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Vietnam: Hunting Asia’s last tiger

As the unremittingly positive attitude of investors and analysts towards Vietnam just seems to get even more positive, capital raising for new fund launches is rising fast.

Merrill Lynch estimates that $1 billion of capital has already been raised by Vietnam country funds in 2006 and expects another $1 billion by the end of the year (see table at end of story).

The latest manager on the road is Saigon-based PXP Vietnam Asset Management (PXP), which aims to close its third fund, Vietnam Lotus Fund, by the end of November. PXP is targeting $100 million to add to the $115 million it already manages and is likely to get commitments well above that.

“We haven’t asked for any commitments yet,” says Kevin Snowball, director and co-founder of PXP, “but we’re pretty sure we’ll be fully committed.”

Rapid market growth

That is not surprising given the speed with which Vietnam’s domestic stock market has moved. From a capitalization of some $500 million at the start of 2006, the market is now at about $3.3 billion and has increased more than 82% in the 12 months to September. By comparison, PXP’s flagship Vietnam Fund increased 90.11% over the same period.

Most practitioners expect the value of the market to have grown to as much as $5 billion by the year-end. Average daily turnover has increased in 2006 from a tiny $700,000 to a more respectable $10 million, says PXP.

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