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Vietnam Stock Market Outlook 2016: Adapt and Prosper

​“In the last 2 years, the Vietnamese government has done a lot to bolster economic growth and bring about the most radical reforms since the late 80’s. As the economy moves towards the late-expansion phase, it has constantly been positioning itself to attract more capital inflows and become more involved in global trade. The TPP and other trade agreements are not the goal but part of the process. As the country prepares for free trade and capital liberalization, there will be plenty of work in infrastructure development from roads and bridges to IT and telecoms. In the meantime, the expansion of FDI-driven manufacturing and the resulting increase in trade will boost logistics and other supporting services.

With increased uncertainties, 2016 is set to be a relatively harder year for stock investors. The stock market should see more volatility and a higher probability of extreme movements while the fluctuations of foreign capital and market liquidity remain a threat to local market participants. This year, we focus our stock-pick strategies on three key themes:

(1) Countering increased market volatility and dwindling liquidity,

(2) Taking advantage of the equitization of SOEs and state holdings sales, and

(3) Capitalizing on the divergence of growth at sector and company levels.

Finally, we hope this report will be a helpful source reference for investors through the many movements of the 2016 stock market.”