Vietnam Commentary: February 2012

Portfolio Management Comments

February inflation rose only 1.37% month-on-month (“m.o.m”), and up 16.44% year-on-year (“y.o.y”)1. Although the m.o.m inflation trend was slightly faster than that of January of 1% due to the seasonal factors, the final number was somewhat lower than several local economists’ expectation of 1.4%-1.5%. Indeed this marks a modest increase in the consumer price index compared to February of the past five years’ average of 2.19%1, which can be seen as continued effect of the government tightening policies. Most of the sub-indices increased by less than 1%, except for accommodation & construction materials and food & foodstuff which grew by 2.47% and 2.11% m.o.m respectively1. The main drivers of foodstuff price increase are gas price (+9.53% m.o.m) and meat products (beef +9.66% m.o.m, pork +3.36% m.o.m, poultry +3.38% m.o.m, milk +1.90% to 2.06% m.o.m)2. Meanwhile the food sub-index actually fell by 0.41% m.o.m because of the recent drop in rice prices2. On March 3rd, the Government allowed gasoline, mazout and diesel prices to increase by 11.90%, 10.10% and…

Read More