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Many of you may be wondering why the trade with Vietnam is so efficient. In recent years, this country’s trading has become more balanced and extremely reliable for other countries all over the world. But this was not always the case. The relaxation of communist control in the 1990s aided the economy growth and proved to be a highly successful decision for the Vietnamese people and their country. What are frontier markets, you may wonder. Know that when countries become labeled as frontier markets, it is a general expectation that over the years it will continue to rise, resulting in the market being very liquid. As time passes by, the frontier market starts to become more linked with other markets and the risks increase, thus making it less desirable for investors who leave to chase other diversification methods. Vietnam’s trading history went from negative to positive in the past few decades. Things were not always bright for this highly regulated and controlled country. As the 1980s passed and the Communist Party’s regulation of trade came to an end, the economy started to show a continuous and sustained growth. Trade with Vietnam started to look like a promising and extremely profitable initiative. It proved to be so efficient because of the rather low cost of the workforce in this country. With the labor remaining very affordable, it is also to the same extent appealing to investors. This phenomenon, often seen in fresh emerging markets, attracted business owners from all over the world into successfully trading with this country. By externalizing their work force and hiring foreign laborers for manufacturing jobs and many other tasks, the investors manage to obtain with great ease items that would normally be done in their home country, with the added advantage that production costs are far lower in foreign markets like Vietnam. If the question on your mind still is what are frontier markets, then know that this term is used to define a smaller emerging market that had not previously been sought after by investors as a place for possible opportunities. The full definition of a frontier market is that of a less mature capital market from the developing world, where countries have less established investable stock markets, in comparison to those found in emerging market environments. Countries considered frontier markets are more than just Vietnam and include Cyprus, Macedonia, Kenya, Argentina, Republic of Malta and Nigeria, among lots of others, and they are also referred to as "pre-emerging markets". They have low market liquidity and the capitalization is smaller than the one seen in "traditional" emerging markets, while they generally attract investors who seek high, long term ROI and low connectivity with other markets around the globe. The implications resulting from a country being labeled a frontier market are that, as time passes, the trading market will become more and more liquid and will begin to show similar return characteristics as the larger, traditional developed emerging markets. According to experts, investing in frontier economies actually diversifies and reduces the risk factors, contradicting the general belief that risk is added by means of including those markets and proving even further that frontier markets have a great potential for profitability. For more resources about trade with Vietnam or about what are frontier markets, please review this link http://www.vietnamshares.com/.
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