Asian markets have become popular frontiers for American investors. Asian countries, excluding Japan, are often considered emerging markets and have a reputation for rewarding astute stock investors with large returns. Most Asian nations, such as China and Singapore, have at least a few stocks that are traded on U.S. exchanges, but there are no Vietnamese stocks trading in the U.S., making an investment in Vietnam's stock market somewhat difficult for American investors. This article outlines the steps to begin your investment process.
Investing In Vietnam's Stock Market
Know the market. Vietnam is still a communist country, and its foray into a traditional stock market is fairly recent. The Ho Chi Minh City Stock Exchange is the country's primary stock exchange, and it is the only way for foreigners to directly access shares in Vietnamese stocks. Foreigners cannot own more than 49% of any Vietnamese stock.
Find a broker. This is the tricky part. If you're not able to travel to Vietnam to purchase your desired shares directly from the Ho Chi Minh City Stock Exchange, you have to find a broker that has access to the market. Few American brokers have access to Vietnam's stock market, and the ones that do will charge investors heavy fees for the privilege of investing there. Another option to consider is opening an account with a Vietnamese brokerage firm, but keep in mind they are not as well-capitalized as their American peers, and there is little or no protection for American investors in these accounts in the event of a brokerage failure or political unrest.
Prior to buying shares directly off the Ho Chi Minh City Stock Exchange, foreign investors need to file a registration form, an applicant information sheet and a background check for criminal activity with Vietnamese regulators.
Notaries both in the investor's home country and the Vietnamese embassy must review the documents.
If you open an account with a Vietnamese custodian broker, the broker will request that you fund the account with the currency of your home country, not Vietnam's local currency. For example, American investors must fund their accounts with American dollars.
You can place stock orders in person at the exchange in Ho Chi Minh City, at a custodian broker's office or via phone, fax or online.
Consult a financial advisor or stock broker with direct experience with Vietnamese equities to get a solid assessment of market conditions there and how to best integrate Vietnamese stocks into your holdings.
Investing in Vietnam is no easy task. Investors should do diligent research prior to buying a single share of a Vietnamese stock.
Things You'll Need
A brokerage account, probably traditional, not an online broker
Possibly, the ability to travel to Vietnam