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Investors can take a bet on Viet Nam at a time of international contraction.

The government projection, made in October, for the growth of gross domestic product (GDP) in 2009 is 7%. This would be the same as 2008 and would be among the highest in Asia.

To be sure, Viet Nam’s exporters of clothes and shoes are seeing orders fall from the United States and Europe, while prices for its coffee are also dropping. An HSBC report in October said investors would not see improvements in the stock market before the end of 2008.

But Dominic Scriven, managing director of Ho Chi Minh City–based Dragon Capital Management company, sees plenty of upside for bargain hunters in 2009.

“I think the Vietnamese government fixed income looks good,” he says. “The dong is a well-backed currency, has limited leverage and 15% yields. Also, there are good cashflow businesses linked to consumption. Regionally and globally, one has to invest with recession in mind. This means careful currency selection—and the strength of the dollar is ridiculous—some protection with gold, and strict blue-chip acquisition programs.”

Scriven also agrees with HSBC economist Prakriti Sofat who advised in an October report that the government should hold firm against pressure to ease rates. “It’s important that the Central Bank keeps the base rate at 14% for some time and for the government to maintain tight fiscal policy,” said Sofat.

The key to stable economic growth in 2009 lies in prudent fiscal policy to rein in growth and inflation, said Benedict Bingham of the International Monetary Fund in October, adding that the country has built up a “very positive profile of an attractive longterm investment destination.” •