„Vietnam’s GDP grew by 8.39% in the second quarter of 2026.“
Mario Timpanaro, Manager of the Lumen Vietnam Fund at AQUIS Capital, discusses Vietnam’s strong growth, attractive valuations, and the opportunities arising from the country’s increasing integration into global supply chains.
private banking magazin: Mr Timpanaro, AI and semiconductor stocks have attracted considerable investor attention, while Vietnam remains off the radar for many. Why do you believe the market is particularly interesting right now?
Mario Timpanaro: From our perspective, this is precisely where an interesting discrepancy lies. While global investor attention remains heavily concentrated on a small number of major themes and markets, Vietnam is simultaneously seeing improvements in economic growth, corporate earnings and market structures. The country remains underrepresented in many international portfolios. Yet we see a market whose fundamental development is considerably stronger than current investor perceptions would suggest.
The Vietnamese economy is currently growing at a very dynamic pace. What are the key drivers of this growth?
Timpanaro: Growth is supported by several pillars. Domestic consumption, for one, is developing very positively. As incomes rise and the middle class expands, spending on branded goods, healthcare, leisure, travel and financial services is increasing. At the same time, Vietnam remains an important manufacturing and investment destination. Companies are increasingly relocating more sophisticated stages of production to the country, supporting both foreign direct investment and industrial development.
In addition, substantial public investment is being directed towards roads, motorways, airports and ports, which should lead to greater efficiency. This combination of consumption, industrialisation, foreign direct investment and infrastructure provides a very solid foundation and should give the country a further boost to growth.
How robust is this development given the persistently challenging global environment?
Timpanaro: The figures so far demonstrate remarkable resilience. Vietnam’s GDP grew by a strong 8.39% in the second quarter of 2026 and by 8.18% in the first half of the year. The Purchasing Managers’ Index most recently stood at 52.9 points and has remained above the 50-point threshold, which signals economic expansion, for 13 consecutive months. At the same time, the tourism sector recorded growth of 13.8% - or, put differently, 13.9 million people visited this beautiful Southeast Asian country.
Corporate earnings have been particularly strong. How do you assess developments in the equity market?
Timpanaro: Earnings growth in the first half of the year was highly encouraging. At the same time, valuations have yet to fully reflect these fundamental developments, in our view. The trailing price-to-earnings ratio is around one standard deviation below its ten-year average. For investors, this creates an attractive combination: strong earnings growth on the one hand and comparatively moderate valuations on the other.
Why, then, has the Vietnamese equity market not performed more strongly recently?
Timpanaro: In the short term, profit-taking and margin calls among domestic investors have weighed on the market. In addition, higher interest rates on bank deposits have once again made them a more attractive alternative for local investors. For us, however, the fundamentals remain the decisive factor. Looking at the first-half results, the quality of many listed companies and their valuations, we see good reasons to expect buyers to return to the market. We have already observed the first signs of increasing activity from foreign investors.
What role does foreign direct investment play in Vietnam’s further development?
Timpanaro: It is central. Vietnam is benefiting from its growing importance as a regional manufacturing hub and an increasingly important location within global supply chains. Disbursed foreign direct investment reached USD 15.2 billion in the first seven months of 2026, while newly committed investment reached a record USD 38.1 billion. Importantly, these investments not only bring capital into the country but also further deepen Vietnam’s integration into global value chains. It is also worth highlighting that a significant share of these investments is being directed towards the IT and technology sectors.
The government is pursuing ambitious growth targets. Which reforms and policy measures do you consider particularly relevant?
Timpanaro: Vietnam is preparing for the next stage of its development. Reforms in the real estate sector are intended to restart projects that have been stalled. At the same time, targets for state-owned enterprises have been raised significantly, with the aim of bringing them more closely in line with international standards over the long term. Infrastructure policy also remains a key factor. Public investment has already increased substantially and is likely to provide an additional boost to growth towards the end of the year.
Where do you see the greatest macroeconomic risks?
Timpanaro: With growth running at such a high pace, macroeconomic stability needs to be monitored closely. Inflation most recently averaged 4.39%, remaining within the target range. Nevertheless, further increases in credit demand could create a risk of overheating. We are therefore paying particularly close attention to interest rates, credit growth and developments in the Vietnamese dong. A somewhat more restrictive monetary policy could help stabilise the economy while also reducing pressure on the currency.
The bond market also needs further reform to enable broader investor participation in the future. With Vietnam’s public debt standing at only around 36% of GDP, the country is in a position to finance itself at relatively favourable interest rates.
One important catalyst is the FTSE Russell upgrade. How significant do you consider this step?
Timpanaro: Vietnam’s planned upgrade to “Secondary Emerging Market” status from September 2026 could provide an important structural catalyst for the capital market. While the immediate capital inflows resulting from the upgrade are likely to remain relatively modest at first, the reclassification nevertheless represents an important step in the right direction. It enhances Vietnam’s international visibility, broadens the potential investor base and could lead to stronger demand from both passive and active investment products over the longer term. For a market that remains underweighted in many global portfolios, this would represent a significant next stage in its development.
How is the Lumen Vietnam Fund positioned in this environment?
Timpanaro: We focus on companies with strong balance sheets, sustainable cash flows, good corporate governance and high earnings visibility. We find leading companies in domestic consumption, infrastructure, industrials, logistics and energy particularly attractive, alongside selected banks and insurers. Our approach is long-term: we aim to benefit from the structural changes that will shape Vietnam over the coming years.
What is your key message to investors who have not yet considered Vietnam?
Timpanaro: In our view, Vietnam should not be seen merely as a short-term growth story. The country combines a growing middle class, advancing industrialisation, substantial infrastructure investment and an increasingly important role in global supply chains.
At the same time, valuations across many companies remain attractive. There are, of course, risks and periods of short-term volatility, but we believe the long-term structural opportunities remain intact. That is precisely why Vietnam deserves a closer look.
About Mario Timpanaro
Mario Timpanaro has managed the Lumen Vietnam Fund since 2012, working closely with the team on the ground. He follows an active investment approach focused on high-quality Vietnamese companies with solid business models, attractive valuations and compelling long-term growth prospects. He also uses technical chart analysis to optimise entry and exit points and generate additional value for the fund.
Source: https://www.private-banking-magazin.de/vietnams-bip-wuchs-im-zweiten-quartal-2026-um-839-prozent/
