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How will Obamas visit affect Vietnam’s economy?

Date: 5/28/2016 11:58:24 AM

Economists have been cautious when asked whether Obama’s visit would give a push to Vietnam’s economic development, but have said it would help Vietnamese products penetrate the US market.

The visit to Vietnam by Bill Clinton, the first visit of a U.S. President after the war, in 2000 ocurred when the Vietnamese stock market was fledgling. However, it still helped the VN Index increase by 200 points, or 17 percent one month, after the historic visit.

The visit to Vietnam by George Bush six years later, in 2006, during which he visited the HCM City Stock Exchange and met Vietnamese big businesses, helped stimulate the purchasing power in the market.

The VN Index soared by 30 percent within one month and continued the upward trend later, once climbing to 1,170.67 points, the highest peak in the history of the Vietnamese stock market, before it fell as a result of the global economic crisis.

Some analysts believe that the third visit of an US President – Obama – would help the stock market exceed the 650 point threshold, the peak gained in 2015.

Economists have been cautious when asked whether Obama’s visit would give a push to Vietnam’s economic development, but have said it would help Vietnamese products penetrate the US market.

Meanwhile, Nguyen Anh Toan from VinaWealth Fund Management JSC (VinaCapital Group) was cautious when talking about the new gains of the VN Index.

He said the VN Index is at the 616 point threshold, but it is not highly possible that history would be repeated and new peaks conquered.

Toan commented that the current conditions of the stock market are different from 2000 and 2006 when Clinton and Bush came to Vietnam.

This is because there is no new economic policy for the immediate time, while the stock market’s growth relies on internal economic policies.

In 2006, Vietnam prepared to join WTO, while the national economy made vigorous moves in attracting foreign direct investment (FDI).

Now, securities investors are taking cautious steps because of high margin rates.

And there are many reasons for people to worry about the national economy performance: the drought and saline intrusion in Mekong River Delta, the mass fish deaths in the central region, and the low crude oil price which is expected not to exceed $50 per barrel threshold.

Vo Tri Thanh from CIEM commented that Obama’s visit, together with TPP, will give a push to investment and trade.

He quoted US Ambassador to Vietnam Ted Osius as saying that the US will apparently become the Number 1 foreign direct investor in Vietnam.

Regarding exports, Thanh quoted an official report as saying that 50 percent of total garment exports of $27 billion in 2015 were to the US, while the figure could be $50 billion once TPP takes effect.

(Source:Vietnamnet news)

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