The Market Vectors Vietnam ETF (NYSEArca:VNM) was retracing
its steps early Friday, rising more than 2.5 percent in early trade
after it staged a sharp sell-off Thursday on growing investor
jitters about Vietnam's economic outlook in light of this week's
arrest of one of its wealthiest banking tycoons.
VNM dropped more than 6 percent Thursday as the market reacted
to what seems like a quick derailing of the once-promising
Vietnamese economy. VNM is the only ETF to serve up exposure
to Vietnam. Indeed, the rapidly growing Southeast Asian country
can't yet be found in broader regional funds by other
Fears that the Vietnamese economy, while still growing at an
annualized pace of around 4 percent, may be getting off its tracks
are behind the ETF's recent volatile price action.
Vietnam was until not too long ago a booming center of economic
growth in Asia. But this week's arrest of Vietnam's prominent
banking businessman Nguyen Duc Kien, on what are still "vague"
business-related charges, fueled concerns that more arrests in the
financial segment could be looming, the latest tidbit to point to
the country's growing economic troubles.
The news sent the local equities market plunging to its steepest
decline in four years earlier this week, making some concerned that
Vietnam might be on track to relive the economic meltdown seen in
Thailand in 1997, according to a New York Times article that quoted
While Vietnam's economy is still growing, hefty debt loads-many
of which are linked to state-run real estate speculators-are
weighing on the market at a time when the global economy is
faltering due to the slowdown in the U.S. and in Europe, the
The $286 million VNM, which launched three years ago, is still
in the black, with year-to-date gains of some 12 percent, but that
could soon change if Vietnam fails to find a solid footing. The ETF
has been among the best-performing ETFs in the past year.
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