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When it comes to the dong, you never want to be short, right @DavidInglesTV 
https://twitter.com/DavidInglesTV/status/1250236272251027458
https://twitter.com/DavidInglesTV/status/1250236272251027458
Exhibit A of a strong dong:
Vietnam 10-yr government bond yields, wait for it, 2.2%, an indication that despite massive EM weakness, liquidity is rather decent & sticky FDI flows = less stress for Vietnam.
In contrast, IDR has been softer. Why?
Vietnam 10-yr government bond yields, wait for it, 2.2%, an indication that despite massive EM weakness, liquidity is rather decent & sticky FDI flows = less stress for Vietnam.
In contrast, IDR has been softer. Why?
Vietnam has a current account surplus & on top of that it has capital account surplus (FDI inflows for all this China diversification play even before trade-war & before the virus).
That makes it strong. Able to fund debt domestically. In fact, supply of VND debt shrinking.
That makes it strong. Able to fund debt domestically. In fact, supply of VND debt shrinking.
IDR has strengthened as of late on risk-on, repo line, and USD issuance. Have u seen what it pays for 10-yr local currency issuance & also USD (much higher than what VN funds in LC).
Why? Excessive dependency on fickle portfolio flows. Plus, exports dependent on commodities.
Why? Excessive dependency on fickle portfolio flows. Plus, exports dependent on commodities.
So, as u know, in the dating world, hot dates can go cold, what you want is predictability & stability (boring I know but defo marriage material & that's what u want).
Fickle portfolio flows will leave u the moment u very much need it but not FDI. No no no. Totally committed!!!
Fickle portfolio flows will leave u the moment u very much need it but not FDI. No no no. Totally committed!!!
So if u're a capital starved EM, u want FDI. And a certain kind of FDI (not all FDIs are equal, as u know from the dating world, predictability & stability aren't enough for marriage material).
Told u, solid investment thesis - long the strong dong. Maybe I went too far there
Told u, solid investment thesis - long the strong dong. Maybe I went too far there
