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Vietnam: Small but perfectly formed

Vietnam’s newly created stock market boasts only five stocks, yet one foreign investor reckons its dematerialized system is far superior to London’s. Strong economic growth rates are attracting direct and portfolio investors. Enthusiasts reckon valuations are at their lowest and likely to rise before long.

There's a renewed buzz of activity in the foreign investment community in Vietnam. The more adventurous portfolio investors are attracted by low valuations and foreign corporations are being drawn in by growth potential. In contrast to most other Asian countries, growth rates are picking up. Yet Vietnam is a small economy in a region just embarking on reform. Its stock market is new and tiny. Opinion is divided as to whether Vietnam will remain an exotic destination for small amounts of specialist emerging market investment, or is on the brink of becoming a serious option for foreign businesses. Dominic Scriven, a director of UK investment company Dragon Capital, which is prominent in equity trading in Vietnam, is in no doubt. "If you blow away all the hot air and verbiage and stress it is a fairly simple proposition," he says. "It's cheap, it's not going to get much cheaper and it's likely to get more expensive."

At the coal face of foreign direct investment, Tuv Rheinland's general manager, Klaus Ehret, is waiting patiently in Ho Chi Minh City for the necessary government licences to establish a local office of his certification and testing company.