New market study, "Vietnam Food & Drink Report Q4 2013", has been published

Vietnam's economic recovery is beginning to lose its momentum. The structural issues affecting Vietnam's banking sector appear much more pervasive and difficult to overcome than we had initially anticipated. Although we continue to maintain a bullish outlook on Vietnam's growth story over the coming decade, we believe that economic and banking sector reforms will fail to spark a forceful rebound in economic activity in the immediate term. We have therefore downgraded our real GDP growth forecasts for Vietnam from 6.3% previously to 5.3% for 2013, and we have also downgraded 2014 growth from 7.0% to 6.0%.

Headline Industry Data (local currency)

* 2013 per capita food consumption growth = +8.0%; forecast compound annual growth rate (CAGR) to 2017 = +9.0%
* 2013 alcoholic drink value sales = +14.3%; forecast CAGR to 2017 = +14.0%
* 2013 soft drink value sales = +15.1%; forecast CAGR to 2017 = +14.2%
* 2013 mass grocery retail sales = +12.8%; forecast CAGR to 2017 = +12.7%

Full Report Details at
- http://www.fastmr.com/prod/686345_vietnam_food_drink_report_q4_2013.aspx?afid=301

Key Industry Trends

McDonald's To Launch In Vietnam: Fast-food company McDonald's is one of the world's standout brands, with a presence in most countries. It has built a strong international business over the past 40 or so years and will soon be able to chalk off Vietnam from the list of Asian economies where its famous burgers cannot be found. It will launch its first restaurant in early 2014 in the commercial capital Ho Chi Minh City. Vietnam will be the 38th Asian market that McDonald's has entered, and judging by its track record in emerging markets across the world, we believe that its prospects look strong.

Auchan Considers Vietnam Entry: The latest multinational reported to be entering the Vietnamese market, as of summer 2013, is French retailer Auchan which, according to local sources, is set to inject US$500mn in the next decade. This highlights the attractive long-term potential of a country that has largely been devoid of international investment in the grocery sector.

Key Risks To Outlook

Downside Risks Prominent: Should commodity prices witness a strong rebound in 2013, we could see Vietnam's central bank adopting a more hawkish stance on monetary policy. The risk of having to hike interest rates aggressively would present significant downside risks to economic growth in Vietnam.

Additionally, despite multiple devaluations since late 2009, Vietnam's trade deficit has witnessed a steady improvement. However, should we fail to see a sustained improvement in the trade balance, we would not be surprised to see the Vietnamese dong coming under further selling pressure.

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