Mekong Memo Vietnam 20230824
Mekong Memo Vietnam Weekly, August 24, 2023: Business, politics, finance, trade & legal headlines.
We monitor and filter the very best and most insightful business stories from Southeast Asia directly to your inbox every week.
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With that said, here is your Mekong Memo Vietnam for the week of August 24, 2023:
This week’s Mekong Memo is sponsored by Smiling Albino’s Bensley Art Trail 2023. Join Smiling Albino and Bill Bensley for an exclusive trip of Bensley-designed hotels in Thailand, Cambodia and Laos and find your long lost artistic child within.
Bill Bensley, for the first time ever, is conducting a 12-day tour of some of his
favorite resorts while conducting immersive art classes along the way.
This will be a colorful journey for discerning lovers of art, luxury, design and
conservation, culminating in a worthy cause.
Vietnam: A Frontier Market to Watch
Vietnam is poised for a significant consumer boom, making it a frontier market worth investors' attention, says T Rowe Price's Johannes Loefstrand. The country's middle-class population is expected to surge from 6 million to over 75 million by 2030. Despite facing economic challenges, Vietnam offers long-term structural advantages like youthful demographics, low labor costs, and modest debt. Loefstrand's fund, heavily invested in Vietnam, has outperformed the Frontier Market sector average, emphasizing the market's low correlation to both emerging and developed markets.
Infrastructure Shortcomings Jeopardize Geoeconomic Goals and Regional Relations
Vietnam's delayed progress on the Vientiane–Vung Ang railway project, aimed at connecting Laos to Vietnam's seaport, highlights the country's broader infrastructure challenges. These delays not only undermine Vietnam's geoeconomic ambitions but also risk its regional competitiveness and special relationship with Laos. While China has successfully completed its Kunming-Vientiane railway, Vietnam's inability to advance its own infrastructure projects could have long-term implications for its geopolitical standing and economic growth.
Source: The Diplomat
Foreign Investors Lead Real Estate M&A Activity
Foreign investors, primarily from Singapore, South Korea, and Taiwan, have dominated Vietnam's real estate M&A market, contributing $1.4 billion in the first seven months of 2023. Despite a 62% year-on-year drop in the overall M&A market value, 92% of real estate M&A buyers were foreign entities. Legal complexities have slowed the pace of deals, increasing both time and costs. The market anticipates more activity in this sector starting 2024.
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