Those following some of the recent short-term fluctuations in the Vietnam stock market would have noticed a correction in July where the market dipped circa 14% in the space of 2-3 weeks. The key driver was a new Covid wave where case numbers were surging from levels seen in June. I will explore why the market over the last month has resumed its upward climb, despite record virus case numbers continuing in August.

Covid impact on Vietnam stock market

Interestingly, the Vietnam stock market at the time of writing appears to have made a short-term bottom on July 19, even whilst covid case numbers reached record levels weeks later. Whilst that may appear like irrational optimism, there has been some factors that may explain why the Vietnam stock market is to some extent looking through the current pessimistic news flow surrounding surging covid case numbers.

It might also offer some encouragement for those travelers that wish to enter Vietnam, which I shall get to later on in this blog post.

Before I get further into this topic, I want to make it clear for readers not to interpret the emphasis on stock markets and economic growth in any way forgets about the real world impacts here of the surging case numbers. It is simply that the stock markets / economy is the topic of this blog. I’ll leave the debates about what governments should and should not have done handling all this to other places on the internet! I am sure one can find enough other sites to argue with strangers about those aspects.

Vietnam economy during covid-19 heading towards late 2021 and early 2022

In recent months the stories about Vietnam securing enough adequate vaccine supplies have been very uncertain. Attempts from the nation in getting the manufacturing of its own vaccine approved and up and running has been slower than what was hoped. When case numbers were rising but not to the levels we started seeing in July, there were also stories about the population being reluctant to fully embrace certain vaccine types. We have also had mixed news in terms of Vietnam making room in their funding to aggressively source vaccine supplies, and also mixed news in terms of other countries being willing to quickly donate supplies for Vietnam to use.

However on the brighter side more recently a lot of these issues are gaining more clarity. Prospects of an imminent solution to producing their own vaccine are looking more likely. The unfortunate surge in case numbers bring about a silver lining to some extent in that the people will show less vaccine hesitancy going forward. The government is now well past the issues of using the funding to obtain vaccine supplies, it is now more about how quickly those that are purchased will arrive. Vaccine donations are now gaining momentum, as some developed countries now have clarity that they will not use all of their supplies.

If we take some of the brighter news just mentioned, and show some faith in the ministry of health’s recent indications, targets of using 1 to 2 million does on a daily basis from now on could be realistic. With Vietnam’s population just shy of 100 million, a relatively safe date for largely re-opening on a wide scale can be looked at with some optimism that perhaps many were struggling to find a month or so ago.

Vietnam has made some decisions that for those living in other parts of the world, may come as a surprise. For example they are well aware of their manufacturing capabilities, particularly in some of the hardest hit areas from covid in the South, and the importance to Vietnam’s overall economy. This has seen such areas given priority in vaccine rollouts. In many large manufacturing companies, staff have been relocated at their workplaces permanently for the time being until hopefully things are back under control soon. So some readers of this may be used to the work from home solutions used to decrease movement and interaction between regions in their own countries. Contrast that to in some parts of Vietnam instead, where we are seeing the live at work solution for the time being. Hopefully things improve and it doesn’t need to stay that way too long.

The feeling is that soon they will be able to draw a line in the sand of a date where things will be relatively safe to re-open in a substantial way. Stock markets might take more comfort in the UK type approach of being more fixated on a carefully considered date based on likely vaccination levels. That’s the impression I get that Vietnam might be heading for which is a little different to other places. For instance where I am from in Australia the key to re-opening is more about when certain vaccination targets are reached and considering case levels at the time, which is anyone’s guess.

Further risks to the covid impact on Vietnam

With what we are dealing with in the world we need more optimism like I tried to give a bit of above.

However when it comes to investing it is not practical to avoid all consideration of the risks out there still. Therefore I should acknowledge that unfortunately there is still plenty that could go wrong. Such risks could be exacerbated for stock market investors due to the current buoyant environment the Vietnam stock market has generally gone through in 2021.

As I write for instance I am still currently struggling to get clear information when Vietnam may be able to get its domestic vaccine producing capabilities going.

Whilst what I do read about the number of vaccine doses they are administering daily does seem to be a great improvement, once again I find it hard to come across clear data sources about the certainty of this being maintained.

The very sad story is that the recent surges in case numbers are placing understandable pressure on the hospital system.

In a general sense, most describe the Vietnam population’s compliance with the tough lockdown restrictions as relatively quite good compared to the rest of the world. Maintaining this though as time goes on tends to get more challenging.

If Vietnam can have a good outcome dealing with all these pressures in the next few months uncertainty will still remain. There might be looming challenges still with new virus strains, and for Vietnam to obtain vaccine supplies in the future in terms of any boosters needed.

Conclusion on Vietnam stock market and economic outlook for 2022

It doesn’t seem so long ago that I wrote about some quite good economic growth forecasts for Vietnam for 2021. In fact it wasn’t that long ago! In a blog post in June I wrote about the latest Vietnam economic growth forecasts when publishing an overview of the Vietnam economy (refer further down for the link). For reasons touched on earlier, my best guess is that we shall not breach the July lows seen in the Vietnam stock market in a significant way for the remainder of this year. Whilst there has been a major setback for Vietnam due to this surge in Covid cases, ultimately the story of the country getting largely vaccinated in 2021 remains in tact. It wouldn’t surprise me for nervousness to persist with the vaccine rollout, but I am expecting buying support would kick in around the 1,200 level on the VN index.

Overview of Vietnam economy

For those wanting to get familiar with the key drivers of the Vietnam economy, you can refer back to my blog post a couple of months ago here..

Vietnam GDP forecast 2021 and 2022

It was in that blog post in June on an overview of the Vietnam economy where I mentioned GDP growth forecasts of circa 6.5% in 2021, with maybe even higher growth in 2022. Given what has transpired in Vietnam in relation to Covid since then, some economists now are suggesting GDP growth of more like 5.5% for 2021. Whatever is recorded for 2021 I would expect Vietnam can improve from that for 2022. I would expect they can fulfill their goal of getting the country fully vaccinated in 2021.


It is currently too early to suggest Vietnam would realistically be open for tourism to any significant extent in 2021.

Currently as I write Vietnam is under the strictest of lockdown we have seen. Yet as I have hinted above, things may change substantially for the better by November.

Vietnam travel restrictions 2021 and 2022

The earlier steps one can hope to see first would be more flights enabling certain travelers in, which we have seen sporadically over the last 18 months. For example, generally when they haven’t been in severe lockdowns we have seen some enter Vietnam such as returning citizens, diplomats, officials, students, foreign investors, skilled experts etc. I personally hope get to Vietnam soon this way.

These sort of flights may increasingly ramp up over the last couple of months of 2021.

I would expect that the time such travelers have to quarantine for will be reduced and I think that has already been announced. I refer to situations assuming one is vaccinated and already tested negative for Covid, and coming from a somewhat lower risk country. A more reasonable 7 days has been suggested rather than 14-21 days quarantine that we have seen in recent times.

There has also been talk of the island of Phu Quoc piloting a system for tourists as soon as possible, here is an example of such an article Hong Kong eyes travel resumption with Phu Quoc Island – VnExpress International.

So for those readers keen on a holiday to Vietnam it may be worth searching for new updates on that. If you want to visit Phu Quoc it may suit, but it also might be important to keep your eye on how that pans out in terms of seeing when Vietnam might open up more for tourism in 2022.

When can I travel to Vietnam again?

The idea of such a pilot program is to see how a tourism re-opening pans out on a smaller case first and then review. This is not too unlike Thailand’s system with Phuket of late. Therefore Vietnam might be keeping an eye out on developments there and that is also something to watch for that keen prospective Vietnam tourists might follow.

Is Vietnam a good investment?

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