Vietnam is where China was 20 years ago

The Vietnamese stockmarket has had a "stinking four years", says Dominic Scriven of Dragon Capital. But this year it has risen to an eight-month high and the good times might just last.

Policymakers finally appear to be getting to grips with the economy. There was a Chinese-style, state-mandated lending boom during the global financial crisis. While this kept growth humming, it drove up inflation to an Asian record of around 20%. That widened the current-account deficit and pushed up bad debts in the banking sector.

A new central bank governor arrived last year and reduced credit growth (which had reached an annual 28%) to 12% last year. Inflation has eased to 14%. The cooling economy GDP growth fell below 6% last year has also reduced the trade deficit. The national currency, the dong, has now stabilised.

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In a country where people hold more physical gold than anywhere else because they're worried about their currency being constantly devalued, "this is a major breakthrough for foreign and domestic investors alike", says Fiona Rintoul in the Financial Times.

Moreover, the banking sector is being consolidated and more privatisations are on the cards. "These reforms all seem to be going in the right direction." The compelling long-term story hasn't changed. Vietnam has a young, well-educated population, plenty of commodities, and low labour costs, which are appealing to more and more multinationals. Vietnam is "where China was 20 years ago", according to Walter Bollier of Asset Management Consulting.

So now that Vietnam appears to be turning the corner, the Aim-listed Vietnam Opportunity Fund (VOF), on a discount of 34% to net asset value, and PXP Vietnam Fund (VNF), on a discount of 10%, may be worth researching and tucking away.