As the global economy is more interconnected than ever, one economy’s loss can often translate into another’s gain.
While China is grappling with rising costs, its neighbors, like Vietnam, Cambodia and even Myanmar, are said to be among the popular destinations for mainland factories seeking cheaper production bases elsewhere.
Applying the same logic, as China’s stock markets find it hard to recoup their year-to-date losses, Vietnamese stocks, for instance, keep edging higher, as money has to be invested somewhere, and investors are flocking to rising economies where economic prospects are rosier.
Blessed with strong economic growth and an influx of foreign investment, Vietnam’s stocks have been climbing on hopes of improving earnings prospects.
Expectations of robust manufacturing activity and higher consumption driven by rising wages are also powering the increases in stock prices.
The Vietnam Stock index has rewarded investors with a year-to-date jump of almost 9 percent after four consecutive years of gains.
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