Wolf Money(Vietnam)part 1
Hello or Xin Chào in Vietnamese. For the past week, I went on a trip to the former Capital City of South Vietnam, Ho Chi Minh City also known as Saigon.
I have written a few commentaries about Vietnam in my blog on several occasions due to my investment in Boustead Singapore and Valuetronics. Both companies have a strong presence in the country. There are so many good things to talk about Vietnam, I can almost pass off as an unofficial influencer for the Vietnam economic promotion board. During my trip to Ho Chi Minh City, I can sense a new dawn for this awakening mini-dragon. The country gives me the same kind of vibes which I had on my trip to China in the early 2000s, just before China’s powerful growth in the next decade. If China had done so well by opening its economic doors, Vietnam could potentially be like China on steroids. Below are my observations on this future economic powerhouse of South East Asia.
Geographical
Vietnam coast line stretches 3260km along South China Sea. Given the country long coastline. Seafood is abundant. Vietnam is also one of the largest producers of rice and other important staple. Vietnam has the third largest oil reserves in Asia after China and India. They aim to be energy self sufficient by 2027.
Social
Vietnam has around 100m population. Vietnam’s demographic is young, one can sense the vibrancy of the nation with its youths. They are one of a handful of countries in Asia with a population fertility rate of 2 which is almost two and a half times higher than South Korea and twice of Singapore. A young population is an advantage to her economy. I find people that I met to be enterprising and hardworking. Ho Chi Minh City has 9 millions inhabitants that makes it one of the largest city in Vietnam. Cafe hopping, drinking in pubs, enjoying good food, shopping in malls and working out in the parks are some of the activities most young people do during their leisure time. If you want to express your love for someone in Vietnam, it is common to give a bouquet of flowers. I saw a lot of ladies carrying a bouquet on the street.
Economy
In the last few years, Vietnam is one of the fastest growing economies fueled by investment from around the world. Given the abundance of labour, many MNCs set up shop in Vietnam as a way of de risking from China. Vietnam is one of the chief beneficiary of FDI into ASEAN. I find Singapore companies well represented here. Sembcorp through VSIPs(Vietnam Singapore Industrial Parks), Keppel Land through offices, shopping mall(Saigon Centre) and residential projects. Singapore’s Grab and Shopee have a very strong presence in Vietnam’s digital economy. Through my observations Vietnam will have many decades of growth in areas like infrastructure, tourism, manufacturing and banking etc. Any Singapore companies operating out of South East Asia must incorporate a Vietnam strategy. I foreshadowed the size of Vietnam’s economy to reach 3/4 of Indonesia within the next 10-15 years, making it the second-largest economy in ASEAN. There is a large contingent of South Korean businesses operating in HCMC especially in retail banking. I saw a lot of Korean Banks operating within the city.
There are so many opportunities in this country due the country’s growing middle class. Retail and tourism are two likely sectors to do very well. Vietnam will be Singapore’s top 5 tourists source in the next few years. Vietnam’s full potential can only be realised if the country avoids the pitfalls of growth in tackling corruption, excessive borrowing and how the country balance her relationship with the US and China. Vietnam is going through their own property slump. Prices had dropped 30% since 2022. A three bedroom apartment in HCMC now costs around USD $250k-$300k. Things to take note, borrowing rate is around 5.4%. Restrictions apply for foreign buyers of Vietnamese properties.
Tourism
After the end of the covid lockdown, tourists have been going back to Vietnam. Statistics from Saigon Times, a business weekly, reported Vietnam has welcomed more than 1m visitors per month to its shore since July this year. The city is only 2hrs away from Singapore, which makes it an excellent getaway away for a short weekend holiday. Cash is still the preferred mode of transaction. Vietnam is a value for money destination. My family spent less than $12m VND(excluding accommodation and flight) during our week long stay in Ho Chi Minh. The city displays an old charm with its old colonial buildings that are uniquely HCMC. Food is affordably priced. A family of four could have a very nice meal for less than $1m VND about $55 SGD. My trip to HCMC took me to many cafes big and small. The thriving coffee culture is one of the most vibrant in Asia. Travellers will be able to experience the different types of coffee on offer. Vietnamese coffee do pack a punch. I also managed to cover the city extensively on foot. A few personal recommendations if you are traveling with children. The water puppets show with it funny stories is a must watch. One could still enjoy a good laugh even though the play were conducted in Vietnamese and a trip to Landmark 81, Skyview, to experience what’s like to be on top of South East Asia’s 2nd tallest building. A visit to Independence Palace, the former residence of The President of South Vietnam, to see the official state room where The President hosted foreign guests and dignitaries. Other interesting places include Saigon Central Post Office, where one could send a postcard to your loved one back home. The post office with its French architecture put the romance back into writing letters. The Ben Thanh market is a great place for those looking to put their bargaining skill into practice.
To be continue….
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