The hottest story in the newly emerging markets is Vietnam. Vietnam's stock index rose 145 percent in 2006 and further increased by 44 percent in the first two months of this year, according to US newspaper The Wall Street Journal.

The Wall Street Journal quoted Perry Jung from Auerbach Grayson Co., a New York-based brokerage company, as saying that Vietnam began attracting risky investment funds last year as investors saw the stock market increase by 120 percent at a certain time and wanted to set foot in it.

The paper said even though experienced investors still hesitate to purchase bonds in the Vietnamese market, there is no denying Vietnam's long-term appeal with its economy growing by around 8 percent annually, the country has become the 150th member of the World Trade Organization (WTO) and the Government is speeding up the tempo of industrial privatization. Foreign direct investment (FDI) is increasing in Vietnam where a half of 84 million Vietnamese are less than 35 years old.

Until 2006, foreigners interested in Vietnam turned to property or private-equity investments. But following a spate of offerings, more than 100 stocks are now trading in Vietnam. For a developing country, the breadth of companies represented is wide: banks, telecommunications, technology, refrigerator makers and dairy-products makers. In addition to attracting foreign “hot money”, these stocks have generated interest locally. Everybody on the streets is gambling on stocks.

This investor interest has created some market distortions. The most popular stocks are now trading at more than 50 times their trailing 12-month earnings. Setting up a local stock trading account in Vietnam takes two months, and most risky investment funds don't want to wait.

Source: VOV