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Vietnamese exports are poised to recover, Dragon Capital says
Exports from Vietnam, the world’s second-biggest shipper of coffee and rice, are poised to recover as commodity prices and production increase, fund manager Dragon Capital told investors in a monthly note.
Shipments from the country declined 13 percent to US$32.35 billion in January-to-July from the same period a year earlier, according to data from the General Statistics Office in Hanoi. The trade deficit shrank to $3.4 billion during the period from $15.2 billion last year.
The pace at which Vietnamese exports have declined has been “relatively modest” compared to the rest of Asia, particularly given the slide in commodity prices from a year ago, Ho Chi Minh City-based Dragon said in the note. “Chances are growing of an export recovery.”
Vietnam’s oil exports are benefiting from rising prices and production, Dragon said. The average global price of crude in July was about 25 percent higher than the average in the first half of the year, according to data compiled by Bloomberg.
Crude oil exports from Vietnam rose 18 percent by volume in the first seven months. The country was the fourth-largest crude oil producer in Southeast Asia in 2008, producing an average of 317,000 barrels per day, according to BP Plc.
“Vietnam’s mix of commodities and low-cost manufacturing has remained far more resilient than the rest of Asia,” said Dragon, which manages the $88.3 million UK-listed Vietnam Property Fund Ltd. Dragon cited an increase in garment exports to the US.
Vietnamese exports to the US rose 2 percent through May to $4.72 billion, making Vietnam the only one among the 30 largest shippers to the world’s biggest economy to increase sales to the American market. Vietnamese garment exports to the US rose 1 percent and footwear shipments jumped 20 percent.
Foreign investors who scaled back during the global credit crisis are beginning to focus on “low-cost producers” like Vietnam, which may also help manufacturing, Dragon said.
“When the stock of capital does roar to life it will be felt across the economy,” Dragon said.
thanhnien, bloomberg
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