
HOSE:VNINDEXLong
by nineny66
Fundamental and Technical Analysis of Vietnam HOSE:VNINDEX 1. Fundamental Analysis The chart above illustrates Vietnam's GDP growth (VNFGDPG). The data clearly shows a significant decline after the COVID-19 crisis, indicating that Vietnam's economy was substantially impacted by the pandemic. Prior to COVID-19, GDP growth was relatively stable, but a sharp decline occurred during the pandemic, reflecting economic contraction. The recovery of the VNINDEX (Vietnam Index) after the COVID crisis serves as an indicator of the country's economic recovery and the financial market's response. 2. Technical Analysis The VNINDEX represents the movement of the Vietnamese stock market index, which has shown an upward trend in the long term. However, there are clear signs of corrections and recoveries over the past few years. Between 2018-2020, there was significant fluctuation, with a steep drop during the COVID-19 period (2020), followed by a recovery in the subsequent year. After 2021, the index has been rising, and it is currently facing resistance around the 1,287-point level, indicating a possible attempt to break through this resistance. The upward arrow symbol shown in the chart suggests a potential for the index to breach this level, which could indicate a continuation of the upward momentum. 3. Additional Insights for Analysis The recovery of the VNINDEX aligns with the broader economic recovery trend post-COVID-19. The steadiness of the VNFGDPG could point to other economic factors still influencing the country's growth. If compared with other countries in the region, how do you view Vietnam’s economy? When comparing Vietnam's economy to other emerging markets, especially in Southeast Asia (ASEAN) such as Thailand, Indonesia, the Philippines, and Malaysia, Vietnam stands out in several key areas: 1. Economic Growth Vietnam has maintained a relatively high GDP growth rate over the past decade compared to other countries in the region. Especially before the COVID-19 pandemic, Vietnam was recognized as one of the fastest-growing economies in the group. The Philippines and Indonesia also have robust economic growth, driven by the expansion of industries and foreign investment. Compared to Thailand and Malaysia, Vietnam’s economic growth has been more prominent. Both Thailand and Malaysia have experienced slower growth in recent years, particularly in sectors like tourism and exports, which were heavily impacted by the COVID-19 pandemic. 2. Industrial and Export Development Vietnam is regarded as a new manufacturing hub of Asia, especially in electronics, textiles, and heavy industries. Vietnam is a major exporter of these products, particularly to large trading partners like China, the U.S., and Europe, which has helped its economy recover quickly post-COVID. Indonesia is strong in energy and natural resources, being a major exporter of oil and natural gas in the region, while the Philippines has seen growth in information technology and business process outsourcing (BPO). On the other hand, Thailand and Malaysia face challenges due to their heavy reliance on tourism and decreased foreign investments. 3. Foreign Direct Investment (FDI) Vietnam has been a major destination for foreign direct investment (FDI), especially from companies shifting manufacturing out of China to avoid the U.S.-China trade war. This has driven strong growth in Vietnam’s manufacturing, technology, and construction sectors. The Philippines and Indonesia also attract FDI, particularly in mining, energy, and IT sectors, but challenges related to infrastructure and political stability make them slightly less attractive compared to Vietnam. Malaysia, while still receiving considerable FDI, has seen its growth slow in recent years, which makes Vietnam more appealing in comparison. 4. Challenges and Opportunities Opportunities: Vietnam has significant growth potential due to its large working-age population, low labor costs compared to other regional competitors, and economic policies that promote exports and foreign investment. Challenges: Infrastructure and bureaucratic inefficiencies remain obstacles to attracting further FDI when compared to countries like Malaysia, which has more developed infrastructure. 5. Impact of COVID-19 Vietnam has shown one of the fastest recoveries from COVID-19 in terms of GDP growth in the region, especially when compared to countries like Thailand, which relies heavily on tourism and was severely affected, and Indonesia, which struggled with controlling the pandemic in its initial stages. However, global economic uncertainties still pose challenges for all countries in this group. Conclusion: Vietnam stands out for its strong economic growth, industrial development, and substantial foreign investment, especially in the post-COVID-19 period. Compared to other countries in the region, Vietnam seems to be better positioned for recovery and continued growth. However, challenges related to infrastructure and political systems could slow its future expansion.
HOSE:VNINDEXLong
by nineny66
Macro Monday 52 - Vietnam – The Global Food Supply Giant Macro Monday 52 Vietnam – A Global Food Supply Giant & Diverse Manufacturer According to a report by global wealth intelligence firm New World Wealth and investment, Vietnam is forecast to see a 125% increase in wealth over the next 10 years. This would be the largest expansion in wealth of any country in terms of GDP per capita and number of millionaires, according to the New World Wealth. “Vietnam is positioned to see the sharpest increase in wealth growth in the world over the next decade as it cements its status as a global manufacturing hub” New World Wealth. The GDP growth rate for Vietnam in 2024 is expected to meet the government’s target of 6.5% making it one of the fastest growing economies in terms of GDP growth, the GDP growth rate reached as high as 8% in 2022. Vietnam is also home to 100 million people with 70% of the population between the ages of 15 – 69 and 25% under the age of 15, offering some sustainability to the long-term workforce. Vietnam’s top exports: 1. Electrical machinery and equipment: Valued at $187.1 billion (40.8% of total exports). 2. Machinery including computers: Amounting to $40.1 billion (8.7%). 3. Footwear: Contributing $33.7 billion (7.4%). 4. Knit or crochet clothing and accessories: Worth $21.5 billion (4.7%). 5. Furniture, bedding, lighting, signs, and prefabricated buildings: Totaling $21 billion (4.6%). 6. Clothing and accessories (not knit or crochet): Representing $20.1 billion (4.4%) Footwear experienced the highest growth among these categories, increasing by 85% from 2021 to 2022. Additionally, machinery (including computers) saw a significant 66.3% advance in export sales during the same period. Nike and Adidas have established their main production bases in Vietnam. If there is one thing everyone needs, it’s a pair of shoes, a great staple for the country to specialize in. Food Produce In recent years, Vietnam has quietly transformed from a regional agricultural producer into a global food powerhouse. Its innovative food industry now plays a critical role in shaping the world’s food supply and that has not happened by chance. Vietnams food story is historic but has also been recently significantly leveraged through government incentives and investment. Vietnam’s impressive array of food exports includes rice, coffee, cassava, bananas, mangoes, and citrus fruits. These products not only sustain local communities but also have a substantial impact on feeding people worldwide. If you ate rice recently or had a robusta coffee, there is an increasing probability that it came from Vietnam. Lets have a look at some of the main Vietnamese food exports that are critical to the global food supply Rice Vietnam will likely become the 2nd largest rice exporter in the world in the 2024/25 season, over taking Thailand’s current 2nd place export volume of 8.2 million tonnes annually. Vietnam exported approximately 7.6 million tonnes in the 2023 to 160 countries. This is expected to exceed 8.5 million tonnes in 2024/25. The Philippines remains Vietnams largest rice buyer, accounting for 45.5% of the country’s rice export turnover. It is interesting to revisit last weeks Macro Monday Country, the Philippines and their close trade ties with Vietnam. The Philippines is one of the largest producers of coconut oil. It is starting to look like South East Asia is a diverse set of critical food producers and disseminators. India hold 1st place as the largest exporter of rice in the world, exporting 17 million tonnes annually. We must acknowledge China as the largest producer of rice in the world at 208 million tonnes, however China only exported c. 2.2 million tonnes, making China a lessor contributor to the supply of rice around the globe. Coffee Vietnam is also the 2nd largest coffee exporter in the world, exporting 1.5 million tons of coffee a year. It is their second most exported asset after rice. Vietnam is known as one of the world’s largest producers of the Robusta coffee bean. Remarkably, Vietnam contributes a significant 40% of the world’s overall Robusta bean production, renowned for its bitterness and suitability in well-rounded coffee blends. Similar to the Ivory Coast, the largest producer/exporter of Cocoa in the world that we covered a few weeks ago, there is also a strong French colonial connection in Vietnam. Vietnam was colonised by the French between 1858 and 1900. This is relevant because the exploitation of natural resources for direct export was the chief purpose of most French investments post colonisation. The robusta coffee in Vietnam was introduced by the French during this period which is the only reason the region has the unique robusta coffee production and export ability. Whilst this could be perceived as having a good long term impact on Vietnams economy, there was a segment I came upon which outlined how rice production was significantly increased as early as the 1900’s, then pushed by the French colonists. This segment paints a tragic picture whilst helping us understand how these countries with favourable land and climates where forcefully farmed and natives subjugated; “ Through the construction of irrigation works, chiefly in the Mekong delta, the area of land devoted to rice cultivation quadrupled between 1880 and 1930. During the same period, however, the individual peasant’s rice consumption decreased without the substitution of other foods. The new lands were not distributed among the landless and the peasants but were sold to the highest bidder or given away at nominal prices to Vietnamese collaborators and French speculators.” - Britannica Excerpt Considering the above, it is easier to understand how these countries have become major producers but also major exporters for Rice, Coffee and Cocoa. Robusta Coffee Background Coffea canephora, commonly known as Robusta coffee, has its origins in central and western sub-Saharan Africa. Dutch botanists discovered it in its native form in the former Belgian Congo, and it was later introduced to Vietnam in 1900 after specific coffee rust disease devastated separate plantations in Ceylon(Sri Lanka) and Java (Indonesia). You might recognise these names for the famous name sakes, Ceylon Tea and Java Coffee (Arabica). It appears South East Asias has a strong history of production in not just tea, but coffee also. Coffea canephora boasts several unique features. First, it contains nearly twice the caffeine compared to Arabica beans, contributing to its bold flavour and strength, making it ideal for espresso-based drinks and commercial blends. Second, Robusta plants thrive at lower altitudes (typically below 800 meters) and in hotter climates with ample rainfall. Their resilience against diseases and pests makes them a popular choice for coffee farmers in tropical regions. Lastly, Robusta beans deliver a pronounced bitterness and are less aromatic than Arabica beans, appealing to those seeking a powerful coffee experience. Now lets have a look at The Vietnam Stock Index which is valued in Vietnamese Dong. The Vietnam Stock Index - HOSE:VNINDEX - You can clearly see a long term ascending triangle and a rising 10 month moving average. The targets and trade structure is clear and presents a great long term potential upside over 5 – 10 year time horizon. VanEck Vietnam ETF - HOSE:VNM For a shorter term play, and to take advantage of this growing economy, you could invest in the VanEck Vietnam ETF between now and 2026. - Ideally you would want the price to break out above the red line (POC) and find support above the 200 Day SMA (Blue Line). Once the 200 Day SMA is sloping upwards it would be a matter of riding the trend. - Given price has been gradually making higher lows since 2020, we can presume that this is a long term increase in demand gradually pressing up price. We have a stop placed with a 6.5% downside risk with potential for 77% return or an earlier exit if you wish with lessor percentage gained. - The structure for the trade is clear on the chart and it is there to be played. We have economic information that suggests that Vietnam is going to have a good decade. Based on all our information above and the positivity around the Vietnamese economy, there is ample opportunity over the next few years to establish a good long term allocations in the above indexes or specific stocks in Vietnam. Getting exposure to South East Asia in general is starting to seem like a smart choice. The Vietnam economy, similar to the Philippine economy we covered last week, and the South Korean economy we covered weeks ago, are all signalling that they are likely entering into golden era’s of significant growth. All these charts are available on my TradingView Page and you can go to them at any stage over the next few years press play and you'll get the chart updated with the easy visual guide to see how the Vietnamese stock market has performed. I hope it’s helpful.
HOSE:VNINDEXLong
by PukaCharts