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By  Samuel Ruiz

Vietnam: vibrant, dynamic and fastest growing

Sam Ruiz is on location in Vietnam delving into why this emerging market is fast becoming an attractive investment destination.

August 2024, From the Field -

Video Transcript

I'm here in a very hot and humid Vietnam this week.

And when we think about the world being a large place with a large opportunity set for investors, Vietnam's actually one of the countries that we think presents a very strong opportunity going forward, but has one of the most vibrant, dynamic and fastest growing economies of any we can find across the world.

Unbeknownst to many people, Vietnam is actually expected to be the country over the next decade with the largest increase in wealth of any population.

And how did we get here?

A lot of the groundwork was actually laid in the mid-80s where the government at that point looked to change a country that was very centrally focused and not integrated with the rest of the world.

Very much government run and a lack of private enterprise and entrepreneurship.

But they instigated reforms to change a lot of this.

And since that point we've seen a very rapid increase in foreign direct investment for companies looking for an outsourced partner, primarily in manufacturing.

The country has very strong demographics and this is one of the biggest tailwinds we think that can continue this growth.

Around 55% of the population is aged 35 years or younger.

It's a very fast consuming part of the population.

It's also a population of around 100 million people where we expect that that more skilled labour force will increase over time.

And if you're a global company looking for somewhere in the world to outsource some of your supply chain, it's really encouraging to know that Vietnam can offer you more skilled labour in the future.

It's also a country that's very well geographically positioned on the border of China.

So we are seeing more investment when it comes to the IT supply chain moving from China into Vietnam.

And one of the largest investors into Vietnam today is actually Samsung.

They have around 110,000 employees currently here making things like the Samsung phone and it's something where Intel are already making their chips here.

But more and more we're seeing interest that this could become an AI hub.

So NVIDIA has recently announced a big investment into the country and they're expecting to work with things like chip design and potentially semiconductor manufacturing in the future.

So all in all, with very strong structural tailwinds at the population level amongst others, we're expecting that all of this is going to see incomes continue to rise and expand, which is great for consumption and great for a set of well run companies that can monetise this increased consumption, the rising wealth and effectively the expansion of the middle, middle class across Vietnam, which we expect to increase and improve for years to come.

Samuel Ruiz Equity Portfolio Specialist

Samuel Ruiz is a portfolio specialist in the International Equity Division. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Australia Limited.
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