Vietnam: still a rewarding play

Vietnamese stocks have slid to near three-year lows amid corruption scandals and bad loans. Is now the time to buy in?

Vietnam is an "on-again, off-again emerging-market darling", says William Mallard in The Wall Street Journal. At the moment, it's off again. Last month, stocks slid to a near-three-year low when the founder of one of the country's biggest banks was detained on vague charges of "illegal business".

The episode reminded investors that "after years of sloppy management and exuberant lending, Vietnam's banks are in dire shape", says The Economist, while "corruption and waste pervade the economy". As in China, the Communist government encouraged a lending spree to ride out the global financial crisis. The central bank has now admitted that bad debts amount to up to 10% of all bank loans. "The real figure could be two or three times that."

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